Shoals acquired ConnectPV to target more energy storage projects


Shoals Technologies Group, a leading provider of electrical balance of system (eBOS) solutions for solar, battery storage and electric vehicle charging infrastructure, as part of its third quarter earnings report, noted the company acquired ConnectPV to round out its offering.

“We are not just taking a bigger slice of the pie we are in, we are growing the size of the pie available to us by broadening our product portfolio,” stated Jason Whitaker, Chief Executive Officer of Shoals. “We have been doing that organically through new product introductions like our wire management solutions and IV curve benchmarking products, and now inorganically through the acquisition of ConnectPV, which we completed during the third quarter.”

ConnectPV adds products targeted specifically to energy storage, which obviously has tremendous growth potential.

“ConnectPV also gives us access to a number of customers that we did not historically serve, which should further accelerate our market share gains. We are also expanding beyond solar by taking our technology and expertise to the rapidly growing EV charging market. We manufactured the first commercial versions of our full EV System Solution set including all four product families during the third quarter, and took first orders from customers in November. We remain very focused on the EV charging opportunity and are excited about the prospect of creating a significant business in EV to complement our core solar business. Between continued share gains with BLA, new products for solar and the business we are building in EV, I am incredibly excited about the future for Shoals.”

Whitaker says Shoals continues to grow faster than the market as Shoals’ System Solutions take share from conventional solar eBOS. Third quarter revenues increased 14% year over year and they ended the quarter with the highest level of backlog and awarded orders in the company’s history. Since the beginning of the year, the number of solar EPCs and developers that use BLA has more than quadrupled.

ConnectPV’s historical gross margins are lower than Shoals’ historical gross margins primarily due to the higher prices they pay for components used in their products as a result of their smaller size relative to Shoals. Shoals expects to bring ConnectPV’s margins in line with Shoals’ average gross margin as they move ConnectPV’s business to their suppliers.

“Like many other companies, the key challenge to our growth is the current supply chain environment,” Whitaker said. “Our business model has effectively insulated us from most of the margin pressure that many of our peers are experiencing as a result of rising commodity prices and the form factor of our products has limited the impact of shipping and logistics shortages on our business—but, unfortunately our customers still have to contend with these issues as they progress their projects. The result is very fluid delivery schedules, with customers making frequent changes both to product specifications and when they want product on site.

“Recently some of our customers’ projects have been delayed to accommodate design updates as a result of panel changes or because other materials or components needed are not available. In both cases, the impact to us is to delay when we can produce and ship product which will have the effect of shifting revenues that we expected to recognize in the fourth quarter of this year into the beginning of next year. Importantly, we have not had a single order cancel. We view these conditions as temporary and expect delivery schedules to normalize as the supply chain and logistics issues our customers are contending with abate,” concluded Whitaker.

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