Sungevity, a Berkeley-based startup that uses Internet and satellite images to reduce the cost of installing solar power on homes, says it’s ready to take on the rest of the state. The company, which has focused mainly on installing solar in Northern California so far, announced Tuesday it has raised $6 million to expand its business in Southern California and the Central Valley.
Greener Capital, a new cleantech venture capital firm, led the round. Sungevity, which launched last year, previously raised $2.5 million from German solar companies Isolventures and Solon, as well as angel investors including actress Cate Blanchett.
Sungevity uses satellite images — and proprietary software — to create online estimates for potential customers without expensive home visits, a process that it claims can cut approximately 10 percent of the cost of selling solar systems. The company has installed 220 systems since its launch, Sungevity President Danny Kennedy told us.
The next step will be to add customer financing to make it easier for new customers to pay for their solar-power systems, he said, adding that Sungevity is aiming to offer financing next year. “We would like to offer them an interactive quote, a box they can click for a pay-as-you-go option to pay monthly,” so that customers could find out online exactly how much they would pay — and how much they could expect to save — each month, he said. After Sungevity pins down this financing, “the brakes are off and the rocket ship takes off,” Kennedy said, referring to the company’s potential growth.
Setting up this financing will be one of the first tasks for Chief Financial Officer Charles Ferer, one of three new hires Sungevity also announced Monday. Aside from Ferer, who previously held the same position for SolarCity, California’s largest solar installer, the other new executives include Chief Operating Officer Daphne Li, formerly of ADP, Apple and DoveBid; and Vice President of Engineering Ariel Tseitlin, the founder and former CEO of software consultancy CTOWorks. Sungevity earlier this year launched a new line of business in selling its software as a service to other installers.
In addition to the new executives, the company on Monday announced it has doubled its sales team, growing from 15 employees at its launch to 32 today. While some of Sungevity’s new money will be paying for its new hires, most of it will go toward marketing and expanding sales throughout the state, Kennedy said. “We’re making good revenues and growing well on our own steam,” he said. Kennedy didn’t disclose the company’s latest revenue figures, but the San Mateo County Times in October reported the company had earned $2.5 million in annual revenue.
One potential shadow over Sungevity’s plan to expand in California could be the uncertainty over net metering in the state. Net metering, a policy that enables utility customers to feed solar electricity back into the grid, offsetting their electricity bills, is limited to 2.5 percent per utility in the Golden State, and one utility, Pacific Gas and Electric, is approaching that cap.
Advocates say rooftop solar projects for homes, businesses, schools and municipalities will stall if the policy isn’t extended. Kennedy agreed that net metering is critical to the solar industry, but says he’s confident that state politicians will raise the cap. He also added that Sungevity would easily be able to shift to other states if that didn’t happen.