LOS ANGELES, Oct 9 (Reuters) - SolarCity Corp saidon Wednesday it will acquire Zep Solar, a maker of mountingsystems for residential solar panels, for about $158 million instock.
The acquisition announcement was SolarCity's second in asmany months. In August, it said it would pay $120 million fordirect marketing company Paramount Solar.
But the Zep Solar deal is SolarCity's first foray intoproviding the hardware for its rooftop solar systems. Thecompany's chief executive, Lyndon Rive, said Zep's products costless than rival mounting systems and have cut in half the amountof time it takes for SolarCity's installation teams to put up atypical residential system to one day from two to three days.
"The only way we can expand our growth and penetrate moremarkets is to reduce our fully loaded cost of installation,"Rive said in an interview.
Zep's hardware eliminates the need for aluminum rails tosupport the panels, allowing them to lie flush against the roof.This makes systems with Zep's hardware more aestheticallyappealing to customers, Rive said.
SolarCity, which is backed by Tesla Motors Inc founder Elon Musk, has grown rapidly thanks to a business modelthat allows homeowners to pay a monthly fee to lease solarpanels, eliminating the need for a large up-front investment.But the San Mateo, Calfornia-based installer is also underpressure from investors to cut costs, which have escalated dueto its dramatic growth.
Both the Zep and Paramount acquisitions are aimed at helpingSolarCity meet its goal to reduce overall costs by 5.5 percent ayear. Paramount's remote selling expertise will help SolarCityreduce the amount it pays to attract new customers, the companysays, while the Zep deal will allow it to install more systemsin less time.
Zep Solar will operate as an independent business unit ofSolarCity, which plans to sell Zep's products in Australia,Germany, Japan and the United Kingdom - markets where it doesnot currently have a presence.