Rooftop revolution: Coronavirus chill upends solar power
industry
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[July 09, 2020] By
Nichola Groom, Isla Binnie and Nina Chestney
LOS ANGELES/MADRID/LONDON (Reuters) - The
booming rooftop solar panel industry nosedived overnight when the
coronavirus forced homeowners to rein in spending and keep their
distance from would-be installers.
Now, in their struggle to survive, companies on both sides of the
Atlantic are turning to online marketing rather than knocking on doors,
using drones to inspect roofs, arranging digital permits and coming up
with attractive new financing plans, according to interviews with 12
executives.
At stake is the future of a key driver of the global transition from
fossil fuels to renewable energy: solar power was the second-fastest
growing renewable source after wind in 2019, according to the
International Energy Agency.
And rooftop installations, which generate electricity used by homes or
businesses rather than feeding into the grid, made up more than 40% of
the market before COVID-19 struck.
Energy research firm Wood Mackenzie has slashed its rooftop solar
installation forecasts for Europe and the United States by a whopping
30% this year, while lifting its forecast by 3% in Asia, where China
provides strong government support.
![](http://archives.lincolndailynews.com/2020/Jul/09/images/ads/current/diversifiedservice_sdadaily_HG_2020_.png)
Joana Palau, 42, a council worker on the Spanish island of Ibiza, was
one of the few in her neighbourhood who pressed ahead with a plan to
install 12 solar panels on her farmhouse in June: "If I had not been
working and did not have the stability of a salary every month, I
definitely wouldn't have done it."
By contrast, large-scale solar installations that power the grid have
fared relatively well. Wood Mackenzie trimmed its forecast by less than
10% for Europe and barely touched its U.S. outlook as rock-bottom
prices, subsidies and government mandates helped insulate larger
projects from the pandemic.
'RADICAL SHIFT'
In the United States, the third biggest rooftop solar market after China
and Japan, about 80% of the 100,000 job losses in the solar sector so
far have been at rooftop installers, the Solar Energy Industries
Association said.
Many of the staff who were not laid off, however, began to focus on one
of the industry's most persistent challenges: how to cut the cost of
identifying homeowners with suitable roofs, and then persuading them to
buy panels, executives said.
Quickly, companies made sales appointments virtual.
Leading U.S. installers SunPower Corp, Vivint Solar Inc and Sunrun Inc
said that reassured potential clients worried about the virus. It also
cut the cost of acquiring customers, which Wood Mackenzie puts at nearly
$4,000, or 22% of the average $18,000 cost of a U.S. system.
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Normally reliant on door-to-door visits, an effective but expensive
sales tactic, Vivint trained hundreds of salespeople to canvass by phone
as its sales slumped 60% following state lockdowns, Chief Executive
David Bywater said.
By early May, sales were down only 30%.
"It was a radical shift," said Bywater, adding that it had hastened
Vivint's plan to diversify sales strategies and cut costs: "I hope we
never lose that and we accelerate that."
In fact, the strategy was so successful that larger rival Sunrun
announced on July 7 that it had agreed to buy Vivint in an all-stock
deal valued at $3.2 billion, 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
Sunrun Chief Executive Lynn Jurich said had become even more durable
during the COVID-19 pandemic: "Both companies are delivering above where
we expected."
'GAME CHANGING'
Rival SunPower has also seen a massive shift to digital sales, with
about three-quarters of consultations now happening via video chat, up
from a 10th previously.
Chief Executive Tom Werner said he expected half of its sales would be
digital from now on. He said it was harder to close deals in virtual
chats but that was offset by cutting out travel time between
appointments.
"Ideally, you have the day when solar is like Amazon, so you can buy and
be fulfilled in a very efficient process," he said.
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![](../images/070920pics/busine41.jpg)
Rodrigue Kauahou, a worker of the installation company Alromar, sets
up solar panels on the roof of a home in Colmenar Viejo, Spain June
19, 2020. Picture taken June 19, 2020. REUTERS/Sergio Perez
![](http://archives.lincolndailynews.com/2020/Jul/09/images/ads/current/graue_preowned_070620.png)
Sunrun, meanwhile, had to pull its salespeople out of stores such as
Costco and Home Depot during lockdowns, outlets that had been bringing
in nearly a third of its sales.
Within two weeks, Sunrun had moved its field sales team online and
launched a promotion offering six months of home solar power for $6.
While initial online commitments were lower, the percentage of customers
following through was higher.
Sunrun said innovations like virtual sales and automating permits to
avoid physical processing by authorities will trim about $2,000 off the
cost of an array over the next year or so.
EmPower Solar https://www.empower-solar.com, a rooftop installer based
in Long Island, spent New York's lockdown on "game changing initiatives"
such as digitising sales and paperwork, and using satellite imagery and
drones to inspect roofs, said Chief Executive David Schieren.
He said, however, that it was harder to build rapport with potential
customers without face-to-face contact.
'ROOFTOP REVOLUTION'
In Europe, rooftop solar firms developed more enticing finance plans as
the pandemic made clients wary about spending.
SotySolar https://sotysolar.es in Gijon in northern Spain accelerated
the roll-out of a "Netflix-style" subscription model. It installs panels
and charges a monthly fee though homeowners can buy them or end their
contract when they like, said co-founder Daniel Fernandez.
"We have been thinking about doing this for a while but we brought it
forward because of this situation," he said, adding that he expected to
triple installations with the offer.
In Barcelona, renewable energy utility Holaluz has accelerated an
initiative to install panels free for people with available roof space -
and use them to generate power for all its customers. It aims to extend
the plan to apartment blocks and commercial buildings.
![](http://archives.lincolndailynews.com/2020/Jul/09/images/ads/current/ldn_sda_062409.png)
Holaluz expects to boost clients to one million and carry out 50,000
rooftop solar installations by 2023. It estimates fewer than 10,000
Spanish homes currently have panels.
"This is the rooftop revolution," said co-founder Carlota Pi. "We have
spent so much time at home, we have become much more conscious of the
value you can create by transforming your roof into a source of energy
generation."
Nevertheless, despite such innovations, the industry will take time to
bounce back, according to industry groups.
In Italy, one of Europe's biggest rooftop solar markets, one in five
companies fear they may close due to COVID-19, according to a survey in
May by Italian solar trade group Italia Solare.
In Spain, solar association UNEF, for example, has slashed its forecast
for rooftop installations this year by a third.
Nevertheless, European firms are hoping moves by the European Union and
governments in Spain, Germany and elsewhere to pursue "green"
post-pandemic economic recoveries will help.
"The sector looks set to undergo a quick recovery," said Michael Schmela,
head of market intelligence at industry association SolarPower Europe in
Brussels.
In the United States, residential installations are not expected to
return to previously forecast levels until 2025, according to Wood
Mackenzie - and some say going online won't work for all, especially in
some rural communities.
![](http://archives.lincolndailynews.com/2020/Jul/09/images/ads/current/castlemanor_sda_FINANCIAL_2017.png)
"It's a totally different culture," said Benjamin Mayer, vice president
of marketing for SunBug Solar https://sunbugsolar.com, which sells in
the countryside of western Massachusetts. "If you are going to get
traction in that community, you need to be there for a decade."
(Additional reporting by Matthew Green in London; Editing by Richard
Valdmanis and David Clarke)
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