Third-party-financed residential solar -- offering homeowners rooftop solar at no cost, then reaping the benefits of tax incentives and economies of scale -- is all the rage these days. California saw third-party solar outpace homeowner-owned solar for the first time last year, with contenders like SolarCity, SunRun, Sungevity, Clean Power Finance, OneRoof Energy, and others vying for the new market.
It appears that cheaper power bills for little or no money down is an attractive offer for many homeowners. But could new approaches open the market up even further?
Gen110, a San Francisco startup with 70 employees, 11 offices in California and about 2,000 customers for its solar-backed energy bill reduction service, says yes -- if you can pick out the right customers. On Thursday, Gen110 announced an investment of undisclosed size from Kleiner Perkins Caufield & Byers to expand its “energy concierge” concept to broader markets, along with unspecified “business development support” from the big green venture capital firm.
It also announced that it will be using SunPower panels, and SunPower's financing program, in projects in California's Central Valley, adding the high-efficiency PV maker to a list of partners that includes solar financing startup SunRun and roofing and solar installer PetersenDean.
The startup works with solar installers, developers and financiers on the customer engagement side of the business, from picking out the right customers to target to getting them to sign up for a long-term relationship to lower their energy bills, CEO Jason Brown said in a Wednesday interview.
“We’re not a solar company; we’re a distributed energy company,” he said. Gen110 has partnered with big third-party solar players, but it’s also looking at future applications of on-site combined heat and power systems, energystorage and other technologies that could provide homeowners their own power, Brown said.
That’s because Gen110’s main relationship with its customers is as an energy services company of sorts, he said. The startup’s core IP resides in analyzing the world of potential customers in a market -- in this case, California -- and picking out those that pay higher bills. Those are typically owners of larger homes, though Brown said there’s a mass market for the service as well, as long as you pay about $120 or more per month for electricity.
From there, Gen110 hits those customers with a marketing and customer service experience that includes home visits to lay out just how a no-cost solar array -- whether via a power purchase agreement, financing plan, lease or another structure -- could reduce the customer’s power bills, not just today but in the future, he said.
These customers represent fresh markets for the solar industry, which has depended so far on targeting so-called “green” adopters, rather than doing market analysis to identify economic needs, Brown said. He wouldn’t provide much more in the way of details on the “big data” analysis that goes into this process, saying that it’s a core part of Gen110’s intellectual property.
Gen110 makes money via revenue-sharing agreements with its partners, Brown said. That could include energy efficiency service providers and others interested in ways to isolate and target customers who stand to see the most economic benefit in being sold a third-party-financed project or system, he noted.
Typical savings add up to about $50,000 over 20 years, he said. But while some customers want to get involved in how much they’re saving, a good deal of them just want to get a cheaper, fixed rate for power and leave the rest in Gen110’s hands, he said. The startup is concentrating on California right now, though Brown said it could expand to other states and regions.
Just how Gen110’s offering will fit into the ecosystem of third-party solar developers remains to be seen. Flagship third-party solar startup SolarCity, which took the top spot for U.S. residential solar market installation in the first nine months of 2011, certainly spends a lot of money targeting and marketing, and so do its competitors. The proof in the concept will no doubt lie in whether or not Gen110 can land more partners like SunPower to use it.