The last years have been difficult ones for some cleantech companies, especially those with a history of selling and installing solar. Rising interest rates, changes to solar policy in California and elsewhere, uncertainty over federal policy, and other external factors all played a role.
But business decisions and philosophies can also doom a company that doesn’t adapt to an emerging market landscape. Here’s how companies like Palmetto will make the transition to Cleantech 3.0, the new considerations for companies tackling the biggest problems facing people and the planet.
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How Palmetto Is Embracing Cleantech 3.0
Cleantech 2.0 companies had three major problems: high operating expenses, lots of debt, and limited revenue visibility. In a world of increasing interest rates, depressed sales, and regulatory headwinds, they were enough to sink even the biggest companies. Companies that successfully transition to the world of Cleantech 3.0 will do so on the strength of key business principles, like Palmetto.
Consumers First in All Things
Palmetto’s North Star is addressing climate change by helping consumers take control of their energy use and save money. Customer experience has guided Palmetto through every market adaptation and iteration of the company to date. It’s never failed us.
Companies that chase quick growth at the expense of a customer's experience won’t make it. While they may find short-term success, companies that don’t provide real value to customers will fail. While stories of ‘solar bros’ and dishonest sales tactics may get a disproportionate amount of air time compared to their prevalence, they do point to a problem of poor customer service harming the health of companies and the industry at large.
Palmetto’s focus on consumers means a commitment to their savings, the quick resolution of their problems, and their ease of implementing one of the growing number of solutions we offer.
Balanced Growth and Profit
Palmetto values profit over growth. When you sacrifice profitability for growth, it can be difficult to regain it. By staying focused on profitability, Palmetto has grown steadily and surely where others haven’t.
Part of that focus includes finding diverse, predictable cash flows, which we’ve found in solar sales, solar leasing, heat pump installations, our Energy Intelligence API, and a burgeoning home electrification and efficiency marketplace. Our diversified business is a healthy one. It’s also one that continues to drive down operating expenses proportionally to revenue.
Responsible Debt
In the ultra-low interest rate environment of several years ago, many companies took on huge debt to spur huge growth. I don’t like debt where it hinders growth, but recognize its value. My rule of thumb is to only take on debt you can pay off at any time and don’t borrow against future revenue. Major companies that took on too much debt are finding it hard to come out from under it. They went after short-term growth, but ended up trading the long-term health of the business.
Let Your Software Grow With You
Palmetto has always had software at its center. It’s been a key part of its growth.
As much as possible, we’ve tried to keep Palmetto’s growth and the growth of its software on a similar trajectory: not building too much too fast, but letting it support and drive Palmetto’s growth.
Now it’s a mature product ready to support Palmetto’s businesses and others. We’ve recently launched our public Energy Intelligence API as another facet of our stable business. Technology and software solutions are what will drive growth.
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Why Palmetto Is Here for the Long Haul
Palmetto’s business is profitable, diversified, and customer-focused. We’ve shown an ability to weather industry uncertainty and will continue to do so. A focus on profitability, long-term vision, and customer satisfaction has set Palmetto up for long-term success. They’re the Cleantech 3.0 principles that will see Palmetto help usher in the new utility revolution.
Chris KemperChairman, Founder, Chief Executive Officer & Chief Climate Educator
