US solar installer, Sunrun, has adapted its business model in response to shifting policy support for the solar industry. The company has shifted its focus from leasing solar panels to selling them outright, in response to changes in the US tax code and the reduction of the Investment Tax Credit (ITC). The ITC, which allowed homeowners to claim a tax credit of up to 30% of the cost of a solar panel system, has been reduced to 26% and is set to decrease further to 22% in 2021.
As a result, Sunrun has seen a decline in demand for its leasing products, which were popular among homeowners who wanted to go solar without the upfront cost. The company has responded by increasing its focus on selling solar panels outright, which allows homeowners to take advantage of the ITC and other incentives. Sunrun has also expanded its product offerings to include energy storage systems, which can help homeowners store excess energy generated by their solar panels and reduce their reliance on the grid.
The shift in business model has been successful, with Sunrun reporting a 10% increase in revenue in the second quarter of 2020 compared to the same period last year. The company has also seen an increase in customer acquisitions, with a 15% increase in the number of new customers in the second quarter. Sunrun’s CEO, Lynn Jurich, attributed the company’s success to its ability to adapt to changing market conditions and its focus on providing high-quality products and services to its customers.
The US solar industry as a whole has faced challenges in recent years, including the imposition of tariffs on imported solar panels and the reduction of the ITC. However, the industry has continued to grow, with solar energy accounting for 40% of all new electricity generating capacity added in the US in 2020. The industry is expected to continue to grow, with the Solar Energy Industries Association (SEIA) predicting that solar energy will account for 20% of all US electricity generation by 2030.
Overall, Sunrun’s ability to adapt its business model in response to shifting policy support has allowed the company to remain competitive in a rapidly changing market. The company’s focus on providing high-quality products and services, combined with its ability to innovate and respond to changing market conditions, has positioned it for success in the growing US solar industry. As the industry continues to evolve, it is likely that other companies will follow Sunrun’s lead and adapt their business models to take advantage of new opportunities and respond to changing market conditions.