The two companies announced a partnership today to encourage more Americans to reduce their energy consumption.
“Energy prices are increasing and are expected to continue increasing,” said Sunrun’s founder and CEO Lynn Jurich in an interview with VentureBeat. “Energy is an industry filled with entrenched interests and powerful incumbents with a lot at stake. Sunrun and Nest are trying to tell consumers that they don’t have to be a victim to rising energy costs.”
Bill Clinton said that our outdated energy grid’s outages cost the U.S. economy $25 billion or more every year. The U.S. is the world’s second largest consumer of energy in terms of total use.
This partnership will provide significant financial incentives to get people to adopt smarter, more energy-efficient technology. Current Sunrun customers will receive a free Nest (which retails for $250) and $250 worth of electricity. Current Nest customers will receive $500 of free electricity if they do solar with Sunrun.
Sunrun claims to have invented “solar-as-a-service.” Jurich said that the solar market is under-penetrated in the U.S. — fewer than 1% of U.S. households have solar. Part of this is due to the cost and effort it historically required to buy and install solar panels.
Sunrun lets people pay a low fixed rate for solar panels sourced from third-party providers. The company owns, insures, monitors, and maintains all the equipment — consumes only pay for electricity consumed. This approach removes a lot of the friction for consumers and helps solar companies add customers.
Nest offers a sleek “learning” thermostat. Most people have their house set to one temperature, unnecessarily heating/cooling it when no one is home. Nest learns your schedule and adapts the temperature in your house to your patterns. It can also be controlled via smartphones, and the company claims it can reduce your heating and cooling bills by up to 20%.
Lowering energy consumption cuts down on cost and carbon emissions, and yet Americans can be remarkably resistant to make energy-efficient changes to their homes. Part of this is due to the upfront costs and inconvenience of going more eco-friendly.
Sunrun and Nest are two green tech companies that have gained some traction in this area by focusing closely on the consumer.
Advancements in solar, smartphone, and Internet of Things technology has made it possible to become more more energy aware and efficient much more easily. However, many consumers are unaware of their options for getting smarter about their consumption.
Jurich said that the technology/convenience and cost are now at consumer-friendly levels, and the last hurdle is getting a significant number of people to adopt new technology. Nest and Sunrun will benefit from the each other’s customer base and reach these already-interested consumers with targeted offers as well as share sales leads.
“There needs to be a real pain point to inspire change,” Jurich said. “People are busy, and this is not the first thing on everybody’s mind. We want them to know that simple and easy options do exist that are in fact cheaper and better for the environment. We are offering them a financial incentive to motivate people to take action.”
Sunrun is backed by $145 million in venture capital and recently secured financing for more than $630 million in residential solar projects, led by JP Morgan. It has 35,000 customers and is active in 11 states.
Nest is also backed by a hefty amount of venture capital. Earlier this year it raised $80 million in new funding. Investors include Google Ventures, Venrock, Kleiner Perkins, Generation Capital, Lightspeed, and Shasta Ventures.