Jeremy Leggett, 67, a former Greenpeace director, founded the solar panel pioneer Solarcentury in 1998. Having sold a majority stake to private equity during the 2000s, the business was sold last year for £117.7 million. He has since acquired two estates in Scotland for rewilding and sees similarities between the rise of the solar industry and the emergence of nature-based solutions to tackling climate change.
I have been a climate campaigner posing as a businessman
I am not doing business because I am that way inclined; I’m doing it because it’s a fantastic campaigning tool, if you are lucky and get it right. I was lucky with solar and I’m going to try to do it again with the nature-based solutions revolution.
My original vision in 1998 for solar was flawed. I was going to be a broker between the fledgling solar companies and the financial institutions who were beginning to talk about how worried they were about climate change. I brokered a few investments, but then one of the investors said: “Why don’t you set up a solar company and do it yourself.” Our first commercial year was 2000.
I led the company through to 2007 when I brought in the first of our two professional CEOs — the guys who really knew what they were doing. That period was also when we raised all our private capital — four rounds of a total of £28 million.
When we sold to the Norwegian utility Statkraft in 2020 we still had that money in the bank, essentially. That was a fundamental reason why we made it through the valley of death. We raised more money than we needed. Many compadres, in the aftermath of the financial crisis, went under simply because they didn’t have enough cash and couldn’t get more.
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Four of the original private equity firms stayed with us until the sale. They were far from happy about it. They just didn’t have any choice. The thing with VCs is that they much rather you die quickly than struggle on. They want their Facebook to emerge, and all the other 19 companies can die quickly.
We had two near-death experiences
The first was under-selling and almost running out of cash in around 2004 and 2005. Solar was beginning to happen but not fast enough. The UK was particularly bad because we didn’t have the government stimulus that was available to the Germans and Japanese. So we had to sell our way out of trouble.
Then there was the financial crisis. I have been a bit unkind about the VCs. One positive was that in 2007 we took in our fourth round of investment for £13.5 million and that was the one we didn’t need. The VCs said go out and raise money, and our finance director Neil Perry and I agreed we didn’t need it and didn’t want to dilute further. By then the VCs had a majority stake and said: “Thanks for your opinion guys, we really don’t care what you think. Go out and raise some money.” So we did. That was a lucky break. It was the maxim you raise money when you can, not when you have to.
There are some similarities and differences between the nature-based revolution and the solar revolution
The main difference is that when we started in solar, it was a disruptive technology, massively resisted by huge incumbents, who did everything they could to slow it down.
In the early days most pundits thought it was a green hobbyist’s technology. A minister said to me in a debate on energy: “You are a rootless dreamer, Jeremy.” That was the kind of sentiment that existed.
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This time it is very different. Almost everyone you talk to, of all political persuasions and all camps, accept that there is an imperative that is going to make it happen and/or it’s going to happen anyway.
The classic example of that are the estate agents here in Scotland. Until relatively recently they had been used to selling tracts of land based on how many tonnes of grouse you could blast out of the sky. Now it is different. They have to talk a different game, and they do. They’ll blether on about natural capital and how the peatlands can be improved. If you are prone to cautious encouragement, that is encouraging.
The similarity between the two revolutions is in financing. Solar happened because high net worth individuals and family offices believed and could back the solar horse. That triggered a response from governments, and policies came into play. Mainstream capital didn’t come in until you could see the tipping point. That is the same now. The people doing the front running with nature-based solutions are the same. Despite all the heavy rhetoric from the financial institutions you try and get almost anything past a credit committee in a bank or asset manager.
It took us a long time at Solarcentury. Two decades of hard graft and two near-death experiences. This time we don’t have two decades. We have to do it quicker and I am optimistic it will happen fast.
Another similarity with the solar industry in its early days is the need for verification: then it was “Does this technology really work?” It is the same now, with both carbon and biodiversity. The carbon sequestered has to be measured at a granular level, verifiably, and in many cases it isn’t. There is so much scamming going on with carbon offsets. We are trying to make nature-based solutions investible, and more quickly than would otherwise happen.
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We also have to show it can be done economically. We have to make ethical levels of profit or else how are we going to persuade land owners that this is really a better way of doing things?
We are now trying to scale and I am fundraising again
For the first push 18 months ago I raised £9 million — £3 million of my own from the sale of Solarcentury and £6 million from the same sort of investors who backed Solarcentury in the early days, high net worth individuals, family offices and impact investors.
The scaling vehicle, which we are calling Highlands Rewilding, is now fundraising with a target of £6 million in equity, which we will then leverage. I am up at £4 million and counting.
My idea is to introduce retail crowdfunding as well as to make the shareholder base really broad. There is such an issue with landownership in Scotland so if you can create something that ordinary people can get in and co-own the land you are operating that will be a good thing. What does not sit well here is individual billionaires or companies buying great tracts of land and operating them from afar. We have had a disappointment with crowdfunding as none of the existing platforms will take it. So we are in the process of innovating there.
Jeremy Leggett was talking to Richard Tyler, editor of The Times Enterprise Network https://www.thetimes.com/article/what-i-learnt-about-timing-h6jqtd7wn
