Comcast has dabbled in the energy and electricity market before, but through a new partnership announced today, the company is now committing to a years-long plan of cozying up to the power utility sector. More specifically, the cable operator has signed a 40-month marketing and reseller deal with residential solar energy provider Sunrun.
Here are the details: Comcast Corp. (Nasdaq: CMCSA, CMCSK) will start promoting Sunrun services in select markets later this year, taking in a fee for every new solar energy customer signed and earning its way to up to 9.99% ownership of Sunrun's outstanding shares as part of a warrant agreement. Comcast subscribers will have the option of signing up for a Sunrun BrightSave plan where Sunrun owns the solar panels it installs on a customer's roof while the customer pays a fixed monthly rate for solar power with guarantees against significant price increases for 20 years.
Comcast's role in the actual delivery of electricity is effectively nil, but the cable company does shed light on why it's partnering with Sunrun, explaining that making "smart solar energy and storage solutions available to consumers complements Comcast's efforts to offer smart home services."
The smart home services here refer to Comcast's Xfinity Home offering. Xfinity Home, while first and foremost a home security service, includes access to connected thermostats that can be remotely controlled using the Xfinity Home app to reduce overall power consumption.
There are multiple interesting takeaways from the new Comcast partnership with Sunrun. First, Comcast is betting on solar power at a time when the energy sector is rapidly approaching a tipping point where renewable energy will be cheaper to produce than energy generated by fossil fuels and nuclear plants. The Sunrun press release cites a 2017 Bloomberg New Energy Finance report that predicts the US rooftop solar market will nearly triple in size by 2025. However, there are countless other studies that also show how the cost of producing renewable energies is coming down and creating more opportunities for growth.
Second, and perhaps more important to a telecommunications audience, the deal with Sunrun shows how Comcast is thinking at a high level about connectivity and the Internet of Things. Telecommunications companies have not had much success allying with the power utility sector in the past, but since both markets are going through transformational change today, there are new possibilities to consider. In particular, the intersection of energy delivery and Internet connectivity in the home shows how new IoT services can bridge a gap that's long existed between the telecom and electricity industries.
For Comcast's part, energy devices become just one more set of endpoints to manage, more or less equivalent from a communications perspective to managing set-tops, connected light bulbs and security systems.
Third and finally, the news about Sunrun becomes especially interesting in light of the rumor that AT&T Inc. (NYSE: T) may be looking to sell off its own home security and automation service known as Digital Life. (See Why AT&T May Dump Home Security Biz.)
While AT&T is hot on IoT, it hasn't had overwhelming success in the smart home space; nor has Verizon Communications Inc. (NYSE: VZ), nor many smaller cable operators in the past. In contrast, Comcast has not only grown its smart home customer base to more than a million subscribers, it's also looking at numerous ways to expand the business. They include more wholesale activity, an expansion in certified Xfinity Home devices, and now an official entry into the energy utility market.
- Comcast Eyes Electrical Surge
- Comcast Reaches for Xfinity & Beyond
- Comcast Gets Its IoT On With Icontrol Close
- Comcast Opens Up on Smart Cities & machineQ
— Mari Silbey, Senior Editor, Cable/Video, Light Reading