Sunrun’s latest earnings report illustrates solar’s balancing act

A slew of second quarter earnings reports are outlining a clear picture of growth for the domestic battery storage industry — even as the state of adjacent technologies, including electric vehicles and rooftop solar, is less rosy.

In late July, Tesla reported a 158% increase in storage revenue, alongside a 7% decrease in automotive revenue. And yesterday, amid a flurry of news about the shutdown of a competitor, Sunrun reported a 152% jump in storage installations — but adjusted projected solar installations down 15%.

• The top line: Looking ahead to the rest of 2024, Sunrun is leaning heavily on its storage business to buoy overall numbers. The energy-as-a-subscription company upped its full-year storage installation projections from 57% to 86% growth alongside a 54% attachment rate.
• The market grounding: Sunrun’s overall earnings, though, were less promising. Total revenue was down 11% year over year, dragged down by a 35% decrease in solar installations. The company’s storage boom is likely thanks in part to California’s net metering overhaul (dubbed NEM 3.0), a move also at least partially responsible for its dampened solar outlook.
• The current take: CEO Mary Powell said on the earnings call that Sunrun’s decision last year to pivot to being a “storage-first company” has been a boon for the company in the last year. “Our focus on storage products pays dividends faster than we even expected,” she added.

Also on Tuesday, Sunrun announced a partnership with Tesla Electric, Tesla’s retail energy arm, in Texas. That program, Powell said, “will scale up while dispatching stored solar energy from at home batteries to rapidly increase capacity on the grid during periods of high consumption.”

Customers will be compensated for their dispatches while maintaining a portion of their stored energy as backup, she added. That compensation comes in the form of yearly payments, currently set at $400 per Powerwall for 2024.

The partnership has already enrolled more than 150 Sunrun customers to date, who will be participating in ERCOT’s Aggregated Distributed Energy Resources pilot program. It marks Sunrun’s “first operational aggregated power plant program” in Texas, the company said.

Tesla, for its part, is also doubling down on its storage offerings, according to CEO and founder Elon Musk on the EV company’s second quarter earnings call last month.

“I think people don't understand just how much demand there will be for storage,” Musk said, pointing to the ongoing problem of renewables curtailment. “[They] are underestimating this demand by product order of magnitude.”