Dive Brief:
- SolarCity will offer discounts of up to $400 on solar installations in 84 U.S. metropolitan areas through an online coupon offer with Groupon.
- The discount is about the same as three to four months of free electricity and is in addition to the zero dollars-upfront, maintenance-free lease deal typically offered by SolarCity, the leading U.S. residential solar funder and installer.
- SolarCity said it considers the trial limited Groupon deal, the first such offer in residential solar, as a form of inexpensive lead generation because many of the bargain shoppers who respond to it will likely not have the high FICO score and interest in a 20-year SolarCity lease/power purchase contract that will actually turn them into customers.
Dive Insight:
SolarCity and others in third party ownership solar are working to cut the costs of customer acquisition. Competitors like Sunrun, Sungevity, SunPower, and Vivint will be scrutinizing the results of the Groupon offering.
The per-customer cost of acquisition for SolarCity has fallen from around $8,000 to around $3,000, or $0.49 per watt, for a typical 6-kilowatt residential solar system. But that is still high compared to Germany’s $0.07 per watt average solar customer acquisition cost and SolarCity is aiming for a below $100 per customer acquisition cost.
SolarCity will need significantly increased sales to get to its targets of one gigawatt of installations by the end of 2015 and a million rooftop solar customers by the end of 2018.
In pursuit of customers, SolarCity last year bought Paramount Solar for $120 million to acquire its direct marketing and sales force, has been selling in Home Depots since 2010, and this year launched sales in Best Buy stores.
