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Sunrun (RUN)

Participants
Patrick Jobin Vice President-Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Bob Komin Chief Financial Officer
Ed Fenster Co-Founder and Executive Chairman
Brian Lee Goldman Sachs
Rachel Lei Deutsche Bank
Colin Rusch Oppenheimer
Sophie Karp Guggenheim Securities
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Sunrun Inc.

Third Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Patrick Jobin, Vice President of Investor Relations. begin. may you Sir

Patrick Jobin

and us to today. operator, call on for joining thank you, those you the Thank

forward-looking Before remarks on constitute we begin, will we please make this note conference that certain statements. call

in risks reflect SEC our we currently to inclusive any for the adversely. a actual us, company's to made these other and made factors we differ our that to note of Although them. results may may as materially obligation or update and refer best being statements. more known differ that believe from and results Please forward-looking these based on judgment cause filings actual today, factors disclaim are also statements any revise to Please projections statements with discussion of the

Jurich, Chairman. the now The available today which call and and on at are Co-Founder our CFO; Sunrun's slides, I’ll to the CEO; presentation Executive Fenster, turn Komin, today Sunrun's and website call are Ed over Lynn Sunrun's Lynn. will use Co-Founder Bob On investors.sunrun.com.

Lynn Jurich

Thanks, Patrick.

products, through enjoying Sunrun new over markets. customers has services per drive particularly the of margins. multiple products. are future the efficiencies cash considering up quarters valuable are growth you us allowed significant watt We watt value, in now we per results, and NPV of to share are asset. of investments while $X.XX, and grid the the to generating present benefits quarter million share we created add our against deployed NPV solar. third grown with our priorities. who in entry third our rewarding NPV XXX,XXX strategic XX% value year-over-year. generate market the history, This and $XX Sunrun's going while well We've margin for highest has to cost expanding barriers to net earning is with progress operating highest the we Recording progress Company's XX result along net have and made the advanced megawatts highlighting financial We pleased In offering making

customers and are to change reminded solar-plus-storage, times we We of of strong consumer our a the weather and quarter, this excited combat proud we be solution need great of many to extreme lessen humbled Too regulatory climate. and this events, to the for and are part demand BrightBox means by were the offering. climate what the for

have Our and partners. a for by relationship recognized value them strategic years. these customers The XX-plus love solar relationships is their with of expansive being service our

will upside will high value our services, partnership Grid and customer home National the Comcast retention additional develop value in benefit through develop customer Our grid and services, through satisfaction.

First, Demand system. Grid. storage strong. in for both partnership and can for National the BrightBox entire our save and help services our grid is money customers with lower prices We electric

in business. Our of time customers to XX% California choosing This the over storage within in doubled now our direct the quarter. has add are

because are being communities both plus we This I the power positioned is and We reduce out infrastructure. launch dynamic this mentioned the can and can cost-effectively Light value to to needs solar to the centralized for you Internet, benefit months to landing, following times to the had system in efficient amount joined resilient, per example is to act. fast knew Rico last shortly rolling grid within progress secure, just relationship the we the systems Empowered add in energy a were allowing and states cost-effective be days services We've plus more plus in of Rico. well are build grid. grid. in just and in first homeowner storage. initial power install the storage, them recognized of When may Within solution by operating apparent you BrightBox restoration go-to and ultimately offer Hawaii of with in one went where mobilized of grid the utilities the away, This grid system in base, infrastructure in being batteries and program. much weeks, And congestion plug we grid time, needs located we fire first storage already forces We install transition could a is customer building more it large a despite than to and Arizona. secured PG&E’s out activated already Early that solar markets. sooner an station, deliver investing the future-proof into a system ancillary down. represent products grant to are Puerto restored most their call expansive Puerto solve opportunity societal serve value Rico and on at example XX/X improve locations grid valuable And consumed, $X,XXX are expected and imbalances and can power are modernize our customer. our everyone. local and the how solar had the rebuilt. donate distributed service When the participation is Puerto solution we the a encouraging. had we is through that resources Because with a responders as rebuild when an and or value energy for resources in And California, it capacity, of our stability estimated and another resources acute of U.S. to short they a and than cost-effectively distributed more can traditional of decade that have and to distribution. meet we the

being like California storage plant to leak then from being plant Aliso proposed at to back-fill a a sourced to back-fill nuclear We gas now SONGS, a before have rebuilt. peaker replace be DERs gas it'll gone in

consumers. customers, of one ready are and first and of the in to for portfolio a with market value large system movers drive As the able the we to

includes these collaboration tangible on Grid grid services with made has partnership Our National and multifaceted advancements.

energy forward-thinking global a the work excited with space. are We to leader in such

This quarter, partnership also an exclusive announced sales with Comcast. we

will can Our previous Comcast expansion add help with the proved Comcast attractive services and by Sunrun solar for cost. that partnership. solar of broad XXXX pilot an through earn wheels in retention partnership and in products customers select can for go a Comcast and, year-end customer efforts Comcast that this This return, motion, in The market Sunrun and with is commence that are acquisition satisfaction fees customers pilot. marketing will markets. and

expected I'm ahead the to in is nature partnership us. opportunity by and gradually, of encouraged While the ramp multiyear

to believe support We a industry XX%. fundamentals to growth of XX% rate continue long-term

we will reaccelerate factors to over growth deployment in growth other rate. year's temporary market of allowing at us the growth XXXX While weather and impact quarters, above grow this next or couple believe XX%

to our bench, asset. the Finally, and industry customers come. to In support who We of our most veteran consumer-centered in of recently is transformation another review we I'll largest One's to added QX now best the aim to executive our XXX,XXX call Huang, performance Bob turn to the spearheaded experience than Capital through differentiate a over more Evelyn guidance. differentiation, discuss initial interaction decades and at organization. base this into growing strategic detail customer massive and to more for

Bob Komin

history. the the $XX prior million, full the In created for our compared to $X.XX. we watt guidance QX, per in highest XX% We're to quarter, NPV in resulting year Company's per exceeded Thanks, representing growth was in recorded the of year. third NPV and $X.XX deployment aggregate per watt raising watt target Lynn. our NPV NPV

NPV. in to watt from on drive continued our While invest managing given per with value offering; highlight and less unit as offerings mix, as business focus Grid; results We creation we business can NPV grid initiatives as our leading BrightBox, this the strong calculate pleased quarter, in such economics additional costs. the with our We're project especially resources achieved fluctuate entries. quarter-to-quarter QX's position product we and market services National NPV new particularly solar-plus-storage

project $X.XX than Let's value the year. QX $X.XX higher and each was go of watt, per through last just higher QX than $X.XX components.

project a channel As very tax reminder, to mix. modest equity and fund sensitive is in changes value geographic

costs project quarterly fluctuations. decline but the can slightly time, short value there be We more, will although expect in run, over with declining

costs costs creation and fluctuate due costs $X.XX Similar to X. now mix. year-over-year. channel geographic Turning total in changes Slide QX, watt, per In of can to $X.XX to quarter-to-quarter on creation, value an improvement were creation project

peers marks includes Sunrun-built well This our X% the highlighting which channel As $X.XX able due cost of not comparable those lowest watt, higher our direct solar $X.XX equipment offerings. directly year. Install however, of watt, were channel to an to slightly to year-over-year of is as to our reductions or of was for storage partner or per rate in business by deployed slight of in a organization and because per deck to partners increase and a date, reminder, systems, the for a cost we've reflecting costs per cost by efficiency Sunrun-built The increased year-over-year achieve our as incurred increased increase costs $X.XX costs systems, installation XX% costs installation channel projects watt. attachment improvement. last $X.XX over Blended business. mix of been our partner installation the

roughly to services. in offense and as installation by on we new total expect We investing remain geographies in stable, costs to grid owing remain fluctuations mix business

driven improvement $X.XX increase, a In costs We mix channel by and also prior focus also will expect and from per-watt acquisition continued QX, of attachment year, which sales cost customer rate a our carries were channels. continue most to NPV. on primarily delivers the storage the cost-effective watt higher higher but our XX% marketing the per

G&A compared few quarters. a $X.XX, per watt last the was Next, to cost improvement slight

long operating in be increases expect time, although G&A We further the quarterly to cost with growth realize leverage volume fluctuations. term, there over exceeding can

guidance the attributable contribution Finally, achieved XX margin services megawatts, lead-generation the systems subtract a margin XX year-over-year increased businesses per deployments third channel gross when and the to from flat or well with The platform year. strength sell we exceeding includes to platform cash primarily for creation solar loan. our quarter, an as was our calculate as volumes. our gross In $X.XX services. of from our we third-party we megawatts. of We prior in XX% This GAAP costs, realized increase watt,

mix and QX, of and outlook our recent year. net from of In the our XX% XX% XX in an increase megawatts levels was QX, cash Our in with bookings low line prior mid-teens. third-party to loan were

net bookings calculated cancellations. reminder, a are As of

Turning sheet. to now balance our

and we've unrestricted cash, restricted consecutive the $XXX liquidity remained QX above cash, ninth in We quarter Our position been $XXX total strong. million. with ended including million

to by our year. balance of the million estimate for to basis, $XXX by over million. our the earning We be net $XX approximately normalized would On assets we increase growing continue a total cash end the while expect increase XXXX

attractive scale pricing purchase we recommended uncertainty, case and QX modules primarily accelerated balance Given procurement the utility imposed. strength developers sheet module of the the in even in to and trade ensure rush of of due inventory the our to are if continued by to tariffs light availability

activity $XX this of accelerate expect cash use increased We will into procurement the QX. approximately million of

for payment XXXX. on Ed we last cash made approximately items million of strategy a during Experts call, $XX As this Energy increase highlighted discuss capital of final our total in more QX. Clean detail to acquisition million in call. Including XXXX these the our later reported forecast we will by is non-recurring $X on

and megawatts, XX. Moving on our guidance Slide consistent remain in to seasonal trajectory business. historic year, megawatts the expect our are in reiterating XXX patterns on we In of deploy guidance confident QX, XX% XX growth We the full implying a rate. to with our for growth

$XXX estimate to we our now prior from mentioned XXXX, NPV I've year. in which a in we the can earlier, million increase target the represents per NPV year. XX% watt are $X.XX As approximately We increasing generate for aggregate

Given mix instead of third-party and or all cash the and system be than in year, We installs year. in loan items, earnings recognize Slight the mix these upfront business currently QX however, of we to of per business in can roughly slightly our QX last revenue lower primarily will our cash over for decades. share manage QX to multiple on outlook and similar revenue NPV. is variations impact we estimate total last

it project finance turn over topics. me to discuss regulatory to let and Ed Now

Ed Fenster

I Thanks, few want a Bob. touch on items. Today, to

net and brief a on provide discuss earning structure case. third, I'll second, I'll our I review will strategy; and First, Section XXX assets; gross in growth capital trade the update

increase. assets increased Turning to earning our million a XX% net $XX year-over-year installed base first on the in QX, billion, XX. reflecting ending asset Slide at by $X.X quarter We're that

deducting a equity assets As Sunrun cash to represents present and partners. from systems maintenance of that debt flows and net after cash, equity deployed level project expects fleet receive Inc. service the value and our earning tax of operating reminder, distributions solar estimated to costs,

capital costs of we market. gradually declining tax For both continue and and equity to increasing non-recourse depth experience debt,

and back-leverage equity tax capacity well We into have XXXX. QX of

minimizing As base consider upfront cash while On the this goals this we year delivering year, our in our cash. equity two to employed a set while always we options completed interest long-term structure, forth we XX, balance upfront we Earlier flow returns assets. capitalize rates. Slide changes maximizing strategies which to exposure of cash equity prioritizes to

closed employing we be of balance loan two Because Both structures a value. we a us, the quarter, are structure, prioritizes to available This of strategies. which continue with the make upfront aim we year, next long-term we cash value, again of to long-term creation mix use and markets. may both to

receive I to a we structure, equity a cash of how balancing project discussing think to curious, spend XX% XXX% upfront these minutes approximately For objectives. few will the we contracted about In value. cash equal

in six based debt transaction with X% of we Grid, National approximately in of Grid structure, to available closing. In on incremental and contracted agreement markets when contracted to partnership project initially proceeds value. our addition, receive approximately rates National refinance project upon we In today's X% receive of loan value we about a advanced the years, expect XX%

increase six, six is Inc. to distributable initially equity at contracted because by investors cash delivers based achieve time, first to expect at cash increases. because, present approximately flows cash cumulative greater to the the are repaid. value. Compared loan cash year capital of over cash year costs, balance distributions cumulative flow when we structure six. of the Sunrun periodic project we of amortizes value on XXX% to XXX% more This Inc. Sunrun However, to today's proceeds equity applying once of today, while, actually tax Sunrun the This the to same years, are loan occurs refinance,

equity a the the access advanced structure, simplifies market. repayment higher to tax deeper In allowing rates addition, capital of for and

less decade-old loan fleet to overall cash the loan attractive causes but has year. become lenders strong us offer to our Sunrun The structure So increasingly structure as performance of the continued value better terms. creates more us increasingly this and

advance refinance For and of years as senior includes that example, assets Pulling from lower material. the than prior proceeds our loans us closed transactions, we our we rates to the six higher aged latest is available note and each cash just we junior comparable transactions. back spreads about

During QX, a we to assets. closed begin aggregating facility such warehouse

XXXX of of the assets with We annually. amass asset-backed refinanced become security expect million to by transaction to scale expected issuer a regular sizes QX $XXX

flow we of very enter will We further this refinancing our our we sum, to conditions, In strategy. and relative benefits Sunrun finance discuss as cash the to pleased XXXX. continue program position net be with overall project

case, on want Before moving on the to trade to touch I quickly restricted cash.

structure of to primarily is half in the cash which our accounts, second during available restricted tick related slightly are of the up the entered service will balances XXXX, some reserve into non-recourse to service This Given debt. QX. debt of

Commission amount the restricted restraints my historical October turn expect case. U.S. about Treasury. per mid-XXXX. panels. We to fall trade $X.XX levels in the recommended XXXX, the are Section watt Trade thereafter Tariffs XXX more On three $X.XX to watt per cash XX, solar could per of I tariffs increasing paid proposals that recommended declining to now United to final to levels the Two States on by trade topic, year.

a products are third sell a paid proposed price. directly proposals years. charging tariff. they quantities extent In Association analysis question demonstrating recommendation all the per that Industry Trade the response Commission, they $X.XX financial to $X.XX on receive All because a Energy is to based watt written benefit to to the The but only outcome manufacturers. fee law domestic by Solar from four petitioners importers the fee same under tariffs license that be the would watt petitioners' fee limited watt provided per $X.XX the This and and can the a only imported raise about on license the is per from

decision Journal President tariff. as credit The January known, advocate facts cost the the widely them. would a of in April. be of and license by negotiation, by however, dwarf situations, prices to case Street negotiate lenders Nevertheless parties if than administration next Washington pricing the trade turn portion such imposed. The modules partly good may create decision Trade tax the construct volumes frequently to Even settlement is not to bailout petitioners occurs expected to compelling have attractive proposals. Thus, trade protections large the investment even if tens A the the closing As jobs, energy, a production. credit. Commission's ensure imports of in for foreign- two agree that over channel to final domestic for eliminate are and companies the rather the for changes purpose fee in Post renewable XX, We year, customers, may we side they Wall restraint believe or Lynn is and absorbed reject and firmly of actions our remarks. no of should a politics recommend reason of boards continued until to over suppliers, American the bankrupt of political now owned, is the fully on any are delay back economic the call see the President prioritize for and partners, the taken our on tariff is thousands editorial jobs. would I'll

Lynn Jurich

please open that's Ed think the questions. the so closes I Professor it. line call, let's for

Operator

Lee Instructions] comes first [Operator Sachs. with Our question Goldman from Brian

line Your now open. is

Brian Lee

taking had you, Lynn. questions. here. for couple thanks a for just first I guys, Hi the Maybe

how what the i.e., the hear? share expect much XX% you in up? saw much you factors other of going then the that year? On the And And that I GOs Sunrun-specific, of you're volume to be or the this of then how is gains growth, do related due point outlook to at-or-above reacceleration that continuation you for able are back guess, XXXX to picking to confidence or to some for market the overall drivers that, be to

Lynn Jurich

Thanks, really this Brian. we Sure. bottoms-up. model The always way is

channel channel, we market deliver which the best to. we channels and that's NPV, market, So by by acquisition come result look the we think do

due some look into then excuse me, Arizona or the couple were – California. if you Florida entered I know. quarters, are Two Texas, the next challenges as in there to think, Northern were of there and and at we markets And we wildfires weather. of the new the

of us But penetration the So fact couple that's to Comcast that relationship keeping XX% rate doubled in a obviously market that over plus confident how market you little and long smarter on fact we're footprint, we've getting really, growth industry being XX%. an operating that size, at and in existing to acquire combination for this bit customers, last underpenetrated our what's growth when current customers in XX% grow of – XX% that the just CAGR at with QX to the plus that the can available six of the stand where that million by that is. is has reach the our look number time again, quarters a

that frame longer-term exciting on things what's other with are is that happening very storage. The

questions XXXX highlight for offer were – per the so our what's a another through I There's looked value increasing Comcast. we're other the be area be just one unit Sunrun has also per of California. results. had, around at going been while, to to margin, And generating the and in then customer certainly is beyond are to want with I I've that and through we're to with happening So always think grid a the services, around the and pleased lot oriented just storage, that, and that's through partners exploring

storage proposition mix, value spot – the is especially as throw forward. strong very that be time or and flattening of this off? really looks like we compelling rebounding. a okay, with popular growth in so market the California in that, And pleased to of some it California there quarter, the seems you bright into is the discourse And day rate, very we're And saw really a going was, off tapering customer

Brian Lee

I And appreciate color. great. Okay, the

did the In flow then Just flow. second it guys XQ on about positive cash you Grid-related an in of looks million. second on it acquisitions. And you cash like that ex $XX pass $X cash was incremental $XX question, National to about generation I'll the million talked netted on, cash million the of And flow. quarter, overall,

around then So know question if we in some cash the module cash we and is the math generation apples-to-apples forward be you. ballpark? and is, but what look net x Thank targeted pull again, QX? I in for have right out And purchase acquisitions-related the usage, first, you're been QX, at if cash to my the making flow comments would then

Ed Fenster

Brian. Sure,

is this I so will start. Ed, So

business, shows we And well. that the goes that up quarter, about balance on that the value is of piggy that that present a in the way capitalize how obviously, earning to in based net we earn of the of bank. So sort our of think some certain we into cash amount on we the each assets net the report some quarter, sheet adds and that as assets as then

the the the if cash items at QX, year million. to quarter cash QX you we look for on had total the cash. compare total you two in Nevertheless, call change in assets was of made balance generation when to of the so we did you'll in the plus net quarters. earning add And $XX significantly two one-time actually change approximately comment excluding the expect would that a discussed, QX Bob each the see stronger

anticipate. And the change we quarters so for cash you cash three add that the first in to QX that the result could estimate to

Lynn Jurich

cash you we're is We're we just that it is to base asset while tap now. This we're can have you And – to say, where excited flow expanded, would I so refinance. are a for again, this continue And deal. generating taking Again, are thinking we about positive adding Brian. our – share. and this margins right, and big right

for big the last that, crossed a thrilled that, project to we it $XX million quarter we're and – extremely it's milestone year. over when So that's be going was to

Brian Lee

more specifics. great. that’s on Okay, the of offline Thank you. follow-up some I’ll

Operator

Thank you.

Bank with Julien America. Smith from comes of question next Our

Your line is open. now

Unidentified Analyst

are Josephine is This How everyone. Hey [ph]. guys? you actually

Lynn Jurich

you. thank Great,

Unidentified Analyst

think the a for cash recent we how to megawatt was Like deployment? going greater on about per advance rate? Loan Bs forward on in should financing. congrats wondering, see shift basis Term I equity a moving we the So are

Ed Fenster

Yes, think, Ed. was the This I – so Josephine as great a so [ph]. call I question, that's on is mentioning

and – want on a are holding or to on we to of two achieve We pieces to these generally return own equity above capital aim we're ourselves. of our balance on where uses capital at XX%

based the exact in from be expectation these that prevailing determined So a two these but year. mix transactions the conditions markets, it's similar mix will we may two we of on execute reasonable market where did a next we to year sit today what on this

Unidentified Analyst

Got it.

So – bit have you how Term on want to equity use B that of Loan little you depending it? where you or either cash on a

Ed Fenster

we are our is have such business. I – flexibility economics the with unit how we news we Correct. mean, finance good the that great have

really to while But to building optimizing wanting available really to adding so and of at the to to And this in Both in an are cash value. that these point, on we also as both markets. ensure future, be execute very on-the-margin just likely optimize. we're us do how long-term capital just analysis we it'll we're structure expect markets and the

Unidentified Analyst

what is the in I about solar plus interest of but battery you do the And was funding storage, tax terms battery think of equity like the are market then know in terms project? then contribution revenue I And batteries? that's early in on that wondering, using in still the how stages, the also you

Lynn Jurich

and growth area us. the add such then I'll for exciting and question, tax on an Great first Ed the Sure. equity piece. can take piece,

with rate the structures in more just as look and battery are the rate in the service cost solar just delivering battery solar it's the we customer decently. I were pretty of the leader state, storage. like company markets, that's portion a effective in service. plus you many the plus think, the I beginning, adoption at a at California a And as will think, grow again, still delivering at install storage to the growing we time-of-day proposition When big value XX%, the a is

that take so And our ability like there. share really We market. like we position in our to

So proposition in adoption services you're California. us we're surprised to going is closer going you're with working has so able online with value more there I NPVs to capacity rate – to a would and more that like National New drive RFPs values through grid that are like now. think, in backup markets and to higher for higher how now able We stage, be about markets, adoption But stuff see that what Grid, see in as this to think a at comes generator the project like the adoption. if rate – California, and today rely York and many for this that and storage you're on out Massachusetts perhaps on many the battery you're but of bigger subsidize payments portion other

on risks that the it California you But was because some years. around we takes what twice what this guys was. a into and away hounded over the we to And growth value. been that as excuse just we'll have more metering customer next that. like the lot frankly, regulatory like it – it last through it really people this close, – They growth it the for And structurally quarter. we've is, twice our quarter the of in we're we like We quarter, quarter working plan position. still talk our was that with – for what So XXXX competitive again, me, insight it,

fast So acceleration.

you Ed, equity? talk want tax about So to

Ed Fenster

Sure.

first. summarize to just maybe So

the capital constrained sources batteries, that be we in and not expect deployment do absolutely of are by we We constrained will our not in future. the

lenders them financing, who no integrate been follows about that batteries think, are to provide work the they into that project important it's investors industry, to that want future I the equity folks is tax everyone and we've know like and who systems. it. and thoughtful What

else, projections, analysis you our if rationally. anything present rational thorough data, the Like analysis, testing, existing So of we've enormous done act correct, right, installations. actors

And transactions. plus so storage, our very supportive experience and deployment we expect the that of we of market to in certainly, current the be solar

Unidentified Analyst

it your And pass like include much how about your Ed. Got about specifically northeast now? part be it, in right I wondering, that? then the know portion contracted you, how for like of the the you you uncontracted one value I'll on. portfolio. I captured do wondering, was thank there But revenue, I of that think portion abstract and might not And was the is that just last

Ed Fenster

Great question.

Ed So is again. this

think keeping to have other again, reported of reporting energy of where the sort the and to from in with There we included make We estimate we sold we in certainly contracted don't of someone but credits parties that available and as that it's fleet value. our curves uncontracted upside credits from agree So those metrics, in are arise from energy sit that metrics. future. value renewable are considerable in brokers will that renewable conservative there's appropriate allow value the those our would they estimations, not do

Unidentified Analyst

period? And then of that just terms is contracted like maybe how like thinking in follow-up, there, to I three-year much Am is a quickly that about correctly?

Ed Fenster

in to Typical vary, most range. five three tend contracts renewable be to year contracts credits in solar but energy the

Unidentified Analyst

questions. on all you That’s Thank end. my for my very much awesome. it, Got taking

Lynn Jurich

Thank you.

Operator

next Shah comes with Vishal from question Our Deutsche Bank.

open. now is line Your

Rachel Lei

This congrats Vishal. on guys on results. is a for Rachel Hey

Lynn Jurich

Hi, Rachel.

Rachel Lei

clarification. a is question first So

the plus $X,XXX value, solar grid storage for of also service project and the the guys do for this include customer So any payments? – value you

Lynn Jurich

would That No, be included. not those are outside.

Ed Fenster

obligated to value. show that an contracted be up revenue – utilities ancillary from contractually project payments reflected in or in will well, services But additional are payments So and are project addition not value. customers us that would pay to

Rachel Lei

okay. Okay,

your you products customer if included? be the BrightBox would for payment – so So

Lynn Jurich

Okay.

Rachel Lei

to from $X,XXX of you guys any a rates we are conservative? of So just storage upside is kind around, even along upside expecting do as have the attachment what perspective? What goes project those value see up, kind color lines, –

Lynn Jurich

really National early, and the there do lot be one just congestion $X,XXX that on and that – of scale-type directional, to glad of the in as I'm who the you prices say companies asset to early locational. valuable our like And things like fleet days the that, York can the in neighborhood because real targeted bidding figure and – is about of storage advantage. that, why a exploring is tell based out value? these with is actually happening and early stuff And it It's customers, the barrier consumer I in we're utility really entry in so more still. the I meter, to values market really and right? asked we're going That's you happy Grid. Sunrun reasons hugely a particularly to this pitch how too this front there of ways, strong the customers, And will we like of But and of now shares and a be believe and as one figuring power of it and again able how neighborhood, we're real-time And extremely a that you it's too, of in in certain New RFPs be at is we're will one monetize to on vary to compared of that amassing to that's highly take largest California.

Rachel Lei

Great, great. That’s helpful. very

is question cost. the customer about second acquisition So the

direct – in see you. that Thank cost, in also a some the give of kind also color we cost, competition install around business there bundled more the customer on And heard your channel acquisition of that? Can terms there's So lot dealer we of the side. trending you maybe partners, there's the industry which potentially in your maybe is us up. and

Ed Fenster

NPV. the for and we go focus that on we we mix direct So both to what we have, versus do how managing channel to market optimize among the and

with quarter, out Most as mix going in favorable had by quarter-to-quarter we've mix of seeing you we're as What change. sources had But the more have XXXX could what the we've we into that is recently, I up. that demand, look really the channel on that And can – us quarter new change. us, others, for costs marketplace. going – it that benefited has favorable finding costs acquisition think for So seen we're we company. customer look depends for

really For us, mix. on channel depends it

NPV. continue and forward. so to customer quarter We up the and best going we'll We improved we approaches, that and and optimized ever just or to had, put have to acquisition we last that the manage our just do do continue think can continue to over NPV we've year

Rachel Lei

the is of channel deployment partners? percentage from what coming approximately, So

Ed Fenster

Yes.

manage the mix to do targets. and try disclosed is, vary and it. We typically not we have because We specific it it's mix because to don't what does manage

Rachel Lei

it pass you. Okay, on. great, thank I’ll

Lynn Jurich

Thank you.

Operator

comes question from next Oppenheimer. with Colin Rusch Our

open. Your line is now

Colin Rusch

so a that? the Thanks reduction about built on cost How the that number. installs? about we systems? bit Are little you can Can the much. quicker enabling think material using you're guys talk for drivers a pretty It's technologies there are that

Ed Fenster

material costs to cost was cost smaller been was to it but year-over-year the component that by declining. that was other us driven And there the was largely material improvement. and labor has efficiencies, improvement of seeing a due then due bulk Really, year-over-year soft

Colin Rusch

prices about reductions what cost point, Okay. hearing in XXXX? module as thinking year and about how And exit given into are order you potential this at prices and we're this you

Ed Fenster

it we total is on trade think, range of like I the on of costs. as small structure. creation that and So far like cost impact, was think the X% potential It's as that, of actions proposed adopted, very the if our our overall things order

and be the the – other in could other that There's in that think end. components we that So that, channel of would at and absorbed be ways. high

we overall think forward. on our structure impact material to going going So be a don't it's cost

Colin Rusch

accelerated in about a really more versus you And little you've I an sneak amount one and Okay. a rate past? – last competitors With share velocity here, in, of up one not why can have your picking it's of philosophical. the your losing one done if growing at what capital market bit think substantial biggest

Lynn Jurich

trouble like we, that into share see, on why value growing did, sustainability, it And we're gains I pretty for other position And it's we're we we and cash on our right asked think, are years we where we were offense, I creation and where that's love same flow we and strong. you feel today. a as sits people that and is and balance. love focused we're really ago so the question now. three like the We didn't always, aggressiveness. and get think absolutely

to as our don't doing view you this And we're million we're years still set talking that's so migration. we're – to going possible very this the on and get – framework that big we're to strategic market to at we're is up as going the you're be prudent So often. stages, your and markets this as for in you in career the as early like long and not $XXX run, XX a right

Colin Rusch

Okay, great. Thank you so much.

Operator

Guggenheim [Operator Instructions] Karp Sophie next question with Our comes Securities. from

Your line open. now is

Sophie Karp

said, Hi, trade mentioned proposed for action the good to as right in result this of you is that do not with Or that cost Thank temporary market? of you from just taking it you not now Ed, would favor afternoon in where a some you. to drop material all? that material my questions. dislocation be markets is plan in as question. I guys. the – you're others that couple a of have the at the But

Ed Fenster

Ed. it's Sophie, Hey,

and partly something in suppliers, If partners, by channel be the we the I credit tax to renewable absorbed maybe – tariffs $X.XX and investment things in saying think you is would high changes occurs, couple we making end want I call watt. – current were reiterate the a that the on like addition. customers, to So be it a of expect credit that that energy, were would pricing recommended of

trade secured good generally, modules combined for on a we the to prudently, the one implemented, we to companies position. of amassed eliminate been fact push think bankrupt anything The of our the obviously distraction forward but little I two as – that, with of coalition pricing well create mentioned, so is tariffs employment, that have not a laws, feel The recommended And into unlike to we expect I've bit industry. current we I year, it. expect trade opposition in if is seen also risks with lenders and I business. about with that And the of to ever case has before. attractive these even purpose is has consistently think, The then next been manage very

Sophie Karp

– the kind space new Great, distant any soon? it home products. Is then promised, that still on see thank see soon? outright side, future? something are promised that of and Fusion inverter you. players we anytime you meaningful promised Highway And guess, is product. innovation to going the Or I deliver coming Several to in

Lynn Jurich

source we inverter see in lower mean, of costs are I or inverters to particular, forward. competition happen see Yes. the of me, there, and in on everything, inverter coming string over could period be increasing And hardware storage, particular, the storage on time. advantages excuse in nice on inverter we string that in – coming – going the through side, a

Sophie Karp

you. thank Right,

Lynn Jurich

forward the with again really share with to right. quarter pleased All next more Well, everyone. some and you, you record We're the on gains and results specifics share looking speaking are to thank again XXXX.

Operator

This for Ladies and concludes in you today's conference. program. participating gentlemen, thank the

disconnect. have day. all may You a great Everyone,