Think of solar developer Distributed Sun as a hybrid of the Dell direct model and the Federalist Papers.
The Washington, D.C.-based developer specializes in commercial solar projects. Instead of selling the power to utilities, however, it sells it directly to the end consumer. If the array is on a rooftop, for instance, the consumer could well be the primary tenant or building owner. (This is the Dell part of the equation.)
Because it sells directly to customers, it doesn't have to compete against the wholesale price of power, or get a local state regulatory agency to sign off on the power purchase agreement. Instead, Distributed competes against the higher retail price of power. As a result, it claims it can deliver power at a substantial discount to customers. The company has installed 572 kilowatts since it was founded in 2009 and has 2 megawatts' worth of projects under construction.
The company now hopes to bring its costs down further with what it calls the Distributed Sun Network. Engineering and procurement companies, solar panel manufacturers and others are being selectively invited to join the network. Once in, members can band together to tackle projects. If an installer is preparing a bid for a project, for instance, he or she can try to secure the services of other members as part of the bid.
The idea is to better compete against established, full-fledged, full-service developers like SunEdison while at the same time avoiding trying to merge regional solar specialists into a unified conglomerate. Network partners will be able to help each other -- one could imagine panel or inverter manufacturers being able to provide group discounts -- without having to go through the pain of a corporate marriage. (This is the Federalist Papers part.)
"This is not a roll-up," said CEO Chase Weir.
Competitors like Soltas and even GridPoint have tried to tackle this problem via the acquisition route. Soltas, for instance, takes majority stakes in regional solar developers and together the members qualify for group discounts from panel makers and other suppliers. While Distributed's network comes with less overhead, there's no guarantee that members will put their best projects in the pool. Then again, acquisitions can be extremely difficult. Both could work. It mostly depends on execution and costs.
Either way, Distributed's efforts could give a boost to regional solar companies and underscores the innovation that is occurring outside of panel and equipment development.