Listen to Part 1: Origins here.

Audio Source: https://www.sunrun.com/quick-reads-from-ceo/masters-of-scale-podcast-sunrun-ceo-lynn-jurich

Transcript: https://mastersofscale.com/wp-content/uploads/2021/01/rapid-response-transcript-lynn-jurich.pdf

SAFIAN: You mentioned climate change. With health concerns rising over the last year, it
sometimes felt like climate's become, I don't want to say a secondary priority, but it's been
pushed down. Sustainability now certainly includes health in a way that maybe it didn't a year
ago. What do you think the long term implications of that will be?

JURICH: I think that we're seeing more impact from extreme weather than maybe the
question appreciates. If you think about California as an example, with people at home,
working from home, schooling at home, and the fact that the power is getting turned off
because of fire risk, that is a very visceral experience for people, and we'll see more of
this.

Puerto Rico is another example where the energy system is just frail. I think 70% of the
energy assets are old, and extreme weather is only making it worse. So I do believe that
it is and will increasingly become visceral for people. And back to that change formula, I
think that dissatisfaction is, and that pain will drive awareness and attention to it.
We're taking a different approach, which is, independent of your view on climate, we can
offer you a better lifestyle and meet carbon emission goals. If you look at the home,
there are about four big choices you can make around energy that lead to your carbon
footprint: your car, how you power your home, your heating, and your cooking. An
electric vehicle is less expensive. An induction stove is superior. An electric hot water
heater can save you money, and solar saves you money. So if you look at what we can
create for a household, it's an average of $1,000 to $2,000 of savings. So you don't have
to be a climate warrior to adopt these products.

The challenge is really social and political and financing, because many of these green
assets, they're more expensive upfront, but they're less costly over time. And that was
the innovation of starting Sunrun was we saw solar as a technology that would clearly be
the future.

What was so breakthrough about solar is that it can be distributed. You can site it locally
where the power is actually going to be used. In the U.S., two-thirds of your power bill is
transmission and distribution. From a first principle standpoint, if you're able to use
existing infrastructure and put the solar on there, it will be a more affordable solution. We
just needed to eliminate the upfront cost, and so we invented the business model of
solar as a service where we paid to install the solar system and the homeowner just
buys the electricity, just like they would from the utility, only it's cheaper and it's green.
When we think about climate, we don't think it needs to be this ethereal thing. It's about
everyday savings, a better lifestyle, and job creation.

SAFIAN: Now, when you describe all that, it raises the question of why residential solar isn't
more ubiquitous. It's still a small proportion of residential homes have solar. So what is that
about?

JURICH: First, because this is called Masters of Scale, I’ll throw out a few scale facts for
you all, so one, we already have 500,000 customers, just Sunrun, and we've raised
capital to install about nine billion dollars worth of solar. Sunrun is the second largest
owner of solar in the U.S. behind NextEra, the huge utility. Residential does have scale
now and will increase.

If you look at a market like Hawaii, where the value proposition was strongest first, it's
about 30 to 35% of households have solar power. California is about 12%, the rest of the
country is about 1 to 2%. It will all get there. The amount of power you can get off of a
rooftop with solar would serve 75% of California's energy needs, it would serve 40% of
the U.S. energy needs, so it is a scale technology. What's holding us back is inertia. It's
why do I want to do it now? 90% of Americans are in favor of solar. The interest is there.
It's just the challenge of friction in the process.

SAFIAN: So I have to ask you, your biggest competitor is Tesla, which took over SolarCity a while back. What's it like to compete against Elon Musk?

JURICH: Well, you never underestimate him, that's for sure. I think we're still in the
adoption phase where a rising tide lifts all boats. So I'm very pleased with their brand
being well-known, well-liked because it just increases the awareness of solar energy. As
we mentioned, it's only 1, 2% penetrated right now, so that'll help lift us. Recently when I
looked at the data in the markets where we're both competing, we have a higher close
rate, effectively. Again, it's this normalization of solar that's a benefit. It's the awareness,
it's the trust in their brand, and I aspire to, over the years, have the Sunrun brand be
better known in terms of turning your home into an electric energy asset.

Lynn Jurich of SunRun, Pt 2: Growth

The Swyx Mixtape