Solar financer Sunrun buys installer
NEW YORK (AP) — The company that helped pioneer a unique financing scheme that has put solar panels on thousands of homes is getting into the construction side of the business and becoming more like one of its chief rivals, SolarCity.
Sunrun is acquiring the residential installation company REC Solar from Mainstream Energy Corp., as well as two of its other divisions, the parts distributor AEE Solar, and SnapNrack, which builds the racks that hold solar panels in place.
Terms of the deal were not disclosed.
Sunrun CEO Lynn Jurich said in an interview that the acquisition will give Sunrun more insight into the installation market, lower the cost of attracting new customers and allow the solar installation companies that it works with to lower costs.
"We're trying to maximize reach and lower our cost structure," Jurich said.
REC Solar was Sunrun's first construction partner and the companies have collaborated on installations since 2007.
Sunrun was among the first companies to cover the huge initial cost of install solar panels in exchange for a monthly fee from homeowners. The initial cost of installing a solar system — $25,000 to $30,000 for a typical residential system — has been a major barrier for the industry.
Homeowners that have solar panels installed continue to buy some power from the local utility, but often the electricity bill and solar payment together cost less than a traditional monthly utility bill.
Solar systems are subsidized by the federal government with a tax credit worth 30 percent of the cost of the system. Many states also offer incentives on top of the federal subsidy.
SolarCity Corp., based in San Mateo, Calif., offers a similar deal — solar for no money down — but it does all of its own installation. In just over a year since going public, SolarCity shares have rocketed 700 percent higher.
Jurich says the acquisitions are not an attempt to mimic SolarCity's business model in order to position itself for a public offering, though.
"We're not looking to impress investors, we want to run this company so that in 20 years it will be a massive energy business," she said.
And Jurich insists that Sunrun will not become a competitor to the companies that install solar systems. She says Surun will still rely on local partners for most installations.
The deal will allow Sunrun to help the solar installers it works with by providing them with cheaper parts, better customer service and better strategies for lowering costs, Jurich said.
Sunrun, based in San Francisco, has nearly 50,000 customers in 11 states. REC Solar has 11,000 customers in seven states.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .