December 5, 2017 | By RGR Marketing Blog

Will SunRun’s Minimally Diversified Strategy Pay Off in the Long Run?

At first there were several startups in the solar sector; then there were two front-runners and all the others. It seems like only yesterday that everyone was comparing SolarCity and SunRun to see whose business model would triumph and land the major chunk of the booming solar market.

Would it be SunRun with its primarily lease-based strategy that relied on local installers to complete its transactions, or would it be SolarCity with its structure-heavy approach that relied on a primarily purchase-based strategy?

Over the course of the six years between 2010 and 2016, no real winner emerged. In fact, SolarCity and SunRun together didn’t really dominate the market; they were just the two front-runners. And while SolarCity drew most of the press’s attention thanks to Elon Musk’s involvement with their board, SunRun quietly diversified their market strategy.

Then Tesla bought out SolarCity, in what many market analysts called a buy out and the SEC began looking at both companies as the market softened a bit. In the year that’s followed, both companies have claimed to be healthy and growing.

The Tesla SolarCity Strategy in 2017 and Beyond

Over the course of the last year, Tesla-backed SolarCity has made some huge moves, doubling down on its general strategy by building a two-gigawatt per year plant in Buffalo, launching a new Powerwall product, and by designing and preselling a new series of solar roof tiles.

They are the biggest, if not in terms of market share, then at least in terms of power production and diversified product offerings. One might think that this will lock up the market for them going forward. But a tremendous amount of their success depends on ongoing tax credits and wide-spread adoption of their products.

The SunRun Strategy in 2017 and Beyond

SunRun, on the other hand, has spent the last several years slowly growing its certified partner network, selling leases and purchased systems while driving the market into more and more areas throughout the country (and abroad).

SunRun has worked to balance the ratio of leased systems to purchased systems that it is selling, and has only really received one major setback—having to pull out of the Nevada market following that state’s revision of its net-metering policy.

While SolarCity and Tesla have been innovating, SunRun has seemed content to play to its strengths and grow more organically.

The Takeaway for Your Solar Business

It’s too soon to say if Tesla and SolarCity can manage to dominate the market with their new offerings, their soon-to-launch roof tiles, and whatever else they may have in development. SunRun may not look like they’re up for fighting for an equal share of the market, but analysts have counted them out of the game before.

The logic seems to be that SunRun is too reliant on income from leases vs. purchases and any day now, their earnings will fall short of predictions as the market tightens and consumers decide to remove their systems rather than renew their leases. Well, only time will tell – in the interim, your business may be well to hedge your bets and work towards selling solar leases and all-out purchased systems.

If you’re looking to supplement your current prospect base by buying high quality exclusive solar leads, get in touch with RGR Marketing today. We’re here to help your business meet its sales goals!

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