Residential solar installers are gearing up for a surge of demand for battery storage products as the critical California market swings from a COVID-19 shutdown straight into wildfire season.
Storage has become increasingly central to the business models of home solar companies in the U.S. And as solar sales tick back toward pre-coronavirus levels, many companies are preparing for growing demand for batteries in the largest state market, as California anticipates a wildfire season expected to be especially hazardous due to the coronavirus pandemic.
Already, many solar companies have their highest “attachment rate,” the percentage of solar customers who also purchase storage, in Northern California, where in 2019 utility Pacific Gas & Electric shut off power to millions of residents in a bid to prevent wildfires from sparking.
Companies selling home solar and storage anticipate that trend to continue this year, with California's fire season, which generally runs through summer and into fall, now beginning amid a pandemic.
Though storage systems generally cannot back up an entire home, companies have refined their pitches on solar-storage systems to focus on self-reliance and resilience. And many would-be solar customers are more tied to their homes than ever before. Time spent at home for affluent customers who are considering solar may encourage some to double down on the resilience concerns that drive many storage purchases.
While the epicenter of that dynamic is still the Golden State, similar trends have also shown up in areas impacted by hurricanes, like Florida and Texas. The Atlantic hurricane season began on June 1.
“In places like Florida, where a power outage can be quite damaging because you have so much heat and humidity, interest is high. Texas is another area,” SunPower CEO Tom Werner told GTM. “But California is where the economics work the best.”
SunPower begins installing Equinox solar-battery systems
Residential solar companies reported significant declines in demand this spring due to the coronavirus pandemic. A nose-diving economy, along with shelter-in-place orders across the country, stalled solar sales, shrunk the number of customer inquiries and slowed or halted installations. Wood Mackenzie Power & Renewables forecasts residential installations will shrink by 25 percent in 2020. The solar industry said it shed tens of thousands of jobs in March and April.
Some of those same companies are now prepping for a rebound.
This week SunPower began installing its new in-house residential storage product, called Equinox. SunPower’s overall attachment rate in California hovers around 20 percent, but in some parts of the state, it touches 50 percent.
Werner said that in 2019 the company saw as much as a 15 to 20 percent increase in demand for its products during California’s wildfire season, and it’s already seeing more demand for the Equinox product than it can supply. “The wildfire zones are definitely the most significant catalyst because...you can use the storage solution to back up critical load and be resilient against public-safety power shutoffs,” he said.
Although the company is active in a majority of the U.S., it plans to keep the Equinox product only in California through the third quarter of 2020.
Brian Eglsaer, vice president of field operations at California-based residential solar company Freedom Forever, described a “parabolic dip” in March and early April, with demand bouncing back in May.
Some of that increase may be attributed to pent-up demand, but several companies said the drive for solar-plus-storage could lead to even more of a pickup.
California's wildfire season arrives during a pandemic
California is prepping for a particularly intense wildfire season this year. A dry winter means more susceptibility to fire. Shutdowns related to the coronavirus pandemic also stymied some preparation efforts, like prescribed burns.
When fires do start, the state is changing its techniques: putting out even small fires as quickly as possible rather than letting non-destructive fires burn to improve forest resiliency. That’s an effort to limit the number of firefighters needed to manage larger fires, with authorities worried about conditions at firefighting camps allowing the spread of the virus.
The National Interagency Fire Center has said many areas in Northern California were likely to have above-normal fire potential through the summer. The state has already logged 60 percent more fires in 2020 over the same timeframe in 2019, according to California Governor Gavin Newsom.
For homeowners uneasy about wildfire-related outages and who can afford solar-plus-storage systems, the pandemic might provide an additional incentive to add batteries.
“Now my home is my office, my school, my everything,” said Eglsaer. “I want to make sure I have reliable power.”
Roofing and solar company PetersenDean told Greentech Media it has seen the most demand for solar-plus-storage in high-fire-risk zones and areas that have been impacted by PG&E’s power shutoffs.
“In the high-fire zones…with the shutdowns, there’s a large demand for storage,” said Craig Rickabaugh, PetersenDean’s national director of purchasing.
PetersenDean’s overall battery attachment rates in California are around 32 percent, but that number swells to about 50 percent in areas the California Public Utilities Commission has identified as being at risk for elevated or extreme fire risk, said Rickabaugh. Those CPUC designations cover large swaths of Northern California near Oregon, the Sierra Nevada mountains and areas along the coast down to the border with Mexico.
In April, solar leader Sunrun said its battery attachment rate in the Bay Area, a region served by PG&E, exceeded 60 percent. Overall, Sunrun grew installations of its Brightbox storage system by more than 50 percent from Q1 2019 to Q1 2020.
Installers expanding their storage business will be doing so in a challenging environment, however. Coronavirus-related impediments delayed the launch of SunPower's Equinox systems by several months. Now that installations have started, SunPower is having to digitally train installers and its network of dealers on how Equinox works because of the pandemic.
As PG&E prepares to exit bankruptcy this month, the utility has said it plans to reduce the number of customers impacted by power shutoffs by one-third in 2020 and make its power shutoffs 50 percent shorter.
But Governor Newsom, who has repeatedly criticized the utility's wildfire response, expressed doubt in May that all of PG&E's promises would be met. “I don’t hold my breath,” Newsom said. “I am not naive that these utilities are where they need to be.”
Solar companies suspect some residents will feel similarly.