By Chris Meehan | Oct 01, 2014
Solar and renewable energy projects
Founded: May 2011
Majority owned by Blackstone, operating as a separate company
Employees: Approximately 1,200 employees as of February 2014, 1,800 anticipated by end of year
Vivint Solar rocketed into the U.S.'s residential solar market in 2011, roaring from nowhere to the country's second-largest home solar installer today.
From the beginning Vivint Founder Todd Pedersen has wanted Vivint to lead the home solar market in the U.S. Greg Butterfield was tasked with that goal when he came on as CEO last September and he's been busy. "Let's put it this way: Getting about 4 or 5 hours of sleep a night is awesome," he quips. But he shrugs off the idea of being first: "Really, the focus is more on the customer and providing a good value proposition."
Like SolarCity and other providers, the company finances solar arrays for homeowners through power-purchase agreements (PPAs). The PPA usually allows the homeowner to pay less for electricity from the solar array than from their local utility -- without having to pay for solar up-front.
Butterfield calls residential solar a huge opportunity. "Right now you've got about 1 percent market penetration on a $100 billion-plus space over time. The reason we're growing faster than any other residential solar company is the strength of the Vivint model and our connection with Blackstone."
"We're actually opening up a new office every two weeks," Butterfield says. "Since the first of the year we've opened up three offices. Another three offices will open up in February. By April we will have opened up 16 new offices since January."
Putting solar on rooftops is capital intensive. "It will cost $15,000 to $20,000 to put solar on someone's roof," Butterfield contends. Meeting that requires hundreds of millions of dollars.
Like most residential solar installers in the U.S., Vivint Solar uses PV modules largely manufactured in China, which are usually less expensive then their U.S. counterparts. The company has had non-exclusive supply contracts with Trina, Yingli, and Canadian Solar for modules in the past. Vivint Solar also uses Enphase microinverters, which are designed in the U.S. and manufactured overseas and in Canada. The microinverters convert the DC electricity produced by the modules into AC electricity suitable for use in the home. They also allow monitoring of each module in the array to help ensure performance and make maintenance easier.
"I've been here a little over 5 and half months, we've raised over a billion dollars in tax equity," he says. The funds have come from outside Blackstone, which purchased Vivint in 2012, but the company takes advantage of those connections. "It's been hugely instrumental to have [Blackstone] involved in doing the introductions and to help with transactions."
Vivint Solar is based in Utah and has about 450 employees at its headquarters in Provo near two large universities, Butterfield says. "We've got a fairly young workforce. . . . We have hundreds of college students that are working in our client services, our processing and our CAD design teams. They will put in 6 to 8 hours and get a free lunch. There's a gym, there's a free doctor and they're 10 minutes from campus."
The majority of its employees are at its field offices in California, Connecticut, Hawaii, Massachusetts, New Jersey, and New York. Each office has about 20 sales representatives, a similarly sized installation team, and its own warehouse, materials, loaders, and trucks. "We're trying to put the endpoint as close tot the customer to best meet their needs," Butterfield explains.
"We do believe over the next three years that there will be grid parity," Butterfield says. That's when solar will cost as much as grid-based electricity. When that occurs, he anticipates solar will make sense in 40 or more domestic markets.
Challenges: An antiquated electric system and interconnection process. "Something we could do in hours or days takes weeks or months in the public sector," Butterfield sayd.
Opportunities: Intellectual property. "The benefit we have being Vivint Solar being tied to Vivint Inc. is we have an indispensable platform that allows us to better understand the needs of our customers," Butterfield contends. "We continue to raise lots of capital. The more capital we embrace, the more systems we can deploy."
Needs: "Dealing with growth," Butterfield says. "We've grown from 800 employees at the end of last year to 1200 employees."