Shares of residential solar installer Sunrun Inc. (NASDAQ:RUN) jumped as much as 12.1% in trading Thursday, after the company announced a new marketing agreement with Comcast (NASDAQ:CMCSA). The 40-month agreement will make Sunrun the exclusive solar installer for Comcast cable, which the company hopes will be a big sales generator. Shares were still up 7.9% at 2:55 p.m. EDT.
Comcast will fold the solar offering into its Xfinity Home product, which is a security and home automation product. After a one-year pilot program, the two companies found it was worthwhile to expand the partnership.
From Sunrun's perspective, a partnership with a company like Comcast can bring leads at lower costs than its traditional sales network. Ultimately, that's the goal of any agreement with Comcast.
Residential solar installers have long made partnerships with utilities, telecommunications companies, and retailers in an effort to reach customers. And in that respect it's business as usual and the kind of partnership that happens regularly in residential solar. What's strange about the stock move is that these partnerships haven't proved to be particularly profitable in the past. This deal could prove to be good for Sunrun, but if marketing costs per watt don't fall, this will be just another sales channel and doesn't change Sunrun's investment outlook for the long term.