Tigo Energy Goes Public as Improving Technology Boosts Solar Industry Potential

When Zvi Alon finished building his house in 2007, it looked futuristic enough for him to upgrade it with solar panels. As Tigo Energy launched in the same year, a founder approached Alon to learn about his then-recently installed system. The two had remained in touch in sunny California—as half a decade passed and underlying technology became cheaper, Alon invested in Tigo Energy in 2013. A year later, he became the Chief Executive Officer.

As rapid technological advancement also affected photovoltaic systems, the prices of solar panels dropped by 54% in the past decade in California, according to the US-based Solar Energy Industries Association (SEIA) statistics.

“In the initial years, it was hard to justify the installation of solar panels and related systems without government subsidies and incentives,” Alon told the California Business Journal.

But today, upgrading a home or business with a PV system makes practical sense.

A decade ago, solar panels carried the stigma of clunkiness—especially when storing the generated energy. Batteries were big and inefficient. Solar panels could deliver little value if a house could not use the grid to upload excess energy and download when needed—usually during the night when generation was down.

All that has changed. “In the last three to four years, we have reached a stage where we no longer need the governments’ assistance to popularize solar energy. The systems are very cost-effective,” Alon says.

Components are more high-tech and their price points are dropping. Photovoltaic (PV) modules are becoming more efficient, and the physical size of system hardware is shrinking. Energy storage issues are dialing down thanks to improving battery technology—a textbook example of Moore’s Law.

“Earlier, if you had a PV system, you had to rely on the grid. Today, it’s more about consumption and self-use,” Alon explains. Today, these systems deliver ample added value to the user.

Entering the Bourse

As the Nasdaq virtual bell rang on May 24, 2023, Tigo Energy went public with the ticker “TYGO” after a business combination with Roth CH Acquisition IV wrapped up. Share prices more than doubled two months after the initial public offering (IPO) at the time of penning this article.

Alon, who had overseen two IPOs in his career before, expressed satisfaction relating to the Tigo Energy IPO, which had two main objectives with going public.

“Firstly, going public means long-term thinking and transparency. As a private company, there’s a ceiling to how far you can go. But when you go public, you’re up to stringent public processes and can create assurances to your customers. Also, it’s easier to do banking, get on IVs (Implied Volatilites) and attract financing.”

Secondly, a strong balance sheet is essential for a company to remain competitive. “The only way of addressing the issue of generating a stronger balance sheet is to go public—if you go public, over time, you can build a strong balance sheet,” Alon adds.

Scorching Competition

California ranks first in the United States for total installed solar capacity, which stood at 40,977 MW at the end of July, SEIA statistics reveal. This power is enough to energize over 11 million homes. After growing by 5,068 MW in 2022, pundits expect the market to further accelerate by 22,620 MW in the next five years.

California’s solar market is valued at $90.6 billion. Its 2,380 solar companies—403 manufacturers, 1,103 installers and developers, and 874 other companies—employ over 78,000 staffers, most recent statistics add. Globally, investments in solar PV capacity additions increased by over 20% in 2022, surpassing $320 billion and setting another record for the year, International Energy Agency (IEA) figures say.

For Tigo, which is present in all seven continents, the data means potential—and race. What do they do to remain potent in such a cut-throat rally?

“The PV world is abundant in IPs (intellectual properties) and patents, sparked by a quickly-evolving industry,” Alon says. “Beyond this progress, three critical factors are essential for a company to make a difference.”

Firstly, PV solutions must deliver value to clients. Secondly, installation must be swift. Thirdly, and potentially most importantly, reliability is of the essence.

“There’s quite a market sentiment: Solar panels are expected to last forever,” Alon says. “Usually, suppliers talk about a shelf life of 25 years, which may be a tad over the board. When you install a roof on your house, you get a 20-year warranty. Solar panels shall serve reliably for roughly the same time frame.”

The technological development of solar energy compares to mobile phones. Technology is more reliable, cheaper, and more potent by the day. “The market is becoming more trustworthy, and we are catering to people who are not early adopters anymore,” Alon says. “People buying such systems today are less technical than in the early years of installing PVs. They don’t want to know about wattage and tech nitty gritty anymore.”

As the initial solar panels installed are approaching the end of their lifespan and their systems are being dismantled, concerns about the sustainability of these systems are arising among green energy experts and the public due to the waste generated. How does that reflect on the industry?

“In the last few years, we have seen retrofits and upgrades happening. The industry is facing a challenge, and we must deal with it,” Alon says. “I have no doubt these issues will be addressed, especially as replacement and upgrades will become more mainstream in the upcoming years.”

For now, the market for new installations is much bigger than retrofits. Most of the systems installed are suitable for 20-25 years—time is ample for the industry to correctly nail the processes and procedures of recycling disassembled systems.

Alon’s outlook on the company’s future is bullish. The company has consistently grown since its foundation; the most recent IPO has proved to be a success, and its presence in all seven continents hints at an intriguing, solid basis for operations. What is the most essential factor for success?

“If there’s anything I learned is this: Anything that counts is that you must bring continued value to your customers,” he concludes. “If you do that, they’ll recognize it, pay for your product, and go along with you.”

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