LOS ANGELES Oct 9 SolarCity Corp said
on Wednesday it will acquire Zep Solar, a maker of mounting
systems for residential solar panels, for about $158 million in
The acquisition announcement was SolarCity's second in as
many months. In August, it said it would pay $120 million for
direct marketing company Paramount Solar.
But the Zep Solar deal is SolarCity's first foray into
providing the hardware for its rooftop solar systems. The
company's chief executive, Lyndon Rive, said Zep's products cost
less than rival mounting systems and have cut in half the amount
of time it takes for SolarCity's installation teams to put up a
typical residential system to one day from two to three days.
"The only way we can expand our growth and penetrate more
markets is to reduce our fully loaded cost of installation,"
Rive said in an interview.
Zep's hardware eliminates the need for aluminum rails to
support the panels, allowing them to lie flush against the roof.
This makes systems with Zep's hardware more aesthetically
appealing to customers, Rive said.
SolarCity, which is backed by Tesla Motors Inc
founder Elon Musk, has grown rapidly thanks to a business model
that allows homeowners to pay a monthly fee to lease solar
panels, eliminating the need for a large up-front investment.
But the San Mateo, Calfornia-based installer is also under
pressure from investors to cut costs, which have escalated due
to its dramatic growth.
Both the Zep and Paramount acquisitions are aimed at helping
SolarCity meet its goal to reduce overall costs by 5.5 percent a
year. Paramount's remote selling expertise will help SolarCity
reduce the amount it pays to attract new customers, the company
says, while the Zep deal will allow it to install more systems
in less time.
Zep Solar will operate as an independent business unit of
SolarCity, which plans to sell Zep's products in Australia,
Germany, Japan and the United Kingdom - markets where it does
not currently have a presence.