The Power of a Business Model

What does actress Cate Blanchett know that you don’t?

The power of a business model.

Blanchett was an early investor in Sungevity, which has been gaining serious market share in California and just raised $15 million in order to expand operations to the U.S. East coast. thanks to a lease-based business model and some savvy marketing.

The company’s press releases, posted here at RenewableEnergyWorld, include public efforts to put Sungevity panels on the American and California governors’ mansions.  The company blogged here about powering the home of the Maldives’ President.
Marketing isn’t why this has all worked, however. It’s worked because banks have decided that backing Sungevity leases is good business. The company pitches its panels with a 10-year contract, which assures the panels will be paid for, then advertises hard savings on electrical bills it says makes overall costs lower than current bills.

Sungevity is not depending on utility companies’ to pay a fair price for the excess electricity its panels create. It works with any form of net metering. DC power from the panels is turned into AC power by an inverter, and the excess given back to the grid.
Its inside page tout environmental dangers, patriotism and rising electric bills, but the bottom line is that this is supposed to work on a consumer’s bottom line.

Enter a California address into the site and up pops a Bing map with the address circled, along with a pull-down menu asking for the roof’s square footage and what it’s made of, your current electrical provider and what you’re now paying. Enter contact information on a second screen and you’re on your way – the start of the process takes just a few minutes.

That’s another important part of the model. Sungevity hides complexity. It’s not available everywhere, but where it is around it’s a good deal.

As the company continues to scale it will become increasingly difficult for a competitor to come in and copy this model. And its profitability should increase as Sungevity is able to buy national advertising and get the attention of national media.

The profits aren’t nearly so cool as winning an Oscar but Blanchett will take them. And you can take a lesson from her. Deliver a compelling business model and you can do very well in this business.

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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog,, in 2007.

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