Why rooftop solar leader Sunrun chose a utility executive as its next CEO

Rooftop solar company Sunrun grew to a $10 billion market cap by promising to disrupt the century-old electric utility paradigm. Now it will be run by a former utility CEO.

Founder and longtime CEO Lynn Jurich is stepping down, the company said Thursday. She will stay involved co-chairing the board with fellow founder Ed Fenster. Mary Powell takes over as CEO on August 31, bringing with her a decade of experience running Vermont’s largest utility, Green Mountain Power, up until 2019.

Sunrun pitches its solar and battery service as a cheaper, more reliable alternative to outdated electric utilities. After being led for more than a decade by the entrepreneurs who founded the Bay Area startup, Sunrun selecting an executive from the world of utilities wasn’t an obvious choice.

But Powell is no stranger to Sunrun; she has served on its board since 2018, playing a role in its strategic planning. And her leadership at Green Mountain Power focused on numerous initiatives that fit right in with Sunrun’s positioning.

Powell ramped up clean energy while investing in a decentralized grid. Green Mountain Power also launched one of the first efforts to use a network of home batteries as a distributed power plant for the grid; Sunrun is building out that concept around the country as a strategic growth area.

Speaking to Canary Media last week, Jurich described Powell as a ​“customer-obsessed, employee-obsessed operator” who would bring ​“more firepower” to the fight against climate change.

“The technologies are there — Sunrun has the financial strength and the strategic position to really capitalize on this,” Jurich said. ​“When you come across someone like Mary, who I’ve gotten to know over the last three years, she is just the absolute perfect person to take the company on that next chapter of growth.”

Zero to 600,000

Sunrun has already experienced a lot of growth — it pulled away from the pack of national rooftop installer competitors, and then bought runner-up Vivint Solar in 2020. Now the combined companies serve some 600,000 customers, adding up to 4.2 gigawatts of solar capacity.

Venture capitalist Steve Vassallo of Foundation Capital bought into Sunrun’s vision back in 2008, when it wasn’t clear that the financing model of solar-as-a-service could work for households. Foundation led Sunrun’s Series A fundraising round with an $8 million check at a $15 million pre-money valuation.

Back then, Sunrun needed to prove that no-money-down solar was workable for homeowners. Then it had to line up capital to finance solar installations that would be paid off over years of customer payments. All the while, the company had to navigate the regulations and policies that circumscribed how the business could operate.

Jurich captained the startup through the industry’s ups and downs by thinking further ahead than is characteristic of Silicon Valley executives, Vassallo said. That perspective helped her grow the company at a sustainable pace, rather than chasing growth at any cost.

“She is thinking in decades, not one year or two years,” he said. ​“This is infrastructure, so you’ve got to be long-term right.”

Now Sunrun expects to grow its solar installations by 30 percent this year and battery installations by 100 percent year-over-year. That said, solar has yet to reach the vast majority of U.S. households, so there is plenty of growing left to do.

“Natural partner” to utilities

Sunrun typically owns the systems it installs, so customers can access solar power and backup power without having to buy the equipment outright. Those customers pay Sunrun for the service. But the company increasingly seeks out revenue from aggregating its fleet of installed batteries to deliver power to utilities or wholesale markets when demand is high.

“I think that’s why Mary’s such a good fit,” Vassallo said. ​“She had one foot in utilities and one foot in the next generation.”

Powell’s utility-industry Rolodex could come in handy as Sunrun seeks to ink more grid services contracts (Sunrun says those deals total $75 million in revenue so far). She can also speak from experience about how Green Mountain Power installed thousands of batteries in people’s homes to keep their lights on when winter storms knock out power lines. In the summer, Green Mountain Power uses those same batteries to lower its power demand, which saves millions of dollars for customers.

“I operated in that industry and in that space for a long time,” Powell told Canary Media. ​“As the grid and the utilities need more help meeting demand and dealing with climate events, we are just going to become the natural partner that they’re going to gravitate toward, even if they haven’t started that work already.”

There’s some tension involved in pulling customers away from what Sunrun calls the ​“old world” of expensive and polluting utilities, and then turning around and selling networked grid services to those incumbents.

But in many places, the old world clearly needs the help. California is struggling to source enough power to make it through its annual summer heat waves. Aging grid infrastructure there regularly starts wildfires, which then threaten power lines and force them to shut down. Texas ran out of supply during its February 2021 cold snap. Hawaii is seeking quick-turnaround capacity to fill in after its last coal plant shuts down.

Sunrun can build decentralized grid infrastructure because customers pay for it. Then it can offer utilities capacity that’s ready to go, in place of power plants that take years to permit and build. There’s nothing like sheer necessity to bypass philosophical differences between incumbents and upstarts.