Upfront solar energy capital investments remain a key barrier for businesses, especially small- and medium-sized firms, that want to go solar.
A new partnership between REC Solar and Sungevity aims to address this while helping businesses of all sizes reduce energy costs.
“This partnership will afford small and medium businesses to save money on their energy costs because we will be introducing the REC Solar power purchase agreement to them so they can lock in their electricity rates over a 20 year period,” says Sungevity chief development officer Dave Dunlap.
In an interview with Environmental Leader, Dunlap and Alan Russo, REC Solar senior vice president of sales and marketing, explained how the partnership will benefit commercial customers — and the two partner companies themselves.
Russo says while solar costs go down every year, energy costs typically increase. “If you lock in your energy rate now, you’re going to be saving more and more, but the big advantage is zero upfront costs, ” Russo says. “A power purchase agreement is a terrific option for a small or medium business that doesn’t want to write a check [for a solar installation] or take out a loan but wants to save money now and in the future.”
REC Solar operates solar projects and sells the energy to commercial customers with systems typically larger than 200 KW. Duke Energy, the largest utility in the US, owns the majority interest in the California-based solar provider, which Russo says gives REC Solar an “unprecedented amount of staying power” in the solar industry, which is currently under stress as solar energy giant SunEdison reportedly prepares to declare for bankruptcy.
Sungevity is also a California-based solar provider. About a year ago it expanded its business from strictly residential solar services to the commercial market, focusing on what it calls the “underserved small business sector,” or systems sized between 50KW and 200KW.
Under the agreement, Sungevity will offer the REC Solar power purchase agreement to its customers. REC Solar will provide solar power and energy services for larger-scale commercial customers, while Sungevity will work with small- and medium-sized commercial markets.
The partners say that by working together, they will be able to share sales leads appropriate to each company’s market focus, which will help reduce “soft costs” and result in more affordable solar energy for commercial customers.
“Soft costs in the solar industry — customer acquisition costs, how much money you spend to get a customer — are huge,” Dunlap says. “As REC Solar finds leads that are smaller than they can manage, we will close those deals,” Dunlap explains. “And we at Sungevity inevitably will get into deals that are too complicated or large for us and we will hand them over to REC Solar, which further reduced their soft costs. By focusing on different customers, this will help keep costs down.”
In addition to helping customers save money on energy costs, which Dunlap says is “the value proposition to any solar customer,” the new partnership also helps commercial customers “do something good for the environment,” Russo says.
“Customers are struggling with what to do about the climate,” Russo says. “The Paris climate talks are all over the news, along with the water crisis in California and energy prices. This is a time when environmental and energy issue are playing out in the headlines and customers are struggling to figure out how to make their budget go as far as possible, This partnership makes it easy for customers to do what is right for the environment and right for their budget.”
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