Green firm with its roots in El Jebel goes national
April 25, 2014
A company with a humble start in El Jebel four years ago has evolved into a fast-growing firm and a shining example on Earth Day that going green can be profitable.
Clean Energy Collective started as a three-person operation in cramped quarters in El Jebel in January 2010. Its first renewable-energy project was a pilot solar garden near Blue Lake subdivision.
But the business model, assembled by founder and President Paul Spencer, a rural Pitkin County resident, hit a chord with both energy consumers and utility companies.
"It's been growing like a weed," Spencer said.
“We’re profitable. By the end of this year, we should be very profitable.”
Paul Spencer, founder and president of CEC
Clean Energy Collective currently has 44 community-owned solar arrays in eight states either producing or in development. "We're working in the tune of $120 million in projects this year," Spencer said.
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What's the appeal?
Spencer realized that while most people want to tap solar power for all or some of their electricity needs, many people cannot for various reasons. The roof of their house might be too shady. They might be renters who don't want to invest in infrastructure. The cost of installing solar panels and the associated infrastructure might be more than they can afford.
So Spencer came up with the idea of building solar farms that electricity customers buy into. The consumers own a part of the actual array rather than the electricity it produces. The utility companies that Clean Energy Collective works with agree to buy the electricity produced by the arrays. Clean Energy Collective developed software that allows utility companies to credit the accounts of customers who bought into the solar arrays for their share of electricity produced.
Holy Cross Energy pledged early on to purchase electricity from the Clean Energy Collective solar arrays — a critical step to launch the company. That essential early agreement led to construction of what was then the largest community-owned solar array in the country at the Garfield County Regional Airport near Rifle. Once Clean Energy Collective cemented its relationship with Holy Cross, other utility companies became interested in the model.
"It no longer looked like a risky proposition for a utility company," Spencer said. The firm now works with 18 utility companies.
"Our relationship with (Clean Energy Collective) is good," said Del Worley, CEO of Holy Cross Energy, which provides electricity to some residents of the Roaring Fork, Eagle and Colorado River valleys. "We really built the model that he's working under together."
At this point, Clean Energy Collective projects provide less than one-half of 1 percent of Holy Cross' energy portfolio, Worley said, but the service has an important value beyond power capacity. Some of its customers want solar power and this method is an effective tool.
Cost is still a barrier
Although Clean Energy Collective's model opens the opportunity for homeowners who can't add solar panels directly to their houses, cost can still be a barrier, Spencer acknowledged. For example, a humble midvalley home occupied by a conservation-minded couple uses about 340 kilowatt-hours per month of electricity through Holy Cross Energy. The annual electricity bill is about $600.
Spencer estimated the couple would have to spend $7,700 to buy into a Clean Energy Collective project to offset 100 percent of their electricity usage. That would be about 10 solar panels at one of the community-oriented arrays.
The advantage is the household would hedge against rising energy costs. It no longer would be susceptible to rising electricity costs since it is producing what it consumes. There is an environmental ethic that also appeals to many people. Homeowners and business owners that buy into Clean Energy Collective's solar gardens reduce their carbon footprint.
"It's a good investment to make, both financial and environmental," Spencer said.
But he realizes that not everyone has $7,700 or more available to invest in a solar array. "It's still a bit of money," he said.
Clean Energy Collective provides low-interest loans that take some of the sting out of the purchase.
Company outgrew El Jebel
Clean Energy Collective's model has enough appeal that the company quickly outgrew its El Jebel office. Clean Energy Collective signed a contract to provide a certain amount of capacity to Holy Cross Energy within a certain amount of time. Terms of the contract are confidential, Worley said.
With that deal under his belt, Spencer started fielding inquiries from other utilities. In August 2012, Clean Energy Collective earned a contract to provide the first community-owned solar array in Colorado's Front Range when it signed a deal with Fort Collins. Later that month, it signed a deal with energy giant Xcel Energy to provide six solar gardens.
Before long, more projects materialized, including one in Paradox Valley in southwestern Colorado that supplanted the Garfield County Regional Airport project as the largest community-owned solar array in the country.
In December 2012, Clean Energy Collective moved its business operations from El Jebel to Boulder, though Spencer still spends part of the time at his midvalley home. The latest move was the opening of a residential sales office in Broomfield this year.
In December 2013, Clean Energy Collective had a five-member staff for residential sales. Now it has 20, Spencer said. Last year, sales were nearly $10 million. This year the company projects sales at $52 million.
Overall, the size of the staff ballooned from seven in early 2007 to 70 now.
"We're profitable," Spencer said. "By the end of this year, we should be very profitable."
Spencer said he is engaged in talks with utility companies that could produce partnerships that would implement Clean Energy Collective's model on an even broader scale.
Still connected to valley
Despite the growth, and prospects for even greater growth, Clean Energy Collective maintains important connections with the Roaring Fork Valley. The company has leased the former Garfield County landfill, on Catherine Road before it crests Missouri Heights, and has submitted an application for what could potentially be its largest solar array. The review by Garfield County is just starting.
Once approved, Roaring Fork Valley residents could again buy into a solar garden built by the homegrown business. The massive solar array at Garfield County Regional Airport is completely sold out. Residential, commercial and agricultural consumers of Holy Cross Energy purchased all 3,575 solar panels in the 858-kilowatt array.
Spencer said Clean Energy Collective owes its success to Holy Cross Energy's early interest in its projects. The firm is now committed to working with more utilities to meet the needs of consumers who want alternative energy.
"They realize their customers want to use solar," Spencer said.