Sun Seems To Be Shining On Solar As Costs Continue To Decline – Wins For Correlate Energy In 2023, And Its Plans For 2024

The sun may be starting to shine on solar energy as consumers and businesses look for cheaper and cleaner power sources. The sector is expected to continue to grow as the cost of solar energy continues to decline. That's good news for solar companies like Correlate Energy Corp. CIPI. The distributed energy company that blasted on the scene in early 2022, and has been in growth mode since, with the groundwork it laid starting to come to fruition. 

Last year "was all about executing what we started the year prior," said Correlate Energy president and CEO Todd Michaels in a recent interview where he discussed the company's successes in 2023 and its plans for 2024. This year, "it's all about executing what we accomplished in 2023 and setting ourselves up for doubling again and tripling again in the coming year." 

Correlate Energy is focused on financing, developing and selling localized clean energy solutions and microgrids to industrial, commercial and residential customers. The company is entering 2024 with a pipeline of $150 million in actionable projects and counts big names like Continental Envelope and EnerSys ENS as customers. Of its pipeline, $22 million is already deployed, $50 million is in ready-to-go projects and the rest is in various stages of contract talks. "We have a constant conveyor belt of a maturity of opportunities which allow us to smartly invest in different parts of the business," says Michaels. "From origination and sales to construction and oversight, we have a consistent view of how to build the enterprise, which is great. Not every business has that." 

Solar Savings  

Solar is proving to be a popular choice because it is green and the cost is going down. At last check, installing solar panels was less than $3 per watt; 65% cheaper than the $8.50 per watt cost a decade ago, according to the U.S. Department of Energy. As a result, the solar market is projected to reach $373.84 billion by 2029, growing at a CAGR of 6.9% from now through then. In 2023 alone, a record 32 gigawatts (GW) of new capacity was added, marking a 52% increase from 2022.

"Solar is the most applicable tech right now," says Michaels. "It's beating the grid for cost. You can easily do a 10% to 20% discount of what a person pays the local utility." That cost savings is a big reason Continental Envelope, one of the nation's oldest envelope manufacturers, tapped Correlate to construct Illinois's largest rooftop solar power facilities at its manufacturing plant in Geneva, Illinois. It recently went online supplying approximately 20% to 25% of the facility's overall energy requirements. Correlate says it will offset approximately 18,849 tons of carbon dioxide over the next 20 years, not to mention save money for Continental Envelope. 

The project, which is valued at $2 million, is the type of customer Correlate is going after. The company typically builds solar farms and microgrids for businesses with 10 to 100 locations across the country. The company says they have proven businesses, are well run and are looking to reduce costs and improve margins everywhere. Continental was "looking at solar for ten years and didn't know when to pull the trigger," now they have a compelling reason, says Michaels. 

The Wins Keep Coming 

Continental isn't the only big-name customer turning to Correlate for their green power solutions. In November 2023 Correlate announced a solar energy installation project totaling 3.8 megawatts with EnerSys, the global leader in stored energy solutions, at its global headquarters in Pennsylvania. It is one of the largest behind-the-meter solar installations in the United States, according to Correlate.

In May last year, the company secured $11.9 million for the project with Green Bridge Energy, a leading technology-enabled investment platform focused on clean energy projects in the commercial and industrial market segment of the U.S. That project was expanded to 5.2 MW and began installation in 2023. The company also plans to retain ownership of some of these energy systems, giving it a reliable and recurring stream of cash. It's also on the acquisition hunt, looking for proven renewable energy companies to help grow its business. 

Looking further into 2024, Correlate is beefing up its operational team, project financing and backlog. It is also doubling its staff, implementing systems to help lever up employees to maximize EBITDA and scaling the business into new markets – all the while benefiting from federal tax credits like the Inflation Reduction Act, which earmarks $1 trillion for clean energy projects over the next decade. 

"Never has the industry had that stability. Typically it's a couple of years and the commitment tails off. Now we have ten years of predictability to pursue this opportunity," says Michaels.

Featured photo by Zbynek Burival on Unsplash

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