Silicon Valley Badger: Tom Werner

Posted on 02. May, 2013 by in Academic Departments, Alumni, Industrial and Systems Engineering, Issues, Magazine, People

Helping solar energy’s future shine bright

Tom WernerThomas Werner’s solar energy company, SunPower Inc., in San Jose, has been keeping some pretty high-profile company these days. Take the San Francisco 49ers: The franchise is partnering with SunPower this year to make the new $1.2 billion Santa Clara stadium the greenest in the National Football League.

It was also reported that Apple Inc. uses SunPower arrays to help power its massive data center in North Carolina—a system that produces enough kilowatts to power 17,600 homes.

And then there’s Warren Buffett, the household name of mega-investors. Buffett’s organization, MidAmerican Solar, is investing as much as $2.5 billion in a Los Angeles-area SunPower installation that is the largest permitted solar power development in the world.

Naturally, this is great business news for Werner, a 1982 UW-Madison industrial and systems engineering alumnus who has served as SunPower CEO since 2003. But these stories also represent an exciting turning point for the industry, which Werner describes as “the mainstreaming of solar energy” across major corporations, utilities and residential homes.

According to the U.S. Solar Market Insight report, 2012 was an historic year for the U.S. solar industry. Photovoltaic installations grew 76 percent over 2011, to total 3,013 megawatts in 2012, with an estimated market value of $11.5 billion. “If you asked people about solar technology 10 years ago, the most common responses would be, ‘too expensive’ and ‘not ready for prime time.’ Today, those two issues are long gone,” Werner says.

SunPower technology is a big reason those two issues have been put to rest. The company makes the world’s highest-efficiency silicon solar cells, with a sunlight-to-electricity conversion rate of 24.2 percent. That’s pushing the theoretical maximum of silicon, set at 25 percent. “When people buy a solar system, they are buying it to get cost-effective energy,” Werner says. “Cost effectiveness is really the cost of the system divided by energy production, so you get dollars per kilowatt hour. We attack both ends—higher yield from the sun, but a lower-cost system for generating the power.”

That efficiency-to-cost equation also is greatly expanding the geography where solar power can be successful. “We see countries like Germany, which has about the same sunshine levels as Alaska, getting as much as 50 percent of their energy from solar on a peak sun day,” Werner says. “It’s becoming more cost-effective than conventional energy sources.”

SunPower’s national map of dealerships deftly illustrates the point. With 221 dealers, California operations still dwarf all others, yet the map shows a growing presence in less-than-sun-drenched climes, such as Minnesota (three dealerships), Michigan (four),
New Hampshire (three) and Maine (four). SunPower has four dealers in Wisconsin, including two (Full Spectrum Solar and H&H Solar Energy Services) in Madison.

Werner notes that 30 states in America have a renewable portfolio standard—basically a target for overall energy derived from renewables—which should pave the way for future solar growth outside the traditional sun-rich states. “What is really going to move the needle is mainstream solar—the big, visible success stories,” he says. “Another really big deal is the financing of solar. When you buy a car, you rarely pay cash—you get a loan. Why with a solar system would you need to pay cash? So the solar market is converting to a lease market, where you sign a lease agreement with no money down and start making money from day one of the installation.”

Werner, a West Allis native, attended UW-Madison from 1978 to 1982 and added a second degree in electrical engineering in 1986 from Marquette. He started his career with General Electric, which moved him to locations across the country. In the mid-1990s, he landed a job with a modem company in Chicago called U.S. Robotics, which was later purchased by the Silicon Valley-based 3Com—offering Werner his first career link to the valley. He chose San Jose over 3Com offices in Phoenix and Tampa Bay. “My criteria was warm weather and a place where, if things didn’t work out, I’d have a lot of other opportunities,” he says.

Werner is an avid runner and bicyclist who has participated in numerous Ironman triathlons—a trait he showed in Madison as one of those hardy souls who rode his bicycle year-round, even through the slop of winter.

Werner has led SunPower through a time of tremendous growth. When he started in 2003, the company had 35 employees and $4 million in revenue. Today SunPower is a publicly listed company with non-GAAP revenue of $2.6 billion and more than 5,000 employees. He has helped launch public outreach efforts such as “One Million Lights,” which is helping bring solar technology to rural communities around the world, and “One Million Students,” which educates K-12 students about solar.

SunPower also has one of those classic Silicon Valley story lines—a company developed from the technology of a Stanford University professor, Richard Swanson, and nurtured along by Sand Hill Road investors. Werner says the company is a powerful draw for young professionals as a place that attacks environmental challenges and improves the nation’s energy security while also being an economic force. “What makes SunPower so unique is we have the dual advantage of being a high-tech company, but also a solar company, and renewables are an exciting place to be,” he says. “A lot of students graduate and say, ‘I want to change the world.’ So we have the advantage of both: You can change the world and build a great company. That’s our yin and yang.”

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