Project Solar doesn’t make solar panels or employ crews to install them on rooftops, but the startup says it can disrupt the residential solar industry by skipping commercials and automating some parts of the ordering, design and installation process.
Backed by a new $23 million Series A funding led by Left Lane Capital, Project Solar says it is on track to install 30 megawatts of solar power this year, primarily in California and Texas, while apparently lowering the price of some of its competitors. The startup aims to increase its 2022 install figure by five in 2023.
But first, some background: Tesla gave up knocking on the door a long time ago, only to see its market share plummet. Sunrun, meanwhile, has over 100 sales jobs listed on its site and is the No. 1 residential solar brand by market share. So why would removing vendors work for Project Solar, which is currently nowhere near as active as the industry leader?
For owners, the sale mainly comes down to price. The startup says it charges an average of $2.20 per watt for installations, and as little as $1.63 after federal incentives. That’s about 25% cheaper than the 2021 national average of $2.94 per watt (before tax credits), according to the Solar Energy Industries Association. Whether it qualifies as “considerably lower,” as the startup characterizes it, is more a matter of opinion. For particularly DIY-minded people, Project Solar also offers cheaper DIY options.
Project Solar’s revenue comes from equipment price markups, for which it gets volume discounts. The company says removing vendors saves it up to a dollar per watt, and from there it relies on its in-house software to reduce the time it takes to do things like system design, authorization and coordination of subcontractors. For every sale, “there are about 40 hours of labor involved in the backend process (not including the physical labor of installation which typically takes a team of 3-4 people 8 hours),” CEO Trevor Hiltbrand told TechCrunch. He added that the company’s software includes “a tool that has cut engineering/CAD time from 3 hours to 30 minutes.”
Project Solar plans to use Series A to expand into the Midwest and South and continue to work on its software. Beyond Left Lane Capital, Project Solar declined to share who participated in the funding round, calling them “strategic within the industry.”