Investment

Polsky’s way – the very capitalist way to resolving climate change

The world is groaning with ESG investment strategies. But we need engineers like Mike Polsky to deliver practical solutions to the climate change conundrum. 

Polsky’s private company Invenergy Renewables has raised finance worth $42 billion to build 176 projects, including 7,000 wind turbines.

Like Henry Ford, before him, Polsky benefits from Wright’s Law, which states that companies with rising production reap big cost savings

To get them built, it has taken on local vested interests, including a group of Amish farmers, to get its projects built. Invenergy has a catch phrase: “While others talked, we began to build.” 

According to analysts, Invenergy could be worth $10 billion, net. Polsky’s stake could take his wealth to $1.5 billion, according to Forbes.

In December, Quebec’s state pension scheme CDPQ committed $1 billion to Invenergy, after buying an economic interest of 52% in Invenergy’s renewable business in 2018, although Polsky retains management control of it. 

On 1 April, CDPD agreed to co-invest $125 million with Invenergy’s corporate venturing arm, Energise Ventures. Energise has already backed digital businesses worth $200 million which may benefit its parent. The deals include commercial drones, cybersecurity, car charging and AI. 

Polsky’s family investment office, Skydeck Capital, invests in unconnected areas. Deals include real estate, private assets like waste solutions, 3D Printing, health, online learning, elevators and timber manufacture. 

Like Henry Ford, before him, Polsky benefits from Wright’s Law, which states that companies with rising production reap big cost savings. By choosing the right sector, entrepreneurs can further improve their chances.

Improvements in wind and solar energy generation now make them cost-competitive with fossil fuels, according to Lazard. And few have built to a greater scale than Polsky.

The green revolution is leading to practical achievements elsewhere. For example, it is changing the housing market.

Meritage Homes Corporation is chaired by Steve Hilton, who co-founded the business in 1985, taking it to revenues of $4.5 billion in 2021.

Hilton is making a big play for new homes which come with solar panels and battery systems, capable of storing energy and selling it back to the grid at a profit.

“In the ‘80s, people installed solar because they cared about doing the right thing,” CR Herro, Meritage vice-president told The New York Times “Now, solar and battery systems are like putting an ATM in your kitchen that spits out $20 every month.”

Elon Musk isn’t just a fan of electric vehicles. Tesla is also installing solar panels and Powerwall batteries for residents in their existing houses.  

ESG investors see themselves as influencers, but Polsky, Hilton and Musk know that most people don’t listen to them. They are more interested in paying their bills, supporting their family and enjoying life. They will only switch to green energy if the deal saves them money. 

Polsky, a Ukrainian engineer, built his first fortune with SkyGen, a specialist in gas-fired generators, which he sold to Calpine ten years later.

Invenergy started its wind business in 2004 with large projects in Montana, Colorado and Idaho. Over time, it became the second-largest wind producer behind listed utility NextEra Energy after pressing into service turbines higher than the Trump Tower in New York. 

The US will need a lot more Polskys to meet President Biden’s proposals for 60,000 turbines and 500 million solar panels, as part of his proposed $3 trillion infrastructure package. 

This means taking on local vested interests to build wind turbines and their high-voltage transmission lines. Polsky knows the process. To replace a coal plant in New York, he even took on a group of Amish farmers, who are now looking for land elsewhere.

Polsky has confirmed plans to build the biggest wind and solar projects in the US. He has battery storage and gas projects. He is relentless. 

He told Forbes: “If you’re just making money, you can only go so far. When you have a mission, a conviction, you perform on a completely different level.” 

He adds: “Clean energy is the most important part of the solution to the climate challenges our world faces.” 

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