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It’s time for Part 2 of our back-to-back episodes focused on trends that are shaping the solar sector. On our last episode, Daniel Cruise from Lium Research discussed what’s going on in the solar market here in the United States. Today, we hear from Harald Overholm, the co-founder and CEO of Alight Energy. Alight is a solar energy development and consulting company based in Stockholm, Sweden, so Harald is going to walk us through current solar trends in the Nordics and the rest of Europe. During our conversation, Harald and I will touch on the rise of solar-as-a-service, the role power purchase agreements (PPAs) are playing in Europe, and how Alight is working with companies like Toyota and Swedbank to help organizations optimize the potential of both on site and off site solar.
Highlights from Harald Overholm
How did Alight get started? (3:29)
How has the solar market matured? (6:03)
The trend of industry verticals moving to solar together (11:22)
Headwinds solar is facing (13:21)
Investment trends in the Nordics (16:10)
The benefits of agrivoltaics (18:37)
Bold predictions for the future of solar (23:32)
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Transcript
(Note: This transcript was creating using artificial intelligence. It has not been edited verbatim.)
Sean McMahon 00:01
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What’s up everyone and welcome to the Renewable Energy Smart pod. I’m Sean McMahon, and today’s episode is part two of our back to back look at the solar sector. On our last episode, Daniel Cruise from Lium Research shined a spotlight on trends in the solar market here in the United States. Today, we’re gonna hear from Harald Overholm, the co founder and CEO of Alight Energy. Alight is a solar energy development and consulting company based in Stockholm, Sweden. So Harald is going to walk us through current solar trends in the Nordics and the rest of Europe. During our conversation, Harald and I will touch on the rise of solar-as-a-service, the role power purchase agreements are playing in Europe, and how Alight is working with companies like Toyota and Swedbank to help organizations optimize the potential of both on-site and off-site solar.
Looking ahead on the calendar, climate week is right around the corner. So Lauren Collins from Vinson and Elkins will return to the show to discuss what’s gone on in the renewable sector in the last year, with a specific focus on the first anniversary of the Inflation Reduction Act. Lauren first appeared on this podcast, just as the IRA was being passed, so it’s gonna be great to hear from her on how that key piece of legislation has changed the landscape for renewables.
We’ve also got a few shows cooking for COP28, coming up in the United Arab Emirates, but I’ll share more details about those as the event draws closer.
Before we get things started with Harald Overholm from Alight Energy, I want to take a minute to mark the sad passing of one of the most energetic people I’ve ever met in the renewable energy industry. Kacie Peters from Pivot Energy recently succumbed to cancer. We had Kacie on the show back in April, and she was a dynamo. Her passion for all things renewables came through in her voice. So much so that that was one of those episodes where I wish this podcast had a video element, just so you all could see what I saw, which was the way Kacie’s face lit up when she talked about her work. Kacie Peters was a bright light, and my heart goes out to her family and her friends. She will be missed.
Hello, everyone, and thank you for joining me today. My guest is Harald Overholm from Alight. Harald. How’re you doing today?
Harald Overholm 03:29
Pretty good. Thanks, Sean. Hi, thanks for having me on the show.
Sean McMahon 03:32
Yeah, I’m excited to talk to you. I’m very familiar with light and all the work you do. But let’s take a minute or two let you kind of explain what your firm does kind of how you got started and where things stand right now.
Harald Overholm 03:41
Yeah, thank you. So we’re light, we do solar as a service for big commercial power users. And that just means that we build an Own Operate solar, selling the power to those users, typically through something called a PPA. That’s a power purchase agreement. Maybe familiar, maybe not. But it’s the big contractual way of making sure that you can you can buy power from a new solar plant without having to own the plant or having to maintain it or even think about it, you can just get the benefits of that power. That’s what we do. And we built the market in the Nordics. It was it was really new when we got going 10 years ago. And obviously now just like many places in the world, solar is booming. And we’re just struggling to keep up with with the pace off the market.
Sean McMahon 04:23
Yeah, speaking of the market, what are some of the overall trends you’re seeing? I mean, let’s start big picture when it comes to the solar industry, maybe within the Nordics or even kind of beyond that. What are you seeing out there?
Harald Overholm 04:32
Yeah, I mean, look, I think solar is in a big trend. Solar is in a positive place, someone I talked to recently to use the word euphoria for the global solar industry. And it’s not, it’s not wrong. You mean, in the US? The IRA, I don’t need to tell you about that. But it’s the same thing everywhere. Solar has never been as big as it is now or grown as fast in terms of megawatts installed. So that’s fantastic. And I think that gives rise to a lot of other trends within the industry, which are all about maturity. So just to give a few examples to think like battery storage in Europe, something being coupled with solar is maturing really rapidly, it’s just being done in a way that’s never been done before. People putting battery storage on the ground with good commercial contracts on it, something we did, we put our first couple solar couple batteries storage on an asset one year ago. And since then, just seeing the pathway to roll out much more with I would mention capital as a strong trend, like the maturing capital interest in solar. As you know, we did the capital race a year ago, and in the running app to that, ultimately, we did it with a with an infra fund called def, but it was a long process. About a year we met a lot of international investors. But this just striking how mature the interest in investing in the solar industry has been never seen that before. I mean, I’ve been in the industry for 20 years, basically, it’s very new. So yeah, a very strong overall trend to think for solar in Europe, as in the US. And that’s helpful to every bit of the of the value chain.
Sean McMahon 06:03
Okay, you mentioned how you know, things that have definitely matured in the last decade, even though concept of solar as a service being better understood. So what were those conversations like in the early days? And how have they changed now? I mean, are most of the people you talk to you know, exactly what you’re talking about when you come in talking about PPAs? And solar as a service? Or is there still kind of an educational curve?
Harald Overholm 06:20
These days, we’re pretty close to a situation where most people know exactly what you’re talking about. And that’s great, because it’s night and day, compared to 10 years ago. I mean, look, when we started, we had to start by telling people that solar was actually real, that it actually worked. People go into solar, you know, I don’t think that works. And even if it works, it probably doesn’t work in Sweden, and you know, why would I even do that? So it was just like, when I think back on it, it was just a different world completely. And then we have to go,
Sean McMahon 06:48
Wait a second, wait a second. So they were hitting you on, you’re in Sweden, and it’s too dark during the winter, and so it’s not gonna work there.
Harald Overholm 06:55
And you know, people at the time, so Well, you know, heard about solar, as someone builds solar in southern Spain, I’m sure that works, it won’t work in Sweden, because it’s cold, or dark, or wet, or whatever, you know, and, like people that didn’t have a clue. And you know, can’t blame them like yours, because they’ve never seen solar, and there wasn’t any solar companies on the stock market, or it wasn’t any solar news clippings and the press. So, yeah, nothing, you know, and I’ve come out of the US market, I spent a lot of time in the US market a few years before setting up Alight. And of course, in the US even at the time, solar was going big, it was coming like a big business and really commercial and people understood it as being an actual commercial future industry to be in. So I really had to like, tell myself, like, you know, look, you gotta start from zero here, like we’re gonna start with this is the panel. This is how it works. But I’m so glad. I mean, it’s it’s great to think about how they can run faster transition has been, and today I don’t think there’s there’s not anyone who, who seriously disputes that that solar is going to be important in Sweden in the future. And now it’s just a commercial question like, will I buy this now? And how will I buy it? And can I have a look at the contracts or, like normal things that you expect from from a business conversation?
Sean McMahon 08:08
Yeah. And since that market has matured, you and the team at Alliant, you’re out there in the marketplace? So what are you feeling the most demand for? Is it? Is it on site solar stuff, you know, are companies coming in saying, hey, put it right here? Or is it more the off site distributed data model,
Harald Overholm 08:21
I’m gonna say that in Europe, of site got going a lot sooner than on site itself. So there’s much more well established is mature these days. And then actually, when it comes to PPAs, the power purchase agreements, in Europe, they first came along in the wind industry, and there was there was really big, like the big off site Wednesday, and then it transferred into the off site solar like a big solar site, and then it’s kind of moved from there. So so definitely off site, solar grid connected solar PPAs is something that’s kind of an established product, everyone knows self on site is really exciting. But you gotta remember that not just that is a bit newer to Europe, but also that not everyone can do on site, because you’re going to have rooftops, or parking lots that that are available to you, where you can invite someone like us to do solar, I know just one of them. Because typically, if you want to do something, and you want to invest whatever your your customer, but you want to invest time management time and thinking about how to do this, it’s got to be significance. And typically, you want to have a number of places and number of premises where you can put this so for example, one of our customers to Yota obviously, they control industrial sites where the lot of rooftop a lot of parking lots, but also do it as big companies. So they have them in every country and they can they can decide to do one framework, the foreign side. Now that’s not available to everyone. So it is by definition, a smaller market, but for those companies that can have it. I think the demand is now huge. It’s really something that hit quickly as a trend because there’s a competitive aspect to this when when someone starts doing it like to the people around you, in their markets in their niche will will notice and they’ll go hey, you know, I can’t let my competitor lead on this thing, because who knows what benefit they can get from that in the future. So I gotta follow. So on site, high demand, but in niches of site, pretty high demand, pull over and say,
Sean McMahon 10:11
Getting back to Toyota, are they setting an example for other companies? Right where they are? Or like you said, in their industry vertical? What does that competition look like?
Harald Overholm 10:17
I think the industry vertical dynamic is really strong when it comes to something like solar. I think that’s true for every new technology that within an industry vertical, suddenly someone does something. And if you’re the closest competitor, can you afford to ignore it? Because I mean, let’s let’s take solar, if your biggest competitor suddenly goes solar, and like they’re putting solar on the rooftops? Are they buying into the big solar PPA? Now? What is that going to give them, it’s going to give them cheap power, maybe really stable power over time, you know, maybe they can keep the lights on during that month, three years from now, when when power is suddenly prohibitively expensive, because something strange has happened in the power market, maybe that’s gonna, maybe they’re immune to that, you know, or just the green aspect, you know, maybe that gives them in the next, the next time in your industry vertical, when when a big customer is asking you for proposals, maybe your competitor is going to be able to say that, hey, I run them solar. And that gives me whatever edge in that proposal process. So can you afford to ignore it? No, you probably can’t, you know, even if you, you might be unsure of what what what the edge is, but you can’t ignore it. So then you get going. So we see this dynamic where individual verticals suddenly move together almost. And there was a early on in the European solar market, for example, beverage, at some point, suddenly, everyone in beverage was just doing solar. And it was within month, you know, it was just like they were going to the same trade fairs and reading the same trade magazines. And they just went wow, you know, so there was a Heineken bottle with a solar panel on it. And then there was a Colesberg bottle with a solar panel on it. And then there was the Pepsi and then it was really, really distinct way. And I think that’s true for many technology. So I’m probably just experienced it myself in this industry.
Sean McMahon 11:58
Any industries out there you say are kind of hitting that tipping point right now, that beverage had years ago, any? You know, obviously, Toyota is doing it with you. But I’m trying to think of a random industry but I don’t know widgets.
Harald Overholm 12:14
I think because the industry is growing. Now it’s a phenomenon in many more verticals, but definitely industrials in general. And for some reason in automotive during the period of time, we’ve seen strong, strong demand recently, we’ve seen you know, anything that’s more consumer oriented, being very interested. So two people, at some point, a number of different companies grabbed amusement parks and like had, you know, this general need of saying you want to go to the amusement park, you can trust that the power comes from green sources, and they got going so but because of the pace of industry, we now see the faster cycles and more different parallel verticals. But yeah, the widget, the widget verticals is right there with them.
Sean McMahon 12:55
Yeah, and I appreciate what you said earlier about, you know, the proposal aspect, because especially here in the US with disclosure rules coming down, like if you’re within someone’s supply chain, and you can tell your potential customer, hey, we’re powered by solar as opposed to a company that’s not, then that’s definitely can help you because they’re gonna have to report that out. So I see how that can kind of push things your way and keep Alight really busy. We talked earlier about some of the trends and positive trends going on and solar. Do you see any trouble ahead or any headwinds,
Harald Overholm 13:21
I think you might want to look at the grid as being you know, a headwind coming up, there used to be issues in in the supply chain, and coming out of COVID supply chain was disturbed, it was shipping was a problem, the start of the value chain, like polysilicon production was was in a bit of a strange crisis disruption mode for a while. So but that has gone away. Luckily, so that’s not a I mean, we spent a lot of time analyzing the value chain. And we have we have a team tournament, just like the executive every step of it. And now we’re really happy. I mean, it’s just a little bit come down in terms of cost, but it’s also gotten fairly predictable again, so I like that. I think that’s that seems to be a good trend right now that the value chain is responding to the increase in solar demand. But grid is an issue because grid is is obviously ran by monopolies. It’s like local monopolies that manage the grids. And when something is growing as fast as Solo’s to is, right now, what happens is that they get overwhelmed with with applications. I mean, that’s where the trouble starts. So it’s just a manpower question where the application officers who suddenly have 10 times as much to do and they can’t really cope with that. So and then it becomes a budget issue for the grid companies. And then it becomes a technical issue, because then they have to sit down and figure out, you know, what’s going to happen technically to the grid, if we let all the solar come along you they might not really know that so So then it becomes like some sort of analysis issue. And now the whole thing just amounts to a big bottleneck. I mean, grids definitely being a bottleneck for for solar across Europe at this point. And I mean, you can’t blame the great companies. They were maybe they were just existing in different reality before and that reality switched into something new. So there’s a I think a joint response from from good companies in the industry and policymakers probably needed to fix that.
Sean McMahon 15:05
Yeah, I mean, transmission and grid infrastructure is obviously a hot topic here in the US as well. Is citing an issue for you. I know you mentioned manpower and kind of technical aspects. But I didn’t hear you mentioned citing a sighting as much of a challenge there over in the Nordics as it is maybe here in the US,
Harald Overholm 15:18
Not really. You fly over Sweden, you don’t understand why, because it’s, it’s just pretty empty. But of course, again, as the industry grows rapidly, there’s there’s bound to be questions, more questions asked about where you’re going to put stuff like, what about the conflicts of interest with agriculture, etc. Overall, I think fair questions. And I mean, we believe we can do all the solar we need to Sweden without encroaching on on agricultural needs. But But it’s fair that questions ask them, it’s rather than baits there. But in general, it’s not holding us back to the same extent, individual cases, there will always be, you know, permitting issues, but it’s not. I think that’s more true for market niches like Spain, sort of places in Spain, where solar has been going on for a long time. And they’re kind of ran out of land, lease good land. But we’re lucky to be market where that’s not the case.
Sean McMahon 16:10
I gotcha. And then, you know, speaking of trends that are both here in the US and over in Europe, in the Nordics, you talked earlier about capital, this is a pretty good time in terms of capital coming to the marketplace. Over here, I’m sure you’ve heard of the old inflation Reduction Act and how that’s kind of driving investment here. What have you observed, you know, within the Nordics, in terms of a response to the IRA, I mean, we see stories about how policymakers are trying to kind of keep up and offer the same kinds of incentives. But what does that look like, from your perspective at a company like light,
Harald Overholm 16:39
I don’t think we’ve seen in solar as much as they do, and other like manufacturing industries, because we’re the end part of the value chain, we build solar to produce power, we couldn’t really go to the US and do that. Or we could, but I mean, it’s just very different market. So we’re not in a situation where we go, oh, look, to so much more attractive in the US now. So we’re gonna go to the US. But it’s more of manufacturing question where I know, in the Nordics, we have, for example, battery manufacturing, that that’s now rapidly escalating, which is useful for us in the solar industry, because we want those batteries from a couple them with solar. So that’s good. And I know, that’s gonna question like, are you gonna? Is it better not to go into the battery factory in the in the US rather than in Europe? And can European policymakers respond to that? So I guess that’s healthy and as a healthy competition, but I can’t say that I’ve seen, I’ve seen that phenomenon in solar, we probably just more seen that, that it’s a good thing globally, that the value chain, the people that produce solar panels are the people that extract quartz to turn into post silicon, they feel even more confident that demand is going to be high in the future. So they keep their factories running and expanding. And that’s good for all of us.
Sean McMahon 17:51
So you know, ahead of talking to you, I’ve dug in your website a little bit was taking a look at some of the projects you could have just launched or maybe in the past. So you’re not seeing a couple of things on on Agra Voltex. Tell a little bit more about your approach there and kind of what seems to be working on the projects you’ve launched.
Harald Overholm 18:05
Yeah, the sheep, we talk about, we talk about the sheep as our new team members, we’re really proud of them. They, they and so that’s the big agriculture a project that we’ve done is to put sheep on one of our assets and eight mega watt assets were producing power for the lotto. It’s a plastics company in Sweden. And we said, hey, you know, it’s, we have to cut the grass. And anyway, so how can we do that more efficiently, we tried out robotic grass cutting in on another side. That was that was interesting, we thought, you know, even better than robots that are sheep. So let’s get the sheep here. And it turns out, it’s a great thing, because for the sheep, it’s apparently very good, they eat more, because they they like the shading from the panels. And they kind of feel comfortable, they don’t feel they seem to feel exposed when they’re on the big field without panels. And the panels provide some sort of sense of natural security for them. So they, they like it’s good for the actual sheep farmer. And for us, it keeps the weeds away, keep the grass short. And overall, what it does. And what a well managed solar site does to its surroundings is actually interesting because it increases the biodiversity of whatever is around it. So if you if you have agriculture, land, agricultural production next to one of our Silversides and the way that we manage them where the rich flora and fauna and with the sheep, we’re going to increase the overall biodiversity by making it a haven for for the bees and for everything that pollinates and cross pollinate. So it’s just really nice to to understand that positive aspect of how solar can not just take land but just the refit into the land and contribute.
Sean McMahon 19:46
I gotcha. So we’ve also talked a little bit about Toyota, what other projects are what other companies have you partnered with that you can share kind of the details on, you know, how things got started and what the project looks like.
Harald Overholm 19:57
This we the grid connected sign we communicate the stuff that we do with with a bank. That’s what makes one of the major banks in the Nordics. They were very brave to sign one of the first or the first solar PPA in Sweden. Very brave for a big bank to do that, and they helped us in a tangible way helped us to get going and kickstart the markets that was fantastic. We you know, forever grateful to Swedbank for for that they also am very happy to notice that it ended up being a very good deal for them. It’s it’s how power prices went from that point on, it turned out to be a smart move to sign that, that PPA after them, we worked with X food, one of the key food retailers in the Nordic Region, we worked with h&m, which is big international clothing, reseller. So different niches, different industries, they’re all just bound by a common need for power, like any company, they need power, a strong sense of, of sustainability purpose, of course. And when it comes to on site, we work with a lot of industrials to have many insights on what many industrial sites across Europe to work with. Many of them are guarded around the fact that they do this because they like to probably keep it a little bit of secret from competitors, and many of them are very big companies like fortune 500, stock listed companies. So unfortunately, less names that we can publicly communicate but kind of respect that. And I think the dynamic is interesting of, of companies wanting to build quite a significant base before they then I think they will envision talking about it at some point. But when it’s like, really a done deal, it’s all been built out it’s become a significant part of their power use. I think, of course, in general, there’s a sense that you know, when I communicate green initiatives that you haven’t executed on because it just makes you well makes it look like you’re trying to communicate a bit too far in advance. But yeah, a big pipeline of customers that work with,
Sean McMahon 21:56
That’s interesting. So you’re saying folks are kind of keeping it quiet till it’s done? Because I know, there’s been some blowback and pushback on ESG and things like that. But for years there, it seemed like companies were kind of trumpeting, hey, where are you going green stuff, but you’re saying some of them are actually kind of keeping it close to the vest until it’s fully completed? Or nearly? Or near completion?
Harald Overholm 22:13
Yeah, none, as you say, maybe there’s been too much of the other thing going on. So there’s a backlash? I don’t know. We’re just that the green question. The sustainability question has more of an edge to it today, it’s more important people really care about it. Whereas maybe five years ago, it was a little bit more seen as a nice to have thing. Now. It’s, it’s for real, you can’t communicate something unless it’s true. I don’t know what what exactly the dynamic is. But we definitely see that customers prefer to make sure that they’ve, that they’re completely sure that you know, something is done, it’s built, it’s producing power, it’s something they can talk about, after the fact. And that’s, that’s fair enough. You know, I respect that. I think it’s probably good dynamic, but but it unfortunately means that lots of interesting and cool logos that I wish I could share, but I can’t.
Sean McMahon 23:01
Yeah, I also think it’s kind of the questions have gotten more, you know, educated on that kind of stuff. You know, a few years ago, you could say, oh, we’re powered by renewables, and I’m gonna be like, Oh, congratulations. Now. It’s like, hey, how, you know, are you building an on site? Or do you have a PPA? Are you just doing offsets? You know, exactly how deep into this? Are you? And how committed are you? So
Harald Overholm 23:18
Yeah, even been some, I think legal repercussions for people who went live it to foreign saying that they were powered by something that they maybe they didn’t buy the environmental attribute credits, or, you know, just didn’t do them the right way. And I think that’s fair. I mean, the your things shouldn’t be regulated in this area. And you shouldn’t be able to say, whatever. So that’s good.
Sean McMahon 23:38
One of the questions, I usually ask guests about their bold predictions for the market in which they operate. So you’re sitting there in Stockholm, you have a Nordic view, but also a global view on solar. What are your bold predictions for where that marketplace is going, or any trends that might not necessarily be on the radar now, but might be hot topics in the near future?
Harald Overholm 23:58
One thing, the big bold prediction is that we’re going to have a world powered by solar wind and batteries. I mean, that is the energy transition, we there’s nothing holding us back from reaching that end point where the power needs of this, this world comes mainly out of solar when the battery so if I can make one really big and bold prediction about everything, and that’s, that’s the one when it comes to my markets, we then also like to be bold, because I think the way we see things progressing right now, Sweden is going to be 15 20% powered by solar within within a decade. And that’s not something that anyone from from any public, you know, body or analysts has accurately predicted. But I can see it happening from the inside. I mean, from from the industry. So, yeah, I mean, maybe I’ll be back on the show 10 years from now, and I have to have to eat these words, but 15 to 20% is what solar could do for Sweden within the time period, and it’s happening rapidly. You know, when you see projections for solar, there’s this wonderful chart where someone is showing like what the International Energy Agency predicted for solar versus will actually happen. And it just year by year, the agency is predicting some kind of linear growth and reality’s just exponential. So it’s just always outperforming, I don’t really know what they’re doing at the IEA, how they, how they, how they can not have seen this chart themselves. But I think that’s the truth would solar, we’re just going through an extraordinary hyper growth period, and it’s just gonna make a big mark on everything quite soon.
Sean McMahon 25:28
One other fun question I like to ask people is, if you had a magic wand and kind of fix any issue that’s in the marketplace, or any issue that you face, either just individual with Alight or the the broader solar ecosystem. And again, you’re a magician, you can make any problem go away? What would it be?
Harald Overholm 25:45
Can I focus on the people that work the grid companies, and I don’t want to do I don’t want to use the wand and do anything bad with them. I just want to give them more support so they can become more people that want to multiply them. Can I do that? So that’s what we’re gonna do.
Sean McMahon 26:01
So you’re talking about sheep and cloning in the same episode?
26:04
Exactly, exactly.
Sean McMahon 26:06
I’m just messing with the hell. Listen, I really appreciate this conversation. It’s great hearing what’s going on with you and the team at Alight again, from the perspective of not only just Sweden in the Nordics, but also what you’re seeing globally. So thank you all for your time. I appreciate it.
Harald Overholm 26:19
It’s been a great conversation. She also thank you so much for having me.
Sean McMahon 26:27
All right, everyone. Well, that’s our show for today. Thank you all for listening. And if you haven’t already, please subscribe or follow this show on Apple, Spotify, Google, or wherever you listen to your podcasts. And as always, please be sure to share it with your friends and colleagues. Have a great day.