Sunrun (Nasdaq:RUN), one of the leading rooftop solar companies in the U.S. has formed a partnership with National Grid (NYSE:NGG), one of the largest investor-owned utilities to expand solar in New York. The partnership includes a joint marketing agreement, a collaborative grid services pilot, and a direct investment by National Grid in Sunrun’s tax equity funds.
New York Solar Market
The partnership will be focused on increasing adoption of residential rooftop solar systems within 100,000 homes in the utility’s downstate service area. The partnership may provide a boost to a slowing residential solar market in New York, as Sunvago’s 2016 New York solar recap details. Residential installation growth in New York has slowed to ~12% in 2016, relative to approximately 100% growth in 2015. The slowing growth may be due to the end of the NYSERDA incentive in Long Island that reached its cap in April. The National Grid territory targeted in the Sunrun partnership would fall under the Upstate Region Residential Block, which is still within the 7th of 9 blocks per NYSERDA’s live dashboard.
Based on information from NYSERDA, Sunrun has installed more than 4,300 residential solar systems in New York since 2012, including more than 2,200 in 2016, which represents approximately 10% market share.
Sunrun and National Grid Partnership Details
The partnership will also include research on how distributed energy resources can be aggregated to balance and optimize the grid, a service which is currently provided by centralized generators. In addition to marketing and research efforts, National Grid will make a $100 million financial investment in Sunrun’s tax equity funds that will own over 200 MW of residential solar systems.
John Flynn, SVP of Strategy and Business Development at National Grid said, “This exciting partnership with Sunrun provides an opportunity for National Grid to increase our capability in the distributed energy space, and enhance our ability to meet the changing energy needs of our customers and communities.”
Residential Solar Company and Utility Partnerships
Sunrun’s main residential competitor, SolarCity, has also formed similar partnerships with utilities, which include aggregated distributed energy resource grid services, as indicated in a May 2015 announcement. SolarCity’s partnerships with utilities include, Kauia Island Utility Cooperative, Connecticut Municipal Electric Energy Cooperative, and Southern California Edison. SolarCity’s partnership with Southern California Edison included a pilot with rooftop solar, batteries, and smart inverters on 50 homes in SCE territory. Select utilities have been more receptive to rooftop solar and storage. Green Mountain Power, the main Vermont utility announced a program to offer certain customers an “Off-Grid Package“, which would allow customers to generate their own power and is a first for a U.S. utility. We anticipate more programs similar to these to be announced in 2017.
