A pioneer of the Minnesota solar industry has sold most of his stake in IPS Solar to SmartPitch Ventures, a recently formed private-equity firm focused on the fast-growing renewable-energy industry.
Terms were not disclosed, but SmartPitch is investing several million dollars, company officials said.
CEO Ralph Jacobson, 67, who founded St. Paul-based IPS Solar in 1991, will remain a minority shareholder and chief innovation officer.
“This will allow Ralph to devote time to forward-thinking energy storage and also developing solar farms for American Indian nations,” said Eric Pasi, a 12-year IPS veteran and the chief development officer. “He just completed a pilot project for the Red Lake Band of Chippewa. This will allow him more time to nurture that side of our business.”
IPS Solar has 35 employees and posted revenue of $32 million in 2017. Pasi declined to provide sales figures for 2018.
Chief Operating Officer Jamie Borell, a 14-year-veteran, has been named CEO of IPS Solar. With 1,500 installations completed in the Midwest, IPS Solar was the 51st largest company of 415 solar firms ranked in 2018 by Solar Power World magazine.
Borell, 47, and Pasi, 36, will remain minority shareholders of IPS Solar.
“This investment will enable IPS Solar to take on an even more prominent role nationally,” said Pasi, who declined to specify the amount. “We also can staff up, specifically for solar for affordable housing and community solar farms nationwide.”
Jacobson said in a prepared statement: “I couldn’t have orchestrated a better transition. I will continue in an entrepreneurial role, scouting new opportunities for solar, plus storage in the national market.”
Solar energy generates less than 2% of Minnesota’s electrical output. But the popularity of community-owned “solar gardens” and the growth of large-scale commercial installations, as well as the declining cost of solar as the industry scales up, emboldened the American Solar Energy Society to predict this summer that Minnesota will increase its output to 10% over the next decade.
Jacobson is a materials scientist who once supplemented his modest income from his solar venture by working at food co-ops and doing construction projects. As the business boomed, he was able to pay himself an annual salary of $150,000 by 2018. Jacobson was the first president of the Minnesota solar-energy society more than a decade ago.
The Minnesota solar market was boosted by a 2013 state law that promoted decentralized solar-power projects.
“We had 35 megawatts installed last year ... enough to power roughly 6,000 average-size homes,” Pasi said. “Our five-year goal is to operate in 10 different community solar markets and have more than 100 employees. We are hoping to be north of 25% growth year-over-year, which is commensurate with industry averages.”
Virginia-based SmartPitch is led by founders Gautam Chandra and Sanjiv Mahan, who are veterans of the technology, energy and utility industries. It raised $12.1 million for an equity fund in May, according to an SEC filing.
“We look forward to working with the IPS team and growing the company into a national solar platform as part of our overall vision for growth in sustainable energy,” Chandra and Mahan said in a prepared statement.