Spend any amount of time in southern Utah, and it's easy to understand why Shane Perkins and Shaun Alldredge both wearied of the commute to Las Vegas, where they were selling home security systems five years ago, while also seeing the potential of solar power.
It's just under two hours by car from St. George to Vegas, though the drive is frequently slowed by traffic and construction. But the area is also the recipient of copious amounts of year-round sunshine. Daily temperatures are often much higher than in Salt Lake City, four hours to the north, with many retirees flocking to the region known as "Utah's Dixie" specifically for the warmth.
Today, four years after launching Legend Solar, Perkins and Alldredge’s privately held firm, the pair are just about walking on sunshine: Business jumped by 402 percent last year. In April, the firm made a $10 million donation to Dixie State University (Alldredge is an alum) to rehab the school's football field, which now will be called Legend Solar Stadium. And last week, Inc. magazine ranked Legend No. 29 on its "Inc. 5000" list, as well as Inc.'s top Utah company. The magazine also ranked Legend Solar as No. 2 in the energy sector. All of which is not bad for a company's first 48 months.
Commuting and climate were two reasons Perkins, 37, and Alldredge, 34, cast a longing gaze toward the solar business. The pair, Alldredge recalled in an interview, met on the "selling floor" of a DISH Network satellite TV dealer's call center. After that business went away in the 2008-09 recession, the pair ended up in home security sales – a relatively lucrative field in the Las Vegas area – but, as noted, the commute became a grind.
"With all that driving we actually would consistently look at ideas that were on the forefront of an industry, for the future," Alldredge said. "One day, solar came up and we just talked about it, and talked about it, and talked about it. Our practice was to essentially try and poke holes into something until we could destroy it, rather than get into it and see what happens. We just couldn't poke holes in solar."
He added: "We knew that we would take our hits at the beginning, it would be slow going, that we could have a portfolio and be ahead of the game by the time 90 other solar companies jumped into the state, which is the case is now."
Last year, Legend Solar sold 3.8 megawatts of solar power to its customers. Through seven months this year, Perkins said, they've already sold 3.3 megawatts. And while that 402 percent growth number for 2015 was certainly impressive, Perkins and Alldredge are aiming for a more consistent growth rate of 200 percent a year, they said.
"Our business model is an ownership model," Perkins explained. "Utahns take pride in [being fiscally] conservative, and in ownership in Utah is [why the state is] probably one of the capitals of entrepreneurship, because there's so much ownership and desire to be independent, and thus the reason why the market has done so well is not because of the sunshine, but more because our business model is designed around [saying], 'Why not own your power position, rather than rent it from the power company?'"
Perkins said a traditional utility customer is merely "renting" the coal a power company uses to generate electricity, and that rent is always subject to increase. Solar power, instead, allows customers access to electricity without the utility markup, he said.
While Legend Solar can finance a customer's installation over a 12-year period (at 1.99 percent interest), the pair said customers often cover the cost within seven to eight years.
Along with the "ownership model" for solar panels, Perkins said the firm's selection of SunPower solar panels – Legend Solar is an elite-level dealer in Utah for the firm, and one of only two companies allowed to sell the product here – is a plus for the customer. Cost-per-kilowatt is lower over the life of an installation, he said, and SunPower's 25-year "bumper to bumper" warranty outshines competitors by far.
Of course, it also helps that Uncle Sam – and the state of Utah – lend a hand to solar panel buyers. A federal tax credit of 30 percent of a system's cost, due to expire this year, has been extended through 2022, although the percentage will begin to decrease in 2020.
Utah's tax credit, capped at $2,000 per user, is a bit more controversial. Enacted 30 years ago, activity has only heated up in the past few years. The Salt Lake Tribune reported in July the state expected to process 12,000 applications for the tax credit this year, more than all previous years combined.
The rise in Utah solar tax credit payouts has led some to speculate the projected $45 million cost will cause legislators to scrap the program. But Perkins noted some 3,000 Utahns had jobs in the solar industry last year, including 150 at Legend Solar, and that the industry brings some $300 million into the state each year.
The solar duo believes Utah, where between 1 and 3 percent of homes have solar installed now, could rise to the level of Germany, where solar power generates 60 percent of the country's electricity, and that the 60 percent penetration could be repeated across much, if not all, of the country.
Hawaii, Alldredge said, is one example of a potential growth market: Electricity costs 46-cents per kilowatt hour, yielding $800-per-month electricity bills "before you turn on the air conditioning."
Along with Utah, Legend Solar is licensed in Idaho, Montana, Wyoming, Arizona and Washington, as well as Oregon, where the firm has a Portland office. The firm aims to cover the entire West, they said, with the possible exception of solar-saturated California, and "a few other states."