Sunrun joins forces with National Grid for rooftop PV push

Sunrun, the second largest US installer of residential solar after Tesla’s SolarCity, has announced a “multifaceted partnership” with UK and US utility giant National Grid, including a $100m equity investment into Sunrun assets.

The deal will see National Grid jointly marketing Sunrun’s solar and storage offerings in its downstate New York service area, with the two companies exploring ways in which distributed energy resources can be aggregated to help balance and optimise the grid. 

As part of its ambitious Reforming the Energy Vision programme, New York is looking to reshape long-standing business models within the electricity sector so that distributed energy resources – like rooftop solar and home battery storage – no longer pose existential threats to traditional utilities.

National Grid is among the world’s largest investor-owned utilities, and the owner of a vast network of power and gas infrastructure in the UK and the northeastern US. The company, listed in London and New York, sells power to customers in Massachusetts, New York and Rhode Island.

National Grid’s $100m equity commitment means it will own a stake in approximately 200MW of residential PV spread across Sunrun’s various US markets, hugely expanding its exposure to operating solar capacity. Sunrun will retain ownership of the assets and continue to service the customers.

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The investment is important because it allows Sunrun to monetise the PV arrays it installs more quickly, rather than waiting years for its upfront capital outlay to pay off through leases and PPAs—a shift many rooftop solar companies are making to help reach profitability sooner.

On the projects in which National Grid is investing, Sunrun says it will receive total upfront proceeds worth 95%-100% of the assets’ total contracted value.

California-based Sunrun, which went public in 2015, installed about 285MW of new PV capacity last year, and is growing faster than its closest rivals SolarCity and Vivint Solar. Unlike those two companies, which also focus on commercial and industrial customers, Sunrun only installs residential solar.

Last year Sunrun launched a combined solar and battery product, known as BrightBox. National Grid’s investment will cover both Sunrun's straight solar installations and its BrightBox solar+storage systems.

The deal “demonstrates Sunrun’s ability to develop new strategic and financial relationships with partners to increase consumer access to rooftop solar while further unlocking value for customers”, says Sunrun chief executive Lynn Jurich.

Sunrun shares rose 5%, to nearly $6.00, on the announcement.

National Grid is not the only European utility investing in US distributed solar, with Germany’s E.ON having backed Sunrun’s smaller rival Sungevity—whose IPO plans were recently binned due to poor investor sentiment in the solar sector.

Among its network of assets, National Grid built and owns the offshore grid infrastructure connecting Deepwater Wind’s 30MW Block Island offshore wind farm to the US mainland, meaning its Rhode Island customers are the first in the country to power their homes with offshore wind power.

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