U.S. power company NRG Energy Inc aims to grab a bigger piece of the residential solar industry by expanding its business in California, the nation's biggest solar market, and offering a new financing option to its customers.
NRG Home Solar on Tuesday will announce two new offices and plans to add 100 employees in the Golden State. The company is already a top competitor on the East Coast but has lagged rivals such as SolarCity Corp and Vivint Solar Inc in California.
That is about to change, according to Kelcy Pegler, president of NRG Home Solar.
"We are in this residential solar space to win, and this is evidence of our commitment to become a big player in the state of California," Pegler said in an interview.
NRG has quietly made inroads into the residential solar market over the last several years. But the company is making a major push this year after buying installer Roof Diagnostics Solar and online solar sales company Pure Energies. Pegler came to NRG from Roof Diagnostics.
NRG Energy owns power plants throughout the United States, and its rooftop solar foray is tiny in comparison to its primary power generation business. But NRG Chief Executive David Crane has put a large emphasis on renewable energy and distributed generation such as rooftop solar.
Earlier this month, Crane told analysts that NRG will have 10,000 home solar installations at the end of this year, and between 35,000 and 40,000 by the end of 2015.
As of the second quarter, NRG Home Solar had 2.4 percent of the U.S. installation market, behind rivals SolarCity, Vivint and Sungevity, according to solar market research firm GTM Research.
"The company has set its sights pretty high, so I'd expect to see this share grow pretty rapidly," GTM analyst Shayle Kann said of NRG.
NRG Home Solar's new offices will be located in Merced and San Diego, adding to offices in Emeryville and San Francisco. The company has 1,000 employees and will be adding 100 more.
NRG will also begin offering a loan to customers who want to own their systems but cannot afford the $20,000 to $30,000 upfront cost. The company would not disclose details of loan.
Solar leases, which allow homeowners to pay a monthly fee for their panels while another company owns them, have underpinned the growth of the U.S. solar market in recent years.
But loans have become increasingly popular because they allow homeowners to take advantage of generous federal tax credits for solar systems. SolarCity launched its first loan option earlier this year, a product it expects will make up half its residential business by the end of next year.
NRG's Pegler said he expects leases and power purchase agreements, another no-money-down option, to be the most popular options for customers over the next two years.
(Reporting By Nichola Groom; Editing by Ken Wills)