Consolidation starts to gather pace in the US Solar Residential Market as big companies look for increased reach
Another Major Blow for Thin Film Solar Technology
February 17, 2014Solar Equipment to rise by more than 5 fold in the next 3 years
February 19, 2014US Solar market sees big time Consolidation
Big US installers such as SunRun and Solarcity (SCTY) are rapidly expanding their geographical footprint in the USA by buying other installers and system equipment companies. SunRun has bought REC Solar and other Mainstream Energy companies to expand its base in Colorado. Note mergers and acquisitions by small US residential installers is nothing new. The residential solar market is typically fragmented in most countries due to the low entry barriers. USA has seen the bigger companies grow larger in size, as they have used financial innovation to reach out to more customers. Their competitive advantage has been to secure massive fund (for tax credit) from banks such as Bank of America and companies such as Google. This has led to the emergence of large US solar installers such as SolarCity, SunRun and Sunpower (SPWR). While Sunpower is an integrated manufacturer and global supplier of solar systems, SunRun is a USA centric business.
USA saw a massive growth in solar panel installers with more than 4 GW installed in 2013. This growth should continue in the future as the US market is still vastly underpenetrated. USA solar installers are also strategically buying up racking equipment makers to lower the overall cost of solar system installations. With most of the solar energy price decline being done by lower module costs, the future price declines will be contributed by solar system cost improvements. There is still a very large scope of reducing costs and installation times by use of standardized and innovative racking, mounting systems. The price of USA solar residential installations is still twice that of Germany due to higher solar system installation costs as well the costs of regulatory and legal clearances required.
SunRun, a California solar power development company that is big in Colorado’s renewable energy market, has purchased the residential division of REC Solar, which also has operations across the state.REC Solar has 50 employees in Colorado.
Together, SunRun and REC Solar will be the second-biggest in the state in terms of the number of solar power systems they’ve installed in Colorado, Slocum said.
In 2013, third-party leasing arrangements accounted for 24.7 megawatts worth of solar power systems installed in Xcel Energy Inc.’s operating region in Colorado..SunRun is buying REC Solar, as well as AEE Solar and SnapNrack, from Mainstream Energy Corp., based in San Luis Obispo, Calif.