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SolarCity, one of the leading companies making lower-priced rooftop solar panels for homeowners and small businesses, is expanding its reach today with the acquisition of residential energy efficiency company Building Solutions. The deal could be one of the boldest moves yet to combine solar power generation with home energy management, a growing area of interest for th eindustry.
SolarCity, backed by the likes of Tesla Motors CEO Elon Musk (who also serves as company chairman), Draper Fisher Jurvetson, First Solar and Pacific Gas & Electric, made a name for itself offering financing options for people interested in installing rooftop solar panels at low upfront costs. Instead of paying the typical $25,000 for even a small-scale system, its customers lease the panels for a monthly fee.
It could be this competition that motivated Foster City, Calif.-based SolarCity to diversify its offerings. The company says the acquisition of Building Solutions fits neatly into its ultimate strategy to lower energy bills for its customers — now through both solar generation and energy efficiency modifications.
Based in nearby San Francisco, Building Solutions is one of several companies on the market that evaluates people’s homes, makes recommendations for how they can be made more energy efficient, and helps them execute on these tasks. The company told CNET that it takes on about 10 new projects a month, taking them from inspection all the way through weatherization — whether that entails adding more insulation, caulking windows or upgrading water heaters.
While it’s logical for SolarCity to look for an energ-efficiency play, it’s somewhat odd that it chose a company with such limited and local capacity. You would think that it would prefer instead to partner with any number of services offering scalable web-based, or automated home energy efficiency solutions — like Tendril, OpenPeak, EnergyHub or even Microsoft Hohm.
From this perspective, it looks like SolarCity is primarily interested in Building Solutions’ unique software, which helps auditors develop tangible recommendations. Maybe this is the cheapest way it could get its hands on this kind of system, which it could easily enough integrate into its existing solar portfolio.
Solar-panel installation has similarities to energy-efficiency retrofitting. Both require skilled contractors, specific equipment and a detailed evaluation of the building in question. So there’s already a lot of synergy between how SolarCity and Building Solutions have been conducting business.
Financial terms of the acquisition have not been disclosed.
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