Solar M&A: Solar Universe Acquires Gen110, M+W Acquires Gehrlicher, Plus More

A small wave of mergers and acquisitions in the downstream solar industry

Solar Universe, a solar franchise and installation firm, just acquired Gen110, a solar customer originator. M+W Americas, an EPC, acquired Gehrlicher, a project developer, and HelioPower, a small solar installer, acquired Greenzu, a solar financier.

The solar consolidation is happening. It's occurring via deep attrition -- and a growing list of deceased solar firms

But it is also occurring via a wave of M&A and restructuring, which signals a maturation of sorts in the industry as supply rationalizes and customer channels evolve.

As we reported in April, First Solar's acquisition of TetraSun in June signaled the thin-film leader's move into high-efficiency modules for residential and commercial rooftops and an admission that there's a real value to high-efficiency PV. Last month's $120 million SolarCity acquisition of Paramount showed the importance of customer acquisition costs in the downstream solar business.

Recent acquisitions add some color to this trend.

 As noted, the solar franchise firm Solar Universe just announced that it acquired Gen110 (a "customer originator" in the words of co-founder Jason Brown). This acquisition of a customer acquisition expert is in the same vein as last month's acquisition of Paramount Solar by SolarCity.

San Francisco-based Gen110 was founded in 2009 as Solmentum, changing its name to Gen110 in January 2012 and garnering funding from KP in May 2012. Solar Universe was founded in 2008 and has 37 locations in the U.S.

Gen110 founder Jason Brown told GTM that the company is involved with the customer from "initial point of contact through power-on." Brown claims that Gen110 has already enabled 3,000 solar installations.

Shayle Kann of GTM Research notes that Gen110 is known as a door-to-door sales expert. Brown said that his company's technology platform allows "well-educated college students to walk the customer" through solar fundamentals, as well as the process of installation and financing.

Brown sees the next stage of the solar industry as one of consolidation, smart vertical integration, and concentrating on scrubbing out soft costs and customer acquisition costs. He said that Solar Universe's acquisition of Gen110 makes the combined entity the third-largest installer in California and number five in the U.S.

GTM Research sees the residential solar financing market in the U.S. growing from $1.3 billion in 2012 to $5.7 billion in 2016.

Keep an eye out for an upcoming report from GTM Research on customer acquisition costs. Residential customer acquisition costs in the U.S. are now reckoned to be close to the cost of the solar panel itself (!) and represent the fattest target for cost reduction in residential solar financing and installation.

 

M+W Americas acquired 100 percent ownership of Gehrlicher Solar America Corporation (GSAC). M+W Group is a big global engineering, construction and project management (EPC) firm. GSAC is a 52-employee firm focused on the "complete PV downstream value chain, from project development through engineering, procurement and construction (EPC), and finally operations and maintenance (O&M) for commercial and utility-scale projects." Gehrlicher America expects sales of $150 million in 2013.

Jerry Shinn, formerly COO, will become president of GSAC. "The combined capabilities of M+W and GSAC will provide that ‘one-stop-shop’ for our clients,” said Rick Whitney, M+W Americas’ President and CEO.

 

In other solar M&A news: