Bay Area California Solar News – Akeena Solar d/b/a Westinghouse Solar has decided to stop installing solar panels in California and focus on setting up a solar dealer network. Akeena solar has had a long history of service in California but with their new name brand agreement with Westinghouse, things have changed. By exiting the residential and commercial solar installation business, Akeena will also reduce overhead and lower their break even point. Read More Solar News -
Global News Wire Los Gatos California – Akeena Solar, Inc. d/b/a Westinghouse Solar, announced that it is expanding its distribution business to include sales in California, the largest solar market in the U.S. To implement this distribution expansion, the company will exit its solar panel installation business in California, focusing exclusively on its manufacturing and distribution business. This move will position the company to sell its Westinghouse Solar Power Systems directly to dealers in California for the first time.
“Expanding our channels to include authorized dealers in California will accelerate the growth of our distribution business,” said Barry Cinnamon, chief executive officer of Westinghouse Solar. “California is the largest state in the country for solar products, accounting for approximately 50 percent of the U.S. market. Westinghouse Solar panels are safer, more powerful, more reliable and easier to install than other products on the market today. Our outreach to qualified solar installers in California begins immediately, making our solar panels available to more consumers in the state.
“As we transition to a distribution model in California and sign up new dealers, we will continue to focus on securing new distribution partnerships and adding dealers around the country,” Cinnamon said. “We will honor all outstanding solar installation obligations, and in many cases expect to work with new Westinghouse Solar dealers to take over our remaining backlog of California installation projects.”
Since launching its distribution business in the second quarter of 2009, the company has built a network of more than 100 solar dealers across the United States and Canada, including solar installers, HVAC contractors, electricians and roofers. It has also developed distribution partnerships with Lowe’s Home Improvement Stores, Highland Solar in Canada and Lennox International, a global leader in residential and commercial HVAC equipment. Distribution revenue grew from $202,000 in the second quarter of 2009 to $2.2 million in the second quarter of 2010, a ten-fold increase.
“Our transition last year to a more scalable solar distribution model in other parts of the country made it increasingly clear that we can reach sustainable profitability more quickly by focusing exclusively on our lower overhead manufacturing and distribution businesses,” said Gary Effren, president of Westinghouse Solar.
As a result of its decision to exit the California solar installation business, the company will record a restructuring charge of approximately $2.5 million in the third quarter of 2010, primarily related to headcount reductions, equipment and inventory write offs, lease accelerations and write off of goodwill, the vast majority of which will be non-cash charges. The company also expects to incur transition expenses from its discontinued operations for the next two quarters, after which its quarterly cash operating expense run rate is expected to be approximately $1.5 million. This represents a reduction of over $3 million in quarterly cash operating expenses compared to levels during the first and second quarters of 2010. Under this pure manufacturing and solar distribution business model, the company’s plan is to achieve cash flow breakeven at $9 million of quarterly revenue in mid-2011, with projected revenues for 2011 in the range of $25 to $30 million.