SunPower Corp. (SPWR - Free Report) , in partnership with CPower Energy Management, recently won an auction bid from ISO New England, for delivering its residential solar solutions. Per the terms, SunPower is going to supply approximately 1,375 home solar solutions to New England homeowners, which will translate into approximately 11 megawatts (MW) of direct current (DC) solar power.
By offering localized solar energy at lower prices to these New England homeowners through this auction, SunPower is expected to retain its position as one of the leading energy services providers in North America.
Residential Solar Market & SunPower
The residential solar market in the United States experienced a record year in 2019 as costs fell and its footprint expanded in state markets. In particular, the nation witnessed a record-setting residential solar capacity of 2.8 gigawatts (GW) last year, per a report by Solar Energy Industries Association. Looking ahead, future growth in this market is expected across the country as prices continue to fall and combined solar plus storage systems become increasingly viable.
To reap the benefits of an expanding residential solar market, in 2016, SunPower launched Equinox, a pre-engineered modular solution for residential applications. This product combines its high-efficiency solar module technology with integrated plug-and-play power stations, cable management systems, and mounting hardware that enable SunPower’s customers to quickly and easily complete system installations and manage their energy production.
Moreover, Equinox systems utilize SunPower’s latest Maxeon Gen 3 cell and ACPV technology for residential applications, wherein the company is expanding its initiatives on storage and Smart Energy solutions.
Such developments enabled SunPower to witness annual growth of 10% in 2019 from its residential customers driven by higher residential deals as well as an increase in sales of solar power components and systems to its residential customers in the United States. Considering the latest auction win, we expect this solar solutions provider to witness similar growth in the residential solar market in the coming days.
Global Boom: SunPower& Others
Per a report from the International Renewable Energy Agency (IRENA), global electricity generation from solar energy is expected to increase to nearly 360 GW per year in 2050 from the current level of 109 GW.
We notice that to gain from this expanding global solar market, SunPower and other solar players are enhancing their manufacturing capacity, which is evident from solid contract wins and better module shipment predictions. These, in turn, are expected to boost profit of the solar majors.
Evidently, SunPower won awards worth more than $500 million in 2019 and acquired bookings worth 26 megawatts in the fourth quarter. Such contract wins indicate solid revenue growth opportunities.
At the end of September 2019, Canadian Solar’s (CSIQ - Free Report) utility-scale solar power plants in operation totaled 795.8 MWp, with an estimated resale value of $900 billion. Moreover, the company’s late-stage, utility-scale solar pipelines, including the ones under construction, increased to 3.4 GWp.
In 2019, JinkoSolar (JKS - Free Report) reported record high solar module shipment of 14.3 GW. For 2020, it projects total solar module shipments of 18-20 GW, indicating an improvement of approximately 35%.
Given the growing demand for solar modules, First Solar (FSLR - Free Report) expects to increase its nameplate Series 6 manufacturing capacity to 6 GW by 2020 and 8 GW by year-end 2021.
In a year's time, shares of SunPower have plunged 17.2% compared with the industry’s 15.1% decline.
SunPower currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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