By Chris Meehan | Feb 01, 2015
Solar and renewable energy projects
Employees: About 100
Founder and President Paul Spencer is guiding one of Colorado's fastest growing companies to a bright future.
Clean Energy Collective built the first community solar garden in the U.S. Last year, Inc. called it the third fastest growing company in Colorado.
"We're growing like a weed," says Spencer. But this isn't a weed in a garden anyone should be plucking.
Clean Energy Collective nurtured a seed when it developed the first commercial community solar garden, an 86-kilowatt solar array with Holy Cross Energy in El Jebel, Colorado, five years ago. The company moved from the Roaring Fork Valley to Boulder County in 2013 and now has more than 40 projects completed or actively under construction, the company's -- and competitors' solar gardens are flourishing.
When the company launched, the only way for utility customers to go solar in the U.S. was to install solar on a home, business, or other property. Not everyone can do that, so Clean Energy Collective allowed customers to buy into a larger project, either by purchasing individual panels or essentially leasing or renting them, and use the energy produced to offset their use of electricity from other sources.
Since the solar garden as a whole is a larger project than a rooftop installation, it can qualify for economies of scale that reduce the cost of the solar panels and equipment in the array. It also makes it easier for utilities because a solar garden can be ideally located to make the most of the solar resource while reducing the amount of individual customers putting energy back into the grid.
The approach is proving popular. "We have sold out facilities in a as little as two and a half weeks," Spencer says. "Between 2011 and 2013, we grew 2,217 percent. We were ranked the third fastest growing company in the state of Colorado and the 194th fastest in the country. We have grown at a 500 percent clip year over year and this year is no different."
"We'll do somewhere around $50 million in revenue [for 2014]," Spencer says. "We expect to do $250 million to $300 million in revenue next year."
Primarily, that's come from selling the panels in the projects, but in newer solar gardens, it's essentially renting the panels. "In that model, we make a smaller amount of money, but it's coming in every month, so it's a long-term revenue stream." The company also makes a small amount of revenue from maintaining the systems.
The company isn't putting boots on the ground across the country. "Typically, we're using either a local EPC (engineering, procurement and construction) contractor or we're using a larger EPC that subs it out to local partners," says Spencer. "About 95 percent of the manpower comes from locals, no matter how you install solar."
"We've pulled it off with 18 different utilities in eight different states, with all three types of utilities: investment-owned, co-ops as well as municipal utilities," Spencer says. "We've done it in a lot of ways -- on roofs, in-ground with trackers, without trackers. I think the benefit of that experience is that people now look to us as the de facto standard. We're the only developer or community solar specialist that's actively succeeded in partnering with the utilities on a one-on-one basis."
In Colorado the company has 20 projects underway or completed -- 11 with Xcel Energy alone. Spencer predicts that in 2015 Clean Energy Collective will install more than 100 megawatts of solar power -- and in 2016 it could install 200 more megawatts of solar gardens. That's enough to power about 50,000 homes.
In 2015, he estimates the company will have to raise $400 to $500 million to finance its projects. In the past, the company has partnered with local banks, credit unions, and US Bank, he says. The quickly growing pipeline and larger projects needing financing the company is exceeding the lending capability of smaller banks and Spencer is now looking to national banks.
One of the reasons the company has been able to get financing is the promise of a quick turnaround. "About 65 percent of our projects are sold out before we get done construction. On average, within 90 days of completing construction, we're completely sold out," Spencer says.
Challenges: Managing growth, says Spencer. "Keeping up with demand. That comes in many different facets. Finance is always a difficult one for a young company."
Opportunities: "We're the leading provider of community solar by a factor of twentyfold. Our closest competitor has two projects in the ground. We're very well-positioned for growth in the solar industry," Spencer says.
Needs: "More great people. More capital. We're looking for strategic partners and for expert employees in marketing, sales and finance."