Home News Sunrun Beats Out Tesla’s SolarCity on Residential Installations

Sunrun Beats Out Tesla’s SolarCity on Residential Installations

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New analysis shows that Sunrun’s direct company now leads in residential solar installations.

According to data out of Wood Mackenzie Power & Renewables, Sunrun’s year-to-date installations through its vertically integrated station — in which the business manages funding, sales, marketing and installations — narrowly overtook Tesla-owned SolarCity installations through Q3 2018. Even though Sunrun’s direct company installed 163 megawatts in the first few quarters of the calendar year, SolarCity installed 156 megawatts. 

Last year Sunrun’s joint company, including direct installations and Sunrun-financed installations through channel partners like Trinity Solar Power and Solcius, outranked SolarCity. WoodMac’s newest figures show that, for the first time, Sunrun’s direct company has surpassed SolarCity installations.

Although Sunrun’so border is marginal, WoodMac older solar analyst Allison Mond expects the growth trend to continue. The information also indicates that big national installers could possibly be prepared for a resurgence.

“This really will be going against the trend of the strength of the long tail,” said Mond. “It’s demonstrating a large national installer actually can continue to grow and it’s not just losing market share to smaller companies, or it doesn’t even need to necessarily rely on its channel company to grow. ”

In the last few years, as big installers like SolarCity and Vivint faltered, the long tail of residential contractors reaped the benefits. (Vivint has produced a tiny comeback in recent quarters.) 

“Installation volume has been picked up from the long tail, mostly from the big regional players,” said Mond. “It’s created a great deal of chances for those companies there aren’t even all these huge installment behemoths on the market anymore. ” 

Although Sunrun has grown, its market share so far in 2018 stays at 9.5 percent according to WoodMac. Tesla/SolarCity asserts 9.1 percent. Both numbers are small compared to the 33.5 percent share that SolarCity once enjoyed.

Sunrun said in Q3 it included 13,000 customers and 100 megawatts of all deployments, the organization ’s greatest annual quantity in history. Its direct company is growing 50 percent year-over-year. 

At a Q3 2018 earnings telephone, Sunrun CEO Lynn Jurich stated Sunrun’s success “signifies we’re more attractive to big national partners like big-box retailers and homebuilders, we have supply chain advantages that we’re seeing play out now with batteries, plus we’re engaged with utilities to design the energy system of the future. ”

The near future is murkier for Tesla’s residential solar small business.

In answer to questions concerning Tesla’s market share, the company pointed to previous remarks from Senior Vice President of Energy Sanjay Shah, who stated in a November Bloomberg part that “we all don’t need to grow the company just by chasing volume.” In addition, CTO JB Straubel told USA Today in July which Tesla is “concentrated intently on the customer experience, not on using a higher market share. ”

Straubel said the firm was “looking at the bigger picture. ”

Not long after Tesla obtained SolarCity, the company declared it’d wind door-to-door revenue. In June of the year, the company ended its venture to market at Home Depot stores. Now you can only buy Tesla solar products in its stores and on the Internet.   

“That’s a fairly unproven way to market real estate solar,” said Mond. “Based upon this, I’m hoping to see that their installment volumes continue to decline or stay flat. ”

Sunrun, on the other hand, continues to employ an “all-of-the-above strategy to revenue ” said Mond, working with retailers, door-to-door, referrals and much more. The company also has stuck with leases or power-purchase agreements, while Tesla has increasingly moved toward customer-owned systems financed with cash or loans. 

Tesla said shuttering traditional and much more expensive sales channels, like through Home Depot and door-to-door, plus a decrease in marketing costs, has enabled the company to decrease its system cost by 10 to 15 percent. That’s subsequently passed through to customers. In November, the company cut costs because of its own systems by $3,000 to $5,000, for the normal customer.  

In accordance with Mond, this price drop is Tesla’s indication in a long time that it still has a stake in its residential solar small business. It's likely that Tesla is actually now making a higher margin on the programs it sells due to cuts to revenue channels and customer-acquisition expenses.

Although SolarCity has maintained its No. 1 market share in California, Mond said it’s unclear what will happen in other markets.

“It feels like every move they’ve made since being obtained by Tesla shows they aren’t concentrated on the residential solar business,” said Mond. “If their goal is to grow their residential company, they’re not even grateful. ”

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