Sungevity Founder Danny Kennedy on Making a Difference With Solar
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the residential customer. For residential, you do have a certain amount of red tape, but the real estate is free, and it’s at the point of use, with the highest-rate electricity you can get.
X: How do you decide where to do business? Is it driven by the climate and how much sunlight people get?
DK: Solar resource isn’t really the issue. Fifty percent of the world’s solar is in Germany, which isn’t exactly a sunny country. The issue is the background economics, and the way the utility rate structures and rebates and other incentives are set up. The right policy settings are available in California, Arizona, and Colorado, so we are growing our business to address those markets where it works. We will be going into new markets next year as far away as the East Coast, and maybe internationally. We are ramping the business as fast as we can.
X: How fast are you growing?
DK: The limitation is our own internal growth capacity. We are getting to the point where we are the lowest-cost electricity provider, which puts you in head-to-head competition with grid electricity, so you grow as quick as you can fill those niches. This year we are going through a 10x growth. We did just under $3 million in revenue last year and we will do $25 million this year. We grew from less than 30 people last year to around 90 people now. We moved into this space in order to have a new home in February. We went from having a few crews to having 45 crews and a field force to manage them. We brought on board a bunch of VCs to pay for the expansion in late October, November of last year, and we launched the solar lease on March 1 of this year, and have been going gangbusters since then. Since March 1 we have done twice as much business as in the previous two years.
X: How are you capitalized right now, and who are your investors?
DK: We raised a $6.5 million Series B round from Greener Capital last fall. We had been funded up to then by a $2.5 million Series A angel round with a group of about 22 angels who were involved right from the start. Some of them re-upped in the Series B, and a few other superangels got involved, including Skip Battle, the chairman of Netflix and Fair, Isaac and the founding CEO of Ask Jeeves, who joined our board. He’s your archetypal Internet commerce guy. He had gone through a solar purchase for his place, and had gone through the hell of the cottage industry—sitting at home waiting, the guys don’t turn up. He said “What is this?” and then he hears about us from Greener Capital, and he’s like, “Wow, I want to be involved in that.”
X: You’ve got some serious competition in the form of companies like SunRun and SolarCity. How do you stand apart?
DK: We are all doing very well. We stand out with a much-simplified process that’s built for that, whereas they are migrating to the online service model. We came up with it. We have a lower-cost business structure. If you look at the amount of capital raised by those companies and the service territory, you get a sense of why our overhead and scalability is much better. I think there is a bit of brand differentiation as well. We have a focus on the residential customer that they don’t.
X: What has the transition from the non-profit, NGO world into the business world been like for you?
DK: Great, actually. I’m having a lot of fun. It requires a lot of the same skill sets. In a non-profit you’re trying to do high-impact things with minimal resources, by any means necessary. I had to be everything from the investment relations guy to the market guy to the … Next Page »