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By Anthony Termini, Benzinga
In September, Arizona-based The Awareness Group (OTC: FHLD) (“TAG”) became a fully SEC-reporting, publicly traded company through a reverse merger with Freedom Holdings, Inc. The deal made TAG a wholly-owned operating subsidiary of Freedom. With control of the public entity, TAG is moving forward with an interesting growth strategy to build a leading business targeting both commercial and residential solar projects within the alternative energy sector.
The TAG GRID
TAG competes in the solar power segment of the alternative energy industry and reports it is creating an exciting model within the space. It does this through The TAG GRID – an ecosystem that enables its third-party members, which are solar industry service providers, including solar project sales and lead generation organizations, brokers and solar installation contractors (engineering, procurement and construction firms, or EPCs), to take a project from conception to completion. TAG then oversees all or parts of the sales, engineering, procurement, construction and financing functions that are key to bringing solar projects to life.
A major industry analysis is that individual companies are only as good as their next lead. By working with hundreds of service providers, TAG says it significantly reduces this risk. The company also says that this provides a seamless experience for TAG GRID members and their customers, pointing out that this model results in higher satisfaction for service providers and end users.
TAG Financial, the company’s finance unit, has two divisions that serve as a key part of the TAG GRID. TAG Financial Services, or TFS, supports and manages the process for sales and lead gen organizations and EPCs, from a project's conception to the signing of the contract. The company’s fintech enables a seamless process for these organizations to access TAG’s project funding solutions – either TAG’s proprietary underwritten lending products or third-party lending products.
TAG Capital serves as the fund management arm for TAG Financial. This organization services or securitizes TAG’s underwritten lending portfolios and monetizes investment tax credits (ITCs). The company says this helps to maximize the value of its loan portfolios and investment tax credits.
TAG has also acquired five companies across the alternative energy space. These acquisitions plug into the TAG GRID and serve to both enhance revenue growth opportunities for the company and enable TAG to guarantee projects in case a TAG GRID member is unable to complete a project.
One TAG Innovation Seeks To Shake Up Project Financing
While attending the recent RE+ 24 tradeshow, one of the country’s largest renewable energy conventions, TAG announced its new Residential National Solar Power Purchase Agreement (PPA) program.
PPAs are contracts where a third-party developer installs, owns and operates a solar system on a property. The property owner then buys the electricity that the system generates. Price and terms are set by the PPA. Traditionally, the property owner’s creditworthiness would be a major factor in the contract’s financing terms.
TAG seeks to make such financing arrangements easier. Its pre-paid PPA program is not driven by minimum FICO credit scores and income requirements. The company believes this program could disrupt the renewables market by breaking down one of the traditional barriers to financing. TAG says it will allow more customers to embrace renewable energy. Today, the PPA is available in 28 states plus Washington D.C., where PPAs are legal and TAG expects to imminently introduce another proprietary product that will enable it to expand to all 50 states.
The program is designed to boost contractor project profitability and provide homeowners with immediate electricity utility cost savings.
According to Pablo Diaz, CEO and founder of TAG, the company is providing “TAG GRID members with exclusive access to cutting-edge lending and financing tools, accelerating renewable energy adoption” and that its “proprietary non-credit score-driven pre-paid PPAs, make clean energy projects more accessible than ever before.”
Solar Energy Is A Rapidly Growing Component Of The Renewable Energy Market
TAG notes that the domestic solar market exceeds $320 billion. Solar power generation is also expected to remain one of the leading components of the renewable energy market.
The U.S. Energy Information Administration expects “solar and wind to lead growth of U.S. power generation for the next two years.” It notes that “solar is the fastest-growing renewable source” of electricity generation.
Research firm Mordor Intelligence estimates that the residential solar energy market will exceed 190 gigawatts by 2029. A gigawatt equals a billion watts of energy. CNET says that’s enough to power about 750,000 homes for a year.
Mordor currently estimates the residential market to be about 139 gigawatts. It credits “factors such as favorable government policies, increasing investments in upcoming rooftop solar projects, and the reduced cost of solar energy…to drive the market” between now and 2029.
TAG’s business model also appears to be a key differentiator in the industry, which is populated by many competitors, few of whom seem to have integrated the various components the way TAG has.
For example, Synergy Solar, a large contractor in the commercial solar sector, is mostly focused on installation. Companies like SunPower (OTC: SPWRQ) and Sunrun (NASDAQ: RUN) design and install residential solar systems, but don’t offer the end-to-end ecosystem TAG has created. While powerhouse Tesla (NASDAQ: TSLA) offers design and installation of both residential and commercial systems, it is more focused on storage than any of the revenue-generators TAG is building.
TAG Focuses On The Future
The acquisition of Southwest Financial Services, from which TFS was created, was intended to revolutionize financing options for TAG GRID members. It marries traditional financial expertise with next-generation fintech. For example, TAG says it is the first in the market to offer financing to non-contractors.
And acquisitions are a key part of the company’s growth strategy. The TAG team helps acquired companies focus on strategic growth and operational planning to drive future success. TAG’s M&A strategy identifies assets or companies it believes can enhance the TAG GRID or provide unique technologies.
An example of this is the company’s crypto and blockchain incentive programs. It plans to introduce a program where customers can earn specialized coins for the energy their solar systems produce. By using blockchain technology, TAG expects to enable the owners of solar systems and TAG GRID members to sell energy to other users. It believes this will bring each of them better returns on their systems.
Featured photo by Sebastian Ganso on Pixabay.
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