Sungevity Says Solar Leasing Is On The Rise

May 20, 2010

First there was its offer to install free panels on the White House. (Lease payments were available if Barack felt uncomfortable with the gift.).

Now solar installer Sungevity is turning its sights on Hollywood stars. It’s plot? To promote a solar-lease initiative that is becoming the central thrust of its business.

Solar cell customers need the financing, says Sunvegity CEO Danny Kennedy.

SolarCity pioneered the residential solar lease two years ago. Sungevity is finding it is more popular among cash-strapped homeowners than purchasing panels outright. “They need to have it financed,” says President and co-founder Danny Kennedy.

Sungevity kicked off its leasing program in March with $24 million in financing from U.S. Bancorp. Two and a half months later, the initiative is taking off faster than expected. Since March, 210 systems have been leased – 80 percent of Sungevity’s business, says Kennedy. “We didn’t think we’d be at this level yet,” he says.

Several more systems will be added, if Kennedy gets his way. To promote its push into Southern California, Sungevity calculated the lease payments and energy savings at a handful of celebrity homes. The Blind Side star Sandra Bullock would cut her monthly electricity bill 36 percent, or $131, in exchange for a lease payment of $97. Pop singer Madonna is a bigger winner. Her monthly savings come to $260 for a lease payment of $164. Sungevity stresses the estimates are just that – estimates – and that actually quotes could vary.

On a more serious note, the company added a new weapon to its Southern California arsenal: a 20-year solar lease for the 3.8 million customers of the Los Angeles Department of Water and Power. Sungevity offers 10-year leases elsewhere in the state. But for LADWP customers to take full advantage of government solar rebates, they need the longer repayment periods, Kennedy says.

With a hint of consolidation coming to the solar installation business, Kennedy says he is not being thrown off his game plan. SolarCity’s acquisition of Building Solutions, makes sense, he says. But he doesn’t think mergers between home-energy modelers and solar installers are necessary.

As the business of solar installation matures, it naturally will link more closely to the broader home energy-efficiency market. But there are lots of opportunities to partner, he says. “There are different ways to skin a cat.”


Sungevity Becomes Latest Solar Installer To Offer Residential Leases

March 3, 2010

Solar installer Sungevity announced Wednesday that it has begun offering residential leases for rooftop solar panels.

The Sungevity lease has a 10-year duration, instead of the more typical 15 years or more

Solar leases are seen as a way to expand the use of solar in the United States by shifting $10,000 to $40,000 in solar installation costs from homeowners to installers. In exchange, installers and the banks that finance them get a steady annuity from residential customers in the form of electricity payments.

Sungevity said its program is among the most aggressive in the country. It comes with a 10 year lease duration, instead of the 15 years or more typical in the business.

But if that places more pressure on the company to renew contracts, and give it an opportunity to make money on the equipment it installs, Sungevity isn’t showing it. Co-founder Danny Kennedy expects to see annual revenue grow three to five times this year to as much as $25 million with the lease program a significant contributor.

“We’re on the threshold of finally making solar real for most Americans,” Kennedy says.

Sungevity’s lease program will be available in California and targets homeowners with electric bills of $120 and greater. Customers should be able to save about 15 percent a month without having to fork over a penny for panel installation.

In other words, homeowners with monthly bills of $150 will see their statements drop to $70. In place, they will pay $50 a month to Sungevity for solar power and save $30. The lease comes with a financial guarantee, says Kennedy.

Sungevity is the latest installer to offer lease financing, following in the shoes of SolarCity and companies in states such as Connecticut, New Jersey, Massachusetts and Arizona. To make the program economical, Sungevity is able to collected federal and state subsidies and incentives for the equipment it installs.

In a Wednesday press release, the company, which differs from its competitors by allowing people to buy solar systems over the Web, said it had expanded the hours of its customer call center and promises to provide a leave quote in 24 hours.


Solar Installer Sungevity Gets $6 Million In Financing

September 22, 2009

Solar installer Sungevity said Tuesday it raised $6 million in series B funding as it prepares to double it sales force and expand into three new markets by the end of the year.

Sungevity says demand remains strong in rooftop solar

Sungevity says demand remains strong in rooftop solar

The Berkeley company lets homeowners order rooftop solar panels on the Internet, saving them time and money.

The financing, which closed this month, brings to $8.7 million the money the startup has raised. The most recent round was led by Greener Capital, a new venture firm, and joined by angels who were previous investors. Greener Capital Managing Partner Charles Finnie will join the company’s board.

Sungevity co-founder Danny Kennedy said the company is putting the money to work by adding several new executives to its management ranks, including CFO Charles Ferer, who came from solar installer SolarCity.

He added that market demand remains strong with August the biggest sales month in the company’s history. Sungevity has 220 customers.

The company meanwhile is preparing to offer leasing terms to customers starting in 2010, Kennedy said.


Solar Startup Plans To Take Internet Business Model To Southern California

April 8, 2009

Solar energy is all well and good. But if you can’t easily get solar cells from the factory to a residential rooftop, what is it worth?

The dilemma is a little like the one facing electric car startups, such as Tesla. If a company doesn’t have a national network of dealers, how big can its car sales become?

Sungevity will announced three down-state installers on April 22

Sungevity will announced three down-state installers on April 22

Sungevity hopes to solve the solar challenge. The company has been installing solar cells on homes in the San Francisco Bay Area using an Internet-based ordering technique that lets homeowners choose from five competing systems. The process eliminates the site visit by relying on satellite maps – and potentially saves buyers money.

Co-founder Danny Kennedy says the startup does two to four homes a week.

Now it plans to take its business model on the road and expand to Southern California. It will be an interesting experiment to watch.

Sungevity plans to announce a partnership with three down-state solar installers on April 22. The expansion will enable it to cover 65 percent of the state.

The company could be serving 5 percent of the entire California market by 2010 or 2011, says Kennedy – a big step.

While sales turn down over the winter, partly due to the economic downturn, business has recently shown some life. “We’ve picked up again,” he said.

It will be interesting to see the company’s reception down south.


Shakeout Seen In Solar Cell Market With Company Failures Predicted

December 19, 2008

The oversupply of manufacturing capacity for solar cells could continue for several years, placing severe financial strains on companies, industry executives say.

Prices falling for solar cells

Prices falling for solar cells

The financial turmoil could prove enough to threaten some with survival.

As the global downturn lessens consumer spending and business investment, the demand in the solar market place will likely slump. That will continue to lead prices for solar panels lower.

Already cells are seeing a decline, says Danny Kennedy president of Berkeley-based solar installer Sungevity. A panel that cost $3.75 two months ago now costs $3.10, says Kennedy.

Over the past couple years, panel prices have been rising, but by next year, consumers should begin to see declines. That because estimates show global silicon cell manufacturing capacity to be more than 10 gigawatts, well in excess of demand.

Eventually prices will reach a floor and not decline further, say some executives. But that won’t be adequate to sustain some manufacturers, says Homayoun Talieh, CEO of thin-film solar cell developer SoloPower. Some are too highly financially leverage.

“Sooner or later, there will be company failures in this market place,” says Talieh. That will cause some capacity to come offline in the next six to 12 months, he said.


Solar Startup Prepares To Expand Globally

December 17, 2008

Sungevity is building a business around a simple proposition: it claims it can save consumers 10 percent by automating the installation of solar cells on rooftops.

Company will test its business plan, says Danny Kennedy

Company will test its business plan, says Danny Kennedy

The Berkeley startup operates in San Francisco and several surrounding counties, letting customers use its Web site to order from among five different systems.

In February, it will expand to Germany and into other communities across the U.S., hoping to test whether its Web-based ordering will work as it partners with local contractors.

“The real restraints are labor and workforce training,” says President Danny Kennedy about residential solar. “We make it easier and cheaper.”

Sungevity claims it has sold more than 125 systems since opening for business in April. “We’ve taken out the site visit” by replying on satellite maps, says Kennedy.

Kennedy said the company began its Bay Area business to prove whether the model works. Satisfied, it is preparing to expand, and to raise money for that expansion. Kennedy won’t say how much, but he claims that by the end of 2009, Sungevity will have tested its business concept.


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