From Backwoods to Bankrupt: The Rise and Fall of Real Goods Solar

Real Goods Solar ended its corporate life on the industry’s
periphery last month, penniless and trading for pennies.

But this isn’t just any bankruptcy. A decade earlier, Real Goods
Solar grew organically and through acquisition and pulled in tens
of millions in revenue. Four decades ago, the company helped kick
off the residential solar phenomenon by supplying panels to
off-grid dwellers in the remote forests of Mendocino County,
California. It is one of the few companies that has followed the
solar industry from its humblest beginnings to its propulsive
current state.

That journey stopped on January 31, according to a
with the Securities and Exchange Commission. The board
of Real Goods Solar fired CEO Dennis Lacey and “determined to cease
all business activities, to terminate all of the company’s
employees, and to commence a plan of action” to file for Chapter 7
bankruptcy in Colorado, where the company was headquartered.

The company’s share price had been in the tank for years. It
gave up on conventional solar installation
, on account of
losing too much money in that business. The leadership instead
pivoted to
selling the Powerhouse solar roof technology
that Dow Chemical
had tried and then discarded in 2016. 

Solar roofs failed to save RGS. But a piece of it lives on with
founder John Schaeffer, who left the company in 2013 and bought
back control of the Solar Living Center, a lush compound in
Mendocino dedicated to teaching sustainable lifestyles, including
solar power, permaculture and natural construction techniques.

“I wasn’t cut out to be CEO of a giant company,” Schaeffer
said in an interview. “I was getting tired of it all and longing
for the old days.”

That old way of life persists, as the solar market claims one
more once-bustling enterprise.

No grid, no problem

Schaeffer moved up to Mendocino in the late 1970s, and soon
opened the Real Goods store to supply his community with the tools
to carve a life out of the remote hills and forests of northern

“All these people were moving up to the country,” he recalled.
“I discovered that they all needed the same thing: They were tired
of kerosene lamps, reading bedtime stories to their kids by

One day, someone drove up in a silver Porsche with a handful of
photovoltaic panels. Schaeffer said he laid them out in the parking
lot and verified that they could charge batteries. Then he added
them to the roster of off-grid supplies.

At the time, the technology was a hand-me-down from the space
program, and had not reached anywhere near the manufacturing scale
to make it an affordable household product. Still, Schaeffer sold
10, then 100, then 1,000. Local, off-grid cannibis growers provided
crucial early demand.

“They were the only ones who had enough money to afford the
solar panels, which were selling for $100 a watt back then,”
Schaeffer said. He’s now working on a museum dedicated to the
symbiotic histories of solar and cannabis.

Real Goods survived the ’80s and ’90s as a mail order catalogue,
and later merged with eco-lifestyle brand Gaiam. In the first
decade of the new millenium, Gaiam’s leadership decided it was time
to make a push into the nascent rooftop solar industry.

A vintage Real Goods ad displays all the implements needed to
grow a homestead off the grid. (Photo courtesy of John

Growth before a fall

Real Goods Solar went public in 2008, raising more than $50
million from investors. That’s a notable feat, coming years before
the biggest names in the industry: SolarCity’s IPO raised $92
million in 2012; Vivint raised $330 million in 2014;
Sunrun raised
$251 million in 2015

Blessed with a pile of cash at a time when few solar installers
had it, RGS went on a buying spree. It acquired regional installers
including California outfits Marin Solar, Carlson Solar,
Independent Energy Systems and Regrid Power, and later absorbed New
Alteris Renewables
. Pretty soon, Schaeffer said, RGS had become
a very large solar company pulling in tens of millions of dollars
in sales — all cash deals, as solar financing had yet to take

“By 2010, it was boomtown out there,” he said of the rooftop
solar industry. “Of course, nobody was making any money. It was a
revenue game.”

Real Goods Solar had a string of profitable quarters around that
time, Schaeffer said. But the company grew with each acquisition,
and balancing a local team’s culture and knowledge with a
centralized, national business model became a challenge. The push
for scale put pressure on how much time employees could spend
taking care of customers and nurturing new sales around the kitchen

Schaeffer stepped down from the CEO role in 2010. An enterprise
that emerged from “hippies in the woods” built out a professional
management team to handle operational scale and financial
reporting, rather than sweating it out on a rooftop in the summer.
Eventually, they pushed to
rebrand as RGS Energy
, all but erasing the name that customers
knew from decades before.

“That’s when I knew I had to get out,” Schaeffer said. After
leaving the company, he bought
back the Solar Living Center
in 2014, and focused his efforts
on leading the board of the nonprofit Solar Living Institute that
runs it.

RGS Energy hung on as many of the bigger national installers ran
out of cash or exited the market:
NRG Home Solar
. SolarCity’s meteoric rise ended in a sale to
Tesla and a quiet abdication of market share. Sunrun and Vivint
have proven the rare durable solar installers at a national

“It’s just hard to maintain profitability when you’re
operating in a lot of different areas,” said Barry Cinnamon, whose
installation company Akeena Solar also came up in the 2000s, went
public and faced similar challenges with the multi-state business

Financial maneuvers helped prolong RGS Energy’s life. Through
2016 and 2017, it repeatedly raised multi-million dollar sums
through common stock offerings. But by that time the stock price
had entered terminal decline. In a truly novel last-ditch effort,
the company attempted to revive itself by
licensing the solar roof technology
that Dow Chemical had

abandoned years earlier

The solar roof market, historically, makes conventional rooftop
solar look easy. Despite the
$127 million in “written reservations”
the company claimed to
have received, it ceased operations a year after installations of
its updated solar roof began. That intellectual property could be
up for grabs again. The cycle of birth and death continues, just
like it does in the fields of John Schaeffer’s biodynamic

Source: FS – GreenTech Media
From Backwoods to Bankrupt: The Rise and Fall of Real Goods Solar