Stanford business school grad Lynn Jurich has always been an environmentalist, but after spending a summer in super-polluted China, she realized she really needed to get in the game. The global energy crisis is "the biggest problem our generation has to solve," she says. "By 2030, we’re predicting the world will use twice as much energy as it does today. You just can’t avoid the economic and environmental damage."
So in 2007, Jurich left behind her career in finance and venture capital to join fellow Stanford grad Ed Fenster and launch Sunrun, now the nation’s leading home solar company. "The utility industry and how energy is delivered had not changed in a hundred years," says Jurich. "The key innovation we brought to the market was delivering solar as a service." In a nutshell, Sunrun pays for the panels and the installation, and sells the resulting electricity back to homeowners at a rate that’s locked in for 20 years. "Imagine if you’d installed a gas tank in your backyard 20 years ago, when gas was $1 a gallon, and you could buy gas for $1 a gallon for 20 years?" Jurich says. Another analogy: It’s like Forever Stamps, but for your electric bill.
Starting a residential rooftop solar company (a.k.a. "distributed solar") took the Sunrun team into uncharted waters, and Jurich will admit the learning curve was steep. "The good news is there was nobody who really knew much, which made it a little less intimidating," she laughs. Eventually, they learned the technology was perfect for their business model: Unlike wind, for example, solar is peak-producing and requires little storage, and the declining price in panel hardware made the idea of leasing equipment to consumers cost-effective. Raising capital also came naturally, as the pair of finance vets turned to the venture capital world for their operating budget; they then asked giant banks to finance the project sums, like hardware and installation. Of course, with the latter, they faced what Jurich calls a "chicken or the egg" problem: "We had to get a lot of things up and running simultaneously," she says. "You have to aggregate enough customers to make banks interested, but it’s hard to aggregate the customers with no reputation. You’re literally asking customers to trust that you’re going to provide energy for 20 years. So the biggest issue was, ‘Okay, we know this works long-term, but how do we make these initial few deals prove it?’"
Jurich and Fenster set up their first system on Fenster’s roof—his house also served as their office for a time—and then Jurich hit the road, looking for customers. "I went from this cushy venture capital job to selling home services at a county fair," she says. "I was driving to Sacramento on the weekends and going to farmer’s markets. I still remember, I sold the first system in an agricultural center, like, next to the giant pumpkin. It was a hustle, I’m not kidding." Five years later, Sunrun is installing $1.5 million in distributed solar every day, operating in 10 states via partnerships with everyone from local roofers to the Home Depot, and they just raised another $200 million in capital from Credit Suisse.
Jurich believes these first five years are just the beginning. By the time the contracts they’re signing today come up for renewal, she says, "I think there will be millions of homes that have rooftop solar, and we’ll be a very important piece of the whole energy portfolio. What we’re doing is analogous to what wireless phones did. When wireless phones came out, people said, ‘Oh, they’ll only probably penetrate two, three percent of the market. Landlines are the way to go.’ Well, clearly, fast forwarding, you see what happened there."
The solar industry has indeed become something of a recent punching bag for those seeking to politicize the climate change crisis, thanks primarily to the infamous collapse of federal grant recipient Solyndra. But in light of that chorus of naysayers, Jurich says, the results of their customer surveys might surprise you. "Thirty percent of our customers are veterans," she says. "Our target customer tends to be in their 50s, they have a couple kids at home, they could probably buy the system if they wanted to, but they don’t want to have the hassle of dealing with it."
Even more unexpected: The majority of Sunrun’s subscribers self-identify as Republican. "I had a suspicion that that was the case, but I love it," Jurich says. "Renewable energy is bipartisan. It appeals to anybody who is responsible about their home. All people believe in America, jobs, creating energy here, not being dependent on foreign energy sources. And then we save people money."
This piece is part of Change Generation, our series on young, change-making entrepreneurs. Read the rest here.