Mainstream Energy sells business units, names new CEO
San Luis Obispo-based Mainstream Energy, parent of REC Solar, is selling off its residential solar installation line to focus exclusively on commercial clients and has named its third CEO in as many years.
REC Solar is owned by Mainstream, which had about 200 employees in the region and 800 in total, according to Business Times records. In addition to REC Solar’s residential solar business, Mainstream is also selling off AEE Solar and SnapNrack, its wholesale distribution arm and panel-mounting system maker.
The buyer is Sunrun, a San Francisco-based startup that has raised $155 million in venture capital. The sale price for the Mainstream business units wasn’t disclosed. Current Mainstream Energy CEO Paul Winnowski will join Sunrun as chief operating officer, and Timothy Ball, Mainstream’s chairman, will join Sunrun’s board of directors.
REC Solar has named a new CEO, Paul Detering. Detering was a co-founder of Utah-based Tioga Energy, a commercial solar developer that pioneered some of the financial arrangements that reduced the upfront cost of installations for commercial customers. Tioga has installed 1,290 panels for the city of Santa Barbara.
For its part, REC Solar has installed more than 100 megawatts of commercial solar panels, for customers such as wineries, Costco and the Department of Veterans Affairs.
“The commercial and residential solar businesses are built upon fundamentally different models, with unique customer bases and disparate sources of capital,” Detering said in a press release. “With this decision, REC Solar can better serve the needs of our commercial solar customers moving forward.”
Between 2009 and 2011, Mainstream’s revenue grew 72.8 percent to $254 million in 2011, the last year in which Mainstream provided revenue data to the Business Times.
In the years since then, low-cost Chinese panels have flooded the U.S. market, ticking off an international trade battle. Combined with new zero-down financing models, the cheap panels led more consumers than ever to install solar, but resulted in tighter margins for installers.
Mainstream Energy did not take a side in the trade dispute. In 2012, the company confirmed to the Business Times that it installed and distributed some Chinese-made panels but said that they were not a “significant” part of its business. For its commercial installations, however, Mainstream said that it exclusively relied on panels from the REC Group, a Norwegian firm that put $40 million into Mainstream in 2008 and is a part owner.
Meanwhile, Mainstream has gone through several CEOs. In 2011, the company hired Lee Johnson, a former executive for the shipping giant Maersk in Latin America. Johnson left without explanation and is now economic development manager for the city of San Luis Obispo.
In late 2012, the company named Winnowski, a former executive with United Technologies Corp., as CEO.