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Sunrun (RUN)

Participants
Patrick Jobin Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Bob Komin Chief Financial Officer
Edward Fenster Co-Founder and Executive Chairman
Michael Weinstein Credit Suisse
Rebecca Kratz Goldman Sachs
Philip Shen Roth Capital Partners
Colin Rusch Oppenheimer
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Sunrun Incorporation Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Patrick Jobin from 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

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

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

Lynn Jurich

Patrick. Thanks,

$XXXX representing deployments. to with we and the value results strategic growth guidance you customer. operating quarter and created against financial of progress XX,XXX with megawatt along In In the are NPV share XXXX, in watt than exceeds first customers per more the in represents second highest priorities. We added This present the per and $X.XX Sunrun’s half quarter, in million we volume result second quarterly company’s over or pleased net XX% history. generated of $XXX our

announce have customers. to XXX,XXX we We excited that are surpassed

healthier scale, these next XX our means technology most we easier. for and what strength. learned is excited am industry, that is that customer Throughout we the A power our is will communities. by makes customers energy because with the make for a are solidified financial be chosen simple, customized families offers next us brand, Sunrun to means disrupting the superior dollar that exceptional company million with to service Sunrun creating we For energy the more want that a and have solar resilient contributes as leader winning an experience, to going the decade back-up lot service. from customers decades. multi-trillion I to and their industry have first position past committed years, a and and a

plus year are for growth guidance in of innovation and growth above and The reiterating customer product acquisition increasing a above continued while generation deployments front per NPV be cash the full will us growth, watt our in full for growth our delivering investments market XX% We this and $X rate. are year. confidence in in This achieved of leadership. acceleration opportunities

solar company footprint. the in U.S., largest the leading the national Sunrun As has

our acquisition, experience investing business deliver this We by are direct-to-customer capabilities platform the capitalizing a customer we on structure and cost in believe time. which around will and over superior our increase position onboarding most

XXXX strong separate place Our all retail a of Direct current rate. capabilities, from the lays include year-over-year. retail success multiple front track with Sunrun matter partnerships for XX% are the and opportunities scale in Strategic like and opportunities the growth foundation This grew us back. national record, combined a expansion business brand over which for

take advantage recent well home also are mandate. new to We positioned of the California

engaged be in already to opportunity installed Sunrun has California. top-XX with have installations the importantly, half we new volumes Most yet, home homebuilders of large aren’t are While the and the leading want. homeowners, Sunrun development utilities is the grid. falling in providing our loved to proposition are and in energy what provider the for value to customers extend the product customers short

expectations. gain traction to continues exceed service Battery and Solar Home Brightbox Our and

short-term the will thus cycle first far time as the in second has cost installations XXXX thousands Brightbox more have of than to half caused of Brightbox systems installed and and compared We we half. headwinds. double This

However, time are in business. leader. could launched our In Puerto rate nation’s California, has states for This nearly clean and fires Brightbox. returns choosing well certain the while a a With above deployed. energy are and Rico weather-causing been and superior attractive this In customers rapidly further financial California, power of add service markets the our of about service seven direct direct Southern extreme we to outages, increasing XX%. XX% as now XX% the Sunrun and differentiates in resilient, are is that solution be already represents

the are Battery power the to want For and enjoy create wind Home and cut Homeowners by and freedom offering they off and told reliable, Puerto their utilities will instance, blowing. affordable Brightbox in power partners California is temperature the entered we when being high our through back-up customers proactively is that Solar second service energy outages. In during residence power can Rico own quarter, channel deliver. the

energy already Sunrun are certain we Brightbox also in to with to Florida. participate system. are advance able services. the have to distributor program We in Grid, play will in grid active on California launched and recently future National started where continues officially Massachusetts energy customers work role Together small country’s resources in a the in

growing We utilities and regulators. are the interest from encouraged by

to addition our performance. continued In to and strong market deliver we leadership, product financial

future and strategy, sheet. in cash strong while have performance and result even we and a guidance the of capital QX investing to balance to Komin, in call leadership to discipline As turn flow more our discuss are now allocation growth review our product CFO over a Bob financing I’ll detail. maintained and positive

Bob Komin

the with $X.XX, per the and despite second $XXXX per quarter customer investments and XXXX, value in business of watt was tariffs watt Thanks, per leadership. In to we $XX,XXXor was making NPV half line in the our watt. $X.XX Lynn. direct product with Project are from it and per per for or tax along levels headwinds half year, the target accelerate first in first reform, $X.XX approximately was Customer was our the watt. approximately the $X.XX NPV QX,

project sensitive slightly decline but changes the in over can’t there to although modest mix, equity very in is value geographic we will tax value time declining and project more, with be reminder, fluctuations. a run quarterly channel As expect short cost fund

lower we that higher a value also our QX, in of cost, mix projects had channel in lower affected instance, For metrics. business our and

We expect to will with trends levels QX. more recent return project consistent in value

Turning year. watt fluctuate now X% were can QX, total $XX,XXX creation per the on In per Creation X. first cost year-over-year. lower Slide customer costs creation to creation were cost the $X.XX value, approximately for $X.XX and project half per watt were of cost Similar quarter-to-quarter. to or

the and and to as expect described. declines even business consistent Lynn invest as growth with to in them tariff we to more the in our few will We for module modest in cost impact return continue quarters creation full year QX with expect sow levels last direct the

of appears the built per by lower partners, those cost half well In As a of deck as projects reminder, systems value $X.XX $X.XX were projects year-over-year channel our cost is in Blended improved as for not installation installation XXXX, as and our due to cost business directly Sunrun I our by higher costs installation $X.XX watt. comparable first business. watt, the partner channel our cost mix cost channel solar total which largely incurred deployed includes per earlier. watt of to lower because to per of mentioned the

or in were $X.XX increase consistent an levels return to X% will by cost of cost watt to this trends mix installation a expect per is reflecting Most also recent with year-over-year $X.XX Sunrun of more higher batteries. Install QX. per We increase. related built systems

our $X.XX In We batteries a QX, of higher QX. continue higher expect increase cost home $X.XX a value. also to from rate will but improvement the project per an marketing per were adoption sales reflecting cost to carry which watt watt and

pleased seeing are strong report We year-over-year. improvements that efficiency we to are sales

Our and faster total Sunrun rate. in business marketing increased our expenses at Direct volumes a GAAP grew year-over-year, sales the but XX%

to QX, settlement of reported for due watt these be watt, cost and there somewhat related QX, higher watt of and sales business by per In mix. XX% cost per this occur means activities our to sales per higher cost A this we systems action deployed. megawatts installation will And also time reported marketing $X.XX court in sales the result dividing unit the channel blended were direct item million per unit but cost a business and causes the or lower In the record sales earlier increase. watt of we cost over growing marketing calculated mix IPO. cost lawsuit expenses than improvement. marketing to in G&A G&A over are by these consolidated direct class time, to excluded $X.XX business $X.X state and a rapidly of the Our direct non-recurring Most costs will related sales total deployed. lower are period relate are

line sought distribution our We GAAP we from In with gross well gross systems in third-party businesses, achieved services This reflecting as quarter, cost, guidance above we of cash year-over-year with loan. watt realized platform XX calculate includes our generation recent per racking megawatts, deployed of services. creation Finally, the our XX margin trends. for the XX% and subtract solar we when megawatts margin growth. second $X.XX as platform contribution lead we

manage Brightbox strategic Comcast large platform desired where efforts. sales installation we direct retail for rate partnership business partners. between that the is mix a While the business partner and channel enables to national business we and for platform and the the initial behind our strong be the is direct Sunrun also partner The at growing focused don’t particular is and a our direct, and

Our of with third-party XX% outlook QX, levels loan cash our also to consistent and mid-teens. mix line low in recent in was and with

Turning now to our balance sheet.

quarter. XX% strong. $XXX remains or and with total position cash QX ended liquidity last increase million We $XX million Our from in

please cash finance timing more, to will the or our beyond our so we year Quarterly $XX generation any We cash define excludes for multi-quarter a in of recourse generation less plans. our the that continue would current a on can change outlook in cash grow basis. the or debt. our strategic due million cash opportunities fluctuate generation provide to higher be We forecast note project total as XXXX. Also generation change activities, XX% forecast which cash

unit in guidance on NPV In QX, reflecting deployments or expect guidance on sequential deploy full XX% remain Moving XX% higher. We of our to growth XXX Slide $X X. from of to we in growth megawatts year confident QX. and economics

to year growth Our half. full growth XX% the QX, or from just implies year-over-year over sequential QX over guidance for just second XX%

Now let to it me turn Ed. over

Edward Fenster

next the margins, plan the and our gross to in assets The residential decade service; net changes to I address strategy to and capital of topics. Today, Bob. finally, earning Thanks, benefits providers especially guidance near-term a and solar quarter as IRS of June’s three during to pipeline.

IRS Slide issued advance the as will believe incurring we X, investment through clarified cause credit instance than company want investment XXXX, investment IRS a most for in tax will recent making to by regarding cost to X% example tax advance through extreme for in solar illustrate delay of to least XXXX step-downs advance, credits. large by market the XXXX. a comfortable. continue make it managing of increased down tax that how I rather the claim And purchase service. can in credits the the December on project the XXXX, This of investment we by purchase XX% especially XX% and in guidance XXXX, the First credit, June, in a a In share phase XX% step-downs can December have inventory, the XX% tax the in at

opportunity, tax for and more the not strategy this a we’ve presents rule While favorable the development extend credit our it clearly higher levels. has to regarding options company the finalized

benefit providers capital from balance strong with Our relationship position this to guidance. us and well sheet

In step-downs It for and for by ability solar investment homeowners guidance the buying through owning systems delay such only addition, not businesses this exists the owned Sunrun. credit does of themselves. exists as the systems tax to

a and schedules enjoy tax exists and business the today, the XX% rules. both are different homeowners subject different and businesses and phase credits in code individual to credit of tax Although sections out

DTM individuals of an Sunrun XX% shift advantage a tax would a credit. would see service tax when could peak we least XXXX enjoy benefit to at and the that face market like would in from in permanent This from service from a tax providers the customer-owned individuals volumes such, is a in to expect customer to XX% expires XXXX. XX% receive buying systems. a credit credit like benefit settle credit Sunrun but credit. solar as would after individual December Sunrun of this solar credit, today directly XX% begin would when As would XXXX no XX% tax industry-wide Neither tax like approximately half purchase tax solar mix and service providers advantage estimates XX% providers

Importantly, step-down makes this the tax of easier. investment guidance credit managing the even

maintain achieved X.X% of credit. phase under XXXX achieve to a last approximately be clear, step-down inception, cost ITC. the we and X% in annual annual of the have significantly Assuming federal full Historically, X% our margins can XX% state three we in rate and reductions in XX% do X% about raise the better. escalation we under to consumer since per three prices reduction years only times managed cost need size reductions we have and expected main today year retail XXXX To think we we by a just markets, the tax between through for in the subsidy of

now to Turning the out million on the where different the way financial different that earning tax assets net to accounting can XX, is earning cash in to treatment equity to assets for Sunrun’s calculate I the cash flows point figures. Net want these structures, our statements find while there $XX to payments slightly Because $XXX counterparties. components QX, to you Slide tax million. after equity value grew describe are increased index of shareholders

This pass-through, structure quarter, years. called we haven’t in used which a we the several used

So unpack it. is calculate so more eliminated how I competitive the provider will is pass-through future. explain financing we obligation. current million by flips, that line. of pass-throughs $XX want to Tax the receives the is The assets may revenue used book pass-through expect tax Due as be this assets liability of financing the a benefits million, them to the use pass-through portion value a reduced tax to the be when has time, financing portion At credits earning has of in we that amount partnership obligation recognized of more to net we which reform with pass-through that in investment nature, the financing, on In on revenue. short-term reflected the funded. would $XX made

it, interest. benefits bottom book For at non-controlling GAAP the a partnership value loss the to we because the of flip P&L as structures, requires allocated of tax

the of book pass-throughs, tax utility. local we For the from upon of receipt benefits value interconnection permission

value this For deployment. structures, flip we partnership a book earlier, beginning

the such, this a a timing period, to Each as resulted above the one, use geography line income lags. depressed pass-through, where in the shareholders but operating method As although Sunrun’s EPS the begin quarter. such and generates in to net moves under effect common we is This different. in income GAAP,

Turning upcoming our capital and to strategy pipeline.

due build increased operating on we call, the occur finance in shared to but As remaining project cash prior will we timing, the expect also QX annual leverage.

QX. principally to assets next achieve project markets, As desired in to rather market debt than believe the such, net finally equity sequencing We execution debt we during we in best the in will expect extent is public earning first the cash by increase the subordinated possible senior applicable the market. our and transactions

year. generate this $XX at still are to on least of We track cash million

$XXX opportunities, is Our for operational to million next outlook still does come refinancing double XXXX and which post-flip the require opportunity on of year. XXXX, not assets between refinancing generation growth could cash

I And over back debt Lynn. turn into Our already year. will runway commitments that, to with tax and capital provide next equity call the

Lynn Jurich

thing at cash grew in in, he said, that XX just about assets earning increased slightly QX, net to Ed QX. Ed one while minutes and and Thanks, correct quickly wanted meant

are we through. So,

questions the please. Let’s open line for

Patrick Jobin

Operator can you up the queue questions?

Operator

question [Operator from of And our Weinstein Instructions] the with Credit Michael first comes line Suisse.

is line open. Your now

Michael Weinstein

Hi guys.

Lynn Jurich

Hello.

Bob Komin

Good afternoon.

Michael Weinstein

the I you are guess, a that’s of are an forward quarter. has seeing and to lag this pass-through that So, how if changing isn’t going be Ed, also explanation first increase in very this we financing lagging and thank much things really effect. and going for it and things quarter

to that’s the to we expect there? happening at look if basically we lags earning So future should assets increase in Slide net quarters you with catch-up expect, XX,

Bob Komin

question. good Sure,

the there to are lags. two So components

statement income next beginning that net normalize The first income. is excess approximately quarter, and you depressed which the actually should in income you period the where pass-through, would a a quarter in might one using see on discontinue

In service, little pro we that And are forma describe million net forma describing slide, which how placed adjustment we on a away. details are terms are the and note. a deployment that earning the at time completes the of $XX in in adjustment we fund assets making more the foot go assets, that for that will bit pro

Michael Weinstein

so in least on so and it’s that’s basically, in? seeing, it’s already are factored we Okay, factored there XX at Slide

Bob Komin

Correct.

Michael Weinstein

other number was, quarter the for pretty QX. megawatts third I Is there one deployed a – And Okay. question for QX than for would imply guidance the your why reason higher had steep be any past QXs? would

Lynn Jurich

Yes, absolutely.

is supporting QX, really the strong strong the so, that particularly in So, it’s direct a business growth. couple things and growth

about, QX talked and which very year-over-year again then confident XX% QX, the XX% hitting. we if and the from that growth QX we you as XX% into in from So would rate look was that’s feel imply sequentially,

you on pull-forward in had bit it’s a in the with a QX the change what year little of Arizona lot the to of last we a channel of structure tough due seeing that, think is that happening. because, are was year-over-year I installations comp the comp the rate side,

channel the we a is flow normal we’d that’s business. strong are trajectory seeing comp the order seasonality But overcoming year, tough long-term in this such QX. for So the see

Michael Weinstein

you. Thank Okay.

I to Thanks. I’ll pass now. somebody else. it think that’s for on me it

Lynn Jurich

Thanks.

Operator

Thank comes you. And of our the Brian Goldman next with question Sachs. Lee from line

line open. Your is now

Rebecca Kratz

again for Rebecca it’s Hey, Brian. on

some the but impacted a structure have is supply oversupply. degree, lot tariffs of negatively chain being the So, to cost

quarters see cost inverters current what panels from declines next in as results what’s just that you you the maybe forces, extends pricing was and of do you magnitude pressure stand for interplay there? of the two these with see what be wondering XXXX inventory. to embedded if do you I and several expect So where decline And QX into on well in expecting as

Bob Komin

questions. Great

across they ahead in definitely probably to section a this likely, prices rolling P&L XXX are the basis run the the we of on price seeing are of until spot back board terms So, where were due I think sort up cost, wouldn’t ago spot of prior panel see that fourth a to approximately year. in declining, equipment inventory the of the tariffs. quarter We through year prices

We a But other – price depending on temporary, tariffs speaking, also to suppliers one in few we Those the That are how little of any higher. ought adapt. because tariff the prices. the fluctuate can speaking, market inverter these arising bit the in from increase think situation markets seeing, pennies could way of or be I will generally our declines out. in and industry the what factories generally chains supply, that chairs musical are said, a days are playing attachment costs on a what what supply just increased global just also and world drive plays batteries such rate

cost all we do related battery be and will believe year, next that to batteries to of cost installation related Although batteries power over the electronics the labor declining.

all factors are of if them, other are than fast others. writing let play. Can that know your you, components been I have not all those may I answer. to at but didn’t me there to question reach tried I So

Lynn Jurich

competing factors, the to from headline by it’s installation growth back. slight in so but in the - a there like the adding declines offset year, to that Because these like strong going you to from be overall this to operating the – the cost is see battery are we cost the of rest the leverage are going see number pickup a through from going

Rebecca Kratz

Yes, okay. got I the all. color Thanks think for it and you

battery in kicking any rank a then just you growth here volume follow-up, here and new with they how as near-term and partnership avenues with growth contribute of just are to Can the entry XQ and order comments? to leasing, number have And you a and the in state those? a Comcast Illinois. So, going further in of

Lynn Jurich

here thrilled Sure, and the environment really the sure. our with are position We direct. on demand – again, we

the hit one. you So, big

really We retailers bullish a –for We’ve also now them. are how that on recognizing So, like. That’s retail. channel for and it’s a given cost that, an retail, to it. we profitable in category been operate area this that really we know we is and while a are are

four to discussion in today. with are we are chains We national that talking

see won’t you that short-term. mean, that I So,

nice Comcast You position sets in well. is partnership The us. are meaning entered QX, Similarly is but going also up cost really is with see holding, very for to next for attractive Comcast. we year. progressing for thesis The really the not into us that acquisition it

it’s we delivering potential company it’s markets growth not partnership. funnel new we they Comcast said are are by and past, again, But that the we and And well. the something that expectations together. encouraged For for multi-year the so, in They longer-term contributor, the as something then into but it us partnership, that in sets QX that for large as also a by learning up expecting rates. are is were a

we I are think and all over the good proving couple strong be into entered quarters the markets. long-term new of markets last to are

help We help they meeting will our expectations. are are So also and contribute. think durable they they certainly –

why of back part that to confident into happen and confident half in XXXX. acceleration are that’s above will year-over-year growth that we why are the is grow aggregate XX% happening Michael’s back we So, should getting so and question this

Rebecca Kratz

I’ll pass on. Okay, thanks. it

Operator

Partners. Thank Shen Roth you. question Capital line And with from our next of the comes Philip

is line open. Your now

Philip Shen

Hey the guys. questions. Thanks for

The is QX the on first a follow-up outlook. one

about You degree To you quantify us great? going into be are see from your coming you guidance, your what that view And That business. just shaping the that far you you of gives does can know not give XXXX? but, will can strength if as direct official in that and so you be confidence talked can of up. I XXXX kind might anyway, providing how strength

Lynn Jurich

Yes, absolutely.

of, of hits that on QX if kind growth that a lot going with the help of I guide, So, just year-over-year answered I look that support XX% believe again, driver strong previously that what But think, just implies QX – you of kind the is, we’ve rate. would be at for are I question the north to growth.

year from strong very, expect expected year-over-year we look this what we year, you QX, in at growth. very versus If certainly, last

for early And us XXXX. growth rate. for too guidance comment the a make officially the so, on But it’s to accelerating it’s certainly

Philip Shen

there. color the for thanks Great,

Let’s storage. shift to

lead being hearing some we of is availability tightness and six attach about, regions XX%. You XX% within There California times of seven talked of months. in are rates I California to battery and think

was release of in supply batteries, a what able is batteries assuming because supply that that sense be demand to be? serve of For how supply of year in might much example, my you of mean I anymore first how much So, constraints? by the would lean not is, today, But online. there terms not next constraint are half there come

Lynn Jurich

We are in for with year position the are a where we through the already of and procurement place comfortable end battery that. have in supply

as prepared install we we the So, stated double year will expect the to than of amount the comments, year. more versus in of of Brightboxes the half back half first

strong with growth very So, supply.

year the are on cost the us to year an which take the side both But going advantage so, that through that well side. end do with how of people should do there And positioned supply agree them. we the this on bode again next other we a come big I and lot seeing – give for into people we you is, and given well the are of are should is market market when

Bob Komin

And decline more the come proposition particularly, more as will value cost battery making manufacturers online, attractive.

those but all point, secure. features, the So for situation is year to Lynn’s our positive supply are

Philip Shen

you pass on. I’ll it Great, thank both.

Operator

our And Colin with Oppenheimer. the you. Thank from question next of line Rusch comes

Your line now is open.

Colin Rusch

It’s so Colin. Thanks much.

Lynn Jurich

Colin. Hey

Colin Rusch

not up four years? about structure much, quite a raising so managed or a and in cost. equity can three over growth prices thinking rising you by like the on about little next the be advantage tax bit rates, this pricing position free the you to accelerate especially It seems might So, strategy some the talk

and the decision-making think just puts through want that and So, about go are that takes you might you how to process? I considering guys

Edward Fenster

Yes, great question.

my degrees think we trying you and XXXX a one to end with I are tax to think business discussion the today. margin the ways are than of just illustrate around in higher can what is, up credit, if referring many investment I freedoms

our will And what and concluded year that so, look, neutral just a chart have at of the and to conservatively tried XX for approximately – we markets. there believe markets charge year X% looking studies, what let’s you consulting to in per to assume performance PA said, more customers. we was CAGR those top X.X% here X%,

conservative. like thought So, we the is X%

history a cost out structure have every about We of X% year. from taking our

X% conservative. number is here So the

in like feel lot department. So freedom we we of degrees that have of a

terms are In decline. of rates, see continuing interest spreads obviously, to we

So trend company If the than that that, we far been which you been cares about nice energy base we works, tailwind faster has rate. declining have that are a not rate still have interest spreads only increasing. see is

regulators if between look those is a competitor through escalation the residential major rates. is history bill two-thirds cost the of utility customers rate us in debt About utility of as caused electric the operate and we cost amortizing utility. the our So, and capital the utility utilities that in and see markets cost a XX grade, and equity increases, very a to And extra pass you you’ll retail escalate. correlation at interest year of rate strong of

expects flat market around up which it’s rate then year environment, interest rate does ten the approximately - sorry, end or low treasury. the interest Xs in if X XX% future do higher a we the a market for So a for show

to see escalating You would expect retail rates.

our existing to we on are Finally, as of relates existing it approximately fleet. our XX% hedged business, book

in locked specific most slots rates are balance sheet. of are those independent even that loans which have and of the the on those are So we

Lynn Jurich

found And then, XX% you I - you a also is question I historically also in Colin, think, threshold. have difference think, asked huge implicit isn’t would that there we savings what elasticity hit once is that, adoption – I of think in you a kind price I had and about, when just there

in increase a isn’t probably further for reasons other necessarily go away are in changes which consumer. to have to vision to them attached a control, people particularly of type from proposition, our of time, a over there for the of and XXX% are methods over you that batteries to going type choosing the value prop value If reliability again, of adoption a more run, real savings this the systems long

So, we up. that believe trade-off. price move at rate there is expected will elasticity price do to always look But, we room the with escalation, the that

Colin Rusch

and batteries fair technology is portfolio how enter question might the functionality. flows guess really from and is your the that actually really is our sort an control? And about of enabled then, just starting of much the then, next capable as source talk There market to speculation cash about that initial And up? I secondarily, question the think flows how flow. perspective grid cash Great. modular is incremental prepared enter it attach is you a and future related that of the just into how of around two-fold. One, the to of how on cash I to should my rates services can timing impact a we guess, portfolio into amount scale

Bob Komin

Great question.

is think the as I scales. today, a story expected short all exists will bit capability it in manual years a few more than little I be it’s the

will putting that with automation batteries top make certainly plumbing grid provide it today be the But to simpler. over to We of services exists.

Lynn Jurich

I And to would willing as well. that, do are consumers also it add

indications in the been So drop the early battery positive. to our utility willing what the around consumers have

of So, planning cash cycles. that mean, that’s we terms lot again these these are But major factor are projects on I to contributing of were, a well. these obviously an important in flow, working long-term as

will But that the of two, when will we in projects are there. years technology feel are sort any at. three and we meaningful confident these about think that work looking So scale you out, be

Colin Rusch

Perfect. much guys. Thanks so to you

Lynn Jurich

Thanks, Colin.

Operator

our Merrill next And Dumoulin-Smith line Bank Lynch. with from the of Julien of you. America Thank question comes

open. now is line Your

Unidentified Analyst

it on that just expect value cost projects on value going quarter to guys. in markets? lower is forward? wanted that higher the project do entry clarify. primarily? what be – driving Is is and discussed you XXXX that But some lower Hey more quick into Julian. Just value. there to you was question normalized further for actually Eric a In But, lower This

Bob Komin

lower to channel our in NPV. Yes, clear, lower also and especially said, said, price remember, we be to value cost we business, we

So, mix is NPV-driven. bunch the effects when look projects, those a we it’s there at – mix and of

in quarter on So, previous some quarters. but they were the in NPVs were those than fine, lower this

Unidentified Analyst

the that? in primarily presumably? choosing go Gotcha, then, gotcha. NPV to the so, Just And maintaining was what driving economics unit for

Bob Komin

have. and Yes, – just sensitive fluctuate it that It’s fluctuates various depending it really it effects quarter-to-quarter. can mix we on

Lynn Jurich

contracts… channel has that the their the mix, To pricing on

Bob Komin

you a might you $X $X presents you might that’s someone presents contract if if for $X, one for think worth pay it. it simplicity, worth that pay and very just mean, is you someone $X, I you

Unidentified Analyst

more then, Safe touching of markets Are Harbor. guidance expectations? you of sort that to with hand strategy terms expand going ITC changed like and what’s upon deployment just Safe into planning And aggressively well the long-term on expanding? that’s as the in What ITC new in Gotcha. was Harbor

Bob Komin

So us obviously time a want exactly decide have execute we the of to optionality it. to and ITC how deal good Safe fantastic Harbor we provides

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Unidentified Analyst

Gotcha.

So the we in commentary strategy further should expect later on calls.

Bob Komin

Correct.

Edward Fenster

Correct.

Lynn Jurich

Correct.

Unidentified Analyst

you. thank Okay,

Edward Fenster

Thanks, Eric.

Lynn Jurich

Is that everything?

Bob Komin

That’s everything.

Bob Komin

soon. care. you thanks Well, everybody Take and with speak right. again All we’ll

Operator

gentlemen, you day. Thank have and all Everyone conclude program a for thank and does participating in you. wonderful today’s Ladies disconnect. This may you today’s conference.