Sunrun reports strong Q4 results


This afternoon Sunrun released its fourth quarter and full year 2015 financial results, showing an 83% year-over-year growth in deployment in Q4 to 68 MW, along with 80 MW of bookings.

The company brought in $100 million in quarterly revenue, $70 million of which was through sales of PV systems and the other $30 million of which was from operating lease and incentive revenue. And while Sunrun reported a $15 million net loss in the quarter, the company prefers to note that it created $50 million in net present value (NPV).

Recurring quarterly losses are not unusual for solar companies that deploy PV, whether at the distributed or utility-scale, and then earn a substantial portion of their revenue through long-term electricity sales. This is particularly true for companies that are growing as rapidly as Sunrun.

Sunrun also brought is “creation cost” for PV systems down to $3.64 per watt, a decrease of $0.11 per watt from the previous quarter. Creation cost is now $0.86 per watt under the “pre-tax project value” of $4.50 per watt. The company notes that the cost for systems which it installs is substantially lower than that of its channel partners.

Over the full year results were similarly strong, with a 76% increase in deployments to 203 MW and an 85% growth in bookings to 274 MW. Full year revenue hit $305 million, with $160 million in NPV creation and a net loss of $28 million. Estimated nominal contract payments remaining reached $2.4 billion at the end of the year.

Sunrun projects a strong future, and is making tweaks to its business. On its quarterly earnings call company executives repeatedly referred to lower portion of business through its channel partnerships as it focuses on “key relationships”, and those partner companies which bring in cash.

The executive team also spent a fair portion of the call ensuring investors of its ability to continue to raise capital despite larger difficulties in capital markets. The company closed a $250 million credit facility in January, and notes that it has sufficient tax equity to continue to fund the tax equity portion of its financing through November.

Sunrun Chair Ed Fenster noted difficulties in the asset-backed securities market. “Complexities largely specific to this market have made it less attractive to all issuers,” explained Fenster. However, he noted that the company “will continue to participate in the ABS market despite these issues.”

Fenster stated that the debt and tax equity markets had been good to Sunrun, noting that the company’s cost of senior debt had fallen to around 4% in 2015.

Nevada also featured in the call, and Sunrun notes that the dismantling of the state’s net metering policy has cost the company an estimated 12 MW from its backlog that it would have installed in Q1. Despite this Sunrun expects to install 56 MW during the quarter.

Sunrun CEO Lynn Jurich was also sure to inform investors that no more than 10% of its business is in any one state besides California, stressing that this diversification insulates it from policy risk. The company expects to increase deployments 40% in 2016, but to grow its direct deployments 100% as it focuses less on its channel partner business.

The company did not offer a 2016 financial guidance, but stated that it was targeting $1 per watt of NPV over the course of the year despite the impacts of its Nevada exit and investments to grow its direct business.

Simultaneously with the quarterly earnings call, Sunrun has unveiled a new integrated solar and battery storage project for the Hawaii market, which will allow consumers to participate in the “self-supply” or self-consumption option in Hawaii’s successor programs to net metering.

Sunrun did not name the vendor for the lithium-ion batteries its BrightBox will use, but did state that the product is now available and is being installed in the home of its first customer.

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