Solar panels are installed on a roof in Washington, D.C. Photo: Michael S. Williamson/The Washington Post via Getty Images

Sunrun, the largest U.S. home solar provider, is buying rival Vivint Solar in a $3.2 billion all-stock transaction, the companies announced Monday.

Why it matters: The deal between major players brings new consolidation to the U.S. solar sector, a growing market that has been hindered by the coronavirus pandemic.

  • The companies, who have a combined customer base of 500,000, said the deal would provide $90 million in annual cost "synergies."
  • It says they see room for significant growth, noting that residential solar is only at 3% penetration in the U.S.

What they're saying: "Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries," Sunrun CEO Lynn Jurich said in a statement.

What's next: Both companies' boards have approved the deal, but it still needs sign-off from shareholders as well as regulatory approvals. It's expected to be completed in the fourth quarter of this year, they said.

  • Sunrun's stock is up over 3% in pre-market trading on Tuesday.

How it works: Greentech Media notes that while the companies' regional sales overlap considerably, they have also pursued different strategies.

  • Sunrun has aggressively pushed its paired solar and battery storage systems, while Vivint "has a strong ground game and has long been a leader in door-to-door solar sales."

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