Over the past few weeks, the U.S. residential solar industry has seen layoffs, warnings of falling demand and a scramble to shift as much work online as possible.

So far, many of the reports of pain have been anecdotal. But soon the industry’s public companies, including Sunnova, Sunrun, SunPower and Vivint Solar, will report on their first earnings periods since the wide-ranging impacts of coronavirus landed in the U.S. The results should make more clear how effective the attempts to boost sales and keep installations moving have been, even as most of the country remains in lockdown.

The third-ranking solar installer in the U.S., Tesla, has already reported its first-quarter earnings, detailing underwhelming solar installation numbers that undercut two quarters of consecutive gains. Tesla's solar installations dropped 26 percent from Q1 2019 to Q1 2020 and fell from 54 megawatts in Q4 2019 (usually the largest quarter for solar installations) to 35 megawatts in Q1 2020.

Though Q1 overlapped only partially with the COVID-19-related crunch, Tesla’s dismal installation numbers do not bode well for the rest of the industry. For more than a year, the automaker has experimented with all-online sales techniques and low-upfront-cost rental options — tactics now being adopted by the likes of Sunrun and SunPower to juice sales during the pandemic.

Tesla began shifting to a passive sales process in 2017, soon after the company acquired then-market-leader SolarCity. Tesla cut door-to-door sales before ending a partnership with Home Depot and eventually closing most of its retail stores. Though its sales took a nosedive, Tesla’s solar sales continued at a lower level thanks to the company's fervent following, brand power and synergies with its storage and auto offerings.

None of the nation’s other leading solar installers can call upon that same support.

Playing catch-up with ... Tesla?

Despite its poor Q1 numbers, Tesla probably benefited from its shift to online-only sales in the early stages of the pandemic, said Bryan White, a solar analyst at Wood Mackenzie. “For them, sales mostly involve the customer completing the entire sales process on their website. [...] In that sense, Tesla had already eliminated one of the...pain points that companies are facing during the pandemic, which is the lack of face-to-face interaction as a means to move the sale along and complete the deal.”

Other residential solar companies are now playing catch-up, trying both to generate leads and close sales via virtual platforms. While Tesla has been content to watch sales roll in at whatever pace customers choose, its competitors are digging into the digital toolbox to emulate a face-to-face transaction with Zoom or other video conferences.

Additionally, SunPower and leading installer Sunrun have rolled out deals to entice customers, requiring zero money down and collecting little to no money for the first six months of a traditional 20-year home solar contract.  

So far, residential solar seems to be the sector hit hardest by the coronavirus lockdowns, compared to large-scale projects that are less directly affected. An ongoing survey conducted by the Solar Energy Industries Association shows layoffs concentrated among respondents in the residential market. SunPower has cut worker hours and reduced executive salaries, while Sungevity laid off hundreds of employees. Both SunPower and Sunrun have recalled their 2020 guidance.

All of the residential solar sector's major publicly listed companies are set to announce their first-quarter earnings results over the next few weeks, starting with Sunrun on May 6. Sunrun’s financials are comparatively healthy, and its leading installation numbers could cushion the downturn. SunPower could be in a trickier spot than others because of its relatively weak financial position. Vivint Solar, the company that relies most heavily on door-to-door sales, may outline shifting sales tactics. 

Overall, the numbers to look for are megawatts installed, number of new customers and any updates to 2020 guidance. In an era of abounding uncertainty — and an industry where quarterly losses are common — most companies will be girding for a challenging rest of the year and an uneasy entry into 2021.