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Sunrun (RUN)

Participants
Patrick Jobin Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Ed Fenster Co-Founder and Executive Chairman
Tom VonReichbauer Chief Financial Officer
Mark Strouse JPMorgan
Julien Dumoulin-Smith Bank of America
Brian Lee Goldman Sachs
Philip Shen ROTH Capital Partners
Colin Rusch Oppenheimer
Jeffrey Campbell Tuohy Brothers
Moses Sutton Barclays
Marshall Carver Heikkinen Energy Advisors
Call transcript
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Operator

Hello, and welcome to the Sunrun Second Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Patrick Jobin. Please go ahead, Patrick.

Patrick Jobin

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

and note call remarks forward-looking risks, may to expressed Vivint by please on will statements implied uncertainties begin, Vivint or differ Sunrun, conference of materially could this contain Solar results and we assumptions that involve statements. cause we certain make related Solar that Before that acquisition actual substantial to the such and/or those constitute from regarding Sunrun’s and but than and and and intentions, business forward-looking other in statements. Vivint any facts timing and not the the operations, and plans, limited Sunrun of underlying historical of statements Solar Vivint the financial transaction, results benefits including, statements and objectives, of All our any transaction, Solar’s to, included foregoing the of financial potential their expectations closing and discussion, assumptions condition, of the impact

our the filings the with proxy be believe circumstances from made that factors the SEC, actual to made that these materially known made. in results our to Sunrun us, these results transaction actual statements we Please exhaustive with joint Solar’s statements those and Although for in connection differ to statement the projections risks including judgment with from reflect the currently factors occur a filings prospectus, refer statements. based other and will the and after any more to and of SEC events discussion that may forward-looking cause adversely anticipated differ on may are best Vivint and or reflect

Room Washington, available retrieval SEC with and services document SEC will www.sec.com. Solar’s maintained Vivint any SEC or Vivint by D.C. website be at Sunrun the commercial public Sunrun reports by to the You the of in may and Reference from the that in the also read Solar Public and at are the filed a filed copy filings information

these materially may us, known SEC filings and to these Sunrun based Although Please and events statement made the for anticipated to on made exhaustive and judgment with statements. statements connection prospectus, currently after results we with in statements in a believe those actual factors forward-looking will adversely reflect refer proxy to or discussion differ including may projections joint the are results Solar’s the reflect to from transaction occur made. other filings the any SEC, Vivint and of cause circumstances and more with that best that our differ factors our the that actual be from risks the

them. and revise that reports or of note or also be obligation today, are You may filed will read Washington, in or by and update made being any SEC statements these filed other Reference the at copy in to the Please any information D.C. disclaim a Public Sunrun Vivint Room we as Solar

Okay.

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

Lynn Jurich

Thanks, Patrick.

against progress and second strategic added XX,XXX we to megawatts of our now quarter, base compared XX XXX,XXX results quarter customer our deployment. over XX%, second the Sunrun’s year, customers In We share to well pleased strong. priorities. are representing We grew last

back and increased with from affordable than at customers revenue to our as for Consumer we clean, in to outages year. in shareholders. Ongoing exceeded the consumers’ an more in sequential vehicles deliver on solar and and and our combined the plant performance energy with COVID, storms virtual Our time and value are margins operating lead of can with value wildfires, resilient enhanced half electric power and in net track These home. our the ever more storage batteries customer expectations of at of unlock improvements growth increased technological create is spent we strong tailwinds, improvements onset needs efficiency the affordably and power and our improvements stronger in customer and reach leading to combined will interest proposition, energy are replace opportunities.

we Over the operating accelerated last our few corporate months, have effectiveness. and metabolism

Here are few a examples.

up Our customer by same have has in result to cost and increased productivity and we labor cycle approximately time productivity the customer’s install These installation year. changes signature last an period experience. improved sales XX%, from improved to compared reduced is XX%

sales $X,XXX customer result, Order certain We term. in improvements installation we of enduring from And restricted lower these not due access customer March volumes to per expect levels. early lower did have interest volumes cost decline, continue initiatives. and a channels to near to April as

deployments channel, gradually to and Order into into with channel safely utilize successfully a increase expect team returning selling, direct-to-home and sales of in the significant levels, we QX. our our several and virtual pre-COVID retail execute partners robust. that volumes now sequential QX to reentering continues We’re are and remains the

over growth. XX% expect we QX, sequential For

$XXX Our strategy in transitions sources, use for energy to company clean on only the world year Consumer over all U.S. invest of utilities while favor and billion out reliable surveys power. the more solar renewable nine solar billion electrification. people energy, $XXX our of show the as on is U.S. per XX expanding households of be in transition and have new spend home infrastructure. made per nearly and electricity Today, X% energy to than powered more year go-to towards yet the even

which of customers. industry our Vivint we cost the last increase our the provide will have to base synergies consumer-led the reached our In reach, to accelerate lead expanded and transition Over capabilities to months, electrification. customer acquire we few expand agreement July, and Solar, an

awards million have increases awarded with we where costs, company, can customer virtual advanced of plants. will a This programs form customer in solar we pricing, customers leading and globally. This incremental services the services lower penetration totaling with a power further we to for grid of allowing They our regions million now in opportunities, owner lower XX present already contracts quarter, recurring $XX together or These be over revenue, As combined acquisition opportunity. and flywheel have over differentiating batteries revenue X.X assets offering. in while our and number solar stages. even deeper these In customer are those a enable network coupled programs. grid doubled

now developed in proof-of-concept our We XX% of have programs geographies.

choice This Con X Southern that quarter, of our was of team in incredibly launching provide and California the largest one programs a power three & in Edison, for Rockland, and busy million Area homes. California utilities with Orange subsidiary the Bay community nearly aggregators Ed; U.S.

to affiliated SK connected we’ve of development to conduct consumer venture and that The a electrification announced the the Group electrification venture will a and companies. to new accelerate the system. renewables, we energy and addition, distributed the the accelerate of activities research formed homes and home In with of transition adoption

Before team I the to is all doing. of work I over turn want it say Ed, our am I to proud how

execution, but building on for Sunrun near-term to forward. focused industry We’re also strategy lead the the

Our team’s ability to Ed. but to benefits, drive to and our only deliver Over change country. you, not customers also will shareholders,

Ed Fenster

I’ll Lynn. the our Thanks, market our asset runway. discuss recap Today, financing performance capital for assets, and our

financing tailwinds We’re now seeing markets. in significant

cash supporting call is of of flows through positive has in at customers economic apparent one. The been strong, last decline. financing or to increasingly cash and which have payment at trend capital we recurring remained with project raise these high-quality proven low-risk, Investors a our flows customer long-term, trends with offer stable below always is strength on as contracted environments The Senior continues fund in last costs all-time debt, appreciate be especially continued growth bedrock comments and pricing asset nonrecourse highlighted the class. lows. continued X%, value particular, quarter, like capital Our performance flows Consistent currently to the compelling below cycles. we cash our my proposition. costs this

than July COVID. of and PPA not as is customers before XX, due pricing savings charge of days proposition. the in power customer jurisdictions, increases. a total are of electricity XX in open We the solar less mail. the top XXX at utility as receivables This lower tiering XX, delinquencies electricity our to As are the the electricity and our XX, from use of as onset enhances value is payment to surprising the many accounts and lease and further This each for home grows home than incumbent of waterfall basket, percent now

that to continue project the us a in activities. maintain long runway ability finance affords to We market be capital selective

weeks, continued raise onset of four we’ve at to tax those to last the similar before in saw equity terms COVID. Just the we

We that evaluating. also project have finance additional a long pipeline we opportunities of are

company’s and of tax lease closed considering As the fund funds, to XXXX. financings what equity megawatts the of second end of approximately August of provide through prearranged was the deployed XXX projects capital committed beyond only quarter debt XX,

turn now to for additional sheets Tom. We installations. also that, to have project call executed And fund with I’ll capital finance over term the

Tom VonReichbauer

Thanks, Ed.

the of the the outlook. Looking results and team during early and quarter’s of executed our spite restrictions faced well. we second COVID, powered Sunrun the through now to In stages

volumes we to QX expectations, improvements exceeded activities see levels. Our strong initial back sequential pre-COVID to sales continue with and

retail We QX less solar of offsetting quarter, advantageous both in also deployed during now improving business We stores cost the approximately NPV our and of QX, efforts streamline In operational lower approximately impact COVID, operations, responded challenge we with customer to restrictions XX,XXX creation local of was and approximately the our megawatts from customers. have customer. Project accelerated to of presented and was were second experience. permitting The capacity XX quarter cost costs notably quarter us XX second result customer, XX% contracts. growing a year-over-year, during to the for total provide in declined on value efforts. the our and monthly efficiency first second per the $X,XXX we led as with Deployments the a clean the approximately electricity most quarter in under of our them most absorption, authorities. volumes customers onset at per gains XX-year paying recurring business customer XXX,XXX or in them $XX,XXX on per $XX,XXX basis from to

opportunities of in of indicators and able staffing a to deliberately were lifted. level presence improving saw restrictions we be to April, maintained to in-market measured respond we sales as As

higher in costs increases Lynn of XXXX. that for and a volume and earlier sales of operational in have be month optimistic per we pressuring future increases about period, further second The which mentioned in volumes improvements customer. NPV each sequential in experienced QX in-period continued QX, sales of installed the Additionally, will combination that half sequential us resulted marketing

sequentially net QX NPV, values, customer to than or $X,XXX with and per to customer. We levels of improve to QX more see continue in expect QX,

we and as discussed With structure the operational expect company. efficiency with an improved XXXX values to earlier, cost higher customer independent net enter improvements, an

also Solar differentiation additional society will value additional the and competitive cost at shareholders creating expect customers, the for provide leverage entity of and with We combined acquisition Vivint large.

partnership partners cash generally maintenance in point of flows flip $XX were structures, distributions our cost net project receive flows quarter, Turning equity competitive sheet. the to funds net time. partner earning active fund and a from reflecting end on assets a the towards earning measure to during from Gross with equity second now to expect customers expenses discounted is X% quarter, any partners increase and cash balance first million of at to partnership at more have over and second mix unlevered weighted And earning tax the of is fund gross several WACC. that our and more at billion assets capital. time, assets of the a an We the of financing the Gross heavily quarter. operating $X.X we allocates

were year. project in growth of As debt. but new less second had the an also $XX all We value. billion in lower net assets, gross $XXX increased by combination nonrecourse ended is shareholder million to at looking reflecting prior $X.X of earning corresponding a way earning gross the assets million the basis. flat of project the Despite earning compared assets level end cash, quarter, the with first net a second our increase million and cost and performance combination over volumes less year-over-year generating the the reflecting we assets result, proceeds but the of decline to quarter. believe in total more the on assets Net of financings. earning QX cash We cash absorption million $XXX $XX challenges, evaluate quarter the a and QX provides and earning less prior Net from and a from quarter, at assets earning

increasing balance earning open while line our the We our year, also cash strong net please. expect questions, that, for With to maintain let’s assets. this

Operator

[Operator coming Our today first Mark JPMorgan. Instructions] is from question from Strouse

live. now is line Your

Mark Strouse

XQ, declines very detail you I Thank our Curious up questions. afternoon. on the in taking Thank a year-over-year you could household, XX%, over growth? that’s Good thing? some at XQ in Hi. could Do much for the NPV unlevered to look think XQ. pretty more of you still volumes we for back happens is per though, you that the interesting. suggest that when we that do in think Question see XQ? Or is, year-over-year when XXXX get

Tom VonReichbauer

place that around growth permanent And in bit as into feel part Right some the retail we also the feel around going are now, market But giving still restrictions of I in of QX. well navigate place in XX% a slowness think, sequential the into real we’re QX, confidence is positioned in margins out and QX, the clarity very good net about, we little locations. of into XXXX. to but we continue restrictions, comfortable that some is customer the

Mark Strouse

good. Sounds

one And you. Thank Okay. then just follow-up.

Any chain announced? since of qualitative your you Just acquisition any your partners, great. you’ve can of, Vivint value would your provide kind color of received dealer any partners, was entire be the financing feedback that from

Lynn Jurich

has are excited brand of in product for channel what improved larger recognition The in very and can They’re, Yes. strong. a as bring particular, response well. partners, offerings pricing about scale been the terms and customers

it’s what kind underscoring there customer, think such leads a at look penetration when of that we’ve the burden of It’s kind just we’ve data of Vivint industry small. I past, just isn’t how – we even just about industry that customers our it’s up noted still. of touched awareness And lot our many fragmented at a end a tides really X%. as is rising or the level. of becoming again, very needs in internal And that

that say the positive, quite it’s would response. been I So

Mark Strouse

Great.

That’s it us. Okay. you. Thank for

Lynn Jurich

Thank you.

Operator

Thank you.

Bank today next Julien question America. of is Our from coming Dumoulin-Smith from

line live. Your is now

Julien Dumoulin-Smith

time. Good for the you afternoon, everyone. Thank

Just the growth to But you put that me clarify consolidated here think this integration it do metrics, So talk on the customers, acquisition. of How et about about way. in process right? let in terms cetera.

your the the quarter, forma that expectations pro previous Sunrun sort thought Vivint but outlook? especially next compounding years, are not initial you separately, in through trending about the against for of If and expectations just how combined

Lynn Jurich

One, I have to closed has yet. emphasize just not Sure. the again, transaction

companies separate So as two you entities, we’re very much as the running expect. might

I we just – believe the strong example think little of there underscore is, And give growth that. there revenue – part that really I are that dissynergies. or don’t how to of any overlap is

there reason think to believe I that. so – no

a sort a opportunities the each Vivint model, discussed – Just batteries. couple really have. value. two together, we when put levels that the rates generate still growth the I of unlocks more there’s penetration they’ve each – but that think had more been historical sales has you has and We’ve can companies that of – And they fill There’s with can that, in been each first one not Sunrun the leader same discussed. we’ve is complementary that

And sold the sales so value that’s creator, really increase force. a is battery immediate to of through mix incremental their

effect services create of share a locally. flywheel order in these The are other sort really grid from differentiation of which take the we’re thing – excited we believe do emergence about a are contracts, standpoint to

some generating provide to we’re scale. more then savings an which customer much the who you pass the contracts. gives where customer. along to new to grid megawatts, batteries new just around, the growth, because And where model around And services contract your to company particularly density, target you’re of sales contracts. you some more there’s has allows – that valuable quite acquisition increased grid consumers, more which in power bigger direct-to-home capacity, and look services-type then that utility then supportive can not plant the value operating the you the really at directly the more even at when have these you per makes Vivint to the of target it’s us a areas grid brings, edge, the us it force but the virtual And programs, So with the there’s unlocks want some the

Julien Dumoulin-Smith

obviously, your thinking the here then Right. how the year quarter. Not too? the recovery And I dynamics can, given briefly talk expectations And earnings in mean, the on you here and through the seasonality year-end, cash earnings about cash also your But here can talk of if over core you here? just are gross about through you flattish – that growing just dynamics. contracted sharp course somewhat obviously, asset? base there’s

Tom VonReichbauer

Yes.

funds no led So area increase specific the noted but QX, a earning additional as project in that in smaller there. in you assets, to gross out

And so you flow NEA. that see through fully on

I move forward, have funds we think deploy. that continue as a we’ll we to range of

assets grow we and over earning balance headline to think intend is I the that the of net cash the year here here. maintain

And positioned in that so we regard. feel well

Julien Dumoulin-Smith

Okay.

cash? to ready not Just further on commit

Tom VonReichbauer

No.

Julien Dumoulin-Smith

Fair right. Thanks All Okay. guys. enough.

Lynn Jurich

Thank you.

Operator

Thank you.

Michael from today question Suisse. from Credit coming Weinstein next Our is

now live. is line Your

Michael Weinstein

that Hi, bit Specifically, are demand what quarter? seeing or kinds comeback – assumptions that you where at virus little in is recede a the you of kind are half the way? third states where Are in those place you’re will assumptions in you rebound? the second the guess, of demand guys. in in lockdown any starting Could guys upend any making or looking things you at talk particular second about the to least only, what I

Lynn Jurich

question. Good Yes.

couple we I we is March, happened clarified with things second jurisdictions an different a a different what we’ve of are think essential even are versus if wave. – service. what there’s that in One

cycle. practices So to the instituted pivoted We’ve team the through sales We’ve we’ve safely. install been all that digitally.

and fully ramped we right to which this have we’re the be operating were installing already still So were stores back all our stronger box from would not perform of in. some not that there were some us quickly. At continue enable to time even anywhere. big restricted We to even if additional get now, that of restriction. point retail force in able made took they those But to done to improvements initiatives, put still we’ve

the operating. have on reason the a one for reason interest a will – if – to operating calls us the But have we problem is, really the whole a make backup was the the the three, has worked – restrictions comps. we’ve the really customer improvements So to problem. restrictions of of in conviction which that And point is, operating endure. we forced the of lot just backlog. one, putting plans, little we’ve was bit touched year-over-year not is have even the drag faster earlier it Two, that those through the on this situation, of The never slowdown benefits

yes, So from the units have and – it’s and year-over-year costs as we is make growth the we more this lower less margin are doesn’t usual. put were rate return as really quarter because look to to exit this we us, going to the able this quarter right to But a changes around. fixed benefit spread really business in

Michael Weinstein

the a does And you. in in in that follow-up, effect or the is in especially looking hearing are that as and noticeable storage second quarter, the blackouts and about now right the the living battery England. Northeast how storage on that any third these Have Got outages have adoption, adoption for – the New and all we’re storms specifically? half battery through,

Lynn Jurich

the There’s in things half are increase of that Yes, two back absolutely. storage that adoption. happening the year should

point any shut we and The and the haven’t storm wildfire had first us yet. one pain is the that from consumer outages,

into that Northern season We’re just emerging California. in here

have there’s residents numbers, there’s year, New about X.X think million California, last didn’t that just power. power; you lost in X.X If Jersey million

solar solar in assets globally, Sunrun, and a and of again, we, we globally, So only combined the sort as largest owners XXX,XXX even where markets, those again, Vivint we’re, just penetrating about have of think customers. one

restrictions places think that, living, us just how terms will felt people are have in in of increase I real they if about considerably. where to you market the adoption even that available size think So

in system. is seeing for The price we are first on the battery that other time we really thing the happening quarters, improvements have

improvements the XX% customers So proposition to is we selling be battery on first And the just back the lower will price to – than some value to through of be our half. we’re that stronger. we’re make of going half for passing that year this again,

the more see a start that to So third making customers solution. services the solar utilities behalf, – adoption. those having traction, we’re have we technologically get as factors give two marketing on we’ll that affordable really programs us aware these is ready, confidence and our increased grid is batteries Then resilient,

to optimistic. make quite those So combine us all

Michael Weinstein

Thanks a Lynn. lot,

Operator

Thanks.

Goldman question Brian today is next Our coming Lee from Sachs. from

Your line now live. is

Brian Lee

Lynn, here. million in the of might Maybe, opportunity. Thanks for services some XX you to the grid revenue a the incremental part $XX at any your taking contracts in I advanced follow-up sense of can million? you is mentioned, of $XX details also could just And what the I during the prepared you how pipeline, more answer revenue? you just that contracts and worth missed a that versus have negotiations opportunity questions. over Or give of And then of on remarks Is But that think, the annual committed course aggregate? you mentioned gave. us stage? then sense have the a many pipeline be revenue

Lynn Jurich

Sure.

million because not is mechanism is $XX contract. the they to pay – have at markets a do battery the for we designed that the So necessarily strategy over how up value of the And these can adds. where have The the markets. life to open been you really our have

no for you using, mechanism paid amount is the there’s just California, for load me to reducing the but the for let get In into power grid. get back pushing example. actually So example, we one small paid home of give extra

the change programs doing traditional CapEx. these from So to going that is trying and really across and benefit assets plants they what pilot prove can find the that virtual most areas replace rules we’re power would helping work these the country, and

or about So virtual made of development, test of today, XX% geographies convinced term, our we’ve market the better to power start to these sort pilot plants. for a and lack of

able about to being current us XX% of geography. pipeline address our Our would have

develop we much per an our early really grid view So in affirm services is the that out $X,XXX-ish people contracts, programs incremental still to that again, these caution they’re And still. And market. early early add very pilots by negotiations proven can it’s that these affirmed want customer. very the but do

be revenue item not line but be huge And to so in meaningful, XXXX. going it’ll a it’s

Brian Lee

you on then a Okay. appreciate the I as XXXX specifically I and for seems more now. markets. runway. given availability, posturing right chatter And bit usual concern maybe tax just speak color. be can market? a maybe to how Ed enough. question maybe financing are the here equity for bit – your the on update There But a the Fair second about banks on just appreciate

Just wondering to if that you some needed of what can and confidence particular to from group? visibility then the have speak for that year financing partner or you next secure sort funding Thanks.

Ed Fenster

Sure.

So we have continue to feel equity ongoing the committed we comfortable with lengthen the it. discussions pipeline, and we the both to tax that have capital that

has It’s the market Our capital a and pipeline we’re transact. a is earnings it. announced there’s committed think, year. for earnings. find might accrue reported frankly, obviously banks in it And risk to that do same us brings a easy of smooth is our next much more – relatively it massive if than our little I And to Residential into business. actually Vivint It benefit. their the leader. tightness, flow profile diversity use utility-scale projects counter-parties the

continue I in XXXX. comfortable to tax in So both certainly – equity, be

Brian Lee

markets trying follow-on. election be and election, equity tax outcomes, a as could dependent to crystal you thoughts are implications the but think ball around, maybe just your for And not availability? Okay. into kind look of for the do get you Any meaningful your on that quick there to

Ed Fenster

federal of so there paths an are number increasing terms outcome obviously, Well, in currently. mean, paths – I of winning

new of tax for a a depreciation which come are it as corporate does. industry could Senate, big number President, new go much actually up, as That large So with ITC a extension. paths a like income an ours, there relief could to has an which rates benefit are a package,

lost watt the corporate about project value. reduced, You may tax in rate a recall we when $X.XX was

to we our also prefer the the the corporate taxes again, the depth of in tax income market, see higher and depth in So other the rates. whether of increase more comfortable with feel not rates or finance would pay help we that market. an we Higher companies might corporate ability actually But tax business that suggest would XXXX.

Brian Lee

so it. right. I Thanks much. All appreciate

Operator

Next question Philip ROTH Capital from is Shen Partners. coming from

now is Your line live.

Philip Shen

Thanks for the questions.

a on is follow-up question First storage.

Sorry was QX this, QX? what to missed be wondering for rate QX? to if able then might if and be but And do I it you storage share was I what how attach in – expect you your

Lynn Jurich

we’re highly – The variable improvement – seeing Sure. based as on know. geography, incremental strong on it’s you

then X%. Hawaii, some in markets at California of are the XXX% the high And it’s in other is percentage. So XXs

based it’s it’s provided geo, incrementally don’t disclosures business. we really previously, overarching So that run the not on giving by some we but number, especially that’s geo of we’re we given the – not we’ve – improving, just how manage an

product is. to in this more faster which the outages, would the other grow to than the for that happen option think I people half it continues coming feel a acceleration we’re reasons in certainly, than solar-only pain So that back will attach with listed, expect as It I these happened the year. is well But out it’s lower-priced as from much growing. I steadily

Philip Shen

Lynn. Thanks, Great.

grid your solar been historically, integrating guys complementary. offering. to can But generators As have not a it that generator relates be your too into keen services, believe, on say you I some plus

in generators and adding generators, on as your to VPPs wanted you And benefits latest any base? just see customer an to option general? just so if your see in And view to what’s

Lynn Jurich

the home We’ll things – different with certainly, be pattern a lot can there’s cases, that’s market each specific use be of energy house. and area a there’s in each – the of of specific, the use one about can lot of or some constraints is the unique residential there’s the

of especially it plus last where – a are the multiple solar off-grid powers there can battery the The over the through battery proven solar they recharges for probably that’s work, and battery multiple really they that, you applications with cases, night. days. want sense, the outages make the as the battery, through the So we’ve of couple years, if solar reliable power. you generator, I minority think do work

for looking it’s of customer average for generator is why blackout, just So – unclear that’s sort from an necessary. relief a a temporary for

ship just structural for a the every power day. a a ability the and useful of It’s because The just asset. generator that that kicks advantage load asset It’s battery the when just use battery useful asset. grid out. is the useful versus a other just is of on It’s services

upfront a So technology business fact you can selling and system-wide, when to service solar our it with to look plus battery, the efficient addition more adopt that a it in model, much as in with the people it’s zero carbon addition with being free cost.

Philip Shen

And I then Great. if may. one Okay. more,

I this an of QX color NPV, harboring to In if be now that wondering QX, per wanted But out it comment if to can a view you We on per related terms about the do was your a you for watt. and in QX, QX and given which of saw also, And year? cost paths watts on NPV in $X,XXX think, customer see safe kind being watt extension I Where give talked you harbor and forth, relates to could in on per I it’s $X.XX you see $X-plus – bit bit that imagine more. could as QX. per inversely in QX? is then more in to turns your safe little the us many about, customer with it so I trend. a what

Tom VonReichbauer

Ed. ahead, Go

Ed Fenster

Tom. go, You

Tom VonReichbauer

and the the absorption. on cost again, of a QX continued lot that terms into QX sequential questions with into expecting So and what like, increases in volumes around cost XX% improved obviously, us looks the and helps then over QX increase

don’t about of on in measure, these because divide trying to is customer like terms more towards per-watt thing the deploy notice basis. you as back a into You’ll especially very shift batteries that a things unit that appropriate we’re talking reasonable really

we’ve of you’ll we absorption both see gains continuation talked there, and about. operational volumes efficiency So cost that higher cost and improvements

$X,XXX that right than does to You’re per watt. $X translate more

about. I that’s, a to thinking so framework And think, be good

Ed Fenster

And make as an safe we would approximately safe XXX-megawatt so this I first, to point, year. program harbor harbor, the executed into heading

for possibilities carefully different And to harbor a have we the in so at expect are number may regardless. triple-digit credit as safe XX% that of tracking, a megawatts before, exist mentioned extension. I Obviously, XXXX

suppliers our advantages a in these clear of regularly who’s capability large of market make an as purchaser leader, we we have to the late equipment extremely One the with as lot possible. the here, as of decisions industry and have

flexibility. also We sheet balance have

to be based make evolving So and at to we’ll decision able this probably of share time. end be to and closer more information, that year a a the time the later over going we’re will on

Philip Shen

on. I’ll you pass all. Thank it

Operator

coming from from Oppenheimer. Rusch is question Next Colin

live. Your line now is

Colin Rusch

so on help thinking much. you potentially to on geographies? market understand moving are the expanding into how new Thanks us passing about addressable guys you Can and savings cost customers,

Lynn Jurich

Yes.

with generate see, feel $X,XXX as we in the per confident we a different $X,XXX through, $X,XXX our mentioned, million think me, mean, opportunities I great question a of strategy we we if probably I us, that something per can mean of to $X that’s a going work customer, add to and have, different and available we that customer, of different NPV we’re generate for can excuse and geos. I see operating another, customer. up services that another of Vivint almost $XX synergy grid you at kind watt per improvement the number segments – there’s sort is

are opportunities the materials the cost other cost then all us. be battery we improvements and and improvements costs the available we’ll on on side. then – hardware have those And So to

again, homes there’s really value growth, distributed adopted and So be us. U.S. a delivering order solid – And bucket have of customers that growth, in see market the priority – share. the is of to that of at the look size to for really value potential good we to grow and customers when good we to X%

Colin Rusch

these especially conversion permanent actual from update in COVID? sales as us projects are could and throughout home like at Great. give the – And home with spending more sales, you an trends time in the into on folks

Lynn Jurich

what but productivity sales Yes. saved in it’s they’ve driving. at – really really look per we that rep, exciting It’s of and an seen, exciting hours we’ve the that uptake – an it’s per say majority simple, the XX XX% week If them to development. it’s attributed fact

– there’s so wholesale and you And puts see to the takes as process.

are XX% converting customers one, So salespeople our getting per – able – effective more week. in

of lower the a make virtual versus but really way are in of to through of You all a you the sale, conversion little those actually customers being sales bit install. for how the up really it from terms fulfilled many see in-home

of And in these initial per sticking. we the to $X,XXX savings could – they’re encouraged productivity size we indications this that customer really again, about So improvements. we’re are

Colin Rusch

much. so Thanks right. All

Operator

you. Thank

today Tuohy is question Campbell from coming next Our from Jeffrey Brothers.

Your line is now live.

Jeffrey Campbell

existing acquisition? there to VPP that Ron customer is else? essentially the this mean customer share? how to it that receives its something will devote margin Offering this new participate afternoon. gain and market understand. a that I’d aids any of from benefit VPP easy in Or lower the an Does like costs customer is to But better to Good new to understand in

Lynn Jurich

Yes.

lower more on of to sort at effect more – the VPP, And that up to definitely Our batteries compensated the contribute, provide. because and to your that as cost these kind really sense through in the of combined services get and makes think for savings them regulations – you, pass are the I more generate there’s it said, grid pass all markets to open of the the when to flywheel to some customer these look again, portion the change – the is can you opportunities plan of the way assets customer. that it’s We a the and virtual that really on value then benefit plant. certainly the the it’s a revenue, plus services to power the fair things of some bigger of there are acquisition

a costs to program calculation make just utilities, spend so with offset the that’s the We’ll that these revenue. acquisition we’ll of give by a tangible more there’s than customers give They’ll going e-mailing available. this just gained customer but discount, the example, California, opportunity program. CCAs to So And the it’s efficiencies – programs bases, it’s just then are us. a services grid the by marketing we’re and increased spend on in lower for by saying their sort really on

It’s the every all we So have batteries to there But, market-by-market rooms value in to our to much be be specific in need ambition very is and proposition-driven. going country, and need isn’t electrify again, a we formula. single home.

that And us so barrier that’s a to make cost strategy make more one. we’re more driving to competitive that not geographies, hard number in on lowering

Jeffrey Campbell

you’re the quickly regulatory power When onto be talking to may talking for we’re to said, grid of on what that about just you you credit which want were about kind not your change, helpful. thing back to catalysts where what you was for and very you earlier putting that talking getting that you’re And just paid looks follow-up about? that. Is

Lynn Jurich

more the those to worthwhile going changes Exactly. more because you’re you’re and airtime resource, scaled a And get more for actually motivating, the to regulators. affect it’s the the reliable

Jeffrey Campbell

My to definitely. to your obtain can kind you goals Yes, R&D any that release? acceleration press do just of SK the follow-up that the regarding Right. provide is in of color expect sort you outlined the in you JV with E&S

Lynn Jurich

a believe asking around for at that. homes of scale about tipping that Thanks we’re electrification Sure. big and do point really We cars.

better of of gas all it’s I source, on only want can are to energy know starting invest done it’s that the the provides renewable that, with better really think and better, lot anymore a banning now, affordably. is EV, power in saying, powered, are because run I a you which house, all-electric, hey, this to and a resiliency, communities eliminating obsolete. be actually is math into people now realize heating to to don’t lot Like going natural line are converting going utilities if solar batteries sources. it the to just an you be home, a infrastructure what, It’s it’s life grow better drive electric

strongly EVs we the around to trend this happen. are electrification house believe of the So going just and that

providing And for JV problem, products solution making different and exploring is sure of a attacking single a just not home. that so ways again, different services. the that And really then we’re

energy networking actually build to everything We’re together really an Internet.

to electrification. this really on, what the home not are, So the but specifics commenting we’re vision accelerate is, is

Jeffrey Campbell

Okay. you. Thank

Operator

Sutton from question is next Barclays. today Moses Our from coming

is line live. now Your

Moses Sutton

in. ABS perhaps issuances, do me year? Or Any on update squeezing XXXX? this we are chance another at to for looking the transaction Thanks

Ed Fenster

is Sure, Moses. This Ed.

of is and bit even expect for speaking, a potentially ABS could Generally over the a make the be, market them six So good still definitely months. wide spreads to recovered are next I little nicely issuance. where

market refinanced spreads as so attractive more our would, And transaction can make be basis compress. that a because and a in immediately called on bank full-term they mind,

see you probably, think think I attractively while issuance. might for to some likely transactions, us, start more XXXX next solar I So a still is priced very it ABS

Moses Sutton

lower a How lower I’m Got PPAs, of it. then here, it’s sort watt Is $X.XX escalators? here. renewal the per this watt per The there? geographic another drivers mix, speaking And per Very think of of dropped sort should with gears really switching of function helpful. so. watt, or we areas

Tom VonReichbauer

versus of past. renewal on to thing the larger the continued is contracts Primary more there in mix XX-year shift just XX-year a

you due so the And to there. shorter renewal see decreasing time horizon

Moses Sutton

years Are XX it. more… Got now

Ed Fenster

that that, the Not clarify XXth Maybe through to the of right, report way. all year, just do of irrespective only contract our life. we peers it

So to that. want just underscore I

Moses Sutton

toward it. now XX-year Got sort And Very helpful. of still an more are it’s you or contracts blend? even

Tom VonReichbauer

primary. Correct. the XX years,

Moses Sutton

the the in XXX how are committed Great. How not still able you Great. how of of level, I megawatts same a Committed number you sort last that? give And we one go added much term know might financing, have forward. that already, much think place of to sheets that’s we then – cover for one. if would but level?

Ed Fenster

the have term structure, we of junior equity, sheets areas and debt. senior and capital multiple for in obviously, can So exist tax

And that, longer to so past than are some as start others. move you

if So sheets about and with we a of have this that hundreds additional was the think I it. capital. place we to the thought have nice millions discussions cut of term that certainly, of But dollars hundreds and we counter-parties,

Moses Sutton

Got Very it. Thanks. helpful.

Operator

today Carver Our Advisors. coming next question Heikkinen is from from Marshall Energy

is live. Your now line

Marshall Carver

Yes. Good afternoon. Thanks question. for the

see to does VPPs no earning way approval, could immediate so get approved If uplift about talked net to an areas, there’s the assets? we growth not in in yet being most is monetize that that. You

Ed Fenster

Ed. is This

want currently So you ahead? to go – Lynn,

Lynn Jurich

Go No. ahead.

Ed Fenster

earning in was services reporting of not I say, uncontracted gross estimate we assets. our grid revenue just going currently to and renewal contracted do

were time, But change and to start numbers. would the this were there were although contracted, At just extent and change a we’re some policy of not it it. reported you see a if significant in that sort to it So in the value be that uncontracted, that would including enhancement. policy moment in in

Marshall Carver

follow-up. Okay. And a Thank you.

a only in were being about few and profitable areas. barely profitable batteries talked either or offering about in talked Vivint most it states So not

battery as You Do way or almost everywhere. attract a a offering more of offer the batteries profit see center to customers? you

Lynn Jurich

both. Definitely

the solar-as-a-service, and innovators battery we’ve to again. the been out think how I on deliver figuring

So range battery purchase our want you more if from it labor to terms for – lot a want everything all you at where of the if plus can you $XX,XXX multiple a batteries. look and with are competitors if in to $X,XXX pricing

you’re it reliable also if – you. how to on, think power I is again, depends So important

seemed helped as really Also, the their proposition maybe When mentioned, arrange to power you, expensive a in financing million have so also, huge think can and of a New capital you the outlay. I people gate value so that before we’ve X.X happen that doesn’t maybe off out Jersey. had And I that that shut in area delivered as the X.X service and it a as sound without expensive. compelling for it be million a

signature the we that – were announce this on have did of acquisition call the synergy. pretty a we we strong the when the we – did together part So see as announcing as for

Marshall Carver

All right. much. very Thank you

Operator

you. Thank

over like closing our comments. any turn have to I’d for further end to floor of Lynn the reached session. back question-and-answer the We

Lynn Jurich

me. for soon. from and will Take in touch listening, you further care. Nothing be we Thank all

Operator

does today’s That teleconference. conclude

your thank today. participation You at may you disconnect time, and wonderful this have lines your a day. We for