Understanding the Residential Solar Ecosystem, Part 2

Having such a fragmented process for closing a customer, installing the system, and providing financing can lead to inefficiencies and slow down the sales cycle. Because of this, the market has begun to consolidate across these areas as solar providers find that being vertically integrated can lower costs and maximize growth rates.

We can break down most of the recent M&A activity into a few categories.

1) Acquisition of lead generation and sales companies

As discussed in Part I, the ability to acquire customers cheaply and efficiently has proven to be a rare skill among installers. The fact that installers have had to turn to third-party originators is a testament to this challenge.

However, it’s also very expensive to pay for another company to close a customer. For this reason, one of the most common types of M&A deals over the past two years has been the acquisition of companies that are particularly good at sales. These include both originators (such as Paramount Solar, the phone sales company acquired by SolarCity in 2013) and lead generators (such as Clean Energy Experts, acquired by Sunrun this year). There is now a growing group of companies specializing in door-to-door sales (several founded by former Vivint employees) that are shaping up to be the next acquisition targets.

read more at: http://www.greentechmedia.com/articles/read/understanding-the-residential-solar-ecosystem-part-ii?utm_source=Solar&utm_medium=Picture&utm_campaign=GTMDaily

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