Smooth agitator

Photo credit: Heidi Schumann

In September 1998, a 27-year-old Danny Kennedy strapped on a harness and rappelled  several hundred feet off a Kellogg Brown & Root construction crane in Texas’ petro capital, unfurling a banner proclaiming, “Houston, We Have a Problem – Stop New Oil Exploration!”  Police promptly hauled Kennedy and his comrades to the city jail after they reached the ground.

Flash forward 12 years and the veteran Australian climate change activist is once again donning a harness, clambering to the roof of the presidential mansion in the Maldives, one of the island nations most threatened by global warming.

This time, though, he’s greeted not by the police but by the Maldives’ president, Mohamed Nasheed, who helps Kennedy install a solar panel, part of a 11.5-kilowatt array designed to wean the nation from imported oil.

Both men are wearing orange hardhats emblazoned with the logo of Sungevity, the Oakland, Calif., startup Kennedy co-founded that organized the donation of the photovoltaic panels and which has become one of the nation’s fastest growing solar companies thanks in part to its cutting edge technology.

Nasheed is not a Sungevity customer, but a beneficiary of the company’s collaboration with climate change activist Bill McKibben’s 350.org and its “10/10/10 Global Work Party” event last October.

Kennedy’s transformation, of course, makes for good copy: An affable environmental rabble-rouser who racked up a rap sheet for civil disobedience on four continents morphs into a green entrepreneur whose startup has attracted $25 million in funding from the likes of actress Cate Blanchett and Thomas Steyer, the San Francisco hedge-fund billionaire.

It’s hardly uncommon for a green business to promote environmental causes. But the story of a longtime Greenpeace activist who grabbed a piece of the green tech action is emblematic of the emergence of a new kind of environmental entrepreneurialism and a generation that increasingly sees no contradiction between capitalism and environmental crusades.

“It’s business as environmental campaigning,”
says Kennedy, 40, who signs off his emails with “Shine on.”  “If we start to show clean energy is the sexy place to be, that’s when we really become the shit and are able to challenge the fossil fuel industry.”

RAISING HELL DOWN UNDER

In 1983, 12-year-old Danny Kennedy, a budding birder aand wildlife enthusiast, walked into the Australian Conservation Foundation and volunteered to work in the environmental group’s bookstore on Sydney’s waterfront.

Born in Los Angeles to Australian parents, Kennedy had until then spent little of his life in Australia. His father was an executive with the Australian Tourism Commission – you can thank him for bringing Paul “Crocodile Dundee” Hogan to America – and the family  moved from L.A. to Chicago and then to London before returning to Sydney.

He spent his teenage years volunteering in the ACF’s campaigns to stop the logging of old-growth eucalyptus forests and to block the construction of a dam in Tasmania that would have destroyed a vast wilderness. Along the way, he became the youngest member of the group’s council, showing an early knack for cultivating influential allies; among them, Peter Garrett, the front man for agitprop rockers Midnight Oil and the ACF’s two-time president who later became Australia’s environment minister.

While attending university in Sydney, Kennedy became involved in early climate change campaigns and attended the 1990 meeting of the Montreal Protocol on Substances that Deplete the Ozone Layer in London as a youth member of the Australian delegation.

Wandering out of the conference to talk to college students protesting on the sidewalk he met a young American named Alec Guettel who would go on to become a serial entrepreneur and a co-founder of Sungevity.

“We went out and had a beer and the rest is history,” says Kennedy.

Back in Australia to finish up his university studies, Kennedy landed a gig as an environmental reporter at a Triple J, a government-funded alternative national radio station. His foray into journalism abruptly ended when dispatched to Rio de Janeiro to cover the 1992 United Nations climate change conference he ended up getting arrested at a protest, a scene beamed back home by an Australian news crew.

“My parents wake up in Sydney with a report of me being carried out of the conference by some Brazilian security guards while I’m shouting, ‘George Bush is selling the youth of the world down the river,’ ” laughs Kennedy.

After graduating, he joined Greenpeace and worked in the impoverished Pacific nation of Papua New Guinea in a campaign to stop oil extraction by multinational corporations.

In 1996, Kennedy and his American partner, Miya Yoshitani, moved to Berkeley, Calif., where Kennedy started a group called Project Underground to fight environmental degradation and human rights abuses in developing nations. Three years of constant travel to Africa and Indonesia took its toll, as did the murder of one of Kennedy’s campaigners in Colombia.  With a new baby at home, Kennedy called it quits.

Rejoining Greenpeace, Kennedy ran the organization’s clean energy campaign, managing an effort in 2001 to pass a San Francisco ballot initiative to finance $100 million worth of solar and wind installations.

“We got 73 percent of the vote,”  says Kennedy. “I had been doing politics since I was 12 and I had never experienced anything that got 73 percent of the vote. It was like, ‘Solar is fucking magic.’ I started really obsessing about it.”

Kennedy and his young family returned to Sydney in 2002 when he took a position as a Greenpeace campaign manager there. But he had solar on the brain.

In 2006 he stopped in New York to see Guettel while on his way to Greenpeace headquarters in Amsterdam. During the dot-com boom in 2000, Guettel had co-founded a legal services company designed to disrupt old-line law firms and the fossil fuel industry looked ripe for the same treatment.  “I was telling Alec, ‘I’m so excited about solar’ and he said, ‘Let’s do a business.’ ” recalls Kennedy.

SUNSHINE ONLINE

Around that time, I happened to be chatting with a Wall Street Journal reporter at an environmental conference when the subject turned to Australia and he told me the next time I was in Sydney I really should look up this Greenpeace activist named Danny Kennedy.

As it turned out, I didn’t have to go that far. A few months later at my son’s elementary school in Berkeley,  I was introduced to a woman whose family had just relocated from Australia. Turns out we had lived in the same beach neighborhood in Sydney and when I asked what brought her to California she said her husband had been with Greenpeace but now was starting a solar company.

Standing on the other side of the playground was Danny Kennedy. Tall with a head of curling sandy hair, he greeted me with a smile and an easy-going, “G’day.”

“He’s about the smoothest agitator you can imagine,” says A. George “Skip” Battle, a Sungevity board member and Silicon Valley veteran who also serves as a director of LinkedIn, Netflix and OpenTable. “When I think of Greenpeace I do not think of someone who has the ability to listen, the ability to use,  instead of a battering ram, judo tactics.”

By the time I met Kennedy in the spring of 2007, he and Guettel had abandoned their initial solar scheme – a plan to cover the California Aqueduct with photovoltaic panels to generate electricity while minimizing evaporation as water was transported from Northern California to Southern California.

While still in Sydney, Kennedy had met Andrew Birch, a Scottish former investment banker who traded his pinstripes in to obtain a masters degree in the economics of photovoltaics at the University of New South Wales, renown for its solar research program.

Birchy, as everyone calls him, took a job at BP Solar in Australia but had a better idea how to slash the high cost of solar and take it to the masses by tapping the power of the Internet and imaging technology.

Despite the futuristic sheen of the solar business, putting photovoltaic panels on roofs had been a decidedly old school, labor-intensive endeavor, not that much different, really, from selling aluminum siding. Half the cost of a solar array, in fact, typically comes from the labor costs of multiple visits to homeowners to sell them a solar system, assess the suitability of their roof and then design and install the array.

Birch, now Sungevity’s chief executive, and Kennedy’s idea was to do for solar what Dell did for personal computers – cut sales, marketing and supply chain costs by allowing customers to shop for solar online, customizing their photovoltaic array much like they would personalize a PC.

With $200,000 in seed money from Guettel, Kennedy and Birch relocated to California and set shop in a small office in Berkeley’s Gourmet Ghetto district.

On a February morning in 2008, Birch and Kennedy gave me a preview of the technology they planned to unveil on Earth Day that year. Birch punched in a Berkeley address and a satellite image of the house’s roof appeared as well as the annual kilowatt-hours of electricity the residence consumed.

Using Sungevity’s proprietary imaging software, employees determine the roof’s pitch, shading and analyze other factors that affect electricity generation and then design a solar array to fit the roof and maximize the homeowner’s savings. Within 24 hours, a potential customer receives an email with a photo showing how the solar system will look on their house, the cost, rebates and financing options.

On a whiteboard, Birch, who is as reserved and soft-spoken as Kennedy is gregarious, furiously scribbled equations breaking down the economics of rooftop solar and electricity rates, which in California rise as more power is consumed. A smaller rooftop array can actually save a homeowner more money on electricity than a larger one, he said, by eliminating demand for the most expensive tier of electricity charges.

“What we’re saying is to mainstream the technology, the most economical systems should sell first and people should be basing that decision on economics,” Birch declares, adding that Sungevity’s technology can shave 10 percent off the cost of a rooftop array.

As Sungevity grew in 2008 and 2009 it attracted employees like JP Ross, a Greenpeace activist who worked with Kennedy on the group’s clean energy campaign in San Francisco.

“I had found my niche in solar but found it quite difficult to work with companies and politicians from the Greenpeace seat because Greenpeace has a reputation for being a bit reckless, as they should,” says Ross, who is Sungevity’s vice president for strategic relations.

“On one hand, it’s really great to have people who are super committed to solar and the environment, but on the other hand at a certain point to create a really strong industry we have to go and get the top personnel to drive the business. Sometimes that means someone who is not committed to solar and the environment but is just really good at their job.”

CRACKING THE SOLAR CODE

That shift began to gather speed in September 2009 when Sungevity landed its first big investor, Greener Capital Partners, a venture capital firm that led a $6 million funding round. Sungevity also lured a top executive at its much larger rival SolarCity, Charles Ferer, to be its first chief financial officer.

Before the news hit the wire, Kennedy suggested I meet him and Charlie Finnie, Greener Capital’s managing partner, at the Conga Lounge, a hipster tiki bar in Kennedy’s Oakland neighborhood. Finnie, a veteran investor, joked that he had never before held a business meeting over mai tais, but his interest in Sungevity was serious.

“The main reason I invested in Sungevity is that they cracked the code on the main problem bedeviling solar installers,” says Finnie, who serves on the company’s board. “Sungevity’s use of aerial photography and clever software meant that fleets of expensive trucks and armies of roof walkers were not required.”

 “In the case of Sungevity,” he adds, “there’s a higher mission and sense of purpose that infuses that company with a tremendous energy, no pun intended.”

That passion would soon be shared by Greener Capital’s financial backer, Thomas Steyer, founder of Farallon Capital Management, a $20 billion San Francisco hedge fund. When two Texas oil companies last year bankrolled Proposition 23, a California ballot initiative to derail the state’s global warming law, Steyer became co-chair of the No on 23 campaign. 

Yoshitani, Kennedy’s wife, is associate director of the Asian Pacific Environmental Network, an Oakland environmental justice group, and Sungevity served as a liaison between inner-city activists and wealthy financiers in an effort to mobilize African-American, Asian and Latino voters against a ballot initiative that could have crippled California’s green tech industry. In the end, Prop 23 went down to a crushing defeat.

If some of Sungevity’s campaigns seem like Greenpeace-inspired publicity stunts – such as sending contortionists into a big solar power conference to make a point about red tape tying up solar installations – others reflect a savvy blend of marketing and mission.

In January, the company launched Sungevity.org as part of a campaign it calls “Beyond the Bake Sale.” When a school or non-profit refers a customer to Sungevity who ends up buying or leasing a solar system, the company donates $1,000. Kennedy kicked off Sungevity.org by appearing with actors Ed Begley, Jr., and Helen Hunt at the Westside Waldorf School in Los Angeles.

“A lot of solar companies do solar projects and that would be nice, but more important is the money to maintain the arts and music and meet the needs of the school,” says Kennedy.

And that of course puts more solar on roofs and cash in Sungevity’s coffers.

Sungevity gave the campaign a dry run last year when it offered a $500 referral fee to the Center for Biological Diversity, an environmental group known for its aggressive litigation on behalf of endangered species. The effort raised about $50,000 for the Center, which translates into 100 customers for Sungevity. If each customer bought or leased a $20,000 solar system, for instance, that’s $2 million in revenue for the company.

Peter Galvin, one of the Center’s co-founders, says his organization usually avoids endorsing companies’  products to its members.

“One of the reasons we agreed to work with these folks is Danny and his work and reputation in the environmental field,” says Galvin. “He’s a very, very authentic guy and he’s just a great activist and obviously this is a game-changing business he’s started.”

THE PHOTOVOLTAIC PAYOFF

Of course, all Sungevity’s good deeds and Kennedy’s idea of business-as-an-environmental- campaign will come to naught unless the company succeeds in a competitive market.

So far, Sungevity is on a roll.

While the startup was late to the game in offering homeowners the option to lease their  photovoltaic arrays and avoid the five-figure cost of going solar, revenues have exploded since it began a solar lease program in 2009 and are projected to reach $70 million by this year, according to Kennedy.

The company operates in California, Arizona and Colorado, and in December raised $15 million from its investors to expand to the East Coast.

“Danny is a really interesting character but he’s not why I’m at Sungevity,” says Battle, the Sungevity board member. “I’m at Sungevity because of the solar issue and because I think I can make money at it. Good intentions are not enough. They want to run a successful business.”

As Sungevity has morphed into the No 3. solar installer in California, Kennedy’s role has evolved as he spends more time as the company’s public face and policy advocate.  In February, he ceded the president’s title to Ferer when a new chief financial officer, Mac Irvin, was hired from SunPower, the Silicon Valley solar giant. The company also just hooked LinkedIn’s chief marketing officer, Patrick Crane, to serve in that role at Sungevity.

Over dinner at Gather, a locavore, organic restaurant at Berkeley’s David Brower Center that has become a gathering spot for the East Bay green scene, I ask Kennedy if he misses life on the barricades.

“I have two children who are going to inherit this earth,” says Kennedy, dressed as usual in orange and brown, Sungevity’s colors, his orange-and-brown cargo bike parked outside.  “I could have a dogma and stick with it and do nothing or I could sell a hell a lot of solar, make some investors a hell of a lot of money and demonstrate that we don’t have to kill ourselves with fossil fuels.”