Contractor’s Corner: SOLV Energy
SOLV Energy may not be a household name yet, but the company’s presence in the solar industry is already significant. SOLV Energy is the new combination of solar construction company Swinerton Renewable Energy and O&M division SOLV, now officially a separate entity from main contractor Swinerton Builders. All existing Swinerton RE employees are transitioning to renewable energy-focused SOLV Energy, effective today.
We last had an in-depth interview with SOLV Energy President George Hershman in 2016, just after the 2015 extension of the Federal Investment Allowance (ITC). The company, then called Swinerton, celebrated the significant achievement of achieving 1 GW of cumulative solar installations. Now SOLV Energy is installing more than 2 GW of projects every year. A lot has certainly changed in five years.
In this episode of the Contractor’s Corner podcast, a first “rerun” of the series, we talk to Hershman about the new name and focus of SOLV Energy, and how it affects the position of the best solar contractor in the industry.
Part of the interview is below, but be sure to listen to the full podcast for even more insight, including the recklessness currently surrounding proposed tariffs, what’s needed to boost domestic production, and how the big boys are dealing with supply chain disruptions. .
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To what do you attribute the significant growth of Swinerton/SOLV Energy over the past five years?
We’ve seen market growth and stability through the expansion of the ITC, the willingness of utilities to recognize renewables as the lowest energy costs on their new build platforms, and we’ve seen a turnaround of businesses and the general public for renewable energy needs. We still retain a significant portion of the overall market share and we are very excited about the future. We have a government that supports renewable energy and recognizes that a change in clean energy production is really a requirement to deal with climate change.
Why the decision to become SOLV Energy now?
With an administration that has set huge renewable energy targets and solar is such a big part of that, we set out to see how we can support the company’s growth going forward. We recognized that there are two companies in development within Swinerton: our main commercial construction and then this growing renewable energy business. We saw that it would be difficult for a traditional construction company to manage both growth trajectories. So we started looking at opportunities and made the decision to move forward with a strategic investor, combining Swinerton Renewable Energy and SOLV into one entity. We ended up with American Securities as our equity investor, which is something we’re very excited about. They have a commitment to the sustainable business and it is a very good cultural match. “SOLV Energy” says a lot about what we are trying to do. We are trying to be part of solving the future energy industry.
How do rate requests, while not official or final, affect your project schedule?
I don’t want to discount the fact that a solar panel still costs 45 to 50% of the total cost of a project. So as modules get more efficient and we have more steel in projects and all these other components, I don’t want to discount the fact that if you put a significant rate on a component that is 50% of the cost of the job, it definitely has a lasting effect and a huge impact. We have a number of projects that, if modules were going at a 250% rate, would be clearly non-economic and would not be built. These rates have a huge effect on us and the industry as a whole. It makes planning for our company much more difficult. We are in a period where we should all be planning and building for growth, and this is holding us back. It is a real challenge for companies like ours, which have a lot of installation personnel. How do you conserve repositories if you’re not building projects? Not you. It took us eight years to build 1 GW of projects, and now we build 3 to 4 GW of projects per year. The scale of the business has grown, the number of employees has grown, and to sustain that, we need consistent access to materials and equipment. That wouldn’t happen under this kind of tariff regime, so we wouldn’t be building projects at a time when we would need to expand. That’s the shame of it all, that at a time when we’d have to work hard with the administration to support the infrastructure package, when we’d have to expand our resources and equipment to meet the high demand, we’re all a bit stuck in the mud because of trade actions.