Kleiner Perkins backs solar sales & marketing startup

Gen110 started out as a solar sales and marketing company but now plans to add other residential energy services, and it has lined up venture firm Kleiner Perkins Caufield & Byers as an investor to help its expansion, Gen110 said Thursday.

The San Francisco startup, founded in 2009, was formerly called Solmentum, but it changed its name to Gen110 in January this year to reflect a broader goal to be an “energy concierge,” said its CEO, Jason Brown. The new name refers to the 110-volt electrical wiring and outlets commonly found in a home and serves as a metaphor for generating clean power where it’s consumed, Brown said. He declined to disclose the amount of investment from Kleiner.

Gen110 focuses on finding and convincing consumers to sign up for solar leases and put solar panels on the rooftops of their homes. It sells financing plans from Sunrun and works with roofing company PetersenDean for installing the solar equipment. Gen110 has lined up over 2,000 customers and 10 MW of installations since its start three years ago, Brown said.

Gen110, which focuses on the California market, is occupying a more narrow slice of the solar market than what companies like SolarCity and Sungevity do. SolarCity does all its own sales and marketing and solar system design and installation, and it raises funds from banks and investors to finance leases and installations. Sungevity does all that except the installation work, which it outsources to local contractors. Sunrun’s model is similar to Sungevity’s.

Gen110 wants to do more than solar sales and marketing and plans to move into areas such as energy efficiency, fuel cells, energy storage or even electric cars, Brown said. The company would sell financing packages from other firms to enable consumers to afford more energy efficient equipment, such as LED lighting and use cleaner sources of power. But the company plans to announce what else it will do beyond solar later this year, Brown said.

Selling solar

A marketing and sales business may not sound so innovative in the vein of developing a new compound for solar cells or software to manage battery packs. But an effective marketing and sales strategy is crucial – and overcomes a huge challenge – for any company that wants to provide solar services, from offering financing plans to installing solar panels. The cost of lining up a customer can be as much as 20 percent of the average cost of selling and installing a system at home, at least in California, said Travis Bradford, an investor in Gen110, in a blog post last year.

As the solar market matures and good money can be made, it’s natural to see more companies cropping up to offer more specialized services. Two months ago, I highlighted a startup called Ethical Electric that wants to market and sell clean power without having to install or own renewable energy equipment or distribution lines like a traditional utility.

Gen110’s intended move beyond solar also follows similar decisions by a growing number of companies that started out as solar service providers and have since branched out to other energy-related services. For example, SolarCity also sells energy efficiency equipment and services and offers lithium-ion batteries from Tesla Motors (s TSLA) to go along with a solar electric system.

Like other solar companies, Gen110 collects data to figure out which homeowners might make ideal customers. Brown wouldn’t say what kinds of data the company analyzes to find customers, but he said the information is more than just satellite images showing the size of a home or whether it’s got a swimming pool (which would indicate the homeowner has a high energy bill). Generally, a homeowner who spends at least $100-$150 for power each month would make a good target for Gen110, which then sends out sales people to try to talk to the homeowner in person.

Selling a solar service plan effectively requires a look at the utility bills and energy consumption behavior of the homeowner and an explanation of how a lease plan could help him or her save money in the long run. In a lease, consumers typically put little or no money down and pay a monthly fee for the solar electricity generated. The lease is long-term and is supposed to offer rates that are similar or lower than what consumers would pay to their utilities. Ownership of the solar systems goes to the companies that finance the installations, and consumers may or may not get to own the equipment at the end of their leases.

Most Americans “don’t know what they pay per kilowatt hour. They aren’t aware of the impact of rate hikes or don’t want to think about it,” Brown said. “Face to face customer education is the only way to get mass scale adoption of energy.”

Photo courtesy of Gen110