Cypress Creek to quit EPC business, diversify development

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As policy goes, so must business models. In previous years Cypress Creek had a big presence in most of the state markets where the falling cost of solar made the must-take contracts enabled by the Public Utilities Regulatory Policy Act of 1978 (PURPA) a good deal. But as state regulators and legislatures put the brakes on PURPA at the behest of utilities, installations under PURPA contracts collapsed in 2018, and Cypress Creek found itself in trouble.

Yesterday in an email to employees the company’s new CEO Sarah Slusser unveiled a strategy which explicitly states that it is looking beyond both PURPA, and the states which have been its biggest focus since Cypress brought North Carolina-based FLS Energy in 2019:

While continuing to invest in the Carolinas and PURPA markets, we will also advance development in dynamic wholesale markets, such as PJM and ERCOT, and maintain our leadership position within the community solar segment.

Slusser notes that this work is already “well underway”, with large-scale projects under construction in Texas as well as community solar development in New York and Illinois.

The email further states that the next phase will involve expanding its customer base of “corporate offtakers, hedge providers, municipalities, community solar subscribers” in addition to utilities, with an emphasis on repeat customers.

 

Bye bye EPC, finance team

Another aspect of the FLS acquisition which Cypress Creek will be moving away from is the engineering, procurement and construction (EPC) business that it acquired with FLS. Slusser attributes the move to third-party EPC to the company’s national diversification:

EPC made sense when we were concentrated primarily on deploying solar in the Carolinas, but as we have expanded outside of the Carolinas, it makes less sense.

Slusser says that the company will be “winding down” its internal EPC business over the coming months, and along with this will be “winding down” the responsibilities of Mike Belikoff, its executive VP of EPC and O&M.

Belikoff will be the latest Cypress Creek executive to leave the company, following a sweep of management last month, wherein the CEO, president and board chair were all replaced. Ben Serrurier, the Senior Manager of Market Development, also left in June.

In addition to these, Cypress Creek has revealed that Chief Structured Finance Officer Patrick McConnell, Managing Director David Riester, and Chief Capital Markets Officer Brad Bauer will all be leaving after a transition period.

Without skipping a beat, Slusser’s email follows this dramatic change in business strategy and shake-up in staff with an emphasis on future growth:

During this next phase, we will continue to be one of the most effective solar companies in the country, with one of the largest pipelines in growing markets for solar… Together we will build a truly dynamic, resilient, and national solar company to advance the exponential growth of solar.