Atlanta based Radiance Solar, LLC was founded in October 2007 to develop and design turnkey solar energy systems. The focus is primarily on commercial customers, who can take advantage of incentives and depreciation to achieve high ROI’s and whose facilities are more likely than residences to have large flat roofs exposed to sunlight.
Current energy market conditions (increased global demand, limited supply, higher prices) and the growing concern for the environment have resulted in massive investments in both renewable energy and efficiency technologies. Despite having more solar sun hours than any market outside the Southwest, the Southeast remains an underserved market for distributed solar energy. With solar photovoltaic (electricity) technology approaching grid parity in 3-5 years (currently up to 20% efficient and $7,000 per kW) and solar thermal (hot water) technology already at grid parity (up to 80% efficient and $1,500 per kW), the company believes there exists a huge opportunity for providing comprehensive solar solutions to meet the growing demand for renewable energy in the Southeast. Radiance Solar has completed 10 commercial and residential projects since June of last year, including the largest commercial solar hot water system in the state of Georgia. This system, pictured above, is at a Manheim Auto Auction and utilizes 1600sf of solar thermal collectors to achieve 50% cost savings.
The benefits of solar are many: tangible cost savings, reduced environmental pollutants, water savings, “green” intangibles, and LEED points.
The game plan is to lead with solar thermal systems for the 10,000+ heavy commercial hot water users in the Southeast and quickly expand nationally. These systems range in cost from $20K-$2M. Hot water and industrial process heat account for up to 60% of all commercial/industrial energy use. Solar thermal technology can provide clean, renewable energy for hot water and industrial process heat at or below current market rates. Radiance will also offer solar PV as a complementary energy system to customers.
The revenue model has four components:
- One-time revenue from system design and implementation
- Recurring revenue from Power Purchase Agreements (PPAs)
- Recurring revenue from the sale of Renewable Energy Credits (RECs)
- Recurring revenue from service contracts
Radiance Solar is a turn-key sales, installation, and service business for commercially available solar energy components from OEM’s such as SunPower, but it relies heavily on its expertise and proprietary processes to be competitive in this realm. The company also believes there are few players in this space, none with more than 5% market share, and that it has a first mover opportunity.
The company gives its commercial customers the option to purchase systems or to purchase energy via PPA’s. Solar thermal systems can have immediate ROI’s, and as PV systems come down in price, customers can be migrated to them under the company’s solution selling and support techniques.
Competitors include such national players as Solar City, Sun Edison, and Akeena Solar along with Southeast regional entrants Southern Energy Management and Texas Solar. Radiance Solar is in a “land grab” game requiring aggressive marketing and sterling execution.
The team taking on this responsibility is headed by James Marlow, CEO (Yahoo!, IBM, Lotus). Joining him are Jamie Porges, COO (Turner Broadcasting, Riverview Properties), Powell Smith, CTO (IBM, Lotus, and W3C, and Scott Meyerhoff, CFO (The Intersect Group, Infor Global Solutions, Arthur Anderson). A well recognized group of investors and advisors is backing this leadership roster.
The company is generating revenue (along with power) and is actively selling and marketing per plan. We would describe this as relatively capital light business with a short path to sustaining revenue.
