Elon Musk is no longer leading the charge in residential solar.
Tesla Inc. installed 87 megawatts of commercial and residential solar in the fourth quarter, including about 50 megawatts at homes, according to a GTM Research estimate. Rival Sunrun Inc. added 85 megawatts of residential systems in the same period, according to a statement Tuesday. Counting only that part of Tesla’s operation, Sunrun took the lead in the third quarter.
The changing of the guard comes more than a year after Tesla bought Musk’s debt-burdened SolarCity for $2 billion. Tesla has since prioritized profitability in solar over growth-at-all-costs as the company seeks to transform itself into a solar and battery giant to complement its electric vehicles. Tesla has ceded solar market-share in most quarters since that deal, and without SolarCity trumpeting solar, the U.S. residential market contracted in 2017 after at least 16 consecutive years of growth.
“SolarCity was the marketing and lobbying machine for the entire industry, and everyone is struggling in its absence,” said Hugh Bromley, a New York-based analyst at Bloomberg New Energy Finance.
Tesla’s retrenchment accounted for 97 percent of the residential segment’s contraction since SolarCity’s installations reached a peak in the fourth quarter of 2015, according to Bloomberg New Energy Finance. Without that marketing muscle, smaller installers also saw declines in that period, and total U.S. residential installations may shrink again this year.
“We like having Tesla in the market,” Lynn Jurich, Sunrun’s chief executive officer, said in an interview Tuesday. “Tesla is a really well-known brand,” she added, pointing to the company’s product innovations.
Sunrun, meanwhile, has reported steady gains in the face of the market-wide slowdown. It has focused on improving margins instead of rapid growth, and installed 90 megawatts in the third quarter, up 12 percent from a year earlier. “That foundation is what we believe sets us up for the long term,” Jurich said. Sunrun projects 15 percent installation growth this year.
“Sunrun is clearly number one,” Joseph Osha, a San Francisco-based analyst at JMP Securities, said in an interview. “They’ve executed where others have stumbled.”
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