Demand for solar panels, batteries after Texas storms

  • The grid crisis in Texas will fuel the demand for solar modules and batteries on the roof.
  • Homeowners lose confidence in their utilities when the power goes out and look for resilience, experts say.
  • Solar energy company Sunrun said traffic on its Texas website increased 350% after the outages.
  • You can find more stories in Insider’s business section.

A devastating winter storm that led to widespread power outages in Texas is driving demand for solar panels and batteries in the Lone Star State, where solar power is slow to penetrate despite abundant sunshine.

After the Texas grid operator cut power to millions of citizens last month, internet traffic to Sunrun, the nation’s largest installer of rooftop solar panels and home batteries, rose 350% in the state.

“The acceleration of extreme weather events will continue to drive consumers to choose solar and batteries,” Sunrun CEO Lynn Jurich said in a conversation with investors last week.

Analysts had already expected 2021 to be a big year for solar roofs with a cleantech-friendly administration in office. The Texas crisis, which has exacerbated fears of failure and extreme weather, almost guarantees it.

Natural disasters create demand for solar panels and batteries

Other natural disasters have contributed to an increase in demand for solar panels and batteries.

In October 2019, California utility Pacific Gas and Electric shut down hundreds of thousands of homes in the Bay Area to keep power lines from starting wildfires. This month, the number of Sunrun customers in the region who wanted to equip their solar systems with batteries skyrocketed. There were record solar panels on the roof for the last three months of 2019, said Bryan White, an analyst at research firm Wood Mackenzie.

Those outages in California were among the first signs that the desire for energy resilience was becoming a major driver of demand for panels, White said. In the past, customers usually installed them for environmental reasons to save money.

Texas is likely to have a similar, if not greater, impact on demand – and Sunrun is positioned as its greatest benefactor.

After taking over rival Vivint Solar in October, Sunrun is by far the largest umbrella company in the country. With more than 550,000 customers, it outshines its competitors Tesla and Sunnova. It controls about 15% of the market, White said.

Coupled with federal policies that could benefit clean energy – and a pandemic that underscores the value of uninterrupted home energy – Sunrun is preparing for a massive year of growth due to the fear of extreme weather events that Texas has sparked.

Texas storm

Pike Electric Service Trucks line up after a blizzard on February 16 in Fort Worth, Texas.


Ron Jenkins / Getty Images

Extreme weather drives the demand for solar power and batteries on the roof

After widespread power outages, homeowners are losing confidence in their utility companies and looking for services that provide energy resilience, said Joseph Osha, an analyst at Wall Street firm JMP Securities.

Solar and home batteries are a tempting option: panels can provide power during the day, and batteries can keep critical devices like refrigerators running at night (or on days when the panels are not producing).

More and more homeowners are choosing them, thanks in part to forced power outages.

The residential solar energy market in Texas is a fraction of what it is in California, but “it’s been growing like crazy in recent years,” White said. In fact, much of the recent growth in solar roofs nationally is being driven by Texas, he said.

The grid crisis should only accelerate the solar boom in Texas, added White.

“Things were already exploding,” he said of the demand in Texas. “It will be difficult, like in California, to find out what can be attributed to these events here – but we know it is important.”

Sunrun’s battery business will drive growth

In the midst of the failures, Sunrun announced that it would expand its product offering in Texas. Days later, during the quarterly earnings presentation, the company included a slide showing a large house in Houston with the door lights on and the words “Our customers are looping through.”

Sunrun said its products enabled many customers in the state to “turn on lights and keep space heaters on” during the Texas blackout.

(It’s worth noting that household batteries can only keep a small number of devices running, White and Osha said. Some energy companies have been accused of misleading customers into large solar and storage stores by overwriting their products.)

“By expanding access to home battery storage, Sunrun is giving more Americans the ability to protect themselves from power outages,” the company said in a public statement.

Sunrun presentation 2021

A slide from Sunrun’s fourth quarter earnings presentation on February 25th.


Sunrun

Batteries are big business. They increase margins and give the company access to new revenue streams for utility companies, White said.

When the demand for electricity increases and loads the grid, Sunrun can ask its customers’ batteries to discharge electricity, creating a so-called virtual power plant. The utility companies pay the company for this service. According to Sunrun, so-called grid services bring in around 2,000 US dollars per customer.

“The grid services business is available to about 1 in 10 new customers we come from. However, we have a pipeline and negotiations underway where we believe we can get that to 50% in a period of maybe 18 months. can increase, “said Sunrun, co-founder and co-founder of Sunrun chairman Ed Fenster said on Monday at a Credit Suisse event.

Biden solar panels

President Joe Biden.


Brian Snyder / Reuters

Biden can also give Sunrun a boost

Sunrun predicted that battery systems would more than double this year and that solar systems would grow by 20 to 25% – or about the equivalent of two power plants, Osha said.

The events in Texas only add tailwind for Sunrun, he said.

With the pandemic keeping people away from the office, uninterrupted power at home is more important than ever. In the meantime, the Biden government, which has been a strong advocate for clean energy, could take action to boost solar power on the roof, Osha said.

While the most important energy lies at the local level, the federal government can permanently grant tax credits for clean energy or even enact a carbon tax that would ultimately benefit the solar industry. Biden also has some tools to help with energy storage and to make approval easier.

“There’s a lot of tailwind in the market now,” White said of the home solar industry. “We expect this to be the greatest year ever.”

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