VANCOUVER and SAN DIEGO, Dec. 17, 2015 /CNW/ – Finavera Solar Energy Inc. (‘Finavera Solar Energy’, ‘Finavera’ or the ‘Company’) (TSX-V: FVR) is pleased to provide the following letter to shareholders:
Dear Fellow Shareholders,
I write to you just days after the historic approval of the Paris Agreement on Climate Change and the tabling of a Bill in Congress and the Senate that will likely extend solar energy tax incentives for the next 5 years. The world has a stronger commitment to a low carbon economy, with the beginnings of premiums being charged against the fossil fuel industry. A recent headline on Bloomberg Business declared “Big Oil, Make Way for Big Solar” with renewable energy entrepreneurs planning for an exciting future. There is a resounding social call for solar energy today and increasing economic drivers that are facilitating even greater growth of renewables. For our Shareholders, I believe the timing is perfect. The drive to exit the fossil fuel era as quickly as possible is high, both socially and politically, and this is resulting in a bull market for solar energy.
Finavera Solar is poised to capitalize on these developments. Finavera has experienced the rising tide of renewable energy since I founded the Company as a start-up in Dublin in 2003. We have developed over 360 megawatts of wind energy projects now in construction or operation, resulting in over $1 billion of renewable assets. We have developed renewable energy technology, testified to an energy subcommittee in America which assisted in shaping policies and legislation in Congress and the Senate. We have been through the cycle of wind energy development, aggregation and consolidation in partnership with some of the world’s largest corporations and utilities, including of GE, NextEra and others. We became a public company in 2007 and raised finance just ahead of the Great Recession, which we weathered. Last year, we sold wind projects in Canada for total consideration of $24.7 million, a gain of $14.3 million. Within a short period of time, we expect to complete the sale of Ireland’s largest wind project, which we developed from greenfield, for €10.5 million of total consideration.
It has been a good time to be a wind energy company, yet there have been challenges. Dealing with a provincially owned utility with a monopoly in British Columbia was difficult. The long lead time of wind projects was challenging with a small balance sheet where capital was tied up for years. We are also publicly listed on a market where significant commodity exposure caused large investor losses during a multi-year down cycle which had a negative impact on liquidity across the TSX Venture Exchange.
Despite this, Finavera has used its energy experience from the last decade to focus on the market opportunity presented by distributed solar energy. The outdated model of the last century with centralized power plants is starting to show cracks and that presents an opportunity. The cost of solar photovoltaic panels has fallen by an order of magnitude over the last 10 years alone, resulting in a large, accessible residential market. Financing products for the homeowner continue to evolve, making solar cheaper than traditional energy sources in many markets. The ageing infrastructure of the distributed market is an overhead that can be significantly reduced or eliminated as homes move off grid with battery storage. The deployment of residential solar continues to be in its infancy with approximately 1% of residential homes in America having solar on their rooftop. Home solar has been a consistent growth story over the past three years, posting annual growth rates over 50 percent in 2012, 2013 and 2014.
This period of the distributed solar market can be likened to the distribution of computing power from mainframes to personal computers and from wired phones to wireless. Convergence is occurring between distributed solar energy, electric cars, battery storage, smartphones and smart homes. This is an exciting time in an industry that will revolutionize and democratize renewable energy generation, placing direct power in the hands of the consumer and removing it from the utilities surrounded by their force fields of boringness.
To capitalize on this market opportunity, Finavera reviewed a number of opportunities before making its first step into solar energy through the acquisition of Solar Alliance of America, a well-established brand and platform in southern California. Solar Alliance has seen revenue of approximately $20 million annually in 2012 and 2013, before entering into the acquisition process with Finavera in 2014. Solar Alliance presents an excellent opportunity as a sales and marketing company that manages the customer experience of the solar consumer from origination to installation. Over the last quarter we have focused on improving human resources, enhancing software systems and optimizing marketing dollars to ensure a superior customer experience and lower customer acquisition cost. We have built new relationships with installation partners, deployed new financing products and created new methods of lead generation. Our CAPEX is low, our development/installation cycle time is measured in days, not years, and the potential for growth is large by replicating a scalable structure in new cities where there is a significant demand and backlog of customers wanting solar systems. Consumer demand is driving this market forward.
Over the next year, we plan the following:
The transition to solar energy and the acquisition of Solar Alliance is has taken time to complete. I thank the Shareholders for their support and their ongoing belief in the Company’s objectives and our ability to achieve them. This Shareholder’s Letter represents a new commitment to communication with you and with the market. We have a number of exciting plans in addition to those outlined above and we will continue to communicate them directly. I look forward to the next time I can update you on our progress.
Sincerely Yours,
Jason Bak
Chairman and CEO
About Finavera Solar Energy Inc. (www.finavera.com)
Finavera is focusing its renewable energy development efforts on residential and utility scale solar projects in America. Through its subsidiary, Solar Alliance of America, Finavera’s mission is to create and operate a diversified portfolio of renewable energy projects while protecting and enhancing the physical and social environment. Finavera has developed over 360MW of wind projects and subsequently sold them to utilities or large independent power producers.
About Solar Alliance Of America Inc. (www.solarallianceofamerica.com)
Located in San Diego, California, Solar Alliance is a solar sales and marketing firm focused on residential solar installations. In 2013, Solar Alliance had $20.7 million in revenue and was ranked #49 on Inc. magazine’s Top 500 list of America’s Fastest Growing Private Companies, making it #2 in the San Diego Area and #9 on the list of Top 100 California companies. In 2012, Solar Alliance was rated #45 on the Top 500 list. From its inception in 2009, Solar Alliance has installed more than 2,000 residential solar systems in southern California.
Statements in this news release, other than purely historical information, including statements relating to the Company’s future plans and objectives or expected results, constitute Forward-looking statements. The words “would”, “will”, “expected” and “estimated” or other similar words and phrases are intended to identify forward-looking information. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different than those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to the ability to raise sufficient capital, changes in economic conditions or financial markets, litigation, legislative or other judicial, regulatory and political competitive developments and technological or operational difficulties. Consequently, actual results may vary materially from those described in the forward-looking statements.
“Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”
