How Tesla Dropped to Fourth in U.S. Solar Market Share While Freedom Forever Gained
March 30, 2022
Market share for the top 10 solar contractors in the US increased slightly in 2021 after several years of declines. Freedom Forever (#9 in our Top 10 solar contractors in NJ) surpassed Tesla to capture the #3 spot nationally. Large solar contractors continue to rely heavily on and expand their third-party sales networks. Third-party sales networks are comprised of independent sales organizations who sell solar to homeowners and then turn around and sell those projects to a contractor who installs the system.
When evaluating a home solar purchase, it’s important for homeowners to understand whether the company selling them solar is the same company that’s installing the solar. Read our take on third-party sales and how to choose a solar contractor here.
Here’s a link to the original article on what’s happening with large regional and national solar contractors and you can find the full text below.
Despite rising costs and supply chain woes, U.S. residential solar continued to grow nearly 30% year-on-year in 2021, reaching a record-breaking 4.2 gigawatts (GW) of new installations. A sizeable chunk of that business went to Freedom Forever. The California-based solar installer has secured 3.9% of the U.S. residential solar market share last year, overtaking Tesla in the top three for the first time, says Wood Mackenzie.
Some of that is by design, notes Wood Mackenzie research associate Caitlin Connelly:
“Freedom Forever’s installation volumes grew a massive 80% in 2021, and the company entered 12 new state markets. Simultaneously, Tesla has become increasingly dependent on subcontractors for solar installations as the company shifts its business model more towards that of a full-suite technology supplier. Given these two factors, we expect to see Tesla continue to decline in the installer rankings over the next several quarters.”
At its current rate, Freedom Forever’s growth puts pressure on runner-up Titan Solar Power’s position (4.8% market share) going into 2022. While Titan managed to grow installation volumes and market share in 2021, its growth is significantly smaller compared to previous years. As large regional installers with expansive networks, Titan and Freedom Forever often compete for sales volumes, and their operations overlap in 15 state markets.
Additionally, both companies follow similar business models that rely solely on third-party sales companies. Outsourcing sales to third-party companies – a customer acquisition strategy also used by Sunrun – continues to be a popular tactic for top installers looking to create efficiencies as they expand their geographic footprints.
For the fifth consecutive year, publicly-traded Sunrun maintains its top residential installer position, securing 13% of the total market. However, Sunrun’s market share is down nearly a point since 2020 – the second year in a row the company experienced market share declines. Although both Sunrun’s direct and indirect installation volumes continue to grow, flat Q4 volumes attributed to Omicron-related labour shortages ultimately hurt their market share for 2021.
“While Sunrun still maintains a comfortable lead, the rising pressure on the company’s growth rate is a testament to the unyielding momentum of other top players,” Connelly says.
Together, Sunrun, Titan Solar Power, and Freedom Forever command over 20% of the US solar residential market.
Further down the Leaderboard, competition continues to intensify. In the latest example of consolidation in the residential market, SunPower announced the acquisition of Blue Raven in October 2021. In 2020, SunPower and Blue Raven made up 1.4% and 1.0% of the total market respectively. Heading into 2022, the combined entity SunPower holds 2.7% of the total market, settling comfortably ahead of both Momentum Solar (#6 with 2.2% market share) and Trinity Solar Power (#7 with 2.0% market share).
Connelly said: “The acquisition of Blue Raven strengthens SunPower’s direct installation business, expanding their geographic footprint for direct installs from eight to 19 states. SunPower has noted that direct installs are central to expanding service options and revenue streams.”
The residential finance market is also consolidating. The top five largest players financed over 70% of the residential market in 2021, up from 60% in 2020. Market consolidation ramps up competition between financiers, driving down interest rates and dealer fees.
- GoodLeap held onto its position as the top financier and loan provider, capturing 26% of the total market.
- Sunrun leads the third-party owned (TPO) market, capturing 15%.
While TPO capacity volumes grew in 2021, loan volumes continue to dominate new growth and now represent over 60% of the market. Wood Mckenzie expects this trend to become the norm over the next couple of years before the investment tax credit expires for customer-owned systems in 2023.
How Tesla Dropped to Fourth in U.S. Solar Market Share While Freedom Forever Gained
March 30, 2022
Market share for the top 10 solar contractors in the US increased slightly in 2021 after several years of declines. Freedom Forever (#9 in our Top 10 solar contractors in NJ) surpassed Tesla to capture the #3 spot nationally. Large solar contractors continue to rely heavily on and expand their third-party sales networks. Third-party sales networks are comprised of independent sales organizations who sell solar to homeowners and then turn around and sell those projects to a contractor who installs the system. When evaluating a home solar purchase, it’s important for homeowners to understand whether the company selling them solar is the same company that’s installing the solar. Read our take on third-party sales and how to choose a solar contractor here.
Here’s a link to the original article on what’s happening with large regional and national solar contractors and you can find the full text below.
Despite rising costs and supply chain woes, U.S. residential solar continued to grow nearly 30% year-on-year in 2021, reaching a record-breaking 4.2 gigawatts (GW) of new installations. A sizeable chunk of that business went to Freedom Forever. The California-based solar installer has secured 3.9% of the U.S. residential solar market share last year, overtaking Tesla in the top three for the first time, says Wood Mackenzie.
Some of that is by design, notes Wood Mackenzie research associate Caitlin Connelly:
“Freedom Forever’s installation volumes grew a massive 80% in 2021, and the company entered 12 new state markets. Simultaneously, Tesla has become increasingly dependent on subcontractors for solar installations as the company shifts its business model more towards that of a full-suite technology supplier. Given these two factors, we expect to see Tesla continue to decline in the installer rankings over the next several quarters.”
At its current rate, Freedom Forever’s growth puts pressure on runner-up Titan Solar Power’s position (4.8% market share) going into 2022. While Titan managed to grow installation volumes and market share in 2021, its growth is significantly smaller compared to previous years. As large regional installers with expansive networks, Titan and Freedom Forever often compete for sales volumes, and their operations overlap in 15 state markets.
Additionally, both companies follow similar business models that rely solely on third-party sales companies. Outsourcing sales to third-party companies – a customer acquisition strategy also used by Sunrun – continues to be a popular tactic for top installers looking to create efficiencies as they expand their geographic footprints.
For the fifth consecutive year, publicly-traded Sunrun maintains its top residential installer position, securing 13% of the total market. However, Sunrun’s market share is down nearly a point since 2020 – the second year in a row the company experienced market share declines. Although both Sunrun’s direct and indirect installation volumes continue to grow, flat Q4 volumes attributed to Omicron-related labour shortages ultimately hurt their market share for 2021.
“While Sunrun still maintains a comfortable lead, the rising pressure on the company’s growth rate is a testament to the unyielding momentum of other top players,” Connelly says.
Together, Sunrun, Titan Solar Power, and Freedom Forever command over 20% of the US solar residential market.
Further down the Leaderboard, competition continues to intensify. In the latest example of consolidation in the residential market, SunPower announced the acquisition of Blue Raven in October 2021. In 2020, SunPower and Blue Raven made up 1.4% and 1.0% of the total market respectively. Heading into 2022, the combined entity SunPower holds 2.7% of the total market, settling comfortably ahead of both Momentum Solar (#6 with 2.2% market share) and Trinity Solar Power (#7 with 2.0% market share).
Connelly said: “The acquisition of Blue Raven strengthens SunPower’s direct installation business, expanding their geographic footprint for direct installs from eight to 19 states. SunPower has noted that direct installs are central to expanding service options and revenue streams.”
The residential finance market is also consolidating. The top five largest players financed over 70% of the residential market in 2021, up from 60% in 2020. Market consolidation ramps up competition between financiers, driving down interest rates and dealer fees.
- GoodLeap held onto its position as the top financier and loan provider, capturing 26% of the total market.
- Sunrun leads the third-party owned (TPO) market, capturing 15%.
While TPO capacity volumes grew in 2021, loan volumes continue to dominate new growth and now represent over 60% of the market. Wood Mckenzie expects this trend to become the norm over the next couple of years before the investment tax credit expires for customer-owned systems in 2023.
Have a question about home solar contractors or anything else? Send us a message and we’ll answer ASAP.
Have a question about home solar contractors or anything else? Send us a message and we’ll answer ASAP.
