Comcast Corp. has struck a deal to market Sunrun Inc.'s solar roofs to its cable customers in a pact that could lead the cable entertainment giant to take a stake in the San Francisco company, if the arrangement generates enough new customers.
Comcast's marketing for Sunrun - which will launch later this year - will be through online banner ads, bill inserts and direct mail to subscribers. Subscribers would have to contact Sunrun and won't be up-sold on the phone for solar roofs when they call Comcast for repairs or questions about their Xfinity cable or internet services, spokeswoman Jennifer Moyer said on Friday.
With the pact, Comcast, which has nearly 29 million cable customers, can realize a 5 percent equity stake if the agreement leads to 30,000 new customers for Sunrun or Comcast spends $10 million on marketing the program, according to the agreement filed with U.S. Securities and Exchange Commission. Comcast will take up to a 10 percent stake in the company if its marketing leads to 60,000 new residential or commercial customers over the 40-month term of the deal.
Sunrun's stock on NASDAQ soared by as much as 10 percent on Thursday when the deal was announced, but then fell by almost the same amount by Friday afternoon. With a market-capitalization of $738 million on Friday, Sunrun posted revenues of $168.4 million and a net loss of $303 million in 2016.
"Our challenge is making homeowners aware that they can save money today with solar," Sunrun CEO Lynn Jurich said in a statement. "We are excited to work with Comcast to help their customers go solar and save on their electric bills while reducing their dependence on fossil fuels."
Earlier this month in a conference call with analysts, Jurich said that "despite the media hype and well-funded lobbying efforts of many utilities, the adaption of distributed resources," such as solar units on homes, "is the future."
Jon Kaplowitz, general manager of new business at Comcast Cable, said the agreement can help Comcast "customers take more control of the price they pay for energy, save them money and help contribute to cleaner communities."
Rooftop solar is expected to be one of the fastest-growing sectors in the energy industry, nearly tripling by 2025, according to a Bloomberg New Energy Finance report this year. Comcast also has been expanding its Xfinity Home services that include home-security and home-automation products, connected through the internet.
Comcast and Sunrun tested a pilot program in 2015 and 2016 in northern California and parts of the northeastern United States - Massachusetts, Connecticut, New Hampshire, New Jersey and Maryland. Comcast surveyed participants in the test program and they were pleased with, giving the company confidence with expanding it, Moyer said. Neither Sunrun nor Comcast disclosed the markets that would be part of the marketing program to launch in the fourth quarter.
We recently asked you to support our journalism. The response, in a word, is heartening. You have encouraged us in our mission - to provide quality news and watchdog journalism. Some of you have even followed through with subscriptions, which is especially gratifying. Our role as an independent, fact-based news organization has never been clearer. And our promise to you is that we will always strive to provide indispensable journalism to our community. Subscriptions are available for home delivery of the print edition and for a digital replica viewable on your mobile device or computer. Subscriptions start as low as 25¢ per day.
We're thankful for your support in every way.