SolarCity (NASDAQ:SCTY) has tried just about every customer acquisition strategy possible and today turned to Groupon (NASDAQ:GRPN) to acquire even more new customers. The company announced a $1 Groupon that would "save" consumers $400 on a solar installation.  

The Groupon says that SolarCity is offering a free consultation, site survey and proposal, custom design and installation, ongoing customer service, and savings. For someone who isn't familiar with solar, this may sound like a big deal, but is it?

Scty Installation Image

Getting more communities to go solar will add value to SolarCity's shareholders. Source: SolarCity.

Finding new ways to buy customers
What SolarCity doesn't say is that what it is offering consumers through this Groupon is the same thing it offers every customer. Go to, and you can get the same consultation and savings, and it won't even cost you a dollar.

The bigger story here is that Groupon is another way for SolarCity to acquire customers. Last year, it paid $120 million for Paramount Solar, essentially a solar telemarketer, to add to its sales capabilities, and it can now be found in Home Depot and Best Buy stores. The goal is to get as many contact points with customers as possible in an effort to get more people to go solar.

Scty Installers

Workers installing a residential solar system. Source: SolarCity.

So far, so good, for that strategy. SolarCity is expecting to grow around 90% this year to 500-550 MW installed and will nearly double next year to 900 MW to 1 GW. That growth puts more solar assets in SolarCity's lease financing, but will something like Groupon add value?

Will Groupon add value?
For a partner like Groupon or Best Buy to add value, SolarCity needs to see operating (acquisition) costs fall and retained value per watt remain high while growing. Last year, SolarCity spent $188.4 million on operating expenses and added $306 million in contracted retained value, and the goal will be to increase the spread between those numbers long term. No individual partnership will increase that margin, but as SolarCity tests out new sales models and expands its footprint, I think the margin will expand.

A Groupon is a pretty cheap way to test a new marketing method, and for SolarCity, just getting a few headlines is an incremental value add. But this won't be a game-changer for shareholders, and the real value will come from keeping costs low to fend off competitors.

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Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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