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How 1Q16 Revenues of Downstream Solar Players Compare

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Revenue

The downstream solar (TAN) business is all about capturing market share. Because the solar lease contracts and power purchase agreements (or PPAs) typically last for 20 years, a company with a higher market share in the mature stage could get more revenue than the company with a lower market share.

Despite regulatory headwinds and seasonal fluctuations in demand, major downstream solar players like SunPower (SPWR), Sunrun (RUN), and SolarCity (SCTY) reported their revenue, beating analysts’ 1Q16 revenue expectations. However, Vivint Solar marginally missed analysts’ 1Q16 revenue estimates.

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For 1Q16, Sunrun reported $98.7 million in revenue compared to $49.7 million in 1Q15. The combined 1Q16 revenue of SunPower’s residential and commercial segments revenue remained nearly unchanged from its 1Q15 revenue at $204 million. Sunpower’s revenue from its power plant business is not included in this comparative analysis.

Vivint Solar (VSLR) reported $17.2 million as its 1Q16 revenue compared to $9.5 million in 1Q15. SolarCity’s 1Q16 revenue came in at $123.0 million compared to $68.0 million in 1Q15.

Growth rate

Higher sales resulted in higher 1Q16 revenue growth for Sunrun (RUN) compared to its peers. On a YoY (year-over-year) basis, Sunrun’s revenue nearly doubled, by ~99%, in 1Q16. The revenue of SolarCity and Vivint Solar grew at nearly the same pace, by ~81% each, in 1Q16 on a YoY basis.

Revenue per watt installed

When the 1Q16 revenues are considered on a per-watt basis, SunPower has the highest revenue per watt installed at $2.27, which is followed by Sunrun’s $1.65 revenue per watt. SolarCity’s revenue per watt installed came in at $0.57 compared to Vivint Solar’s $0.31.

Lower revenue per watt represents aggressive pricing. On a YoY basis, Vivint Solar’s revenue per watt installed grew by 52%, the highest among its peers. The revenue per watt installed by SunPower, Sunrun, and SolarCity grew by 16%, 21%, and 29%, respectively.

In the next part of this series, we’ll look at the cost performance of the major downstream players in 1Q16.

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