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Vivint Solar Crosses 1 GW Threshold in Residential Installations

By Frank Andorka, Senior Correspondent

In the hoopla surrounding Tesla Home Energy and Sunrun as they battle it out for the top spot in the residential solar installation business, it’s easy to forget about who is in second place – and who is installing solar at an ever-increasing pace as its steady growth continues to show.

Vivint Solar announced it has installed 1 gigawatt (GW) of solar energy systems since its launch. The company installed 1 GW in just seven years, making it one of the fastest residential solar providers to reach this significant milestone. Vivint Solar first announced the achievement yesterday when it reported third quarter 2018 financial results.

Founded in 2011, Vivint Solar has become a national leader in residential solar, helping more than 146,000 customers in 22 states enjoy the benefits of affordable, renewable energy.

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“We’re extremely proud of the entire Vivint Solar team for their contributions to this remarkable achievement,” said Vivint Solar CEO David Bywater. “The impact we have made on the environment and in the lives of hundreds of thousands of Americans by enabling them to power their homes with clean energy is immensely rewarding. We are confident that the quality of our installations and incredible customer experience will continue to differentiate us in the residential solar market.”

Deploying 1 GW of solar power underscores Vivint Solar’s success in evolving from offering a single product in a single sales channel to a flexible, customizable home renewable energy platform available to consumers across multiple channels. Under Bywater’s leadership, the company has pursued a sustainable growth strategy and focused on more profitable markets, solidified its capital position and diversified its solar plans to include loans and enhanced lease options, which have become rapidly adopted by customers. Vivint Solar has also strived to lead the industry in workmanship and quality control standards for installations.

“There has never been a more exciting time to be at Vivint Solar. Achieving 1 gigawatt of solar installations further validates our roadmap as we work to innovate and become the most trusted, best-run residential solar company in the world,” said Bywater. “Above all, I am proud to lead a company of over 3,500 outstanding employees who are committed to delivering a best-in-class customer experience and passionate about providing choice and control in energy generation and consumption.”

Just in 2018, Vivint Solar’s financial and strategic achievements include a solar-plus-storage solution with LG Chem batteries, the largest residential solar asset-backed securitization to date and an innovative multi-party forward flow funding arrangement, and three new tax equity funds to expand the runway for future transactions. In addition, the company announced a collaboration for new home construction in California with one of the nation’s largest homebuilders.

Vivint Solar Plans To Grow California Operations Aggressively In Anticipation Of 2020

By Frank Andorka, Senior Correspondent

California has the most aggressive solar plans in the nation. This is no surprise. Between the 100% renewable portfolio standard (RPS) (which in the Golden State means solar) to its mandating that all new construction must have solar panels on them starting in 2020, it’s clear the legislature and the people of California have gone all in on the Solar Revolution.

But that would mean nothing if there is no one to serve the burgeoning market. Which is why the most recent announcement from Vivint Solar is so exciting that they are expanding their solar leasing program to the entire state.

Vivint Solar, a leading full-service residential solar provider, announced it has launched a new fixed rate solar lease plan. Initially available in select markets in California, the new solar plan allows new customers to install solar panels for no money down, lease them from Vivint Solar for 20 years and pay the same fixed monthly payment over the entire contract term.

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The new offering underscores Vivint Solar’s commitment to expand the solar plans homebuilders can offer to homebuyers as they prepare for California’s 2020 mandate requiring rooftop solar installations on new homes. In collaboration with Vivint Solar, homebuilders in California can offer multiple solar plans to homebuyers, who will have the opportunity to choose their preferred financing option.

“In order to provide a best-in-class customer experience, we must continue to diversify the ways homeowners can go solar and save money on energy bills,” said Vivint Solar CEO David Bywater. “This new solar plan introduces a simple, flexible option for embracing clean, renewable energy and gives new customers the assuredness that they will pay the same amount for solar energy in 2038 as they will in 2018.”

Vivint Solar expects to extend the fixed rate solar lease plan to additional states in the coming months.

Vivint Solar Raises $200million in Tax Equity, Installs 59MW in Q3

By Yann Brandt; Vivint Solar announced today that it has raised $200 million in new tax equity, a day before announcing it’s 3rd quarter financial results. The $200 million were critical given the delay the company was having in raising new tax equity after a failed acquisition by Sunedison. Vivint Solar even went out of its way to negotiate a new compensation deal with Thomas Plagemann, the EVP of Capital Markets. Plagemann is entitled to 0.15% of tax equity raised as part of the bonus compensation. The $200 million will go a long way to and help finance 123MW for an estimated $480 million of system values.

In the 3rd quarter, Vivint Solar announced that it had booked and installed 59MW. The 59MW came from 8,266 systems for a cumulative amount of 93,138. The average system size was 7.1kW but the total installed amount was a 2MW decrease from the same quarter last year. You can likely blame the focus on the acquisition on the decreased sales and marketing efforts.

The quarter showed signs of improvements. The total system costs decreased to $2.85/watt from $2.94/watt last quarter and $3.12/watt in Q32015. Sales and marketing costs came in at $0.55/watt in the quarter in line with average costs over the past 10 quarters. The $0.55/watt is significantly lowed than competitor SolarCity, which disclosed sales and marketing costs of $0.71/watt in Q2 of this year. SolarCity will release financial information on November 9th after market close.

In other financial data, Vivint Solar estimated that retained value per share was $5.97 per share which reflects an almost 100% premium over its current trade price of $3.05 per share. The current contracts have remaining payment obligations of $2.48 billion which is pre-debt payments so the cost of capital on those non-recourse loans are quire important.

Q3 Presentation

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Q3 Financials

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Q3 Cost per Watt Methodology

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Solar Asset Management: 4 Best Practices From The Experts

By Richard Matsui

With the notable exception of Intersolar North America, it’s surprisingly rare for a major solar conference to be held here in San Francisco. So when Solarplaza extended an invitation for us to speak at its 2nd annual Solar Asset Management conference here in the city, we leapt at the opportunity.

I joined fellow panelists Kent Williams (VP of Asset Management, Vivint Solar), Jimmy Bergeron (Director of O&M, SolarCity), and Matt Golden (Senior Consultant, IBTS) for a discussion entitled, “Challenges in effective management of small scale portfolios.”

4 Asset Management Best Practices From The Experts

Measure twice, cut once: With small scale portfolios, it is especially important to build systems right the first time. Why? The cost of a single truck roll to solve an O&M issue can wipe out years of electricity value that the system is generating. Therefore, the most cost-effective solution to O&M is to ensure that O&M is not needed in the first place, by ensuring your installers are building high-quality systems with high-quality equipment from the start.

You need to examine the tails: While our industry often describes portfolio performance in terms of its average (e.g. “my portfolio is at 103% of expectations), there is a wealth of insight hiding in the anomalies, the “tails”–especially when looking at portfolios that run into the hundreds or thousands of systems. Even with a “103%” portfolio, it’s your customers on the left tail of the portfolio distribution who are not giving you referrals and leaving you negative Yelp reviews.

Be disciplined with data collection: Jimmy Bergeron showed an impressive chart of 75+ O&M issues that SolarCity deals with, in order of frequency. Generating this chart requires that SolarCity classify every single O&M case it has ever handled–that is a painstaking investment for any developer. But it pays off richly: SolarCity has tremendous insight into what factors cause O&M problems. That insight is fed into the organization’s operations as learning, thus completing a feedback loop–which brings us to our last best practice.

Adopt a learning mentality: Even as our industry scrambles to service solar portfolios that are doubling in size every year, it is critical for asset managers to see the forest through the trees. After the session, one asset manager drew an analogy to medicine: “Today, a lot of O&M issue handling is really about treating symptoms, but we are not yet curing the underlying disease. In order to cure the disease, we must learn about what these symptoms share in common.” For instance, beyond simply fixing problematic systems as they arise, identifying underlying trends to learn that Installer X is systematically causing these problems will enable you to take corrective action up front.

kWh Analytics is helping our industry to “cure the disease.” We enable solar investors and asset managers to take control of their risk management and reporting through a web-based portfolio management platform. The platform delivers risk insights from 40,000+ PV systems, representing the industry’s largest independent database of operating solar assets. The firm’s clients include several of the leading solar originators and financial institutions.