Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published: November 12, 2010

 

CEOCFO: Mr. Green, would you give us an overview on Clear Skies?

Mr. Green: Clear Skies Solar is a national solar integration company in the commercial, industrial and agricultural sector. What we do is sell, design and coordinate financing along with managing the construction and the installation in its entirety down to the interconnection agreements with the utilities. We also maintain the systems and we keep our fingers on the pulse of new solar markets.

 

CEOCFO: What is the geographic reach for you today?

Mr. Green: Well we have international capabilities and before the crash of 2009 we were starting to operate in Greece & India. For the time being, we limit ourselves to the contiguous USA.

CEOCFO: There are a variety of types of solar systems: what is your expertise that separates Clear Skies Solar from the pack?
Mr. Green: The thing that separates us from the competition is they tend to be cardboard developers meaning when they get a live customer, they well call up one of a dozen sub-contractor companies to handle the development etc. We on the other hand are different. We usually get chosen based on our past performance. Every time we show up on a project, the same people are doing each one of those jobs, where as with other companies you never know what you are going to get. There is an old saying that you are only as good as your last job. We don’t need to worry about that, every job is a successful job.

CEOCFO: Would you tell us about your proprietary monitoring system?
Mr. Green: We received the patent for our XTRAX in February 2008. The technology allows us to monitor energy production from renewable energy sources and distribute the date via our software as well. This allows system owners to affordably monetize the production values of a given system.

CEOCFO: Would you give us an example of a typical project?
Mr. Green: The typical project, if we started on day one with a customer, it could take them anywhere from 60 to 90 days to make a decision. Some clients are faster, but that is the norm. Once we have been selected, we move to final engineering, with preliminary engineering already done to ensure viability. It is important to check the structure and measure it to ensure that the roofs will be able to support it. We have also performed a preliminary electrical study to make sure that there are no violations existing and that the electrical infrastructure can handle the load. We then move forward with the local municipalities and utility interconnection paperwork, which usually takes about two to four weeks. So starting from day one, the sale, until the time you actually break ground, it can take 4 to 5 months. The longest that I’ve ever seen is six months, but that is usually for project financing reasons. The good news is the construction is relatively quick.

CEOCFO: Was it a smooth transition for you getting into solar?
Mr. Green: We come from the construction industry, which is where I have spent the last 20 to 25 years. I made the transition into the solar energy sector after making some investments in several solar energy companies that were operating overseas in third world countries. The more I learned about the technology, the more I realized that it was construction, but using a higher technology, that is when I jumped into it to test the market. In 2004, I realized that there was something viable here and we made the transition from hard core construction, to solar energy and we officially launched in 2006.

 

CEOCFO: Do you do any new builds, or is it all retrofitting?
Mr. Green: New constructions is rare, because the entire building really has to be constructed before we show up and developers today have little interest in having solar installed, they leave it for the next buyer or tenant to invest in solar.

CEOCFO: What is the financial picture like for the company today?
Mr. Green: Business is certainly on the rise. In 2008, we came out very strong with $10 million in sales and completed $3 million of that pipeline. Unfortunately, the market collapse starting in September of 08 causing our financing to be pulled on a $6 million project in California. For 2009, let’s just call it a disaster for everyone, we were flat for the year but this year 2010 we produced just shy of $2 million in the 1^st Quarter of 2010 with guidance for $15 million. Our expected project profit margins range from 12% to 15% so we are looking at 2011 extremely optimistically. The markets turning around, financing is back and we are happy to say that we are part of that.

CEOCFO: You mentioned that you do work with your clients on financing: is that an important part of what you do?
Mr. Green: If we didn’t have financing available to our clients, we wouldn’t have a business. You have to be able to model internally and that makes us unique as well, with everything from sales to engineering and the complex financial modeling, we provide one stop shopping to our customers. In New Jersey alone we know of 45 different billing rates which makes the job interesting to say the least. The type of financing we offer is called the Power Purchase Agreement, commonly known as PPA, requires no money down from the client. The client only pays for the electricity that they use, as a discounted rate of 20% to 30% off market. So if the client is paying 0.15 cents right now, they will only be paying .10 cents. Therefore, it is financially sound. However, there are people who find it hard to grasp. It is a new technology and financial tool.

CEOCFO: Do you do much investor outreach?
Mr. Green: We are involved with investor outreach and we do have an investor relations department, although it is small. We are starting to do road shows again, getting out to the markets and telling our story, because we are going to have a very nice turnaround. We are very happy to say that we are coming back even better and stronger.

CEOCFO: Final thoughts; put it all together for potential investors; why pick Clear Skies Solar out of the crowd?
Mr. Green: We feel that we are undervalued. For the financing of 2009 that we undertook in order to maintain operations we had to take a dilution hit but we didn’t have much of a choice. However, we believe we offer a tremendous opportunity to the investor that looks for affordable stock. We announced that we have several contracts coming up and of course, contracts that we have already completed. It has been a good 1^st Quarter, and I stand by my guidance for 2010.