EnSync Inc (NYSEMKT:ESNC) made a decision sometime back to shift its business model from selling energy storage equipment to actually developing projects under power purchase agreements (PPA). But is the management regretting the move? It turns out that EnSync is contented with its business model and looks forward to continued growth.
EnSync Inc (NYSEMKT:ESNC) has just announced the first major deal following the shift in business model. The company has said that it recently sold a portfolio of solar power projects in Hawaii, which marks its first PPA transaction.
The power projects have been sold to a unit of American Electric Power Company Inc (NYSE:AEP) called AEP OnSite Partners. EnSync did not reveal the financial details of the transaction, but said that the projects sold represent a major part of the $13 million backlog that it had reported at the end of 1Q2016.
The projects sold to AEP OnSite consist of solar panels and energy storage systems. EnSync added that the projects are located at a university campus and also at condominium buildings on the Oahu and Hawaii islands.
In addition to the revenue generated directly from the sale of the solar power projects, EnSync said it that it has also won a contract to provide ongoing project services to AEP OnSite. But again no details were shared about the value of the service contract.
Valid business model
Despite keeping the financial details of the transactions under wraps, EnSync Inc (NYSEMKT:ESNC) has said that the sale of the projects validate its business model. EnSync hopes to build on the milestone reached in Hawaii to become more success in the PPA monetization space.
The management said that they have seen the PPA backlog expand since entering the Hawaii market. CEO Brad Hansen said that he looks forward to continued growth in the coming quarters and years.
EnSync has a subsidiary called Holu Energy, through which it has developed a massive project pipeline on the islands of Oahu and Hawaii.
In the March quarter, EnSync Inc (NYSEMKT:ESNC) generated revenue of $0.16 million and posted EPS loss of $0.05.