Comcast Solar Marketing Deal Prompts Partner Sunrun to Soar

Sunrun Inc., the residential solar company that’s boosting market-share, rose to a 52-week high Thursday after saying it will tap a partnership with the biggest U.S. cable-TV company to add new customers.

Comcast Corp. and Sunrun agreed to a 40-month partnership after a trial showed that cable customers had interest in solar products, according to a statement Thursday. San Francisco-based Sunrun will be Comcast’s exclusive residential solar provider.

“Comcast has the install base and the marketing arm,” Lynn Jurich, Sunrun’s chief executive officer, said in an interview Thursday. “We have a product people want.”

San Francisco-based Sunrun surged 11 percent to $7.69 at 11:37 a.m. in New York — the biggest intra-day jump since November. Comcast shares fell 1.3 percent to $40.14.

The partnership will help Sunrun — which operates in 22 states — reach a larger pool of potential customers. “The existential challenge for these companies is acquiring customers at a reasonable cost,” Joe Osha, a San Francisco-based analyst at JMP Securities LLC, said in an interview Thursday. “Anytime you go into an outfit like Comcast to acquire customers, that’s great.’

Comcast has about 27 million subscribers in markets that include Chicago and Philadelphia. The cable giant will advertise the solar program as an option for its XFinity Home service, which gives customers the ability to automate devices around the house, like turning lights on and off.

There’s some precedent for energy and telecommunications companies to collaborate.

Five of the largest Czech utilities offered mobile services as of January 2016, according to Bloomberg New Energy Finance. In parts of 2014 and 2015, Comcast’s XFinity customers in Pennsylvania were eligible for rewards — including cash back and movie tickets — if they bought energy from a unit of NRG Energy Inc., the largest U.S. independent power producer, according to the BNEF report.

“There are a plethora of options for monitoring your solar production and being able to do that from a connected home platform that does much more — smart thermostats, lights, alarms etc — is quite compelling,” said James Sprinz, a New York-based analyst at BNEF.

Comcast has been expanding into new lines of business as growth in selling cable-TV subscriptions slows. It recently introduced a mobile phone service to compete with wireless offers from AT&T Inc. and Verizon Communications Inc. It’s also trying to expand its business of selling home alarm systems and TV, phone and Internet for businesses.

“Solar is the obvious next step — if you can convince a cable customer to sign a 20-year agreement,” said Hugh Bromley, a New York-based analyst at BNEF.

Comcast is eligible for warrants representing as much as 9.99 percent of Sunrun’s outstanding common shares under the deal. They’ll be earned pro rata only after Sunrun installs 30,000 new customers and will fully vest once Sunrun wins 60,000 new accounts.

Sunrun, the U.S.’ largest residential solar-only installer, has just under 150,000 customers, Jurich said. It expects to do 45,000 installations this year. Customers typically sign 20-year leases or power purchase agreements.

This is Sunrun’s third partnership with a brand-name company this year. In January, it announced that London-based utility National Grid Plc committed about $100 million to a partnership that will own about 200 megawatts of residential solar assets. It also has a partnership with Engie SA.

“Comcast has these extensive contacts,” Sophie Karp, an analyst at Guggenheim Manager Inc., said in an interview Thursday. “The cost of reaching those customers may be lower than what Sunrun pays now.”

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