As a former project-management banker at HSBC and Bank of America, Michael Whalen says he’s been “eating my own cooking” as the current CFO of SolarReserve, where a big part of his job involves raising money to finance solar-energy plants that provide electricity to utilities.
There’s a good chance that Whalen’s metaphorical meal would include a fair amount of salt. Indeed, as the sole licensor of technology spawned by United Technologies’s Pratt & Whitney Rocketdyne subsidiary, SolarReserve develops plants that are able to produce power night and day by storing the sun’s energy in molten salt.
Launched in 2007, the start-up’s aim is to solve, at a reasonable cost, what’s called the “intermittency” problem common to other forms of renewable-energy production: wind power, for instance, may supply energy at inopportune times of the day. “Frequently, in much of the United States, the greatest wind load is in the wee hours of the morn when that power is actually not particularly valuable,” says Whalen. The same is true for other forms of solar power, unless the producer spends heavily on additional storage technology.
SolarReserve’s claim to fame is that it ties up energy collection and storage in a single package that can dish out power during and between peak hours. The technology, which uses thousands of sun-tracking mirrors (called heliostats) to focus sunlight on a receiver mounted on a 600-foot-high tower, has had its detractors, Whalen acknowledges. The critics say the system doesn’t have the operating history of other solar technologies. For his part, the finance chief responds that United Technologies is a solid name and that the technology has been tested in previous U.S. Department of Energy-funded projects.
While those projects weren’t commercially viable, six private-equity firms, led by US Renewables Group (a $750 million investment fund focused entirely on the renewable-energy industry) and including firms owned by Citibank and Credit Suisse, believed the technology was trusty enough to supply SolarReserve with the seed money to commercialize it. Last month Whalen sat down with CFO editors to talk about what it’s like to work for the private-equity firms and other aspects of his job. A condensed and edited transcript of the conversation follows.
What’s it like to report to private-equity investors?
Based on their investment in other like enterprises, they provide a lot of feedback to our management about what they see on the renewable-energy and capital-markets horizons.
What I am freed from is quarterly reporting requirements. I have owners who appropriately want to receive good-quality information on a periodic basis. But it’s much more of a two-way communication.
What do you mean by “two-way communication”?
We get real-time feedback on our reporting. If an investor wants more information than we’re providing him or her with, it’s the nature of a privately held company to supply it. My team is there to make sure that we meet those requirements.