What options are there for small- to mid-sized, independently owned solar companies to become established in an industry where corporations hold the majority buying power? In most cases, it means struggling for the first few years to negotiate fair prices and establish buyer relationships with solar distributors. For a group of 50 North American solar companies, it means teaming up on transactions.
The solar purchasing cooperative Amicus Solar of Denver, Colorado, was founded by CEO Stephen Irvin in 2011. The co-op was conceived while Irvin was an employee-owner and CFO at Namasté Solar, also based in Denver. Irvin realized how difficult and costly it was for a company of Namasté’s size to purchase through solar distributors, and sought a better, more cost-effective route for buyers. He said Amicus was the antidote to the economies of scale that national companies bring to solar distribution.
“When I say antidote, Amicus is a purchasing cooperative, meaning its intention is to support independently owned and operated businesses,” Irvin said. “It allowed Namasté Solar to combine forces with friends running other solar companies in different parts of the country, and together get the economy [of] scale we needed to compete with SolarCity and other large national companies.”
In its seven years, Amicus has expanded beyond just offering reduced solar purchasing offerings. Members of the co-op started the Clean Energy Credit Union for U.S. solar companies to take out reduced-interest loans and also launched Amicus O&M, which dispatches solar crews in its network to array sites for operations and maintenance at a reduced cost. The cooperative can even handle purchasing office supplies at lower costs for its members.
“There’s no third party involved. There’s no one who is there in the background trying to make a profit,” Irvin said. “It’s us. We own it ourselves, and still do today. Amicus is owned 100% by its members.”
While he holds the title of CEO and founder, Irvin reiterates that he doesn’t own the company. Taking a note from Namasté Solar, Amicus is partially owned by each of the 50 companies that compose its membership. There’s industry representation from mounting to panels, with companies in 35 states, Puerto Rico and Canada. Between them, Amicus members have operating licenses for solar in every state.
“As a group, the companies are installing about 400 MW of systems in 2018, and we’re leveraging that buying power to mute the impact of tariffs,” Irvin said. “One company on their own might only be installing 4 or 5 MW, but they’re part of this group that’s leveraging something almost a hundred times that. The impact of the tariff is completely gone. The threat of the tariff came in, pricing went up, and right now, today, it’s lower than it was before the tariff scare happened.”
But a company needs to be more than independently owned to become a member of Amicus.
According to Irvin, Amicus members are solar companies that have been in business for a while or have veteran leadership. The civic and humanitarian work done alongside the day-to-day solar is just as important to the cooperative. While it’s not mandatory, about 40% of Amicus’ membership are also certified B Corporations. The certification is given to companies that maintain standards that include public transparency, community outreach and high ecological requirements.
“We look for companies that focus on people, planet, profit,” Irvin said. “It’s those companies that are in it for solar, but in it for more than just solar. They’re really looking to make an impact and make a difference in their communities.”
Amicus started with a group of friends in the solar industry but shortly began pitching the purchasing cooperative to other independently owned companies. One of those was ReVision Energy, a solar company founded in Portland, Maine, that handles turnkey solar for residential and small commercial accounts.
“We were pretty skeptical of the idea when Stephen first pitched us, in part because we’re in a small market and we didn’t know the other members,” said Fortunat Mueller, co-owner and managing partner of ReVision. “The founding members had sort of long-standing relationships with each other and saw the value of a cooperative instantly. We thought, ‘What could they possibly do for us and we can’t do for ourselves?’”
A lot, it turns out.
Mueller knew ReVision needed to aim upward to make a viable supply chain. He speculates the company’s purchasing power would have gradually grown without Amicus, but not as quickly as it did as a member. And ReVision was able to avoid making a lot of mistakes by consulting Amicus membership, Mueller said.
“Maine has the dubious decision of probably being the most backward solar market in New England,” Mueller said. “We have suffered, at least in the last eight years, under an administration here in Maine that is pretty strongly anti-renewables, and that has impacted the way we’ve grown our business. We, by necessity, have to have a very sharp pencil to run our business. We bring that attention to detail and process to the rest of operations.”
ReVision’s skepticism about the cooperative receded after seeing similar best practices put in place by Amicus member companies. Mueller said he noticed other members prioritizing the same values-led, mission-driven benchmarks his own company set. A few years after joining, the company became a certified B Corp.
“Business is one of the most powerful forces on Earth,” Mueller said. “If you want to accomplish important things on the planet, you need to harness the force of business.”
Northern neighbors join the group
Arctic Solar Ventures is a recent addition to the Amicus Solar family. The company was founded in Anchorage, Alaska, in 2015 by lifelong state native Stephen Trimble. While the Alaskan solar industry dates back to the 1970s, he said the first arrays were mostly microgrids used to power remote cabins. Arctic Solar Ventures, also a B Corp., supplies customers with grid-tied solar options.
Whereas Amicus approached ReVision Energy, Arctic Solar came to Amicus. Trimble inquired about membership and wasn’t accepted, but Trimble kept in touch. The company persisted.
“Not only are we kind of far away geographically, trying to do something new, but there’s this great organization of like-minded businesses that have banded together to make themselves stronger and share information, provide better purchasing power, and ultimately become better businesses,” Trimble said. “It just seemed like a fantastic fit.”
There are a few local distributors in the region of Anchorage, but members of the co-op can buy directly from manufacturers, forming a stronger buyer relationship much faster. Eventually, Arctic Solar was allowed into Amicus, enabling the company to control its supply chain. That was a pivotal moment for Arctic Solar.
“It’s really empowered our business in a ton of ways, not only because we’re a young company,” Trimble said. “We’re able to tap into the vast knowledge and resources of all the other member-owners to learn and share best practices. The cooperative is built around purchasing, so it’s totally revolutionized our supply chain, which has really changed the way we purchase equipment and price projects and open up a lot of new opportunities for the industry here.”
Life can be tough for smaller solar companies that don’t have the purchasing power of a big-name national installer. Amicus Solar Cooperative’s members work together to make sure local, independently owned solar companies can stay competitive in their markets.