Sunrun Reports 70% Battery Attachment Rate, Signaling Shift to Energy Storage

What's Happening?

Sunrun, the largest U.S. home energy systems installer, reported that 70% of its nearly 29,000 new customers in the last quarter added batteries to their rooftop solar systems. This represents a 50% increase in the battery attachment rate from the previous year. The company is shifting focus from solar-only installations to energy storage systems, which support virtual power plants (VPPs). Sunrun has installed approximately 3.2 GWh of distributed storage capacity and aims to reach 10 GWh by 2029. The company is preparing for the expiration of the federal investment tax credit for third-party-owned residential solar equipment in 2027 by sourcing lower-cost solar equipment and increasing grid services revenue.

Why It's Important?

Sunrun's increased focus on energy storage reflects a broader industry trend towards integrating solar power with battery systems to enhance grid reliability and efficiency. The rise in battery attachment rates is partly driven by policy changes in California, the largest market for residential solar. This shift could lead to significant growth in virtual power plants, which offer a cost-effective alternative to traditional power plants. Sunrun's strategy to mitigate the impact of the expiring tax credit by reducing costs and increasing revenue streams highlights the company's adaptability in a changing regulatory environment. This development could influence other solar companies to adopt similar strategies.

What's Next?

Sunrun plans to expand its project backlog to qualify for the solar investment tax credit beyond 2027, potentially extending to 2030. The company is also exploring new markets and opportunities for customer-sited solar and battery systems. As more states implement policies supporting distributed energy resources, Sunrun's focus on energy storage and VPPs is likely to grow. The company's ongoing efforts to align with utilities' interest in VPPs could lead to increased participation in grid services programs, further solidifying its position in the energy market.