Lowe's, the home improvement giant that uses Gene Hackman for radio voice-overs, has taken an equity stake in Sungevity and will sell Sungevity's services through its stores.
For Sungevity, it's a big deal. The company emerged in 2007 with the first tool for estimating residential solar systems online. Traditionally, installers had to come out to your house and climb around before they could provide an estimate. By using satellite imagery from Microsoft and its own know-how, Sungevity managed to come up with a way that would be 95 plus percent as accurate as a manual install but cut the total cost of a solar system by 5 percent or more. (Cate Blanchett is an investor. Oi!) Once an estimate is complete, Sungevity then signs the contracts via the internet, and schedules and performs the installation, generally through a subcontractor.
Through the Lowe's deal, Sungevity can reach more customers in its existing territories and start serving customers on a nationwide basis. (Sungevity right now operates in eight states.) Roughly 15 million people traipse through Lowe's every week. And someone that gets lost looking for 5/8ths of an inch self-tapping wood screws or the Genisys gas grill is a prime candidate for solar. The partnership begins this summer.
Beats buying panels off Amazon or at Costco.
Sungevity has a dual personality of sorts. It develops software, but also serves as a general contractor/installer. Being an installer and a software developer presents potential problems, particularly as a company grows. Approximately 30 percent of Sungevity's employees are "project managers," i.e., people who thumb through reams of material to make sure that a given solar installation complies with local codes, qualifies for local rebates, etc. Sungevity installs a megawatt of solar some months. As it gets bigger, one could see the temptation to focus more on software than actual installation. On the other hand, the bulk of the revenue comes in installation. How the business operates and where it focuses will be one of those issues it will likely have to hone in the future. Who knows -- Lowe's could even become a prime subcontractor for Sungevity.