The sun is shining on Coronal Energy.
The Pasadena solar panel installer and operator has grown its revenue by a rate of 4,316 percent since its founding in 2013, generating $30 million in sales last year. Driving that growth is a red-hot solar industry, said Jonathan Jaffrey, the company’s chairman and chief executive.
BUSINESS: Solar panel installer, operator
TWO-YEAR REVENUE GROWTH: 4,316 percent
2015 REVENUE: $30 million
“The renewable energy space is one of the bright spots in the economy now,” he said. “We are in an industry that has the wind at our back.”
Installation of solar panel power capacity is projected to grow 119 percent this year to 16 gigawatts, according to GTM Research.
Moreover, Coronal has found a way to streamline the process of installing panels, which often requires several independent parties to coordinate financing, engineering, and construction. Instead, the company has created a one-stop shop.
“We tried to design out the friction points,” Jaffrey said. “There have been very few players that have the financial capital to amass those things under one roof. We were able to understand the operating needs of each of those places under the development curve.”
The company’s growth has placed it at No. 3 on the Business Journal’s list of Fastest Growing Companies this year. (See page 30.) In fact, Coronal appears to be ahead of a coming trend, said Andrew Yakub, chief executive of solar panel manufacturer Rayton Solar and founder of ReGen America Inc., a solar panel installer.
“As the price of solar comes down, and it’s coming down quickly, we are going to see a lot of companies that are integrating everything under one umbrella,” he said. “It will become a mainstream industry.”
Coronal has funded its vertical integration through the backing of Japanese battery maker Panasonic Corp., which gained a minority stake in the startup by investing $13 million total across two separate installments – the first in December 2014 and the second this September. Panasonic has an exclusive relationship with Coronal to develop solar panel systems equipped with its batteries in North America, which the solar panel installer plans to roll out at an undetermined date.
“We are in a very capital-intensive business, so we’ve had to have good partners,” said Jaffrey, adding that Panasonic is not aiming for short-term results. “I think the nice part of having a Japanese partner is they are long-term oriented.”
Coronal, which has 113 employees, generates the majority of its revenue from selling its solar panel systems mostly to utilities in California. It also lists municipal governments, school districts, and corporations as customers. Coronal’s president, Ed Feo, is the co-founder and former managing director of USRG Renewable Finance, an affiliate of Santa Monica investment firm US Renewables Group.
Once its systems come equipped with Panasonic’s batteries, buyers will be able to store power that can be used in peak usage periods and sold to utilities.
In the long run, Coronal aims to generate the majority of its revenue from selling energy generated by its solar installations. The company owns and operates 14 sites across North America that generate more than 120 megawatts of power, including a site in Lost Hills, which sells energy to Southern California Edison.
“To continue to fuel growth we do need to sell systems,” said Jaffrey. “But at some point … we’ll hit a tipping point where we’ll own and operate, if not all our systems, at least a majority. Our long-term focus is to continue to grow that portfolio and energy ownership.”
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