The Texas blackouts are fueling a massive market for solar energy — and Sunrun is set to cash in

The Texas blackouts are fueling a massive market for solar energy — and Sunrun is set to cash in

3/2/2021 8:29:00 PM

The Texas blackouts are fueling a massive market for solar energy — and Sunrun is set to cash in

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Michael Noble Jr./San Francisco Chronicle via Getty ImagesThis story is available exclusively to Insider subscribers.and start reading now.The Texas grid crisis is set to fuel demand for rooftop solar panels and batteries. Homeowners lose faith in their utilities when their power goes out, and seek energy resiliency, experts say. 

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Solar-energy company Sunrun says traffic to its website in Texas shot up 350% in the aftermath of the outages. Visit the Business section of Insider for more stories.A devastating winter storm that led to widespread blackouts in Texas is fueling demand for solar panels and batteries in the Lone Star state, where electricity from the sun has been slow to catch on despite abundant sunshine.

After the Texas grid operator shut off power to millions of state residents last month, web traffic to Sunrun, the nation's largest installer of rooftop solar panels and home batteries, shot up 350% in the state."Accelerating extreme weather events will continue to drive consumers to choose solar and batteries," Lynn Jurich, the CEO of Sunrun, said in a call with investors last week.

Analysts were already expecting 2021 to be a huge year for rooftop solar, with a cleantech-friendly administration in office. The Texas crisis — which has worsened fears of outages and extreme weather — all but guarantees it will be. Natural disasters create demand for solar panels and batteries

Other natural disasters have contributed to an uptick in demand for solar panels and batteries.In October 2019, the California utility Pacific Gas and Electric shut off electricity to hundreds of thousands of homes in the Bay Area to prevent power lines from sparking wildfires. That month, the number of Sunrun customers in the region who chose to add batteries to their solar systems

ballooned.The last three months of 2019 saw record rooftop solar installations, said Bryan White, an analyst at the research firm Wood Mackenzie. Those California outages were among the first signs that a desire for energy resilience is becoming a major driver of demand for panels, White said. In the past, customers typically installed them for environmental reasons and to save money.

Texas will have a similar, if not larger, impact on demand — and Sunrun is positioned to be the largest benefactor. After acquiring rival Vivint Solar in October, Sunrun is, by far, the nation's largest rooftop firm, with more than 550,000 customers, dwarfing competitors Tesla and Sunnova. It now controls about 15% of the market, White said.

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Along with federal policies that could benefit clean energy — and a pandemic that's underscored the value of uninterrupted home energy — the fear of extreme weather events that Texas has ignited is setting Sunrun up for a massive year of growth.Pike Electric service trucks line up after a snow storm on February 16, 2021 in Fort Worth, Texas.

Ron Jenkins/Getty ImagesExtreme weather drives demand for rooftop solar and batteriesIn the wake of widespread power outages, homeowners lose confidence in their utilities and look for services that offer energy resilience, said Joseph Osha, an analyst at the Wall Street firm JMP Securities. 

Solar and home batteries are an enticing option: Panels can provide power during the day and batteries can keep essential appliances, such as refrigerators, running at night (or during days when the panels aren't producing). More and more homeowners

are opting for them, thanks, in part, to forced power outages. The market for residential solar in Texas is a fraction of what it is in California, but"it's been growing like crazy for the last couple of years," White said. In fact, much of the recent growth in rooftop solar nationally is driven by Texas, he said.

The grid crisis only stands to accelerate the Texas solar boom, he said. "Things were already exploding," he said, of demand in Texas."It's going to be hard to parse out, like in California, what you can attribute here to these events — but we know that it's significant."

Sunrun's battery business will fuel its growthAmid the outages, Sunrunannounced that it was increasing its product offeringsin Texas. Days later, during its quarterly earnings presentation, the firm included a slide showing a large home in Houston with a door light on, accompanied by the words,"Our customers are powering through." 

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Sunrun said its products allowed many customers in the state"to keep the lights on and space heaters running" during Texas' utility blackouts. (It's worth noting that home batteries can only keep a small number of appliances running, White and Osha said. Some energy companies

have been accused of misleading customersinto large solar and storage deals by overhyping their products.) Read more: Business Insider »

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Residential solar is highly competitive and sold at too low a price in TX for SunRun to compete profitably. Of course, they have access to credit to fund capex so maybe that won’t be a concern for them. In Texas, somebody who already had solar hit ROI in three hours.