Sunnova CEO talks up Houston as the energy transition leader
When John Berger founded Sunnova Energy International, the residential solar company, in Houston nine years ago, others in the local energy industry balked.
The idea that Houston would be home to a renewable energy firm seemed ludicrous at the time, and most still associate the city with oil refineries and gas pipelines. In the past year-and-a-half, however, more major oil and gas companies have announced Houston-based ventures to explore clean energy.
Just in April, Occidental Petroleum announced plans to build a pilot plant to create ethylene without using hydrocarbons, Exxon Mobil proposed building a $100 billion carbon-capture project along the Ship Channel and the country’s largest energy-tech business incubator opened its second location, in Midtown.
Sunnova now serves more than 100,000 homes and employs more than 400 fulltime-equivalent employees. It reported a $33 million loss (31 cents a share) for the quarter ended March 31, compared to a loss of $71 million (85 cents) the year earlier. Revenue soared to $41.3 million in the quarter from $29.8 million a year ago.
Berger said he’s not surprised by the growth in adoption. He said Houston is primed to become a leader in a transition from fossil fuels to lower-carbon sources of energy.
But to make the change, he said it will take more private investment, government grants and subsidies, as well as making more credit available to start-up companies in the renewable space.
He spoke about his hopes for the city’s energy future in late April. Here are his comments, edited for clarity:
Q: What do you see as being the biggest barriers to Houston making the energy transition?
A: It’s really just ourselves. We need to be open, we need to embrace change, embrace technology and, at the same time, we should never go back in and say, “Let’s stop creating these jobs in the oil and gas sector and everything else.”
Look, there’s going to be change, there always is change, that’s what Houston’s
done a very good job of for well over 100 years.
We need to continue to be true to that — it’s who we are. We’re a place that’s the most diverse city in the United States, we have the lowest cost structure of any major city I’m aware of, and we have people who are very well skilled in the energy business all the way through. A lot of them who work here now never worked in solar, for instance.
We have huge attributes, we just have to have the will and get the message out and say “Yeah, we’re going to embrace everything in energy and we want to be the energy capital of the world — not just the oil and gas capital of the world.”
Q: Why do you think some of the oil and gas majors and others are really paying attention to the energy transition now, versus even a year ago or year and a half ago?
A: I give a lot of credit to Bob Harvey and the Greater Houston Partnership. Mayor Sylvester Turner has done a good job with this as well, but it goes back to my point before about communication, making sure that people know we’re open for business.
Just a couple of years ago, a lot of these international oil and gas firms thought it was perfectly fine to locate their solar, wind and other investments in other cities and still have their oil and gas here.
The city leadership and the Greater Houston Partnership said, “Well wait a minute, we want those too.” It was getting that message out that really turned the tide. Companies are paying attention and saying you know what, this is a great place to be, but we didn’t know you wanted us.
Q: State leaders like Gov. Greg Abbott and Lt. Gov. Dan Patrick criticized clean energy during the freeze and blackouts in February, blaming much of the power failures on their capabilities. How much do you think that affects Houston’s ability to position itself to be a leader in the energy transition?
A: I think that criticism is not well placed, and certainly in some cases it could be counterproductive in getting to the truth of the matter. We need to recognize they are the leaders — Gov. Abbott and Lt. Gov. Patrick — but they aren’t the leaders of the city of Houston and our Houston region.
And whether a company locates in Houston or Austin doesn’t, because (Abbott and Patrick) are leading the state of Texas, they don’t really mind either way.
But we care. And we want to see those companies locate here in Houston. So I think it’s more important to pay attention to the leaders of Houston and not necessarily the leaders of Texas.
Would I like them to be a little bit more careful in what they say and more thoughtful? Sure, and certainly more embracing of all things relating to energy. Politics is politics.
Q: What do you think will be next in energy tech or renewables?
A: I think we’re going to hear a lot more about being able to run off-grid, about wireless power. We’re going to hear a lot more about the cost of (energy) storage going down, a lot more electric vehicles on the roads than we expected.
The transition or the electrification of the economy is happening faster than people fully appreciate, and I think the job creation in this area, both in number and in pay, is going to surprise a lot of folks.
We, as Houston, want to have more than our fair share, not just our fair share. And there’s a lot to go get.
Q: Where do you see those opportunities, specifically?
A: There’s a lot of supply chain on-shoring — solar module production, solar cells or solar wafers, poly silicon, battery manufacturing, but the demand side of what we do, the service producing side, is the wireless power company is key as well. We’re the ones buying all the gear and putting it all together and servicing the customers.
So, we as a city want all of these pieces of the new ecosystem of energy, and it’s fast growing. We’ll hear a lot more about how this change is happening and how fast it’s really occurring. It won’t be a smooth straight line upwards, but I think we’ll hear a lot more about how fast it is and what a wonderful economic growth opportunity it is.
Q: Anything else you’d like to add?
A: I think Houston is in the right space, and we have the right assets and people to be very successful.
Not only to be successful, but to lead and become truly the energy capital of the world, not just the oil and gas capital of the world.
I would encourage everybody on the leadership side to continue to push forward, and the business community certainly is continue to get that word out that we’re open for business, we want renewable energy, new energy, energy transition — whatever the phrase you want to use — we want these firms to be born here.
If we can’t have them born here, we want them to get here as fast as they can.