Fast-growing Draker Laboratories makes the most of its moment in the sun
In a field in southern New Jersey, one of the nation’s largest solar farms is turning sunshine into clean energy with the help of high-tech instruments made in Vermont. The 100-acre solar array in Pilesgrove Township uses a data-management system made by Burlington-based Draker Laboratories  to track the array’s power output, weather conditions and technical problems in real time.
Solar power was the fastest-growing industry in America in 2010, and Draker Labs has been enjoying a wild ride on the “solar-coaster,” as insiders have dubbed it. Company revenues are on track to grow 250 percent this year, and Draker has been on a hiring spree to meet the demand for its product. The company started the year with 12 employees and expects to end it with more than 50. It outgrew its solar-powered offices in Burlington’s Old North End and in April moved into more spacious digs, the former location of Dealer.com in the Maltex Building.
At its new office — a bright, post-and-beam space with hardwood floors and exposed brick walls — Draker manufactures what it calls “turnkey” monitoring systems for large commercial or utility-scale solar photovoltaic systems. CEO Charles “Chach” Curtis explains them as sensors and instrumentation that collect data about a solar system — amount of sunlight captured, ambient air temperature, kilowatts produced — so operators can tell whether it is performing properly and troubleshoot any problems that arise.
That information has become increasingly important as solar power systems get bigger and their owners put more money on the line. For instance, the developers of the New Jersey solar farm, Panda Power Funds, and Con Edison Development have sunk $90 million into the project. With that much money at stake, Curtis says the developers want assurances that their investment is paying off.
Privately held Draker appears to have the right product at the right time. But it has required smart business moves, hard work and “tremendous effort on their part” to get there, notes Jeff Wolfe, CEO of the White River Junction solar panel company groSolar . Employing a different metaphor to describe solar industry trends, Wolfe observes: “Rising tide certainly helps get you the opportunity, but you have to row really, really hard.”
Since its founding in 1999, Draker Labs has installed monitoring systems at 500 solar projects in the U.S. and Canada, including ones in a vineyard in Sonoma County, Calif., in a Nevada gold mine and on the rooftops of seven REI retail stores. When the 20-megawatt New Jersey solar farm — the largest in the northeastern United States — went online last month, Draker was already knee-deep in an even bigger project: a 30-megawatt solar array in Ontario.
Draker’s sensors are also monitoring solar projects in Vermont. The company partnered with groSolar to build the 100-kilowatt rooftop array at the Green Mountain Coffee Roasters headquarters in Waterbury. An informational kiosk in the building and an accompanying website display exactly what the Draker sensors are detecting. On an overcast, 57.1-degree day last week, the system was generating 75.8 kilowatts of power, enough to offsets up to 20 percent of the plant’s energy needs.
More recently, Draker joined Burlington-based Pomerleau Real Estate to build what at the time was the largest solar array in Vermont: the 1-megawatt Ferrisburgh Solar Farm off Route 7. Curtis says Draker would love to do more business in Vermont, but government incentives are weak here compared with those of other states. A pilot program called the “standard offer,” which extended advantageous rates to solar projects in 2009, attracted many more applicants than it could accommodate.
“We hope the Vermont Legislature expands the program,” Curtis said during a recent interview in his minimally decorated office. “Clearly the demand is there.”
A soft-spoken Connecticut native, Curtis joined Draker Labs as CEO two years ago. Before that, he worked as chief financial officer and later as vice president of sales and business development at Northern Power Systems, the Barre-based manufacturer of wind turbines. He got two degrees from Dartmouth College: a bachelor’s in economics and an MBA from the Tuck School of Business.
Curtis believes Vermont is a great place for tech companies to do business — though it might not seem that way to outsiders. He says one of the most frequent questions he gets from out-of-state investors is whether he can hire and recruit enough qualified employees in such a small, rural state.
“Their vision of Vermont is not exactly high tech,” Curtis says. “The good news is that the technical people that want to work in renewable energy don’t necessarily want to be in New Jersey or metropolitan New York. They can work in this field and live in a beautiful place like Vermont and raise kids here. That’s a home run.”
Curtis took over for company founder and chief technical officer A.J. Rossman, who parted ways with Draker this spring because of what he calls “a difference of opinion with a number of things internally, including how we go about sales and how we go after investments.” Rossman still maintains a minority stake in the company, but no longer serves on the staff or board.
Rossman admits that he needed management help as the company grew — he’s an engineer, not a businessman — but says it was still hard to walk away from his “baby.”
“I developed the technology platform, recruited the team, grew the company, satisfied the customer, grew the niche and essentially outperformed the competition to put Draker in a position to become a large company,” he says. “Now it’s up to the MBAs to grow the value.”
Like so many entrepreneurs, Rossman started the company — building solar power systems — in his living room. He founded Draker Solar Design in 1999 when he moved to Burlington to study for a PhD at the University of Vermont. At first, he built and installed residential solar power systems, but he quickly recognized monitoring was a key niche.
“It became apparent to me that people were spending money on systems and had no idea how well they were working,” Rossman says.
So he set up a business, named it after his dog Drake and exhibited his product — a prepackaged data-management system with a user-friendly web interface — at a trade show. Within days, he had his first customer: a company that sold a commercial power system to a rice farmer in California. Initially, the company, later renamed Draker Laboratories, made monitoring systems for solar and small wind projects — “a little bit of everything,” Rossman recalls. He quickly realized the real growth, and the real money, were in solar. Still, the cash wasn’t exactly rolling in.
Rossman says he charged everything on credit cards, then rolled that debt into a second mortgage. He purchased a solar-powered building on North Street and used his equity in it to secure a $200,000 loan from the Vermont Community Loan Fund.
“I leveraged every asset I had along the way to meet payroll,” Rossman says. “There was a time when I didn’t pay employees or myself for nearly three months. Out of the first seven employees I had, only one left — and he ended up coming back. We had a lot of good people who were very committed to what we were doing.”
A turning point came in 2008, when Draker secured $1.3 million in venture capital to develop a next-generation energy-monitoring product from a consortium that included Shelburne-based FreshTracks Capital, Campbell Scientific, the Nathaniel Group and Vermont’s Clean Energy Development Fund. This past July, Draker completed another round of equity funding: $3 million from New Hampshire-based Harbor Light Capital Partners will propel research and development of its next-generation monitoring instrumentation.
“If you start gaining traction and success, you outgrow funding sources in Vermont. You’re forced to look out of state,” explains Curtis. “That’s a double-edged sword in that you need capital to grow, but the more you take from out of state, [the more] you weaken your ties to Vermont. We’ve seen a number of successful tech start-ups acquired or moved out of state as they’ve grown. I don’t see that being a risk here.”
Looking ahead, Draker’s goal is to launch internationally by the end of 2012. Curtis sees “huge potential” in Europe, particularly in solar-friendly Germany and Italy. The challenge, he says, will be to grow smart.
“We’re conscious of not piling on too much, too fast,” he says. “Frankly, the challenge for us is execution.”