Main U.S. rooftop photo voltaic installer Sunrun has bounced again from the hunch it skilled at the peak of coronavirus shutdowns.
The corporate put in 109.5 megawatts within the third quarter, up 40 % from 78.1MW within the second quarter. That put in capability additionally marked a 2 % enhance over Q3 of 2019.
Meaning Sunrun is again in development territory after the coronavirus put a pause on in-person gross sales and a few set up work earlier this yr. However the firm has extra work to do to get again to its pre-pandemic trajectory.
Firm management predicted Thursday that deployments would rise 10 % within the fourth quarter of this yr to 121.5MW, which might beat its earlier file of 117MW in This autumn 2019. However that might nonetheless see the corporate fall wanting the 11 % annual development in deployment it achieved in 2019.
Sunrun had extra progress to report in its power storage enterprise, which the corporate describes as a value-add for photo voltaic clients and a differentiator from different photo voltaic choices. The San Francisco-based firm has now put in 13,000 BrightBox solar-charged battery methods, up from the beforehand reported 10,000 in Might, and is making the product accessible to all states the place it sells photo voltaic.
The merger between Sunrun and Vivint Photo voltaic, the second largest rooftop photo voltaic installer, closed in October, so the businesses didn’t report mixed financials for the third quarter. The mixed firms will develop above the market common in 2021, and can achieve this whereas managing margins, Sunrun CEO Lynn Jurich mentioned on a Thursday name with buyers.
Development in storage, however income stays distant
Sunrun additionally expanded its digital energy plant efforts with utility Southern California Edison, signing a 5MW grid providers contract which can pay a set fee over 10 years for Sunrun to mixture batteries in that territory. That contract will kick in in 2023.
The newly introduced deal adopted a partnership made public in June, involving 300 present Sunrun photo voltaic clients in SCE territory. Evidently, SCE determined it did not want to attend for the complete yr of testing to maneuver forward with a extra formal settlement.
“This can be a very lengthy contract, and clearly with a really subtle, giant utility,” Jurich mentioned in an interview Thursday. The 5MW cope with SCE builds on quite a lot of solar-storage aggregations that Sunrun is engaged on in California, Massachusetts, New York and Hawaii. Digital energy plant contracts are an rising grid product, nevertheless, and a few codecs solely lock in a number of years of predictable income.
BrightBox gross sales are up 45 % in comparison with Q3 2019, Jurich mentioned, and 2021 installations are anticipated to double from 2020, increasing the vary of shoppers that might be enlisted to assist utilities mitigate peak grid calls for.
Nonetheless, will probably be a number of years earlier than grid providers contribute important income to quarterly earnings, Jurich famous. Partly that is as a result of it takes a number of years for the corporate’s contracts to kick in. It additionally takes time to put in sufficient tools in individuals’s houses to generate considerable grid providers income.
That is an space the place the mixed forces of Sunrun and Vivint have an edge, she mentioned.”We now have these grid providers applications and it’s onerous for different gamers to compete for these, as a result of they don’t have the size or the visibility we constructed over the past decade.”
A kind of rivals that trailed Sunrun on battery gross sales was Vivint. However the former Vivint crews have now elevated their battery attachment fee in California to 20 %, Jurich mentioned.
Decrease prices from COVID-driven digital gross sales but to emerge
As quarantine set in again in March, the photo voltaic trade misplaced its favourite gross sales method: the face-to-face chat in a possible buyer’s home.
However as extra tech-savvy installers migrated their gross sales ways on-line, they observed a brand new alternative: promoting in quarantine may power enhancements that might in the end decrease buyer acquisition prices, a persistent problem for rooftop photo voltaic firms. Sunrun beforehand mentioned it may save $2,000 per set up based mostly on this digital-first method.
“It was an actual accelerator, it did enhance our company metabolism,” Jurich mentioned of the shift to digital gross sales. However “it takes time for all of it to scrub by way of” by way of decreasing buyer acquisition prices.
Sunrun’s “creation value,” or the price of including a brand new photo voltaic buyer, stood at $three.55 per watt in Q3. That is down from the earlier quarter’s $three.72 per watt, however nicely above the annual determine for any of the final three years.
The costlier creation value is essentially as a result of a rise in the price of set up since Q1, probably stemming from the logistical complexities of working throughout a pandemic. Gross sales and advertising bills peaked in Q2, and in Q3 fell again to the extent they had been at in 2019.
“Whereas Sunrun confirmed quarter-over-quarter declines in creation prices, these stay a lot larger total for Q3 than they had been in the beginning of the yr,” mentioned Bryan White, photo voltaic analyst at Wooden Mackenzie. “Gross sales and advertising prices additionally dipped from historic highs in Q2, however we’ve but to totally see the $2,000 per buyer value reductions as a result of adjustments in operations introduced on by Covid-19 that Sunrun has cited.”