Sunrun’s $3.2 billion Vivint Solar bid challenges Tesla’s energy ambitions – ProWellTech
Tesla 2014 acquisition of SolarCity it has transformed the electric vehicle manufacturer into the biggest undisputed protagonist of residential solar, but that lead has constantly eroded when its main competitor, Sunrun, has gone ahead with more aggressive plans. Now with the $ 3.2 billion acquisition of the residential solar installation company, Vivint Solar, Sunrun is seeking to consolidate its place in first place.
From the very first days of Tesla Elon Musk he tried to define the company as an energy company rather than just a manufacturer of electric vehicles. When Tesla made an offer of $ 2.6 billion for SolarCity, the move was seen as the culmination of the first phase of his “master plan”, which asked Tesla to “provide zero-emission electricity generation options.”
Now that plan faces an important test by a publicly traded competitor that focuses solely on providing residential solar energy and on the ability to cut costs for its panels through greater scale efficiency, according to analysts who monitor the solar energy sector.
“Sunrun it’s going to be really crazy, ”JMP Securities analyst Joe Osha told Bloomberg News. “They are clearly looking for ways to achieve scalability and efficiency.”
In fact, the combined companies will save approximately $ 90 million annually through operational efficiency, according to a Sunrun statement. And economies of scale will give companies even more leverage when they contract with utilities to power the electricity grid.
As Sunrun acknowledged in the announcement of the Blackstone-backed Vivint acquisition, the combined customer base of 500,000 homes represents over 3 gigawatts of solar resources. This figure still represents only the 3% penetration of the total residential solar market in the United States.
Sunrun had already won Tesla for first place in residential solar installations and together the two companies account for 75% of the new residential solar leases each quarter, according to Bloomberg NEF data.
“Americans want clean and resistant energy. Vivint Solar adds an important and high-quality sales channel that allows our combined company to reach more families and raise awareness of the benefits of home solar and batteries, “said Sunrun CEO and co-founder Lynn Jurich in a statement. “This transaction will increase our scale and grow our energy service network to help replace centralized polluting power plants and accelerate the transition to a 100% clean energy future.”
Although the $ 1.46 billion Sunrun stock (and taking on about $ 1.8 billion in debt) creates a huge competitor in Tesla’s solar sector, there is an opportunity for Tesla to sell more. batteries through its residential solar competitor.
Sunrun and Vivint will likely push their customers to add energy storage to their solar installations and this means using Tesla Powerwall batteries or their own Brightbox batteries produced in collaboration with LG Chem .
Investors responded to Sunrun’s latest move by pouring money into the stock. Sunrun’s shares rose by over $ 5 in midday trading.
“Vivint Solar and Sunrun have long shared a common goal of providing clean, affordable and durable energy to homeowners,” said David Bywater, CEO of Vivint Solar, in a statement. “Joining forces with Sunrun will allow us to reach a larger number of customers and accelerate the pace of clean energy adoption and network modernization. We believe this transaction will create value for our customers, shareholders and partners. “