Sunnova Ends 2019 With Growth but Overall Losses, Heralds ‘Year of the Battery’
Storage is becoming central to Sunnova’s future growth strategy.
Residential solar company Sunnova experienced a surge in customers buying energy storage in the fourth quarter of 2019, CEO John Berger said on an earnings call Tuesday.
The share of customers opting for batteries alongside solar, referred to as the “attachment rate,” jumped from 15 percent in Q3 to 24 percent in Q4. The continued growth prospects inspired Berger to deem 2020 the “year of the battery.”
“Batteries continue to add to Sunnova’s profitability and recurring cash flow,” Berger said. “The instability of regional power grids is becoming increasingly intolerable for consumers. As a result, demand for our product offerings continues to increase.”
The potential to add batteries to solar systems will be a “significant catalyst” for future growth, said Berger, as Sunnova wrapped up a quarter that brought in more than 6,000 new residential solar customers, an 84 percent increase over the same period in 2018. The company now offers energy storage in 16 of its more than 20 markets, but penetration among its overall customer base remains in the low single-digit percentages. That could make existing customers a receptive audience for battery retrofits, even as Sunnova pushes to increase the attachment rate on new deals.
Despite projecting confidence, Sunnova logged another quarter of losses — a trend that’s held in all quarters since the company’s IPO in July 2019. For the full year 2019, Sunnova reported losses at $133.4 million, compared to $68.4 million in the prior year. The company attributed the higher losses to IPO-related costs, an increase in customers and losses on interest-rate swaps. But Sunnova did reduce its Q4 losses compared to the same period in 2018, and the stock price responded by drifting up nearly $2 before mellowing to close at pre-results prices.
Heading into 2020, Berger said Sunnova will continue growing storage deployments in expected states like California as well as in areas where the economics are a harder sell, such as Texas. The CEO attributed much of the spike in interest to resiliency concerns related to wildfires and significant storms.
“Anywhere you see that, you’re going to see some storage pickup,” said Berger.