SunPower’s rationale for turning toward distributed solar is based on the assumption that DG demand will increase by 40% in the next 5 years while power plant demand is supposed to remain stable. In addition, it pointed to its excellent products and US market shares in this segment.
- SunPower reported net loss of $116 million in Q1/2018, exceeding the guidance of $100 million to $90 million
- Announces exit from utility scale project development business to focus on DG business, primarily residential and commercial segment
- In Q2/2018, it expects revenues of $360 to $410 million and 2.5% to 4.5 gross margin
- Deployment guidance for Q2/2018 ranges from 350 to 380 MW with largest shares expected in power plant segment
- 2018 revenue guidance is between $1.6 and $2.0 billion with deployment estimate of 1.5 to 1.9 GW
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In a major announcement made during the first quarter 2018 call with analysts, SunPower said it will exit the utility-scale solar power project development business. This includes not just stopping to develop new projects but it means also to sell off plants and remaining development assets. Instead, the solar subsidiary of French utility Total wants to focus on its distributed generation (DG) business.
SunPower’s rationale for turning toward distributed solar is based on the assumption that DG demand will increase by 40% in the next 5 years while power plant demand is supposed to remain stable. The mix toward DG is driven by improving behind-the-meter customer economics and policy, according to SunPower. In both the residential and commercial segment, SunPower emphasized it is the market leader in the US. In the residential segment, it reported a 35% YoY MW growth in Q1, in the commercial segment growth was even at 50% YoY. In the latter, it has a $2.5 billion pipeline
Moreover, SunPower’s high-efficiency products are well suited for rooftop solutions and there is further improvements expected. For its premium back-contact module for the high-end market it expects to cut cost by 40% compared to today’s IBC technology. Its shingle module shows higher performance compared to the competition at competitive prices, SunPower pointed out. SunPower announced a Chinese JV for a 5 GW plant for its shingle P-type modules in early 2017 (see SunPower 5 GW JV In China). Finally, SunPower said it offers now also an “entry level high quality product sold through complementary channels for maximum market coverage and share.” This product is being manufactured at the newly acquired SolarWorld Americas mono facility (see SunPower Acquires SolarWorld Americas). SunPower said it will improve facilities, increase working capital and partially convert its Modco to P-Series panel technology.
Once the Solar World Americas acquisition is officially approved, SunPower will have one-third of its total production capacity based in the US, owning SWA’s 400 MW nameplate mono-PERC solar cell fab and 600 MW module assembly capacity. Regarding its premium IBC technology, SunPower said its IBC performance is now at commodity panel cost structure and that 23% efficiency modules were submitted for UL certification.
In the SunPower Solutions (SPS) segment, the company said it ‘exceeded MW, revenue and EBITDA forecasts,’ with Q1 deployments up >5x YoY and bookings and awards exceeding 850 MW. While it sold the 126 MW Guajiro project in Mexico and was awarded a 145 MW complete solution project in Hawaii, SunPower anticipates up to 1 GW of shipments in this segment in 2018 and focuses increasingly on international DG markets to drive margin expansion.
Regarding financials, SunPower Corp.’s quarterly revenues plummeted close to 40% in Q1/2018 quarter-on-quarter but improved by 19% YoY.
While it brought down net loss to $116 million from $572.7 million in Q4 and $219.7 million a year back, it was higher than last quarter’s Q1 guidance of $100 to $90 million (see Strong Q4, Weak 2017 For SunPower).
For Q2, SunPower expects to earn revenues of $360 to $410 million, with gross margin in the range of 2.5% to 4.5%. Net income loss is expected to be in the range of $100 to $125 million. During Q2/2018, it expects to deploy 350 to 380 MW, with the largest share estimated to be installed in power plant segment.
Regarding the sales of its 8point3 yieldco JV, SunPower said it “expects to close transaction in Q2 with $380 million in proceeds.”
In 2018, the revenues are guided to be in the range of $1.6 to $2.0 billion. Capital expenditures are expected to be around $100 million and deployment in the range of 1.5 GW to 1.9 GW.