Aztec Solar Power, LLC

Product & Service Mix

Aztec Solar is a turnkey solar installation firm with plans for expanding into the solar module manufacturing marketplace. The company was incorporated in 2008 as an offshoot of the Royal Petroleum Corporation, a fuel oil and energy services firm that has done business out of Sharon Hill, Pennsylvania since 1936.

Aztec Solar Power’s primary mission is the design, engineering, and installation of solar photovoltaic and solar thermal systems. The new company is currently headquartered in King of Prussia, PA. Aztec is also in the process of developing a solar module manufacturing facility in York, Pennsylvania, and plans to begin manufacturing operations in the Summer of 2010.

Company Location Logic

The location of Aztec’s sales, marketing and installation headquarters in King of Prussia places it in the center of the company’s initial marketing area. However, Aztec’s designs in York have grown from a strategic partnership with Komax, a Swiss manufacturer of solar module assembly equipment already located in York, and the York County Economic Development Commission’s desire support to create a Solar Park, made up of multiple renewable energy manufacturing concerns.

As a small start-up solar installer, Aztec faced an extremely tight market for solar panels at the peak of the solar boom in 2008. Hoping to avoid future supply difficulties, Aztec sought to manufacture its own modules, and entered into discussions with Komax to purchase a solar assembly line. While market conditions have since changed, the company felt “the rumbling, the awakening of the United States” solar marketplace, and recognized that there would be a "demand for solar panels, and in particular, for the new generation of solar panels." As relayed by Jerry Robbins, Chief Information Officer of Aztec Solar:

"The branch of Komax that manufacturers is located in York. We met with them with the intention of purchasing one of their machines…and in talking further with them, they suggested that it would be in everybody’s best interest if we might consider relocating there. For them, to demonstrate their machines…is a disruptive, time consuming, and expensive process. Whereas if we were in close physical proximity, operating a 24-7 line…that would benefit them and us, in that we wouldn’t have to inventory spare parts for the machines, and we wouldn’t have to worry about any upgrades."

Robbins adds that:

"Yet another reason why we wanted to open the York facility is that…we firmly believe that the United States is still a viable manufacturing base. We don’t have to export all manufacturing jobs from technology that was developed here in the United States because of cheaper labor…We have people here who are able to work, who really want to work…and by developing things locally, we’ve cut out the long delivery problem, and the cost of bringing in modules from Malaysia, or China, or for that matter Germany or anywhere else. We feel we can be competitive, and intend to keep not only the jobs in the U.S., but the dollars here too: unlike foreign-owned manufacturers who may produce and market here, but the dollars eventually flow back to the parent company’s origin. We want to help the Pennsylvania and the U.S. economy as well as our environment and we want to help reduce our nation’s reliance on unfriendly sources for our energy. At Aztec we’re optimistic, and so far the people we’ve spoken to feel the same way."

Company Size & Structure

Despite the economy, Aztec is actively hiring as it works to become a fully integrated solar company and develop in-house expertise. On the installation side, the company takes pride in not just being a "purveyor of solar panels," but rather a "turn-key operation" that is involved in each stage of the installation process, from financing and permitting assistance, to siting and installation. Aztec’s installation business currently operates with 12 full-time employees and four commissioned sales associates.

The company is also in the process of building-out an in-house installation team (the company currently employs contractors) and expects to soon bring onboard an electrical engineer and two full-time estimators.. Aztec expects to expand the sales team as the company grows, and envisions future opportunities in partnerships with the architectural, real estate developer, and farm communities.

Aztec also has commitments from "an incredible management team" for the York facility. This facility is expected to bring in 50 to 100 new jobs, and will be headed up by a seasoned manufacturing executive with experience in global tool manufacturing. On the research end, Aztec has a commitment from a research director who holds several patents in thin-film technology and brings extensive experience in the semiconductor industry.

Top Requirements to Capitalize on Opportunities

In addition to the tight supply situation Aztec encountered in 2008, Robbins notes that a major hurdle in project development has been the lack of uniform solar codes at the various township and municipality levels; some townships do not have any solar standards on the books, and "part of our job is educating the permitting officials." However, the Pennsylvania Solar Planning Committee, which includes representatives from industry (including Aztec), government, and labor, has recently released a "Solar Energy Systems Ordinance" for residential and small commercial solar systems. While there is no mandate for municipalities to adopt this ordinance, Robbins is hopeful that municipalities will use these standards as a model to streamline the solar permitting process.

From the demand side, one of the major problems facing small and large-scale (up to 3 megawatts in Pennsylvania) consumers is the up-front cost of solar installation. Consumers are expected to invest a considerable sum at the time a system is commissioned, and there can be a significant delay before consumers begin to accrue the incentives and benefits of installation. While Robbins notes that solar lease programs in Connecticut (administered by the CT Clean Energy Fund and CT Solar Leasing, LLC) and California (SolarCity) are interesting, such programs do not currently fit into Aztec’s business model and Robbins would like to see a national, industry wide financing option "tailored for the specific needs of financing a solar project."

Views on Policies

Robbins believes that state Renewable Portfolio Standards have played an important role in the development of renewable energy, and that "the continuation of the AEPS…is a big part of making solar economically viable."

Analogously, Robbins would also like to see a more expansive and mature renewable energy credit (REC) market, commenting that "we are all part of the same grid and same country." Currently, REC’s generated in one state can only be sold in that state, leading to an uneven marketplace where REC’s in New Jersey sell for much more than REC’s in Pennsylvania, just over the border.

Regarding a national carbon cap and trade policy, while Robbins expressed personal reservations about entering into such an agreement without first building a comprehensive international consensus, he offered that: "Aztec wants to see a cap on carbon dioxide, or for that matter, on all emissions, and a nice solar carve-out in it."

This case study was prepared by Collaborative Economics for Environmental Defense Fund.

Posted: 17-Feb-2009; Updated: 17-Feb-2009