Solar Roadways

Solar Roadways

Early Stage

Future of Roads

Future of Roads

Overview

Raised this Round: Raised: $2,498,021

Total Commitments ($USD)

Platform

StartEngine

Start Date

12/23/2020

Close Date

04/30/2021

Min. Goal
$10,000
Max. Goal
$2,500,000
Min. Investment

$296

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$4.55

Early Bird Valuation

$27,000,000

Pre-Money Valuation

$30,000,000

Year Founded

2006

Industry

Energy, Power, & Natural Resources

Tech Sector

Cleantech

Distribution Model

B2B/B2C

Margin

Low

Capital Intensity

High

Location

Sandpoint, Idaho

Business Type

Growth

Solar Roadways, with a pre-money valuation of $30 million, is raising funds on StartEngine. It is the first company to develop Solar Road Panels, which opens up a brand-new market for the solar industry: all walking and driving surfaces. The crowdfunding round has a minimum raise of $10,000 and a maximum raise of $1,070,000. Solar Roadways was founded by husband and wife team Scott and Julie Brusaw. Solar Road Panels are intelligent, modular, strong infrastructure panels which have solar cells to produce clean energy in places where it was previously impossible: parking lots, sidewalks, driveways, bike paths, roads, playgrounds, airports, etc. Solar Roadways®’ research and development has been funded by three U.S. Department of Transportation contracts.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$211,392

$419,838

COGS

$123,479

$253,603

Tax

$0

$0

 

 

Net Income

$-90,085

$18,044

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$7,063

$46,957

Accounts Receivable

$0

$0

Total Assets

$202,678

$266,675

Short-Term Debt

$28,813

$2,725

Long-Term Debt

$0

$0

Total Liabilities

$28,813

$2,725

Financials as of: 12/23/2020
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Synopsis

The twin challenges of fossil fuel reliance and aging infrastructure invite huge innovations in the way America transports, builds, and consumes. Despite recent strides in clean energy, the US gets 81% of its energy needs from oil, coal, and natural gas. While much of these resources can be found in the country, oil — which accounts for 92% of transportation sector consumption — presents a particular supply challenge. Roughly one-quarter of consumed petroleum is imported from around the world. In addition to leaving the country beholden to foreign suppliers, use of these non-renewable resources is wreaking long-term havoc on the environment.

Infrastructure presents an even more immediate challenge. In 2019, the federal government spent $29 billion on infrastructure and sent $67 billion more to states. State and local governments spent even more — $162 billion was spent in 2017, not counting federal money. Half of that federal spending goes to highways, propping up the U.S.’s 20 trillion dollar economy in major ways. Modern US infrastructure faces critical shortages. In 2016, the American Society of Civil Engineers estimated that the country faced a $2 trillion shortage in infrastructure funding. At the same time, investment in infrastructure is hugely popular among likely American voters — 96% say that it’s at least “Somewhat Important” to future economic growth and the quality of life for their children and grandchildren.

With growing demand for new infrastructure and production of reliable, clean energy, Idaho-based Solar Roadways Incorporated plans to address both challenges at once. This startup has perfected a “Solar Road Panel” constructed with tractioned tempered glass that can serve as a replacement for traditional asphalt and concrete driving and walking surfaces, from roads to playgrounds to helipads.

These high-tech panels absorb energy from the sun, providing clean energy and absorbing heat that would otherwise be reflected into the air. They are also embedded with LED lights which can signal to drivers and light up dark roads. The panels are heated to just above freezing, melting snow and ice to keep roads clear. Eventually, they will be able to provide dynamic electric vehicle charging, so electric cars can charge as they drive. Solar Roadways estimates that replacing all paved surfaces in the US with their panels would provide the country with three times the energy it currently uses, all in clean solar power.

Solar Roadways’s current StartEngine raise has been rated a Deal to Watch by the KingsCrowd investment team.

Next Section: Price

Price

Solar Roadways is raising at a $30 million valuation. This valuation does take into account the company’s ample room for growth and thoroughly-tested product. However, it is still extremely high, given recently-declining revenue and a lack of supporting infrastructure for commercialization. Therefore, Solar Roadways’ price score is very low.

Next Section: Market

Market

One thing is certain — Solar Roadways’s obtainable market is absolutely massive. In 2020, the global smart cities market sat at $410.8 billion and is expected to rise at a 14.8% CAGR to $820.7 billion by 2025. Given that the product can replace all paved surfaces, provides alternatives to painted road lines and fossil fuel-based energy production, and can eliminate the need for cold-weather mitigation, Solar Roadways is primed to take advantage of future-minded infrastructure builders.

Solar Roadways is priming itself for the commercial market with the development of its first commercial model, the “SR5.” After securing three grants from the U.S. Department of Transportation (among other prominent promotions), it seems likely the company will secure government contracts for future infrastructure investment. The biggest challenge for Solar Roadways will be overcoming technological challenges to lower prices. This will be necessary to supplant traditional road materials — current consensus is that solar roadways are too gimmicky and expensive. Despite that hurdle, the market potential for Solar Roadways is quite significant. Therefore, the company’s market score is very strong.

Next Section: Team

Team

Solar Roadways is headed up by a husband-and-wife team, Scott and Julie Ann Brusaw. The Brusaws bring valuable education and industry experience to the company. Scott, the company’s President and CEO, holds a master’s degree in Electrical Engineering from the University of Dayton. He spent more than a decade as the Director of Research and Development for PDi Communications and owned Radiant Bridge Solutions. Scott left Radiant Bridge in 2006, and the company dissolved in 2013. Scott is a frequent speaker at international events, such as the International Parking Institute conference in 2013.

Julie, the company’s Vice President, has a less-traditional career path that offers the company a unique perspective. Julie holds an M.A. in Counseling Psychology and spent eighteen years in private practice. While she doesn’t have the same technical chops as her husband, she puts her soft skills to work managing the company’s significant international social media presence. The company has more than 85,000 likes on Facebook and is followed by more than 10,000 people on Facebook — including former US President Obama.

Alyssa Delbridge-Ramos serves as Solar Roadways’s Director of Science. Delbridge-Ramos holds a recent master’s degree in Environmental Science from the University of Idaho and worked for six years as an ER Tech prior to graduation. She brings youthful perspective and energy to the team. Mike Morris is another young team member, who has a Certified Solid Works Associate certification. This team, in addition to checking the technical know-how boxes on its own, is complemented by an assortment of advisors from the engineering and climate science sectors.

Overall, the Solar Roadways team brings a strong combination of industry experience, innovative thinking, and savvy social media skills. As a result, the team score for the company is very high.

Next Section: Differentiators

Differentiators

Solar Roadways prides itself on being the first company to develop solar panels integrated into roads, opening up a new place in the market. As of now, its relatively few competitors — SolaRoad, SolarImpulse Foundation, Qilu Transportation Development Group, and Platio — are all based in other countries and don’t cover the same ground as Solar Roadways’s panels. To secure its place in the market, the Brusaws have secured multiple patents, and released two to the company.

While Solar Roadways has experienced its own stumbles over its 14-year history — a 2016 installation had several non-functional panels at opening — the product has been tested and brought ever-closer to perfection over those 14 years. Provided the development of its fifth model proves successful, the product will offer functionality and durability unmatched by any of its competitors. Due to these strengths, Solar Roadways scores strongly in the differentiators metric.

Next Section: Performance

Performance

Solar Roadways has experienced huge success on the publicity front for years now. Its 2014 “Solar Freakin’ Roadways” video experienced a viral level of 22 million views, and it has captured the imagination of the American public, even receiving a shout-out in Barack Obama’s 2015 State of the Union Address. 

On a more practical front, the company has performed decently but inconsistently. Following up on three U.S. Department of Transportation contracts, Solar Roadways secured an SBIR contract with the U.S. Department of Defense and has received commercial requests from around the world even before scaling up production.

That said, hard numbers provide a more troubling outlook. Solar Roadways went from an impressive $419,838 in revenue in 2018 — resulting in a positive net income of $18,044 — to $211,392 in revenue in 2019. The company has yet to scale for commercial production, but this decline year-over-year is concerning. Because of these sliding financial figures, Solar Roadways’ performance score is its lowest across all five metrics.

Next Section: Other

Bearish Outlook

Solar-powered roads — while attracting huge levels of public attention — have so far been little more than expensive gimmicks. The challenge is in replacing what have been cheap, simple, reliable road-building materials for literal millennia. In order to do so, the modules have to be sold as cheaply as possible — cutting into margins — while providing the same level of safety for drivers. Meeting these rigorous standards is an enormous challenge and requires buyers to have a long-term perspective. True, solar roadways won’t get potholes, but when it comes to replacing existing infrastructure, customers will be highly incentivised to go with what works in the short term: more asphalt, more concrete. Even the product’s major selling point — collection of solar power — has so far been far less efficient than other solar collectors.

In order to reach the levels of success that can turn a profit for investors and meet massive public expectations, Solar Roadways needs to meet several challenges. It needs to develop its own custom micro inverter that can more efficiently capture solar energy, undergo a $500,000 certification process from the Underwriters Laboratory and secure a $19,000 approval from the FCC. Furthermore, the company does not yet have the strong sales infrastructure in place to support commercialization and scaling — which will soon be an absolute necessity. Without cost-cutting tech innovations and powerful sales presences, Solar Roadways will remain little more than an expensive gimmick, shunned in favor of more reliable materials.

Next Section: Bullish Outlook

Bullish Outlook

It’s never been a better time to provide infrastructure innovations. America has been beating the drum for restoring its crumbling infrastructure for years now, and Solar Roadways can capitalize on that priority. At the moment, panels are manufactured by hand, making them incredibly expensive. With scaling of the product, costs can be driven down. The company certainly has no shortage of consumer interest. It has a promising list of potential customers. If it can secure even a sliver of the enormous smart cities market, the company has a potential to make hundreds of millions or even billions of dollars in the coming years.

Next Section: Executive Summary

Executive Summary

Solar Roadways has been rated a Deal to Watch as a possible road to the future of transportation and energy. The company’s tractioned tempered glass Solar Road Panels absorb energy from the sun, albeit at a less-efficient rate than other solar panels. The panels provide safe driving surfaces for vehicles, illuminate LEDs that can connect to wireless city management software, and heat roads to mitigate snow and ice buildup. The company estimates that if all paved surfaces in the U.S. were replaced with their panels, they could provide three times the current energy needs of the entire country.

The company has secured three successful grants from the U.S. Department of Transportation and a contract with the Department of Defense. It plans to use funds from its current raise to finance expensive certification processes and develop a custom micro inverter, to better the product’s solar energy absorption. The SR5, which is currently in development, will be Solar Roadways’s first commercial offering.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.

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Solar Roadways on StartEngine
Platform: StartEngine
Security Type: Equity - Common
Valuation: $30,000,000
Price per Share: $4.55

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