Written by Emily Ballard | Photos by Anthony Harden
Phelps Clarke and Douglas Ager are aiming to revive the lost art of craftsmanship.
On an early spring day, the drive out to Sugar Hollow Solar in Fairview, near Asheville, is picturesque. As the fog lifts, the valley is littered with livestock grazing in pastures, and signs indicate family farms that are steeped in generational and regional history. Driving past Looking Glass Creamery and Hickory Nut Gap Farm, you start to wind along a wooded road. Through the budding trees, a simple geometrical logo can be seen on the side of a large barnlike structure, marking the destination of an innovative business with strong ties to the community and a business philosophy committed to fairness and integrity.
Phelps Clarke and Douglas Ager are cousins and the driving forces behind a renewable energy and solar technology company. Their office is set in a rustic building that could easily be mistaken for an old hunting lodge. Upon entering, you are met with a space completely outfitted to run a business with employees diligently working on sales, design, and operations. Down a narrow, creaky hallway, Phelps and Douglas settle in behind a long desk. As they talk, they both casually throw their hands behind their heads and lean back in their seats. Their demeanor is relaxed, and as they tell their story it is obvious that they are in their element, a perfect blend of simple country surroundings mixed with modern technology, much like the business that they are so passionate about.
Growing up on the Farm
Phelps and Douglas grew up in Fairview, and were no strangers to getting their hands dirty and helping out around the farm. They were comfortable using a chainsaw to cut wood, or fixing up an old Ford truck, but they were also honors students. “We were farm boys, but we also grew up in a family of lawyers and doctors,” Douglas explains. Both have a strong intellectual side, but have a natural proclivity to field work and building things with their hands.
Phelps’s father was and is a lawyer in Asheville, and he had every intention of following in his dad’s footsteps. He had a preconceived notion of what his path should be. “I just thought you bumble through high school, you bumble through college, and then you got a good job. That’s what you did,” he recalls. But he was plagued with nagging doubts, and as a self-proclaimed slacker he was deeply confused about which direction he wanted to pursue.
Phelps recalls being deeply affected at the age of 16 when he read a book that his aunt gave him. The book was Ishmael, and a seed was undoubtedly planted that would shape his approach to future endeavors. As he recalls this time, he describes his ambitions in an almost sheepish manner, but there is a spark of genuine passion and enthusiasm behind his words. “It seemed important to do something good for the world or something,” he says. “I mean, that sounds all glorious, but… you might say that I got sold on the environmental imperative to help fix and sort out things.”
For a period of time, Phelps tested the waters in different areas. He went to college as a history major, but was never fully invested in it. He and Douglas were both trying to find their way. Inspired by the Cormac McCarthy book, All the Pretty Horses, the two even planned to set off to Mexico on horseback as a break from college. This didn’t quite work out for them, but it certainly reveals the adventurous and idealistic values that the two share and would eventually combine to create a business.
Phelps attended the automotive program at A-B Tech, but once again felt that there was something missing. He decided to go to school at Bowdoin College in Maine, and suddenly he found that physics was something which resonated with him, and he quickly excelled. “I worked as hard as I have ever worked,” he remembers. “There was a lab that I would spend hours in just training my common sense. That is what my physics education did.”
After an internship at Camp Chewonki (located near the Maine coast just slightly northeast of Portland) that, with its focus on environmental education, explored solar and sustainability, Phelps was inspired and felt that he had some hands-on experience and a genuine interest in the field. As many of his classmates were graduating to move on to Wall Street or become doctors, he set his sights on home. With a clear direction in mind, he contacted Dave Hollister with Sundance Power Systems, and spent five years learning everything he could about commercial and residential solar power options. (Sundance Power Systems was profiled in the November 2014 issue of Capital at Play.)
Phelps describes his time spent with Sundance as “an equal exchange of value in the marketplace.” He had a drive and an ambition to learn the industry, and the value he gained through this experience enabled him to form a basis for the kind of business he wanted to pursue on his own.
A friend introduced Phelps to a craftsman who specialized in heating systems, and he was instantly intrigued by the work. Keith Holdsworth had 30 years of experience with boilers, radiators, and hot water systems, and the two instantly clicked. The result was Holdsworth and Clarke, a company that Phelps could call his own. By the second year they had a rush of business. They found a niche in radiant floor heating, and when a company called First Light Solar closed their doors, they sent all their leads to Phelps and Keith, which led to a boom in their solar electric work.
“I knew how solar worked; Keith knew how heating worked; but neither of us really knew how to run a business,” says Phelps. “I thought it was just slap your name on it and do good work and it all works out, but the reality is, it’s a lot more complicated.”
With a new company to manage in an industry that was growing, Douglas’s interest in joining forces with Phelps was both timely and appreciated. A new phase for the company would emerge. “Doug’s the guy with the vision. I am just the solar guy,” Phelps admits.
“Building and craftsmanship is something that interested me, but I got tired of building things for other people. I realized that I needed to turn that craftsmanship into a business that I could grow and retain ownership of.”
A Welcome Addition
Douglas feels that business is not something that was ingrained in his DNA. His great grandfather was a Presbyterian minister, and when he moved to this area in 1916 to a piece of land that would become Hickory Nut Gap Farm, he wanted to serve the community. He started The Farmers’ Federation to help the local farmers and to cultivate better agricultural practices in the area, and these values carried over to Douglas’s parents, and consequently helped form his own similar ideals.
“Growing up, business wasn’t really a route I saw as a possibility,” Douglas remembers. He feels strong ties to the region, and says that for him and his family it wasn’t always about profit. The family sustained the farm, and Douglas developed deep roots to the land and to fieldwork.
When his brother Jamie started to show interest in running the business, Douglas took notice. As Hickory Nut Gap Farm grew and prospered, as well as nearby Flying Cloud Farm that was run by his cousin, Douglas was starting to form his own ideas.
After years of working as a carpenter and a contractor, he was ready to embark on something new. “Watching them do it… at some point it just kind of clicked for me,” he says. “Building and craftsmanship is something that interested me, but I got tired of building things for other people. I realized that I needed to turn that craftsmanship into a business that I could grow and retain ownership of.”
His experience working for other companies led him to frustration with leadership and management techniques, and he began forming his own concrete ideas of how he could do it better. He went back to school to receive his master’s degree in English at Western Carolina University.
Writing was what really inspired him, but he felt that in order to truly pursue that as a career, he would have to move to a larger city, and he wasn’t ready to make that compromise. Instead, he used other aspects of his education to put towards a new venture. “It taught me how to research a lot, and also how to sit at a desk for eight hours a day,” he explains. “It’s hard to do when you are used to working outside. It’s hard to transition, and that really enabled me to be productive.”
He was able to apply this to a marketing and writing skillset that were just the elements missing in the business that Phelps was growing. With his desire to stay in the area and a business he could sink his teeth into, the stars aligned for the two cousins. “This was a way to stay here and do something good, and feel good about it,” Douglas says.
A Business Reboot
When Douglas joined the team, the company was primarily focused on heating and solar hot water, but in the renewable energy industry at the time, solar electric was a huge component to succeeding in the business. They quickly expanded into that arena.
The name of the business was changed to Sugar Hollow Solar—it’s located on Sugar Hollow Lane, just off Sugar Hollow Road—and they implemented a marketing plan. They also began hiring a qualified team to join them on their business journey. Douglas wrote the company philosophy for the website with the mission of “changing the current energy and business paradigms.” It reads: “At Sugar Hollow Solar, we care deeply about moving our society towards a more sustainable future—not just in the environmental sense but in how it relates to overall quality of life, now.”
When Phelps read the articulated business philosophy that Douglas had written, he was blown away. He felt that he had hit the nail on the head. Of course they both wanted to succeed as a business, but it was more important for them to build something together that they could be proud of. To that end, one thing they have adopted is a servant-leadership technique to running their business. This type of management is an alternative to most hierarchal business models, placing heavy emphasis on employee development as a means to produce better and more meaningful work. They have 11 employees, and most of their work is done in-house, only occasionally hiring a subcontractor to do work (such as excavating a trench) if needed.
Their style is also open book management. “We are trying to do business better, to innovate, to be transparent,” Douglas explains. “We are trying to provide good service to every client and also provide good service to our employees, to build an organization that they can all believe in.” (He adds that he currently owns one-half of the shares of the company, and while at the moment the employees do not share any equity, he and Phelps are interested in exploring options for the future in regards to that.)
Phelps doesn’t approach a job in a hurry; he is more concerned with client satisfaction and employee dedication. “We care about our clients,” he says. “This is our town, and we have one shot at building a reputation, and that is super important. I don’t care about the money—I care about a good reputation through honesty and integrity.”
With a focus still on energy efficiency and environmental conservancy, they are able to take on a new range of projects. This shift in work is especially interesting to Phelps. “I love that stuff. If I could just plumb all day, I would. You can put your hands on the pipes and just feel it. Solar electronic, you have to imagine the little electrons moving through the wires.”
Part of building a lasting business is adapting to change. This is something that Sugar Hollow Solar is experiencing firsthand as the industry is going through some ups and downs. The types of services that Douglas and Phelps have offered are solar electric, which are the panels that convert sunlight into electricity; solar hot water that utilizes the sun’s energy to heat the water in your hot water storage tank; and radiant heat that uses water to carry heat through pipes in the floor as an alternative to forced air. They also offer micro-hydro projects that use water from a natural stream to create electricity.
In 2015 Sugar Hollow Solar installed approximately 60 solar electric (aka rooftop) systems, plus other projects, experiencing their best year yet. That could have been due, in part, to the looming deadlines of the North Carolina tax credits that were offered to customers. Under the previous system, solar energy clients were able to recoup a large portion of their installation expenses. With an estimated 30% federal tax credit and a 35% North Carolina state tax credit, this was a huge incentive for individuals and businesses to purchase a system.
Unfortunately, the state tax credit expired at the end of last year, and Douglas and Phelps believe that this has, and will, drastically affect the industry and their business. Although they saw an influx in business before the expiration, there is certainly not the same incentive that they can offer to their customers anymore as a cost reduction.
“We really won’t know until spring what it has done to the market. We are hoping it is just a blip in the pattern,” Douglas says. “North Carolina solar rooftop residential is pretty bad right now, and commercial is even worse. They aren’t looking 15 years out; they are looking at next year. So making those big investments is even harder for those businesses.”
Many solar companies are shifting their focus to doing business in South Carolina, where tax credits are still offered. (According to the South Carolina Energy office, the current incentive in the state is 25% of eligible costs, with a maximum incentive in any given tax year of $3,500, or 50% of the taxpayer’s tax liability for that year, whichever is less; and if the amount of the credit does exceed $3,500, the excess can be carried forward for up to 10 years.) Although Douglas and Phelps are certainly considering that route as well, they have also decided to focus on alternative services to offer that will hopefully supplement their business and maintain their trend in growth.
“Our margins are really tight,” says Douglas. “Definitely not a highly lucrative field at this point. We try to make 15% profit on jobs, but have been lucky to end up with 10% or so. We’re still working out a lot of the kinks due to the growth in our operation last year. Since North Carolina got rid of the tax credits we’ve basically been breaking even—no profit—since the beginning of this year just to keep our guys busy and give us time to move into the South Carolina market. We’re hoping it is only a temporary lull [here]. This time of year is the toughest as far as cash flow, because we don’t have many jobs on the calendar—which means there are no down payments in our bank account.”
Phelps adds that when it was just him and Holdsworth, they were doing around $200,000 in revenue. Then the first year with Douglas they did $300k, and then $600k. Last year, the sales goal was $1.2 million and they ended up at $1.5 million. He says they have set a goal for this year of $3 million, noting, “I have set that goal for myself every year and achieved it.”
One part of their business that is thriving is the radiant heating. With the knowledge in hand, they are diversifying their business through electrical work. With a focus still on energy efficiency and environmental conservancy, they are able to take on a new range of projects. This shift in work is especially interesting to Phelps. “I love that stuff. If I could just plumb all day, I would. You can put your hands on the pipes and just feel it. Solar electronic, you have to imagine the little electrons moving through the wires.”
A few avenues and projects that they are exploring are maintenance and renovations on old electrical systems, and battery operated systems with the emergence of new technology, such as the Tesla battery.
When asked about the future, Douglas says, “Honestly, we are still working on it, but obviously it is providing good service and being committed to this place. Ultimately, it is about giving back to the community.”
“We call ourselves solar craftsman, and I think craftsmanship is really a lost art,” Phelps adds. “You can’t just do the same old thing that your grandad did.”
With every new business venture, there are growing pains and an element of learning as you go. What usually makes for a lasting business is a strong foundation. Douglas and Phelps are passionate about what they do, whether it is adding a new valve to a water system or reaching a milestone in their advertising campaign.
They both bring their individual skills to the table, and the result is a company that continues to grow with two passionate individuals at the helm and a team behind them that wholeheartedly shares their vision. Hopefully this will be the perfect recipe for success.
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