Shine On: Solar Power for the Masses
Since New Jersey-based Skyline Solar started installing home solar systems for Sungevity Inc. in early 2014,
Skyline has expanded from six employees in one state to 130 workers in six states.
“We built our company to service Sungevity, and their business is in large part why we’ve been able to grow,” says Ryan Lane, Skyline Solar co-founder and CEO.
Home solar power is not only driving a transformation toward a low-carbon economy — the industry is also driving job creation across the United States. In 2014, there was a nearly 22 percent increase in employment in the solar industry over 2013 numbers. With 174,000 jobs, more than twice as many people were employed as solar workers than as coal miners, and the growth has continued to today.
Sungevity is a technology company with solar-design software and specialized financing that support a network of solar panel installers, suppliers and banks in converting residential and commercial customers to solar power. Based in Oakland, California, the company provides services to 13 other states and Washington, D.C., as well as the Netherlands, Germany, Belgium and the U.K.
Since its founding by Andrew Birch, Danny Kennedy and Alec Guettel in 2007, Sungevity has sold about 25,000 home solar systems across the United States and Europe, and estimates it has offset about 5 billion pounds of carbon over the lifetimes of its systems.
Its success designing and selling renewable energy systems and residential solar panels has earned it a spot as a 2016 Best for the Environment honoree.
“We’re a platform business, and I can point to 40 businesses that have created hundreds of jobs,” says Dermot Hikisch, Sungevity’s director of corporate services and sustainability. “So we’re not driving the local guys out of business. We provide training and best practices and discounted equipment they might not otherwise have access to.”
At the time of this writing, Sungevity is planning to accelerate its growth and scale its mission by merging with the asset-management firm Easterly Acquisition Corp. Sungevity will become a public company if shareholders vote to approve the change.
High Tech for a Low-Carbon Economy
Homeowners can log in to Sungevity’s online platform to request an iQuote and generate customized solar-system designs and prices based on satellite images and aerial photography. To generate a quote, customers just have to type in their address.
Sungevity designs the home solar systems remotely and sends the designs to local residential solar panel installers. Of the technology, Hikisch says, “It gives us the ability to generate a very accurate proposal in almost real time without having to initially send a representative to a customer’s home for what can be a time-consuming process.” Sungevity claims to provide low-cost, flexible plans by offering customers loans that last 10 or 20 years at a locked-in rate, the option to lease or purchase their panels, and a mobile app to track their solar system’s performance.
[caption id=”attachment_5246" align=”aligncenter” width=”500"]
Sungevity designs solar systems, such as the one installed in the Bay Area in Northern California, using satellite images in lieu of a physical visit from a representative.
Photo by Maku[/caption]
Last year, Sungevity added a home-battery business through a partnership with sonnenBatterie. The battery, comparable to Tesla’s Powerwall product, enables customers to store solar energy and use it as backup power during outages or when the sun isn’t shining.
An Environmental Thread
Sungevity invests in its employees’ well-being in several ways, including an on-site commuter bike program. A few years ago, the company switched to offering organic produce in its cafeterias, even though that move doubled the company’s food costs.
The company pays for 100 percent of its employees’ health benefits, provides a reimbursement allowance for professional development, free access to all lynda.com courses, and encourages employees to volunteer with local charities. Part of Sungevity’s success, its executives believe, lies in its ability to recruit — and retain — a vital workforce. “Our mission, robust benefits package and B Corp status all contribute to our successful recruiting efforts and to employee retention,” says Susan Hollingshead, chief administrative and people officer.
Sungevity reports giving more than $2 million to nonprofit organizations, including the Alameda County Community Food Bank, Factory Farming Awareness
Coalition and the American Diabetes Association. Each time one of Sungevity’s partner nonprofits refers a solar customer to the company, Sungevity donates $750 to the group.
Through its partnership with Empowered by Light, Sungevity’s Every Child Has a Light program donates a solar light kit to a school in need in Zambia for each new U.S. residential customer. (Note: Sungevity’s relationship with Empowered by Light is now based around an employee-led volunteer program instead of direct donations.)
Hikisch acknowledges that although there can be short-term challenges related to things like vendor selection, he believes in the long-term benefits from operating the business as conscientiously as possible and supporting good causes.
“Creating responsible, cooperative solutions might be a challenging path initially, but you can get cost-effective business solutions,” he says.
Extending Its Rays: Sungevity Merger with Easterly Acquisition Corp.
Sungevity executives say the merger with Easterly Acquisition will help spread the company’s services even further. The merger, which is expected to give Sungevity an implied initial market capitalization of $607 million if there are no redemptions, comes at a time when the solar industry is growing rapidly. Sungevity would receive $200 million to help it expand.
Some U.S.-based solar companies have experienced significant financial challenges trying to grow rapidly to take advantage of the expanding market. SunEdison, for example, filed for Chapter 11 bankruptcy this year after making a series of expensive acquisitions in an attempt to keep up with demand for new solar systems. While Skyline Solar’s Lane is optimistic that Sungevity’s merger will lead to more business for his company and other solar installers, he’s also cautious about the implications of public ownership.
“It’s potentially good and bad,” he says. “Right now they’re insulated from the market to a degree.” But by going public, he says, Sungevity would become susceptible to the demands of investors, which could affect how it operates. However, he also points out that because Sungevity has a simpler business model — with no equipment or installation crews of its own — going public could result in better outcomes.
“It creates the opportunity for people like me who believe in the solar-platform model to invest in that,” he says.
Note: The financial details of the initial market capitalization have been updated since printing.
Read the full list of best for the environment honorees.