By Rachael Green, Benzinga
As demand for renewables continues to grow amid soaring fossil fuel prices and increasingly unreliable grid infrastructure, Correlate Energy Corp. (OTCQB: CIPI) seems to be positioning itself as a key player in the emerging clean energy market.
The distributed energy company that provides custom clean energy solutions at no upfront cost to commercial customers reported over $4.1 million in revenue in its second quarter, representing a significant increase over the same quarter last year when it brought in $236,690 in revenue. Here’s a look at how Correlate’s business model works and what it’s looking forward to in the months ahead.
Correlate Removes The Barriers Of Cost And Complexity When Transitioning To Renewable Energy
Correlate’s service starts with an in-depth audit of a customer’s existing energy usage and goals. From there, the distributed energy company develops a customized operating strategy that might include a mix of solar installations, battery storage and other microgrid infrastructure along with energy efficiency upgrades and utility contracts. That mix is tailored to the company with the goal of not just helping it transition to clean energy but doing so in a way that both cuts costs and generates positive cash flow.
Once the strategy is finalized, Correlate takes it a step further by collaborating with its existing network of solution providers and co-developers to actually implement those solutions at a cost-effective price, nationwide – while also often providing 100% financing so that Correlate’s customers aren’t paying any upfront costs.
In May, for example, Correlate announced that it had secured $11.9 million in financing to build a 5.2-megawatt solar project for the EnerSys headquarters in Reading, Pennsylvania. Installation began in Q3, and when completed, it will become one of the largest commercial solar installations in Pennsylvania to date.
In July, the company announced a joint venture with eDGe Renewable Partners to deploy up to $100 million in initial financing as well as technical and engineering resources to support solar energy projects and microgrid infrastructure nationwide for partners.
After implementation, Correlate continues to work with that customer to monitor and maintain that new energy system using the company’s proprietary systems. For customers, this model eliminates the complexity, time and upfront costs of transitioning to clean energy. For Correlate, it helps reduce that initial resistance to making that transition while forming multiyear relationships with customers that could yield future sales opportunities.
Renewable Energy Is Rapidly Becoming More Affordable Over The Long Term Compared To Fossil Fuel
In an interview with Financial Survival Network, Correlate CEO Todd Michaels spoke about the rising costs and increasing volatility and unpredictability that come with existing non-renewable fuel sources like oil, coal, or natural gas.
“The compounded average increase on electricity is 7% right now,” Michaels said. “It might go down one year because of some change. But on a compounded basis, it has never gone down since the 70s.”
Meanwhile, a renewable source like solar has not only gotten cheaper over the years as technology advances, it gets even cheaper over the long term because generating your own power eliminates the risk of fluctuating fuel input costs.
Moreover, with a microgrid – a series of technologies that give you the option to switch between pulling power from the grid or pulling it from your power source – you’re no longer at the mercy of a centralized grid that could be taken down by, say, a wildfire if you’re in California or a heat wave if you’re in Texas.
“If the grid goes down because of a weather event,” Michaels explained. “You can choose to go off the grid and operate your own with your own sources of generation, storage, and managing your loads.”
What was once relegated to a handful of early adopters has now become something that just makes economic sense. However, the cost of installing that clean energy infrastructure and the complexity of navigating a renewable energy industry that is still highly fragmented and confusing have become huge barriers even for companies who want to make the transition.
That’s why Correlate provides a service as comprehensive as it does. By offering 100% financed solutions and coordinating the installation and monitoring and maintenance afterward, Correlate makes it as easy as possible for companies to achieve their energy goals.
Moving forward, Correlate will make that unique approach even more cost-effective through its upcoming M&A strategy aimed at scaling its operations and services to improve efficiency and expand its range of solutions.
“There’s a huge opportunity to work with decade-old businesses that are doing good work but don’t have sophisticated systems and processes, the ability to raise capital, or the project finance team to help fund their projects,” Michaels said during the interview.
To help structure those potential partnerships and acquisitions, it appointed Eli Albrecht to its board of directors last month. The acclaimed M&A lawyer with extensive experience in the renewable energy sector will help the company drive roll-up opportunities in the highly fragmented clean energy landscape.
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