SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY
Sunrun claims to have invented “solar power service.” Its approach to solar financing has people leasing solar panels from third-party providers so they can go solar without the actually buying and installing panels. Sunrun owns, insures, monitors, and maintains all the equipment. This model works for consumers, who can lower their energy costs, as well as solar companies that need help adding customers.
“This is an important announcement for the entire industry and for homeowners looking for an affordable way to make the switch to solar,” said a company spokesperson. “The investment by J.P. Morgan is its first in the residential solar space, a significant landmark and a major capital increase in our industry. It provides stability for the entire industry, reinforcing our third-party-owned solar business model and the excitement from investors. This financing also provides a level of confidence for our partners to build systems quickly satisfying consumer demand for clean solar power.”
The solar market has had its fair share of challenges. Residential and commercial customers alike have proved reluctant to pay the hefty price for purchasing, installation, and maintenance. At the same time, Chinese manufacturers are fueling a global oversupply of solar panels that is pushing down pricing. While this has presented some financial troubles for U.S. solar manufacturers, more affordable solar panels is ultimately good for the industry.
Green Tech Media and Solar Energy Industries Association (SEIA) forecast that during 2013, the industry will install 4.4 gigawatts of solar-power facilities, up 33 percent over the same period in 2012. Furthermore, solar installations are up more than 75 percent, according to the Solar Energy Industries Association, which projects another 65 percent increase in 2013. The industry’s rapid expansion has made solar the fastest growing energy source in the United States, according to the SEIA. These trends have created opportunities for startups like Sunrun to bring solar to the masses with innovative financing solutions.
The company partners with leading local installers and hires experts in each market to ensure seamless execution. It now has 35,000 customers across 11 states and launched in Connecticut just last week. This financing will support its continued national roll out.
Sunrun has done a series of deals like this. A couple years ago, Sunrun formed partnerships and financing agreements with PG&E and U.S. Bancorp to support installations. This latest financing includes commitments from previous and new investors, including JPM Capital Corporation, a subsidiary of JP Morgan Chase. President and cofounder Lynn Jurich said that financing like these are an important part of Sunrun’s business. Sunrun now has enough capital to support the purchase of more than $2 billion in home solar systems nationwide.
Sunrun’s main competition is Elon Musk’s SolarCity, which went public in December. Sunrun has raised a total of $145 million in venture capital from Foundation Capital, Sequoia Capital, Accel Partners, and Madrone Capital Partners. It is based in San Francisco.
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