New and developing markets are a flexible concept where business models are concerned. There are the typical business models that larger corporations follow, and then there are the alternative business models that perform in much the same way but offer a bit more latitude. Observers would be hard-pressed to decide which works better for the targeted end-user and investor, but in markets where there is very little history, different may actually be more profitable.
JUHL Wind Inc., a community wind farm developer/operator, works to develop and manage community wind farm projects across the Midwestern US and Canada. The company’s CEO and chairman is a widely acknowledged expert in the wind energy field who has developed, and is working with, a unique community wind energy user-based business model. The model is unique in that the communities and farmers served are substantial owners of the equipment that sits on their land or serves their local needs. The company derives its revenue through oversight of the individual wind farms and services provided to maximize each local wind farm.
The company is apparently benefiting handsomely from this unique model, and is in the process of solidifying its company structure to make more efficient use of its current and past successes. A strategic merger with already affiliated companies, and a private placement in recent weeks, has resulted in a unified company with the capital to move forward with additional community wind energy projects. The fact that the private placement of approximately $5.1 million was primarily funded by institutional investors doesn’t hurt the company’s reputation as a viable and going concern in a market that is growing rapidly, but with less than certain outcomes for smaller players within it.
JUHL Wind currently operates 11 community wind farm projects – serving 35,000 households – that generate approximately 117 megawatts of power. The company is at various stages of development for 16 additional community wind farm projects totaling 400 megawatts of power in the relatively near future. In a developing sustainable energy market, there are several ways to look at associated business models. JUHL Wind has one that differs significantly from the typical corporate plan, but appears to be generating profit potential nicely.
Let us hear your thoughts below: