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How Big Box Retailers Can Move Solar Power Into the Homeowner Mainstream

Last Updated May 18, 2011 12:02 PM EDT

Home improvement giant Lowe's (LOW) and solar installation and financing company Sungevity have made a remarkable discovery: Homeowners still view solar as a fringe energy source. You don't say. But what's new here is what they plan to do about it.

Big box retailers have tried without success to sell solar equipment before. Simply stocking shelves with panels, it turns out, isn't enough. Consumers need the whole package -- financing, installation and a lot of hand holding -- before they're willing to take the renewable-energy plunge.

A deal announced this week between Lowe's and Sungevity tackles that consumer tentativeness head on. Sungevity will sell its services -- financing, installation, and even leasing options -- in Lowe's stores. At first glance, the agreement looks fairly pedestrian, but if it's successful, it could become a model for other big box retailers. Which means that solar could finally seep into the mainstream consciousness (and the midwestern suburbs).

How it works
Sungevity's user-friendly software and its solar leasing program makes it the ideal partner for this big box experiment. The company has developed an online system that uses mapping technology to identify and analyze a potential customer's house. Within 24 hours, Sungevity gives them an "iQuote" which shows exactly what the installation will look like on their house, what they currently spend per day on dirty energy and what they'll spend with a Sungevity solar lease.

Sungevity will put interactive kiosks in Lowe's stores that do the same thing, but customers won't have to wait 24 hours for the results. The advantages here are that homeowners don't need to rearrange their schedule for a home visit -- which is typical of other companies -- and Sungevity doesn't waste its time and resources trying to sell solar panels to an unconvinced customer.

Lowe's national reach makes this a slam-dunk deal for Sungevity. The solar company will roll out its services at Lowe's stores located in the eight states where it currently operates. Lowe's is also taking an undisclosed equity stake in Sungevity, meaning that its kiosks and services may well pop up in other Lowe's locations across the country.

If that happens, it would be a huge break for the solar company. Every week, 15 million customers wander through Lowe's stores buying supplies for their next DIY project. These massive big box stores, which are so difficult to escape, are a perfect place to capture a potential solar customer.

It's the lease you can do
Sungevity's leasing program -- which every solar company should offer, though most, for some godforsaken reason, don't -- is what makes this whole experiment really sing. The upfront cost of solar equipment is a deal killer for many homeowners, even those who understand they'll see savings in the long term. It's simply cost prohibitive for the masses. But these are exactly the folks solar companies need if they hope to go mainstream.

Photo from Flickr user Living Off the Grid, CC 2.0
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