How I made it: Doug Stewart, founder of Green Energy UK

The Sunday Times
April 26, 2009

Rachel Bridge

CARS were always a passion for Doug Stewart. As a child growing up in Letchworth, Hertfordshire, and then High Wycombe, his favourite pastime was playing with his Dinky and Corgi cars, which he still has stored in his loft. When he left Southampton university, where he studied economics and law, he joined Ford as a graduate trainee and spent seven years there. Then, after a spell of working for a recruitment exhibition company, he bought a Volkswagen Audi dealership and became a full-time car salesman.
So it was a big surprise to his friends and family when Stewart decided to set up a company supplying electricity created by green sources such as solar and wind power.
Stewart was at a child’s birthday party when he had a conversation that changed his life. He started talking to a man who was doing a PhD in photovoltaic physics. “I talked to him about solar energy for three hours and was absolutely fascinated,” said Stewart.
As soon as he got home he turned on the computer and tried to find out all he could about solar energy. He quickly decided it was something he wanted to get involved in.
“I wanted to do something that made a difference. I had spent 20 years polluting the planet but now I had a young family and I was sitting there thinking, what do I want to do?”
The big question was how to go about turning his enthusiasm into a viable business. “All the research I did said that in 10 years solar energy might be a viable proposition but for now it was for philanthropists.”
His first thought was to become a roofer so he could specialise in attaching solar panels to roofs. His second thought was to start up a green electricity company.
“I mentioned it to someone who said that electricity was a big boy’s business and I would never be able to do that. That was like a red rag to a bull.”
Stewart discovered that it was possible to buy electricity through another electricity provider that already held a licence. So with a start-up fund of £50,000, of which £25,000 came from the sale of his car dealership and the rest he borrowed from his family, he set up a website and opened for business. He began by supplying electricity to friends and former colleagues and grew the business from there.
All the electricity he supplies is provided by the National Grid so that for every unit he takes out to supply customers, he must immediately put in an equal amount of generated electricity. The units that Stewart’s customers take out are not necessarily “green”, but the units he replaces them with are. He said: “What we are trying to do is green up the grid.”
The idea took hold and his company thrived. Four years ago, though, he made a mistake that nearly derailed the business. Faced with the prospect of a big order, Stewart broke his own golden rule and accepted the order without backing it up with a contract to buy the same amount of electricity, thinking that he could simply buy the electricity he needed on the open market.
“We sat down and said, what could possibly go wrong?” Unfortunately, the deal was struck just days before Russia cut off gas supplies to the Ukraine. Overnight, the price of electricity shot up sixfold and Stewart’s business, which was committed to providing electricity at a set price, lost £500,000, pushing it to the brink of collapse.
Stewart said: “We were spectacularly unlucky. But it was one of my biggest mistakes in not adhering to the risk strategy that we had set ourselves.” Fortunately the business survived and this year will have a turnover of £5m.
Green Energy UK now buys electricity from 30 small-scale generators across the country who use a variety of green technologies, as well as from some households. It supplies electricity to Waitrose, Neal’s Yard Remedies, and the Duchy of Cornwall, among others.
One unusual feature of the business is that every customer is given free shares in the company and will ultimately receive dividends. As a result, Stewart’s stake in the business is gradually dwindling from 50% to 25%, the lower limit he has set.
“When I said I wanted to give half the business to the customers our financial advisers said I must be mad. But I wanted them to feel part of what I was trying to do and to share the vision.”
Now 52 and married with three children, Stewart has this advice for budding entrepreneurs. “Always listen to the advice you are given, but remember that you don’t have to actually take it. People are happy to offer advice if they think you are listening but they will stop if they think you are not.” As to the secret of his success, Stewart said: “Just do what you are going to do, on time and at the price you say you are going to do it, and you will probably exceed every customer’s expectation because most of the time customers are used to people promising one thing and delivering another.
“And if you make a mistake, own up, say sorry and offer a solution. I have usually found this rarely costs me anything and I tend to win a customer and a lot of loyalty from them.”
The updated paperback edition of Rachel Bridge's book, 'How I Made It – 40 successful entrepreneurs reveal how they made millions', published by Kogan Page, is out now, and is available from The Sunday Times Books First at £9.99 (including postage and packaging) on 0845 271 2135 or at timesonline.co.uk/booksfirst