TMCnet Feature
June 21, 2021

PosiGen Closing the Clean Energy Affordability Gap for Low-Mid Income Communities

PosiGen is a leading provider of residential solar installations and energy efficiency solutions. Over the last decade, PosiGen has installed over 18,000 systems, the vast majority of which are in low-income census tracts. Headquartered in New Orleans, PosiGen has over 300 direct employees and supports more than 120 additional workers through its contractors in Louisiana, Connecticut, New Jersey, New York, and Florida. The firm recently secured a $60 million equity investment to scale its business, as well as an additional $50 million of tax equity funding to fund solar initiatives where they are needed most.

How did PosiGen start? How is its business model different from those of other solar companies? What is PosiGen doing differently from other clean energy enterprises that have made it so successful?

The PosiGen Success Story

In the wake of Hurricane Katrina in 2005, as the people of New Orleans began to rebuild, many programs were launched to make local homes better, more efficient, and more affordable. However, most of these programs were only being accessed by the wealthy, leaving countless low-to-moderate income families and communities of color – who together constitute a significant proportion of New Orleans’ population – at a disadvantage.

PosiGen’s founding team wanted to do something about this disparity. They wanted to help disadvantaged locals rebuild their homes and their lives, and they realized that they could do so by closing the clean energy affordability gap. What if clean, low-cost solar energy and energy efficiency – which is typically inaccessible to low-to-moderate income communities and communities of color – could be provided to these families? What kinds of programs would work, and what would the long-term impacts of this new solar and energy efficiency paradigm be?

Thanks to an innovative business model, PosiGen has been wildly successful, and the business results – and the community-level change that they drive – speak for themselves.

PosiGen’s Business Model

The PosiGen model has proven to be nothing short of transformational – both for the company as well as for the families it serves. The firm spends on energy efficiency upgrades in their customer’s homes that complement the solar system production, substantially increasing the customer’s savings. The families they serve see a significant increase in savings with the combination of solar and energy efficiency over solar alone. Traditional solar companies only offer solar, PosiGen’s addition of energy efficiency upgrades to every solar install not only significantly increases saving, it also increases the value of the home and improves the air quality of the home, making it a healthier environment.

Furthermore, the designs of all of the firm’s systems are easily replicable. This helps keep costs down. Also, a simple yet effective onboarding process helps to put new customers at ease. A demonstration, agreement confirmation, and end-to-end installation by expert teams ensure that new clients know what they are getting. This transparency is critical to the long-term success of each customer’s relationship with the company. Seamless and hassle-free onboarding also helps customers better understand the value proposition of PosiGen’s services and spread the word to others.

In this way, PosiGen’s sales are driven by savings and word-of-mouth referrals from satisfied customers. Solar systems are only installed if a customer will save money by going solar, this ensures a high level of customer satisfaction.

With each new install, excitement began to grow in PosiGen’s target communities because of the prospect of installing green energy systems and saving at the same time. From there, sales began to ramp up, and the company grew rapidly.

The efficacy of PosiGen’s innovative business model was further enhanced by the leadership team’s understanding of the needs of its customers. In a departure from industry norms, PosiGen does not require its clients to have a high FICO score, or any FICO score. There are no minimum income requirements, nor any specific debt-to-income requirements. All that is needed is for the customer to be a homeowner and to have a current electricity bill. PosiGen offers a fixed monthly bill for the entire 20 years of each installation agreement with no escalators, unlike the majority of solar companies that increase their customers’ lease rate every year.

PosiGen is the only company to pair a custom energy efficiency package with a solar offering. By doing so, PosiGen is the only company to guarantee savings by installing solar energy solutions for its clients.

PosiGen's Growth and Long-Term Community Benefits

PosiGen has grown rapidly, and the company now installs thousands of solar systems every year. Mr. Thomas Neyhart, CEO of PosiGen, stated that more than half of the company’s customers are identified via referrals from satisfied clients. As a result, the company spends less than the competition to acquire new customers. PosiGen’s acquisition costs are as low as one-fifth of those of its industry peers. With a solid value proposition, the company does not have to pay as much as others to acquire new customers.

Along with a solid value proposition, PosiGen tries to ensure that it makes a positive impact on the communities it serves. It also strives to provide job opportunities to the communities it serves. Many people in the company’s target locations have been given a second chance to rebuild their lives after battling, for example, substance abuse, or overcoming the many obstacles that affect employability and career advancement after a criminal conviction. By investing in local communities, PosiGen has helped people from disadvantaged backgrounds start meaningful work in entry-level positions and move on to become managers, regional managers, and directors.

In addition to providing job opportunities, PosiGen’s affordable solar and efficiency solutions also help low-income and high-need communities save money. Money saved by these communities can be funneled back to local businesses. In this way, PosiGen supports local economic growth.

In terms of long-term benefits, PosiGen’s solar systems can lead to better health outcomes. This is because PosiGen’s solar and energy efficiency solution address leaking ductwork, seal the home from high intrusions of spores, mold, pollen and water intrusion for their customers.  They do not provide just a solar system, but a holistic solution. PosiGen’s energy efficiency is not just about maximizing savings for its customers, it results in tangible benefits above and beyond what they would receive from just a solar system.  This has proven to be a win-win for PosiGen and its clients.

 What the Future Holds

The COVID-19 pandemic has disproportionately affected low-to-middle income families and communities of color. Now more than ever, these communities need access to the cost savings, clean energy, and health benefits that solar and efficiency solutions can deliver.

PosiGen has a diverse and inclusive team, with over 65 percent of its team being persons of color and/or female. Led by CEO Thomas Neyhart, a recognized leader in the solar energy space, PosiGen continues to change lives and drive meaningful transformation in marginalized communities. The company’s success goes hand in hand with the growth and prosperity of its customers. Although this approach to business may be thought of as somewhat unconventional, the ends justify the means.

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