SOLV Energy may not be a known name yet, but the company’s presence in the solar industry is already considerable. SOLV Energy is the new combination of solar construction company Swinerton Renewable Energy and O&M division SOLV, now officially a separate entity from general contractor Swinerton Builders. All existing Swinerton RE employees are shifting to the renewable energy-focused SOLV Energy, effective today.
We last had an extended interview with SOLV Energy president George Hershman in 2016, just after the 2015-extension of the federal investment tax credit (ITC). Then-called Swinerton, the company was celebrating the significant achievement of reaching 1 GW of cumulative solar installations. Now SOLV Energy is installing over 2 GW of projects each year. A lot has definitely changed in five years.
In this episode of the Contractor’s Corner podcast, a first “repeat” for the series, we talk to Hershman about the new SOLV Energy name and focus, and how it affects the top solar contractor‘s standing in the industry.
A portion of the interview is below, but be sure to listen to the full podcast for even more insight, including the recklessness right now around suggested tariffs, what’s needed to boost domestic manufacturing and how the big guys are dealing with supply chain disruptions.
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To what do you attribute Swinerton/SOLV Energy’s significant growth in the last five years?
We’ve seen market growth and stability through the extension of the ITC, the willingness of utilities to recognize renewables as delivering the lowest cost of energy across their new-build platforms, and we’ve seen a sea-change from corporations and the general public for the need for renewable energy. We continue to hold a significant portion of the overall market share, and we’re really excited about the future. We’ve got an administration that supports renewables and recognizes a change to clean energy production is really a requirement to deal with climate change.
Why the decision now to become SOLV Energy?
With an administration that has put forward huge goals within renewables and solar being such a big part of it, we started looking at how we’re going to support the growth of the business moving forward. We recognized that there are two developing business within Swinerton: our core commercial construction and then this growing renewable business. We saw that would be difficult for a traditional construction business to manage both of those growth trajectories. So we starting looking at opportunities and made the decision to move forward with a strategic investor, combining Swinerton Renewable Energy and SOLV into one entity. We’ve ended up with American Securities as our equity investor, something we’re very excited about. They have a commitment to the renewable business and it’s a very good cultural fit. “SOLV Energy” says a lot about what we’re trying to do. We’re trying to be part of solving the energy industry moving forward.
How do tariff requests, although not official or finalized, affect your project planning?
I don’t want to diminish the fact that a solar panel still takes 45 to 50% of the overall cost of a project. So while modules are becoming more efficient and we have more steel in projects and all these other components, I don’t want to diminish the fact that if you put a significant tariff on a component that’s 50% of the cost of the job, it absolutely has a lasting effect and huge impact. We have a number of projects that if modules were to go to a 250% tariff, clearly they would be non-economic and not be built. These tariffs have a huge effect on us and the industry as a whole. It makes planning for our business much harder. We’re in a period of time where we all should be planning and building for growth, and this stalls that out. It really challenges businesses like ours that have large installation workforces. How do you retain installation resources if you’re not building projects? You don’t. It took us eight years to get 1 GW of projects built, and now we’re building 3 to 4 GW of projects a year. The scale of business has grown, the employee numbers have grown, and to be able to sustain that, we’ve got to have consistent access to materials and equipment. That would not happen under this type of tariff regime, and we would therefore not be building projects at a time where we should be expanding. That’s the shame of all of this, that at a time where we should be working hard with the administration to support the infrastructure package, when we should be expanding our resources and equipment needs to meet the high demand, we’re all kind of stuck in the mud because of trade action.