The growth of the U.S. residential solar sector is being increasingly nurtured by just five leading installers, with Elon Musk-backed SolarCity out in front, supplying 34% of the market in the first half of the year.
The latest U.S. PV Leaderboard Q3 2015 from GTM Research has found that the same five solar companies have claimed the bulk of the market for the past three quarters, competing amongst themselves to increase market share.
In 2014 SolarCity also claimed 34% of the market share, and the companys consolidation in 2015 is no mean feat considering the strides made by its nearest competitors Vivint Solar and Sunrun this year.
According to the Leaderboard, Vivint has accounted for 12% of all residential installations in the U.S. so far this year, with Sunrun following in third place on 3%. NRG Home Solar and Sungevity are fourth and fifth respectively, each with around a 2% market share.
In July, Vivint Solar was acquired for $2.2 billion via a definitive merger agreement with SunEdison and its yieldco vehicle, TerraForm Power. This deal saw TerraForm assume control of Vivints 530 MW of installed solar PV capacity.
That same month, Sunrun published the terms of its $309 million IPO, launched on the back of a solid 2014 in which the company tripled its revenues. SolarCity, far from resting on its laurels, has been equally if not more proactive in ensuring it continues to evolve with the market, completing its fourth securitization in August and rolling out a suite of complementary services to support its initial solar leasing program.
A victim of all this jostling for market share has been Sungevity, which slipped from third place in 2014 to fifth spot in the midway point of this year. Sungevity has been outsourcing its financing to focus mainly on sales, said GTM Research senior solar analyst Nicole Litvak, whereas Sunrun and NRG Home Solar have both acquired installers to become partially vertically integrated.
"Thus far, these market share trends indicate that vertical integration is the best way to scale quickly in residential solar," said Litvak.
The report also forecasts the U.S. residential solar market to exceed 2 GW of installed capacity this year.