TODAY'S PAPER
79° Good Afternoon
79° Good Afternoon
Business

Local firm capitalizes as big solar leasing rivals exit Long Island

Scott Maskin, president of SUNation Solar Systems, shown

Scott Maskin, president of SUNation Solar Systems, shown here overlooking the 2,674 solar panels his company installed on the roof of a 180,000-square-foot warehouse in Ronkonkoma. Credit: Newsday/John Paraskevas

The exodus of several large solar-leasing companies from the Long Island market over the past three years provided an opportunity for one local market player to grow amid the rubble.

With the departures of Level Solar, SunEdison and Direct Energy during that time, more than 4,000 local solar customers--around 10 percent of Long Island's installed base--had to look elsewhere for the occasional service and repair the systems need. For SUNation Solar Systems of Ronkonkoma, which negotiated pacts with those companies to take on the customers without the corporate liabilities, it was a chance to grow its sales volume.  

The decision to take on that business was particularly ironic for SUNation, which two years ago was in talks to be bought by one of the region's then-largest solar leasing companies, NRG Solar. 

Scott Maskin, chief executive of SUNation, said the company today is glad it walked away from that deal, which would have enriched the owners but led to cutbacks and an uncertain future for SUNation. NRG quit the home solar installation business on Long Island and elsewhere shortly thereafter.

“I knew the black eye was coming,” Maskin said, referring to the exodus of leasing companies from the business amid customer complaints of hard-sell tactics, shoddy installations and accelerating payments, detailed in a Newsday report in August.

NRG spokesman Dave Schrader declined to discuss the proposed offer to acquire SUNation, saying the company doesn't disclose "information about deals that didn’t happen." NRG's former Long Island customers are serviced by several contractors, Schrader said, but NRG remains their primary contact. "We have employees who take service requests," he said. "Some of the actual work may be done by vendors, but we remain the primary contact."

Schrader declined to name which vendors service NRG's Long Island accounts. SUNation isn't one of them, Maskin said.

Another large Long Island company, EmPower Solar of Island Park, services customers from NRG, said Tara Bono, EmPower marketing manager.

SUNation, in its biggest pact to date, last year took on more than 3,000 solar-leasing customers from Level Solar, a Manhattan-based company that ultimately filed for bankruptcy protection, in a service-only deal that leaves SUNation with no debt or liability, Maskin said. The deal also brought SUNation into the lease-payment servicing business, processing thousands of customer payments per month.

PSEG Long Island said SUNation's move helped prop up the local solar market. “We’re pleased that SunNation stepped forward to continue serving solar customers who previously were served by Level Solar, allowing continued production of clean energy, and helping customers to save.”

SUNation has also taken on another thousand leasing customers from companies such as Direct Energy and SunEdison as they left the local market, Maskin said.

During the past three years, SUNation’s workforce has more than doubled, to 140 from 58. Around 25 are dedicated just to the service business. The company installs from 70 to 100 systems a month, and services more than 9,000 rooftop systems, just under half of which it installed for its own customers. SUNation doesn't lease systems.  

Maskin said he wrote a memo to LIPA in 2012 predicting much of what happened as big leasing companies flooded a Long Island market that had long been dominated by local installers who sold rather than leased systems to customers.

 He and consumer watchdog groups say the area saw an influx of bad deals and low-quality installations. “It was all a race for the federal tax credits” and the LIPA rebate, Maskin said. The rebate has since been discontinued after leasing companies largely gobbled up that $40 million pot. The federal tax credit continues but decreases in increments through 2021.

Revving up its business has helped SUNation increase its volume to an estimated $30 million in revenue this year, double that of five years ago. It has installed around 33 megawatts of solar across the Island since its founding in 2003, Maskin said. One megawatt powers around 175 homes in New York, according to the Solar Energy Industries Association. 

He predicts there could be further market consolidation in the solar leasing market, and said he’s prepared to take on servicing of those customers. “I think there are going to be more casualties,” he said, and he’s got the infrastructure in place to take on more. “I would love to take over 9,000 solar systems, as long as somebody else owns them.”  

Company: SUNation Solar Systems, Ronkonkoma

CEO: Scott Maskin

Employees: 140

Systems intalled per month: 70 to 100

Systems serviced: more than 9,000

Estimated 2018 revenue: $30 million

Comments

We're revamping our Comments section. Learn more and share your input.

More news