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:
- Revenue growth in Solar Alliance. Solar Alliance will be
our foundation of organic growth in California, growing northwards into new
markets. We believe that we can deploy twice the amount of
solar energy over the next decade than we did with wind energy over
the last decade.
- Additional aggregation. Our intent is to leverage the
revenue from Solar Alliance into additional aggregation of small,
local solar sales and marketing and installation groups, adding to
revenue growth.
- Listing on an American Stock Exchange. We intend to list
on a stronger, more liquid market so we can take advantage of a
domestic product in a domestic market and build the Solar Alliance
brand on an American market with a much larger financial
audience.
- Develop recurring revenue. We plan to launch a fund that
will allow us to internally finance installations and own a select
portion of the solar systems we install on rooftops. This will
provide recurring revenues and regular income to the Company,
increasing our financial strength.
- Establish new partnerships with recognized industry
leaders. The nascent solar industry is in the first few
minutes of its life. We have had excellent relationships with
large, world class companies and look forward to establishing new
ones.
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."
SOURCE Finavera Solar Energy, Inc.