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DIRECTOR'S LETTER
I am writing you as classes begin again and the building is filling up with the energy and excitement of students
embarking on a new semester! At the Center for Social Value Creation, we are committed to making the world a better
place through business principles, and I am more enthusiastic than ever. This Fall we saw a significant increase in student
engagement at CSVC. And it’s not just about participation, it’s all about ownership! Students are driving proposals for
new courses in their majors, designing active partnerships with corporations, launching an undergraduate chapter of Net
Impact, co-creating student outreach campaigns, and more! ( READ MORE)
IN DEPTH
Why Bother with Standards?
Written by Kimberlee Robertella
Sustainability and social impact are in a state of transition. It’s no longer enough to simply push the envelope or disrupt
the status quo. Today’s landscape is about taking on new challenges and, more importantly, advancing in a way that can
be measured and evaluated. In a world that increasingly embraces the ethos of ‘doing well by doing good’, we are all on
a mission to prove our worth. ( READ MORE)
WHAT'S NEW :
The Fifth Annual Social Enterprise Symposium (SES13)
The Social Enterprise Symposium (SES13) returns to the University
of Maryland on March 1, 2013! Created and hosted by the Center
for Social Value Creation, the Symposium brings together over
1,000 students and professionals to explore the role of business in
creating lasting social and environmental change. Unlike any other
event on UMD’s campus, the Symposium helps connect students
with thought leaders who are using the tools of business to
change the world. This year’s Symposium will feature two independent keynotes, including Elysa Hammond of CLIF Bar,
as well as twelve break-out sessions boasting such notable panelists as Amy Hall, Director of Social Consciousness at Eileen
Fisher; Anas “Andy” Shallal, Founder of Busboys and Poets, and Scott Allshouse, President of the Mid Atlantic Region of
Whole Foods. See the full Symposium line up on the SES website, or visit ter.ps/ses13 to register now!
A big 'THANK YOU' to Symposium Sponsors and Partners, including: PwC, Ernst&Young, Earth Color LLC and The Smith
Annual Fund.
CSVC Heads to Thailand to Teach Social Value Abroad
This January the Center for Social Value Creation led an
undergraduate global studies course to Thailand to teach about the
manifestation of social value creation in a context beyond the
United States. Twenty two undergraduate students, led by CSVC
Assistant Director Guillermo Olivos, visited CSR initiatives in Bangkok,
monarchy philanthropy projects in Chiang Mai, and hiked into the hills
of Northern Thailand to stay overnight in a Lahu hilltribe village—
without electricity or clean water, and supported by a local social
enterprise. ( READ MORE)
RECAP :
First Ever Study of Maryland Benefit Corps (January 24)
On Thursday January 24, 2013 from 7:30am-12:00pm at the Miller Senate Building in Annapolis, ChangeMatters, Benefit
LLC released findings from the first survey and report on Benefit Corporation and LLC activity in Maryland. Research and
analysis for the report was conducted by a team of Smith MBA candidates under the guidance of the Center for Social
Value Creation. To learn more, access the full report here.
Think Globally, Act Locally, Hosted by the AshokaU Terp
Changemakers (December 5, 2012)
On December 5, 2012, the AshokaU Terp Changemakers hosted “Think
Globally, Act Locally: Social Entrepreneurship in Action.” The event presented
local Social Entrepreneurs making waves in the DC Metro Area, and
throughout the world. Featured social entrepreneurs offered personal stories
from the fields of Engineering, Health Care, Microfinance, Education and
Environmental Studies. Featured Social Entrepreneurs included:
Phillip-Michael Weiner and John Randall Gorby, Co-Founders of Nourishmat;
Josh Notes, Co-Founder of GreeNEWit;
Sara Choe, Special Projects Coordinator of Justice Ventures International;
Matthew von Hendy, Founder of Green Heron Information Services;
Praduman Jain, CEO and Founder of Vignet.
The College Park Sustainability Jam (Nov. 2-4, 2012)
After a 2011 launch from 40 sites worldwide, the Global
Sustainability Jam debuted at the Robert H. Smith School of
Business on November 2-4, 2012, thanks to sponsorship and
coordination from the Center for Social Value Creation. UMD
students and representatives of the Chesapeake Bay Foundation,
EarthColor, Peer Insight, and the University of Maryland’s Office of
Sustainability worked in groups to generate concepts for sustainable
business models, products and initiatives towards a more sustainable
world. UMD participants represented various student organizations,
including Engineers without Borders, the College Park Scholars, and
AshokaU Terp Changemakers. Jammers around the world worked to
solve problems under a “48 hours to Save the World” rallying theme, using a ‘triple bottom line’ design approach to
develop workable prototypes. The results from the College Park Sustainability ( READ MORE)
FROM THE PODCAST:
Video Podcast Recap:
MISSION MEASUREMENT
This past Fall the Center launched a
new video podcast series aimed at
capturing the expertise of our guest
speakers. By conducting brief
interviews, we leverage their thought
leadership and share it with our
student audience via Facebook Here
is Shawn Basak of Mission
Measurement challenging us to think
about Social Impact as a product.
Shawn will also be a moderator at this
year's 5th Annual Social Enterprise
Symposium! Check it out, and be sure
to visit our Facebook page for the
complete Fall video podcast series! (
WATCH NOW)
connect with us:
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DIRECTOR'S LETTER
I am writing you as classes begin again and the building is filling up with the
energy and excitement of students embarking on a new semester! At the
Center for Social Value Creation, we are committed to making the world a
better place through business principles, and I am more enthusiastic than
ever. This Fall we saw a significant increase in student engagement at CSVC.
And it’s not just about participation, it’s all about ownership! Students are
driving proposals for new
courses in their majors, designing active
partnerships with corporations, launching an undergraduate chapter of Net
Impact, co-creating student outreach campaigns, and more!
Our staff continues to grow with this campus momentum. I would like to
introduce our new center coordinator, Valerie Mahar. Valerie has a
background in International Development from American University and has
studied extensively in South Asia. In her free time, she enjoys camping and
hiking with her dog Sadie, road trips, and wine tasting. We are thrilled to
have her on the team and Sadie joins Lexi, Coda and Helicopter – our much loved CSVC mascots.
Let me share a few highlights from Fall Semester:
Over 100 Smith School MBA and Undergraduate students participated in the national Net Impact Conference in
Baltimore. CSVC led a fun and informative panel on B Corps and Benefit LLCs with our good friends at B Lab,
Sustainable Harvest Coffee, and Clean Currents!
In November, we kicked off our sustainability program with the College Park Sustainability Jam, a weekend
dedicated to creating brand-new real-world designs, projects and initiatives which can make a difference in the
world.
Under the leadership of Guillermo Olivos, CSVC led a class to Thailand to study social entrepreneurship in this
emerging market kingdom over winter break. The students explored social change from every corner of society.
The strength of our CSVC network around the world was palatable. Ryan Steinbach, a 2012 Social Innovation
Fellow and current senior, had the opportunity to meet the dedicated and inspiring team at Goodwill Group – his
Bangkok client in last year’s spring practicum course at CSVC.
Our students also made significant contributions through their coursework. For example, MBA students in the
Social Venture Consulting Practicum conducted the first study of Maryland’s Benefit Corporation law, providing a
comprehensive look at Maryland’s companies as well as comparison to other states that have passed similar
legislation. Under the faculty advisement of Dr. David Kirsch, the project culminated in a public event to provide
recommendations to business owners, legislators, and the broader community. The event was hosted by Sen.
Jamie Raskin in Annapolis. You can download the report here.
And coming this spring:
Don’t miss the 5th Annual Social Enterprise Symposium on March 1. This annual conference was initiated by 4
UMD students in my office in 2009 and has grown to 1,200 participants. Join Clif Bar, Eileen Fisher, TruCost, Easter
Seals, Campbell’s, Verizon, Mission Measurement, Whole Foods, GetWellNetwork and more to learn, discuss, and
engage in the role of business in creating economic prosperity and lasting social and environmental change.
Stay tuned for posts and tweets about UMD’s participation in the Ashoka U Exchange this February. Hosted by
the University of San Diego, the Exchange is the world’s premier gathering for social entrepreneurship education.
Students, staff and faculty from UMD will be attending and CSVC is showcasing our work on 5 panels!
This March, we will be calling for applications to our MBA and Undergraduate action-learning courses. Please
contact Guillermo Olivos to learn about how the brightest students at UMD can help your organization achieve its
goals for social change.
On behalf of the entire CSVC team, we look forward to seeing you this spring!
Warmest Regards,
connect with us:
R obe rt H. Sm ith School of Busine ss - The Unive rsity of Maryland Suite 2410 Van Munching Hall | C olle ge Park , MD 20742 US
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IN DEPTH
Why Bother with Standards?
Written by Kimberlee Robertella
Sustainability and social impact are in a state of transition. It’s no longer enough to
simply push the envelope or disrupt the status quo. Today’s landscape is about
taking on new challenges and, more importantly, advancing in a way that can be
measured and evaluated. In a world that increasingly embraces the ethos of ‘doing
well by doing good’, we are all on a mission to prove our worth.
As many familiar with these questions know, defining the metrics for sustainability
and social impact has been a complicated and multifarious endeavor. To set a
standard requires consensus on what it means to achieve success when it comes to
measuring. For example, we may all aspire to make good choices and to do the
right thing - but even this seemingly straightforward sentiment begs hard
questions: What is good? What is right? Should I choose the t-shirt spun from
organic cotton, even if it was produced in China? Or is a regular cotton T purchased from the local t-shirt shop a better
choice? Is it better to purchase from the large multinational with voiced commitments to a sustainable supply chain? Or
should I shop with the local entrepreneur who personally attests to the social value implicit in his production and sales
process?
Social impact and sustainability metrics have catalyzed an expansive dialogue over the years. This past Fall I was fortunate
enough to take part in the discussion with some of the top strategists and pundits in the space. The New Metrics of
Sustainable Business Conference, hosted by the Sustainable Brands Conference and the Wharton School of Business,
included dozens of key influencers helping to shape the way business creates, quantifies, and manages value
measurement. The diversity of viewpoints was laudable; the gathering included participants from across the globe, from
traditional corporations like Dow and Disney, consultancies like Deloitte and Ernst & Young, academics like myself and
Wharton, and government agencies like the EPA. And these names are just a small sampling— all of these individuals
gathered to share their unique perspectives on the creation, measurement, and reporting of value.
If I had to sum up what I observed at NMSBC over the course of the day in a phrase, it would be inhibited optimism.
One session on the fading division between morality and business decisions piqued my energy and engagement, but the
next would ground me with didactic details on whether metrics should be absolute, relative, or context-based, or how
the specifics of Materiality should relate to organizational structure and industry.
Overall the room was always abuzz with discussion and fervor, yet by the end of the conference there were only two
things of which I felt certain.
1)
Interpreting and articulating social impact and sustainability is a clear and ongoing challenge for most leaders,
investors, and stakeholders.
2)
Deciphering these standards is just the beginning ‒ with tens or even hundreds of potential environmental, social
and governance issues to consider, the next great feat becomes securing high-quality, reliable data. Defining this space
and setting comprehensive standards is a necessary exercise that no one in the field will (or should) take lightly.
With the experience of this conference in mind, I can think of no better rally point for my aforementioned consensus
building than for sustainability and social impact standards; I believe all of my cross-industry and cross-sector peers would
agree with this vision. We must begin somewhere; even if whatever standard we have today is slightly imperfect, it still
provides the baseline for driving towards a more perfect metric, and the chance to push the bar even higher.
A global standard is more than just ways off, but that’s fine. We have collectively made missteps on our road toward the
perfect social value metrics. However, it is those same pioneering missteps that will inform the best direction forward.
Lewis & Clark did not find the mouth of the Columbia River using a Garmin, after all; I have confidence that these metrics
will continue to progress and evolve as all stakeholders collectively drive toward measuring the creation of a better world
through business principles.
connect with us:
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STUDENT SPOTLIGHT
Austin Lee, B.S. Finance and Management
Written by Emmy Lang Kennedy, MBA '13
CSVC: Tell us a little about yourself.
Austin: I am a Junior, Finance and Management major at the
Smith School. I have always wanted to do “good” with my career
and originally thought that I would want to work in the nonprofit
sector. However, over the past year I have been exposed to
other business models and career opportunities to create social
value. I am also the President of the Net Impact Undergraduate
Chapter at Smith and excited to lead this chapter with my amazing
leadership team.
CSVC: Can you tell me a little about Net Impact and why you think it is an important club to have at the Undergraduate
level at Smith?
Austin: Net Impact is an international organization of over 300 groups of professionals, graduate and undergraduate
students that want to make positive social and environmental impact through their careers. Another student, Lissa
Murakami, and I were inspired to restart the club after attending the Net Impact Conference this past fall. There is also a
club at the MBA level, but we have a different focus and constituency. Currently, we are focused on educating students
on what social value creation means and creating a network of students that are passionate about doing something
“good” with their careers. I think it is important to have a Net Impact chapter at the undergraduate level so that
younger students are exposed to different types of careers and industries early on. Many of my friends and colleagues
have spoken to me about someday working for or starting a non-profit; I thought Net Impact was a great way for Smith
students to learn about a new side of business.
CSVC: So how has the response been to restarting this club at Smith?
Austin: The response has been amazing and very encouraging. It’s an easy topic to get students interested in. We
have started from the ground up – creating a new constitution and vision for the chapter – and the support we have
received from the student body as well as faculty and staff has been the foundation for our early success. What is really
exciting to see are all the innovative ideas from the chapter leadership team. Everyone has their hands in different areas.
For example, Nima Farschi, one of our VPs, is currently working with the Business Civic Leadership Center at the US
Chamber of Commerce to bring a CSR executive to campus this spring. He's also in the Social Innovation Fellow's
program, led by CSVC Executive Director Melissa Carrier.
CSVC: With all this great experience at Smith and your passion for the intersection of business and social impact what are
your career goals?
Austin: Nothing is for certain after college of course, but I would love to work for a small or medium-sized consulting firm
that works with nonprofits and other social impact related organizations. I am also really interested in opportunities
available at start-ups, social enterprises, and nonprofits that are doing something related to social value creation. I am
most in the “flow” when working with ideas in collaborative team environment to tackle a nonexistent or defunct area
within an organization. My life goal is to get a PhD and ultimately teach at a university, maybe even on courses related to
social impact in business.
CSVC: What kind of impact would you like the Undergraduate Net Impact club to have at Smith?
Austin: I would really like to see Smith at the cutting edge of social value topics. I think Smith needs to be more
proactive at emphasizing its focus and measuring our success - not just based on exit salaries and the companies for
which students work, but on what people are doing at their jobs and how satisfied they are with their careers. I would
also like to see Smith be more innovative in identifying the talents of students and connecting them with the most
compatible jobs and opportunities, not necessarily in social value creation but across all spectrums. I’d like Smith to lead
the way in changing each student’s understanding of what our business skills can do for any employer or industry.
CSVC: Was there anything specific that inspired you to have this career goal and to get involved with socially minded
groups on campus?
Austin: I would say my family and upbringing played a big part. Giving back and being a socially-minded global citizen has
always been a part of my value structure. Professor Bushrui, Director of the Kahlil Gibran Chair for Values and Peace, has
also been a role model and inspiration for me at UMD. I started working for him my freshman year and he always said
that it was my duty as a business student to fix what is wrong in this world. Because of his influence, whenever I learn
something new in my classes I always think about how I can use this skill or piece of knowledge to make someone's life
better.
CSVC: Aside from Net Impact and of course your school work are you involved with anything else on campus?
Austin: I am the Executive Director of SmithPeers, the undergraduate mentoring cooperative at the Smith School, and
a member of the Professional Business Fraternity, Alpha Kappa Psi. I am also a member of Terp Changemakers and going
to the AshokaU Exchange in San Diego next month as part of that club.
CSVC: Do you have any advice for Freshman or Sophomores that wants to make a difference through their career?
Austin: This is the best time and the best place for you to be exploring these things. You probably don’t have any major
commitments yet, so experiment now. I think that business is a great common ground for other disciplines. Business is
what connects the globalized world and if you understand this connection it gives you a great foundation to attack social
issues or causes. It’s also really exciting to understand how business is changing the world and what social innovation truly
is. Being a business major allows you to see how your career can make an impact and is also a safe bet for jobs!
Austin’s Hobbies/Fun Facts:
I love to sing and play guitar and try to practice every day. I am also a big techie and enjoy working with my hands.
Anything from building a computer to making a bird house is fair game.
Interested in learning more about Smith Undergraduate Net Impact Chapter? Email them at
contact.smithnetimpact@gmail.com
connect with us:
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FACULTY SPOTLIGHT
Dr. David A. Kirsch talks Benefit Corporations
Written By Amarpreet Singh, MBA '14
In the United States, a Benefit Corporation is required by law to
create general benefit for society as well as for shareholders.
Benefit Corporations must create a positive impact on society, and
consider how decisions will affect workforce, community, and the
environment. Dr. David A. Kirsch, associate professor at
Management & Organization department at the Smith School,
came by the Center to talk with us about the emergence of
Benefit Corporations and the challenges associated with these
corporations.
CSVC: Why are we seeing this emergence of the Benefit Corporation?
KIRSCH: The state of Maryland was the first in the nation to pass a law in 2010 that allowed companies, either LLC’s or
corporations, to incorporate in the state of Maryland as Benefit Corporations. This was very important because the law
around corporations has been narrowing their social purposes and focusing them solely on the rights and interests of
shareholders and the fiduciary obligations of managers to maximize financial returns for shareholders. For most of us, this is
what we assume that corporations do, but the history of the corporation presents a more diverse picture of the
corporation as a social actor.
If we look back to the mid-19th century, corporations were created by states to serve a specific public purpose. So, the
idea of a corporation having a social goal was very much a part of the vision for the role of the corporation in a modern
industrial society; but we can also see the last 100 years of general incorporation as an anomaly. Having Maryland pass this
law and other states follow suit is the first step in a many decade long process of revisiting the rules that governed the
roles that corporations play in society.
CSVC: What role should CSVC play to contribute to this societal change?
Center for Social Value Creation should be at the center of this process and identify opportunities for serving broader
social needs. Recently, students worked with a consulting firm called ChangeMatters produced a report evaluating the
first cohort of Benefit Corporations in the state of Maryland. The study was presented to State Senator Jamie Raskin,
who authored the legislation. This is a nice instance of the University, through the CSVC, serving both the needs of the
state and the broader mission of social enterprise by undertaking this pioneering study.
CSVC: Do you think that creating social value contradicts with maximizing shareholder value? If yes, how should
corporations go ahead in maintaining a balance between the two?
KIRSCH: There are multiple ways of looking at it. For many corporations, the focus should be on maximizing shareholder
return. For a large publicly traded company, it may be unreasonable to operate as Benefit Corporation because there is a
problem of managerial accountability for poor decisions or not using the corporation funds in the most efficient or
profitable way. There are a lot of things that they can do to be socially responsible which may not involve being
incorporated as a Benefit Corporation - such as understanding the externalities of their actions. They can partner with
non-profits and NGOs in particular communities where they are seeing evidence negative consequences. For example, an
energy firm that is profiting from the extraction of natural resources should be thinking about how it is participating in
reforestation or investing in human capital, in some way replacing the resources that it has withdrawn.
For many small companies, being a Benefit Corporation makes a lot of sense because they do not have to confront the
issue of the separation of ownership and control. In that case, the issue may actually be that they need permission from
their legal charter to pursue the social benefits that they share with their communities.
CSVC: We discussed that corporations should contribute to replenish the resources that they are using. What other
paths should the corporations pursue to create social value?
KIRSCH: The easiest way to create social value in some sectors may simply be pursuing innovation. For example,
bringing to market an innovation that lessens our dependence on imported fossil fuels and that reduces greenhouse
gases and emissions creates social value. Whether the value is fully captured by the producer and the community is more
complex. For example, if someone comes up with a super-battery that obviates our need for any imported oil.
Presumably, the inventor would make billions of dollars but that would be only a small fraction of the total value that the
innovation created. There would also be some value destroyed of the stocks of fuel on earth. The idea is that usually
social and economic value are created in tandem by innovation and that’s what Schumpeter’s model of creative
destruction and industrial capitalism says should happen. One of the fundamental features of modern entrepreneurial
capitalism is that some of the value created will be through the process of creative destruction and will involve private
companies pursuing private ends and thereby also creating social value.
connect with us:
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ALUMNI SPOTLIGHT
Geoffrey Underwood, MBA ‘07
Written By Jacqueline Cleaver, MBA ‘13
I recently had the opportunity to speak with Geoffrey Underwood
a Smith MBA alumnus who is now the Director of East Coast
Project Development at Hanwha SolarEnergy America. We spoke
about his experience in the solar industry, opportunities and
challenges in the solar space and the disruptive ability of solar to
change the way the energy industry works.
CSCV: Can you speak about your career path both before and
after receiving your MBA at Smith and what has brought you to your current role?
Underwood: Prior to doing my MBA I was more of a policy person with a background in economics. I wanted to make a
career transition so after my MBA I took a position with an investment bank as an equity research analyst, which wouldn’t
have been possible without the MBA. I worked within an energy group, it had an energy policy component to it because
it was the renewables sector but as a result of that I became effectively a solar analyst and then covered the wider
renewables sector.
As a result of that role I wanted to get further in the industry and had a number of roles, one of which was a partnership
with an engineering construction firm in the solar space which I was able to grow from $0 to about $50 million a year in
revenue. Then, following the industry trends, I moved to a utility doing larger scale solar development because that is
where the project power was at the time.
Since then I have moved to the development arm of a large multinational Korean conglomerate that with one of its
manufacturing pieces makes it the 3rd largest solar manufacturer in the world. The company’s goal is to continue to
move downstream controlling project assets all the way down to the customer.At the moment we are the only company
within the solar space, which is extremely challenged right now, that is continuing to invest in the industry both in the
development space but also purchasing a number of small development firms, battery development and other novel
technology uses. Where the industry is today we are one of the few that is really positioned to be a dominant player
once this contraction plays out.
CSVC: What attracted you to the solar industry?
Underwood: For me it’s the interesting combination of skills that are required to be successful. It takes kind of a novel
approach to a number of traditional disciplines. There is some expertise on the construction side, there is asset
management, there’s a healthy portion that is frankly estimating market values and future values and really managing
expectations of political risks both on the federal and the state side. I’m active in about 14 states so it’s also managing 14
states policies and structures. Then there is the overall technology gee whiz factor that is attractive.
As an MBA I get to work with large industrial banks, I get to work on extremely complex financial models and financial
tools for deploying these kinds of assets. It’s ended up being a little piece of everything I learned at the Smith school.
CSVC: Just to speak to the social value creative aspect of this industry how is the solar industry different than other
areas of the energy industry?
Underwood: For an MBA the focus tends to be the project details and values and in most instances the decisions on
solar are economically driven, which isn’t to say that the environmental value being created is discounted. In some
instances it’s almost a sunk cost or an expected cost that is already calculated within those projects especially at the
corporate fortune 500 level where there is an expressed interest in capturing that value or paying for those values. Firms
like Apple have very specific mandates and a willingness to pay above market prices for the overall environmental and
social value that is created in these solar projects.
But at its core, at least in my mind, there is the potential for the long-term replacement of the extremely inefficient
regulatory and social structure that is the utility industry. Solar ends up chipping away at the fundamental concepts and
structures of the utility industry that make it inefficient. Everyday you are changing some regulatory structure, which
makes projects work but also has a much larger overall social value, which is moving people to an overall contributive
generation model and to overall efficient community energy models. I think of solar as a slow motion disruptive
technology.
CSVC: Earlier you spoke about the changes that the solar industry has undergone. How has this space changed from
when you first stared working in it and what do you see as the future for solar?
Underwood: Solar started out very small scale and small residential. It began to grow in earnest with the development
of a model called the Power Purchase Agreement (PPA), which allows large corporate or large systems to be developed
without the deployment of their own capital. A Smith graduate named Jigar Shah and the firm that he started called
SunEdison pioneered the PPA.
Really in earnest 5 to 10 years ago the industry started to grow significantly and as that growth went from residential
small systems to larger scale systems to the commercial space, and then continuing to the very large systems that we
think of as utility scale, it attracted a lot of interest from multiple party firms and developers which effectively led to an
over-supply on the build and project side versus the demand for the overall product.
That is the contraction that the industry is in now. Indeed there are a number of large corporate firms that got engaged
in the space that have since exited. Long-term I think the future of the industry is fairly bright although I think it’s going
to weather a contraction now over a 2 to 3 year period.
CSVC: What do you see as the biggest opportunities for businesses in solar or in the energy sector in general?
Underwood: That’s a tough one. The easy answer is batteries and or energy storage; anybody who has the ability to
solve that issue takes that disruptive ability that solar technology already has and multiples it. Unfortunately it is extremely
not economic right now.
Generally as much as this sector seems technology and science oriented, which it is at some level even though there’s
not a whole lot of R&D that’s going into it and there are no real huge shifts that are occurring, the real opportunity in
the industry is much more finance related. The more transformational opportunities are in dealing with the component
parts of the project, where the next piece of real project savings can occur, and otherwise then being involved in the
structuring and development of projects, which is primarily a finance driven field. This is also where a lot of people are
innovating for example with lease structures and purchase structures. Also if there is some sort of significant legislative or
tax change, it would upend most of the current models and require a new set of skills to reinvent it.
CSVC: Can you speak about some of the challenges faced by the solar and alternative energy industries?
Underwood: Yeah well that’s the stuff I do everyday! I mean the biggest challenge is the over supply of people
proposing projects or firms that are actively engaged in projects; they are creating the competition that is running down
the values that do exist and typically without a full understanding of what those values and costs really are.
The other challenge is utilities. Typically state policies that are required to be implemented by utilities are driving the
industry. The utilities aren’t actively resistant in most cases to solar programs but some of that is beginning. For example
in California some utilities are starting to challenge some of the values and costs that would reduce the value of owning a
solar system.
Utilities are a forty-year old legacy dinosaur that knows how to manipulate the regulatory process. They engage very
effectively and in very subtle ways to either diminish value or reduce expectations on them.
Overall the jeopardy to the industry will ultimately be what’s the reference price for energy. The utilities have any
number of tax monopoly benefits that allow them to have a non-market price but then they also control how it’s priced.
So one thing that a lot of utilities do is that they don’t charge customers on a per unit basis instead they effectively have
a fixed cost built into most utility tariffs. So say they have a 15-cent rate, 12 cents of that will be fixed cost, at the very
high end, so the only value of the project is worth 3 cents.
CSVC: Why are the utilities so resistant to solar and how could they be brought on board in the future?
Underwood: At the end of the day most utilities don’t care because whatever programs they are implementing as a
result of requirements or regulations they are charging to the customer so they are calculating that as part of their rate
basis so they have a guaranteed rate of return, which is problematic in so many different ways. At some level too you are
also competing as the solar industry grows. Solar used to be infinitesimal and it’s still just 1% of the US energy supply but
that is starting to mean something and it is encroaching on some level on the utilities’ monopoly. There are a number of
legislative mechanisms that could alter the way utilities operate that would create a freer economy for anybody, not just
solar but for lots of technology and innovation.
CSVC: What advice would you give to students who would like to work in this industry?
Underwood: I think that in this industry in particular you have to expect it to be lumpy. From my experience, the
industry has been a different industry roughly every year to every two years. Ultimately it’s been a boom and bust cycle,
which is difficult. There’s not a lot of money in it. There is the expectation that the project values are extremely high,
which is what I think attracts a lot of investment people into the industry. You certainly make a very good living but it’s
not consistent. Just because the project values are high doesn’t mean that the ultimate take-away of various projects
are high.
I also think the lowest barriers to entry approach is really two fold; one would be to become a project developer and the
other being to start a construction firm which sounds kind of funny but you can fairly easily but those together.
Ultimately the industry is going to consolidate and there is going to be long-term vertical integration. For example the
company where I work has many other units, it has batteries for example and $80 billion of other business. So pulling all
of those various and disparate pieces of what’s necessary in a project but being able to do them efficiently is where the
industry is really going.
CSVC: Can you tell me a fun fact about yourself?
Underwood: Well I’ll tell you what; only to tweak this one particular person from my program I will mention that I was
on the winning team of the marketing strategy business simulation at the Smith School.
CSVC: Well I hope your friend sees this article!
Underwood: I’ll make sure that he does!