REC Solar sells residential solar division

February 6, 2014

recSan Luis Obispo based REC Solar is selling its residential division with plans to focus on commercial clients. Rec Solar employs about 200 people on the Central Coast.

Sunrun, a San Francisco based startup which raised about $155 million in venture capital, purchased REC Solar’s residential division for an undisclosed amount. REC Solar parent company Mainstream boasted $254 million in revenue in 2011.

Since then, the market was flooded with low-cost Chinese panels. Along with zero-down financing models, profit margins for residential instillations were squeezed.

“The commercial and residential solar businesses are built upon fundamentally different models, with unique customer bases and disparate sources of capital,” said Paul Detering, CEO of REC Solar in a press release. “With this decision, REC Solar can better serve the needs of our commercial solar customers moving forward.”


7 Comments

  1. Citizen says:

    Because of the lower priced Chinese panels, there are more maintenance and repair costs in the warranty period. Businesses will go for the high quality panels that have fewer problems.

    It was probably a wise move for the company to drop their residential program.

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    • Maxfusion says:

      Actually Citizen it’s a mistake. Point of use is the only way solar makes sense.

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      • Sarah Bellum says:

        From a technical standpoint, yes. But until the homeowner’s monthly PG&E bill is greater than the monthly payment on the solar panels, preferably without subsidies, leasing arrangements, or accounting sleight of hand, we’re going to have this argument over and over.

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  2. LameCommenter says:

    Sorry to see them go, even if it was inevitable. Some of their personnel gave me flexible quote information for their systems, plus free counseling on how we might build our own system using theirs, or others’, parts. They were highly community and distributed solar oriented in our contacts with them. It wasn’t just a sales game or “our way or the highway” “take one of our packages or else” attitude. Great people.

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  3. BeenThereDoneThat says:

    This was just a matter of time before it happened. The residential side is heavily subsidized. Some of these programs are now at or nearing end. Then throw in the cost of $10-15K+ in a time that refi’s are harder and equity is less and there wasn’t as bright a future at the moment, that the industry paints.

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    • hijinks says:

      An alternative explanation is that REC’s business plan was flawed. I had a really bad experience with them reneging on a written bid, and found another dealer who was much easier, and more honest, to deal with. Reputation’s worth a lot, and I’ve heard REC problem stories from others.

      Another alternative is they’re just chasing the low-hanging fruit, and due to competition and proportionally lower profit margins on smaller jobs, that’s no longer residential.

      Also, subsidies on the business side of solar are even higher than on the residential, so your argument doesn’t seem to hold water. On residential side, 30% income tax credits go through 2015, and will be renewed. That’s the main “subsidy.” If people were afraid of “losing subsidies,” they’d be lining up to get solar today before subsidies go away. Doesn’t seem to be much of a fear, however. Maybe next year it will be.

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      • BeenThereDoneThat says:

        Subsidies on business side are higher so argument doesn’t hold water? Why wouldn’t REC then head that way, they are more than guaranteed to get customers as more money available? Also businesses have more money and incentive. For them running electricity in a business (with a lot of lights etc) they can save way more. As for your lining up? If you don’t have the 15K then you can’t get in line, expiring or not.

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