This article originally appeared on Greentech Media in August 2019.
A high-profile solar-homebuilder partnership has emerged from the flurry of activity surrounding California’s new solar home mandate, which goes into effect in 2020.
Residential solar provider Sunnova and PetersenDean, a California-based company that installs roofs and solar, will work together on solar and storage leases and power-purchase agreements in the state. California’s new policy requires solar installations on new residential buildings under three-stories.
“Our goal in the marketplace is to be able to provide options to builders and their homebuyers,” said Judson Diehl, PetersenDean’s vice president of builder solar sales.
The partnership allows PetersenDean to offer Sunnova financing for “zero-down” systems. The roof builder will continue to offer its own financing for systems that customers choose to own outright.
“Historically, zero-down service providers forced the builder to buy the system through them,” said Diehl. “[Now], the builders are allowed to buy the system directly through us rather than having to buy it through the service provider, which is a more affordable option.”
Last year, PetersenDean installed about 2,500 roofs a month in California. The company has more than 700 full-time roofers and solar installers working in the state and a client base of more than 220 builders. PetersenDean said its deal with Sunnova is the only solar service provider partnership it has solidified in California.
Sunnova told Greentech Media that working with PetersenDean on engineering, procurement and construction aligns with its channel-partner-focused business model.
Offering systems through a well-established homebuilder should also provide cost-cutting efficiencies. Sunnova already has lower customer-acquisition costs (between $0.45 and $0.73 per watt according to Wood Mackenzie Power & Renewables) than the largest installers because of its reliance on local and regional installation partners.
The only option: Solar
PetersenDean’s Diehl recognizes the “huge problem” of customer-acquisition costs in the residential solar market. Soon in California, customers building new homes won’t have a choice about whether to add solar. Creating a through-line between builder and solar company offers Sunnova customer leads with little added outreach.
Though California’s new law has added urgency to these types of partnerships, solar companies have worked with homebuilders for years. When California’s new home solar law passed, Greentech Media reported that SunPower was already working with 13 of the state’s top 16 biggest home builders and had deployed 30,000 new home systems. In its latest earnings call, SunPower CEO Tom Werner said the company has a backlog of more than 38,000 new homes.
In recent public statements, other top residential solar installers have also noted ongoing conversations with California homebuilders.
During Sunrun’s latest earnings call, CEO Lynn Jurich said the company is engaging with “half of the top 10 homebuilders in California.”
On his company’s Q2 earnings call, Vivint CEO David Bywater said he is “pretty bullish” about the possibility of selling through homebuilders because of cost efficiencies associated with that sales channel.
The market presents a big opportunity. According to PetersenDean, California adds between 80,000 and 90,000 new single-family homes each year. Between 12,000 and 15,000 of those homes have solar installed when they’re built, meaning significant growth potential for residential providers in the state.