As it looks to sell its Oregon factory, SunPower is pushing into storage and energy services. “We’ll take over your energy bill,” the company aims to be able to tell future customers.
After a string of big losses, SunPower is working to overhaul its business and financials.
In September, the California-based solar manufacturer and development company officially exited utility-scale development, and following its Q1 earnings call this month CEO Tom Werner told Greentech Media that “SunPower will become an energy service provider” rather than a solar-only shop.
Meanwhile, the Portland Business Journal reported last week that SunPower has placed the Oregon factory it purchased last year from SolarWorld on the market, with plans to lease back the portion of the facility it uses.
Amid these changes, Werner elaborated on the company’s evolving vision in an interview on the sidelines of GTM’s annual Solar Summit last week.
SunPower is already managing its business in two segments: SunPower Energy Services, which encompasses residential and commercial solar systems, and SunPower Technologies, the manufacturing side.
Spokesperson Natalie Wymer told GTM that selling the Oregon facility and leasing back the portion SunPower needs for manufacturing is a “prudent economic move.” SunPower employs only about 200 people there, where SolarWorld had up to 800 workers at the 480,000-square-foot location. Wymer said the sale does not impact SunPower’s greater vision or commitment to U.S. manufacturing.
Still, it’s clear that SunPower is placing a much heavier emphasis on the services side of its business going forward.
The company plans to unveil new capabilities for its all-in-one Equinox residential system this fall, adding storage plus services to the solar systems it already delivers. In the future, Werner said, the company will work to help customers with rate arbitrage and other grid services.
“Now, this is a vision. A vision is not a business plan,” Werner added. “The business plan is sell more storage and services.”
Werner said SunPower is currently working to test its Equinox storage systems and ensure they are ready for release, which it hopes will spur more dealers toward “one-stop shopping” of the company’s products. (It already has an inverter-integrated module, now in partnership with Enphase.)
“As the years go by, we’ll lead with the solar system, but we’ll integrate services and storage. Eventually our vision is, we’ll say to the customer: ‘We’ll take over your energy bill,’” said Werner, adding that it will reduce costs for customers.
Going forward, SunPower will sell systems as they’re built, offloading commercial leases at “notice to proceed” and residential leases when they hit commercial operation. Pairing that development with ongoing grid services will allow the company to create value through one-time sales as well as ongoing revenue from services.
Service revenues are just a fraction of the company’s business today, but by next year they will be a “much bigger number,” Werner said.
The company is already starting to carry out part of its grand vision on the commercial and industrial side, where it sells its solar with a battery and demand-charge management software, which Werner said offers “stacked revenue.”
SunPower is also dabbling in grid service capacity bids in wholesale markets. Last year, the company bid a small amount into ISO New England. It plans to expand those efforts with time.
“Commercial services [and] grid services capacity [are] happening as I speak,” said Werner. “As wholesale markets evolve, we’ll be there.”
Expanding the grid services vision to the residential side, he said, will be more difficult. That’s because smaller, more distributed systems mean higher variable use of energy as opposed to more centralized commercial systems.
As SunPower grows further into this space, Werner said partnerships — and possibly acquisitions once it gets on a more solid financial footing — will help the company expand its reach and gain competencies.
Many other market players “share the vision in some form,” according to Werner. He pointed to Sunrun — which is also pairing solar with storage and bidding into wholesale markets — and National Grid in the residential space and European utilities such as Engie plus oil and gas companies like Shell in commercial and industrial.
While that will create competition as the overall market changes and the role of utilities versus developers versus service providers becomes more muddled, Werner said SunPower’s positioning within the solar market should provide an advantage.
“Only the paranoid survive,” he said, citing a common business adage. “We’re certainly paranoid.”