There was a big acquisition in the residential solar space this week and who, just a few years ago, could have imagined such a thing would be possible?
It really is a sign of the rapid growth of this market, which hardly existed before the end of the last decade, that industry heavyweight SolarCity would go out and spend around $120 million to buy Paramount Solar. SolarCity CEO Lyndon Rive said Paramount was scooped up because it has “the best virtual sales organization in the solar industry, with an extraordinary ability to acquire customers at a low cost.”
And that’s what it’s all about right now. With a hefty 30 percent investment tax credit from the federal government leading the way, incentives combined with innovative lease and power purchase agreements are helping to grow the residential solar market at a rapid rate. Plus, prices are dropping and a report earlier this week said they’re likely to continue to do so.
Still, just a tiny fraction of the potential market has been tapped, and SolarCity clearly in Paramount, which has been in a relationship to send customers to SolarCity for , saw the chance to bolster its ability to compete for those new customers. The deal will also bring Paramount Equity CEO Hayes Barnard – yeah, that guy on that radio – into SolarCity as chief revenue officer in charge of sales and marketing organizations and Ben Van de Bunt onto the board of directors.
Paramount was already in a relationship with SolarCity to drive customers its way, so these folks know each other well.
“We expect the addition of Hayes, Ben and the Paramount Solar team to help us attain our goal to reach one million customers in the next five years at an even lower cost than was previously possible,” Rive said.
SolarCity said it expects modest gains from the acquisition, expected to close in September, this year, but then really kick in next year. The company said it great at 144 percent in the most recent quarter, twice the national residential solar market rate of 60-70 percent, and added that it had “three times the market share of our next competitor in 2012.”