For the second quarter in a row, Sunrun’s results have looked very different not only from their fellow large residential solar companies, but from the market in general. While both Tesla/SolarCity and Vivint Solar have reported declining year-over-year deployments of residential solar in their latest results, Sunrun increased its capacity deployed 16% year-over-year to 76 MW during Q2.
Additionally, Tesla and Vivint are both decreasing their portion of third-party solar sales, as they focus more on short-term profitability. Sunrun, by contrast, is seeing increasing revenues from operating leases and incentives, and reported a 6% year-over-year fall in revenues from direct sales even while overall revenues grew 12%.
Sunrun is not slowing down on its geographical expansion either, and in addition to its return to Nevada, the company has expanded to seven new markets in the past five months, including Texas and Florida, the second- and third-most populous states in the nation. The net result of all of this is that Sunrun is expanding market share, even as the overall residential market appears to be undergoing a period of flat growth, if not contraction.
As is always the case with third-party solar companies, Sunrun’s economics are more complictated. The company has not significantly reduced its PV system cost through its channel partners in the last three quarters, and the Sunrun’s Q2 net loss was relatively flat year-over-year at $65 million.
At the same time, Sunrun has exceeded $1.1 billion in net earning assets – a metric unique to the company which it says represents the long-term anticipated value of payments on its leases, minus the costs of maintaining these systems and payments against financing.
The near-term outlook is even better for Sunrun. The company booked 88 MW of solar during Q2, up 28% year-over-year, and expets to deploy that same amount in Q3. And while the ever-political company expressed its strong opposition to Suniva’s Section 201 petition, Sunrun also notes that it has secured modules through the end of 2017, with framework agreement for “a large portion” of 2018.
Sunrun is also reporting strong progress with its BrightBox solar plus storage system, and reports receiving orders for more than 2,000 of these systems. But the company’s view towards the ‘solar plus’ ecosystem does not stop there. Through its partnership with utility National Grid Sunrun is exploring offering grid services, and while CEO Lynn Jurich notes that the company is “still in the early stages of exploring monetization options”, she also estimates a potential for $2,000 in net present value per system by providing such services.
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