The acquisition of Kailua-based Sunetric by a major player in the mainland solar photovoltaic market will provide the local company with access to capital and other resources that will strengthen its presence in Hawaii, Sunetric CEO Alex Tiller said.
Colorado-based RGS Energy has agreed to buy Elemental Energy LLC, which does business as Sunetric, for as much as $19 million in cash and stock, the two companies announced Thursday. The deal is expected to close within the next three months.
Sunetric, one of Hawaii’s largest homegrown solar companies, will be operated as a subsidiary of RGS Energy. It will maintain its management team, 90-member workforce and the Sunetric brand, Tiller said.
Access to low-cost funding that the publicly traded RGS Energy brings will be a major plus for Sunetric as the solar industry in Hawaii consolidates in the years ahead, Tiller said.
"It will essentially make us a stronger company from the consumer’s point of view," he said. "All around it adds a lot of horsepower to our company."
The acquisition will allow RGS Energy to add Hawaii to its list of markets, which includes California, Colorado, Connecticut, Massachusetts, Missouri, New Hampshire, New York and Vermont.
Sunetric, founded in 2004 by Sean Mullen, has grown to become one of Hawaii’s leading solar companies with 3,500 projects totaling more than 65 megawatts of generating capacity to date.
Sunetric’s revenue topped $38 million in 2013. In 2011 the company opened an office in Denver.
When the deal closes, RGS Energy will have access to Sunetric’s "extensive backlog and pipeline" of commercial and residential projects, according to a news release from the two companies.
Hawaii is among the fastest-growing solar markets in the U.S., said Kam Mofid, chief executive officer of RGS Energy.
"The extremely high cost of utility power in Hawaii has made it one of the most attractive markets for solar systems in the U.S., and this has led to the highest penetration of solar systems in the country," Mofid said.
"As a result, Hawaii leads the industry in important areas such as grid integration and is key to the evolution of solar combined with energy storage. We are eager to participate in this vibrant market and benefit from significant opportunities ahead," Mofid said.
RGS Energy has installed 170 megawatts of solar energy generating capacity since it was founded in 1978. The company, which is traded on the Nasdaq Capital Market, has a market capitalization of $138 million. It posted a net loss of $11.3 million in 2013, down from a net loss of $37.2 million in 2012.
RGS Energy’s shares closed down 8 cents at $3.80 Thursday.
The shares have traded in a range of $1.56 to $7.17 over the past 52 weeks.
Tiller said he will continue as Sunetric CEO for the "forseeable future" while the operations of the two companies are integrated.
Further down the road, Tiller said he plans to focus on a startup company he founded called Autowatts that tailors PV systems to homeowners who also own electric vehicles.
