Sunrun Enters Solar Installation Business

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Sunrun announces it has expanded its installation capabilities. The company has acquired Mainstream Energy’s residential solar sales, design, and installation division of REC Solar, its wholesale distribution unit, AEE Solar, and its mounting systems and hardware business, SnapNrack.

SolarCity may have a hold on a third of the residential solar market, but their competition is heating up.

Today, one of their competitors grew in some interesting ways. Sunrun announced that it has added to its installation capabilities with an acquisition of the residential and hardware arms of Mainstream Energy. The deal includes Mainstream Energy’s residential solar sales, design, and installation division of REC Solar, its wholesale distribution unit, AEE Solar, and its mounting systems and hardware business, from SnapNrack.

 

In the commercial market, REC Solar will continue as an independent organization under the legal name REC Solar Commercial Corp.

 

The value of the transaction was not disclosed.

 

The acquisition makes sense for Sunrun from a strategic perspective. Lynn Jurich, Chief Executive Officer of Sunrun, said, “We continue to innovate our business to further drive down costs, increase quality, and broaden our reach to consumers so more homeowners have access to affordable home solar. The residential solar market is growing rapidly and this acquisition marks the next step in our multi-channel growth strategy. REC Solar’s residential division, AEE Solar, and SnapNrack complement our thriving channel business and further enable us to fulfill the enormous market potential for home solar nationwide.”

 

The company, as a pioneer of solar-as-a-service, has thus far provided financing for solar installations in the form of leases. The actual installations were contracted out by companies like REC Solar, who became Sunrun’s first installation partner in 2007. Now, Sunrun is not only positioned to do the installations themselves but will also be able to control costs with REC’s customer acquisition abilities — plus their physical assets to help with servicing customers’ systems — racking simplification, and large-scale access to equipment distribution.


As Jurich noted, “REC Solar is the industry leader in customer satisfaction and high quality construction, while AEE Solar and SnapNrack bring capabilities that allow us to make solar energy affordable for more consumers, provide superior systems and service, and lay the foundation to become a major energy company.”

 

Sunrun is now positioned well to scale.


And scale they must, in order to remain competitive. To put it in perspective, SolarCity installed over 30,000 systems last year. REC Solar’s claim to more than 11,000 customers across seven states doesn’t seem so huge in comparison. The fact that Sunrun will now be a fully integrated firm could give them more access to capital, which will be important in any efforts to scale.


Some questions remain. Till now, firms like Verengo, PetersonDean, and RGS have had access to Sunrun financing. Now that Sunrun is competing with them, will it lose their business? And if so, will be able to scale? Also interesting to see will be what Sunrun does with AEE Solar. If it continues to be run as a separate company, that might avoid some issues that could arise. If not, what will happen with independent installers who now use AEE Solar? They may not want Sunrun having access to details about their installation business that could give Sunrun a competitive advantage.

 

Time will tell. For now, we know that under the terms of the acquisition, Sunrun will expand its executive leadership team. Lynn Jurich will lead the company as Chief Executive Officer, while co-Founder Ed Fenster will continue in his operating role under the new title of Chairman. Tom Holland assumes the role of President and will guide the company’s strategy and execution. Mainstream Energy CEO Paul Winnowski joins Sunrun as Chief Operating Officer, and Timothy Ball, Chairman of Mainstream Energy Corp., will join Sunrun’s board of directors.

 

“Mainstream Energy and Sunrun have always been perfectly aligned in focusing on customers, maintaining high quality and driving down costs,” said Paul Winnowski, CEO of Mainstream Energy Corp. “Combining our capabilities deepens our relationship and strengthens our shared vision for greater adoption of home solar by more families across the country.”