“Revitalizing Communities: Uniting Residential Solar Installers for Enhanced Quality and Expansion”

The residential solar industry, although relatively young at only 20 years old, has already seen its fair share of ups and downs. From changing regulations, like in California where policy updates have elongated the time frame for homeowners to see a return on their investments, to the complexities of the industry itself, which relies heavily on manual labor and is highly fragmented, there are many factors at play.

“This is the solar coaster. It is crazier than many other service industries,” explained Lee Kesheshian, founder and CEO of Civic Renewables, in an interview with TechCrunch.

To combat the challenges of inconsistent customer experiences and varying levels of quality, Civic Renewables has adopted a unique approach – buying out small solar installers and bringing them under their umbrella organization. Kesheshian noted, “These are generally very skilled tradespeople, but they may not excel in areas like bookkeeping or managing their finances. We want them to focus on what they do best, which is their craft, while we take care of the rest.”

“Generally speaking, these are really good construction people. We say, look, focus on what you do well, which is, you’re an amazing electrician. Let’s focus on that,” he said. “Now let’s go and put those systems in place under this umbrella.”

When a small installer is acquired by Civic Renewables, their branding remains intact, with the addition of the company’s name. Support and resources, such as human resources, finance, and procurement, are provided by Civic, and new employees are given training opportunities. While the current focus is on solar installations, there are plans for expansion into other areas, such as heat pumps.

For Kesheshian, who has previously held leadership positions at Tesla and Palmetto Solar, the workforce aspect is crucial. He believes that providing new job opportunities is a key way to introduce solar to markets that have not traditionally embraced it. “The only way you’re going to make a change in these places is by giving people jobs.”

With this approach, the goal of increasing profitability is not achieved by reducing headcount, but rather by finding ways to accelerate business growth while leveraging the benefits of size and scale.

So far, Civic Renewables has acquired two small installers – Green Rack Solar in Pittsburgh and Ipsun Solar in Fairfax, Virginia. Kesheshian predicts that two more will be added to the roster this year, with a continued focus on the Mid-Atlantic and Midwest regions.

The startup has received backing from GEF Capital Partners, a private equity firm that specializes in climate technology, conservation, and sustainability. “We invested a few million dollars initially to get the business going,” stated managing partner Stuart Barkoff. While the exact amount is undisclosed, GEF has earmarked funds for Civic Renewables to make future acquisitions. Kesheshian’s ultimate goal is for the company to be able to underwrite its own purchases in the future.

Barkoff shared that the plan for GEF is to grow Civic Renewables to around $30 million in earnings before interest, tax, depreciation, and amortization (EBITDA). He believes this would make the company an attractive asset for potential investors in the market.

Because the solar industry has been established for some time now, Civic Renewable’s business model could serve as a blueprint for other areas of the climate technology market. As efforts to reduce carbon emissions continue to grow, the need for skilled labor will only increase. While automation may be a buzzword, there will always be demand and opportunity for skilled tradespeople.