Sunrun shows growth in first quarterly results as a public company

Today Sunrun released its first quarterly results following its initial public offering a month ago. The company reported a 76% year-over-year growth in installations to 42 MW, as well as a 70% increase in bookings. 70% is the same rate of growth as the larger U.S. residential market, and the company’s deployments put it at an under 10% market share.

Sunrun brought in US$72.7 million in quarterly revenue, with slightly less than half of this coming from operating leases and incentives. Its loss from operations stood at US$46.2 million, and its net loss at US$49.9 million.

However, these financial metrics mean something different for third-party solar companies as their business involves deploying assets that they own, compared to companies that produce and sell products or services.

At the end of the quarter Sunrun had deployed 472 MW of solar projects. The estimated future payments on the systems deployed on the homes of its 87,000 customers comes to US$1.92 billion, and the company offered a figure for net retained value of US$808 million, which does not include value from solar renewable energy credits.

Also important has been the company’s cost reduction. Sunrun and its partners deployed PV systems during the quarter at a cost of $4.08 per watt. This represents a 6% reduction from the previous quarter, and as project value held flat this brought costs $0.92 per watt below the company’s calculation of project value.

This is better than the company’s target for the quarter, and CEO Lynn Jurich states that the company is “keenly focused on cost reduction”. She also says that she expects to bring costs down by 2017 sufficiently to allow for value creation despite the drop-down of the federal investment tax credit from 30% to 10%.

Sunrun has also had success in raising capital. The company netted $220 million from its yieldco, as well as completing its first securitization of assets in July, which was priced at US$111 million. The company further states that it is able to tap debt markets at rates “significantly below” the 6% industry standard.

Sunrun has also retained a hybrid business model, where it is both selling and installing PV systems directly, as well as partnering with contractors. The company estimates that its partners are responsible for roughly half of solar installations at present. “We like the (partner) business, because it is a capital-efficient business, and it allows us to reach customers at more distribution points,” notes Jurich.

Sunrun is preparing to grow at a pace at least equal to the larger residential market. During the third quarter the company expects to deploy 54 to 55 MW, an 81% year-over-year increase, and expects to deploy 205 MW over the full year.