Originally published in the Kansas City Business Journal. By Jonna Lorenz.
Atlas Properties of Fort Worth, Texas, bought The Energy Savings Store and renamed the Lenexa renewable energy company Brightergy LLC.
The deal will enable Brightergy to offer leasing and financing programs to commercial customers interested in its solar photovoltaic systems but deterred by the high upfront costs.
“We really are taking this to the next level,” said Jordon Ringel, vice president of Atlas Properties and COO of Brightergy. “That’s the attitude that we’re bringing to the table.”
Terms of the deal weren’t disclosed.
Bob Solger founded The Energy Savings Store in 2003 and remains as president of Brightergy. Adam Blake, a Rockhurst High School alumnus and CEO of Atlas Properties, is CEO of Brightergy. Blake and Ringel, along with two other Atlas employees, have moved to the Kansas City area and will maintain offices at Brightergy’s Lenexa headquarters.
“We wanted to pursue an opportunity that we could scale quicker than scaling our real estate portfolio,” Ringel said.
Spurred by federal and state renewable energy incentives, The Energy Savings Store has experienced rapid growth in recent years. Revenue was $1.6 million in 2009 and climbed to $3.5 million in 2010 through Oct. 31, when the deal closed, Solger said.
The company has 18 employees in Lenexa and in a St. Louis field office. Solger said he expects to add at least 10 employees within 60 days.
Brightergy also plans to open an office in downtown Kansas City, Ringel said. The company is in preliminary discussions with contractors and architects but hasn’t selected a site or determined a time frame for opening a downtown office.
Atlas owns several commercial properties in Kansas City, including the Liberty Lofts near Union Station and the former Pabst Brewing Co. building in the Crossroads Arts District.
Brightergy will roll out its new financing options in Missouri and expand them to other markets based on available incentives.
Financing options for solar installation emerged in the past four or five years and have been instrumental in the industry’s growth, said Monique Hanis, a spokeswoman for the Solar Energy Industries Association, a Washington-based nonprofit trade group.
“It’s huge, especially for the commercial side,” Hanis said. “About 80 percent of the commercial solar energy systems that have been put in place in the last couple of years have had some kind of financing or power purchase agreement that helps the owner cover the cost.”
Nationwide, the capacity of solar photovoltaic systems installed in 2010 is expected to hit 1,000 megawatts, double the amount from last year and enough to power 200,000 homes, Hanis said.
Solger said he looked for about three years for a deal that would allow the company to offer financing.
“A lot of people would like to invest in solar, but the capital outlay is a high hurdle for a lot of companies,” Solger said. “If they can lease a system with minimal outlay that fixes their monthly cost for that amount of energy that’s produced, they’re saving themselves money.”
Specific financing options will vary. For example, a 25-kilowatt system has a retail cost of about $150,000, Solger said. Much of that can be recouped through federal and state tax incentives and rebates, reducing the cost to about $55,000 in Missouri. Brightergy’s financing option will allow companies to pay an initial investment of $20,000 and finance the remaining $35,000 over 15 years.
Brightergy gets the benefit of the incentives. The customer gets energy at a fixed cost that is about two-thirds the cost of traditional electricity rates, paying back the $20,000 initial investment in about two years.
Solger said he expects the financing options to account for about half of the company’s business during the first year.