SunPower Corporation (SPWR) Diversifies Customers and Geographies for Solar Energy

August 19, 2013

SunPower Corporation (SPWR) has diversified its customer base for its solar energy products and services across classes and geographies, and the company is expected to benefit from a beginning recovery in the space, says Ben Kallo, Senior Analyst at Robert W. Baird & Co.

“I like SunPower because of its diversification across customer classes. So it serves as both residential, commercial and then also big large-scale utility projects. The utility projects give us good visibility for the next two to three years, good pipeline there. The residential rooftop market is being driven in the U.S. largely by a leasing program similar to what SolarCity (SCTY) offers and started; SunPower has that business inside of them as well, that’s growing very rapidly,” Kallo said.

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Kallo says SPWR has good exposure to Japan thanks to its relationship with local companies, and he says the country is the largest market this year. He adds that the company’s exposure to the EU is not as bad as previously expected, and he expects the space to play out with SPWR eventually at the head.

“We’ve already started seeing some of the Chinese players pull out of Europe; that was supposed to be kind of the black eye of the industry this year in Europe, and that’s actually gone better than expected, so that should help them out, too. So I think they are set up for a good year, and I’d say a good next couple of years it all emerges as the leader in the space,” Kallo said.