How Sunlight Financial is helping homeowners go solar

CEO of Sunlight Financial, Matt Potere, joins Yahoo Finance to discuss Sunlight Financial's recent debut on the NYSE after a SPAC merger and how the company provides homes with a smooth transition to clean energy.

Video Transcript

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JULIE HYMAN: Sunlight Financial just went public through a SPAC deal. It started trading yesterday. And the CEO of the company is joining us now. That is Matt Potere. Matt, your company provides financing for solar installations. And first of all, I just want you to kind of set the table here. Why does it make sense about your business model in terms of doing the financing separately from the company itself? In other words, some solar providers do the financing themselves. Some do it separately through a vehicle like yours. Why does that sort of separate model make sense?

MATT POTERE: So at Sunlight, we have partnerships with over 1,200 solar installers and home improvement contractors across the country. And our contractors tell us they love partnering with us because we make the point of sale financing experience very simple. It's absolutely paperless. It's a completely digital process. And we can go from credit application to full approval in less than two minutes.

And so we provide that simple point of self-financing to help homeowners go solar. And today, over 125,000 homeowners have gone solar thanks to Sunlight.

MYLES UDLAND: And then, Matt, as you get the projects financed, are you guys working with homeowners to ensure that they're going through the process they need to get the breaks that you get, having solar in your home? And that other side of it as well because certainly, the install is one of it. But everyone hears about this payback period. And I am sure there are thousands of homeowners out there that ended up not following through on the other end and are kind of not getting the benefits that they had hoped from their solar installation.

MATT POTERE: Yeah. So one of the great things about going solar and financing with a company like Sunlight is we allow customers to go solar immediately with no money down. So they have no money down. Their payback is effectively immediately. And they start saving. Most homeowners save money right away on their utility bill. And over the life of that solar system, they'll save tens of thousands of dollars. So the vast majority of homeowners, they get an absolutely terrific value proposition by going solar. And obviously, there are great environmental benefits as well.

BRIAN SOZZI: Matt, is SolarCity the dominant player in the market right now?

MATT POTERE: So there's a very big market today. Certainly, Tesla, which acquired SolarCity a few years ago, is a big player. But there are a number of other public companies as well as some very, very large private companies. There are nearly 4,000 contractors in the US that are providing solar, so some that are providing it nationally and some that are in local markets.

And as I mentioned, we have relationships with over 1,200 solar installers and home improvement contractors. So we cover that market really, really well.

MYLES UDLAND: And Matt, I just want to follow up then. If you have no down on helping someone get an install done, so where are you then sitting in getting your payback for putting up the capital to get this install done? How are you working with the homeowner to make sure they're getting the benefits that they expect with having a solar home but also that you guys are getting paid back on your investment in the project?

MATT POTERE: Yeah. So Sunlight really manages two sets of networks. So on one side, there are the contractors that I mentioned, those 1,200 partners. On the other side are capital providers. And we have relationships with banks and credit unions and other institutional capital who want access to these high-quality loans with great risk-adjusted returns.

And so we help facilitate the loans between these two networks of partners. And what our capital providers tell us is they love access to these assets. They really are high-quality. And one of the things we're most proud of is that we originate the highest credit quality in the industry. So those, our capital provider partners-- and we think about them as long-term partners-- are really pleased with the returns that they experience as well.

JULIE HYMAN: So in that case, Matt, when you're looking at the growth that you're expecting-- and we should say you're expecting revenue growth this year of 77% and total funded loan volume growth of 81%. You do make positive EBITDA, or you're expecting to, on an adjusted basis. What kind of growth do you need in solar installations broadly in order to bring you guys to profitability? How much do you think the industry will grow and needs to grow?

MATT POTERE: Yeah. So it's probably important to note first that Sunlight is a profitable company. We're profitable. We're cash flow positive. And we have a healthy balance sheet.

And so we recently listed. And we're really excited about that and being out in the public markets. But it wasn't a transaction that we needed to do. It was an opportunity for us at the right time at the right time for our business.

The solar market has been growing incredibly fast. And so to put that into context, over the last decade, the market is up 10X. And analysts forecast it to continue to grow really rapidly. Today, only about 3% of US households have solar on the roof. So we think there's a tremendous amount of runway here. And we've grown faster than the market. And we're excited to continue to rise and ride this wave and help provide homeowners simple access to financing so they can go solar.

JULIE HYMAN: Matt, thanks for being here. Matt Potere is CEO of Sunlight Financial. Appreciate your time this morning.