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Why This Solar Company Founder is Starting a Credit Union

Life
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Blake Jones, co-founder of Namaste Solar and Clean Energy Credit Union, was growing frustrated with the poor financing choices available to his customers. Turns out you can get better financing for a t.v. or couch than you can for solar panels. So he set out to do something about it. Jones and his team are launching the Clean Energy Credit Union. Their goal: to offer the lowest interest rates to consumers looking to purchase renewable energy products and services.

A Gradual Epiphany: From Oil & Gas to Clean Energy

How did Blake Jones, a visionary leader in the renewable energy movement, go from working in oil and gas, to launching an employee-owned cooperative solar installation company, a solar purchasing cooperative, an impact investing fund, and now the Clean Energy Credit Union?

Blake Jones, Boulder, CO

“It was a slow awakening”, says Jones. “I was working in the oil and gas industry right out of college when I went to work for a subsidiary of Halliburton. I was in love with the oil and gas industry. It sounds strange to admit that. I had read a book called The Prize, by Pulitzer Prize winning author Daniel Yurgin, about the history of oil.

I thought oil was the neatest thing and made the world go round. I was ambitious, wanted to make a lot of money, and wanted to work abroad. And I got all of those things.

But fortunately I had an older brother who is passionate about renewable energy. He helped me open my eyes to some of the disadvantages of our over-dependence on fossil fuels and what it does to our planet.”

 

Over time, Jones shifted his passion for oil and gas towards renewable energy. He went to work in Nepal for 3 years, installing solar systems in remote villages along the foothills of the Himalayas. “And I loved it”, says Jones.

It was here that he learned about renewable energy technology and small business management. After the Renewable Energy Standard passed in Colorado in 2004, Jones came back to co-found Namaste Solar.

Namaste Solar: Employees Are Owners and Decision Makers

Namaste Solar’s employee-owned cooperative model is their secret sauce and the reason they’ve seen a 50% compound annual growth rate over their 13-year history, while other solar companies have struggled.

“…we were all on the same page about the different kind company we wanted to start. We thought, if we’re going to do this, we’re not going to start a conventional company. … Everyone at Namaste Solar thinks and acts like an owner.”

Jones and his team started Namaste Solar as a 100% employee owned, democratic workplace. In the early years of the company, everyone made the same salary, including the CEO. Today, there’s a 6-to-1 cap on highest-to-lowest total pay. Every employee gets an equal vote in important decisions, like who to elect to the board. Their one-person-one-vote model makes employees feel like true contributors.

“We are completely transparent. Every bit of company information is shared, including pay … which stands to this day. And we donate 10% of our profit each year to the community.”

According to Jones, their secret sauce of employee ownership, democratic workplace, and extreme transparency has attracted many people who are passionate about both solar and proving there’s a better way to do business than the conventional norm.

Namaste Solar is now known as prime example and champion of the B Corporation movement, the idea that the power of business can be used to solve social and environmental problems.

The Dark Side of Solar

Namaste Solar is now 13 years old, employs 175 people and brings in $50 million in revenue per year.  

But it hasn’t been easy. They have done very well in an industry that has seen a lot of shake-out. While the solar industry has been super-hot, the market is so competitive that many solar companies have gone bankrupt.

“There’s a dark side to solar”, says Jones. “It turns out that most of our competitors are not profitable. But they can raise a lot of money on Wall Street because their top line is growing so quickly. The focus for these companies is on land grabbing market share.”  

This makes for strange competitive dynamics since Namaste Solar is going up against companies that are solely focused on expanding total sales through aggressive marketing by using money raised from Venture Capitalists, rather than trying to run a profitable business.

Finding Investment to Fund Sustainable Growth

Yet, it turns out there is a path to raising capital for growth from people who believe in sustainable growth.

In the beginning, Namaste Solar was 100% employee owned.

“Being naïve first-time entrepreneurs, we thought that if we took external capital we’d lose control. We were getting a call every 2 weeks from Venture Capital or Private Equity firms, offering lots of money but it had strings attached. They wanted us to grow quickly and provide a liquidity event in the next 5 years.”

Because they sought to keep control of the company with their employees, they made it a core value that they will never have external investors. “In hindsight, that was a little misguided or misinformed”, says Jones.

They started meeting other like-minded companies, some of them through the Certified B Corporation community and the National Center for Employee Ownership. They met large and successful cooperatives like Organic Valley and Equal Exchange and learned that they could raise capital without losing control.  These cooperatives had issued a class of non-voting preferred stock, which means that external shareholders would not be able to change the company’s philosophy or direction.

“When we saw that model we thought, why didn’t we think of that?”

Namaste Solar can how raise capital via a class of stock that doesn’t have voting rights and allows them to keep their cooperative model and governance structure intact. Seeing that cooperatives could successfully find mission-aligned investors showed Jones that it could be done.  

Beyond Solar: Creating Momentum for Impact

One of the most interesting things about the interview was how this community of social entrepreneurs helps each other out, even when they compete.

Since founding Namaste Solar, Jones launched an impact fund that invests in private companies that provide social or environmental impact. He also co-founded Amicus Solar Cooperative, the first purchasing cooperative in the U.S. for the solar industry. The purchasing co-op is jointly owned and managed by its 48 member-companies.

And now, with the launch of Clean Energy Credit Union, any individual or contractor selling renewable energy products (from any renewable energy provider) will be able to access the lowest rates in the market.

Jones and his team have proven over and over that their sustainable and democratic approach to product, services and capital raising can and does work.

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4 Comments. Leave new

satyaprakashramadhyani
March 28, 2018 3:26 am

Hai Well wallet …….!!!!!!!!!!! very nice that toooooo.,,, Owned by EMPLOYEES WAH!!!! VERY NICE TO KNOW ABOUT CO & too interested to invest from INDIAN if your norms fit

warm regards satyaprakashramadhyani

Reply
Christian Thurston
April 29, 2018 10:35 pm

Interesting piece although it reads mostly like a press release.

In terms of preferred stock not impacting the cooperative model that’s not necessarily entirely accurate. It means in the event of a sale the preferred shareholders get their money out first instead of employees. If that comes with a liquidation preference or other conditions then if they sell for lower than the financing valuation then cooperative employees would be impacted.

The devil is in the detail but it seems odd to gloss over this nuance or assume, prima facie, that it won’t impact the current employees or other existing shareholders.

Reply

    Christian, thank you reading the article and for the feedback. Much appreciated. You are correct about the order of pay-out with preferred stock (that goes for anyone holding preferred stock). However, the primary point of the interview was to relay that the founder had discovered a way to raise capital without impacting important co-op benefits, such as their extreme transparency on compensation and the one-person-one-vote model they have in place for electing the board. There are many companies raising capital without thinking twice about their employees. It’s good to support the ones that aim to do better. Namaste Solar is one of them.

    Reply

[…] members of the startup community have reaped the benefits of this kind of transparency. Namaste Solar is a solar energy company in Boulder, CO that began with a co-op model. Not only is salary […]

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