Now, the company has announced it will deepen that focus further. That means it will concentrate on its core residential solar engineering, procurement, and construction business — and exit its legacy large commercial business segment.
Dennis Lacey, who was brought in last April to head the Residential segment of RGS and promoted to CEO in August, discussed the refocus in a press release: “As we believe our best opportunity for improved future financial performance rests with our Residential and Sunetric business segments,” he said, “we have made the strategic decision to exit the large commercial business segment.”
Lacey emphasized the positive sides of the move: “This decision will have a positive impact upon our future cash from operations as well as improving the Company’s profit margin. We are taking actions to monetize the value of this business segment.” He said the company will complete its existing pipeline of large commercial construction projects in the coming months.
RGS will still do some work in smaller commercial solar. “Although we will no longer be pursuing large solar commercial projects,” Lacey said, “we will continue in our Residential and Sunetric business segments to operate in the small commercial solar customer segment, generally under 200 kW in size. For instance, oftentimes our Residential solar customers own a small business and we also provide solar solutions for their business facilities. We believe the small commercial segment is an opportunity for future profitable growth.”
GTM Research analyst Nicole Litvak was quoted in the Denver Post as saying of RGS, “They’ve been struggling, so they’ve been taking steps.” She added, “Most of the companies in the residential market are doing residential exclusively,” noting that RGS’s share of that market fell in Q2.
RGS Energy, formerly known as Real Goods Solar, has been struggling despite having been a pioneer in the solar industry. Real Goods sold some of the first PV panels to the public as early as 1978.
Shares of RGS Energy closed after the Tuesday announcement at $1.63, down 5.2%, but went up by nearly 15% in after-hours trading.