Nahua, NH — Two major players in the U.S. solar industry have joined forces in a move that will leave each one stronger and better able to flourish within its own market sphere. REC Solar announced today that is has sold its residential unit, consisting of Mainstream Energy, AEE Solar and SnapNrack, to longtime partner Sunrun.
Through the sale Sunrun gains pipeline and a thriving residential business. REC Solar announced last week that its residential business had grown 65 percent in 2013, a rate higher than the overall residential solar sector growth rate (estimated to be 49 percent) in 2013. In addition, the move positions Sunrun closer to its competitor SolarCity as now Sunrun may be able to boast its own sales and installation division. Last fall, Sunrun announced a retail partnership with Nest thermostats and experts agree that strong retail partnerships are key to solar customer acquisition. Readers may recall that in early 2014 Nest was purchased by Google. Together with its new solar sales and installation unit and ties to Google, Sunrun will surely be positioned for growth in 2014.
Without the extra burden of managing a residential solar business, REC Solar is now able to focus on its perceived sweet spot: the commercial market. The company has installed more than 100 MW of solar capacity since 2001 for well-known commercial customers such as IKEA and federal government agencies like the Department of Veterans Affairs. In 2013, the commercial solar sector grew by 40 percent and that growth is projected to continue in 2014 and beyond as more and more major corporations recognize the value in going solar. According to REC Solar, the company has 350 commercial projects in 14 states.
Paul Detering, who took the reins of REC Solar earlier this year, brings his expertise in the commercial solar sector to the company. Detering previously served as CEO of Tioga Energy performing many of same duties that he’ll be perfoming in his new role as CEO of REC Solar, he said. “This is an exciting day,” for REC Solar, he said. “I’ve now got a dedicated team that thinks all day, every day about how best to operate in this high-growth market,” he explained. The biggest challenge ahead will be meeting the anticipated growth in the commercial solar sector. Detering said the company is expanding to the East Coast and is working on some innovations around how it goes to market. The company hopes to unveil those new plans soon.
As far as existing REC Solar customers, Detering said they will continue to be served and should expect no change. “All of the warranties stay in place. Nothing changes on that front,” he said.
Sometimes breaking up an entity into two parts makes each part healthier. Based on the value proposition that this deal offers both REC Solar and Sunrun, each entity appears to now have all the tools it could need to line up for success.
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