Why Business Development is not a Dirty Word

analysis solar deals

It feels like a lifetime has passed since SolarCity went public in December of 2012, when the industry breathed a collective sigh of relief as the wider marketplace snapped up shares during the IPO. The wider investment community gave its nod to the business model backed by the solar lease. All boats rose on that tide. What has come to light since then as the wider world has been scrutinizing SolarCity's books is the unbelievable cost of customer acquisition in the residential solar space.

By now many folks following solar closely have seen the stats from Germany as outlined in the Lawrence Berkeley National Laboratory study on soft costs back in November of 2012. Check out the highlights by Cleantechnica and Greentech Media. "Profit, overhead, and other residual costs" were closely followed by customer acquisition cost as the top offenders in why the installing cost of solar in the US is nearly twice that of Germany's. However, this doesn't need to be another horse-beating session on how policy changes and soft cost reduction goes hand in hand. That ground has been pretty well covered. It would take a massive political effort to streamline the policy issues around solar. That effort cannot solely determine the success of lowering solar's soft costs. Entrepreneurial thinking will always trump hand wringing.

Look back at the moves SolarCity has made over the last few years as they have massively scaled their company and operations, especially the closing of very high-profile deals like SolarStrong (military contract to roll out solar on 120,000+ military housing rooftops), and the recent acquisition of Paramount Solar (due to Paramount's customer acquisition strategy).

The go-to-market strategy for solar is now clearly starting to shift from acquiring individual customers and designing custom systems to a channel and menu options approach, where existing ongoing consumer transactions (like your Netflix account or similar) will be the gateway to the residential solar sale and with a smaller number of options.

With this comes an exciting new career territory for many residential solar companies: business development.

Business development. Not a dirty word. It is the brownie sundae with cherry on top of deal making and negotiations. The top-tier solar leasing companies will continue to grow and create lower cost channels for customer acquisition through strategic partnerships. Watch this space and watch what the Tier 1 players are doing there.

Who would make a likely channel partner for a residential solar company? Home builders? HOAs? I'm sure you can think of a few.

Posted on September 9, 2013 and filed under analysis.