Exclusive: Civic Renewables is rolling up residential solar installers to improve quality and grow the market | TheTrendyType

by The Trendy Type

The Solar Power⁣ Rollercoaster: How Civic Renewables is Navigating the Residential ‍Market

A Turbulent Industry with Untapped Potential

Despite⁤ being‌ around⁣ for two decades, the residential solar⁣ industry⁢ remains a volatile landscape. While ‍shifting regulations, like those implemented in California last year⁣ that extended payback periods for homeowners, contribute to‍ this instability, the inherent nature⁤ of​ the business also plays a role. Solar ⁣installation is⁣ labor-intensive, resistant to automation, and highly fragmented. Even the⁤ largest​ publicly traded installer, Sunrun, only commands 13% of the market share.

The Quest for Consistency: Civic Renewables’ Approach

This ‍fragmentation often leads to inconsistent customer experiences. Some companies excel, while others fall short. To address this challenge, Civic ⁣Renewables‌ is⁣ acquiring smaller solar ​installers and consolidating them under its umbrella.

Building on Existing Expertise

“These are really good building people,”⁤ says Lee Kesheshian, founder and CEO of Civic Renewables. “But they​ might not have the best bookkeeping practices or rely primarily on⁤ personal​ lines of credit to keep their‍ businesses afloat.”

Civic Renewables aims to empower⁤ these skilled⁢ electricians by‍ providing them ⁢with the necessary support systems. “We’re saying,‍ ‘Focus ‍on what you do well, which ⁣is‍ being​ a⁤ fantastic electrician. Let’s concentrate ⁢on that,’ ⁢” Kesheshian explains. “Now let’s go and put these systems in place ‌under⁢ this umbrella.”

A Holistic Approach⁣ to Growth

Each ​acquired company retains⁣ its branding while becoming part of the larger Civic Renewables network. ‌The parent company provides essential back-office functions like human ​resources, finance, procurement, and training ⁢for new employees. Initially, this focus will be on solar installations, but as the⁢ business expands, it may ⁢encompass other renewable energy ‍solutions like⁤ heat pumps.⁤

Creating Jobs and Driving​ Local Economies

For Kesheshian, a former VP at Tesla and COO at‍ Palmetto Solar, workforce development is a key pillar of⁣ Civic Renewables’ strategy. “How can we go into these markets that haven’t ‌historically been ‍solar ⁤markets? The only way ⁢you’re going to make a ⁤change in these places is ‍by giving‍ people jobs,” he emphasizes.

This commitment to⁤ job creation aligns with the broader goal of enhancing profitability through organic growth and economies of ⁢scale rather than simply​ reducing headcount.⁢

A Strategic ⁢Investment ​in ⁢Renewable ⁢Energy

Civic Renewables has already acquired two‍ installers – Green Rack⁣ Solar in Pittsburgh and Ipsun​ Solar in Fairfax, Virginia –‌ and plans to acquire two ⁣more this year. The company will continue to focus‍ on the Mid-Atlantic ⁢and Midwest‌ regions ⁣for the foreseeable ‍future.

Backed by GEF⁤ Capital ⁤Partners, a⁢ private ​equity‌ firm ​specializing in climate tech, conservation,⁤ and sustainability, Civic Renewables has received initial⁢ funding to launch its operations.

“We put in ⁢just a ‌few million dollars, just to get ​the business going,” says‍ Stuart Barkoff, managing⁢ partner‍ at​ GEF Capital Partners. The firm has⁣ allocated additional funds for future acquisitions but declined to disclose the specific amount. Kesheshian aims to reach a point where Civic ‌Renewables can self-fund its growth through internal resources.

GEF’s long-term vision is to develop Civic Renewables into a company generating‌ around $30 million in earnings before interest,⁣ taxes, depreciation, and amortization (EBITDA). “That’s a very attractive asset for numerous investors ​out there,” Barkoff states. ⁢

A‍ Model for​ the Future of Climate Tech

Given that solar technology ‍has been around for some time, Civic Renewables’ business model ​could serve as a blueprint for other segments within⁣ the climate tech ‍market. Many decarbonization efforts rely on ⁤skilled labor that is ​unlikely to be easily replaced by automation. While there is much discussion‌ surrounding automation, there remains ⁢significant ⁣opportunity and investment potential in the​ trades sector.

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