There’s something icky about companies being associated with just one face. I can’t name one other high-level Amazon employee besides Jeff Bezos. We all saw what happened to Papa John in recent years when the spotlight got too hot on the pizza founder. Even Solar Power World is a team effort — we share responsibilities and the “limelight” when it is thrust upon us.
That’s why I’m so happy to see a growing movement in the solar industry of companies shifting toward employee-ownership, whether through a co-op, employee stock ownership plan (ESOP) or some other design that brings all employees to the same level of responsibility and respect.
According to data from the National Center for Employee Ownership (NCEO), the number of U.S. workers participating in employee-ownership is growing, with an increase of over 1 million participants in the last decade. The construction sector is the fourth-highest for employee-ownership, behind only manufacturing, science/technical firms and the insurance/finance/real estate industry.
The solar industry and employee-ownership also seem to go hand in hand.
“It is kind of ingrained in what many solar companies believe in,” said Christopher Fortson, marketing manager of New Mexico’s Positive Energy Solar (No. 162 on the 2020 Top Solar Contractors list), which has had an employee-ownership model for almost 20 years. “I feel that many companies that are out there doing this truly do have that mission of creating a better world. For the solar industry, we’re innovators. We are a little ahead of the curve on a lot of things. So, it’s not really any surprise that when it comes to corporate structure and the way employees are treated that we would be innovators as well.”
Over a dozen 2020 Top Solar Contractors proudly describe themselves as employee- or worker-owned organizations, and many more are working toward that goal.
Many companies new to employee-ownership also participate in the Amicus Solar cooperative. The member-owned purchasing cooperative supports independently owned and values-driven solar companies, and the large majority of its 50 members have some form of employee-ownership model. Original Solar Impact (No. 282 on the 2020 Top Solar Contractors list) co-owners Barry and Elaine Jacobson had been playing with the employee-ownership idea for a few years, and finally launched it after Amicus Solar provided them with different examples to explore.
“I’ve always been a big believer in that cooperative style of wanting to have everyone on board and aligned and sharing. When we first joined [Amicus] five years ago, there were a few [employee-owned companies], but in the last couple years, it’s grown,” Barry Jacobson said. “We learned a lot from other Amicus members.”
Now officially employee-owned for a little over a year, Jacobson said the transition has been good, but it’s definitely a change.
“We went from a dictatorship to socialism. At times it’s easier to just say we’re all rowing this way now, but for the most part it’s been really good,” Jacobson said. “Some of the real positive we’ve seen is…the sales and operations teams were very much independent, but now the operations guys are excited when these sales are happening because you’re starting to see the interconnectedness of it all.”
Solar Impact has always kept operations fairly small. For almost 12 years, the Florida company stayed around 10 employees because that’s all the Jacobsons were comfortable with — but they felt they were holding the company back. Now with an employee-owned business, the employee count has expanded to 25, and everyone is invested in growth.
“Before, we really had a mom-and-pop operation — ‘Don’t worry about the money, you’ll get paid, we’ll take care of it,'” Jacobson said. “But now it’s one of our core values to be open and honest. We talk now about what we’re going to do. It’s not just, ‘Let’s get a new truck!’ Now it’s, ‘If we buy that, it’s going to affect profits this way.'”
Renova Energy (No. 119 on the 2020 Top Solar Contractors list) has had an ESOP in place since 2016. Vincent Battaglia started the California company in 2006 and was the only shareholder. He ultimately wanted to give real ownership to the 200 other “Renovians.”
“My original intent was to just get a different approach for the Renovians, to have them really be bought into everything that this industry was all about as owners and not just as cogs in the machine,” he said. “It took off. When you tell people they’re an owner and you show them about vesting, and they start to understand that, they really do take pride in what they do. When customers know they’re talking to owners, it means so much.”
Because of that “all hands on deck” mentality, employee-owned companies are better at handling surprise business interruptions — like the coronavirus.
“ESOPs are the most-ready for a pandemic because when everyone is an owner, everyone is like, ‘Well what can I do best here in order to facilitate the company remaining in business?'” said Battaglia.
Data from NCEO also backs this up, finding that firms with employee ownership are linked to greater employment stability in economic downturns. And ESOPs are only half as likely as non-employee-owned firms to go bankrupt or close.
“I think that being employee-owned helps in almost every aspect of a business. It allows you to be nimble but get the buy-in quickly because everybody already has a vested interest in the success,” said Positive Energy’s Fortson. “So, when you have to make pivotal changes like [coronavirus protocol] and do it quickly, you really do have to get everybody on board with the same goal and vision. Being employee-owned inherently has that.”
And with consumer awareness at an all-time high right now, many are looking for businesses that align with their values. Those that have employee-ownership models are often more respected.
“There are more options for consumers than ever right now. When they’re looking at what they’re purchasing, the company itself and what they stand for and what they’re doing in the community has a big role in that,” Fortson said. “You want to keep your money local and work with a company that you know is treating their employees well.”
It’s a simple focus: treating employees well. Not only do consumers like it, but it helps with attracting and retaining employees. Battaglia believes that when someone is looking to work at a solar company in the popular Southern California market, Renova’s ESOP sets it apart from the competition.
“I think Renova stands head and shoulders above. We have the insurance benefits, we’ve got a great brand, we have a great reputation, we’ve been around longer than everyone else,” he said. “But that ESOP, being able to say, ‘When you come in and you stick with us for a year you become an owner,’ it pushed people over the edge and brought them into the company.”
Fortson himself had previously worked with small organizations and larger corporations before joining Positive Energy. He said he never really felt like he fit in at those places.
“With Positive Energy, being an employee where I really felt like I can make a difference and be a part of it, it was absolutely part of the motivation to come work here,” he said. “We look at how our profits align with our values. I’ve worked at other solar companies that were profitable, but it didn’t feel the same. Being at Positive Energy, doing this mission that is really important, I think there is that pride.”
While employee-ownership is a positive trend happening in the solar industry right now, there is a certain type of business going down this path. Size of company isn’t as important as the original mission behind opening the installation firm in the first place.
“The [solar] companies going ESOP now are old school. I’ve been doing this 15 years. We got in this industry not because there was money in it, but because there was positive change,” Battaglia said. “Those who founded solar and energy companies in the past, we’re getting to a point now where we want to continue the growth of this industry, and this model plays right into that. Why not make people owners?”
As the solar industry ages, Jacobson said shifting to employee-ownership also makes sure your legacy continues for many years.
“The solar industry is getting to that age where people are thinking about having plans to retire,” he said. “One reason to do this is for people to have an exit strategy, to say, ‘I’ve built this thing and I care about these people and I want to be able to retire.'”
All interviewed companies strongly suggest looking into employee-ownership models. The positive outcomes help in all areas of business.
“We have enough hardship. We have utilities doing sneaky things, we have legislators against us. We don’t need any more,” Battaglia said. “We need just good positive growth messaging, and that’s what ESOPs do.”
This story was featured exclusively in our 2020 Top Solar Contractors issue. See the issue and full list of top U.S. solar installers here.