TJ WALKER - THE HABIT INFLUENCER - Personal Development | LIVE STREAM

Welcome to Inside Communications. I'm your host, Mike Baco. Today we go inside with Beckerman president Keith Zakheim. You would think that the way the economy is going, that more companies, more states and the government would be turning to clean technology, but that isn't really the case. We're joined today by Keith Zakheim of Beckerman to talk about clean tech. Keith, thanks for joining us.

My pleasure. Thank you for having me.

So why aren't more states going to more clean tech technology? Your home state, New Jersey, where Beckerman is based, has really amped it up in terms of going this way.

Yeah, well, I think that a lot of states are. I think actually the problem is the federal government has, I guess what one could say is a schizophrenic policy attitude towards clean technology. So on the one hand, you know, they go through fits and starts with grants and subsidies and tax breaks and R and D incentives, and then they pull back and that creates an uncertain policy environment, which makes it difficult for corporate America to figure out where they're going to make their investments. On the state level, you know, it's obviously 50 states and each state has their own policy. But we found both in New Jersey and California, those are the two really largest, most progressive states in the clean tech industry. They've made significant strides in both implementation, the solar side, and also incentivizing R and D in the public, in the private sector side. But Massachusetts is doing some really good work. And then the states around New Jersey, the Mid Atlantic region, have seen the proliferation of solar power in New Jersey and are starting to try to imitate that with a number of different policy initiatives.

Let's take a specific look at New Jersey. Since 2001 till now, what's been the real main driving force behind it?

So it's solar power, specifically rooftop solar power, both in the commercial and residential sectors. In 2001, New Jersey really had no solar power. And in the past year they have over 340 megawatts of power, representing 10,000 different solar projects. It's actually really a gold rush at this point. Companies that are solar integrators and solar installers are flocking from around the country to get into Jersey right away. There are projects, as I said, it's mainly rooftop, not much utility scale solar right now because the bureaucratic and regulatory process is somewhat difficult on the utility scale. But on rooftop and utility scale generally is considered 5 megawatts and above. So things under 5 megawatts, whether it's commercial buildings or obviously much smaller on the kilowatt scale residential have grown astronomically. And New Jersey now actually per capita is the largest solar state in the country now in terms of megawatts, second to California. But per capita it's now the most.

Progressive and largest and certainly California much larger in terms of amount of land and the amount of people. What can states do to follow New Jersey's example you mentioned on the Eastern Seaboard, The Mid Atlantic states certainly trying to catch up to New Jersey, but what can other states do to either jumpstart the initiatives or just work with what they already have?

So what New Jersey did was two things that were pretty innovative. One was they created some pretty ambitious RPS standards, renewable portfolio standards. So basically what that means is you take utilities or other carbon emitters have to hit certain standards of renewable energy by a certain date in order to offset the carbon emissions. They can do that one of two ways. They can either install technologies, let's say a utility within their own coal burning sites and lower their carbon emissions that way, or they can buy credits, renewable energy credits, we call them in New Jersey SRECs. That's really the solar renewable energy credits from companies that are creating those. And what that did was it created a market. So you have carbon emitters looking to buy renewable energy credits to offset their carbon emissions, and you have people looking to develop solar renewable energy projects and products in order to sell those to utilities. That created an SRECS market. The New Jersey SREC at one point was trading over $600 per credit, which was astronomically high. So it caused all these companies to come in, look to produce renewable energy and then sell it at major profits to utilities. So that really was. So it was a high RPS standard, which basically forced carbon emitters to go look for credits to buy and then allowing producers of renewable energy to sell it to them.

So let's take a look at Beckerman's role in this. Known for handling real estate clients and over the last two years, really jumping headlong into the clean tech industries, going so far as to see great gains just in terms of your actual revenue. O'Dwyer is ranking you fourth, I believe in terms of gains over in the year 2010.

Yeah, well, actually this odyssey in terms of clean tech and renewable energy has been going on for about five or six years. We really started in earnest 2005. George Bush gave a speech at the time, the State of the Union, where he talked about this country being addicted to oil. And that really signaled the second wave of renewable energy activity by the government. The first being in the late 70s, after the Arab oil shock. So we began to. It was kind of serendipitous. We got a client in Florida that was in the space, and it grew pretty quickly. And over those four or five years, we picked up about 15 clients representing really most clean energy sectors. You know, biofuels, solar power, wind power, smart grid, electric vehicles. I could go on. About two years ago, we decided that because our portfolio had expanded the way it had and our reputation was beginning to grow, we thought we could leverage that for even greater growth. We're strong believers in the sector. We believe that it's not a bubble. There's a confluence of three major factors that will make sure that renewable energy and clean technology is here to stay, that being national security reasons, economics and environment. So those three things will make sure that this is not going anywhere. So two years ago, we decided we had to look for an acquisition on the west coast because most of our clients were on the West Coast. And we consummated an acquisition about a year and a half ago in San Francisco, acquiring the Antenna Group. And in fact, our clean tech brand now is Antenna Group, and that is Beckerman's holding company. But 40% of our revenue as a firm now comes from clean technology, renewable energy, both in San Francisco and in New Jersey.

How do you penetrate the mind of someone that's sitting at home that doesn't want the solar panels up on their roof? They think that that's something that people on the west coast do. Leave that to San Francisco, leave it to the other states. But they still want to be environmentally in the know, knowledgeable, save their planet. How do you penetrate that mindset of someone that isn't actively doing something but thinks it's still a good idea?

Yeah, I mean, that's, that's, that's a great question. I think that early adopters of most clean technology, clean technologies are generally motivated by. By ideology. So environmentalists and people who. About the environment. What's happened recently is that the economics of solar power. And you had the same challenge, by the way, with electric vehicles as well. Anything where as an early adopter, you have to have an upfront cost, which ultimately has a payback economically. You have to convince them that the upfront cost is worth it. What's nice about electric vehicles and about solar power is that the payback, that time period has been truncated. So if you put a residential solar system solar installation on your. On your rooftop in New Jersey, depending on how big it is and what your power bills are, you can See return on that investment within 18 months. At times, commercial buildings between two and three years. But the payback is significant. Also, the model in Jersey is somewhat different as well. On the commercial side, for sure, what integrators are doing or solar installers are doing is they're actually saying to a building owner, we'll own the system. You have absolutely no upfront cost at all. We'll put a 2 megawatt system, let's say, on your rooftop. That's going to bring your electric bills down by 30%. We'll own it. You don't have to put any upfront money at all. You let us share in the, for example, in the savings, or you let us sell the power straight to your tenants. So there are different models for it and they've been pretty effective at penetrating the market.

So you have seen that penetration where people are put right in their face in terms of the bottom line. This will help you out with bottom line. If you own a building just a few blocks from our headquarters, from our TV studios, Bank of America, big gigantic tower, I believe, voted one of the greenest buildings built recently and certainly in the world.

Yeah, yeah, no, for sure. I mean, again, it makes economic sense. For iconic brands like bank of America, it makes economic sense, but it also makes public relations sense. So, you know, for those companies, I think the calculus may be a little different, but in New Jersey it just makes economic sense. To give you one small example. But my children's school in Paramus, New Jersey just decided to put a, you know, put a solar rooftop on the school. And that's going to save their PSE&G bill, the utility bill, by about 20% a year over the next five years. The installer came in, they're putting, they're putting, they're doing the installation at no cost to the school. So there's penetration in an economic sense. I think everybody feels good in an ideological sense as well. But really the main message is economics.

And do you think that it will ever become a national issue as we have the election coming up in just a few years? Do you think that it will reach that national level where it becomes federal initiatives, even though there is a lot of red tape, as you detailed right at the beginning. But do you think it will move from a state issue to more of a federal issue?

Well, I mean, it's a federal issue now. It's a federal issue because I think most people realize that we have to wean ourselves off of foreign oil, you know, because most of the places we get our Oil from are bad neighborhoods. So we need to figure out a way to get away from that. The biggest problem that most renewable, renewable sources of energy have is they have to achieve grid parity with their traditional energy rivals. So for example, when you're talking about solar power renewal or wind power, that has to achieve price parity with natural gas. Natural gas right now is incredibly cheap. So I think in terms of being a federal priority, yes, as gas prices go up at the pump, you know, now it's whatever it is, you know, $4 in New York a gallon, I think it becomes a little more pressing matter. It goes down to $3 or $250 and it goes away. But as soon as there's grid parity, the cost of solar or wind or other things being as cheap or cheaper than either gasoline or natural, you know, petroleum or natural gas, then you're going to have a real movement in this country.

And speaking of that movement finally wrapping up, you mentioned that your kids school having the solar panels. How important is it to institute this knowledge to kids at a very young age or even teenagers or people that are becoming voting age, are they going to be the ones that really make the difference in this over the next decades?

I mean, yeah, I think like any other policy priority, you know, you want to educate children. But I think ultimately the main movers of any paradigm shift have to be economics in this country. Right. So we're not a system where you can have a dictator make decisions. Like in China, for example. China is by far the most progressive and fast moving renewable energy country in the world. But they have central planning, they have, right. It's not a democracy. So in our country it has to come from the grassroots, the ground up, ultimately pressure on politicians at the state level, local level, federal level. And that'll happen when the economics really make sense. They're starting to make sense, starting to make more sense now than they ever had in the past. And as a result, penetration is way up. But as our kids get older, it's going to make more and more sense and I think we'll find that to be the case.

Okay, we'll certainly check back with you to chart the progress. Thanks for going inside communications with us.

My pleasure. Thank you, Sam.