Q: What is the compensation like? I’d imagine corporate strategy or LDPs (leadership development programs) of the larger utility and mature companies should pay 100k+ but what is it like at startups? Is it less base pay but more equity?
A: I’m actually going to write a post about this since it’s a pretty common topic of interest. Unfortunately even I don’t have many data points on this but I’ve gathered some numbers from personal experience as well as some from friends.
In general, cleantech compensation will obviously be lower than tech/banking/consulting and on-par with CPG and marketing. A lot will depend on the cost of living and what you negotiate. My general sense is:
Utility LDPs: $90-110k base, small annual bonus: on the higher end for PGE, SCE where cost of living is higher. I know Duke Energy’s MBA internship was prorated annually to around $75k-80k, though I don’t know whether the full-time salary is higher.
Cleantech strategic / corporate : This really depends… you would think they pay well but cleantech companies aren’t the most profitable. I’m referring here specifically to larger companies such as TSLA or SunPower and I believe the base is similar to above ($90-110k). Both companies have reputations for paying (relatively) lower.
Project Finance / banking: As you might imagine, this would skew towards the higher end of the pay range. You're basically getting banking salaries here if you join a company like as Marathon, Greentechcapital advisors...etc. starting salaries of $150k, year-end bonuses of 50%+, and a pretty generous signing bonus. You'll be paying for it in long hours and work-life balance.
Startups/smaller-sized companies: As you might have guessed this will vary widely. The minimum I’ve heard offered is $100k for a bay-area startup (yes there are some startups in places like Arizona which probably pay a lot less). One of my classmates was discussing an offer from a ~300 person startup that was offering base of ~$130k. In general, you’ll probably get some type of long-term incentive (whether it’s direct equity or phantom shares or restricted units…etc.) that seems promising, but my advice is to heavily discount their value.
I know this doesn’t really help much but the good news is if you’re interviewing for the third category (i.e. startups) you can definitely negotiate. For what it’s worth, one of the startups I was considering post-MBA offered a $100k base + equity and I negotiated it a decent amount higher with a guaranteed (albeit smaller) annual bonus. Another startup offered a base of around $135k + equity, with limited negotiating ability. Compared to my MBA classmates going into tech, it was still on the low side all-in for the bay area but I was just happy to get into cleantech. I’ll write more on this topic later but hopefully it’s a starting point…
Q: You mentioned in your blog that you dodged a couple companies that turned out to be going bankrupt. This is actually a pretty big concern for me (taking a job from a company but it going bankrupt soon after). Is there a way to evaluate the financial health of a company before accepting a job offer?
When I was deciding between companies and was in the final rounds I chatted to a bunch of alums and connections in the industry. This included bankers who had pitched to companies directly, alumni who were in the field…etc. This helped tremendously to help narrow the choices. For example, everyone told me how Sungevity couldn’t get their act together for the last three years and went through CFO after CFO. I actually had an offer for a really cool role with good pay but after hearing the same sentiment from everyone I ended up ruling it out. Turns out the advice was spot on…
If you’re considering startups, you have to consider the long-term prospects. My general thoughts are that if you’re pursuing startups and are heavily worried about bankruptcy risks, you probably shouldn’t be considering them anyway. The first step is to always look for funding… (I would advise against joining a pre-series C startup just because of the risk/reward). Second, I would closely look at the value stream / business model. If you’re considering batteries, for example, a startup that is trying to manufacture and commercialize a new flow battery or advanced chemistry battery will generally be way riskier than a new startup solar developer that just focuses on project financing.
Q: Building on #2, are there certain parts of the industry that’s more stable than others? You mentioned going into the battery and storage and I would imagine that to be more stable than residential rooftop installers. Another poster mention trying to stay between tech and renewable energy so you can always transition back into tech if needed. Would you say energy storage is like that?
A: Yes, totally. This is something you’ll get a feel for as you learn more about the industry. Overall, nothing is very stable except for utilities – there’ll always be the need for the grid and in general, we’re still decades away from grid defection or anything of the sort. Battery and storage is still a new industry so it’s much less stable than residential solar, which is in itself much less stable than large-scale solar. If you’re worried about stability and overall job loss, I would recommend you focus on functional skills in your next job rather than general strategy/market research-type roles. I took a finance role at Green Charge because I knew if things didn’t turn out great, I could always transition to another general corporate finance role at a non-energy company. Now that I think we have more traction, I’ve switched to a business operations/market-facing role where I’m getting a lot more involved in the underlying market and tariff structures. The risk of going into a market development role straight out of MBA is that you get a bit pigeonholed with industry knowledge and if you ever decide energy isn’t for you, it can be harder to transition out.
Q: In your experience, does the industry usually hire career switchers for internships and full-time positions? You talked about being a career switcher in your blog but you had the finance skills and experience down. My switch will be a little more extreme since I don’t have any finance or strategy experience. I will be attending a school in California though that’s a target school for the major utility companies like PG&E. But at places like Edison, they seem to require 3 years of relevant experience even for their MBA internship. What would be your advice starting out?
A: You’ll hear of ‘double switchers’ from your career center which refers to both switching function and industry. In general, it’s easy to switch from corporate finance to cleantech finance (industry switch) or cleantech finance to cleantech marketing (function switch) but very difficult from something completely random to a specific function. So, realistically, joining a company such as Sunrun will be hard in a functional role because they definitely prefer the direct experience. However, one of my classmates was at the GAP (retail) corporate strategy pre-MBA and got pretty close to securing an offer for a Sunrun market development role post-MBA without any industry knowledge, so the switch is definitely possible. However, you should consider two options:
1) Focus on larger, structured recruiting programs. LDPs generally don’t mind the double switcher and their training processes are structured enough that they’ll consider anyone smart with a business/MBA background. Utilities have a difficult time attracting top-tier candidates anyway so that gives anyone with a top-tier MBA-degree with an edge. Project finance rotations (SunPower) also don’t mind double-switchers. One of my classes came from a data consulting firm and secured an MBA project finance role. He was pretty analytical and good at excel, though, so I’m sure that helped.
2) Do internships/externships! I can’t stress this enough. You can do them remote during school, do them pre-MBAit’s so easy to gain direct energy experience. I took an energy startup course my first year at Kellogg and learned more about the field. I also did a couple of internships and an independent study during the school year which helped convince potential employers I was serious about energy. Although I initially wanted to focus on finance roles in cleantech, I was in the running for sales ops, marketing, and product management roles as well. I wouldn’t have said this was possible without the internships and direct experience. If you can get some experience as soon as possible, it would definitely open a lot of doors.
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