The results have been nothing short of mind-blowing, and the people who are buying in are not who you would think.
Sunrun’s Lynne Jurich helped create a new industry–selling solar instead of as an expensive home improvement.
Stanford business school grad Lynn Jurich has always been an environmentalist, but after spending a summer in super-polluted China, she realized she really needed to get in the game. The global energy crisis is “the biggest problem our generation has to solve,” she says. “By 2030, we’re predicting the world will use twice as much energy as it does today. You just can’t avoid the economic and environmental damage.”
So in 2007, Jurich left behind her career in finance and venture capital to join fellow Stanford grad Ed Fenster and launch Sunrun, now the nation’s leading home solar company. “The utility industry and how energy is delivered had not changed in a hundred years,” says Jurich. “The key innovation we brought to the market was delivering solar as a service.” In a nutshell, Sunrun pays for the panels and the installation, and sells the resulting electricity back to homeowners at a rate that’s locked in for 20 years. “Imagine if you’d installed a gas tank in your backyard 20 years ago, when gas was $1 a gallon, and you could buy gas for $1 a gallon for twenty years?” Jurich says. Another analogy: It’s like Forever Stamps, but for your electric bill.
Starting a residential rooftop solar company (a.k.a. “distributed solar”) took the Sunrun team into uncharted waters, and Jurich will admit the learning curve was steep. “The good news is there was nobody who really knew much, which made it a little less intimidating,” she laughs. Eventually, they learned the technology was perfect for their business model: Unlike wind, for example, solar is peak-producing and requires little storage, and the declining price in panel hardware made the idea of leasing equipment to consumers cost-effective. Raising capital also came naturally, as the pair of finance vets turned to the venture capital world for their operating budget; they then asked giant banks to finance the project sums, like hardware and installation. Of course, with the latter, they faced what Jurich calls a “chicken or the egg” problem: “We had to get a lot of things up and running simultaneously,” she says. “You have to aggregate enough customers to make banks interested, but it’s hard to aggregate the customers with no reputation. You’re literally asking customers to trust that you’re going to provide energy for twenty years. So the biggest issue was, ‘Okay, we know this works long-term, but how do we make these initial few deals prove it?’”
via FastCoExist – Whitney Pastorek
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