Sungevity Partners With E.ON in Germany to Scale Residential Solar

Europeans pay cash for solar.

Online solar sales company Sungevity is moving into Germany aided by its relationship with European utility E.ON.

Last year, Sungevity began efforts in the Netherlands, in what CEO Andrew Birch called a "test run." The company is now spreading its solar message to global solar pioneer Germany.

E.ON was an investor in Sungevity's $70 million funding round last year, along with Jetstream Ventures and GE Ventures. Sungevity also acquired Dutch partner Zonline at that time to coordinate its European business. Sungevity has raised more than $200 million in VC and project financing from investors including Brightpath Capital Partners, home improvement store Lowe's, Vision Ridge Partners, Oaklandimpact, Greener Capital, Firelake Capital, Craton Equity Partners and Eastern Sun Capital Partners.

Sungevity claims it can quickly deliver a firm price quote for residential solar rooftop systems without having to pay a visit to the site. The company aims to own the customer experience from sale though installation and operations and maintenance.

The E.ON connection connects both utility clients and potential solar customers to the Sungevity sales funnel, where it can deliver co-branded quotes. As in the U.S., Sungevity will continue with its model of using "quality-assured installers" rather than opting to vertically integrate.

Birch said that Germany is "a great place to build a network of solar partners." The CEO added that the localized, non-vertically integrated model is "the modern business model."

Installing residential solar in Germany is cheaper than in the U.S., and the typical installation there is about half the size of the average American system. So the typical solar rooftop costs less -- and customers in Germany tend to pay in cash. 

Birch views the high penetration of solar in Germany as an indication of a "highly educated market" that is "ready for a mass offering." He added, "We'll partner with a utility with reach and trust, combined with our scalable platform, to massively scale solar."

According to the GTM Research U.S. PV Leaderboard, Sungevity was the No. 3 solar installer in the U.S. in 2014. We'll soon find out if its success in the U.S. translates well into German.

FIGURE: Leading U.S. Residential Solar Installers, 2014

Source: GTM Research U.S. PV Leaderboard, Q1 2015