After rebuilding and rebranding itself in 2013, how is Conergy, a global downstream solar company, planning to expand its reach in the United States? During today's OnPoint, Yann Brandt, vice president of U.S. sales and global head of marketing for Conergy, discusses the impact of state net metering policies on business decisions and talks about the challenges of remaining viable in an increasingly competitive industry.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Yann Brandt, vice president of U.S. sales and global head of marketing for Conergy, a global downstream solar company. Yann, it's great to have you on the show.
Yann Brandt: It's a pleasure to be here, Monica.
Monica Trauzzi: Yann, Conergy has had a bit of an interesting history. It was a German solar company with growing success, and then things took a turn towards insolvency. Explain what happened.
Yann Brandt: Sure. To really understand Conergy's history is to understand that -- where it is today, right? We stand -- we sit in 15 countries and really focus on downstream solar, meaning we don't manufacture anything. Over time, since 1998, when Conergy was founded, Conergy started being active in more parts of the value chain -- manufacturing modules and other equipment in the solar industry, and really, what happened over time is there were more market participants, commodity prices fell, and it was really difficult to compete with high capital costs invested. So the company went through a managed insolvency in 2013 and very quickly was acquired by our majority shareholder today, Kawa Capital Management.
Monica Trauzzi: What do you think happened, or what do you think was unique about Conergy back in 2003 that made Kawa consider it to be an asset?
Yann Brandt: Sure. So Kawa and Conergy were actually already in discussions prior to the insolvency. They knew that the assets would have to be divested from the holding company itself. What's interesting about Conergy's story is all of the operating units that were part of Conergy before are still operating today, but they sit with the appropriate company. So Conergy today takes its excellent brand that's rooted in German engineering and focuses on building and investing and developing high-quality solar plants around the world.
Monica Trauzzi: So you say that now, you're profitable. What's happened since 2013 that's brought you to that place?
Yann Brandt: Focus. That is the No. 1, and really listening to our customers. High quality -- with solar costs dropping, the quality of the installation is really important. Because you have no ongoing fuel costs, solar power plants really represent a 30-year cash flow potential if you have built the system the right way, and that's what we've focused on. So whether we're investing in the system or it's ourself in the development or building for one of our many investor clients around the world, we've really focused on this German engineering and broadening it to all of the countries we operate in.
Monica Trauzzi: And is that what keeps you competitive? Because it is still a very competitive field -- increasingly competitive -- so how are you defining yourselves against competitors?
Yann Brandt: Sure. We're one of the few companies that operates on a global footprint, and even smaller number of companies that operate globally purely focus on solar. So we're able to service our customers around the world regardless of where they're trying to build, and that is the No. 1 reason we stay competitive with our clients.
Monica Trauzzi: So what are the markets where you think there's the greatest potential for growth at this point?
Yann Brandt: Sure. So for Conergy, one of our largest potential growth markets is in the U.S. We're very strong in Europe, especially in the U.K., very strong in Asia with Thailand, Philippines, Australia and Japan, but we haven't been very active in the U.S. until this year. This year, we'll complete nearly 100 megawatts and much more next year, so we're really excited about what that will do to the business overall.
Monica Trauzzi: So in the U.S., we see sort of this patchwork of policies on net metering from state to state. There's a lack of clarity in many places. As you try to expand your business, what's your view on net metering, and how do you deal with the different dynamics that you encounter from state to state?
Yann Brandt: Yeah, so we say it all the time, that the United States really represents 50 different solar markets for us. We have to understand the policies and understand what the implications are to our company from a development standpoint. What we have today is we don't have a level playing field. The system today was built for incumbent market participants, so we target the areas where we have -- we have an understanding how to access the grid and how to put solar energy onto the grid, and then in other areas, we try to fight to get fair policies built for us.
Monica Trauzzi: So which states, then, are better for business at this point?
Yann Brandt: Today, you actually would look at states that aren't good for business. With over 20 states in the U.S. today that have over 100 megawatts of solar and 90 percent of Americans supporting today's or increased levels of emphasis on solar, you're starting to see fair policies coming on more and more, but the attacks are still there. So we have the communication, we have the education of the consumers and the ratepayers that really built the energy infrastructure, and that's who we communicate with most often.
Monica Trauzzi: What are your projections for growth this year and moving towards the short term?
Yann Brandt: So last year, we did 300 megawatts on a global basis. Very small piece of that was in the United States. As we look forward, we're looking for a 50 percent increase of that in 2015, and then we'll look to increase from that in 2016 again.
Monica Trauzzi: All right. Best of luck. We'll end it there.
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