RGS Energy, a nationwide leader of turnkey solar energy solutions for residential, commercial, and utility customers, has signed a definitive agreement to acquire Elemental Energy LLC, a full-service solar energy firm operating under the Sunetric brand.
Based in Oahu, Hawaii, Sunetric is one of state’s largest and most established local solar developers and installers. The acquisition provides RGS Energy with rapid entry into a major market that has the highest electricity rates in the U.S. – three times higher than the national average. These high rates provide very compelling economics for homeowners and businesses to adopt solar photovoltaic systems.
Since its formation in 2004, Sunetric has installed more than 3,500 solar projects in Hawaii representing more than 65 MW of installations. Sunetric maintains an extensive backlog and pipeline of commercial and residential projects, with revenue topping $38 million in 2013.
RGS Energy has agreed to pay total consideration of $16 million to acquire Sunetric, comprised of $7 million in cash and $9 million in unregistered Class A common stock, along with an additional $3 million in potential earn-out payments. The transaction is expected to close in the second quarter subject to satisfaction of certain customary closing conditions.
Sunetric will maintain its current management team and well-established Sunetric brand as a wholly owned division of RGS Energy. Sunetric brings more than 90 employees to RGS Energy, including some of the most experienced residential and commercial sales and installation teams in Hawaii.
“This transaction brings to RGS Energy one of Hawaii’s largest and most respected solar companies,” said Kam Mofid, CEO of RGS Energy. “Sunetric possesses a healthy balance between commercial and residential solar projects, plus a strong government portfolio with experience in all branches of the military. They add to our already substantial national footprint, while allowing rapid expansion into new markets with unparalleled solar economics.”
“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,” continued Mofid. “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.”
Alex Tiller, CEO of Sunetric, commented: “Sunetric’s years of industry experience in originating, designing and installing solar systems of varying complexity and size for commercial, residential and utility-scale customers throughout all the islands is highly complementary to RGS Energy. We’re looking forward to applying the resources that RGS Energy provides in order to increase our project development capabilities and financing options for our customers. We are excited to become part of one of the largest and true pioneers in the solar industry. Our cultures mesh very well, so we look forward to propelling our combined business to a dominant position in the industry.”
— Solar Builder magazine