2020 Annual Report
Total Page：16
File Type：pdf, Size：1020Kb
2020 Annual Report Corporate Headquarters SunPower Corporation 51 Rio Robles San Jose, California 95134 408.240.5500 sunpower.com ©2021 SunPower Corporation. All Rights Reserved. SUNPOWER, the SUNPOWER logo and all other trademarks cited herein are the property of SunPower Corporation in the U.S. Executive Officers Thomas Werner President, Chief Executive Officer and Chairman of the Board Manavendra Sial Executive Vice President and Chief Financial Officer Kenneth Mahaffey Executive Vice President and General Counsel Douglas Richards Executive Vice President, Administration Board of Directors Thomas Werner Chairman of the Board François Badoual Director Catherine Lesjak Director Thomas McDaniel Director Julien Pouget Making solar + storage simple Director for everyone Denis Toulouse Director We believe clean energy and backup storage should be accessible to everybody. That’s why SunPower designs Franck Trochet all-in-one residential and commercial solar solutions Director backed by personal customer service and the industry’s Laurent Wolffsheim most comprehensive warranty. And with over 35 years Director of dedicated solar experience, we’re the only U.S.-based solar company that’s been around longer than our Patrick Wood III 25-year warranty. Director 2020 Annual Report CEO Letter Dear Shareholders, Among the many things that became clear in 2020, we learned that widespread renewable energy adoption is a reality. People and businesses are demanding better, cleaner, more resilient, and more affordable energy. That future is here: according to the International Energy Agency 90 percent of new worldwide electricity capacity came from renewable sources in 2020. The markets have spoken, and SunPower is delivering. Poised to enable a new era of distributed energy and self‐produced power Last August, SunPower embarked on a new chapter as we completed our spin‐off with Maxeon Solar Technologies. This split enables SunPower to apply even more focus to the areas where our industry is growing most: sales in the U.S. and downstream tech innovation like on‐site storage and energy management software. Following the split, SunPower is essentially a new company with an incredible amount of insight and a deep heritage in innovation. Growing our U.S. residential market and margins Even in a year when Covid‐19 took a toll on our economy and lives, consumer interest in solar grew, as did our Residential and Light Commercial (RLC) business. With an especially strong second half of the year, we increased megawatts installed 33% in Q3 and 35% again in Q4 and ended the year with a total installed base of more than 350,000 homes. We added more and lower‐cost financing options in our loan and lease mix, enabling us to expand our total addressable market while increasing margins. Consumers are increasingly looking to own their systems — according to Wood Mackenzie 73 percent of solar installations purchased in the first three quarters of 2020 were done so with cash or a solar loan. We are fueling this trend and enabling even more people to generate their own energy with a solar system they own by adding an additional ultra‐low APR, high‐margin loan option in 2021. SunPower continues to sell and install our solar systems through our network of more than 700 independent dealers across 49 states, but we expanded our SunPower Residential Installation (SPRI) program which enables companies to sell SunPower while we take on the installation. This structure provides new channels for SunPower to meet the demand of our rapidly growing customer base and gives homeowners more options when buying solar. Finally, we continued to lead in the new homes market. SunPower is at the forefront of new home compliance, working with 18 of the top 20 builders in California. By collaborating with builders early in the process and innovating in new solutions, we are becoming a go‐to partner for builders, developers and homeowners. SunPower completed more than 11,000 new home installations in 2020. With increasing demand and only 2% nationwide residential solar penetration, SunPower has an enormous opportunity for growth in the years to come. Building resilience against a taxed grid Storms and wildfires tested our electricity grid in 2020, and it became clear that our 20th century energy system is unable to meet the needs of 21st century America. Distributed energy and storage make a more resilient grid and provide people and businesses the reliability they need to stay safe, productive, and comfortable. As demand for solar batteries soared, we launched SunVault™ storage, enabling consumers to charge with solar, decrease energy use at peak‐time, and backup essential electric services. With SunVault, SunPower offers the only solution with completely integrated solar and storage, from the technology down to the single warranty. I’m particularly proud of our ability to pack an enormous amount of power into only two, sleek boxes, where our competitors’ systems are made up of as many as six. We rapidly ramped deployments in Q4 and are seeing increasing demand and attach rates for SunVault in 2021. Along with Helix™ storage for commercial customers, we are helping users better manage their energy and save money while making a more resilient grid. Leading in Commercial and Industrial (C&I) Solutions Businesses and government entities are doubling down on their commitments to make a positive impact in their communities and environment, as well as realizing the cost‐saving and grid resilience benefits that come with solar and storage. Last year we maintained our leading position in C&I Solutions and added to our $3.5 billion pipeline in key verticals including manufacturing, education, municipalities and public transit. These include $50M+ deals with the Washington Metro Transit Authority and JFK, a large project with Chevron at their Bakersfield campus, and many others. With these, and stand‐alone projects, we also increased our community solar footprint and pipeline. Community solar shows increasing promise as its structure enables business and government entities to lower energy costs, achieve revenue, and provide surrounding communities with clean, affordable energy. Demand for our Helix® storage solution also remains high; the company installed 18 MWh throughout 2020. With a combined backlog and pipeline of more than 800 MWh and sales attach rates of 30%, our C&I business is well positioned to capitalize on the increased demand for our commercial storage and services solutions in the year to come. SunPower moves the solar industry into digital age While our sales continued to increase in 2020, the way we sold changed significantly. For years, we had been preparing for a shift in the solar industry that would enable more people to plan and purchase their systems online. Covid‐19 lockdowns accelerated that shift exponentially. We began the year with 5% of sales made digitally; by Q4 we were making 85% of sales online. These sales are fueled by our portfolio of best‐in‐class digital tools for consumers and dealers. Since our Q4 2019 launch of SunPower Design Studio, our do‐it‐yourself solar roof design and visualization tool, we have automatically generated more than 90,000 designs for homeowners. What’s more, our sales conversion rate with SunPower Design Studio is 50% higher than other entry points. For our dealers, we offer the industry's most advanced platform to market, present, design and sell SunPower® systems to homeowners. SunPower's turnkey software enables dealers to customize each project from panel placement to financing options. We are also using our abilities in digital to reduce some of the significant soft costs associated with going solar. In conjunction with industry peers and trade groups, we created and piloted SolarAPP, an online instant permitting application for local jurisdictions. This tool will streamline the solar permitting process, reducing timelines and soft costs, and cancellation rates. Still delivering the best in panels While we have shifted our focus to the downstream market, SunPower is committed to remaining a leader in power, efficiency, and aesthetics. We have a two‐year exclusive agreement with Maxeon to continue selling best‐ in‐class panels in our fully integrated solar and solar plus storage systems. We are also continuing to innovate in panel technology. In 2020 we introduced OneRoof™, the only complete roof‐ integrated solar system. OneRoof replaces roofing tiles with SunPower panels installed directly into the roof deck, creating a watertight, impermeable solar roof. In 2020 long time SunPower partner KB Home began offering this first‐of‐its‐kind system to its Ashbury new‐home community in the San Francisco Bay Area. Significantly improved balance sheet and poised for growth In 2020 we significantly improved our balance sheet and ended the year in a strong financial position. We exceeded our GAAP net income and adjusted EBITDA guidance, expanded our margins, strengthened our balance sheet and generated positive cash flow. We also continued to make progress on lowering our cost of capital while maximizing customer value. We now have a forward net debt to EBITDA ratio well below three and are poised to be on the offense in the years to come. As we look to 2021 and beyond, we are making strategic investments that will enable us to lead in the areas of software and energy services, as well as expand our addressable market and capture more share of this growing industry. Looking ahead: policy that accelerates the renewable energy economy 2020 ended with major legislation including an extension of the solar Investment Tax Credit for two additional years — making solar and storage more affordable for more Americans. As we look to 2021, it is clear that the federal government is serious about tackling climate change, greening infrastructure, creating jobs in renewable energy, and reversing negative impacts previous energy solutions and policies have had on low‐income communities and people of color.