Distributed solar and storage company SunPower ended Q2 with gains and exceeded its previous revenue guidance, offering another indication that some U.S. residential solar companies have begun bouncing back from the coronavirus downturn that hamstrung business this spring.
Despite expectations for overall losses in 2020, SunPower logged a GAAP net income at $19.4 million for Q2, up from a loss of $1.4 million in the previous quarter, though well down from a net income of $121.5 million in last year's second quarter. SunPower reported a non-GAAP loss, however, which the company largely attributed to a long-term polysilicon contract that will remain with its manufacturing arm, Maxeon, when the two companies split.
SunPower's residential installations fell by 20 megawatts from Q1 to Q2 2020, but its 51 megawatts still put it ahead of competitor Sunnova, which reported about 48 megawatts deployed in Q2, and Vivint, which added 43.6 megawatts in Q2.
CEO Tom Werner attributed the relatively resilient quarter to increased demand for residential electricity and the company’s pivot to online sales when COVID-19 and related shutdowns began spreading in the U.S. Though in-person sales have since resumed in some areas, Werner said that the efficient online model “will stick long-term” for a significant portion of SunPower’s sales.
SunPower reacted early to the economic impacts of the coronavirus, slashing executive salaries, cutting work hours and shutting down all of its manufacturing sites across the globe.
Last week Sunnova also reported a positive second quarter and said it would grow customers 40 percent in each of the next two years. Vivint, which Sunrun announced it would acquire last month, reported earnings Wednesday showing that it shrank losses over Q1 and installations fell by more than 10 percent, a figure much lower than the drop in the residential market analysts forecast in June. Sunrun, the nation’s top installer, has yet to report Q2 results.
Tesla was expected to be perhaps the most adaptable to the halting of in-person sales because of its established online-only model. But in July, the automaker reported its weakest solar quarter to date.
On a Wednesday earnings call, SunPower hinted at the opposite trend. Norm Taffe, the company’s vice president of residential solar, said the leads SunPower sells to its network of dealers hit an all-time high in July.
SunPower focuses on new home solar, storage
Despite the turnaround from a choppy sales landscape in March and April, SunPower did not provide guidance for full-year 2020. For Q3, the solar provider expects to install between 95 and 120 megawatts, which would put it near deployment in the last quarter of 2019, usually the largest quarter by volume. SunPower expects to drop back to losses in the coming quarter as it spins out Maxeon. At the end of this month, when Maxeon begins public trading, SunPower shareholders will receive one share of Maxeon per eight shares of SunPower.*
As SunPower sends off part of its business, competitor Sunrun is ramping up to absorb Vivint, the No. 2 residential installer in the U.S. by market share. In response, Werner said SunPower will double down in areas where it excels, such as new-build home solar, custom products and its storage business.
“The net impact to us is we’re going to be more aggressive in areas where we have differential strengths,” Werner told Greentech Media.
SunPower introduced its own residential storage product in California in June. While it has pursued a “cautious ramp” compared to the aggressive storage vision of competitors like Sunrun, it’s now including batteries on about 30 percent of systems in the state; its commercial attach rates are closer to 50 percent. SunPower plans to roll out its residential system to other geographies by the end of the year.
*This figure has been corrected.