2017 Recap

2017 was a good year for solar in the USA but a very good year for me.  I sold most of my solar company in 2017, which helped to generate a profit in the 8-figure range.  Nearly all of that profit was used to pay down debt at my solar company, causing total debt & liabilities to drop from over $100 Million in 2015 to about $3 Million in late 2017.  That's a huge weight off the shoulders of me and my partners in the company, obviously.

Other key milestones and updates:

1. We completed another utility-scale solar project, this one in Wisconsin on a landfill in Eau Claire, WI, which happens to be the largest community solar project in the state at 1 million watts (1 megawatt).  It produces enough energy for the communities in the area to power the equivalent usage of about 300 homes.  Many thanks to Wunder Capital, Industry Capital, The RAQ, B&B Electric, the City of Eau Claire, XCEL Energy, Sustainable Solar Services Corp, and the many other parties who helped make this project a reality despite numerous challenges.  The project uses 40-kilowatt high-efficiency string inverters from Growatt, solar panels from South Korea's Hansol, racking from Michigan's The RAQ, and monitoring systems from Also Energy.  The project took approximately 2 and 1/2 years to develop to "shovel-ready" status, and yet only about 3 months to construct once all permits and electrical grid interconnection studies were complete.  See YouTube below (be sure to like & subscribe to my @SolarNinjaTroy YouTube channel!).  https://youtu.be/GS3kKdfz4W0 
2. Former employees.  After selling the 3 primary divisions of Pristine Sun LLC to buyers, each of the buyers has taken the "shovel-ready" or nearly fully developed projects and finished construction.  This has caused hundreds of millions of dollars of Pristine Sun-developed projects to become operational, representing enough clean electricity to power tens of thousands of homes.  All former Pristine Sun employees should feel very proud of their contributions to these projects that caused this all to be possible! Most of the Pristine Sun employees went to work for the buyers of our projects, and most of the rest ended up working at other solar companies.  Employee staff obligations were paid in full as part of those sales, although some portions of outstanding employee obligations of managers and executives (excluding any unsupported claims by disgruntled former employees who were laid off prior to the sale(s) closings) are to be paid on an "earn-out" basis by the buyers, Pristine Sun's largest shareholder (that's not me; I'm the 2nd biggest shareholder), and/or the last remaining corporate lender of Pristine Sun, upon achievement of certain milestones.  Executive compensation payments that may be due (upon achievement of certain milestones) will be paid last, after any other milestone-based payments or other obligations are paid 100% to all non-executives.  Many of those milestones were achieved in 2017, although some are expected to be achieved in 2018.  My substantial personal earn-out, including bonuses and unpaid wages, and distributions of any profits as the founder and 2nd largest shareholder of Pristine Sun, will be paid out over about 5 years on a milestone basis, but only AFTER all other non-executive employee obligations are satisfied first (again, excluding any unsupported claims by disgruntled former employees).
3. Floating Solar.  In 2017, the United States Patent and Trademark Office awarded patent pending status to 11 patents on floating solar technology.  I am a co-inventor, along with our senior engineer Kenny Forrest, on the patents.  See www.FloatoRack.com.  .The potential for placing solar on bodies of water is enormous.  Benefits include: reduces water losses to evaporation by up to 80%, reduces algae growth (which clogs filters and pumps in lakes and ponds) by a similar percentage, keeps the panels clean (due to daily rinsing via sprinklers, using the water underneath) which avoids the "soiling losses" of up to 40% endured by solar projects in areas with air pollution and/or dry, dusty climates, and keeps the panels cooler (due to the lower temperature of the water) which makes them up to 5% more efficient (solar panels are semi-conductors and therefore lose efficiency when they get hot).  We are developing numerous floating solar projects in various regions, on wastewater treatment ponds, drinking water reservoirs (where recreation is limited or forbidden altogether), and even ocean waters.
4. World-changing technology.  Also in 2017, several additional patents were granted patent pending status by the U.S. P.T.O., and I am the sole inventor of these particular patents.  These are for technologies for a company that started developing a world-changing technology (also in the energy and infrastructure sector) in 2013.  Equipment was ordered in late 2017 to build the first prototype at a secret location in the Silicon Valley San Francisco Bay Area.  Stay tuned for more information on this company and its products, as we hope to come out of "stealth" mode in mid-2018.
5. Additional solar projects.  In 2017, I partnered with Industry Capital where I am an Operating Principal (and a minority owner of the solar fund, Cratus Energy).  We began investing significant capital into developing floating solar projects in Sonoma County and San Diego County, California, as well as additional projects in Wisconsin, North Carolina, South Carolina and a few other areas.  The pipeline of solar projects available to develop within this partnership exceeds 7,000 megawatts (MW), which if they were all built would be about $10 Billion of assets.  Not all of them will be developed or built, due to some that will encounter fatal flaws with permitting, grid interconnection, or the availability of project finance at a reasonable cost of capital.  However, over the next five years, the partnership expects to build at least $2 Billion worth of clean solar energy power plants in dozens of communities across America.

Major Challenges Overcome in 2015-2016 as part of the "Solar Coaster"

This post describes one of the most difficult experiences I have endured in my solar career...on par with getting death threats about 20 years ago while doing wind energy development in Kansas.  It's painful, so grab a cup of coffee or tea and read on!

In late 2014, after two consecutive years of multi-million dollar profits and solid growth, Pristine Sun LLC lost a major incoming investment from a large U.S.-based energy company due to crashing oil prices. As a result, our corporate lender (who had lent us a peak amount of about $22 Million to support our growth of 400% per year in 2013 & 2014) demanded that we find an equity investor to counterbalance their loans.  Prior the then, the company had grown with about $500,000 of equity invested by the founders (mostly me) and a $10 Million investment from Capital Dynamics in 2011.  Due to strong profits, the CapDyn investment was repaid in full (with their 25% return) in 2013 & 2014, buying back the 40% share they had in Pristine Sun.  The company "boot-strapped" its way to further growth in 2015 along with loans from the corporate lender based on about $80 Million of assets we had on the balance sheet by 2014.

Due to the oil price crash and the unexpected and spectacular implosion of the largest solar energy developer in the country (SunEdison), our CFO and executive team (me + five other C-level executives) struggled to find any investors for the company.  For some reason, investors felt like low oil prices were bad for the solar industry.  This is weird since we don't use oil to produce electricity in this country; it's a transportation fuel, not a power generating fuel like natural gas, coal or uranium.  Nevertheless, all the 175 potential investors we spoke to, including those courted by an investment banking firm hired by our CFO, said no thanks the timing isn't right.  But nearly all of them said they would buy our projects from us at a steep discount.  That was not a sustainable business model since selling projects that were under development (but not yet in construction) at a big discount would be a short-term one-time cash infusion and then we'd have little left for our terrific employees to work on.  That was a recipe for unwinding the company and laying off most (or all) of our staff.  Meanwhile, our lender was threatening foreclosure if we didn't do something, and quickly.  Our projects were at risk of having their contracts with customers (electric utilities) canceled due to non-payment of security deposits and lack of construction progress.  Those projects were worth tens of millions of dollars once they became operational, so losing the contracts (which would kill the projects) would have been devastating.  Our options were limited, and time was running out.

So in the summer of 2015, we signed what we thought was a very exciting Joint Venture with a Chinese-based publicly traded but financially awkward solar panel manufacturer, Renesola (NYSE: SOL).  This is public information, and has been disclosed in the SOL public filings. Nothing noted here is non-public information.  The announced JV called for 300 MW of solar projects (about 5% of the Pristine Sun "pipeline" of projects in development at the time) to be developed and built by Pristine Sun and sold to the JV.  The value (at that time) of typical solar projects was about $2 Million per MW, so the total JV represented up to about $600 Million worth of future revenue to Pristine Sun.  And, a significant infusion of cash would come at the time of the signing of the JV.  We were cut off by our corporate lender and had no idea how to meet payroll for our 78 employees.  So we were effectively left with no choice but to sign the JV agreement after our law firm had won a few hard-fought concessions from Renesola's counsel. It was not a fair agreement yet, but we really had no choice; we were out of time.  We had to save our projects, and pay our team.  So we signed, got the money at closing, and saved our projects by paying security deposits to the utilities and starting construction.  The JV agreement called for significant additional capital payments to us over the next several weeks and months, which we were counting on to pay our suppliers for solar panels and other equipment and pay our sub-contractors.

You know what happens next.  We never got any more money from Renesola pursuant to the JV agreement, so both parties in the JV sued each other (the court case is public if you care to read it here). There are 3 sides to every story, but suffice it to say that our team was extremely unhappy with Renesola.  We were being starved for cash, right at the time when we needed it to pay our people and our vendors and suppliers.  It got so bad that we had to begin laying off employees in late 2015 and we sold all of our company trucks and construction equipment, along with selling the constructed projects to other buyers (not Renesola).  We entered a period of very painful protracted litigation.  Our biggest investor cut us off, our corporate lender had already cut us off and would not allow any other loans to come in, and the litigation with Renesola tied up our projects making them difficult to sell without affecting the active litigation.  It was a very trying time for the five of us who were the executives of the company, as we struggled and tried everything we could think of to dig out of the hole.  Finally, after letting the public reporting periods pass for public companies (where Renesola had to disclose the dispute with Pristine Sun), we agreed to mediation.  I cannot discuss the terms of the settlement reached in Mediation in the spring of 2016 (and finalized that summer), but I can say it was very favorable to Pristine Sun and has caused our senior lender to be mostly paid off over a period of time.  The settlement, along with the sale of several other divisions of the company, paid down about $100 Million of debt and other liabilities and caused the company to earn record profits in 2016 and 2017.

As a result of paying down so much debt and earning the record profits, we attracted some large institutional, US-based equity investors who have partnered with Pristine Sun to resume growth and development.  As the 2nd largest shareholder, this has been painful for me too but the future looks very bright: we held onto about 85% of our massive pipeline of solar projects.  This pipeline could be worth $10 Billion someday if we built all of the projects.  We won't: some will encounter fatal flaws in permitting our grid interconnection challenges.  But some portion of the projects will be developed and built, and I stand to gain a lot from helping to make that happen.  However, my role now is a Board director and investor, rather than a full-time employee (my choice).  This gives me more time to spend with my family and train as a 50-year-old (at the time of writing) ninja warrior.

Pristine Sun LLC came out of this dark chapter in the "Solar Coaster" a leaner, meaner company with almost no debt, a small but capable team, and finally a huge upside potential to monetize one of the largest solar project development pipelines in the country.  Wish us luck!