Sungevity Finds a New Buyer
After another round of employee layoffs, the company files for bankruptcy
Sungevity, a California-based solar company, has laid off more employees and filed for bankruptcy protection from creditors, a report in The Mercury News said.
Once listed fifth in market share by GTM Research, the company has laid off some 410 employees since the start of the year. It filed for Chapter 11 protection on March 13, and arranged for the sale of its remaining assets to an investment group.
William Nettles, the new chief administrative officer for the company, said that a group of investors led by Northern Pacific Group, a private-equity group in Minnesota, had reached an agreement to buy the company. The deal will provide $20 million to pay for day-to-day operations at Sungevity.
"The agreement we have reached with the team led by Northern Pacific Group and its co-investors is a testament to their confidence in the future of Sungevity's business," he told the Mercury News. "The actions we have announced will allow Sungevity to emerge as a stronger and more competitive company."
Fortune reported just last year that Sungevity's outlook was positive because it had a simpler business model than many of its competitors. The company operates an online platform that connects homeowners and solar installers, but does not install solar systems itself. That saved the company the expense of maintaining a fleet of trucks and other providing other equipment.
But Sungevity's business approach wasn't enough to head off problems. GTM said that its installations would have to increase "significantly" while operating costs dropped in order for the company to turn a profit. That apparently didn't happen.
Sungevity isn't alone in facing financial headwinds, even as the industry shows strong growth. Solar stocks have been generally lower; the value of the MAC Global Solar Energy index has fallen 26% in the last year. GTM Research said that despite a near doubling of solar installations and a 25% growth in industry jobs last year, the top residential installers have been struggling to make a profit. Even SolarCity, the market leader, cut its staff by 20% in 2016.
- Mike Mozart / CC BY 2.0 / Flickr