In this interview with Oman-based Oil and Gas Review Magazine, Jeremy Crane, CEO & Co-Founder of Yellow Door Energy, shared his perspective on the future of solar in the Middle East.
KINDLY TELL US A LITTLE ABOUT YOURSELF AND YOUR EXPERIENCE NOT ONLY IN THE RENEWABLE ENERGY INDUSTRY BUT ALSO IN THE REGION.
I’ve been working in the energy industry for over 15 years. Over the course of my career I’ve built wind farms in the US, a power company in Honduras and a solar rooftop business in Canada. I first came to the Middle East in 2001 to pursue solar projects in Jordan. It was then that I met the team of Adenium Energy Capital, and was appointed COO. At that time, while there was a lot of talk about solar in the Middle East, there existed only a handful of opportunities worth pursuing, so beyond Jordan we invested in utility-scale solar plants in Europe and Asia. Gradually, solar opportunities have started surfacing in the Middle East and we have been very successful as one of the first players to be based here.
HOW LONG HAVE YOU BEEN WITH YDE? TELL US MORE ABOUT YOUR ROLE AND THE DIRECTION IN WHICH YOU’D LIKE TO SEE THE ORGANIZATION HEADED.
I co-founded Yellow Door Energy (YDE) with Adenium Energy Capital in 2015 after identifying that in the Middle Eastern market there was a huge divide between mega-utility solar projects – along the lines of what DEWA and ADWEA have done – and small commercial scale projects that commercial and industrial companies were requesting in order to improve the efficiencies of their business. The establishment of Net Metering regulation, first in Jordan and then in Dubai, enables Yellow Door Energy to service this market. As CEO, I’m responsible for leading the company by setting the vision and hiring the right people to bring that vision to reality. Having become market leaders in the UAE and Jordan, we are now expanding in the region, Africa and near Asia. We expect to install $1billion worth of solar power plants in the next 5 years.
HOW DOES SOLAR LEASING WORK? AND IN PARTICULAR, YELLOW DOOR ENERGY?
Solar leasing is similar to car leasing except that each plant is customized to the customer’s needs. We install a solar plant at a customer’s premise, normally on their rooftop or in their parking lot. We service the customer plant for the duration of the lease, replacing any parts that are worn out or broken, and guaranteeing its power production. Fortunately, solar systems last much longer than cars, and we can generally lease them for 15-20 years.
The amount a customer pays for the lease, divided by the power it produces is significantly what they would have paid for grid power. In this way, customers can reduce their expenses, and earn equity in the solar system over time.
IS IT BETTER TO LEASE OUT A SOLAR SYSTEM THAN BUY IT?
Leasing vs buying is a very individual decision. The benefits of leasing include: no capital investment, no performance risk as the customer only pays for the system if it performs and balance sheet benefit of building an asset over time.
HOW LONG ARE THE CONTRACTS? AND WHAT HAPPENS AT THE END OF THE LEASING CONTRACT?
Our leases are typically 15 to 20 years long. Typically, our leases work on a Build-Operate-Transfer (BOT) basis, so YDE transfers the system to the customer at the end of the lease.
WHAT DO YOU THINK IS THE POTENTIAL FOR RENEWABLE ENERGY IN THE REGION? WHAT WILL THE FUTURE BE LIKE?
Solar, coupled with storage technologies has the potential to provide all of the energy in this region, especially as it is particularly blessed with high irradiation and plenty of available land that is ideal for solar. And in many parts of this region, bringing solar to the location where electricity is being consumed – the distributed solar business that we are involved in – can significantly improve electricity reliability.