The solar industry's drive to reduce soft costs continues to gather pace with the announcement this week of the acquisition of one of California's largest distributed energy companies by Solar Universe, a franchise that leases and sells rooftop systems.

The acquisition in an undisclosed stock transaction will allow Solar Universe to use sales capabilities developed by Gen110, lowering the costs of acquiring customers without expensive marketing campaigns.

Joe Miller, an executive vice president at Solar Universe, told PV Tech: "Gen110 brings to us a direct marketing capability which allows us to target the consumers that are the most likely to purchase. You can target too many people with your message when only a handful are likely to buy. It's a big win for us all."

Customer acquisition costs vary market to market but range between $1,600 and $2,300, he said.

Solar Universe has 38 franchise offices and operates in 14 states and has around 6,000 residential customers. Miller said the company would add another 10 offices year and as many as 40 in 2014.

"We think that this acquisition is going to help us reduce customer acquisition costs by about 18% right out of the gate," he said. "We're going to really need to bring some very robust tactics to those markets."

San Francisco-based Gen110 was founded in 2009 as Solmentum and changed its name to Gen110 in January 2012. It was backed by leading venture capital firm, Kleiner Perkins Caulfield & Byers in May 2012.

“Our vision is that one day every home will produce on-site electricity, so combining our sales expertise with the installation know-how of Solar Universe is a very exciting prospect,” said Jason Brown, co-founder and chief executive of Gen110. “We’re looking forward to working with Solar Universe and providing homeowners with a more seamless path to getting cleaner and cheaper electricity.”

Last month, SolarCity announced the pending $120 million acquisition of Paramount Equity, a direct-marketing firm, to help the solar company grow its base of 38,000 customers.

"The US solar industry is a really dynamic and growing industry," said Miller. "When you're beginning to see acquisitions like the one that we've made or SolarCity has made it's a sign that the industry is strong. Companies that can make these kinds of mergers are going to distance themselves from the middle or the bottom of the pack."

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