RGS Energy pulls out of large commercial solar

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RGS Energy has announced that it will terminate its business in the large commercial solar segment, after several quarters of relatively heavy losses and as part of a realignment under new CEO Dennis Lacey. The company will maintain its residential and Sunetric business segments.

GTM Research Solar Analyst Nicole Litvak says that this move is in alignment with industry trends, noting that among the top residential installers SolarCity is the only one active in the commercial segment as well.

“Residential is growing a lot more right now compared to commercial, and I think that they saw a larger opportunity there,” notes Litvak. “There’s a huge addressable market, and its just easier to scale in residential solar if you’re doing it right.”

While traditionally the smaller of the two, the U.S. residential sector installed more solar than the commercial sector in the first quarter of 2014, and GTM Research predicts that residential will be the larger segment over the full year 2015.

One factor is market barriers for commercial solar deployment. “Financing is definitely a huge bottleneck in the commercial sector right now,” says Litvak. “There is a decent amount of activity, but it’s a struggle for companies to both find the customers and find the financing.”

“You don’t have the FICA score, the one number that you have for residential.”