The Path to Drawdown: Solar PV Manufacturing
To solve climate change and remain below 1.5ºC of global warming, the globe needs to switch to generating power from fossil fuels to using 100% emissions free sources.
The largest source of this clean energy is the sun (barring advances in nuclear fusion). Photovoltaic or PV solar panels (the kind you see on rooftops) have emerged as the predominant way of capturing the sun's energy and converting it into electricity.
The industry has been growing fast and, as of 2020, solar panels are now the cheapest source of electricity in most places on earth.
Solar produces ~2% of global electricity today. According to Project Drawdown, to be on a path to remain under 1.5ºC of warming, rooftop and utility scale solar will need to be generating a combined ~40% of global electricity by 2050.
To get there, the PV solar industry is going to need to continue to massively scale over the few next decades:
- 720 TWh of solar electricity generated in 2019
- 28,200 TWh needed by 2050
- CAGR of 12.56% from 2019 - 2050
Another analysis from the IEA predicts that in order to reach a 100% clean electricity grid by 2050, annual solar panel manufacturing capacity will need to scale from 110 GWs in 2019 to 500 GWs in 2030.
Sunrun (stock ticker RUN) designs, develops, sells, installs and maintains residential solar energy systems in 21 U.S. states as well as the District of Columbia and Puerto Rico. Headquartered in San Francisco, CA, Sunrun was founded in 2007, and is noted for pioneering the solar-leasing business model now widely used throughout the industry.
RUN's Role in Drawdown
As of 2020, RUN had installations totaling 3.9 GW, and 550,000 U.S. homes as customers, generating 6.5 TWh of solar power annually. That’s ~3.5% of the global rooftop solar generation in 2018 (solar grew in 2019, but we can’t find good data for rooftop solar in particular, so we’re using the 2018 data for this ballpark estimate). To retain a similar market share by 2030, RUN would need to nearly double its current 18% YOY growth.
RUN: What We Like
RUN is making clear commitments to move toward fully sustainable solar panel production, while also setting near-term growth targets better matched to those needed to maintain their market share.
- Committed to achieving net zero carbon emissions by 2040.
- Committed to operating a fleet that’s 1/3 electric or hybrid by 2025.
- Committed to 100% equipment recycling by 2025.
- 2021 growth targeted at 25% – 30% is more in line with required expansion rate (q1 earnings p 9).
- Supply chain reviews include screenings and audits based on environmental and social criteria (ESG p. 17).