By Brian Eckhouse
For Sunrun, buying Vivint Solar Inc. is a way to accelerate a key objective: clustering thousands of batteries in dense areas that the company can tap to provide power to local electrical grids.
That focus shows how rooftop-solar providers are maturing. Installing batteries along with panels gives them a supply of dispatchable electricity that can be sold. As a result, companies that once were viewed as a disruptive threat to utilities are now increasingly partners to them.
“The future of the business is in smart solar – networking our systems together,” Edward Fenster, executive chairman of San Francisco-based Sunrun, said in an interview Wednesday.
Residential solar panels and batteries are now seen as assets for both homeowners and utilities, said Joe Osha, an analyst at JMP Securities. “If you can roll up a bunch of them, you can monetize them in more than one way.”
Sunrun announced its $1.46 billion takeover of Blackstone Group Inc.-backed Vivint last week. Fenster said one of Vivint’s strengths is its direct-to-home marketing. He expects that will help the combined company reach more customers.
“Having significant customer density is important,” Fenster said.
Sunrun has already agreed to provide stored power to utilities, after breaking into New England’s capacity market last year. That was the first time battery-backed solar had been a significant participant in ISO New England Inc.’s annual forward capacity auction.
The company has since agreed to provide its services to grids in parts of Northern and Southern California, Hawaii and in counties north of New York City. Fenster said he expects the company to make further announcements in the near term, and that revenue from these grid services has the potential to make each individual rooftop customer about 30% more valuable.
Next steps for the company include offering battery systems to existing customers that only have solar panels, and potentially expanding its product line to consumers.
“We want to be the energy company that is leading the way for home electrification,” he said.