This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

RGS Energy Fights to Leave SolarCity's Shadow

RGS Energy has 35 years experience in the solar industry and is one of the largest players in the solar installation market. Both of these characteristics provide RGS Energy with brand recognition that is crucial as the market grows. The company has an acquisitive history acquiring seven companies over the past seven years. This experience will be crucial as RGSE helps consolidate the fragmented solar industry.

RGS Energy operates in the rapidly growing solar panel installations market. The solar panel installations market size should increase by 43% over the next three years from $11 billion in 2012 to $15.7 billion in 2016. With RGSE expecting to be a consolidator in this fragmented market, it should grow faster than the overall market.

Despite being a market leader in a very strong growth market, a large valuation gap between RGSE and SolarCity exists. The valuation gap appeared as RGSE saw a decline in sales in 2012 while the market continued to grow at a rapid pace and SCTY grew at a rapid pace. RGSE also had some corporate governance issues with its past controlling shareholder. RGSE has addressed these issues.

In July 2012, the company brought in Kamyar Mofid, who has a wealth of knowledge in the solar industry with previous positions at SunEdison, REC Solar, AEE Solar and Teleflex. In June 2013, the company appointed David Belluck as chairman of the board. David Belluck is a partner at Riverside Capital Partners, a private equity firm with significant experience investing in the technology sector. Riverside Partners holds 25.8% of RGS Energy common stock outstanding.

Thanks to the new management, RGSE decreased total operating expenses from 42% of revenue in the third quarter of 2012 to 24% of revenue for the same period in 2013. RGSE expects 2013 revenue to be between $132 million and $137 million, representing 42% annual growth.

The company has also made acquisitions: Syndicated Solar and Mercury Energy, both in August. Syndicated Solar has a very strong sales force that will complement the company's strengths. Mercury Energy positions RGSE as one of the largest U.S. solar installation companies measured by installed customers and provides RGSE with a much stronger presence in the Northeastern market and a much stronger commercial division.

RGSE also created RGS Energy Asset Management LLC, a joint venture with Altus Power America Management, to develop, finance and manage up to $150 million of commercial solar projects.


We think RGSE will close the gap with SCTY as the market eliminates the premium SCTY receives thanks to its relationship with Elon Musk, and the market recognizes the growth and competitive position of RGSE.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RSOL $0.00 0.00%
SCTY $29.57 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs