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SunPower: Better Pricing Fails to Offset Lower Volumes in 2Q15

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Installations

SunPower’s (SPWR) total installations fell to their lowest level in two years. As a result, revenues in 2Q15 also declined. Though the company deployed 315 megawatts, or MW, of solar panels during the quarter, only 194 MW were considered in the calculation of revenues, as some of the total had already been accounted for in the revenues of previous quarters.

SPWR accounted for a substantial portion of revenue related to some large projects by the end of 2014 (313 MW in 2Q14), leading to the shortfall this quarter. Revenues were also lower because of a decline in component sales. Out of 194 MW, residential, commercial, and power plant segments accounted for 65 MW (83 MW in 2Q14), 39 MW (44 MW in 2Q14), and 90 MW (186 MW in 2Q14), respectively.

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Pricing improves

Improved pricing partially offset the drop in SunPower’s recognized volumes. The residential segment reported revenues of $2.34 per watt in 2Q15 against $1.88 per watt in 2Q14. The power plant segment reported revenues of $1.84 per watt in 2Q15 compared to $1.37 per watt in 2Q14. Pricing for commercial installations dropped to $1.61 per watt in 2Q15 compared to $1.93 per watt in 2Q14.

The improvement in per watt pricing came at a time when polysilicon and solar (TAN) module prices were falling. It’s also useful to note that the company’s pricing may not reflect the trend in global solar module pricing because the company offers a host of value-added and other services.

Revenues

SunPower’s power plant segment reported revenues of $165.8 million in 2Q15 versus $266.7 million in 2Q14. Revenues from the residential segment in 2Q15 stood at $152.2 million as opposed to $156.1 million in 2Q14. Meanwhile, the commercial segment reported $63 million versus 85.1 million in 2Q14. The company reported overall revenues of $381 million in 2Q15 compared to $507.9 million in 2Q14, representing a drop of over 25% to its lowest quarterly revenue in five years. SolarCity (SCTY), FirstSolar (FSLR), and SunEdison (SUNE) each saw their revenues rise in 2Q15.

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