After concern that stay-at-home orders and financial recession would hobble the U.S. rooftop photo voltaic trade, the nation’s largest residential installer took successful in Q2—however not an enormous one.
Sunrun hustled to transform its gross sales efforts to distant and digital strategies within the early days of the coronavirus pandemic. After making the swap, it discovered 10,700 new clients within the second quarter and put in 78.1 megawatts of photo voltaic capability—its lowest numbers for the reason that first quarter of 2018.
Second-quarter installations fell 20 p.c in comparison with the earlier, largely pre-coronavirus quarter, and 24 p.c from the 103 megawatts put in within the second quarter of 2019. An uptick in exercise after the preliminary lockdown—together with an all-time excessive for single-day orders in April—didn’t overcome the broader headwinds like social distancing mandates that saved installers from coming into properties, and metropolis and county allowing workplace slowdowns that prevented initiatives from getting permitted and interconnected.
However it additionally confirmed that the unprecedented disruption did little to change the basics of the enterprise, in distinction to its disastrous results for fracking firms and oil firms, or many native and regional photo voltaic installers extra reliant on door-to-door gross sales.
“What drove the decrease installs within the quarter was not buyer curiosity,” CEO Lynn Jurich stated in an interview Monday. “It was that we have been restricted from promoting in lots of locations and putting in in lots of locations.”
Sunrun’s inventory surged after the early July announcement of plans to accumulate the following largest competitor, Vivint Photo voltaic, in a deal that may reshape the residential photo voltaic sector. However in latest days, traders have pushed Sunrun shares to all-time highs. After beginning the yr round $14, the inventory closed Monday above $47.
“It was undervalued for a very long time,” Jurich opined on Sunrun’s share worth. “This can be a decades-long alternative.”
Installations ought to be 20 p.c larger in Q3 than Q2, Jurich added, heading towards regular ranges by the tip of the yr. However it’s nonetheless not clear beneficial properties within the second half of 2020 will permit Sunrun to beat its 2019 efficiency.
Constructing capability amid a slowdown
A lot of the residential photo voltaic trade needed to scramble to digitize gross sales when face-to-face contact grew to become untenable.
“A variety of these working initiatives that have been on our roadmap, we have been pressured to speed up them,” Jurich stated. “We’re leaner going into 2021, or every time the world will get again to regular.”
Rival rooftop installer Tesla stood out because the lone firm that had pivoted to completely digital gross sales earlier than the pandemic. However Tesla nonetheless noticed Q2 installations drop 23 p.c in comparison with Q1; Sunrun’s fell by solely 20 p.c, even with the swap of its gross sales methods.
Sunrun additionally used the quarter to construct up its roster of grid companies contracts, wherein it networks residence battery programs right into a “digital energy plant.” Three Bay Space group alternative aggregators signed up on the finish of July to offer their clients emissions-free backup energy, and Sunrun finalized applications with utilities Southern California Edison and New York’s Rockland & Orange in June, bringing its tally to 10 grid companies initiatives.
Nonetheless proving grid companies alternative
The experimental nature of a few of these grid companies agreements suggests there’s work to be performed to show their broader commercially viability.
Sunrun hopes to enroll 300 current clients in SCE territory, and pay them $250 to take part in a year-long trial. Sunrun will dispatch the house batteries primarily based on indicators from the utility, decreasing a family’s load and even exporting electrons to the grid as wanted.
The SCE undertaking is designed to check essential questions on the distributed grid imaginative and prescient, resembling what sort of compensation clients need, what trade-offs they face when their batteries reply to utility instructions, how successfully the distributed tools performs in comparison with different grid infrastructure.
“The expertise works,” Jurich stated. “The problem is the market constructions aren’t there to compensate the worth that batteries convey.”
After a number of years build up its Grid Companies enterprise, Sunrun turned to startup Autogrid for software program to regulate the fleet of distributed batteries, fairly than construct the competency fully in-house. That lets Sunrun concentrate on its actual value-add: managing the client relationship, Jurich stated.
“We enroll the client, we talk all the data to the client and the utility, after which we use Autogrid for the software program layer,” she stated. “We did suppose that was the quickest option to scale it.”
Although Vivint has admitted to being “behind on storage” relative to friends like Sunrun, the acquisition might nonetheless speed up the battery enterprise due to Vivint’s energy with direct-to-home gross sales.
“You’ll be able to actually goal the areas the place the utility needs the digital energy plant sources,” Jurich stated. That strategy might let Sunrun focus gross sales on the distribution grid feeders the place versatile capability could be Most worthy to a utility.
Sunrun didn’t reveal up to date numbers on the share of shoppers including power storage, because it has in earlier quarters. However Jurich stated that battery attachments are trending larger, and can seemingly speed up within the second half of the yr as battery prices fall.