According to SolarCity CEO Lyndon Rive, "We have to transform the way energy is delivered, and the only way to do that is to speak to millions of people."

That's why solar installer and financier SolarCity just teamed up with Viridian, a retail energy services provider in the U.S. Northeast. SolarCity provides solar power to homeowners at a cost lower than their current electricity rates -- along with free solar panel installation.

Viridian was founded in 2009 and has about 230,000 household energy customers that are already buying electricity in varying shades of green, as well as natural gas. Viridian calls itself "a socially responsible energy company providing clean energy choices at competitive prices."

So in addition to selling green energy, Viridian's sales channel can now offer solar installation and financing.

If this sounds vaguely familiar, it's because over the last few weeks:

  • SolarCity acquired direct marketing partner Paramount Solar for $120 million, incorporating Paramount's "remote and virtual selling" into the SolarCity financing and sales machine. 
  • SolarCity and energy services provider Direct Energy (a subsidiary of Centrica) created an investment fund to finance $124 million in commercial and industrial solar projects. The fund includes $50 million from Direct Energy, one of the largest retail electricity providers in the U.S., in its first solar deal.

The booming distributed energy financier recently announced a goal of 1 million solar rooftop customers within five years.

For companies like SolarCity, solar technology now takes a back seat to customer acquisition technology -- and it's Viridian's network marketing method that got SolarCity's attention. Rive said that SolarCity had looked at a number of potential partners in retail, "but there was no company with as unique a sales method as Viridian."

He said that there is still "a stigma on payback period where people want to know, 'What's the payback?'" Rive said that even some of his friends have asked him the same question. "Are you kidding me?" asked Rive. The payback is that "there is no installation cost and you pay less for electricity."

That concept is "much easier to describe one-on-one, not in a radio campaign," said Rive.

Viridian employs a network marketing method to reach the customer through friends and family, with what it calls a "20,000-contractor network." The program targets New York, New Jersey, Connecticut, Massachusetts, Maryland and Delaware.

Viridian goes after residential, and the company's founder and CEO Michael Fallquist added, "What makes our model so powerful is that it's a warm sale." He said it was about "education and awareness" in the residential market.

Rive concluded, "The synergies are so amazingly aligned."   


SolarCity Installations by Market Segment and Relative Market Shares, 2012-2013E

Source: SolarCity, SEIA/GTM Research U.S. Solar Market Insight report, GTM Research U.S. PV Leaderboard


SCTY Chart

SCTY data by YCharts


Installation data presented in this article is drawn from the SEIA/GTM Research U.S. Solar Market Insight report, and company-specific market share data can be found in the U.S. PV Leaderboard. Note that GTM Research will be publishing a customer acquisition report in the near future.