Complete Solar Solutions

RESCo Energy

“It was a complete start up,” Co-founder Fidel Reijerse recalls. “We realized that there was a real disconnect between what people wanted to do with their buildings and what they were doing around green energy.”

This business intuition proved correct and the risk paid off. In just half a dozen years, the company has grown to boast a project portfolio that includes some of the province’s largest and most innovative solar projects. Employee numbers have doubled annually to reach a current level of around 75 staff. RESCo has also been recognized by the Canadian Solar Industries Association as “EPC of the Year, 2012” and for “PV Project of the Year, 2011”.

RESCo specializes in designing, installing, and servicing commercial and industrial solar rooftops. The company is one of the largest focused solar EPCs in all of Canada. It also stands out as one of the few solar EPCs in its market space to do all of its work in-house. Instead of acting as a general contractor, as many competitors do, RESCo boasts a dedicated workforce fully capable of completing the entire project from start to finish. “It really allows us to deliver on what we believe is important,” Mr. Reijerse says. “And that is building a long term asset.” Equally important, he adds, is providing the service required to maintain that asset for several decades.

This comprehensive and client focused delivery has been key to the company’s success. “[Customers] don’t worry,” Mr. Reijerse explains. “When there is an issue they know that they can come to us and we will be there.” RESCo’s business model has always focused on providing a reliable solution from a single point of contact. “We were built to mitigate risk for our customers,” Mr. Reijerse reports. “This was something that we started right away in the early stages.”

Keeping operations in-house also prevents many of the hassles commonly associated with construction work. “We design for installation,” Mr. Reijerse explains. “And that avoids a lot of potential problems downstream.” With the engineers and builders working together from the project’s inception, change orders and stalled operations are rare. “There aren’t a lot of changes that are required to get [the product] installed,” Mr. Reijerse explains.

The team is also able to maintain full control over safety and quality. “We don’t have to compromise on one of those in order to get things done,” Mr. Reijerse points out. “We have a very heavily defined safety culture and we have always been dedicated to quality.”

RESCo Energy’s commitment to mitigating risk led the company to begin working with the roofing industry in 2007. “There is a natural synergy there,” Mr. Reijerse explains. Because solar panels are installed on top of a roof, the two systems are closely connected. “We were a little bit further ahead than most people in recognizing the integration issues between solar and rooftops,” he adds. “The building owners obviously [wanted to ensure] that their roof system was maintained during the work and for the long-term life of the entire system.” As a result, the team began working closely with Flynn Canada to ensure that clients received a holistic and reliable solar solution.

Flynn Canada, the nation’s leading building envelope trade contractor, was impressed with the ambitious start-up – and the increasing market potential for solar energy. In 2010, the roofing giant decided to invest in RESCo Energy and the two companies officially joined forces. “They approached us and said, ‘we are interested in getting in the space, but we had rather do it with you.’” Mr. Reijerse recalls. “So it allowed us, as a small organically growing company, to partner with a much larger company that had the strong balance sheet and the bonding capacity and the larger construction experience and labour force. And it allowed us to bring our expertise to their infrastructure. That’s been an enormous success for both companies.” Now, RESCo is able to provide full roofing services through Flynn Canada, including re-roofing, roof maintenance and warranties. And the roofing experts at Flynn are able to ensure the integrity of every roof on which RESCo installs solar panels.

Flynn Canada’s entrance into the market space demonstrates the growing opportunity – and demand – for solar energy in Canada. “There is no question that solar answers a number of increasingly difficult energy challenges for Canadians,” Mr. Reijerse explains. “It is a natural hedge against future energy crises and a natural hedge against future carbon challenges that may exist.”

The technology is particularly helpful in alleviating some of the burden from overtaxed electrical grids. “When the sun is shining is usually when you need the greatest electrical draw on the system,” Mr. Reijerse explains. “That is also when you are generating the most from solar. So it is very coincident with some of the demand management and challenges of existing and aging grid infrastructure.”

The steep investment cost associated with solar has been the deal breaker for many Canadian companies in the past, Mr. Reijerse admits. Prices are plummeting, however, and cost is no longer the barrier that it once was. “The price has dropped probably 80 percent in the last five years in terms of the capital costs of installing the systems,” Mr. Reijerse reports. “Most people don’t realize how inexpensive solar has become.” And, “these cost curves continue to drive down. They are driving down roughly 20 percent a year. It is becoming far more economical, especially as the electricity rate continues to rise.”

An investment in solar energy can be recouped in as little as six years, Mr. Reijerse reports. This number varies throughout the country depending on government incentives and the price of electricity. “It is very regional and it is very politically driven.” Ontario offers the quickest return because of its Feed-in Tariff Program, Mr. Reijerse explains, and nationwide, most businesses can expect to see returns in about a decade.

As that time period drops, incentives will likely ease off, he adds, “and so the equalization point will remain somewhere in the 10 to 12 year range. Given that these assets generally hold 20 year warranties on them, and still produce 80 percent of their original value after 20 years, there is no real risk in a ten year payback. Not in something that easily has 20 years or 30 years of life in it.” Recouping the investment in ten years seems especially positive when compared to the numbers just a few years ago. “Five or six years ago, when we first got into the business, we were looking at 50 year paybacks,” Mr. Reijerse reflects.

The team is eager to see a day when consumers can enjoy a quick return on their investment without the need for incentives. “Within the industry and within the government, there is an absolute desire to move the industry forward as quickly as possible, to move it off any subsidy or tariff based environment,” Mr. Reijerse reports. He believes that, considering the progress that has been made in just a few years, this is a realistic expectation for the relatively near future. “We’ve seen the establishment of a very strong construction base,” he points out. “We’ve seen money come into the industry. We have really established a foothold here in Ontario.”

The seeds of the industry have been firmly planted, but they must be nurtured to ensure continued growth, Mr. Reijerse adds. “If we can maintain the intellectual capacity, if we can maintain the investor certainty, then it will really flourish. I think now we are at the point where we can really reap the benefits of the last three years of growth in this sector.”

The longer term future for solar energy looks even more exciting. “I think that you will get into a world when the economics of solar really match the economics of market pricing for energy,” Mr. Reijerse insists. “And that will be the beginning of the true market driven opportunity.”

This day may come sooner than many people realize. “As the price of energy continues to go up, the price of solar continues to come down, and we start to meet around 2018. The levelized cost of energy of those systems will essentially be equal and you will see more people at that point having the ability to invest in their own energy infrastructure – and do it on pure economic terms without government intervention.”

April 23, 2018, 1:11 PM EDT