How rooftop solar got big: Sunrun hits milestone of 5 gigawatts installed

Sunrun, the nation’s largest rooftop solar company, just turned 15. When it started, solar installations were costly and rare. Many venture-backed startups were experimenting with new financing structures and other techniques to make solar more accessible, but many of those companies have since collapsed.

Sunrun never collapsed; instead, it grew steadily through the ups and downs of the industry’s famously volatile ​“solar coaster.” On Tuesday, the company announced that it has installed a total of 5 gigawatts of solar capacity for 700,000 customers, proof that small, household-level clean energy installations can add up to substantial capacity.

Canary Media’s Julian Spector called Sunrun CEO Mary Powell to unpack what those numbers mean and learn more about how Sunrun has navigated market disruptions from Covid to unexpected federal intervention. The conversation has been edited for brevity and clarity.

Julian Spector: You’ve just announced that Sunrun has, in its 15 years, installed 5 gigawatts of solar capacity and reached 700,000 customers. What does that mean for the broader effort to decarbonize American society?

Mary Powell: The numbers send a message that Americans overwhelmingly want to move toward solar energy. And in many ways, I am heartened by what we’re seeing in terms of customers’ interest in solar energy, particularly now that we pair it with storage — we now have 37,000 home battery systems installed, and we’ve seen 100% growth in battery adoption year-over-year.

Working together, we can really create the grid of the future — one that is more affordable, resilient and climate-hardy for all. So yes, we’re really excited by what we’ve accomplished in our first 15 years, and more bullish than ever on the need to dramatically accelerate this customer-led revolution as we think about our next 15 years.

Spector: The rooftop solar industry has long grappled with the costs of customer acquisition — how much money you have to spend to get someone to sign up for such a big commitment. If you’re projecting 25% growth in installations this year, does that mean you’ve solved the customer-acquisition problem?

Powell: It doesn’t mean that overnight the way we go to market radically changes. But it does say that, over time, yes, we can go to market in ways that are increasingly cost-effective for the customers we serve. We’re very heartened by what we’ll be able to accomplish from an e-commerce perspective, and we do expect that there will be an increase in demand.

While this customer-led revolution accelerates, policy is also important, and it can change quickly and send messages to customers that can alter their behavior. But right now, we are accelerating [toward] a tipping point that will bring down costs over time.

Spector: This spring, the Commerce Department launched its tariff inquiry on four Southeast Asian countries that supply the majority of U.S. solar panel imports. Did that federal action affect your ability to do business this year? 

Powell: That investigation was not needed and was not helpful to the industry. At the same time, at Sunrun, we work to position ourselves to be in a very strong place in terms of inventory. And we have been managing these types of headwinds for well over a year from a supply-chain perspective, so we feel like we are in good shape relative to that investigation and just hope that it is brought to a conclusion very soon.

And the bigger picture here: We think any use of forced labor [in the solar supply chain in China’s Xinjiang province] is abhorrent. We’ve been incredibly proactive on this issue. We partnered with [the Solar Energy Industries Association] immediately when the first allegations arose in 2020 and helped them develop their traceability protocol, and we were one of the first companies to implement it. We signed the forced-labor prevention pledge.

Spector: Can you say for certain that no panels that Sunrun installs contain inputs from Xinjiang?

Powell: In my view, we’ve done everything humanly possible to get to that. We additionally added Sunrun’s own vendor code of conduct, which explicitly prohibits any use of forced labor, and we requested that our vendors recommit [to verifying] that their products are free of forced labor, which they have all done. We believe there is enough polysilicon manufactured outside of western China to support the kind of gigawatt-scale demand that we expect to see.

Spector: There have been a lot of disruptions to the solar supply chain recently: general Covid-era logistics snags, the tariff inquiry, the new law banning imports from Xinjiang. Are you strategizing around the supply chain in a fundamentally different way now than the company was, say, three years ago?

Powell: Yeah, 100%. We continue to maintain a really large inventory balance, so we’re insulated from unforeseen disruptions. Just to give you some numbers around our inventory, it was about $556 million worth [of solar modules] in Q1 2022, which was up about $266 million relative to the first quarter a year prior. One of the benefits of being the nation’s leader and the largest player in this space is that we have really good long-term relationships with the vendors in our supply chain.

Spector: It’s hard to see how tariffs alone could instigate a robust American solar manufacturing base. But the global supply chain currently is highly dependent on China for key inputs like polysilicon and silicon wafers. Are you satisfied with the current state of the global solar supply chain, or is change needed?

Powell: We welcome more production and manufacturing, wherever it can make sense. And in fact, I just spent time last week with clean-energy leaders from all over the country, and I was very heartened by some of the work going on in a couple of areas to, where viable, bring manufacturing into the U.S.

Spector: The White House ultimately decided to freeze the implementation of tariffs on those four Asian countries for the next two years while the inquiry proceeds. Are you happy with that resolution?

Powell: Directionally, that was a positive outcome.

Spector: Let’s turn to your preferred installer partnership with Ford for its F-150 Lightning electric truck. If someone spends $3,900 on this special bidirectional charging equipment, they can use the truck as a backup power source. Are customers taking you up on that?

Powell: It’s early to report numbers, and at the next earnings call I will be reporting actual numbers of what we’re seeing. But yes, I expect that a number of customers are going to want to have that capability to back up their home.

At the same time, I think we are going to see a lot of customers who actually want separate independent energy storage in their home and solar, and probably our [smart electric] panel that we’re partnering on with Span. At the end of the day, that truly provides energy independence, which is what so many Americans want.

Spector: Traditional battery packs for your house might cost $10,000 or more. Now you can get even bigger battery capacity from your truck for a few thousand bucks. Does that undercut the sales case for your stand-alone batteries?

Powell: Some customers will say, ​“I have my Ford; I’ll use that as my energy storage resource.” But a lot of customers want it all.

I spend a lot of time in California now, and I have already experienced multiday outages because of [wildfire-prevention power shut-offs initiated by utilities]. Customers want to be able to drive their EV, and if that event goes on for a week, a lot of people are going to want to have both [the truck and a home solar-plus-storage system]. I think a lot of it will depend on where folks live. But I definitely expect many customers to still want solar-plus-storage, plus their Ford F-150 and the ability to use it as a backup resource if they want to.

Spector: Many solar companies tried to find ​“synergies” with other sales channels — like smart homes merging with solar or traditional utilities trying to layer on solar sales. But a lot of those didn’t really work. Do you have evidence that this Ford partnership is different?

Powell: First of all, this is huge: It’s America’s bestselling vehicle for the last 40 years that has now gone electric. That is such a game-changer.

But yes, what I have seen, anecdotally and statistically, is there is a direct correlation. As customers across America move to heat pumps and other forms of electrification, you’re going to see more and more drive to have more affordable energy. Right now, we are seeing double-digit-percentage utility rate increases all around us; the latest energy inflation number was 12%. People are paying more at the pump; they’re paying more to their utility. It is completely logical that it is going to accelerate this movement toward clean energy independence. Even if you end up only being able to generate half the [electricity] you need for your life, aren’t you going to want that half to be a lot cheaper than the other sources you’re paying for? I would say yes. This is all going to drive greater demand for solar energy.

Spector: Canary Media recently did a special themed week on recycling renewables, and we covered Solarcycle, a startup trying to radically improve recycling of solar panels. Sunrun is the first named customer working with them. What’s your strategy for end-of-life solar panels and batteries?

Powell: We’re in the business of sustainability, so we’re constantly exploring how we can be a part of the next innovation that makes things more sustainable. I was excited when the team sealed that one. It is very intertwined with who we are as a company and how we continue to grow and accelerate what we do to have a positive impact on society.

Spector: To close, we’ve seen plenty of large, well-funded national solar companies rise and fall over time. Here you are 15 years later, seemingly stronger than ever. Why do you think Sunrun succeeded where many others tried and failed?

Powell: It’s not easy, being an innovator and delivering something that you know can be amazing for customers and the planet but isn’t yet mainstream. So much of the [company] culture that I love came directly from Lynn [Jurich] as CEO and our co-founder Ed [Fenster], which is just this intense grit. Like, never surrender — this incredible passion for the cause, for the customers, for the planet.

It is that quality that gives me such confidence in our ability to scale up to even greater heights rapidly in the next few years. And we’re really taking that Sunrun solar-as-a-service business model and expanding it: with Span, with our partnership on smart energy management, through our work to improve permitting processes with SolarAPP. So we’re innovating around how we can become that trusted, beloved partner to help customers transform their lives in a way that’s more affordable.