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Why Did SunPower's Total Revenue Drop 15% YoY In 2018?

SunPower’s (NASDAQ: SPWR) total revenue has dropped from $2.13 billion in 2017 to $1.81 billion in 2018. The fall in revenue for 2018, has mostly been due to the shutting down of SunPower’s large scale projects department. Increased competition in the solar space is also to blame, as it has pushed down average prices, hampering revenue in the process.
However, we expect things to stabilize by 2020, with revenue growth from the residential segment supporting total revenue, while SunPower’s commercial segment is also expected to see steady growth. Revenue from residential sales and leasing is expected to grow more than 1.3x in the next 2 years, driving up residential revenue to about $740 million.

To find out more about how SunPower’s revenues compare with those of its closest competitors, First Solar and Canadian Solar, you can view our interactive dashboard, SunPower Revenue: How Does SunPower Make Money?

Revenues from SunPower’s 3 operating segments are as follows:

A] Revenue from SunPower Technologies to touch the $1 billion mark by 2020, and make up about 46% of total revenue

  • This segment includes sales to commercial and residential end-customers outside of North America and global power plant sales.
  • Revenue from this segment has been trending downward, mainly due to the shutting down of SunPower’s large scale projects department, and increasing competition in the solar space.
  • However, we expect around a $130 million growth in revenue for this division by 2020.

B] Revenue from the North America Commercial segment to grow by around 15%, and make up about one-fifth of 2020’s total revenue estimate

  • Revenue from this segment trended lower in 2018, on the back of low global demand growth and increased competition.
  • The shutting down of the large scale projects department was also to blame.
  • However, things should get better by 2020, as more and more people look toward renewable sources of energy.

C] Revenue from the North America Residential segment to grow to $740 million by 2020, and make up the remaining 34% of total revenue

  • Residential solar power systems are turning out to be more and more economically viable, causing people to gradually make the shift from electrical power sources.
  • SunPower’s products are preferred as they occupy less space, while maintaining one of the highest incident light-to-electricity ratios.
  • We expect this division to continue growing at a steady pace and make up a significant part of SunPower’s total Revenue.

 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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