NEW YORK (AP) — Sunrun, the company that helped pioneer a financing scheme that has put solar panels on thousands of homes, is getting into the construction side of the business. That makes it more like SolarCity, one of its chief rivals.
Sunrun is acquiring the residential installation company REC Solar from Mainstream Energy Corp., as well as two of its other divisions, the parts distributor AEE Solar and SnapNrack, which builds the racks that hold solar panels in place.
Terms of the deal were not disclosed.
Sunrun CEO Lynn Jurich said in an interview that the acquisition will give Sunrun more insight into the installation market, lower the cost of attracting new customers and allow the solar installation companies that it works with to lower costs.
REC Solar was Sunrun's first construction partner and the companies have collaborated on installations since 2007.
Sunrun was among the first companies to cover the huge initial cost of install solar panels in exchange for a monthly fee from homeowners. The initial cost of installing a solar system — $25,000 to $30,000 for a typical residential system — has been a major barrier for the industry.
Homeowners that have solar panels installed continue to buy some power from the local utility, but often the electricity bill and solar payment together cost less than a traditional monthly utility bill.
Solar systems are subsidized by the federal government with a tax credit worth 30 percent of the cost of the system. Many states also offer incentives on top of the federal subsidy.