Solar Spectrum, a clean-energy company backed by private equity firm Northern Pacific Group, bought residential system provider Horizon Solar Power.
They will sit together under the Sungevity brand, the Oakland, California-based solar company that filed for bankruptcy in March. Terms weren’t disclosed in a statement Tuesday. Solar Spectrum in April bought assets from Sungevity.
The merger comes amid a turbulent time for the rooftop solar industry. Sungevity is among several companies that have gone bankrupt, collapsed or are winding down as they chase smaller margins. The rooftop solar industry may contract nationally for the first time in 16 years, according to Bloomberg New Energy Finance, reflecting a shift in sales strategies and increasing pressure from utilities to adjust incentives.
“This is an unusual and opportunistic play,” Hugh Bromley, a New York-based analyst at Bloomberg New Energy Finance, said by email. “Many of the mid-tier solar casualties in the past two years have been heavily exposed to the tepid Californian market.”
Solar Spectrum and Horizon Solar units will operate independently in the short-term, William Nettles, Solar Spectrum’s vice chairman and executive vice president of strategy and investor relations, said in an interview Tuesday. Solar Spectrum has a national footprint reliant on a phone-based sales force, while Horizon Solar has focused on door-to-door marketing in Southern California counties including Riverside, San Bernardino, Orange and Los Angeles.
“As everybody looked for new turf, we stayed and perfected the model,” Frank Kneller, chief executive officer of Horizon Solar and now CEO of the combined business, said in an interview. “We’re a pretty traditional home-improvement business done across the kitchen table.”
— With assistance by Dawn McCarty
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Lead image credit: SeongJoon Cho | Bloomberg