The second-largest rooftop solar installer in the U.S. is getting serious about energy storage.
Vivint Solar’s 233 megawatts of solar installed last year represented 19 percent growth over 2018, CEO David Bywater reported to investors Tuesday. That means the company grew faster than first-place installer Sunrun, which deployed 11 percent more capacity in 2019 than the year before. Vivint expects installations to grow another 15 to 20 percent in 2020.
But while Sunrun and Tesla, the third-largest rooftop solar installer these days, have prioritized battery systems as an add-on to their home solar business, Vivint has held back.
“It is no secret: We’re behind on storage,” Bywater said on a call with investors this week.
Home batteries store solar power so that customers can avoid expensive time-based utility rates and keep a home powered up during an outage, which solar by itself cannot do. Heightened consumer interest in clean backup power, following a wave of wildfire-related blackouts in California, spurred residential storage to its biggest-ever quarter at the close of 2019, when the industry installed 40.4 megawatts, according to data from Wood Mackenzie and the Energy Storage Association.
Vivint's history with storage
Vivint’s hesitance on storage goes back a few years. In 2016, then-largest solar installer SolarCity was acquired by Tesla, effectively merging the solar brand with the most recognizable home battery product, the Tesla Powerwall. Shortly thereafter, Sunrun launched its Brightbox solar-plus-storage offering, largely focused on the LG Chem Resu storage product.
Vivint initially followed suit, forging an alliance with the other big name crossing over from luxury electric vehicles to stationary batteries for the home: Mercedes-Benz. The two unveiled their exclusive partnership in the spring of 2017.
Mercedes-Benz enjoyed ample brand loyalty, formidable engineering talent and funding to spin up a home battery business out of the German company’s Silicon Valley outpost. What it never managed to do was bring a product to market at scale.
As Greentech Media reported in April 2018, corporate parent Daimler decided to abandon the home battery effort and focus on cars. That left Vivint without a go-to storage partner as competitors ramped up their battery sales (Vivint now advertises the LG Chem battery system on its website).
Catching up to a rapidly growing market
Now Vivint is working to catch up. The company doubled storage deliveries in the fourth quarter compared to the third, Bywater said. He predicted growth in the key storage markets of Hawaii, California and the Northeast.
“Storage is becoming an increasing portion of our business, and we believe it will be a material part of our business this year, with double-digit attach rates in markets where we offer a storage option,” Bywater said.
That promise of “double-digit” percentage attach rates falls short of the specificity that Sunrun, for instance, revealed to investors on its late February earnings call. Sunrun said it had installed 9,000 solar-plus-storage systems. Its attachment rate, which measures the share of solar customers opting in for a battery, reached 50 percent for direct sales in the San Francisco Bay Area in Q4, 35 percent for California overall and 20 percent nationwide.
Tesla reports total solar capacity and total storage capacity deployed — 530 megawatt-hours in Q4 and 1.65 gigawatt-hours for all of 2019 — but that includes the utility-scale Megapack as well as residential Powerwalls.
Other home solar companies are getting into the storage business too. Panasonic released a branded storage product, and SunPower now offers one of its own.
The delay in entering this market means Vivint missed out on whatever additional revenue several thousand early battery deals confer, and the company may face more of a learning curve than its peers with extra experience under their belts. But home storage has not yet gone viral — the U.S. market only recently breached the unprecedented level of installing more than 6,000 units in a quarter, after three quarters of consecutive deployment records.
By ramping up now, Vivint could still make headway in a market that analysts expect has plenty of growth in its future.
“I think that we're in the game,” Bywater said. “I think we're kind of catching up on the attach rates, and you'll see it be a much bigger piece of our play going forward.”
More companies are promising that than ever before, presaging more competition among providers and a greater range of options for consumers.