Walking on Sunshine

John Van Scoter always knew he wanted to be a business man. In watching his father run a small ski mountain in upstate New York, he developed a passion for the “value of creation” and for people. This passion carried on into his college career and led to his degree in mechanical engineering from the University of Vermont. After working for Texas Instruments for 25 years, Van Scoter decided to take on the alternative energy industry and joined Burbank-based eSolar. eSolar, founded in 2007, develops and manufactures solar-thermal energy plant technology that aims to be both reliable and cost-effective. The company most recently made headlines in the announcement of their partnership with GE Energy. The project will combine eSolar’s technology with GE’s integrated gas-combined power plants, Van Scoter said. Transitioning from an established company like TI to a startup may seem like a daunting task, but Van Scoter has hit the ground running. In the short time that he’s served as eSolar’s CEO and President, the company has developed projects with the ACME group in India and MetCap in Turkey in addition to their dealings with GE. The recent product development has also created a demand for top talent at eSolar, Van Scoter said. The company is in the process of hiring to prepare for the upcoming ventures. Question: I understand you got your Bachelors degree in mechanical engineering. What was your dream job when you were in college? Answer: I always dreamed of running my own business. I viewed engineering as kind of a means to the end. My father ran a small ski mountain in upstate New York. Through that I got exposed to all the aspects of running a business. I wanted it (my business) to be in manufacturing. I came to believe there are different types of roles that people play in the economy, but I wanted to be part of the value of creation, which I always associated with manufacturing and creating goods and services that help people and help the world. Q: You said your father owned his own business. Were there any values he passed on to you that you continue to carry into your career? A: Absolutely. The first one, which he said often, was ‘work hard and good things will come.’ There’s an underlying belief in not worrying so much about what ultimately will happen. Spend your energies focused on the task at hand, and don’t be afraid to work hard. The second thing was to ‘always look to create value for your customer.’ Whatever you’re doing, seek to create value; don’t seek to make money. If you create value, then you will make money naturally. The third thing, which was probably enforced every hour of every day, was ‘Be flexible.’ Q: You were with Texas Instruments for 25 years before you came to eSolar. What sparked your interest for the alternative energy industry? A: I got to the middle of my career and I was reporting to the CEO of Texas Instruments. I kind of looked at the landscape, and I thought I could keep doing this type of job for a long time. I know how to do it and I can have an impact doing it. But at the end of the day it was just about doing the same thing. I wanted to have a bigger impact on my kids’ future and a bigger impact on the world. I was fortunate enough that my role at TI allowed me to explore some areas in alternative energy like LED lighting, micro inverters for photovoltaic panels and an assortment of other alternative energy things that need electronics to work well. That afforded me a broad canvas for which to see the space, and I became very interested in solar as a result of that. Q: What has been the biggest challenge you’ve faced in your new position as the Chief Executive Officer and President of eSolar? A: First and foremost, raising money to fund the company. We’re an early-stage company. We’re venture-backed. Very early on I realized we would have to be raising another round of funding. We just concluded that round. We announced with General Electric a strategic alliance. They’re making an investment in the company, and they’re licensing the technology. So we have a world-class energy partner for our take-to-market partner going forward, which is a very big deal. The second big challenge is the competitiveness of the technology. There’s been a lot of press and realization of the huge gains that photovoltaic panels have made in the past two or three years. They’ve lowered their costs considerably. The segment that we are part of, the concentrated solar power segment, was really challenged by that price decline and that leveled cost of electricity decline. Q: Do you use any forms of solar energy at home? A: I do. Actually, my wife gets the credit for this. She talked me into a house that I could barely afford, and otherwise would not have bought, if it did not have three different kinds of solar systems on it. There is a traditional hot water heater solar system. There is a separate solar thermal system that heats the radiant heat in the floor of the house during the winter or the pool in the summer. Then there is 6,600 watts of photovoltaic panels that capture the sun’s energy and convert it into electricity. So when the sun is shining virtually at full load, the house including air conditioners and everything is satisfied with the photovoltaic output. My electric bills are very low. Q: Has your lifestyle become “greener” since working for eSolar? A: No doubt about it. I’m still driving the same car, but certainly my home is greener. It’s hard not to integrate into the California culture and have the naturally greener viewer of the world. Q: The company has had a lot of success in procuring solar energy products in the recent years, with their recent dealings with GE and ACME group, yet many solar energy companies are having trouble finding their niche in the industry. Why? A: I would say it started with the recession in 2008. That put an incredible pressure on a variety of companies to raise financing, (and) to be bankable as new technologies began integrating into the grid. Utilities and power producers are looking for stable and proven technologies. That’s difficult to do as a new technology. It takes time. I would say the overall risk appetite has gone down significantly since the peak of 2007-2008. Coupled with that is harder questions being asked about the costs of renewable technologies and renewable energy sources. Electricity demand went down with the recession, so the need to add new capacity went down with that. Utilities are stepping back and saying, ‘Wow, we have these renewable portfolio standard targets, but it’s not as difficult to get there because the demand is down.’ Also, there is no uniform energy policy in the U.S. It’s very fragmented. (Solar projects are) very capital intensive and take a very long time to develop. The frequency of (policy) changes is out of sync with the development timelines and what it actually takes to add in new technologies. Q: Do you think this will change in the coming years? A: It’s really hard to predict. I think the aggressive and progressive energy policy that the Obama administration had early in their term has given way to a lot of other macro factors. They’ve been swamped with higher priorities. I, for one, don’t hold out for any significant energy legislation in this first term of the Obama administration. Q: There are many people who say solar energy will never be a mainstream form of energy. What would you say to these critics? A: I think they’re wrong. Our vision of the company is to make our version of solar competitive with fossil fuels with no subsidies. We’re not there yet, today. But, that’s our vision and we have a clear roadmap of how to get there. Q: Do you think the installation and maintenance costs for solar will continue to be a challenge in the foreseeable future? A: In general, as a solar category, I think you only have to look at the market data over the course of the last three years to say it gets better every month, every quarter and every year. Is there a gap today? Yes. Do we need subsidies to make them even reasonably within reach for your average person to put it on their home? Yes. But, I firmly believe that with volume, which is happening, those costs will continue to be driven down across the board and ultimately the subsidies will not be needed. Title: CEO and President Age: 50 Education: Bachelor’s degree in mechanical engineering from the University of Vermont Career Turning Point: Leaving Texas Instruments after 25 years with the company and moving to eSolar Personal: Married with two children Q: What’s next for eSolar? A: From the R&D (Research and Development) standpoint, this molten salt system is our top priority. We can see the next generation beyond that already. On the project side, the one announcement we made with GE is our initial plant with a customer called MetCap in Turkey. It’s an over 500 mega-watt facility. It will be the world’s first, we believe, integration of wind, solar, and the leading edge integrated gas combined cycle. We also think there will be a lot of projects with the whole notion of retrofitting existing gas-combined cycle and even a coal plant. There’s been a lot of push to retire a lot of coal plants. We have a vision that if we can integrate solar into some of those to make them cleaner, they can get an extended life for that asset and then everyone would win. Q: How involved are you in the hiring process of your staff? A. Very. I work right with individual engineers, supervisors to define positions. I interview every single candidate that makes it through the various interview processes with my team. I do believe it’s all about the people. Q: What’s your favorite aspect of this job? A. Probably having an impact on the world. You go home at night and you’re tired and that’s one thing. But, I always get a good feeling when I go ‘Yeah, we’re really going to change the world.’ Q: I understand you have two children. How knowledgeable are they on alternative energy? A. I’m a big believer of gathering around the dinner table and turning everything off and having a conversation. I do travel a lot, and I’m away a lot, but we try to make it our family time. So we talk about it. They’re very interested in what Daddy does, and I share with them my challenges and my victories and so they hear that. We have a 5 megawatt plant in the Antelope Valley. When my son got out of school at the end of May, I asked him what he wanted to do and he told me ‘I want to go see your plant before school starts again.’ Right after the Fourth of July, I took a half day and took him and my wife to the plant. He really got a lot out of that. He talked about it all the way home. He said it was more than he thought it was going to be. Q. Does either of your children want to follow in your footsteps? A. I don’t think so. They never turn out how you think they will. I was a big math guy and into engineering. They’re not engineering-inclined. That’s fine. My son is science-inclined, but he tends to be more into astronomy. It’s funny we go for a walk at night and he can look up and tell me about every star in the sky. I can’t do that. My daughter tends to be more into history and music, and so I don’t see her following in my footsteps either.