13.2

Gigawatts

of solar installed as of 2019

3.5%

Of Residential Buildings

in the U.S. that could economically benefit from solar panels now have them

82%

Recycling Rate

of solid waste in 2019


The Path to Drawdown: Rooftop Solar

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 (aka distributed) solar will need to be generating a combined ~14% of global electricity by 2050.

There are approximately 67.2m residential buildings in the US that are suitable for solar. As of 2020, approximately 3.5% of them have solar panels.

So, to be on a path to Drawdown, rooftop solar is going to need to continue to massively scale across the globe over the few next decades:

  • 183 TWh of rooftop solar electricity generated in 2018 (approximately 15 million buildings)
  • 3348 TWh of rooftop solar needed by 2030 (approximately 280 million buildings)
  • CAGR of 14.8% from 2018 - 2030
  •  
  • 10,341 TWh (or 6.16 TW) of rooftop solar needed by 2050. (>800 million buildings, using today’s PV efficiency numbers)
  • CAGR of 13.44% from 2018 - 2050

It’s important to note that in addition to manufacturing and installation capacity, rooftop solar will likely need support of additional decarbonization technologies, specifically batteries and microgrids, to reach this level of scale.

About

Sunpower (stock ticker SPWR) designs all-in-one residential, commercial and solar storage solutions. Headquartered in Silicon Valley since its incorporation in 1985, it completed its Initial Public Offering in 2005. As of March, 2020, the company had been ranked #1 in the U.S. for commercial capacity in 2017, 2018 and 2019 by Wood Mackenzie.

SPWR's Role in Drawdown

As of 2019, Sunpower installed 13.2 GW of solar, which generated approximately 22 TWh of solar power each year. That’s ~12% 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). For Sunpower to retain a similar market-share, they will need to have installed 401 TWh of solar by 2030, an 18x increase.

SPWR: What We Like

With 13.2 GW of total installations as of 2019, including 350,000 U.S. homes, SPWR is a substantial provider of technology essential to achieving a 100% clean electricity grid. Additionally, their efforts show a focus on sustainability and expanding non-residential applications for clean energy.

  • Posting of sustainability metrics, including an 82% solid-waste recycling rate in 2019, indicates a commitment to transparency.
  • Some of SPWR’s solar panels are fully recyclable.
  • Expansion into energy storage opens an important additional business line.
  • Focus on commercial and industrial opportunities such as factories and parking lots increases potential for large-scale installations.

SPWR: What We Want to See Improve

Set Clear Expansionary Goals


SPWR has not set the clear decarbonization goals for their manufacturing process or their supply chain that competitors have established. The lack of a zero-carbon commitment date, CO2 emissions trend line or other commitments leaves investors without sustainability benchmarks to use for accountability. And with only 0.33 TWh in their residential pipeline, plus more in commercial and industrial, we’d like to see higher sales channel figures to support expansionary potential.

Set Clear Sustainability Goals


From energy to materials, SPWR has significant opportunities to improve its efforts to achieve sustainable production. Current use of only 0.7% renewable energy is undeniably minimal. And evolving future designs and manufacturing processes to utilize inputs primarily derived from recycling old panels could provide insulation from supply chain shocks and potentially enhance gross margins.

Clean Supply Chain


A manufacturer with SPWR’s leading stature has sufficient leverage to insist on an emissions-free supply chain from its business partners. At present, no such supply chain commitments exit. We believe ethical considerations, as well as the potential to proactively reduce supply chain risks from future carbon taxes, should drive SPWR management to pursue these commitments.

Other Residential Solar Stocks in the Climate Index

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