Willdan’s Acquisition of Weidt Exemplifies the Continued Strategic Positioning of Efficiency Implementers

Willdan Group, Inc. (Willdan) acquired The Weidt Group (Weidt) in early spring 2019. This is on trend with Guidehouse Insights’ view that energy efficiency implementers are positioning themselves to offer a wide array of technology-enabled services as the global electric power industry shifts toward an integrated Energy Cloud ecosystem. Willdan Energy Solutions delivers energy efficiency consulting for utility clients and their end customers including those in the commercial and industrial, healthcare, education, and public sectors. Weidt provides software-enabled consulting services for large commercial and multifamily buildings.

Willdan cites two distinct opportunities for growth through the acquisition of Weidt. First, Weidt provides Willdan with new construction expertise. Second, the acquisition of Weidt will strengthen Willdan’s client footprint in the upper Midwest US, where the company recognizes a growing demand for energy efficiency programs.

Preparing for the Next Generation of Efficiency Offerings

In March 2019, I reviewed three major trends driving energy efficiency that are predicted to drive continued growth in energy efficiency programs as follows:

• New technologies, both customer facing and data analytics employed by utilities

• The integration of a wide range of distributed energy resources

• Third-party program administration

Energy efficiency implementers are strategically positioning themselves to stay relevant in the coming years by expanding their capabilities and geographic footprint through acquisitions and organic growth. Through growing their offerings, particularly to include advanced data analytics and real-time energy data, efficiency implementers look to gain an edge across all sectors and markets. Grid optimization solutions will also allow implementers to integrate efficiency savings with onsite generation, storage, and enrollment of capacity in automated demand response programs. Efficiency integration with other behind-the-meter technologies are necessary to drive deeper savings as efficient building codes become more stringent and widespread.

As regulatory and legislative landscapes continue to support new efficiency savings in the upper midwest and other regions of the US, implementers can gain new market share by offering program administration services where applicable. Therefore, merger and acquisition activity is a main vehicle for allowing companies to be successful in of these evolving parts of the energy efficiency competitive landscape.

Mergers and Acquisitions: A Sign of the Times?

Utilities have greater pricing and market power over efficiency services than they did a decade ago. Given the larger number of efficiency program implementers active in North America, competition in the space is relatively strong in 2019. By offering a range of efficiency and sustainability consulting services—either bundled or as a single solution to fit targeted customer needs—program implementers can distinguish themselves from their competitors.

The energy efficiency field was rife with merger and acquisition activity in 2018. For example, Franklin Energy acquired Planet Ecosystems, Rubicon Technology Partners invested in Tendril, and WECC and Seventhwave joined to create Slipstream. Willdan Group’s acquisition of Weidt indicates that 2019 will bring more of the same. Where some utilities may source a program implementer based on the solution cost-effectiveness, others are increasingly considering the swath of end-to-end offerings available through each solutions provider. Companies that are malleable and able to fit utility customer and program provider needs will have an advantage in securing energy efficiency project work in the coming decade.