Key Takeaways From SunPower’s Q1
SunPower published a stronger than expected set of Q1 2018 results on Tuesday, driven by strength in its commercial and residential solar operations, although this was partially offset by some headwinds in the power plant space. Below, we provide some of the key takeaways from the company’s results and what lies ahead for SunPower.
We have created an interactive dashboard outlining our expectations for the company over 2018. You can modify the charts to arrive at your own estimates for the company’s revenues and EPS.
Distributed Business Drives Results
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SunPower continued to perform well in the distributed solar market. The company’s commercial business posted 50% year-over-year growth in megawatt terms, with its total commercial pipeline standing at $2.5 billion, with 100% of 2018 projections booked or awarded. SunPower has also been seeing strong interested for storage products in the commercial space, with its recently launched Helix storage product seeing ~30% attach rates. The residential business also witnessed growth across markets, with the company posting a record Q1 performance in the U.S., where megawatt growth stood at 35% year-over-year. SunPower expects 20% annual growth in MW deployments in the distributed space this year.
SunPower’s U.S. Manufacturing Plans
SunPower’s performance in the U.S. is being impacted by the Section 201 case, which imposes tariffs on silicon-based solar imports to the country. While the company has been pushing for an exemption from the tariffs, it has also been working to bolster its U.S. manufacturing capacity. SunPower recently announced that it would acquire solar manufacturer SolarWorld Americas, in a deal that would make it the largest silicon solar producer in the United States, while locating roughly a third of SunPower’s total manufacturing capacity in the U.S. SunPower will acquire roughly 400 megawatts of mono-PERC solar cell fab capacity and about 600 megawatts of module capacity. The company has indicated that it expects to convert a portion of the module capacity to produce its P-Series panels. As much of SunPower’s demand comes from North America, it could effectively cut logistics costs by producing in the U.S.