Full vertical integration is a dream for almost all solar companies, offering the ability to control manufacturing, sales and installation and have a cost-competitive system. First Solar and SunEdison have it figured out on the large scale, although SunEdison’s recent market troubles bring uncertainty to its foothold. Now two players in the residential market are asserting their dominance: SunPower and SolarCity.
SunPower has been vertically integrated for over a decade, but its new residential product—Equinox—aims to be a game changer. Consisting of SunPower-manufactured panels, microinverters, racking and monitoring, Equinox ships as one full system under one warranty that is quicker and easier for contractors to install.
“The company is evolving—and I think we’ve gotten there—to be intensely customer-centric,” said Howard Wenger, president of business units at SunPower. “Our customers and dealers love our panels, but what they really want is an entire solar energy solution that’s been thought through from A to Z. We’ve made the best solar panels in the world for a long time. Let’s now make the best solar energy solutions in the world with our customers in mind.”
SunPower got to this place—from starting as a solar cell and panel manufacturer to now being “a solar solution company that’s becoming a solar energy company”—through key acquisitions. The company’s first integrated system, the Oasis Power Plant for utility-scale projects, came about because of SunPower’s 2007 acquisition of large-scale installer PowerLight. With PowerLight’s design and engineering know-how, SunPower was able to produce a full system product using its own panels.
“For 10 years, it’s now part of our DNA to think about a product from the solar cell through the panel through the fully engineered solution for the customer,” Wenger said. “Oasis was our first product to do that. We’ve had that team innovation expertise in the company for a long time.”
This expertise allowed for the next generation of integrated products after the 2014 acquisition of microinverter manufacturer SolarBridge.
“The Equinox product took some time to innovate and put together. The integration of SolarBridge into our company, given our roots, fit really well,” Wenger said. “We spoke each other’s language in terms of how system innovation happens, what the steps are, because we’ve done it before on a system basis.”
SolarCity has been slowly acquiring companies and experience over the years to turn from a solar leasing company to one that provides the full gamut of products. The company bought mounting manufacturer Zep Solar in 2013 and module manufacturer Silevo in 2014. A brand new 1-GW manufacturing plant in Buffalo, New York, is scheduled to begin production of SolarCity-branded solar panels by summer 2017. Throw in a close, family-like relationship with Tesla batteries and all SolarCity is missing is an in-house inverter, but that could soon be coming.
With stated plans to become the most vertically integrated solar company in the world, SolarCity wants to control every aspect of the solar business, from manufacturing to installation and financing.
SolarCity has public recognition on its side, and that may be because of its media dominance. The company made headlines across all major news outlets (not just solar publications) in October 2015 when it claimed it had produced the “world’s most efficient rooftop solar panel” at 22.04% efficiency, but Panasonic rained on this hype parade not even one week later with the announcement of a 22.5%-efficient module. But still, most people remember the SolarCity headlines over eight months later.
While SunPower has a leg up on the timing with its Equinox system, once SolarCity’s panels hit the market in full force, anything could happen to the vertical integration race to the top.