Rooftop Revolution: Coronavirus Cooling Upsets Solar Industry

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LOS ANGELES / MADRID / LONDON (Reuters) – The booming rooftop solar panel industry plunged overnight when the coronavirus forced homeowners to cut costs and stay away from future installers.

Rodrigue Kauahou, a worker from the installation company Alromar, installs solar panels on the roof of a house in Colmenar Viejo, Spain, June 19, 2020. Photo taken on June 19, 2020. REUTERS / Sergio Perez

Now, in their struggle to survive, businesses on both sides of the Atlantic are turning to online marketing rather than knocking on doors, using drones to inspect rooftops, organizing digital permits and offering attractive new financing plans, according to interviews with 12 executives. .

The challenge is the future of a key driver of the global transition from fossil fuels to renewable energies: solar energy was the second fastest growing renewable source after wind in 2019, according to the International Agency Energy.

And rooftop installations, which generate electricity used by homes or businesses rather than the grid, accounted for more than 40% of the market before COVID-19.

Energy research firm Wood Mackenzie has cut its rooftop solar forecast for Europe and the United States by 30% this year, while increasing its forecast by 3% in Asia, where China provides strong government support.

Joana Palau, 42, a municipal employee on the Spanish island of Ibiza, was one of the few people in her neighborhood to continue her project to install 12 solar panels on her farm in June: “If I hadn’t not worked and that I didn’t have the stability of a salary every month, I certainly wouldn’t have done it. ”

On the other hand, the large-scale solar installations which supply the network have worked relatively well. Wood Mackenzie lowered his forecast by less than 10% for Europe and barely touched his US outlook, as lower prices, subsidies and government mandates helped isolate major projects from the pandemic.

“RADICAL CHANGE”

In the United States, the third largest rooftop solar market after China and Japan, about 80% of the 100,000 job losses in the solar sector have been recorded so far by roof installers, said the Solar Energy Industries Association.

However, many employees who have not been laid off have started to focus on one of the most persistent challenges in the industry: how to reduce the cost of identifying homeowners with suitable roofs and then persuade to buy signs, executives said.

Companies quickly made sales meetings virtual.

Major U.S. installers SunPower Corp (SPWR.O), Living Solar Inc (VSLR.N) and Sunrun Inc (RUN.O) stated that potential reassured customers were concerned about the virus. It also reduced the cost of acquiring customers, which Wood Mackenzie estimates at nearly $ 4,000, or 22% of the average cost of $ 18,000 for an American system.

Normally reliant on home visits, an effective but costly sales tactic, Vivint has trained hundreds of salespeople in telephone prospecting, with sales falling 60% following state closings, said general manager David Bywater .

At the beginning of May, sales had only dropped by 30%.

“It was a dramatic change,” said Bywater, adding that he had accelerated Vivint’s plan to diversify sales strategies and cut costs: “I hope we never lose that and we will speed it up.” ”

In fact, the strategy was so successful that its biggest rival, Sunrun, announced on July 7 that it had agreed to buy Vivint in a $ 3.2 billion share transaction. dollars, saving $ 90 million a year and creating a solar player with half a million customers.

Sunrun bought Vivint because of its focus on direct selling, a model of Sunrun CEO Lynn Jurich said it had become even more sustainable during the COVID-19 pandemic: “The two companies are delivering more provided that.”

“CHANGE OF GAME”

Rival SunPower has also experienced a massive transition to digital sales, with around three-quarters of consultations now taking place by video chat, up from 10 previously.

CEO Tom Werner said he expects half of his sales to be digital now. He said it was more difficult to reach agreements in virtual chats, but this was offset by the reduced travel time between appointments.

“Ideally, you have the day when solar power is like Amazon, so you can buy and be satisfied in a very efficient process,” he said.

Sunrun, meanwhile, had to withdraw its vendors from stores such as Costco (COST.O) and Home Depot (HD.N) during closings, outlets that had made nearly a third of its sales.

In two weeks, Sunrun had moved its online sales team to the field and launched a promotion offering six months of domestic solar energy for $ 6. While initial online engagements were lower, the percentage of clients who followed was higher.

Sunrun said innovations such as virtual sales and permit automation to avoid physical treatment by authorities would reduce the cost of a bay by about $ 2,000 over the next year.

EmPower Solar https://www.empower-solar.com, a Long Island-based rooftop installer, has passed the New York foreclosure on “groundbreaking initiatives” such as digitizing sales and paperwork, and l use of satellite images and drones to inspect roofs, said Managing Director David Schieren.

However, he said it was more difficult to build relationships with potential clients without face-to-face contact.

“REVOLUTION ON THE ROOF”

In Europe, rooftop solar companies have developed more attractive financing plans as the pandemic made customers cautious about spending.

SotySolar https://sotysolar.es in Gijon, in the north of Spain, has accelerated the deployment of a “Netflix style” subscription model. He installs panels and bills monthly fees, although owners can buy them or terminate their contract whenever they want, said co-founder Daniel Fernandez.

“We have been thinking about doing it for a while, but we have moved on because of this situation,” he said, adding that he expected to triple the facilities with the offer.

In Barcelona, ​​the renewable energy company Holaluz (HLZZ.MC) accelerated an initiative to install free signs for people with available roof space – and use them to generate electricity for all of its customers. It aims to extend the plan to residential and commercial buildings.

Holaluz plans to increase its customers to one million and complete 50,000 solar rooftop installations by 2023. It is estimated that fewer than 10,000 Spanish homes currently have panels.

“This is the roof revolution,” said co-founder Carlota Pi. “We have spent so much time at home, we have become much more aware of the value you can create by transforming your roof into a source of energy production. ”

However, despite such innovations, the industry will take time to rebound, according to industry groups.

In Italy, one of the largest rooftop solar markets in Europe, one in five companies is afraid of closing due to COVID-19, according to a survey carried out in May by the Italian solar trading group Italia Solare.

In Spain, the solar association UNEF, for example, cut its forecast for rooftop installations by a third this year.

Nevertheless, European companies hope that the measures taken by the European Union and the governments in Spain, Germany and elsewhere to pursue a “green” economic recovery after the pandemic will be useful.

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“The sector seems to be on the verge of a rapid recovery,” said Michael Schmela, business intelligence manager for the SolarPower Europe industry association in Brussels.

Residential facilities in the U.S. are not expected to return to previously expected levels until 2025, according to Wood Mackenzie – and some say online access will not work for everyone, especially in some rural communities.

“It’s a totally different culture,” said Benjamin Mayer, vice president of marketing for SunBug Solar https://sunbugsolar.com, which sells in the western Massachusetts countryside. “If you want to get traction in this community, you have to be there for a decade. “

Additional reporting by Matthew Green in London; Editing by Richard Valdmanis and David Clarke

Our standards:Principles of the Thomson Reuters Trust.

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