On August 15, Citigroup Inc. (NYSE: C) said it was investing more than $50 million in new Sungevity solar leases for homeowners. The tax renewable energy tax equity fund will support Sungevity's recent expansion into the East Coast states of the U.S. as well as new arrangements through its partnership with Lowes, the home improvement store chain.
Earlier this year, Sungevity expanded its presence in the East Coast and has been rolling out its “Rooftop Revolution” campaign, which has included significant advertising, like providing Internet on the Amtrak Acela Express for the month of July, and a truck serving ice pops in Sungevity’s East Coast states, which now include Delaware, Maryland, Massachusetts, New Jersey, New York, and Washington, D.C.
And apparently it’s been working.
“Company data shows that more than 50 percent of solar lease iQuote requests from prospective customers now originate from Sungevity’s five new Northeast markets,” the company said in a press release.
“We really invested heavily in that market,” said Sungevity Founder Danny Kennedy. However, converting those iQuotes into customers is still occurring at a slightly lower ratio than in the West Coast market, he said.
But the solar-leasing market is just getting underway on the East Coast. Some of Kennedy’s conversations with people in New York, for instance, reminded him of conversations he had in California with people three years ago, when the concept was new there as well.
Still, 50 percent of potential business coming from states the company entered into just four months ago is pretty big.
“The soft launch was actually in April, and we started our larger marketing efforts in July with the brand takeover of Acela and with the Rooftop Revolution campaign,” said Sungevity spokesperson John Ordoña.
In all, Sungevity has raised more than $120 million since 2010 to support residential solar leases throughout its territories, which in addition to the East Coast states, include Arizona, California and Colorado. Previously the company raised $36 million from U.S. Bancorp (NYSE: USB) and other large financial institutions.
The rapid growth means the company is growing its employee base as well.
“Sungevity is now in a hyper-growth phase and will hire approximately 200 new employees by the end of 2011, doubling its current headcount,” the company said.
At this point, the company will support projects in existing markets with the funds, according to Kennedy. But it could expand into more states in the future.
“We are looking to expand to other markets. It really depends on a mix of different variables,” Ordoña said.
It’s not Citi’s first tax equity investment in a solar leasing company. Earlier this year, Citi invested $40 million in SolarCity’s residential solar leases. However, a Citi spokesperson declined to speak further on why these are good investments for the company.
“Citi is committed to promoting energy efficiency and environmental sustainability both at our own firm and in support of our clients,” Marshal Salant, head of Citi’s Alternative Energy Finance Group said in the release. “This transaction will help Sungevity provide many homeowners with affordable ways to power their residences with clean, renewable energy.”
Image courtesy of Sungevity.