Before his abrupt death a year ago, the pop musician Prince made an investment in green energy that’s now helping solar start-ups weather an assault from President Donald Trump.
It started with a conversation in 2011 between Prince and his friend Van Jones, a CNN commentator and California human rights agitator and onetime green-jobs adviser to President Barack Obama.
“He asked, ‘If I have a quarter-million dollars, what can I do with it?’” Jones recalled in an interview. “My wife said he should put solar panels all over Oakland.”
That led to the creation of Powerhouse, a rare for-profit incubator dedicated to putting clean-tech entrepreneurs together with investors. The company has helped 43 start-ups get on their feet in an era when venture capital funding for renewables has plunged and Trump is working to slash funds for early-stage entities from the U.S. Department of Energy.
It’s an example of how fledgling solar companies are relying on angel investors, foundations and family offices for seed money. And it has helped make Oakland, across a bay from San Francisco, a hive for clean-tech finance with 13 companies and six industry organizations working near Powerhouse’s offices.
With a grant from Prince, Jones brought in Billy Parish, founder and chief executive officer of Solar Mosaic Inc., then a rookie crowdfunding loan provider working in Arizona. Parish moved Solar Mosaic to Oakland, where he met Emily Kirsch. She was a green jobs campaigner at the Ella Baker Center for Human Rights, a non-profit that Jones co-founded. Kirsch worked with Solar Mosaic on its first four projects then had the idea to make money helping young companies.
“If my support could help one company, what if our network could help 10 or 50 companies?” said Kirsch, 31.
That’s where the story ended for Prince, who died in April 2016 at age 57. Jones said Prince wanted his involvement to remain anonymous.
Powerhouse found its initial home in the office of another emerging solar company, Sungevity Inc. Mosaic, an early Powerhouse company, was also based there at the time.
The incubator emerged as venture capital dried up following unprofitable investments in solar manufacturing and biofuel start-ups. VCs provided $4.3 billion for clean-energy last year, less than a tenth of the $50.2 billion peak in 2007, according to Bloomberg New Energy Finance.
Trump has signaled he wants to cut seed money flowing from DOE programs, and that is apt to cut the number of investors willing to back the industry. A DOE spokeswoman didn’t comment.
“The tourists are out,” said Nancy Pfund, founder and managing partner of DBL Partners LP, a clean-tech venture capital firm that invested and early backer of Elon Musk companies including Tesla Inc.
Even so, Powerhouse is thriving. Kirsch says it’s making money, though she declined to say how much. About half of the entrepreneurs it's backed were founded by women and minorities—above the industry norm, Kirsch said. Those companies include:
• BrightCurrent, which offers field marketing and call-center support for home-energy management.
• PVComplete, which designs and engineers solar projects for other companies.
• UtilityAPI, which provides energy data to solar and storage companies. Hot 4 Solar, which helps identify neighborhoods ripe for rooftop solar.
For the entrepreneurs involved, Powerhouse has helped them shift careers after they had identified gaps in the market, using skills from bigger companies like the now bankrupt SunEdison Inc.
At SolarCity Corp., a rooftop panel installer now woven into Tesla, George Zviagin wanted to develop software for cash-flow forecasts and energy production. While senior executives embraced the idea, funds were lacking, he said. So, he went out on his own.
“I was already at the biggest company, and was fortunate to have joined before it IPO-ed,” said Zviagin, who founded Ra Power Management. “I got some early validation, sold my stock, and used that to bootstrap us for the first year.”
Claudia Eyzaguirre, co-founder and CEO of PVComplete, has hired from within the Powerhouse community. Her company employs 11, including five at Powerhouse. “The cross-fertilization is strong,” she says.
BrightCurrent CEO John Bourne, who used to work at SunEdison, now has 125 workers including eight at Powerhouse nearby.
“We are like the kids who came back to live at home because we love our parents,” Bourne said.
At Powerhouse’s office, a short walk from the headquarters of the music streaming business Pandora Media Inc., the decor is decidedly techy, with conference tables made from reconstituted solar panels. A replica of the Millennium Falcon sits on a coffee table, and Polaroid photos of the 107 members of the Powerhouse community are fastened to strings on the wall behind Kirsch’s standing desk.
The mood remains optimistic even with funding cuts looming. After a period of rapid growth in solar installations, SunEdison’s collapse rattled confidence. Some executives say the industry would benefit from specialists like those at Powerhouse with a sober approach to funding.
“We had this huge, huge party—it was ‘Party Like it’s 1999,’” says PVComplete’s Eyzaguirre. “A correction in this sector wouldn’t be a terrible thing.”
With assistance from Chris Martin.
This article was provided by Bloomberg News.
