Lean Legarda Leviste dreams of solar energy for the whole Philippines

If the government seems slow to address the looming power crisis next year, can the private sector step in to help?

In this era of unique, technology-driven entrepreneurs like the inspirational Jack Ma of China and South African-born Elon Musk of California, when can we in the Philippines produce our own tech-savvy business people?

On Sept. 20 I witnessed the first venture of 21-year-old entrepreneur Leandro “Lean” Legarda Leviste, with his new firm Solar Philippines installing the country’s biggest 700-kilowatt self-use solar rooftop power plant (using German and Chinese technologies) at the Central Mall in Biñan City, Laguna, which was developed by top restaurateur Rikki Dee.

Energy Secretary Jericho Petilla, Senator Loren Legarda, Biñan Mayor Marlyn Alonte-Naguiat, and Santa Rosa City Mayor Arlene Arcillas Nazareno were some of the special guests.

Why is Lean in this business? Can solar energy be a viable alternative to our over-dependence on coal-fired power plants and imported oil?

Lean is a son of top environmental champion Senator Loren Legarda, a champion debater and third-year political science student of Yale University, who went on leave to launch his business. Here are excerpts from our interview:

PHILIPPINE STAR: You’re a talented student leader at Yale University and also International School, who I thought would naturally evolve into a political leader like your mother, Senator Loren Legarda. Why did you go into business?

LEAN LEGARDA LEVISTE: I spent most of my life thinking I would enter politics, but last year I realized that in the 21st century it’s entrepreneurs who are changing the world. The pace of innovation from Silicon Valley is opening so many opportunities to disrupt traditional industries, especially in developing markets like ours, and not enough entrepreneurs think big or have the resources to do so.

Critics of solar power say that it is still too expensive. How can you lower costs to make it viable?

We’re decreasing the cost of solar in three ways: First and foremost are economies of scale. Doing the largest projects in the country has allowed us to reach the lowest-ever costs. Second, we’re the first and only fully integrated solar company in the country, offering financing and installation together instead of having to engage a third party, allowing us to pass on those savings to our customers.

Lastly, we’re a long-term-oriented company, so we believe that this market is a lot bigger than just short-term profit. We believe in building lasting partnerships with our key customers and, as a result, happily, we accept slim margins for large volume.

That’s the traditional Chinese way — slim margins and high volume. What is your business arrangement with Central Mall of Rikki Dee? Did he buy your solar power facilities or is he a co-investor in this system on his mall’s rooftop?

Neither. We fully financed the project at zero-upfront to the mall-owner, supplying the energy at a rate below Meralco. The mall is guaranteed instant savings from day one, and because we’ve built scale to get prices down and are competing against high electricity rates, it’s win-win for us both.

I heard from your mom, Senator Loren, that your venture here in Central Mall pioneers a number of “firsts”?

This is the first renewable energy project in the Philippines, competitive with fossil fuel. This project also marks the first solar-powered mall and also the first bank-financed solar installation in the Philippines. Thanks to the Bank of the Philippine Islands (BPI) for believing in the bankability of this project!

So the concept of solar energy is not just a nice futuristic dream but already viable now? Are shopping malls your best business partners?

Solar makes economic sense on nearly any rooftop, and we hope to bring this zero-upfront model not only to malls but also to all commercial and industrial building-owners in the Philippines.

What is your hope for your firm, Solar Philippines?

Our vision is to become the first distributed generation utility in Asia, by making solar energy accessible and affordable to every home and business in the Philippines. That’s the same vision as the US company SolarCity, founded by Elon Musk, known for being the founder of Tesla Motors, the world’s first successful electric car company — who believes in a future where every building will be powered by solar on its rooftop, replacing the electricity grid we know today.

So you believe the future of solar power everywhere will be soon?

It’s an exciting vision, and something I see happening in my lifetime. To put things in perspective, in the early 1990s, cell phones displaced fixed-line telephones a lot faster than people expected. The same shift will happen between centralized power generation and distributed generation.

What are your plans after Central Mall Biñan?

We are finishing construction on SM North Edsa, starting on Robinsons Palawan, and are preparing for the rest of our eight malls for the year. Now is really crunch time for us as businesses prepare for next year’s power crisis, and we can leverage our economies of scale to make solar affordable, for as little as zero upfront.

How can interested businesses with large roofs contact you for solar power inquiries?

The inquiries have been overwhelming, and we still welcome all others interested in a fully financed solar solution to email us at inquiries@solarphilippines.ph.

Who inspired you to go into solar? Who are your business heroes in the world?

Elon Musk. Known for being the founder of Tesla Motors, the world’s first successful electric car company, he also co-founded SolarCity, which is pioneering the concept of fully financed solar installations and disrupting the electric utility business model through distributed generation.

I recently wrote a column about Elon Musk. What do you think makes him different?

He goes after big problems in sectors lacking entrepreneurs. His other company, SpaceX, is making space travel commercially viable and just won a $2.6-billion deal with NASA. Elon Musk highlights that there are huge opportunities to disrupt traditional sectors, and I dream of one day making the same impact on developing markets like ours.

Is it true financing is not easy from creditors?

Our installation was the first that any local bank had ever financed, so we needed to educate them on the technology and regulatory landscape. What’s also kept back the rest of the industry is a chicken-or-the-egg problem — solar power needs pioneering projects to be deemed viable by banks, but such projects aren’t getting built because banks aren’t deeming them viable.

How did your start-up business overcome that kind of obstacle and doubting Thomases who are still skeptical about its commercial viability?

Solar Philippines overcame that by assembling a deep bench of engineering expertise and installing one part of our project first to demonstrate that the technology worked.

Now that we’re constructing our next three malls, banks are recognizing that solar is a safe investment — it’s tried and tested, has free fuel and no moving parts. Warren Buffett even recently invested $2.5 billion in the world’s biggest solar farms.

The moment banks become truly comfortable, it will unlock the entire market as any home or business can take a loan at 6-percent interest while generating solar power at a 15-percent return, with the equipment as the collateral, just like an auto loan.

What is the potential for solar power in the Philippines?

The potential is as big as the entire Philippine electricity market. There’s more than enough rooftop space to meet the entire country’s energy requirements, and it makes financial sense to go solar in every major city in the country. Provided that the numbers now work, the remaining bottlenecks are the willingness of banks and consumer education.

Wouldn’t it take a long time and a lot of effort to convince our whole society to shift to renewable energy sources like solar power? Is that good for a business enterprise like your firm?

No doubt this is a long process that will take several decades to transition to renewable energy and distributed generation, but our company is here for the long haul. That’s also why we believe in maintaining extremely slim margins, because we’re long-term-oriented and believe in the future of this market.

Another thing to note is that this is a niche: very different from what traditional power companies are used to, and too fast for them to compete in. Just like with solar anywhere else, this market will be won by entrepreneurs.

Would you consider combining entrepreneurship with a career in politics, in the same way as others have done, like former Senate President Manny Villar, the late ethnic Chinese shipping tycoon and politician William Chiongbian of Cebu, or even New York City Mayor Michael Bloomberg?

I’d only consider entering politics if the system changes dramatically from how it is today. First, politics today is mostly destructive, while entrepreneurship is about creating value. Second, individuals can only make a limited impact because they have to work within an existing system. It’s businesses that are building this country’s future, and only businessmen are truly empowered to advocate their own agenda. That’s, in fact, one reason to believe that only a politician who’s succeeded in business has the skills and resources to become a transformative leader.

What have you learned from your parents?

There’s one simple rule in my family: Never take no for an answer. You can always find a way. We’re the most makulit (unrelentingly persistent) people in the world!

What is your advice to other young people interested in going into entrepreneurship?

The world is inefficient, so there are a lot of unbelievable opportunities out there. Think differently, find them, and when you do, go all in.

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