SunPower Corporation (NASDAQ:SPWR) Bets On Residential And Utility Solar To Get Back To Profitability

SunPower Corporation

Despite challenges that were experienced last year, SunPower Corporation (NASDAQ:SPWR)’s residential solar business is growing. Some of the factors that make SunPower attractive to households is the good aesthetics of their products, the high quality, and their efficiency.

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Unlike other solar firms that dominate the market, SunPower has a dealer network through which it sells its products. This enables SunPower to not only sell solar panels to dealers but to even provide lease financing. SunPower has also collaborated with loan partners which enables dealers to be able to sell to their customers products on lease or on loan. Other solar firms do not have similar flexible options.

Highly efficient

Another area in which SunPower stands out is in efficiency. On a cell level, the efficiency rate of its panels is about 25%. This beats the efficiency level of other solar firms by basis points numbering about 300.

With the transition from national installers to decentralized installers in the solar sector now underway, SunPower stands to benefit because of its vast dealer network. That should translate to increased sales and strong margins. When restructuring charges were taken out, the margins hover around 20%.

With regards to energy storage, the market going forward seems to favor those firms that enjoy the economies of scale. SunPower’s vast network of dealers could help in this regard. While SunPower’s competitors are beginning to do the same, they are not able to offer the financing choices as SunPower.

Utility solar

SunPower, however, hasn’t restricted itself to residential solar as it has also been restructuring its utility solar business. Though considered highly efficient, SunPower’s panels in this segment were priced higher. But with the fall in the prices of solar components the advantage the company previously enjoyed no longer exists. To adapt to the changing circumstances, SunPower acquired Cogenra Solar. The acquisition allows SunPower to enjoy the fall in prices of solar components as well as new technologies. With these developments, the prospects for SunPower look bright and this could help the solar firm spring back into profitability.

On Thursday shares of SunPower Corporation jumped by 6.26% to close the day at $8.99.

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