Business model of Sunrun

Customer Segments

Sunrun is dedicated specifically to bringing solar energy solutions to residential customers in the US.  The Company targets general consumers across multiple demographics, in particular environmentally conscious people across a range of demographics.

The Company primarily sells its products and solutions to a more affluent customer base, including middle to higher income professionals and families who own residential property and have enough disposable income to pay for renewable energy systems.

According to reports, Sunrun has more than 233,000 customers in the US, and notably added 50,000 to its customer base in 2018 alone.

The Company serves customers across 23 US states focused primarily across the southern and western states, and in the northeast, including across California, Arizona, Nevada, New York, Pennsylvania, and New Jersey.

Sunrun also serves customers in Puerto Rico.  The Company does not have any international operations.

Sunrun additionally a range of solar energy products – such as  solar panels, inverters, racking systems and other solar-related equipment – to resellers.

Value Propositions

Sunrun provides value to its customers in the following ways:

• Ease and Simplicity – Sunrun’s solar power solutions are very low maintenance for customers, with the Company bearing all responsibility for the design, installation, maintenance, and inspection of its solar panel systems;
• Reliability and Flexibility – Sunrun’s solutions ensure that customers have access to a reliable and efficient source of power and have the flexibility to control when and how to use power via the Sunrun solar battery storage system;
• Sustainability – Sunrun is dedicated to providing sustainable energy solutions with a view to reducing the carbon footprint of its customers;
• Affordability – Sunrun’s flexible solar power solutions help customers to reduce their energy bills and to save power more effectively, making their solutions more affordable over time;
• Expertise and Experience – Sunrun employs teams of highly trained and experienced personnel who specialise in the installation, maintenance, and repair of solar power solutions, ensuring that customers receive the highest quality services and products; and
• Reach – Sunrun has a broad reach across the US, serving customers in 23 states, as well as in the District of Columbia and Puerto Rico.

Channels

Sunrun sells its products directly to customers primarily through an in-house sales force organised across the Company’s operating locations in the US.

The Company offers its products to customers across multiple channels, including telephone sales, field sales – including canvassing and in-home sales, as well as through retail sales channels via its network of strategic partners.

The Company has notably agreed a sales partnership with US telecommunications group Comcast to extend the reach of its own in-house sales force.

Sunrun installs its solar energy systems for homeowners through its own direct-to-consumer channel, with its own team in-house solar power specialists.

The Company also utilises the services of third party contractors and solar energy specialists to assist in the installation, inspection, maintenance, and repair of its solar power systems.

Customer Relationships

Sunrun establishes longstanding relationships with its customers, committing to providing energy via its solar solutions under lease and power purchase agreements that are agreed directly with customers.

The Company consults with customers closely before installation and designs systems that suit the specific requirements and limitations of the its customers’ properties.

Sunrun operates a website at www.sunrun.com, through which it provides information to its customers on a self-service basis, including information on its operating locations, service areas, solar power offerings, and grid services.

The Company also operates an online customer portal under the name mySunrun, through which customers are able to access information specific to their systems and power purchasing history.

Sunrun operates a dedicated customer support team, which operates out of the company’s offices and provides personalised support to customers over the phone and online.

The Company is also able to communicate directly with customers through its various social media accounts, including with  LinkedIn, Facebook, Twitter, Instagram, and YouTube, through which it is additionally able to address customer concerns.

Key Activities

Sunrun is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems in the United States.

The Company provides a range of solar energy services and products to more than 230,000 customers across 23 US states, as well as the District of Columbia and Puerto Rico.

The Company sells its solutions to homeowners over the phone, in the field through canvassing and in-home sales, and through retail sales channels via several strategic partners.

In addition to its core residential solar power solutions, the Company also sells related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

Key Partners

Sunrun works closely with a broad network of partner companies and organisations.

These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of equipment, tools, and specialist solar panels that support the Company’s core provision of solar power solutions, as well as third party suppliers of services that support the Company’s corporate activities;
• Sales and Channel Partners, comprising a range of commercial enterprises that support the Company’s sales efforts by providing additional sales and marketing services, ensuring that the Company’s services reach as broad an audience as possible;
• Service and Installation Partners, comprising a range of contracting firms and solar power specialists that assist the Company in installing, servicing, and maintaining its residential solar panel systems; and
• Energy Partners, comprising companies and organisations active in the power utility sector that support the Company’s coordination with power networks; this notably includes the Company’s partnership with National Grid.

Sunrun has a number of partnerships in place.  This includes tie-ups with GRID Alternatives, Associa, Costco, and Comcast.

Key Resources

Sunrun’s business model depends on its ability to provide efficient and reliable solar power systems to customers at affordable prices.

As such, the Company’s key resources are its intellectual properties – including patents and trademarks, its equipment and solar power components, its suppliers and supply chain, its partnerships – in particular its sales and installation partners, its internal sales force, and its specialist technical personnel.

Sunrun notably has patent applications for a ’method and system for generating multiple configurations for a solar power system’ filed with the US Patent and Trademark Office.

Cost Structure

Sunrun incurs costs in relation to the procurement of equipment and solar power components, the procurement of third party services, the management of its partnerships, the maintenance and repair of its solar power systems, the maintenance of its IT and communications infrastructure, the operation of its physical operating locations – including occupancy and utility costs, the implementation of sales and marketing campaigns, the implementation of research and development programs, and the payment of salaries and benefits to its personnel.

In 2018, Sunrun recorded total annual operating expenses in the amount of USD 881.86 million.  This included cost of operating agreements and incentives totalling USD 240.86 million, cost of solar energy systems and product sales of USD 294.07 million, sales and marketing costs of USD 207.23 million, and research and development costs of USD 18.84 million.

Revenue Streams

Sunrun generates revenue through the provision of residential solar power solutions to customers in the US.

The Company derives its revenue directly from customers under lease and power purchase agreements, whereby customers pay for electricity usage but do not purchase solar panels outright.  The Company also derives a portion of its revenue from the sale of solar power products to resellers.

In 2018, Sunrun generated annual revenue of USD 759,981, up significantly on the USD 532.54 million recorded by the Company in 2017.

The bulk of the Company’s annual revenue, around USD 404.47 million was generated under the Company’s customer agreements and incentives, while the remainder was attributed to the Company’s sale of solar energy systems and products.