![]() ![]() In early July, Sunrun announced that it was planning to buy rival Vivint Solar in an all-stock deal valued at $3.2 billion. "They'll spend on emailing their customer bases, saying there's this opportunity available."Ĭyrus McCrimmon/The Denver Post via Getty ImagesĪcquiring Vivint Solar would allow Sunrun to massively scale its VPP model "As these grid services programs get more traction, we have the utilities marketing on our behalf," Jurich said Monday. Drumming up leads is one of the largest costs for a rooftop solar company. The VPP model offers another major boon to Sunrun: Partner utilities help generate new customers. Some of that additional income will be passed on to customers, the company says, adding that the VPP "will only make use of this battery capacity on the grid when the customer is not relying on it for backup." "The exact payment structure varies depending on the utility and the program," a Sunrun representative told Business Insider. In certain regions, such as Southern California, utilities will pay Sunrun for providing electricity to the grid through its virtual power plant. "What we're doing is going across the country, trying to find the areas that would most benefit from these virtual power plants, and really helping change the rules and pilot programs that prove these assets work," Jurich said on the call. "The markets have not been necessarily designed to have a mechanism where they can pay for the value that the battery adds."Ībout 10% of the regions in which Sunrun operates are starting to pilot and test virtual power plants, Jurich said.Īfter the California utility Pacific Gas & Electric shut off power to more than a million people, the rooftop solar company Sunrun saw a spike in its battery sales. In 2019, the company had about $860 million in revenue, according to public filings. The company has not disclosed the total value of its grid services contracts. On a call with investors Monday, Sunrun's chief executive, Lynn Jurich, said the company now has 10 grid services contracts, in addition to contracts valued at $50 million in the pipeline. Sunrun is among the companies pioneering the virtual power plant (VPP) model, and it's a small but growing segment of the firm's business. When demand for electricity is surging and expensive, such as in the evening when people return from work, Sunrun can inject energy from that virtual power plant onto the grid, and get paid for it by utilities that would otherwise have to meet that demand with expensive-to-run conventional plants. And utilities are the customer.Ĭlick here to subscribe to Power Line, Business Insider's weekly energy newsletter. Sunrun now sells that aggregated energy - known in industry jargon as a virtual power plant - as a product of its own. String together the batteries in hundreds of homes and the power they produce can start to act more like a traditional power plant on the grid. One battery alone can power key appliances in your home when the electricity goes out. ![]() Thousands of Sunrun customers now have batteries attached to their solar arrays. They're also opening up a completely new stream of income - in this case, from electric utilities. But in the last few years, the San Francisco-based solar giant has begun focusing on another product in its growth strategy: home batteries.įueled, in part, by recent power outages, Sunrun's battery sales aren't just bringing in revenue on the margins. Sunrun built its business on the sale of solar panels that go on your roof. For more stories like this, sign up here for our weekly energy newsletter, Power Line.Batteries, which some customers buy alongside solar panels, are an increasingly important part of Sunrun's business and critical to its deal to acquire rival Vivint Solar, announced earlier this summer.Virtual power plants help utilities handle peak electricity demand. The company has signed contracts with several utilities, which pay Sunrun for the power those power plants produce.Sunrun strings together home batteries across sections of its customer base to form what are called virtual power plants.Rooftop solar giant Sunrun has found a new and growing stream of revenue stemming from utilities.
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