Real Goods Solar, Inc. (NASDAQ:RGSE) Just Got Exactly What We Said It Needed

It has been around six months since we first highlighted Real Goods Solar, Inc. (NASDAQ:RGSE) as a potential recovery play in the solar space and our thesis has taken a little longer than we expected to materialize. Materialize it has, however, and anybody that picked up an exposure on the back of our coverage at any point during the last four or five months is sitting on a nice profit right now. RGSE Daily ChartThe company was trading for $0.69 a share during the middle of August and rose to around $0.80 a share early September. This comes after having collapsed from $3.57 (post reverse split) back at the end of January.Right now, Real Goods Solar goes for $2.46. That is a 256% appreciation from lows.So what is driving the action and what's next?For those new to Real Goods Solar, the company is, as its name suggests, a solar energy company that operates across pretty much the full spectrum of the solar industry, from installation to manufacturing to lease financing to fitting. Earlier this year, and on the back of what many saw as potential trouble for the solar industry with the trump administration favoring coal and other fossil fuels in the US, the company took a hit to its market capitalization and was forced to reverse split in order to maintain its NASDAQ listing.Almost immediately subsequent to the split, management announced an equity raise, which served to further compound negative sentiment and is really what pushed the company down to the aforementioned lows.In our previous coverage, we noted that we wanted to see Real Goods Solar put out some solid audited numbers and follow-up with an operational development that could serve to re-energize operations and turnaround sentiment.We did get good numbers and, as of this week, we've got exactly the sort of development were looking for.Specifically, management just announced that the company has signed an exclusive license agreement with industrial behemoth Dow Chemical Co (NYSE:DOW) that will see the two work hand-in-hand on the manufacture and rollout of a new solar panel technology in the US. The technology is called Powerhouse 3.0 and it is Dow's attempt to offer retail customers a cheaper, but just as effective, alternative to the currently available solar panels on the market.So where does Real Goods Solar fit into the picture?The company will be responsible for handling all the commercial activities concerning the Powerhouse 3.0 solar shingles. This includes, and to quote from the press release, supply chain management, marketing, sales, installation and warranty.Inclusive in the arrangement is the fact that Real Goods Solar picks up exclusive licenses to patents that cover the Powerhouse 3.0, meaning the company can market and sell the product outside of the US exclusively, most notably into the European market.The importance of a deal like this for Real Goods Solar cannot be understated.Not only does it show that the solar industry is very much alive in the US (with such a big name trying to push it) but it also aligns Real Goods Solar with one of the biggest names in the US market, never mind just the energy industry, and this serves to validate the company's positioning and operational capacity/ability in this sector.So what's next?The technology needs accreditation before Real Goods Solar can start to sell it and Dow expects this accreditation to come through during the first quarter of next year. This means that we should see a quantitative impact mid to late 2018. Before then, however, Real Goods Solar is going to be expanding its operational capacity (call centers, marketing team, that sort of thing) and this expansion should serve to draw considerable speculative volume towards the company in the interim.Keep in mind that we may see another raise and that this could temporarily serve up some weakness for Real Goods Solar from a share price perspective. Any dip, however, is likely a nice opportunity to pick up cheap shares ahead of the real impact of this deal hitting the financials.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on RGSE, sign up below!Image courtesy of Mountain/ \Ash via FlickrDisclosure: We have no position in RGSE and have not been compensated for this article.