Thomas Neyhart, CEO, and co-founder of New Orleans-based PosiGen Solar has raised $27 million in venture capital to further grow the business. To date, PosiGen has raised $35 million in equity funding.
PosiGen however, operates differently than most other solar energy companies. While leading solar providers focus on reaching homeowners in areas with a fairly high area median income and excellent credit scores, Thomas Neyhart turns his team’s focus to underserved communities. Primarily, low and middle-income homeowners and communities of color that face both significant wealth gaps and persistent redlining in the availability of services.
Investors were initially not convinced of PosiGen’s potential until 10 years after the company’s groundbreaking in the aftermath of Hurricane Katrina, over 17,000 PosiGen solar systems have been installed. 75% of those systems are in neighborhoods that the US Census Bureau deemed low-income.
Thomas Neyhart credits his diverse workforce for achieving such rapid growth and making solar power available to thousands of families. As PosiGen seeks expansion in New Jersey, Pennsylvania, Nevada, and California, the company has differentiated itself for its equally diverse customer base: the sale process and criteria to obtain a PosiGen solar installation accounts for the realities of marginalized communities, which no other solar company has done before.
How do we turn around the idea that sustainability is only for the wealthy?
Even if they attain homeownership, communities of marginalized groups often face environmental inequities. Sustainability practices in daily habits and one’s home are individual choices for more affluent homeowners. For low-income homeowners, they have far less choice regarding their living spaces and circumstances.
Poor air quality ravages low-income areas. Affordable homes tend to be rife with mold and water damage and/or located dangerously close to landfills, industrial facilities, treatment plants, and other structures that exponentially increase the residents’ exposure to pollution and cause health problems. These inequities date back to the practice of redlining which arose in the Reconstruction Era when real estate agents refused to sell or rent to potential occupants in specific areas if they were not white. Affordable homes were built in areas that were not just less desirable, but conducive to health issues like asthma, upper respiratory problems, and heart disease.
While moving away from traditional energy sources and into renewable energy like solar power is an important aspect of sustainability, the realities of marginalized people living in older homes in less safe areas tend to get overlooked. Wealthier homeowners focus on energy savings by investing in a solar panel, but poorer and overlooked homeowners can even have their structural issues addressed.
“Although solar is important, it’s really the microclimate that customers feel. We can reduce the spores and mold and dust and water intrusion. People are living healthier in their homes,” Thomas Neyhart stated on the importance of addressing sustainability challenges for low and middle-income homeowners.
Thomas Neyhart: “Over 65 percent of our employees are persons of color or female, which doesn’t happen that often in the solar industry”
The green energy industry focuses on an affluent white cluster base. Subsequently, these companies’ ranks reflect it at all levels of the corporate hierarchy.
One of the chief differentiating factors of PosiGen compared to other solar companies is that due to the structural inequities faced by marginalized people, there are no minimum income or debt-to-income ratio requirements to meet in order to get a PosiGen solar installation. FICO credit scores are also not checked.
Credit scores have long been a deterrent against homeownership, starting a business, and making improvements to one’s day-to-day life under the impression that they reflect poor judgment in spending. In reality, communities of color tend to be locked out of opportunities for advancement and must take on more debt for necessities and family emergencies.
Ethnicity is also not the only factor that holds people back: women face more discrimination when seeking housing and home improvements. It is often assumed women have lower lifetime earnings than men, due to responsibilities for childcare and/or eldercare. With white women earning about $0.77 for every $1 a white man earns, this comparable amount is even more dismal for Black and Latina women.
The lifetime difference is only exacerbated by the pay gap. Credit and income checks hurt women who needed to flee domestic violence and may still be on a lease or joint account with an abusive spouse who went into default. When solar companies are primarily staffed by white men, the realities of sustainability and financial challenges of women and racial minorities are overlooked. Especially given that they are due to circumstances rather than choices.
Thomas Neyhart credits his diverse team for why PosiGen has achieved rapid growth and having a customer acquisition cost 20% less than comparable solar companies.
Susan Young was a PosiGen customer who initially sought a solar panel from SolarCity. As an immigrant and a single mother to two children living in an old and energy-inefficient home, she faced high fuel costs that only exacerbated her overall difficulties in providing for her household.
Young’s application with SolarCity was denied because they felt her FICO score and income were not high enough. Subsequently, she sent her inquiry to PosiGen and they agreed to do an installation.
Upon saving significantly on fuel costs after the solar unit was successfully installed, Susan Young saw that PosiGen was hiring salespeople. Despite having no prior sales experience, she had faith in her ability to sell the product since she was so happy with the results and knew how to reach the community of Jamaican immigrants which she hailed from.
Susan Young began her career as a salesperson, rose to the ranks of senior salesperson, then team lead, and today she is the community marketing manager for PosiGen’s Connecticut office.
Thomas Neyhart is proud to offer chances to groups of people who have been overlooked and are seeking second chances at stable and fulfilling employment. Immigrants and minorities are key groups in PosiGen’s workforce. Recovering drug addicts, people with felony records, and the long-term unemployed are often frequently turned away by recruiters even though they desire gainful employment, and PosiGen offers them chances when other companies do not.
“We have stories of people coming to work in entry-level positions and moving up and becoming managers, and regional managers, and directors, and community marketing directors,” Thomas Neyhart stated on PosiGen’s hiring philosophy. By unlocking the potential in marginalized communities, PosiGen has been able to rapidly grow and reach more low and middle-income homeowners than their competition.