RGS Energy has made the latest in a series of “strategic acquisitions”, signing an agreement to purchase Hawaiian full service solar energy firm Elemental Energy, which trades under the brand name Sunetric.
RGS, headquartered in Colorado, claims the move will provide the company with “rapid entry into a major market that has the highest electricity rates in the US”. RGS quotes electricity prices in Hawaii as being three times the US national average, driving activity in the solar power market at residential and commercial level.
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Sunetric, which works in residential and commercial sectors, was founded in 2004 and to date has installed over 65MW in Hawaii across 3,500-plus projects. According to RGS, which released its own financial results earlier this week, Sunetric’s revenue for 2013 exceeded US$38 million.
The deal is expected to be closed in the next quarter, subject to conditions. RGS Energy will pay a total of US$16 million, including US$7 million cash, US$9 million of common stock and US$3 million for potential earn-out payments.
The Sunetric brand will remain intact, with its 90 employees joining RGS as a wholly owned division.
Speaking of the appeal of Sunetric as an acquisition target, RGS chief executive officer Kam Mofid said: “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.”
Hawaii has the highest penetration of PV of all the US states; which, as a group of islands has not come without problems, including issues with grid connection and intermittency. As a result, along with California and Puerto Rico, Hawaii has become one of the first regions to issue a mandate for energy storage.