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Sunrun (RUN)

Participants
Patrick Jobin Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Bob Komin Chief Financial Officer
Ed Fenster Co-Founder and Executive Chairman
Michael Weinstein Credit Suisse
Brian Lee Goldman Sachs
Mark Strouse JPMorgan
Eric Lee Bank of America
Moses Sutton Barclays
Hilary Cauley JMP Securities
Philip Shen ROTH Capital Partners
Jeffrey Campbell Tuohy Brothers
Colin Rusch Oppenheimer
Sophie Karp KeyBanc
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Q4 2019 Sunrun Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Patrick Jobin, Investor Relations. Please go ahead.

Patrick Jobin

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

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

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

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

turn Lynn. now, the And call me to let

Lynn Jurich

Thanks, Patrick.

are against our Sunrun’s We progress $XXX In we XXXX, our target. results priorities. million fourth full generated year annual pleased quarter cash strategic and exceeding and share in to

of over in the million At X,XXX as or next solar value In base also increase of customers our X% We $XXX sequential per created present watt while We history. quarter, we from and fourth many the quarterly third company’s and customer. the representing and two of volume the X% the deployment added we net and discount megawatts quarter increasing battery customers a per of customer generated rate, XX%, $X.XX NPV highest as largest XXX Brightbox, residential service. combined. adoption grew by our providers XX,XXX added

construction that through we growth pleased labor year. have last am our worked I which limited bottlenecks our of to most report

sales in XXX season. now positions business. is our open and of positions Open typical as number about organization today in XXX hiring are around over into quarter organization the from our summer in with reduced busy have our we ramp line XXX last installation to We growing this the

company, competitive total benefits purposeful leading recruit. mission-driven when the us offers we careers national and As Sunrun package allows standout to that and a

to through are customer product We reach, the the experience industry differentiation differentiation. building aspirations lead decentralized development and customer energy and clean have of

existing stores retail the has execution which with For example, an another partner have into our over by capabilities XXX this our differentiated grow box to big noted could we expand opportunity retailer and footprint XX%.

on in will business of market investing to also their are the batter will many grid grid sharing With of to We their and our development. customers these utilities and by rates new behalf batteries grid. our with services services value programs, sources customers access attachment have

strong five announced services and have pipeline. grid have programs We a

rates a have in that across attachment all Brightbox to direct In our utility for persisted XX% we Bay installed they reliability. California, now in sales systems. Area poor QX, has Brightbox in geographies, Attachment rates level business. XX% were in over over over the Nationally, were response XX% and approach

in We expect XXXX to to compared last Brightbox year. deployments double nearly

lacks pay unsustainable keep position our who don’t and to to with leading have experience we the customer it. businesses dealer-only intend positive We market customer satisfied long-term focused are the our and discipline is building we industry’s and We This valuable unit base. deliver we economics level always, customers. As why on to maintain most on compete achieved ensure who prices. and capability value

In XXXX. the expect or durable won’t in and channel, issues important our The direct see business, through door-to-door sum, we practices have over we serve and be build XX% this channels over time. long we acquisition to through prohibit very caution acceleration continued the XXXX over believe and are investors salespeople with of cost the sales independent our run. exercising want needs in or we labor that be an industry’s retail, it the customer worked have acquisition to selling sales is have aggressive clear around to growing did to dealers. I are serve growth controls will but We the that around recent stronger channels, that reductions customers to including than in moat provide rates management

accelerate a with today, households rates to climate and is continue to significant and superior which with continue of level is to interest long-term address the energy around of to the solutions us from this ESG to engage service. to category XXXX. We strategic corporates and to company Sunrun and is core to expect grow. and committed expect as will is to There a building building system. crisis. Not social issues, this is industry us partner our in transition but to only enabling awareness mission, will with leader grow find philosophy while the governance growth we XX% providing and to partners capital at transition flow Sunrun There invest environmental, energy from decentralized looking is Sunrun ground

We well. negative help are become already negative company as and carbon deeply and a to partners customers seek carbon our

operational improvements. have lower launched called the program We customer Working to We next kickoff our the Way to Sunrun many best-in-class of our costs. on initiatives deliver soft focused also phase of operational to value and

through installation it steps these to our As takes signature taking ongoing efforts, from part of a times, customer to reduce cycle install. time we the are

the cycle we short Asia soft as with as benefit, costs and soft customer shown much have Europe are are fast down times driving the key lever markets customer. times, per cycle International that believe $X,XXX less Beyond in obvious costs. for

down. For context, this is scheduled step more than the ITC

improved completed improving installation seller significant. In Our and same been commitment also to our standards in and have we initial results and labor time construction the QX despite increased over more pressures, battery attachment. studies compared period safety while high-quality last the to efforts by wage year, on efficiency. than the input while soliciting maintaining offsetting We efficiency were focused XX%

well efforts to the include customer scheduling funnel include we can our technology as through that management site With as to these directly, control increasing project inspections, as processes we from externalities investment, optimizing These standardized, now full such focus permitting. signature installation level and instance, for installation. the improvements extended have install scheduling

I to of these would highlight examples like changes. two

drones and of errors First, we drones use have total back neighbors. customers the while adds reducing for improves the revisits This time a requiring use of the work have cut site site for our XX%, of also wow inspections. implemented factor their and to tax. The experience our

by waste. waste local driving jurisdictions, in way permitting reason considerable process pipelines which create reform. this Second, can affected is many the is are One we tackling no There are permitting by comply called a SolarAPP as process markets. seamless low automated process. campaign will automatically standards solar they permitting can be leading cost they international create as issued with industry permits are The in

including improved locations days over the zero multiple portal that we last that the markets. the from funding XXXX. online funding next and XX Last Energy has Department The piloted year permitting process summer. of partner be instituted early reduced optimistic now to in in leading Vegas been year. And the the technical two with to instant an process in track NREL, is XXXX step adopter have online will or Las permitting to in permitting to fast XX of will most building an am and organizations. to I year, by portal and provided code interconnection, this organizations interconnection

are be after XX-channel With on system and the along to laying the delight just were a are installed continued change, up. customer early able by days Records by foundation the signed a completing focus of excellence, cost this in differentiated X of home end up. customer meant the with after benefit in we customer substantial the two with a January, broken in along improved sign on to we days the reductions value. operational to a installation and come, just These years initiatives, for January,

about to the pack. pull I excited am opportunities our to further away XXXX, Turning now from

have expect We growth counted of deployed. in we in XX% the Also, solar customer would growth XXXX. way about XX% same if in count our rate battery solar base our capacity new megawatts XX% about capacity, and be growth you

cash we $XXX $XXX earning grow sheet, growth, megawatt We net global generation million net to Due faster assets finance but of instance, into more possible, events, cash and strong capital with this timing and hadn’t flow earning out the election, is this combination cash project assets. we in year of termed year more assets. the other the our balance generation, expect million in If net for about if and assets and market than we less maybe markets selective the exit see generation to case, transactions. deployment for the earning would we

to discuss QX review over I to more guidance detail. and turn performance the now Bob to will Komin call in

Bob Komin

Thanks, $X.XX customer per the $X,XXX watt. in was fourth approximately Lynn. per NPV quarter or

in Project the or full value per $X year approximately was watt XXXX, was customer per $XX,XXX watt $X.XX. For QX. per NPV

approximately were on Now X, quarter from turning $X.XX creation improvement the or an $XX,XXX customer, per XX% costs total costs watt, $X.XX Slide of XXXX. of QX, per in or creation fourth to

fluctuate As with costs project can value, quarter-to-quarter. creation

cost directly channel Sunrun our flat projects our reminder, partners a per installation stack of built not of costs by were as watt Sunrun-built watt, a per costs those year-over-year. peers as the Installed systems, solar channel our business. deployed well which from by per of fourth $X.XX $X.XX installation Blended As includes the systems cost incurred partner because for for watt, comparable is $X.XX cost was improvement quarter XXXX. to

and down In per $X.XX QX. costs were marketing sales watt, QX, from our $X.XX

higher in mix it systems be In the by period marketing direct of business per blended QX. cost and to watt. higher the but sales sales results calculated improvement Sunrun-built of A also of by total total from watt reported Our cost $X.XX unit an means lower at and cost deployed. there G&A watt, higher per costs due costs time marketing in megawatts are dividing mix a lower were per will $X.XX per over watt, QX, installation costs

as solar costs, third-party contribution our calculate realized we and lead our as gross from GAAP margin services. a Finally, when distribution we cash generation includes for creation or well This with subtract businesses loan. platform we sell racking systems the

in Our margin per gross $X.XX $X.XX watt services higher than platform quarter. QX, last was

recent which demand by customer to QX, owned. the Our and are third-party levels, loan increased affected systems those down above ITC head XX% of cash that was driven in mix slightly step

Lease from extend to systems benefit at to the higher harboring ITC safe are levels. able

some We QX. stack benefited deployments the above dynamics. of total staffing return to to XX% in and expect seasonal QX The lease from mix cost

and geo costs. both effects some lower project resulted addition, In and value lower mix in product

to compared the costs doubling For modestly the install of full improve to XXXX, expect number despite XXXX we batteries year installed. Sunrun-built

benefit offset higher in partners, cost total select We market will rates roughly resulting stable be stack. roughly by paying channel to expect a this

to NPV We better. XXXX expect or consistent be slightly with

with hardware illustrate we will of watt cost. To XXXX, In capacity installation battery total become installation on were per costs $X.XX Sunrun-built doubling, the battery cost are Brightbox XXXX, of in estimate about effect $X.XX our Sunrun-built $X.XX cost more costs. having total stack, new per batteries watt than to

X% an the see cost to expect would deployed we we reduction. quarter, costs, XXX battery In unit megawatts. additional these exclude you If fourth

$XX.X common our for million and to sheet, other generation harboring debt we Quarterly cash total of cash. as balance common the change was cash We and in after and adjustments, repurchase business total the quarter ended safe now activity adjusting including of Turning repurchases. harboring cash in million less $X program, million recourse acquisitions stock our fourth with $XX million. safe $XXX the of stock the in defined change generation our

year the timing we XXXX, of significantly Cash fluctuate in project full generated cash. activities. due finance $XXX the generation million For to can

we Moving approximately grow on full expect to XX%. X, on deployments to Slide guidance year

be unit approximately watt first be at year’s expect per the We level. or quarter, to In or above to last expect we XXX megawatts. economics deployments NPV

it turn Ed. over me let Now, to

Ed Fenster

Thanks tax Bob. credit our discuss and safe going cots, recap Today, capital program. performance investment harbor am asset I to

greater X% been earning than $X.XX million measured of at First, continued clearly X% assets less capital million, now a be than have about cost, assets, of XX% about which points X%. costs additions NPV and X% At X%. capital Market net at X%. XX% $XXX that weighted assets support for decline. when or to have approximately solar assets measured both I at when greater net $X XX% contracted about or our a $XX,XXX X%. about approximately than earning been at watt X%, more which XXXX earning data greater full at than would pleased to customer, at per cost year At $XXX net to am or share than measured capital would XX% total billion per our be finally average when X%, measured Measured residential when

collected to all $X.XX In and note share that on across XXth the rating and have pools we addition, are both lenders we in This beginning agency the and ABS to lease the billed. those years I our pleased loan arenas. than year peers are are am the key entering that month, company’s performing $X

manifest for proposition, high it peers, many quality we upon sales three December have construction public versus to us. superior and XXXX, is believe time we observable transactions. value soon ABS practices this Although data in than million our $XXX at long-term takes Since years themselves customer consultative raised

our expect ready next We in be market the for transaction will half. second

events cash or a earlier execution. transaction it usual. election, our and strong generate so company when execute significant our capitalization, also smaller believe better we XXXX, transactions We than usual if value. The book other may to margins However, project lead and growth into continues finance given other with may which should than paired both global in the delay result in execution healthy we will to doing

to harbored continue products of successfully expect level. harbor XX% will at executing been the Finally, our and approximately safe XXX be efforts. and safe to Materially, able financing we received I ITC confirm am we we all qualify have projects megawatts the acquisition pleased to are

currently represents deploying business this should expect strategy This their are in receive At supply channel projects disruption helps our credit investment This at equipment. we $XX.X one-third inventory the tax to We we also December peaked or investment develop. than are fully per and business. in of about million us related $X.XX equity use safe less when harbored our deploying against insulate coronavirus XX, this watt. direct our any incremental implementing

end repurchase in recourse for cash stock acquisition, $XXX adjustments cash $XXX safe debt, Finally, common Total year million. million activity less in XXXX. increased harbor the of business

our pipeline, equity quarter. the tax our fourth each and finally run-rate debt to into project extend Turning

back And call with to Lynn. over that, I turn the will

Lynn Jurich

Thanks, let’s please. for line Ed questions, the and open

Operator

question. [Operator Weinstein Instructions] your line Your of the Please from first question comes from Michael ask Credit Suisse.

Michael Weinstein

Hi, guys.

Lynn Jurich

Hi.

Michael Weinstein

Hey.

are shortages about sounds starting of could wondering abate are you XXXX like much how market am this that projecting as towards rate problem talk starts will visibility labor that growth the and So of and to is finish? ongoing if the it when the it it get or to to at the I And end due there this impacted visibility is solved year? any any you

Lynn Jurich

we So I stabilized. believe think that situation labor has

we XXX XXX pretty comments and pretty XXX is also the seen So we as ramp open side down of on in from the in normal normal rates to opening which went even positions in sales we described have terms past. is the

nothing the of the vigilantly labor pipeline tight but that have to we or are we don’t because market, it’s So watching recruiters staff.

us a terms not targets restraining So or hitting for it’s of for really for the the growth anything feature worry in year.

Michael Weinstein

batteries bit talked over to contributing And that the is battery per start will you costs a expect down NPV those little so about they the cost cost watt? go – installing to that and of acquisition, of time

Lynn Jurich

Absolutely.

what but despite fairly still thrilled cost high in are The adoption battery cost. they shouldn’t fact acceleration proposition the We the with there is strong, is value they that do.

we just you boxes been that buying the are historically, and if cost actual retail the price of that’s held. So of look happened what’s curve pretty at declines. lithium-ion the But significant the cells has

packaging, curve coming really the is lot will obviously as in with just of and scale in, that is a the installation, there there in more margin learning that in well. competition still stuff So help

through we double if So the out are projecting year, any deployments the expect in-year we battery we look despite pricing not fact improvements. to

think be prices place that I this we battery get start to will be the realized. underscores primed a So where how to when just

Michael Weinstein

major right of – can happen industry you recession now, Sunrun where might will going talk case a about once recession just that again a is Sunrun again about word everybody’s considering happen? to in question, where the last what one Hey, maybe the and you think

Lynn Jurich

this could opinions countercyclical in be interesting many as I will have products. I is What’s well. we Yes, Ed will, start cases, sure, on that am some and

So household. a for savings product the we are

one So choose are waiting solar of now. why compelled is are adopt reasons don’t they to not if customers sometimes they to the it just or do

always that moments in savings to to a so sales the is can the urgency are we And looking be process actually matter don’t in people reason where create more see.

that’s want anything So to Did you important. add in? certainly

Ed Fenster

the components. highlight say side, market Sure. on I I would financial two would

to of at that transaction asset-backed inside had same of security you And – when time in most recession, actually company. are The finance to the peer perspective see times priced is was a of project manifest of differentiate the from example helpful our with of the price markets. most from that which generally, we themselves lower in recent I obviously December XXXX a rates and market First, significantly points we capital achieved XX interest the additional leverage about adverse in able believe.

We a tend bellwether spread peers versus conditions. adverse our a expand that market are to issuer and benefits trusted slightly in in see more and

capital don’t balance availability the us flexibility given can have but script, we flexibility. ourselves a as usual to sheet leave perform costs as obviously strong more I concerns transactions in our you gives these want we for to to would share as So than when broadly, little that

Lynn Jurich

I think residential up one think the other customers. is we also of capital signing compelling why so again any appreciate point ahead all business of the we raise that is

have the before gives the a we get – then which with price don’t customer, we we you of stuck the backlog up know of So capital cost sign and promise.

Ed Fenster

I finally we have we note business been XXXX. – And in since would obviously

on that great We so $X good company’s the history, feel that through time have collected recession. as from including about performance well. We at the the data $X.XX

Michael Weinstein

Great. Thank very you much.

Operator

of Your Goldman Brian Lee Please ask next question. question comes line from the from your Sachs.

Brian Lee

for Hey, for guidance term to the one the to year-on-year. everyone. taking growth not megawatts questions. XXX trends, first on put of Maybe XX% Thanks. but on guidance, shorter you at the get does down the Thanks bogged QX

maybe year full issues? that? I it moderation seem What’s So growth second year are labor about this year? would rest the year’s comps like in the you math and pretty given implies you a bit through the in growth easy the that given impacting outlook. for year-on-year especially, since XX% basic half talk And cadence guess Can the of last

Lynn Jurich

that Brian. some a for in bit the so of from Yes, XX% benefited the think QX I backlog Thanks, the benefit that in QX. were XX% projects

Now, up like on the and you install winter in feel labor there. time we the do can much caught so we are issue only

believe visibility to the year hit So we for the rest good do that we have XX. of

are think channels and ourselves the our just invest economic right stay to just really we durable continuing trying term. try maintain really think to to of give disciplined unit long level continuing terms to flexibility stay we targets that in I in some are

where for comes that’s out us. the rate So growth

Brian Lee

low much strategizing these much need the strategizing around and so like that That of Okay, have half not in pricing know of a markets term question then financing just are are how sounds raising And right a earlier the secured pieces the there darn but you I the you the days, capital, strategy through of pretty is in have on. second QX is of through now year, in maybe think year, you on fair the later the It lot finance sounds sense. just in makes in I year. in potentially have Ed the deal ABS right back it you the enough. somewhere the of with more this the you in already analyzing, that where how you markets visibility going the and sheets for capital around speaking, year? year, later year the moving base earlier is around generally have case the of lot cuts lower? this volatility now whether like election is capital cost or smaller –

as here? waiting what in of year puts in a keeps the Thanks. year ABS later of So little forward sort the to what to in understand till these the the pulls or terms trying of next takes and bit you

Ed Fenster

Sure. Brian. Great question,

robust recourse the non area raised across So we a areas approximately project of all having finance in $X.X project stack. capital had XXXX billion of finance the

something and so do to therefore we in if mostly don’t third a little little start quarter weeks of very until chest we probably be bit smaller great a facilities to point confident earlier to might it so are to might also transaction a a election a multiple undrawn so opportunities sense a the year to out to XXXX And we is fashions two your have would entering best attractive course commit it are markets be it term undrawn position going aggregation paths do us end that ordinary be and committed war because to want transaction in year a is for doing lot our executing extremely so up just to we a after we make things capital we into not capital carefully rates into am financial where major to filling continue I the and outcome watching there just many advantageous this projections the of making are be and as and have obviously we unique things our now it time can. full both to

Lynn Jurich

the would value just the amount on And you grow and if two historically just also I even going Brian level the substantial. combined aggregate just And really aggregate customer value to more unit certainly one the add think growth our thing is is I installed think about have more years scale so to around the unit then matters the at in that you you the we we way we look matters competitors rate that growth you rate the rate economics. grow next at if of scale look than our per and more performance quite are superior

quantity value growth matters So matters, but rate as well. times

looking really of three are at all we So those.

Brian Lee

what get understood. QX, kind some was creation Yes, those pass the year and see last around drove of elaborate reduction the of know were that saw you in been on XXXX? missed those into of can it any I them, the great. I circumstances have Okay, jumped encouraging, but don’t year I if might have persist to one in there the housekeeping the on Maybe if unique it? that quarter and mentioned that it you will you do costs like sounds kind throughout

Bob Komin

we that was that say it QX question. projects were with mix some lower that there value did somewhat lower We have did had unusual some – Yes, issues costs. also in Brian, that good

percentage a which systems more to services of quarters. We margin it’s QX higher going where That $X.XX trend was to last – about think of in the couple back the up which also we the cash been platform over is had QX. revert than previous also helped

believe rate don’t will that we going that, some lower and yes, continue forward benefits. were So, there

Ed Fenster

One see thing I typical that because have than add might expenses, is relatively in it QX installation you selling origination. new lower is customer higher you volume

see that well. in You well. the historical Obviously, QX for as can installation there us backlog played factor as a

And so that. that cost was cost low marketing and result unit a per – the sales especially as of

Brian Lee

Okay, makes sense. everyone. Thanks

Lynn Jurich

Brian. Thanks,

Operator

Your from question Mark comes next of your from question. ask the Please line Strouse JPMorgan.

Mark Strouse

in as hoping SMUD much homebuilders you suits, you. changes evening. are you announcement? for impact expectations what far potential you that is Thank questions. the new to home on baking you just And are as your as could good about Yes, implementing, Thank the talk was other I utilities California taking our far mandates, XXXX touch what following just very lastly can of, kind since recent as then discussions guidance? with that your

Lynn Jurich

Sure.

fact to what was when essentially quite California fact deliberate. impact with the more people homes grip, think but And done. committing are that comfortable to afraid the and to It’s That in to you new years, on made really commonplace megawatts next have home. I the it’s they it. develop a decentralized couple the – this is more we the is would to That of of to that mandate who with I it. the policy, be biggest harder is California it’s say going are going that that’s the the First, not be their normalization people specific talk people new aren’t decision just have that sell going of of

with of discussion terms very nicely. progressing In our homebuilders, are they

megawatts We this you one have or of builder at XX you pull a say then out of engage XX to and are the yourself builders because win It’s it, over point. going material a just this to year you community with top way continued the get I not in this then be have as permits and expand. discussions builders you year, prove to amount

there, and take plan. bit want So of piece a a we the of are share in slower it’s but it’s in a current investing huge build little to not something we more

I In decision don’t this terms of the all. where meaningful SMUD think is at

the is it’s builders that First put more They money, of cheaper There put solar They costs it’s business With like upfront this want service it’s model, in doesn’t. more to they on the as when buyer, solar. it upfront huge roof. misconception solar it make no to a roof. cost the cost builder, to all, solar money electricity. out no

a product decision is from XXX% there, Lennar it solar was just mandate product. before the it attractive So And a on see attractive even SMUD really you on shouldn’t solar buy solar and that’s leaders like doesn’t moved their prevent it’s the to applaud. who own because that it community It more builders the – roof, putting specific well. get very they it roof, generation from People can we can great. as community and solar, but SMUD as the for which allows they own well is the

of don’t big we think a So issue. as it

support to will facts fact this want that the consumers want it the and carry the think and that builders – I day.

Ed Fenster

a a home. is is get paired prediction is would storage, market just and personal you One thing key with you in can the – to homebuilder the when California solar that just solar use I homes and real add differentiated that feature that as know – as and a sale issue reliability key are

on builders more that and is will in minds territories, California particularly because utilities you important service investor-owned start that differentiated suspect solar I the so move to the towards of combined, and today. factor homebuyers that storage And see is true a

Mark Strouse

you. was Thank helpful. very Okay, that

mentioned of five existing how think should agreements the for those over have the you waiting projects the customers coming we on signed partners or about those some year, have being signed more for touched of do kind of a you you out or waiting near-term? kind are projects those you evidence pipeline, of will be Lastly, grid this services think strong are new and

Lynn Jurich

we we already success and delivering don’t is proof we cycle Massachusetts, have are appropriately and so slow California, show can in programs and capacity assets already our it municipalities. working pipeline. are where in utilities we good they working comment share Some is the for I product can in have that in you we participating and sale when in waiting the with and the that just aggregate points points that a think already We're data are

acquisition customer help and are their to because programs of competitive more good the we that’s as So households our it market want strategy us one be are feature have just so grids as of advantage in the those low us grid really services costs acquire other should on customers operators we will to and a to and consumers on number get to costs business is those relationships possible the put put as help impact affordable some of open there we many direct to operators is all to a we parallel which utility out markets way. that parallel to with and consumers these programs the not two to batteries relying strategies and on electricity solar for system in these working strategy utilities in go also us possible as are to they and these parallel the going should but development should

Mark Strouse

very Okay much. helpful. you very Thank

Lynn Jurich

Thank you

Operator

of America. Please next line Your ask Eric of Bank from your question question. from the comes Lee

Eric Lee

Can taking for question. good Hey afternoon. the me? you hear Thanks

Lynn Jurich

Yes.

Eric Lee

Perfect.

with for drivers above, that drivers ‘XX terms supporting your for you guidance discuss of discuss to relative what at is ‘XX just So can in just to see? for or you NPV

Lynn Jurich

are is as us think of are that I couple a one bit a as we by cost efficiencies Sure, going are whereas little to at but takes to storage the would is costs so to actually efficiencies going on the it insulation year cost if if the improvements and of do there the to the percentage see the flat that side stack $X.XX bring going to increasing value you battery that $X.XX is so Sunrun be we and of somewhat for where so cost that puts is built to be improved other so that’s NPV last cost a moderate $X.XX whereas batteries need that to for able you to overall you well about stable not example stack project is going look the becoming So you to year. have what overcome becoming plan which with was look the it cost

Eric Lee

it. Got

harbor the NPV you how ‘XX reduction as as ITC into the trajectory you that With sustained highlighted safe beyond? for do efforts well cost think about long-term strategy a and implemented

Ed Fenster

in NPV Let in program that just keeping question the see credit the rephrase was mind the also long the you in term safe me do was tax what the is changes trend and question harbor

Eric Lee

that’s well given cost as you Yes the correct efforts reduction highlighted. as

Lynn Jurich

Yes.

don’t we we say believe step flat entire we the would I So the can sustain down. dollar through

is that in deck also there is neutrality maintain need So would about is and about in that cost a doable. by our to that do raise to incredibly slide us on supports year that we so X% that improve we investor pricing by each think there shows what X% to year every

the value envision come from the to necessarily pay the doesn’t of it more willing that so solar, even also sources and services there money consumers envisions is the only are programs type can that grid add fact for that and that battery additional battery. to – So

So we no more company. any be to than I do be we is the able think to our the believe megawatts safe reason There and to continue on path advantage. that. other aside, are have putting absorb At we scale to able right competitive wouldn’t we well have why declines those that harbored, now,

uniquely. to capture should able margin be that a So we are that

Eric Lee

expectations you And how ‘XX and think Got of it. Appreciate that? about and levels cash for beyond it. use lastly, around maybe cash-in

Lynn Jurich

– generating the are cash. we Well,

mean, I of of as your back buying stock use question? such the that cash dividend, in is So

Eric Lee

million perspective, for that cash-ins capital for $XXX levels just and $XXX allocation the those given levels year expectations for ‘XX that from you plus Yes, I repeatable so? this talked just or about for beyond. million like and know

Ed Fenster

Great.

was I announced on the mention QX we programs stock QX. call the So through might buyback which midway

share. allocation During our Obviously, term-outs in QX, our market the opportunities believe dynamic price consider is strategy capital over time price and $XX.XX the stock a at capital $X we own stock an repurchase did in around million I we markets. as around of average

We well. will effort allocate even that little sheet are a we into cash to comfortable probably continuing as and to balance more always grow

constantly QX. difficult perform we was precise in Other little as as guidance. do a actually it it’s get evidenced evident bit that, consider obviously So than we share to did the buyback – by

Eric Lee

Thank you.

Lynn Jurich

you. Thank

Operator

question. Moses from from Your ask next of question comes your Please the line Sutton Barclays.

Moses Sutton

continue? Good afternoon. The you project decline, the in and value why to relates decline contracted associated mix, is in creation increasing would so deployments and costs noted if mix that it this geographic not perhaps Texas

Lynn Jurich

you have coming, and mix that won’t mix coming. product the based have it geographic went quarter visibility continue anomalies what percentages just can the into It’s because good And pretty and on are service mix. is where both we where product

confidence So that, not have good we will that persist.

Moses Sutton

associated And $XX.X Got equity with but many missed I sure exact megawatts the million it. harbor may investment specifically spend? it, safe that are how not have

Bob Komin

megawatts. XXX

Moses Sutton

it. Got Thanks.

Lynn Jurich

Thanks.

Operator

next line of Joseph Your JMP from Securities. comes the from question Osha

now line Your is open.

Hilary Cauley

coming demand context fire areas to those first and be if is Hi, going touch provide I questions. for this of markets? from and if a other rate these wanted doubling kind it’s Thanks on prone that for taking in more on in going is Joe. or actually little are for Hilary those to just if of for some of of the Brightbox this more we could our see to attach where you

Lynn Jurich

you. Thank

that we which it, We of on particularly being California so are is the number not rate, statement would considerable make happy just that Yes, want will power are attachment installations to do through shut about the the big want that said were very driver, of the have areas have I to lived be the people off, people. just excited believe clarify aggregate we number we we that. sure clear who talk double about a to it. to going so

that, attachment some to rate this QX in you Just the stable about look was in you Bay to support our mid it’s up at quarter Area, XXs. the XX% give behind and XX% jumped and if about was

we even seeing and So in moving where we others Southern just California really fast are interest places battery. have it’s towards And are the you above XX%.

solar So more we not people this on battery. no for it’s more majority reason of really product the home is once to plus our sales appropriate types, over see California the force the why educate as switch should can

that’s what’s market. by supporting the market momentum seen it, so really has just And

Hilary Cauley

XXX And great. the on you. we timeline for then what’s stores, partnership? retail already if expanding that then of that partner kind in Thank could just Okay, and with you that the those see kind additional of out further expansion

Lynn Jurich

you. retail. Thank excited we big are Yes, box about

call execute believe We Depot it up we being opportunity our expand the able with terms the partnership And on the channel. another are to to really of that that XX% bringing Costco of retailer about is stores with have and as past. reason both talked have in we underscores in we the into this Home differentiation

but to through we real give are fact that any that, testament and its us. plans channel a didn’t differentiated is this So staffing working still commentary for the for

Operator

from your from Your next question line Philip ask Shen the of Please ROTH Capital comes question. Partners.

Philip Shen

Hey, guys. the Thanks questions. for

us In question, you given item opportunity, flat? putting I or lower, to update so costs follow-up that other learning expect with we terms and have lower expansion the get we costs channel marketing are things do marketing is Comcast how the a channel, your the XXXX much might like and remain can you able stubbornly sales marketing but big with talk of know should money, we to to in on as you sales be guys think quantify you can partners, an and costs your to that you just high. box to line last that sales expect remained and sales how When

Lynn Jurich

always we have $X the I costs of customer NPV. again value say I and customer value said and watt a acquisition lifetime that support Well, over – our delivering will are customer

are that’s rate. $X,XXX value we discount of almost a per So delivering and X% customer at

be that X% market $XX,XXX. to to were we if So, over market today would at

spend would those that acquire rationale long-term have a I we customers value. more value. would go to type order another business to of of $XX,XXX $X in So, deliver argue

that’s is an argue could that remember to out would So the cost fact value maybe more. not not is it’s want important just in dimension acquisition to of and you with the spend even whack you

of really on to pull sales more it’s of that it be a wrong a whether pull really going marketing hunter are is the push, – channels customers reliant type sales more customer, are believe mentality, that people. to able In coming and terms are spend versus on we to get we companies people am more developing but we us where our they lot that to the why the more have have of I versus customers to which actually don’t relying stay the going have of

be an aware to important So dimension that’s of.

with retailers, program. web pretty look acquire So customers. sophisticated we that we a big our efforts some relationships when have of from properties We marketing at have lots box these there, digital of we the leads own

to services are up We we so on signing grid are behalf. have programs utilities going our market

installed customer referrals of. We have to the build off largest base

reliant not for All subject of these things to positioning we people. advantages that costs to the drive be to on down believe only competitive continue sales and us are give be acquisitions us to able

Philip Shen

Lynn. Thanks, Okay.

you don’t of the could We channel speak provide the are direct to up, to business, actively XXXX you specifically direction it you dealer in perhaps volume that but And are dealer in also flat ‘XX trend you I guys meaningfully more to expect dealer business, your your that then and in know wooing dealers, a did trend? your hearing expect you breakout be dealer that how in down? it how down? Thanks. do megawatts flat, do year-over-year, volume was or up Again, between

Lynn Jurich

Sure.

our expect in said above where business I to XX%. script that So this direct we grow our it’s salespeople

So for how XX% of that is faster we will and have a group none think we expect. and unique diversification that our will to we partners us growth we the business, it nice can very well of be channel serve growing the population business will but we of still serve than direct can in that orders channel there be more faster nice than a important good that than so but so grow which is deliver partner that partner will the us that

Operator

Brothers. Please question next question. of your Campbell the ask from Jeffrey Your from comes line Tuohy

Jeffrey Campbell

the items proprietary Good just surround clarify afternoon up streamlining permit to been I the the system to the all grid that speeding or the know want primarily does and the this have both? installing you thanks attachment first solar or the for finish around discussion system information call the I to to providing

Lynn Jurich

that. is typically It

of amounts change of huge and it all it example us not serves will sign we solar are in it but the been practices pretty right instant a that and promises effort are climate to a gave has one do is both this left to in the what cut portal more instant huge be an on so I plan was developed it up focus we to out and of the that work that’s want permit soft multiyear be now building excited that an climate XX will our utility have likely the off [indiscernible] out able Vegas don’t up for best time constituents it building efficient step it undeniable with we and that and go with low. hey game this that that’s program of we more install why really the there in development XX were to that be in for and this about the excited days customer a and the and the and sign things So is company mostly process Las so cut this because believe so piloting to it that connection online is then permit it online why can I am summer on is the people program on will is prospects portal political about has and cities end first the app instant to is with has the you that I your right to this to a for and most California on locations side we going the practices costs and say come you will to now best building for with and will it this efficient get be can the Asia

Jeffrey Campbell

discuss? is it quantify for of you that to can are what talking And we too a early if try little is about to maybe savings there kind Thanks that. something

Lynn Jurich

Yes absolutely.

look not customer is their may Europe today way look if hardware out what just the there the process at difference So same per if have all between get we that U.S. same $X,XXX given and you as the really at that so there of labor cost easier probably that is the bogey $X,XXX so cost you we be but difference is the of possible. would bogey that’s

Jeffrey Campbell

My significant. second question… so Okay that’s

Lynn Jurich

again to the step And you than so down ITC more are going that. put

Jeffrey Campbell

falls even off So this we do ITC of the compensating do but what – talking are improving? what not we if huge about be maybe the could a part only

Lynn Jurich

You got it.

Jeffrey Campbell

ask way sell it since was there, to I it? think is or wondering is generating are are be suppliers right of if that it question there the any better battery that margins I competitive so market currently might not like the a fair about a want saturated batteries seems California it actually all the geographies to trying to is are assume not to

Lynn Jurich

are so if durable. look affordable and just they at you not not still generator product look still people just even don’t X months people that solar in the increase batteries some that California a market research, a sales for mean solar better, to more more a have is the about solar superior Area center know we saturated Bay battery and think If many done place in don’t we just at in I of in are generator. available realize anyway. the is even and

really them we these really and industry as grow you can other certainly really to mean, believe in like creating the it, So so where still but we really of for we don’t margin. trying of trying density a early batteries price markets we deployments, we the communities that in to well, in of are believe in we density value are I are to the that of the are are big the really, a cycle believe grid. think we I real we lot than in aggregate add

also half and compelled we the to to way batteries. to going only are are we is decarbonize the a decentralized capitalist piece energy have we energy. really but solar by huge are and our need vision And is So a both be to decarbonize

in that. So believers we are

Ed Fenster

alone share XX,XXX couple believe systems. of in wildfire numbers And between like million probably state customers just XX,XXX out, last there the battery somewhere force of to of something year involved In underscore were and I a are risk. X California, installed one to that, black because

So, got lot ground have a of we to cover.

Jeffrey Campbell

in they their even and into essence, close a may that’s am to even more Well, the point VPPs your to all able your so I are don’t them to to trying and in going to thing build be as great move utilities are so trying the they that is think capital own model? to that’s Right. fan one installations I that neighborhoods make about am and going battery of protect forms, I load

Lynn Jurich

We odds you. if all plenty to another. plan electrify is together us is it room of work certainly. at need Thank with Thank the there And of for to one and be not you. to

Jeffrey Campbell

harbor bulk If fourth I energy or could fourth of in kind was of solar about you ITC fourth safe as ‘XX harbor ‘XX? that ask as quarter said because of just quarter ‘XX one this so it fourth you capture see of repeat quarter the and last through I value year, quick revs one the one, because sounds the you something is this could maybe remaining the of that wondering quarter grab here, continue but a to kind done as systems have potentially ‘XX do more talking expect we seasonal then don’t itself like been and the safe jumped

Lynn Jurich

This you sales up? are about jumping cash system just the talking – is

Jeffrey Campbell

systems jump to the cash up grab trying in just the Yes, ITC?

Lynn Jurich

I see get don’t safe really harbored new we already educating probably that I a think that think at year. year, sophisticated you we still in because people to, question was of some will this think the they also will I have that possibly, have that, but past more

So I at as probably would see a the will year. little end suspect the significant, but that uptick you quite it be there may not of

Jeffrey Campbell

it. Appreciate much. very you Thank

Lynn Jurich

Thank you.

Ed Fenster

Thank you.

Operator

from ask the from comes Oppenheimer. of question next Please question. Your line Rusch Colin your

Colin Rusch

here of like? economics, an a why simple and opportunity aren’t so Thanks is to growth would ordinate is availability This as consider an guys. you component there there but you much, major And looks is as question, that, what faster? growing maybe plenty clearly then level option a capital, of the given inorganic

Lynn Jurich

added point again I customers competitors many Well, would as combined. as we the two XXXX in next out,

and and about business of is business we the the I in about scale we care we quality we where a here – a are assets, are our operational in care think. significant So really

trying consultative really and that do of that high-quality build time matter expectations sale. really we to the are out show prove We matters, believe will on

And think where rate And so the we we have comes out. balanced those. the run we for long growth see and

to anybody challenge close happen. aggregate year. that, to we that would would wouldn’t of in going we get the the value add I to customer amount are that imagine So

I lot a value. So we are think of adding

comment that In are terms strategic any the look of opportunities never at opportunities of but certainly nature. that always we inorganic on anything M&A question, would available, or we

Colin Rusch

ancillary the services XXXX, assets market set into in how many somewhere Okay. geographies done then And Massachusetts? feel network in of at what as look your XXXX like you you battery bid growing you in you have

Lynn Jurich

Yes, that makes with the across way that So sort what of okay, percentage we grid think cover just we hopefully a like is if look the about says country, of services plan have can we programs? that you sense. population the

to X participate of over in, so And to the the some states of programs. period, sort that we we be think we that services majority in operate that next grid able the X-year will we believe

setting So by the that largest reap we up of fleet. are it all the benefit solar there order out now to having battery in right

Colin Rusch

will take Thanks Okay. offline. rest I the so much, guys.

Operator

question. is ask from your Please question next Your Sophie Karp KeyBanc. from

Sophie Karp

Hi, thank questions. my you taking for

and ask that are everything we on to where a in cushion global chain that? against is and in, the wanted Thank there that and how see Just China will in some trade we supply disruption you from, a the panels with you come I much significant guess, chain seeing question you. chance do considering supply have

Ed Fenster

question. Sure, Sophie. Good

First underscore that we deep panels both our and harbor have would inverters. off, to due I inventory program, safe in

protected we there. just well exceptionally So are

point, see solar at we areas to We haven’t either. steps at We price there continue the be areas one other expect we potential supply minimize suspicion suggest no guidance is see the of it were to potential manufacturing in our currently CEC we obviously increases have from extent, might Probably, relatively we to the any are also taking which any to battery supply Certainly, are detected to is transmission arise, watch chain would impact current this Internally, haven’t supply capacity. be with disruption. And the closely high precede tracking operating carefully. demand consumer to although information we batteries risk. challenge our disruption. most any to consistent

Sophie Karp

you. Thank

Lynn Jurich

Okay.

I will to again and here. next talk everybody signoff you think we quarter. Thanks

Operator

Ladies and you conference. gentlemen, your a have this concludes day. Thank wonderful and today’s for participation

all disconnect. You may