2. Executive Summary
• REC in the North East has had a bumpy road in 2013 with 36% growth in NJ market and slower than expected start in NY,
expected to finish with 619kW.
• Reasons for underperformance are due to lack of leadership,
uncoordinated go to market plan, poor product viability (NJ),
and underperforming RSCs.
• 2014 will be a break out year for REC in the North East. Many
of the key issues contributing to weak performance have been
identified and solutions are in place.
3. Executive Summary Contd…
• The keys to improving regional performance are focusing on
recruiting and training top talent into key positions, targeted
marketing approach, take referrals to the next level, and
operational efficiency of ISS, SOTP, OPS, and OS.
• Strong execution will be supported with additional marketing
and advertising focused on target markets primarily in New
York.
• By year end 2014, the North East Region will deliver $13M in
topline revenue, and result in 3.6mW of orders.
5. PERSPECTIVE- NJ
- Poor Performance
-$676K, 181kW YTD on Plan of $1.5M
-Forecast to be $857K, 231kW- 58% of Plan
-Market growth 25% YOY/REC Growth -36% (Current Share .5%)
-Reasons
-Internal:
-Focus: Not a Focus Market
-Leadership: RSM Top-grading (Peter Awn)
-Sales Talent: RSC Turnover, Just Nick
-Poor Referral Business
-Marketing: Nothing Other Than COSTCO
-Product: SR Exited, NRG Flop, CPF Late Entry for REC
-Pricing: Prohibitive Cost Structure*
-External: Macroeconomics
-SREC Uncertainty
-Lack of Utility Support (e.g. PSE&G Solar Loan)
-Key Players
-Vivint, RDI, SolarCity, Astrum, Trinity
6. PERSPECTIVE- NY
-N e w M a r k e t E n t r y
-3/13 Go To Market, Stumbles on Marketing
-$890K, 230kW YTD on Plan of $2.23M
-Forecast to be $1.31M, 388kW-58% of Plan
-Reasons/Factors
-Internal:
-Focus: Long Island Detour to RONY (Rest of NY), Licensing
-Leadership: Interim RSM (T.J. Slocum)
-Sales Talent: Drop Team, New Hires
-Marketing: Just COSTCO
-Product: Strong SUNRUN Product, Due Diligence on CPF, TBD
Cash Product, TBD Other Finance Partners
-Pricing: Fine Tune Cost Structure
-External: Macroeconomics
-L.I. rebates unpredictable and immature program
-RONY incentives slow to process
-Key Players
-Astrum, SolarCity, RDI, Verrengo
7. PERSPECTIVE- 2013
Lead Source
Orders
%Purch Thru
Costco
Costco
26
100%
Referral
14
35%
Purchase Leads
7
14%
Canvassing
3
33%
Other
3
33%
Total
53
RSC Ranking
Orders
Nick Walsh
28
Sumner Komro (Drop team)
9
Susan Friedricks (Sept 2013)
7
Rob Sandberg (new hire, Oct 2013)
1
Dylan Pywell (new hire, Oct 2013)
0
8. PERSPECTIVE- 2013
NJ/NY Branch P&L Summary
Revs $2.1M on plan of $3.4M, -61% variance
Contains $1.2 in Regional Commercial COGS $2.04, GM 17%
COGS $2.19 on plan of $1.97, -11% variance
Volume is issue, need scale
Gross Margin: 25% on plan of 32%, -7% variance
Volume issue in COGS cascades to GM
SG&A: $650K on plan of $626K, +1.8% variance
Sales attrition, non performers
Net P&L: -$114K on plan of $481K, $595K delta
Lack of sales
NY start up expenses/NJ burdened
9. PERSPECTIVE- 2014
Regional Outlook For 2014
• NJ
-
Moderate market growth expected: 7%
900kW REC forecasted for 2014
Focus on targeted territory
1.5% market share by end of 2014
• NY
-
Breakout growth year expected:114%
2.6mW REC forecasted for 2014
Geotargeting via canvass
Referrals to the next level
5.5% market share by end of2014
10. PERSPECTIVE- 2014
MARKET SHARE 2012-2014
12.0%
11.10%
2012 MS
10.0%
Percentage (%)
2013 MS
2014 MS
7.9%8.0%
8.0%
7.3%
6.0%
5.5%
4.50%
4.5%
4.0%
4.0%
2.7%
3.40%
2.9%3.0%
2.8%
2.70%
1.8%
2.0%
1.2%
0.20%
0.00%
0.0%
CA
1.5%
1.00%
0.5%
HI
AZ
CO
NY
NZ
US
12. PERSPECTIVE- 2014
2014 kW Forecast
Branch
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
45050
4%
$7,120,694
Actual Forecast 4%
Aug Dec
Jan
$137,098
38.08
4%
$4.25 $3.55 3.60
$ (0.16) $ (0.54) $ (0.05)
$433,003
114.25
4%
$3.87 $3.59 3.79
$0.52 $ (0.20)
2014
2013 Monthly Sales Distribution Actual
Waterfall Totals
Jan
Total $s $3,243,600 $s
% of Bus
2%
kW
kW
901 Sales Dist
Avg ASP Rev $3.60
ASP $4.09
ASP Check TRUE ASP Decline
Total $s $10,244,370 $s
% of Bus
6%
kW
kW
2,703 Sales Dist
Avg ASP Rev 3.79
ASP $ ASP Check TRUE ASP Decline
5%
6%
7%
$8,757,855 $10,457,709 $11,776,876
6%
5%
8%
Feb
Mar
Apr
$162,180 $194,616 $227,052
45.05
54.06
63.07
5%
6%
7%
3.60
3.60
3.60
$$512,219 $614,662 $717,106
135.15 162.18
189.21
5%
6%
7%
3.79
3.79
3.79
$-
8%
10%
11%
$13,365,876 $16,135,894 $16,989,251
7%
8%
10%
May
Jun
Jul
$259,488 $291,924 $309,673
72.08
81.09
86.02
8%
9%
10%
3.60
3.60
3.60
$$819,550 $9,921,993 $978,049
216.24
243.27
258.06
8%
9%
10%
3.79
3.79
3.79
$-
11%
11%
10%
$17,363,644 $17,562,163 $15,495,234
11%
12%
12%
Aug
Sep
Oct
$358,192 $389,339 $355,796
99.5
108.15
99.11
11%
12%
11%
3.60
3.60
3.60
$$1,131,288 $1,229,661 $1,126,881
298.49
324.45
297.33
11%
12%
11%
3.79
3.79
3.79
$-
9%
8%
100%
13,741,929 $12,249,019 $161,015,271
9%
8%
100%
Nov
Dec
To
$308,849 $267,724 $3,254,930
83.57
74.37
904.15
9%
8%
100%
3.60
3.60
3.60
$ (0.05)
$950,183 $845,560 $10,280,154
250.71 223.1
2,712.44
9%
8%
100%
3.79
3.79
3.79
$ (0.20)
13. REC SOLAR(SOP) BOP
Process
People
Key Hires: SA, FMS, BD, RSM
Talent Sourcing
System
Sales Process
Licensing
Design tool
Cash proposal tool
Training Recognition
Target demographic
Appointment feedback tool
Canvas Operations
Sales and Marketing
Cross-Functional
From $1.5 MM to $13MM | From 100’s kW Sold to 3.6mW Sold
14. PERSPECTIVE
Competition
• Aggressive
• Low cost
• Self financed
• Poor execution
• Targeted sales
• Self financed
• Speed
• Poor execution
Solarcity
Astrum
• Innovative
• Strong marketing
• Large sales force
• Financing in flux
Vivint
RDI
• Solid sales force
• Roofing synergy
• Home Depot
dependent