California power shutdown certified solar homes from SunPower?

SunPower met or exceeded 3rd quarter guidance, though it fell short of profitability by $15 million on $476 million in revenue. The company revealed that they have ~40,000 new home pre-orders for the California solar mandate market, and their Equinox home storage system launches in Q1.

October 31, 2019 John Fitzgerald Weaver

Sunpower - 23.5 MW at Six Flags in New Jersey

SunPower’s 3rd quarter exceeded (volume deployed, revenue, profit/loss) and met (margins) projections in key metrics, showed much potential for the future with new technologies and markets, though the company as a whole was still short of a quarterly profit.

SunPower lost $15 million in Q3’19, on $476 million in revenue. And while the chart above might suggest a bit of a roller coaster, last quarter’s profitability bump was due to a one off sale of lease projects they had on the books. Though, one can see a definite pattern of growing net income in the third row of the above image, with the company expecting profitability toward the end of 2020, and consistency in the field starting in 2021.

SunPower deployed 586 MW of solar modules, with 73 MW being in the U.S. residential market, and 51 MW for the commercial U.S. market. Stresses in the Massachusetts and Illinois commercial and industrial markets slowed deployment of projects, with pv magazine USA specifically reporting on some of the Massachusetts market stresses.

The company has been able to grow volume as more manufacturing facilities have come online, specifically noting that their P-Series product is scaling as planned. Current quarterly manufacturing capacity is ~700 MW, with the E-Series product having 175 MW, X-Series at 120 MW, P-Series at ~330 MW, and the all powerful Maxeon 5 (A Series) with 75 MW. Regarding Maxeon product specifically, the company stated that it hopes to announce a new financial agreement that will scale that product specifically.

A most interesting tidbit is that SunPower has a 40,000 new home backlog for the California market, with the company claiming a 60% marketshare. They’re selling these panels direct to home builders, not through third party lease companies. The company noted that 80 new home communities, coming by default with SunPower solar panels, in Q3’19.

In the commercial market, energy storage – via their Helix solution – has a 35% couple rate when they install solar power. The group believes the residential market will have a 10-20% coupling rate as 2020 ends at their Equinox system scales.This author believes that their California coupling rate will end up being much higher, with pv magazine USA reporting on the topic this morning showing that there is very strong demand due to the Pacific Gas & Electric power shutdowns affecting nearly 1,000,000 accounts and greater than 2,5 million individuals.

Internationally (above image), the company is showing strong growth, with an estimated doubling of volume shipped from around 900 MW to 1.8 GW. Europe, the Middle East and Africa showed 40% growth, Asia-Pacific had 160%, and Latin America – albeit from a small base – grew 300%.

In general, the market, as of press time seemed to be feeling strong (below image) on the report, up 15% this morning after a heavy decline yesterday. And if you do want to delve deeper – because there’s no way for this author to cover everything within a respectable amount of time, check out these two PDFs released as part of the quarterly call – the Supplemental Operating Performance Information and the Q3 2019 Supplementary Slides.

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