Updated — RGS Energy has acquired the rights to globally commercialize the third generation of Powerhouse brand solar roof-integrated shingles from DowDuPont Inc. for a total of $3 million plus quarterly royalties on net sales.
Two earlier versions of the energy-producing shingles, which lie inconspicuously flush with roofs, were installed on about 1,000 houses in 18 states before the former Dow Chemical Co. halted production in August 2016.
The Midland-Mich.-based company's merger with Dow Corning of Wilmington, Del., prompted a reevaluation of the solar platform and a decision to transition it to a licensing business model.
Denver-based Real Goods Solar Inc., which does business as RGS Energy, was a likely candidate. Founded in 1978, RGS bills itself as the nation's original solar company and had been the warranty service provider for Powerhouse 1.0 and 2.0 shingles since 2015. The enhanced Powerhouse 3.0 system, which is expected to receive Underwriters Laboratories certification in the first quarter of 2018, comes at an opportune time, according to RGS CEO Dennis Lacey.
About 80 percent of U.S. homes have asphalt roofs and about 5 million of those roofs need replacing every year, Lacey said, pointing to potential demand from the replace-and-remodel market in addition to new home construction during an Oct. 4 conference call.
The global market for building integrated photovoltaic products will grow at a rate of 12.2 percent annually from $2.5 billion in 2016 to $4.3 billion by 2021, Lacey said, citing BBC Research.
RGS will be ready to meet demand, he added, with a new version of Powerhouse shingles that uses traditional silicon solar cells instead of copper indium gallium selenide (CIGS) technology, which proponents say significantly reduces the cost while improving panel efficiency. The shingles also are durable and should outlast an asphalt roof, Lacey said, adding RGS will offer a 20-year warranty like Dow did for earlier generations of the product.
Powerhouse shingles will look good, perform well and be priced right, he added.
“Of course, there will be competition but we feel good about the anticipated pricing,” Lacey said. “In fact, we expect this product to be priced below other solar roof-integrated shingles currently on the market, making Powerhouse the best product available to customers from a value perspective.”
The latest shingles consist of a base assembly and electrical connector into which a solar laminate is inserted. Dow holds numerous patents covering the technology and now all are exclusively licensed to RGS.
As the licensee, RGS has agreed to make an upfront payment of $1 million followed by a milestone payment of $2 million within 30 days of UL certification and then pay running royalties of 2.5 percent of the net sales price of each licensed product every quarter.
The terms are described in an Oct. 4 filing with the U.S. Securities Exchange Commission along with some supply chain plans.