NM solar industry grew in 2020, despite COVID » Albuquerque Journal (abqjournal.com)

NM solar industry grew in 2020, despite COVID » Albuquerque Journal (abqjournal.com)

Sunpro Solar workers installed a $100,000 solar system on the roof of the Joy Junction homeless shelter in the midst of coronavirus last year. Local solar manufacturer Unirac Inc. donated the system to give back to the community during the pandemic. (Courtesy of Unirac Inc.)

ALBUQUERQUE, N.M. — The coronavirus impacted New Mexico’s solar companies in different ways, slowing growth for some while creating new opportunities for others.

Most emerged from the pandemic stronger than before. But now, with a new solar boom underway, companies are facing new challenges that reflect the growing pains of an industry on the rise.

Nearly all local solar firms felt the pinch of COVID when the economy virtually shut down in April and May. But by summer, the industry got an unexpected boost from quarantined homeowners who plowed extra savings and stimulus dollars into home-improvement projects. And with cooped up families blasting their air conditioners, appliances and electronic devices, many homeowners took a fresh look at going solar to offset escalating electric bills, said Jim DesJardins, executive director of New Mexico’s Renewable Energy Industry Association.

“When COVID hit, I thought ‘there goes the industry for awhile,’ but the pandemic had almost an adverse effect,” DesJardins said. “The impact was unpredictable, with winners and losers. But in general, I believe the solar industry benefitted in its own way, much like the home-improvement and construction industries did.”

Residential boom

Companies on the winning side doubled down on residential installations in 2020.

New Mexico Solar Group president and CEO Nick Kadlec said it was “wild year,” but a good one.

“We weren’t sure when the coronavirus hit in March and April how much it would affect us,” Kadlec said. “But most of our business is focused on the residential market, and it ended up being a record year for us.”

Solar Group revenue climbed by 34%, from $19.4 million in 2019 to $26 million in 2020. And the company grew its workforce from about 70 in 2019 to 116 now, Kadlec said.

Positive Energy Solar, a long-time residential installer that launched in 1997, experienced a brief slowdown at the start of the pandemic that lasted a month or two, said company co-founder and President Taiyoko Sadewic.

“We came right back and we’ve been going as strong as ever since then,” Sadewic told the Journal. “We barely missed a beat, and we see a trend of good, strong, steady growth now.”

Positive Energy grew its workforce by about 25% since the start of 2020 to over 80 employees. And another six positions are open now, Sadewic said

Manufacturers with reach

Solar manufacturing firms with sales across the U.S. and beyond fared particularly well.

Albuquerque-based Array Technologies Inc., which makes solar tracking systems for photovoltaic panels, went public on Nasdaq last fall. It reported $827 million in revenue for 2020, up 35% from $647.9 million in 2019. And it projects another 30% jump this year, potentially pushing its annual revenue above $1 billion.

Unirac Inc., which makes mounting platforms for solar systems, also had a stellar year, said company CEO Peter Lorenz.

“Overall, we grew our revenue by 30% last year, despite the second-quarter challenges with COVID,” Lorenz told the Journal. “It was our best year ever.”

Sunpro Solar workers install a $100,000 solar system on the roof of Albuquerque homeless shelter Joy Junction that was donated by local manufacturing firm Unirac Inc. during the pandemic last year.

The company, which sells its products in all 50 states and in other countries, grew its Albuquerque workforce from 110 people early last year to 130 now, Lorenz said. It also employs about 130 people at a back-end, research-and-design office in India, up from about 30 a year ago. And it just opened a new sales office south of the border that will now focus on the Mexican and Central American markets.

The company – which operates in two facilities with about 120,000 square feet of manufacturing and warehouse space at the Springer Industrial Park north of Downtown – did move aggressively to cut expenses to avoid layoffs in the first months of the pandemic, Lorenz said. It temporarily reduced staff salaries by 2% to 10%, with leadership taking a 50% cut. But by September, those wage reductions were fully restored.

“What I’m most proud of is how we came out of COVID with our entire team intact here in Albuquerque,” Lorenz said. “Our local workforce is totally homegrown. These are New Mexico residents who we’ve trained in-house.”

During the pandemic, Unirac gave back to the community by donating a $100,000 solar system to Albuquerque homeless shelter Joy Junction that was installed by the national firm Sunpro Solar.

Commercial struggles

Some firms didn’t fare as well in the pandemic, especially those that focused on commercial installations for businesses and buildings. That part of the industry did grow in 2020, but at a markedly slower pace than in previous years, according to the national Solar Energy Industries Association.

Albuquerque-based OE Solar, which concentrates heavily on commercial markets, generated about $4 million in revenue last year, down by 20% to 30% compared with 2019, said company founder and CEO Adam Harper.

“Our commercial installations took a massive hit,” Harper told the Journal. “Before the pandemic, we had about $5 million worth of commercial projects in the pipeline that just went by the wayside. They aren’t necessarily canceled, but on hold, and we hope to see them come back as the economy recovers.”

Experienced Solar, a small design and installation firm that launched in 2016, also saw its revenue decline by about 15% last year, said company owner Kevin Goodreau. The firm closed its doors for about five weeks after the coronavirus hit.

But with the pandemic receding and the economy recovering, all local companies are upbeat about current and future prospects.

“The outlook now is excellent,” Goodreau said. “I believe our revenue will increase by between 25% and 30% this year.”

‘It’s like a gold rush’

Most solar-related businesses now expect a years-long boom, fed in good part by favorable state and federal policies to encourage renewable energy development.

The industry had faced a two-year slump in 2017 and 2018, which cut the New Mexico workforce from a peak of about 3,000 employees in 2016 to just 2,000 by 2019, according to the Washington, D.C.-based Solar Foundation’s last annual Solar Jobs Census, released in February 2020.

The Solar Foundation has yet to publish new tallies on the number of companies and total workforce now active in New Mexico. But industry leaders say it’s expanding exponentially.

“At its peak (in 2016), the industry had like 90-plus companies just in Bernalillo County working in different sectors of the industry,” said Harper of OE Solar. “Now it’s growing again. It’s like a gold rush, with even plumbing companies and heating, ventilating and air conditioning firms getting into it.”

That “gold rush” phenomenon is creating many new challenges and growing pains, including bottlenecks in government permitting and in utility approval of applications to get solar systems connected to local grids.

In addition, as residential and commercial demand grows, many areas around Albuquerque and other cities are bumping up against utility interconnection capacity, preventing many potential solar customers from installing systems on their homes and businesses.

The Renewable Energy Industry Association is working with utilities, the Public Regulation Commission and local and state governments to resolve those problems, said Sadewic of Positive Energy Solar, who also serves as REIA president. But with the nation now entering a fast track for renewable energy development under President Joe Biden, finding solutions to the emerging challenges is urgent.

“Some sections of Albuquerque, Santa Fe and Taos are now reaching grid saturation,” Sadewic said. “With the country’s plans to convert the transportation system to electric vehicles, that alone could double the size of the grid and the distribution system. We have to get ahead of those things as fast as we can.”