NRG Energy is on asolaracquisition streak.
The energy giant just acquired VC-funded Pure Energies Group, a 150-employee online solar customer acquisition platform. It's part of an effort to grow NRG’s residential solar business in a competitive and fast-growing market.
Pure Energies' online and phone-based customer acquisition platform provides a fast look at a home's solar possibilities. It's a natural fit for NRG's recent RDS acquisition.
Pure Energies was originally an Ontario-based solar installer and financier that transitioned to customer acquisition after acquiring 1BOG in 2012. San Francisco-based 1BOG had raised $5 million from venture firm New Enterprise Associates in 2010. Pure Energies Group raised $6 million from NEA and NGEN last year. Pure Energies also acquired Seattle’s Cooler Planet in 2012.
In April, NRG Energy added the 475-employee Roof Diagnostics Solar (RDS), the eighth-largest solar installer in the U.S., to its existing installer network. The RDS acquisition by NRG had a similar flavor to Sunrun's acquisition of REC's residential solar unit. The transaction makes NRG, like Sunrun, a vertically integrated solar installer and financier with a direct sales force like SolarCity and the newly-public Vivint.
The market is seeing a mixture of vertically integrated firms, such as SolarCity and Vivint, and hybrid firms, such as No. 2 rooftop financier Sunrun and NRG Energy. The U.S. added 247 megawatts of residential PV in the second quarter, according to the GTM Research U.S. PV Leaderboard.
Kelcy Pegler Jr., former CEO of RDS and now president of NRG Home Solar, said, "We have a ton of momentum" in "educating customers" and "winning at the kitchen table."
He spoke of a focus on "millennials and baby boomers" and the need to educate these groups, especially the boomers. "They just don't want to feel stupid. They like the idea of better, cleaner, more cost-effective power. There really is no sales process -- it's purely educational."
"I think NRG is going to continue to invest in residential solar," concluded Pegler.
Greentech Media Solar Analyst Nicole Litvak notes, "NRG's acquisition of Pure Energies looks very similar to SolarCity's acquisition of Paramount Solar last year. Pure Energies, like Paramount Solar, specializes in generating leads online (thanks in part to the lead generator that it acquired, Cooler Planet) and closing sales over the phone. These capabilities complement the strengths of the former Roof Diagnostics, which acquires a large portion of its customers through its Home Depot partnership."
"NRG Home Solar was the sixth-largest residential solar installer in 1H 2014, according to the Q3 2014 U.S. PV Leaderboard," Litvak said, adding that this only includes systems installed by NRG/Roof Diagnostics, not systems installed by partners and financed by NRG.
At GTM's Solar Summit earlier this year, Tom Doyle, CEO of NRG Solar, said of SolarCity, "We’d love to give these guys a run for their money. It is such an important space for our business."