Forget Solar Stocks. The Best Solar Returns Are Overseas.

Episode Summary

Executive Summary: The episode centers on Energia, a platform that lets retail investors buy into diversified baskets of solar and energy infrastructure projects, especially in emerging markets, while still emphasizing impact. Mike explains how the business evolved from a personal investing need into a scalable retail product, why emerging-market energy assets can deliver strong yields, and how inflation, electrification, and global supply disruptions are accelerating solar adoption worldwide.

Main Topics: Energia’s origin and business model (Priority: 5/5): Mike traces Energia back to his post-GreenSky transition: he wanted to reinvest capital into solar assets he understood, began with his own money and friends-and-family capital, and built a platform that sells securities in baskets of underlying projects at NAV rather than via an exchange. Emerging markets as yield opportunities (Priority: 5/5): The hosts argue that solar projects in places like Brazil, South Africa, Colombia, and Nigeria offer attractive returns because they often displace expensive diesel or fill energy gaps that developed-market public funds ignore. Impact investing vs. fiduciary framing (Priority: 4/5): A recurring tension is how much Energia should emphasize its social and climate impact versus looking like a conventional financial product. They conclude the company should communicate both impact and disciplined fiduciary management. Retail access, structure, and diversification (Priority: 4/5): Mike explains how small investors can access project-level energy assets through pooled products, why JOBS Act-era regulation made this possible, and why the platform favors diversification across countries and deal types. Global electrification and energy transition tailwinds (Priority: 4/5): The episode connects Energia’s growth to broader international trends: supply disruptions, rising solar imports, EV adoption, heat pumps, and the view that solar is now the dominant source of new power generation globally. Batteries, storage, and asset selection (Priority: 3/5): Mike is skeptical about batteries as a universal investment thesis, arguing they only make sense when market spreads justify them or when they solve backup/off-grid needs; he prefers to follow price signals and use storage selectively. Ask Jigger: utilities, coal, gas, and geothermal (Priority: 3/5): The closing Q&A covers solar recycling, utility ownership in New Mexico, coal and gas retirements, and why geothermal is slow to scale due to the need for upfront subsurface data investment.

Key Arguments: Retail investors can own a share of real energy infrastructure rather than just public-market proxies, and Energia prices shares at net asset value to align outcomes with underlying project performance. Emerging-market solar is not inherently low-quality; in many cases it has superior economics because it competes against diesel or unreliable grids, and the perceived risk is often inflated by American bias. The platform works because it combines sector expertise, software-enabled due diligence, and a focus on mid-sized deals that institutional capital often overlooks. Impact and profit are not mutually exclusive; the best investments can also materially improve access to electricity, education, and local economic activity. Batteries should be added when economics support them or when backup is essential, not because they are fashionable. The global energy transition is being accelerated by supply shocks and electrification demand, making solar increasingly central to both growth and resilience. Geothermal could scale faster if governments fund the expensive upfront exploration/data phase that de-risks later development.

Data Points: Assets under management: $500 million - Energia’s current scale as discussed near the end of the interview. Investor accounts: 19,000 accounts - Number of accounts on Energia’s platform. Active investors: about 80% of 19,000 - Approximate share of account holders who have actually invested. Monthly growth/inflows: $5 million per month - Current pace of new money coming onto the platform. Company yield: 12% - Mike says Energia has done a respectable 12% yield over the last five years. SP 500 comparison: SP 500 has done better over the last five years - Used to frame Energia as a diversification play rather than a market-beater in every period. Brazil return: about 14% - Illustrative return cited for Brazil products. South Africa return: near 10% - Illustrative return cited for South Africa products. U.S. returns: lower than emerging-market products - Used to emphasize relative yield differences by geography. Minimum investment: $100 - Mentioned in the outro as the platform’s low entry point. Nigerian solar imports: up 500% in March - Jamie cites Ember data to show the pace of global solar adoption. Oil tank bottoms threshold: 6.8 billion barrels - Jigger explains JPMorgan’s warning about reaching minimum system inventory levels. Indian/Latin/Europe electrification trends: EV sales and heat pump sales rising - General global adoption trends discussed in the opening section. Colombia households without electricity: 250,000 households - Used to illustrate off-grid need in one of Energia’s lending portfolios. Colombia school project: 700 kids / 400 sleeping on the floor - Example of a school electrification project in Kenya illustrating social impact. Global population without electricity: close to 700 million people - Jamie cites this as the broader electrification challenge. Retention rate: 98% - Mike says very few customers sell once they join the platform. Battery/solar use case in South Africa: 6 hours of grid outage per day - Explains why batteries are valuable there for backup rather than arbitrage. Coal fleet operating cost: $70 to $95 per MWh - Jigger cites this range to explain why coal retirements are likely. Natural gas fleet size: 600 GW operating - Used in the Ask Jigger segment to frame gas fleet age and replacement needs. Old gas fleet share: about 100 GW pre-1995 - Older gas units are less efficient and more likely to retire. Modern gas efficiency gap: about 30% less fuel use - Older turbines use about 30% more gas than modern units for the same output. New gas under construction/announced: about 50 GW - Many new gas plants are described as peakers or behind-the-meter assets. Geothermal unlocking cost: $200 million speculative spend - Needed to generate subsurface data before larger geothermal buildouts, especially in New Mexico and similar states. Geothermal buildout cost: $3 billion - Estimated project spend after exploratory data is gathered. Utility example capital injection: $500 million in 12 months - Used as an example of how private equity can rapidly fund utility modernization.

Pivotal Quotes: "We don't quack like a duck for these wealth investors, the family offices, and the registered investment advisors. We have to look a little bit more like the products they're used to seeing." — Mike: Explaining the tension between impact-first branding and conventional financial-product presentation. "The solution's already deployed. We just need to use it." — Natasha Crow (Octopus Energy ad): Ad copy emphasizing distributed assets like EV batteries as grid infrastructure. "People's money is important to them, but damn it, we do have a huge impact too." — Mike: Mike’s statement on balancing fiduciary seriousness with social impact messaging.

Implications: The episode argues that retail access to real energy assets can align yield, diversification, and decarbonization. It also suggests global electrification, not just U.S. policy, is now the main growth story for solar, storage, and selective geothermal.