Takeaways from a strong Q4 for ‘the new SunPower’

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Since announcing that SunPower’s high-efficiency cell manufacturing business would be spun-off into its own company, CEO Tom Werner has referred to the remaining company as “The new SunPower” — and that idea looks to be more than just a change in mindset, as SunPower posted a rare profitable quarter in Q4, capping off an even larger rarity: a profitable year.

The company posted a net income of $5.4 million to close Q4, a considerable improvement quarter-over-quarter and year-over-year, as the company finished with losses of $15 million in Q3 2019 and $158.2 million in Q4 2018. On the whole, SunPower finished 2019 with a net income of $22.2 million, a much different story than 2018, when the company finished $811.1 million in the red.

On top of this profit, SunPower finished the year with $420 million in cash and plans to pay off more than $30 million of debt in Q1 2020.

The favorable quarter was driven by record shipments, which ended up being ahead of projections. Broken down, the company shipped 536 MW of modules for distributed generation projects, up 95% from 2018, and 256 MW for larger-scale projects. Of those 792 MW shipped, 420 MW came from the company’s P-Series shingled solar modules.

While the P-Series accounted for 53% of all module shipments in Q4, the Maxeon module actually shipped more than the P-Series in the distributed generation sphere, accounting for 39% off all shipments in the quarter.

In total, the company shipped 2.5 GW of modules in 2019, representing 80% growth over 2018. While this still leaves the company about 1.5 GW away from a spot on the top-10 list for modules shipped in 2019, it’s greater growth than all but one company on that list (First Solar).

In terms of what these numbers mean for installation figures, the company added more than 12,000 residential customers in Q4, bringing its total number of residential customers above 305,000. The company also sold 27% more MW of residential solar than in Q3. On the storage side, SunPower built up its project pipeline to more than 175 MW, headlined by a 20 MWh storage project from Chevron.

Now that SunPower has posted a strong Q4 and a profitable year, the next challenge will be sustaining this success while building up the new Maxeon Solar Technologies. That company is being supported by a $298 million investment from Tianjin Zhonghuan Semiconductor, one of the world’s largest silicon wafer makers and the spin-off is a move that Werner believes is the key to unlocking long-term shareholder value.