Part 1. Retailers. Tesla sales, Sunnova innovation, and the next big thing for energy storage.
Solar has had a huge year. If you’ve been tracking with The Swell, you’ve seen the articles about record growth and unprecedented sales, and know that free power from the sun is on the rise in a big way. We thought it was time to do a highlight post on solar in a more comprehensive way, with an overview on how retailers are doing, what buyers are thinking, and what the future of solar might look like in the coming years. Some of it might surprise you, but all of it is pretty encouraging and hopeful (that part shouldn’t be too surprising.)
This is the State of Solar and Storage: Retailer Edition
Tesla Takes Sales Off the Doorstep
One of the big stories of the year was the Tesla / SolarCity merge (link to our article here.) As Tesla continues to work toward incorporating solar into their overall brand, and essentially, a holistic energy-hip lifestyle, they have become a leader in the changing world of solar retail. Most recently, they’ve decided to shift the way they’re pitching solar to residential customers.
Historically, many solar retailers have taken to the streets to get their product up on customers’ roofs. Not anymore. Last month, SolarCity told all of its employees that door-knocking was out, and online retail was in. What caused the change? Tesla reported that they talked to their customers, and frankly, they didn’t love the whole salesman-at-the-door thing. For most customers, having time to research and discover the amazing world of residential solar alone, from the comfort of their couch, was much more preferable. Tesla has seen huge growth in their online and brick-and-mortar retail platforms--enough to justify doing away with door-to-door sales altogether.
A lot of people saw this shift coming. Customer acquisition costs through traveling salespeople are rising, especially in comparison to newer tech methods. Since Tesla already has stores set up, and already has a plan in place to incorporate solar into their brand, the shift to in-store solar selling makes sense. In a matter of time, we’ll see if other leaders in the solar retail industry will follow suit. Since Tesla has recently reported some big sales from SolarCity (closing an equity sale of 38,000 residential solar installations this month, after reporting a sales of 26,000 home residential systems in December), other companies may be eager to follow their lead.
Sunnova Enters into a “New Stage” of Solar
Sunnova, another solar energy company, recently announced some pretty huge numbers after the close of their latest 2017 funding round… like $775 million huge. That means that the company has now raised more than $2 billion in the past four years to push the residential solar sector forward. Many are encouraged to see this sort of cash pouring into solar after some less encouraging news from Sungevity and Verengo Solar. John Berger, Sunnova’s CEO, said he saw the bankruptcy of Sungevity and Verengo coming, and despite the downfall of other companies, he feels very optimistic about where Sunnova is headed. According to Berger, the companies that aren’t making it aren’t following the shift in solar sales. He sees residential solar headed into a whole new stage.
“We continue to see that our industry is a power industry, and that residential solar is becoming conventional power, which is a good thing for all of what we’re trying to achieve as an industry,” Berger said. “What really goes to the heart of it is if you manage a good financial shift, the investors will come, the lenders will come.” The certainly came to Sunnova in droves.
Sunnova is now the sixth-largest residential financier in the country (according to GTM Research.) Their overall market share in 2016 was 3 percent, but Berger says that this isn’t the number to go by. Fast approaching cash flow positive, Berger says the company will continue to grow and thrive not because of any revolutionary ideas, but because of their customer care.
“We want to make sure there’s the proper oversight involved in both sales and certainly the installation process, and if something is not right there, that the company that did it makes it right.” Berger feels the running a good business is what will drive growth--you don’t have to change anything about solar as a concept. It’s already indisputably a great idea.
Energy Storage: The Next Big Up-And-Comer
As solar retailers feel out the market and how to continue its rapid growth, energy storage companies are naturally on the rise, organically falling into step behind solar as the perfect, and perhaps even necessary, partner to every solar energy system. Though energy storage is still just an emerging industry with a lot of growing to do, huge incentives, like California’s SGIP, and making the pairing of solar and storage more and more mainstream. Pairing solar with storage is not only great for solar installers, but also for the weakening and vulnerable power grid. The reasons to pitch solar and energy storage together only continue to grow.
Generate Capital recently stated, “With the falling cost of battery storage and additional incentive from the federal tax credit, solar-plus-storage is finally ready to become a standard offer presented to commercial and industrial customers.”
Yes, energy storage, along with solar, are moving into the mainstream, becoming a more and more common development for commercial and industrial properties… but we think residential solar-plus-storage deserves a mention, too, especially given the crazy-high incentive SGIP is offering.
The SGIP’s incentive in California is so high, it is about to make solar with storage more cost-effective than solar without storage for a lot of customers. Going solar is smart because it protects customers from ever-rising electricity rates, and offers backup power and power resiliency. Getting energy storage already makes a ton of sense for all of these customers. Energy storage, like home batteries, let you keep all of the energy you generate from solar panels during the day, since you probably need it more in the evenings, anyway. It also offers much more reliable and versatile backup power, since energy storage can discharge energy at night, when the sun isn’t shining and solar panels are not producing power at all. In short, most customers with solar already want storage, whether they know it or not. Now, for Californians, SGIP is about to pay these households to get what you already want.
For homeowners that have debated whether or not to add a home battery to their solar energy system, now is definitely the time.
The shift in focus from retailers to consumers is pretty easy when we’re talking about energy storage (okay, so you just got a little preview of the next post.) If the solar climate is pretty great for retailers, it’s really great for buyers. The next post will cover the State of Solar and Storage for consumers, and why investing in solar now is better than ever.