Solar energy has long been heralded as one of the most promising clean energy sources. But while the average cost of solar panels has decreased by nearly 70% in recent years, installing a solar system is still prohibitively expensive for millions of Americans. Millions more live in rental units or other homes where they can’t install solar panels. 

Neighborhood Sun manages community solar programs that connect residents with local solar farms to share solar power. Neighborhood Sun also serves solar portfolio owners, who use the company’s Sun Engine software platform to manage their own community solar programs. We reached out to founder and CEO Gary Skulnik to hear what he’s learned from his previous founding experience and how community solar energy has more benefits than you might think.

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.

Funding Round Details

Neighborhood Sun logo
Company: Neighborhood Sun
Security Type: Convertible Note
Valuation: $27,500,000
Min Investment: $250
Platform: Wefunder
Deadline: Sep 16, 2022
View Deal

What inspired you to take the leap and start this company?

I’ve been in the clean energy space for 20 years, either as an advocate or entrepreneur. I started Neighborhood Sun because I finally saw an opportunity to both promote clean energy to fight climate change and to promote local power for communities that have been underserved for far too long. We do this through community solar, which opens up solar to the 80% of the market that can’t access rooftop solar. Instead, residents subscribe to a local project in their area. It’s a game changer in the clean energy space.

How is Neighborhood Sun impacting communities?

One of the primary parts of our mission is to serve low- and moderate-income communities, and we’ve had success in doing that. Bringing community solar to these communities helps in two ways. One, low- and moderate-income residents get extra discounts on their subscriptions, saving anywhere from 20% to 30% on electricity costs. Two, the fact that the projects they subscribe to are close to their community also means they are benefiting from improving air quality where they live, reducing the pollutants that cause asthma and other health issues.

Who is on your team and how did you come together?

We have an extremely strong management team and board of directors. On the management team, our CTO, John Wilson, has more than 20 years of experience in building and managing software platforms that provide clean energy to retail markets. I knew John from previously working with him when he was at Bullfrog Power, Canada’s leading green energy company. Our CRO, Thom Smith, was the leader of Astral Power, a New York community solar company that we acquired in 2021. The rest of the team consists of some other people from Astral Power as well as two Neighborhood Sun teammates that started with me on day one of the company.

Who is on your board and how do your advisors help you build the company?

On the board, our chair is Bill Bumpers, a retired lawyer who led the climate practice at a major law firm for decades. We also have Wilson Chang, an investor and successful solar entrepreneur who was the majority shareholder in Astral. Kim Kolt runs For Good Ventures and now is a partner with Bay Bridge Ventures, both impact venture capitalists. Ian Sneed represents Galt Power, a strategic investor. Shari Friedman is a climate finance expert who is an independent board member. We have one other independent board seat that we are filling. We have two observers on the board: John Paul “JP” Moscarella, a long-time clean energy investor and successful entrepreneur, and Satish Tamboli, from the University of Maryland, representing the Chesapeake Bay Seed Capital Fund. Advisors include several energy industry CEOs from Washington Gas Energy Services, AES Corporation, and other places. 

What lessons from your previous entrepreneurial experience are helping you grow Neighborhood Sun?

Neighborhood Sun is my second clean energy startup, and I learned a lot from the successes and failures of my previous one, Clean Currents. Clean Currents had a successful exit with our solar division, selling it to SolarCity, but the company ultimately went under when a polar vortex hit in 2014 and sent wholesale energy prices through the roof. We were not hedged enough to cover this volatility. 

From this experience overall, I’ve learned a few things. One is to be more aggressive in expanding to new markets, so if market conditions deteriorate in one, we still have others to work in. Two is to run the company myself, without a partner. Having a partner made decision-making difficult at times and slowed us down considerably. Another is to constantly be raising money and not worry about my own piece of the company diluting. I’d rather have a well-resourced company that I’m a small piece of than an underfunded company that I own a large piece of. Finally, I’ve learned that I don’t have to be the smartest person in the room. I have to hire and surround myself with the smartest people and set an overall direction for the company, but I do not have to have all the answers all of the time. I’ve assembled an all-star team at Neighborhood Sun that impresses me more and more every day.

What does the competitive landscape look like, and how do you differentiate?

The community solar industry is the hottest part of the solar market right now, and there is a lot of competition. Most of the other players are startups or early stage like us. There are a couple of large players, such as Arcadia Power. 

We have a competitive advantage based on three factors. One, our advanced software platform, Sun Engine, is the best of breed. This is in part due to the fact that it’s custom built for community solar after years of actual experience in the market, seeing what works and what doesn’t. We have market validation that our platform is the best. Last year, we secured two large solar portfolios who switched from competitors to us after they did their due diligence and looked at the entire marketplace to see what platform is best. Before we met the team at Astral Power, they had done a market survey as well and rated Sun Engine the best platform compared to about 12 others they looked at. Two, our management team is the best. John Wilson, our CTO, has more experience building and maintaining software platforms at the intersection of clean energy and the retail market than almost anyone else in North America. As mentioned earlier, I have 20 years of experience in the clean energy industry. My colleague Thom Smith, our CRO, has led national teams in the solar industry. Three, our authentic green brand is the strongest in the industry. We are a B Corp with the highest ranking of any solar company in the US. We have built compelling relationships with our customers, shareholders, and broader communities we serve.

How do you intend to use the money you raise this round to scale the business?

We want to fill out the remainder of our senior management team as well as others on the technology, finance, operations, and sales side. Additionally, we seek to enter new community solar markets and accelerate our growth trajectory.

What do you want potential investors to know about you and/or your company?

Neighborhood Sun is the culmination of 20 years of working on ways to promote clean energy as a way to fight climate change. I’ve accumulated the wisdom to know how to make the best decisions to grow the company and increase shareholder value while also having a positive impact on the planet and the communities we serve. The community solar space is the hottest space in the solar market, and if you want to invest in this space, Neighborhood Sun is the best company to bet on. We’ve built a best-in-breed technology platform, have an experienced and skilled team running it, and have worked hard to build a credible green brand that consumers are loyal to. Your investment will be used wisely to support an ethical and honest company and to grow a business that will help make the world a better place.

As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?

The market is wide open now, but we see consolidation coming down the road in the very near future. Larger companies like Arcadia Power have expressed interest in acquiring other players to expand their position. Other possible exits could come from large asset owners, developers, or energy service companies that want to purchase us. Also, we could continue on the public route and do a Regulation A+ offering and/or an initial public offering. Our corporate goal is to build our customer base to 300,000 households, which we feel will put us in a prime position to either go public or attract an acquisition. With that large customer base, we can also expand into other clean energy offerings, leveraging our advanced software platform, Sun Engine. 

We look forward to seeing where Gary and his team take the company. Neighborhood Sun is currently raising on Wefunder.