Toronto, Canada and Knoxville, Tennessee, January 24, 2023 – Solar Alliance Energy Inc. (‘Solar Alliance’ or the ‘Company’) (TSX-V: SOLR), a leading solar energy solutions provider focused on the commercial and industrial solar sector, is pleased to provide a corporate and operational update as the Company targets another year of strong growth in the U.S. commercial solar market.
“2023 was a transformative year for Solar Alliance as our sales and operations team hit their full stride, delivering our first profitable quarter in the Company’s commercial solar history in Q3,” said CEO Myke Clark. “We remain committed to growing the Company with an emphasis on profitability and we believe our business plan and contracted backlog support this strategy.”
“We have focused on larger, higher margin commercial solar projects, combined with diligent cost control, in order to drive responsible growth,” said U.S. General Manager Jon Hamilton. “The second half of 2023 was extremely busy as we built out our backlog of contracted projects and that pace is continuing into 2024.”
Key corporate highlights and objectives
Conversion of contracted project backlog to revenue. The Company experienced a productive fourth quarter in 2023 as the operations and installation teams executed on several larger projects. Significant progress was made on the following projects, which are all expected to be complete in Q1, 2024:
- A 565-kilowatt (“kW”) commercial solar project for a manufacturing client in Tennessee announced on May 31, 2023.
- A 872-kW solar project in Tennessee announced on February 13, 2023, with a $1.8 million capital cost.
- Two projects, 250-kW and 299-kW, for a Tennessee client announced on July 10, 2023. The two projects, with a capital cost of $1.58 million, began construction in Q4, 2023.
- Multiple smaller commercial solar projects in the 30-kW to 100-kW range were completed in Q4, 2023 and several other commenced construction.
Sales targets and project sizes increased. Solar Alliance has systematically, and responsibly, increased the size and number of commercial solar projects it has designed and installed. The average system size being designed and installed by Solar Alliance has grown each of the last three years and the Company expects continued growth in system sizes in 2024 while maintaining its focus on profitability.
|Average System Size (kW)
Project sizes in 2023 range from small commercial projects in the 30-kW range, up to the Company’s largest project sold in 2023 of 872-kW. The Solar Alliance sales team is currently focused on multiple potential opportunities in the 500-kW to the multi-megawatt range as our capabilities expand.
Southeast U.S. Market Focus. Based out our Knoxville, Tennessee office, Solar Alliance has created a centre of excellence that can leverage sales and operations partners to extend its reach. This model, which includes outsourcing certain aspects of project installation, allows for improved pace, efficiency, stronger margins and lower overhead costs. Critically, the key components of sales, design and engineering, and project management are maintained in-house to ensure quality control. In the commercial solar sector in the U.S. Southeast, Solar Alliance continues to build strong brand awareness. The addressable market in the region, combined with demonstrated growth opportunities, has convinced the Company to remain focused on the U.S. Southeast as demand for commercial solar intensifies. In addition, Solar Alliance remains strategically positioned to benefit from interest in Inflation Reduction Act tax credits and other federal incentives. These credits not only contribute to our profitability target but also increase the economic benefits for business that choose to go solar.
Corporate growth opportunities. Solar Alliance is targeting several potential avenues for growth in 2024 in addition to the Company’s strong organic growth. The Company is exploring accretive and strategically opportunistic North American acquisition opportunities, with a bias towards the U.S. market. Solar Alliance is focused on the following potential strategic opportunities:
- M&A opportunities that scale the Company’s current operations. This would include companies with a similar business model as Solar Alliance.
- M&A opportunities that provides sector diversification, including solar project developers.
- Joint venture relationship with entities seeking entry into the U.S. commercial solar market.
Solar Alliance recognizes the benefit of achieving greater scale and is committed to seeking out opportunities that provide strategic value for shareholders. Capital markets volatility in 2023 limited M&A activity in the small cap sector. Solar Alliance focused on achieving profitability and positioning the Company in the event market conditions improve. The Company is optimistic 2024 will provide more favourable market conditions to execute one or more of the Company’s corporate growth goals.
“Solar Alliance is well positioned to execute on the next stage in its growth strategy. We have built a lean, flexible and technically proficient team that fills a need in the commercial solar industry. Our strategic opportunities, combined with a large addressable market and the compelling benefits for business customers, set the stage for an exciting year ahead,” concluded CEO Myke Clark.
Myke Clark, CEO