Interview with Kate Henningsen, Co-Founder & COO of Arcadia
What does it take to break into the clean energy industry? Kate Henningsen went from being a corporate litigator with no energy experience to COO & Co-Founder of Arcadia, which now manages 1 GW of community solar & has 800 employees. I really enjoyed speaking with Kate about her transition into, & success within, cleantech, her advice for others looking to do the same, as well as about Arcadia’s partnership with Urjanet & recent raise of $200M for its Arc platform.
Catherine: Hi, I’m Catherine McLean, Founder and CEO of Dylan Green. And today I have with me Kate Henningsen, Co-Founder & COO of Arcadia. Welcome!
Kate: Thanks, Catherine. It’s awesome to be here. Great to see you as always!
Catherine: Another amazing DC, DMV area, person in my life. So many good people here.
Kate: And we’re back together now. We’re seeing each other in person. We’re able to, it just feels like connection and serendipity is, is back in our lives, which is awesome.
Catherine; Yeah, exactly. Well, first, congrats on raising $200 million to invest in broadening the coverage of your energy data platform Arc. Tell us a little bit about your current role and provide an overview of Arcadia’s work and what makes the offerings unique.
Kate: Well, thank you. So, yes, 200 million. It’s a good thing to go to work and do on a daily basis. So Arcadia is a digital energy platform. And so we’ve been around for seven years and we’re in the energy space, but we’re tackling the energy problems a little bit differently with software rather than hardware. So, we have created a universal data connection to about 10,000 different utilities, around the world. And why that’s important and is exciting is because as you and all your viewers know, there’s an energy transition going on. And really that the heartened soul of the energy transition, we think is going to be decentralization, the customer taking more of a role. And in the same way we’ve seen sectors modernize and digitize across healthcare, FinTech, insurance. That change is coming to energy and it’s really going to be the data that’s the center of that. So that’s where Arcadia is playing, we are unleashing and unsiloing energy data so that consumers, innovative companies, residential folks can start to use that data to make energy choices, to have innovation.
So my role is co-founder and COO. So that is both a strategy, vision, how do we do the things that I just laid out and really execute against that? And then I run sort of our operations, function, our strategy function. So really running the gamut from day-to-day, let’s make sure this things works, to how do we make our next big idea, next a hundred million dollars. How do we deliver on the promise? So it’s fun.
Catherine: I just realized that you’re probably the first person I’ve ever interviewed where I’m a customer.
Kate: Oh, that’s great! That’s fantastic!
Catherine: Because when I met Kiran, when I first moved back to DC like about three years ago he convinced me to be a customer.
Kate: That’s great. I love that.
Catherine: And I’ve been using you ever since that. That’s kinda cool. Because for people that don’t know, like Virginia obviously is a regulated state. So you guys pay dominion power and then charge me a little kind of fee on top of my bill to invest in clean energy projects.
Kate: Yep. Exactly. So we started really as this direct to consumer, let’s give everybody in all 50 states access to clean energy. Along the way we’ve continued that and our biggest direct to consumer product now is our community solar business. Which manage over gigawatt community solar. Which is 300,000 people now using that product. And so we still have a direct to consumer arm, but then to run that business, we basically created this data platform. And that’s really where we see the market pull coming is, in leaning in and investing in that. So there’s lots of various growth, which is great.
Catherine: Yeah, I really wanna get into your background because your background is really interesting. As a recruiter, I’m always really interested in people’s career journeys and how they wind up where they’re in life. So your undergrad was in history, then you did philosophy, a master’s in philosophy, and then got a law degree.
Kate: I did a lot. Did a lot of school.
Catherine: Yeah. A lot of school. Can you talk a little bit about how you made your way into clean energy and how the transition went for you?
Kate: Yeah. So, I actually do tell people often that the liberal arts background, for me at least, informs how I operate on a daily basis. So I didn’t have a finance background, didn’t have a business background. I really think sort of history of philosophy and law is how historically we’ve organized people, problems, sort of philosophy is how we should do it. And then law is sort of the rules around how we organize. And you’d be surprised at how those lessons carry into business. Business is collaboration. It’s making people do things together. So actually those learnings I use every day. But I think what was really sort of the transition for me was I was a lawyer, a corporate litigator, for five years after that. And energy is a regulated industry, primarily. And so I wanted to switch from sort of big corporate litigation into something more creative, into something more impactful and purposeful. I really looked at startups in the regulated field, which is healthcare and energy. I’m so lucky that energy is where I found myself.
And, and it’s really proven to be true that I think a lot of people shy away from innovation in regulated spaces because they’re scared of laws, policies and administrative rulings. But I think there’s so much opportunity in those spaces to bring new insights, creativity. One of the things that Kiran and I talk about a lot is we don’t really have direct competitors, which is odd for such a large market opportunity to not have. You can pick four people to deliver your meal or to pick up your dry cleaning, or there’s abundance of competition in all these other markets. And energy is really not, it’s changing, I wanna say that for sure. Like there’s more entrance coming in, people are innovating, but it’s been quiet for a lot of years because I think people see; it’s scary when it’s regulated and you wanna go innovate in that. And so my legal career was really a wonderful transition because it gave me a lot of confidence to know where the guardrails were, know how to not be afraid of regulation, to use regulation. The community solar business we talked about where it’s a gigawatt now, of new projects on the grid, thanks in part to Arcadia. You have to be comfortable making those laws, talking to policy makers. I think that transition in hindsight was a really sort of easier one to make, but then you learn, startup is just a whole nother world of scaling from zero to, we now have 800 global employees. You have to have be curious and initiative or else you’re not prepared for that type of growth.
Catherine: I knew you had previously said that having a child changed your outlook on your career, partially motivated you to get into clean energy. Can you talk a little bit about that?
Kate: Yeah, so when I just talked about the transition from going from a commercial litigator to why did I wanna sort of do a startup in the regulated field we had had our first child and I think it was really a push we all sort of reflect on what we wanna do after children and really making an impact. I think going into a space where you can make an impact and be creative became more important for me professionally, and obviously there’s real things about climate change that I think we all wanna stay optimistic about. We all wanna be part of the solution, but there’s something deep about wanting to leave this place a little better for your kids once they’re here. And so, it’s actually been a really great personal motivator to want Arcadia to grow because we have a business where if we grow we think we impact the world positively. And so it’s a really good daily motivator to have that.
Catherine: Yeah. I believe that when you started working at Arcadia, you were brought on as a director of business development, but despite the fact that you were a lawyer in prior years, as we’ve mentioned. You then of course, grew to become the COO. What was the transition from Director of BD to COO like? And how has your leadership changed?
Kate: So what is great about starting and founding a company is you get the opportunity to do everything. So I have the privilege of managing every function at the business by this point. So I’ve started our sales team, finance people, operations, strategy, marketing. And so it’s really been a wonderful journey the past seven years of really taking on any problem we had. I think this is where if you’re going to a startup, you wanna sort of make an impact, grow your career, retaining that sort of what’s called the beginner’s mind. It’s a concept of everything can be interesting if you’re curious, if you have initiative. And so I think really the path that Arcadia has been: how do we grow, how do we make the business work better? And that has meant building basically every function along the way. And also knowing, there’s a timing aspect, when do you invest in creating this function? How does it need to be for this stage of company versus the next stage of the company? Where we were at Series A is so much different than where we are today. And so the ability to adapt and change is super important for any startup employee, anyone who’s doing fast growth. I think that the transitions have been remaining curious and willing to learn and willing to sort of ask questions quickly is really the skillsets you need to be successful in that type of fast change. My leadership styles changed entirely. I came in, no one was here and so everybody was an individual contributor. There was nobody else to give work to. And so you really start those early days, you’re doing everything. You’re working, as much as you can because you’re all individual contributors trying to get this off. And over time, now I’m in a spot where I’m the leader of leaders, right?
So I’m managing teams that underneath have hundreds of people. And so you have to really transition from hard work and a generalist mentality to now I think I focus much more on clarity of communication, right? How do I make decisions clearly. How do I pass those decisions on to my direct report so that they can then inform their team. And it’s an odd thing where you actually need to do less to do more, I think in the beginning you just do more. You just do, do, do. And now we’re at a stage where it’s much more important to be clear and decisive so other people can be empowered. That’s a much different job. Yeah, more thoughtful because what you do than influences what other people do. And so making sure that you’re giving clear directions and motivating them. I think what’s stayed the same through a lot of this is really holding the vision of Arcadia and really holding what’s important to us culturally.
And those things have stayed the same as why we’re doing this. I wanna carry to work every day. And that stayed constant for seven years. We wanna democratize energy, we wanna bring more energy choices to the consumer. And so staying sort of excited and motivated and passionate about that core mission, hasn’t changed and telling; now we have responsibility because we have to tell 700 people around the globe why they should be excited about this mission. And so, I probably spend more time now on the culture and the sort of mission, why we’re all doing this and making an impact, than I do on sort of the individual contributor and work every day. So it’s definitely a change.
Catherine: There’s something that you said that really stuck with me. So you said beginner’s mind? So I work with a lot of startups and I get asked for that curiosity piece. They want someone mission driven, they want someone that has the intellectual curiosity. I get asked for that a lot, but that kind of term has never come up. And I think that I really like that. I’m going to kind of steal that because I think that’s what it is. It’s a beginner’s mindset.
Kate: I’m, I’m happy. I’m happy that that’s a new concept. Cause I think it’s a powerful one because a beginner’s mind is a curious mind. It’s an abundance mindset, joyful mindset, curiosity, all wrapped in and I’m really excited to see this problem as an opportunity and to go tackle it and learn about it in a humble but curious way. And I think that’s where you get some magic that happens. Because also, no one’s done this before. Right? Every time we start something new, we signed our first community solar deal in 2018. There was zero megawatts on the grid and now there’s a gigawatt like yeah, you have to invent. And so beginner’s mind is, I think a good place to put yourself when you’re tackling those.
Catherine: Yeah, so I wanna talk about a recent partnership that you’ve been doing with Urjanet. Tell us a bit about this partnership and how Arcadia is leveraging the data and digitalization to advance this fight against climate change.
Kate: Yeah, it’s a great question. So we acquired a company called Urjanet, in May of this year, about six months ago, and Arcadia has historically had residential energy data. So I mentioned previously that we started as a direct to consumer company with customers like yourself and then a gigawatt of community solar, which is basically also towards residential customers. But then Urjanet has always been in the commercial space. So they have access to all the commercial energy data. And so the thesis was that getting all the energy data together, both residential, commercial, global and then different types, electricity, water, gas, is really going to give us the foundation to serve the needs of sort of all energy users around the world, in a very powerful combination. So I think it allows us, because the transition of energy is going to be global. It’s going to be universal. It’s not like residential folks are going to get different things than commercial folks. We think that the trends are going to sort of carry across both things.
And so it really gives us such a good foundation to help our customers sort of drive innovation. And so if you have the data, you can do great things. Like for example, as we get more EVs on the road, people are going to wanna know when should I charge my vehicle? How much is it going to cost to charge my vehicle? Can I switch to a different time of use rate to, to optimize my cost? That type of data then allows EV manufacturers to make really good consumer applications to tell the customer that, to get the customer to see the value of that. We think there’s going to be so much more solar and storage deployed, giving people a calculator to how much they’re going to save, what’s their bill going to look like. Those are the tools that we need to create that Arcadia data powers to really advance the transition to the clean energy economy.
Catherine: Yeah, I think it’s advancing to the clean energy economy for climate change, obviously, but also for cost. I think one thing we really take for granted here is how cheap energy is. I dunno if you remember, but I was in London for a decade and they’re in the middle of just an absolute catastrophe. And I don’t use that word lightly, like people are spending hundreds of pounds on energy a month. And so I think it is about climate change, but it’s also about making sure that we’re on top of the cost, like we’re more involved.
Kate: Yes. You know, in some ways, we see energy costs rising. Obviously everybody’s been talking about the gallons of gasoline this summer, in your examples about Europe and the UK are spot on. And I actually think for the renewable energy industry that’s going to increase the adoption faster. You’re seeing Europe right now where I can have domestic energy production, and control the cost because once you build the wind farm or you build the solar field the sunshines and the wind blows, you don’t have to do anything else. And so it’s in, in an odd way, I think it could be exciting for the renewable en industry because of that high price of power. It’s going to enable some innovation, it’s going to enable people to move faster, it’s going to move up our timeline by decades, and that might be a good push for everybody. And then to your point, consumers start to care more. And I think we’re going to see that they’re going to want more solutions from their EV manufacturer to talk about solar storage. I think the consumer starts to take center stage in this transition in a way. The Monopoly utility system has just had customers because they moved into the right street in their territory. The choice and the options have not been offered in energy in the way that every other industry has to make a customer happy. It has to delight them, drive down costs. It has to show value, the energy industry has never been asked to do that. And I think that’s really the revolution, to your point, that these higher bills are going to start to drive faster. As people say, why am I paying this much? How can I do this cheaper? How can I do this better? And those types of light bulbs, I think help drive. Other companies to innovate, to bring solutions in a way that the monopoly system just hasn’t been forced to do.
Catherine: Yeah, it’s interesting. In the UK you do have a choice. I remember I used a company where that company invested all, all the energy came from wind, and so that’s the company that I used. What’s also confusing about there is that even though you have all of this choice, it doesn’t seem to, at this stage, be helping at all with costs.
Kate; I think that the unfortunate conflict and war in Ukraine is going to drive more domestic production. There’s only really a couple ways to do that, which is in the renewable sector. And so it’s hurting a lot of people. We’re seeing, it’s hurting a lot of people in Europe right now for sure.
Catherine: But that’s why I was so excited when I learned about Arcadia, because when I moved back here, I was like, this is kind of frustrating, you know? No choice. So I felt like at least going with Arcadia, I had some sort of like, choice in the matter. We’ve talked a lot about this gigawatt solar. We gotta get some t-shirts for this. So you’re one of the largest managers of community solar in the US. Can you highlight the unique role that Arcadia plays in acquiring and aggregating the customers for developers, and also share some of the projects that you’re most proud of?
Kate: Yeah. We think community solar is the fastest growing sector of solar in the US right now. So it’s an industry. It really started about four years ago, right? Four to six years ago and it really started to ramp in the recent years. We are so excited about the Inflation Reduction Act because there’s actually a lot of good incentives and prompts to get more sort of this smaller scale, smaller than utility scale, but still on distribution, get generation, that we think, is so important for the energy transition. So I used to tell friends that renewable energy is really a construction and finance field. So you get, you construct, you put poles in the ground and you finance them. And what Community Solar does is it adds on a layer of the customer. So this is really where Arcadia’s been able to build a business and lean in and sort of help these projects built is the, the community solar developer needs to have a residential consumer as an offtaker. So, state programs are developed because they want to bring more third party development into the solar industry. But the carrot, the incentive is, hey, we’ll give you basically close to the retail rate for these projects if you can get a residential customer to sign up for it. And developers who are used to constructing and financing their projects don’t have that innate sort of capability to sign up tens of thousands of customers in mass. So Arcadia’s cresting over 250,000 customers on their community solar product. That’s just not the core skillset of someone who can get interconnection permits, find a land deal, build the project. Like they’re just different skills. So what Arcadia is bringing is the experience in digital marketing, customer acquisition, customer retention, those sort of best in class digital, direct to consumer skills. We’re applying them to community solar, and so that’s really where the partnership with a developer comes in.
We don’t own projects. We don’t develop projects. We’re not an asset owner. We go to the developer and say, Hey, you need a thousand off takers for your community solar project, here they are. And that’s been a really great partnership, because it’s allowed us to really use what’s our special sauce, direct to consumer, those types of skills, and give the developer what they need, which is those customer contracts to be the offtake. I think what’s great is we’ve done it across all the community solar states and because we have this data platform, we’ve been acquiring customers nationally for years before Community Solar started. We’re able to play in all 14 of the community solar states to expand when a new one opens. And I think that’s been really powerful for developers because they want to have a portfolio where they might have projects in different states and they need different capabilities. There’s different rules and programs to deliver. So, that’s really where we’ve brought the value to the community Solar market.
Catherine: And you’re also doing some wind though as well?
Kate: Yes. So our other part of the direct to consumer product, because not every state has community solar, it’s only in 14 states now. We think it’s actually going to expand quite a bit after the IRA. But we also do a direct to consumer wind direct program, which was where we started seven years ago. And that’s what you’re using in Virginia. Community solar is coming to Virginia. So, hopefully we’ll be able to transition you to this also great product. But we also do, for people who aren’t in community solar states, this a wind direct program. But our fastest growth has really been in community solar and then starting to sell our data platform to energy innovators who wanna make new cool products.
Catherine: It’s interesting because I do a lot of recruitment for the Coalition for Community Solar Access.
Kate: Oh, that’s great! Yeah!
Catherine: So we’re literally like, I’m placing people who are trying to get exactly this pass. Like getting a community Solar Pass, these different states. And so I find it really gratifying, working on the government affairs piece, legislation piece. The policy piece.
Kate: Yeah. So it’s real megawatts. You can really track that. States are committing to, we think it’s going to be a three, four gigawatt market a year. That’s a significant part of our national renewable plan, which is exciting.
Catherine: Yeah. So before we wrap things up, I wanted to ask you whether you have any advice for those looking to break into and succeed within the clean energy industry? Everyone that knows me would probably know that I’m asking that question as well with my little diversity lens on. So anything in particular maybe for a general audience, but women perhaps.
Kate: Yeah. That’s great. What’s been wonderful to watch, you’ve been in this industry a long time, I’m now starting to be in this industry. So I feel that things have changed in the last two or three years in a wonderful way. Maybe you feel that too. A couple years ago you were sort of talking to the same type of background, the same type of person, the same sort of business opportunities. And really in the past two or three years, for a number of reasons, there’s been this burst of new types of people wanting to get into the clean energy space, new types of businesses being formed. We’ve moved way past this just being a hardware business and there’s so much innovation happening. And so the first thing that I think is just amazing is that everybody can be able to join the clean energy revolution. There is room for marketers, product designers, engineers, lawyers, policy people. This is now a career choice that you can make for decades. That you can make coming from a big tech firm, coming from tons of different places. And so I think that’s the thing that gives me, first and foremost, just hope, optimism, excitement.
And then go into your diversity lens. That’s also how you get diverse candidates, because now a general population can apply. You don’t just have to have renewable experience, energy experience, finance experience, where finance and construction are generally more male dominated fields. But now clean energy is opening up to everybody in a way that I think should make us all commit to and feel optimistic that you can build a pipeline of candidates that is diverse as the general population. And so I think that’s optimism. You need to follow through on that. I think in all ways you need to encourage people to apply. You want to invite people to apply to these roles sometimes or encourage your network to say, you can do clean energy, you should come be in this field.
What I hear a lot, because I take sort of cold outreach calls sometimes and there’s a lot of people who wanna transition to clean energy and their first question is, I don’t have any of that experience. How do I do it? And so, I think for everybody it’s encouraging. I was a lawyer who had no experience in clean energy or business, but it’s encouraging people to see their wedge and to say, okay, what skills do you bring? Clean energy needs all of them. So let’s frame this as, how can you take your unique skills that maybe have never been applied to energy? You don’t know what a kilowatt hour. But how do you make the pitch that that’s exactly what innovation needs? Because the problem is too big to have anybody sit on the sidelines, and so, it’s time to invite all skills and show them how they can apply that to this problem.
Catherine: But I’m just curious, if you don’t mind, how did you meet Kiran? Like how did you wind up in this situation?
Kate: Yeah, so I referenced the cold email. So I cold emailed him. I started sort of investigating energy startups. The good thing about Washington DC is there’s not a hundred of things going on, right? There are three. And so, I found the three, and I wrote a cold email and I pitched myself as like, this is what a lawyer can do in this industry. And so I am the classic example of a career transition. We’ve grown into a billion and a half dollars business. Using the skills I had as the wedge, which was law and regulatory and comfort with that. And then expanding it with a beginner’s mind to scale a business to 800 people and a billion and a half dollar valuation.
Catherine: Because there’s two things I just wanna mention about Arcadia. I find it interesting that I always use you guys as an example that even pretty early on you were open to taking people from outside the industry. And so whenever I’m doing a brief and they’re like it has to be marketing manager and they have to have this, this, and this. So I’m like, yes but if you look at Arcadia, who’s a company that you really like? Yeah. That their market manager didn’t come from that, their HR person didn’t come from that. Serious, seriously. And I think that you also, I feel like, have put on JDs previously that even if you don’t meet all of these criteria, please feel free to contact us. Because I think what you find with women is that they need to be 150% qualified with the job before they apply. So it’s almost like giving them that permission, if you like. Yes, like you may not be 150% qualified but please, still, still apply.
Kate: One of the things that I hope people take power from is that the future hasn’t been written right? There’s no sort of playbook for what it’s going to be like in five or 10 years that they’ll probably have to solve. And so take confidence in that. We’re not going to do things like we have in the past. And so just taking what we have in the past and applying to the future is not what we need to do. We need innovation and risk and guts and smarts and those are the qualifications I think people need to get into this field and a desire to make an impact. And so, if that’s what you have, then come and raise your hand and apply. I think that in so many ways, what’s great about this industry is it’s still, parts of it are mature, and solar’s been around for 25 years now. We all know that is a big industry, but there’s so much innovation to come that we will miss wonderful opportunities if people think they have to be perfectly qualified, or done this before because it hasn’t been done.
Catherine: Yeah. Also, one thing that I wanted to just ask you about quickly is, because you have been so open-minded about where people come from previously, I’m interested to know about the learning and development within the company. Because a lot of the objections that I hear when I say, let’s bring a diverse candidate somewhere else. My clients will be like, yeah, that sounds great. But we don’t have anybody to train them. We need somebody that knows exactly what they’re doing from day one, because we’re so busy, blah, blah, blah, blah. So there must be some sort of infrastructure that you have within the company to bring these people on and train them up?
Kate: Yeah, yeah, we do. So first thing I’ll say is we are still learning and growing and we change so fast that like we need, we continuously have to invest in things. But one of the things we do for our onboarding is we do an energy 101 course. Our VP of policy, Richard Caperton, does it, it’s an energy 101. It’s a multi-step course, and we teach people about kilowatt hours and interconnection and we’ve made that part of our learning and development. And people love it, right? A lot of people who we get are really climate, I would call ’em climate curious, who are coming. So they’re already starting to read articles and thinking about climate change, and so we really give them, every single person, will take this sort of energy 101 course and learn about the business. We are also real energy nerds here. So we talk about these things that are all hands are lunch and learns. It’s part of our vernacular and culture. And so, people get up to speed, I think, by the culture and so we infuse it in our business for sure. We need to get the smartest engineers excited about energy. We need to get the smartest marketers excited about energy. I think that the amount we need to retrofit the world and to do that, you can’t just do it with the people who’ve been in this industry so far, you have to activate a whole new generation of people. To get excited about this problem and want to solve this problem for us to actually solve it.
Catherine: Yeah. Well, thank you so much for your time. I really appreciate it.
Kate: This was great. This was great. Thank you Catherine. Lovely.