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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
Moses Sutton Barclays
Mark Strouse JPMorgan
Julien Dumoulin-Smith Bank of America
Brian Lee Goldman Sachs
Michael Weinstein Credit Suisse
Stephen Byrd Morgan Stanley
Kashy Harrison Simmons Energy
Colin Rusch Oppenheimer
Philip Shen ROTH Capital Partners
Sophie Karp KeyBanc
Call transcript
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Operator

Greetings and welcome to Sunrun's Third Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Patrick Jobin, Senior Vice President, Finance and Investor Relations.

Patrick Jobin

Thank you, Operator.

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

statements to best differ us, adversely. these factors based materially believe known currently actual we reflect judgment our on and Although results may refer in may cause SEC actual results with of Please from and statements. our company’s projections differ inclusive made risks that more forward-looking discussion the factors other to the to any for filings update made we disclaim and also Please or them. of revise as note these statements today obligation are to being any include will end Please unless Vivint quarter. note not results today acquisition Solar the we specified after discuss that of the as otherwise do the third closed the

On over Lynn Executive CEO; Chairman; call Lynn. to now And Sunrun’s and Ed VonReichbauer, Tom Co-Founder me Sunrun’s CFO. the and today are and now, Co-Founder call Fenster, the Sunrun’s let Jurich, turn

Lynn Jurich

Thanks, Patrick.

In third the sequential to to improvement in execution XX% customers to results the XXX,XXX performance outlook. Sunrun’s strategic our of pleased prior against interest our growing our Sunrun’s and megawatts exceeding is and a quarter, We compared acquisition This XXX customers Vivint XX% scale. are XXX,XXX consumer progress over share XX,XXX October. leading testament priorities. deployment, to and grew base Solar and to of with of Sunrun at year quarter last added a representing We

and margins is than with stronger combined We into expect outages for ever clean, at power wildfires, resilient improving spent with that to and storms continue growth from for accelerated and cuts more XXXX. Consumer home. affordable increased time desire

selling other efficiency productivity highlighted With our year. at productivity have onset last last we our sales of same last the quickly and increases around COVID quarter, compared increasing operational virtual lead activities, call period discussed XX% digital to the The up we stayed. Sunrun the pivoted team salesforce initiatives. generation As capabilities

customer experience. positive from have continued times install better resources mean signature labor customer These less trends improve productivity. along and our a with to installation cycle wasted to Our

per is are The $X,XXX buildings and to solar and value vehicles And and customer of XXXX position. innovation stages to and this year. early result, enter a expect to we Ongoing U.S. proposition. earlier compared at cost electric storage an our transportation. energy strong leading enhanced As in improvements continue we electrifying significant improvements a in

replace And first batteries with virtual renewable energy energy. of of the of synonymous to will during companies consumers owning the solar strengths plus network Sunrun plant will aims has EV home affordably your expectations. our progressed and winner and well. complimentary consumer The with the more to nodes more these the revenue will four lead markets. together both a have by be needs weeks opportunities. power unlock Integration created repowering we brand And take with exceeded cultures operational

already from leveraging each company. practices are We best

than in Vivint doubled more teams the to XX% example, close. since have California battery sales rate attachment Solar over For their

markets high by the the installation already them drones racking of our crews surveys to love combined Solar throughput. leveraging and roll On side, we fill site and scheduled been technology have excess out. demand and to for use Vivint with piloted system and excited able density We've crews it the are proprietary maintain companies our along

sales of world-class channel We direct the to their practices enhance to through rolling trading Vivint and out team. effectiveness are complimentary developed Solar home sales our

These reach. we important maximizes we an as channel grow the about will increasing our partners and bring a to and the scale of our continue Our are quarter also partners strength. market strong our strategy delivered excited part brand and segment

year. XX% installations to grew is more compared now all battery of quarter last Brightbox attachment Failed markets. our offering record available high this in active rates a than Our hit and

and expect We year. installations accelerate over grow Brightbox to next XXX%

in plant expect our To-date, recently the to awards, a markets to of of won over we geographic we Southern XX capacity. are powerplant contracts power virtual progressing new cover well. announcing services grid meaningful And five to XX% coming executed Today, Sunrun across California a country megawatts we virtual Plan Edison Our Power quarters. are develop the award. footprint. provide which have virtual contract efforts with announce

During fixed the from batteries terrain to more reducing the solar if will We'll installed dispatch provide of system. price power power reliable Brightbox home same the thousands energy these backup power SE battery of share households the its XX-year will detail power systems goes contract, and Sunrun in cost lowering territory, solar The critical out. energy also overall on soon.

the not have only XX%. revenue in works, and are with awarded provide which a over that contracts pipeline a million coverage differentiated streams, expand additional provide customer us they XX would those XX% to offering. We of opportunities These recurring

The multiple and a also Two, the more And finalized billion over with One, will SK consider annually. the fraction This enormous. billion quarters. larger in of U.S. will penetrated throughout fuel switching player. the represents of dimensions. has venture in batteries. necessitating opportunities. urgency of is to but vehicles and to provider Group it accelerate the energy joint three, utility consume and significant ambitions doesn't profitable just to over X% infrastructure a can home. in In the the a tiny homes management U.S. also Residential this is This massive is and and several residential still solar sales Sunrun even XXX resource runway with electricity of that creates solar more ahead and are the stealth become only growth We households solar XXX have expected believe adopt CapEx market electricity updates be coming home. will charging electric electrification system. we exciting We mode, we benefit

on a opportunities our job people install polluted Honnold new that California to of communities. hundreds a communities. to grant solar access energy for suite offering install foundation training grid fund income quarter, for to the help our people job indigenous In and paid multi-family customers, will XXXX and projects employees households. projects systems. we vocational September, nearly offer hours partnership XX,XXX through to announced of experience of This with low commitment community-based than solar and will Chanel's help income Expanding We in to solar will Also, we a sustainability more will partnership installation in disadvantaged in launch grants with to most for approximately our the product shareholders, Lastly, skills families support during training, America. gain megawatts black, Illinois, to low to by valuable XX provided investment led certifications the California. hands income residents in people hours across of also for announced XX,XXX expanded and of Chanel low non-profits energy color alternatives. places with

team. Before together mission I simple. to Sunrun organizations and proud I our the never easy inspiring. say turn ingenuity am is it over to collective is Ed, the Vivint passion, and to I Solar of and But want dedication Bringing how

forward head collectively this address industry country deliver service our lead for on are and to best We for energized for employees the meaningful climate career provide and to customers, world. the our change rewarding opportunities and

For network. over to the XXX,XXX the imagine when customers welcome you, strong to create today and Sunrun we Ed. can value Over just millions we

Ed Fenster

We're the asset now performance discuss I'll or financial runway. recap assets for capital our and Today markets. in markets financing seeing Lynn. significant tailwinds Thanks

stable, proposition. our high-quality been cost has we have desire including assets a long-term continued all for driven classes decline, economic underwriting non-recourse particular for growth spreads markets cycle compelling long-term and bedrock appreciation raised offer record cash growing positive with Sunrun value cash call asset which highlighted another track performance, The through customers effort senior solar The recurring time in lows. by to always and and debt an are and the of last project we flows improving continued growing trend strong Our fund performance. contracted financing in capital of service investors pricing a a finance flows, project strong and the

together in securities instance, two yield XX% Vivint a XXX in late backed at average proceeds taken issued X.XX% For weighted an provided million advance asset rate. and Solar September, that

Assuming for below below value. with the before where X.X%. over with stack, cost capital of strong securitization two measured share last with or remains the comments the Consistent they performance average of were capital a COVID. delinquencies capital my of customer X% cost the against the payments onset as be of would quarters, remainder weighted The asset at the of

maintain finance selective market to have the year-to-date closed billion $X.X affords project ability capital to XXXX Sunrun terms. all that healthy continue and be us runway in Solar in together We capital a Vivint project activities. attractive on and

X, XXX megawatts call the close transactions to equity projects third executed November turn beyond leased of the deployed expected now I'll what of As quarter of through and over us over was of sheets Tom. debt provide XXXX. the project tax to end fund and capacity term

Tom VonReichbauer

Ed. Thanks

them the $XX,XXX to we year-over-year approximately NPV expectations. increasing service creation even of exceeding We margins year a and emerge quarter compared With rebounding, XX was to approximately the second paying outlook. recurring to volume with made increasing under The of X% In from our strong an with volumes, and the company QX customers resulting value in us for XX% increase with In approximately on customer quarter’s in has XXX,XXX them approximately ended we deliver solar the to combined stronger deployed project QX, and the was basis third higher balance Looking XX% from our the a QX strong we initial increase to enabled systems cost capacity, quick XX,XXX most offering per through We absorption. prior of Sunrun we value and our XXX improved customers third of quarter proposition deployed another cost our electricity now or contracts. $X,XXX with the a megawatts the $XX,XXX quarter, sheet. lease year and customer. position XX quarter. net growing actions provide COVID, sequential a monthly results clean QX to thrive

the A in of also We performance. operational operating financial Vivint on realize quick and our to from Solar on efforts. the X We closed fourth October update improvement continue Vivint acquisition efficiency Solar's quarter. benefits

As QX accounting with such, as report we period of acquisition company date. combined a the results as partial will

quarter impacted total Solar third significant million areas by the Vivint during which principally restrictions Solar in XX the with and ended suffered COVID, Vivint approximately During was cash. and quarter $XXX more Illinois. installed megawatts Massachusetts third

would and X% including them. If Vivint states XX% volumes sequentially grown Solar’s excluded you have two these

direct-to-home We recent expect by are from channel. Solar's and encouraged Vivint strong trends growth

highest brand the including salesforce year an level at and doing from the is it early with the headcount their product all part for selling pre-COVID indicator, been no enthusiasm has small offering. As Sunrun

cash quarter, $X.X assets end the third were Net this in of quarter total expenses reflecting evaluate the balance looking our assets of assets We to We gross X shareholder quarter. increase net and earning Gross our quarter, the from on maintenance in flows in in performance project partners project million earning all X% with generating at Gross to level financing. now and distributions earning million the were third flip equity and assets gross the the cash of quarter. third Net end cash the reflecting expect a $XX earning discounted of time second increase net earning partners unlevered net a non-recourse prior equity of over an of of the an XXX at $XX earning the from at structures, tax assets, is value. Turning earning customers to at WACC. an partnership second we assets assets and billion believe ended quarter. the provides measure of combination financing sheet. million XXX to increase billion less receive million way and operating

cash to combination by both compared and this net increased year. the increased to the have have prior million earning We quarter $XXX compared and quarter last assets

Turning now to our outlook.

see expect expansion growth continued and QX. We margin in to

over XXX sequentially pro total increase We XX% the Solar Vivint approximately megawatts. volumes for forma to acquisition expect to

across We margins our starting also improvements in and company QX. our see some customer. commence combined the expect systems to net that both a company changes combined leased to process in reported will in reporting the reporting of for as with costs QX. Note are methodologies $X,XXX companies customer there how above per be in continued We're to harmonizing in

through mix channel For of and will example, reduced treatment of the increased installed total costs our in business marketing addition part business. of Vivint Solar and a decrease on originated result volume, percent purely GAAP as based will which customer costs the the a of each sales a

in cost geography term mix the historical Additionally, from shifts and in result integration. near fluctuations through progress we trends product Sunrun as will

improved In discussed improvements values. of Vivint higher expect acquisition efficiency and operational XXXX. cost enter the the we net with With an Solar, to and earlier structure XXXX customer

in XXXX growth on February. We With QX expect our above for we -- above grow outlook in long-term more detail to the open discussed market will the the provide rates the industry please. that, on call line past, we've questions let's

Operator

Thank you, sir.

question Sutton session. a today of be Our Please comes We with proceed Moses first question. will Barclays. [Operator your from conducting Instructions] now question-and-answer

Moses Sutton

And there. results see transaction? strong congrats is this chance issuance? COVID for new something this similar on how the and market Any Vivint get the merger you Ed, expect? the looking off especially close terms a year, following And now of ABS would you especially we

Ed Fenster

So market in fourth often strong some out away is of deep resetting a awaiting budget. the the supportive market shied step ABS incremental definitely transactions the quarter, of issuing We've issuances. buyers and from because their

to So the be next quarter. year, and avail expect of in will indication similar do I last which that would market ourselves wouldn't further transactions we expect suggestion, that But transaction. the

Moses Sutton

acquisition role the given increased larger megawatts sounds XXX Great, of of then funding funding that's helpful. comes on available going capacity a worth, for but seasonality. out good, maybe to thoughts any forward? accounting scale of less a a of the funds you deployments design business, of Any thoughts amount the bit capacity targeting this year's half And in the not basic the than how

Ed Fenster

question. a Yes, great

actually equity tax us equity, because tax the than internally. that the investors the equity quarter by equity is tax head we for new in substantially two But that budgets constrained most greater in receive into So tax we here debt generally is runway January. fourth by next, limited disclosed lowest as we because

the XXX year, have the ongoing, tax so And we but fairly transactions in of most straddle don't to calendar buy equity. up another megawatts discussions

see go those expect increase. I you'd So we next into year, numbers as would

Moses Sutton

helpful. are last versus that how a one, thoughts before topic, into if lease it very I squeeze could on, loans bigger any becomes I in sort Great, One of pass again, markets volumes on trending on year. quarter above but your next like of this that see sort more you mix, specific, sub really pacing anything market, into sounds quarter, the the and fourth of topic that

Lynn Jurich

still the you has tax the versus going mix We materially to pretty again, of loan consistent, given projects. loan tail to credit, delta, believe nothing more of but just industry a as that year, and numbers. remained I tail lease more solar will the our the service in a at Again, the bit customer that's see think the probably little own point the change end winds

it's where customer. capital I think and besides think are have quality I we guarantee just the a the power now, being better value a have proposition cost interests we one also aligned, Right just equipment, higher for advantage. just we

is, of the the at If third complex, market superior you that also rates you're end course, of are benefit see I And from to over itself being and services arbitrage the market. ITC, you a will and have program own and then perpetuity, a loan the little for to home source market, trend last strong of the will more being ongoing zero. versus and to in party. assets then, party credit XX% to look be And starting diverge the if locked years, the market have it terms by service system into energy and then, of and receive days in a a Harbor their manage next Safe customer service grid of plugged third the able which in as we lends at a the a relationship the think own few finally, tax assets really terms the

Operator

Mark your proceed of Strouse from with is The question question. next JPMorgan. Please

Mark Strouse

for Yes, Thank taking you our good much afternoon. very questions.

cash the how or just of trend Whichever the or your unlevered to So best material over you you think flow with it's You're NPV metric? expect kind about revenue colored. the announcement per good grid two? to it Can household? your to do currently is in services grid is or see next so services talk year how you your

Lynn Jurich

Yes.

program in we a question. grid customers winner programs to there. revenue, the offer see to thank a structure fit to the differentiated $X,XXX So But customer. in of markets. and first been consistent. in years. fact more services service a then starts short-term XX is of our won't per grid Many specific you that's that for it take so great most believe, market. you, industry believe sell lead we value And the And that It's these about have you our we're seeing a and in also We into what NPV the advance really few these in really is into grade

start And the we but so, on that we'll contract again, consumer the of our we XX%. about XX% that pipeline geographies cover covers have to see that really about us offering. serve, differentiated And, current

So, again, beyond revenue years, services and grid its offering follow I differentiated couple think consumer will the the that. next of

Mark Strouse

per on to $X,XXX into? that, are contracts, NPV Or you to on something close household just And scale there? clarify seeing is have initial unlevered that the you Okay. these to

Lynn Jurich

Yes.

Mark Strouse

Okay, just more perfect. one one. And then quick

Sorry.

Just volume the last in XXXX. in acceleration comment regarding the

organic that an basis simply or a on of Vivint just function was was on Just that organic? in layering an

Lynn Jurich

forma… pro it’s Organic,

Operator

America. question is Bank Julien next The of from Please Dumoulin-Smith with your question. proceed of

Julien Dumoulin-Smith

Perhaps just kick it on storage the front. to off

California little more certainly to more and rates comments understand the off on here to It enough a reinforced as from driving in can being no I have to And just this, implied obtain the you cetera. certainly you southeast in expand I geographies? your seems if here. confidence a comment can storms, et that mean, you that. concerns your secondly, wildfires input, on want little bit it's that demand, if implicitly decision resiliency to able supply Just on first that across first then longer attach just from are elaborate meet suppose bit

importantly why to want process too? your customers the than were the expanse thought more from understand Just

Ed Fenster

to wants Sure, take And battery touch Ed. can from I Lynn it is the there. this supply. maybe on

think the position and support supply in puts manufacturers, I enough presently certainly have we in further a help that also agreements we supply us reduce batteries for think our our scale all We risk. have to definitely place growth. across preferred

outpaced For manufacturing sure, demand rapid batteries growth been it's capacity in true for not the yet. that has by

a declines accelerate limited cost been bit battery existing yet, with costs, have little increasing the manufacturers but multiple lower batteries so capacity. And further would and growth rate obviously in are

in further our the to the insurance need do expect have coming we also We so and year service batteries customers. that we expect to

Lynn Jurich

the fairly on had attach the we've our that demand had. sales it's quarter, In on strong. rate highest side, And we

that So to continues grow.

the XX% year. said at If XX% attachment is market look in above grow XXX% Hawaii. by we've expect XXX% year-over-year that they And, installs, grew California. And rate in the past and you in to we highly variable, next

We the solar, which we also the the have first integration salesforce. synergy the the in $XX number specify the one from been, as of million attachment and in just California count we've of rate with their had adoption less in well, month, in, benefits Vivint is had that XX%, didn't increased

So, battery to and very over outpace solar the which expect rate, we strong future. is the we're dramatically the encouraged already growth

one of a for -- want believe so I system educating is getting the think the groundwork will solar HJ's be battery. what reasons two, we your every in in we all lay expand trained learning to curve and to crews the this years, on also the markets a really the there to is, market of where into terms has three a

Julien Dumoulin-Smith

does little quickly more XX, above if clarify Got can bit market to a I it. what Excellent the follow just quantitatively? that mean, on

Tom VonReichbauer

Yes.

will to salesforce And improved So, annually growth long our with rates brand returns grow the market, we and year strength given we've position offering. over next we that our industry XX% expectation said more historically larger is normal run. product above grow the and to stronger can the now think think XX%

Julien Dumoulin-Smith

Okay, all right.

is changing. in not key. XXXX. that's This So That's

Tom VonReichbauer

Yes.

Operator

of Please The question. with next Sachs. Brian Lee question your Goldman proceed from is

Brian Lee

down it recall still of And last about questions basis kind around including XX% I on the guys a on in flat actual, a is And of than into Yes, the things. we talking But maybe if I guys year-on-year. year, bit are just having you growth. but implies giving issues deployments the roughly, follow Julian's actually know baseline just correctly, combined to ‘XX. guess, which labor if side megawatts I us XXX of XQ you I around sequentially. hone slightly little outlook, XQ on appreciate guide for a you're better the

I felt and easier so, XQ. been cost the And year-on-year might in grew like have you X%

basis. maybe So year the of just a seeing out on acceleration faster why not end here a year-on-year wondering that's of the --

Lynn Jurich

Yes.

the results. is of the we're north that So really increase XX%, seeing XX% important strong which to NPV note profitability quarter-over-quarter quarter-over-quarter is and increase

We couple just really a that's of our we're on, that and the that going integration. of a also us respective feeling practices some company Illinois factor then, we confident into has Tom the each XX direct Vivint and from restrictive and things we've the in seen days, -- first team, which is, focused put swift the there's fast more home one bigger to best And share was quite on you've key already, each why on what acceleration COVID. growth be. Massachusetts where, call terms will And mentioned had Solar have markets had like model in

of we're just out so that. And growing

wouldn't the much read too into I fourth So quarter.

And I XXXX. and in a sort think in of COVID there. there's still rebound growth lot performance integration expect strong do we of

Brian Lee

Okay, fair metric. second to of hasn't color. provided And have then a report metrics highlighted appreciate other that and Vivint guys cash the No, you historically on, here, generation continue just that question I the one enough.

for trick when before model about cash sort gen? we comes year a you of a or to grow how XXXX generation, on guys under the pandemic on is cash basis how should versus were, wondering and does it you that about more cash I the business high correctly $XXX that you million I to cash combined can know historical this generation, generation of the as and So you're thinking capability with impact vivid so, it tracking particular and early level, if really the maybe change trends. economics deal figure how set does thinking thoughts I'm be any into relevant recall

Tom VonReichbauer

and Yes, thanks. here. things on a here question couple Good

in still the So first, of we're combining process metrics.

and Overall, company around margins, the volume as a as growth, with and As you and or of well edges be can things that good combined few the then indicators performance. QX metrics. customer our NPV, imagine, customer I aligning a cash the we'll are NEA report there continue combo, to think and we're overall

towards And largely so, going gravitate that. to we're

As about margins. think think Yes, growth translate update will we well well the into we when as color but precise bit as we will qX, expect that provide more again above a expanded industry XXXX, we I the rates generation and/or depending cash heading NEA the into strong weeks We're we growth decisions given capital the very four just Lynn the but upon on that work acquisition integration confident focused really as closed ago, mentioned, there. structure make XXXX.

Operator

The Suisse. from of Michael next with your is question Weinstein Credit Please question. proceed

Michael Weinstein

the Vivint Hey, you sorry, if how XX%. did QX? guys. is Hi, deployment Solar if already that Is mentioned perform Vivint I'm Solar, in but it this, historically did, QX guidance include or

Tom VonReichbauer

Good good. Yes, question.

XX% So inclusive XX megawatts. for Vivint QX the approximately quarter-over-quarter deployments of growth their Solar and were is

Michael Weinstein

talk utilities. there? I contracts have can maybe FERC the know little that smaller Ed, you other might bigger type of markets? there And a is in some participation and about in out New than other when you lot you. England timeline for Expectations with the bit Is Got participation market ISO you XXXX ISO a a have

Ed Fenster

order the by counterparties, up energy the the a significant virtual the with, wholesale we've opening by markets success of going question. future our met XXXX about counterparties said for business. power order and already removing in competition the to as FERCs actually electric everyone to press playing great promote electric the own said will work this That's on usher number of in Sure, we're from They help markets, can the level field. order, expands you barriers nicely. on competing resources it know finding grid distributed the preventing FERC backup And excited we release with plant pretty be grow call,

I agree establish these couldn't could with on So, take be have to point, also done or a to might for think To fully it basis. more rules year a participation, individually your regional and our the we more. that all

our advantages a industry So and which near term play to plants leading scale, competitive leaps this from in sorts we're of these virtual complex impact really benefit and from But there's also be to exist, and are this area very bounds. the order. not of going power opportunities, by obviously,

probably for existing very as business it from year. next our year, Lynn significant expect do earlier, at business least excited wouldn't pipeline, it. increasing we're So that growth a power mentioned see about plant But the although virtual heading in into we

Michael Weinstein

I'm are And important tax mentioned an guys the part wondering, large I And capital of that earlier just you players you in Right. that structure. know, capital, market. is equity

have what you in So and have XXXX? market of forward? might impact how thoughts impacting bit concerns talk but markets can the really seeing How you election about -- of up the don't shaping -- that also, don't is might tax be same little smaller you that for have you're uses equity a scarcity, then terms going any on might

Ed Fenster

confident smaller this last like I'm and want we've excellent in it's relationships tax also candidly, our almost It's And relationship the XXXX, And still like which the this we business years strong need markets with over have in than very be obviously, plays scale, for profiles like little it advantage. support that our feel I that, the and the more probably growth think our in to and supply quite than our that, more them we long much cadence now. because that. frankly, compared equity track Well, of attractive. fantastically deployment is as GAAP market they earnings residential, might record, counterparties size XX place they fund the And steady to smooth are deploy, needs world counterparties XXXX, of thing a is scale, the election speculation at moment. But a a our can whatever a to built diversified. provides to. utility kind that, I

turn into and about it might actually very it, feel So good strategic a advantage.

people around existing the provide probably corporate budgets I their tax rates. think it, who plan

benefit value would rates the at depreciation. higher they because So up, our tax if also from increase were more to supply go corporate increase of those probably rates it assets,

So all but we're we're upside, that anything not that would be contemplating comments today. making

Michael Weinstein

Great. into And safe cash you maybe talk how to about your you intend strategy for one, much that. last could just put harboring, one

tweaking it, least developing wondering probably or you're at post-election, a how Now, that's going? new strategy,

Ed Fenster

is That question as a well. great Yes.

to enter the with customer as loan megawatts of year, And will credit. we number sold XX%. XX% solar cash So, at or reminder, harbored for receive a a significant expect to a next safe XXXX, systems

those that's So make into about would inverters, and it to qualify we of additional those so Simultaneously, and the or credit we agreements and to we we which add harbor the not year, But allow our us XX% entered at Harbor choose haven't credit. if options. safe execute $X,XXX, that less expiring Earlier negotiated modules addition XX% options would be to. than whether this purchases Safe XX% to mid-November, yet XX. in purchases to to decided

I time so, us our think call. for harbor a the best on of position next be safe would view provide complete the And to probably

Operator

The is Stephen your Stanley. proceed Please with of next Morgan question. Byrd from question

Stephen Byrd

the on watt good NVP progress. per and growth strong Congrats

on of if for just my with to of the or California storage, opportunities focus wanted more saw see been I watching -- storage? moment other compensation questions grid changes on California, need that blackouts you for One sort to developments we given those in this curious addressed. had summer. additional you're or maybe services California a I'm in just for any the

Lynn Jurich

just think just year is it's indicators so. going outages consumer every previously, said it build in the all The to this And are high. across -- builds the so I these like Absolutely. we've happen very to interest interest, and continues just

encouraged we're by trend. that long-term So

when much accelerate off that's our we with use permitting. in automatic there's outages. here solution one power opportunities our can to policy California at just regulators, this think I from and and connection quickly efforts our permitting of a And even that also, anticipate a more We to customers contract. lot people important a estimate $X,XXX that need to save streamlining

to contribute likely like are that the we are areas. seeing, batteries to out and in also the in in, program programs one that additional successful. communities for you're they that's disadvantaged quite for And rolled think been wildlife support participating has I

no So number to there think that point it's I that can a ways for lead to question I something will there's strong business. isn't that, necessarily the a just there's markets, tailwind today. of specifically great this But

Stephen Byrd

the and And direction just be know of even get policy, were terms in impact support at sort shift green the for as speak to what federal ideally elements to bill. margin I'm federal going clean you'd energy level. in I just to lot latest of thoughts policy just your your know there's I'm there in on the stepping stimulus of for that to were Understood. I level? how gross federal latest there thoughts we sort bill. of curious, stimulus your potential. there is of to of expected. some back a I might see federal but that terms like like that's uncertainty

Ed Fenster

Yes.

and renewables underscore with lines, that really expect rooftop supporting and because policy for So of grid therefore, do. first, think proposition that we a outcome. the federal our rooftop choose I more utilities a kind power by value jobs going consumers of reliable. than XX% more reliable, development. And deliver solar Americans, solar experience with And of and obviously, the batteries, than product supportive I unreliable party and and solar persist, recently, to going better which interest XX% is solar, rooftop all low across makes And it's obviously wind has election customer it's to fundamentals better been companies should regardless provided most power comprising frankly, rates, the than of

been in be republican sort tax supported a if And and of do so to some measure perhaps, all previously would will probably over of be increasingly And of Congress, that accelerate as policy in increasingly likely extension the that, been late kind expect effort. credit, of expanded growth these bipartisan off future. to things, that's presidents further one included would were like it the we time, a suspicion, supportive most form under policies my be because always our

attractive policies candidate I've as predict always and that employment, very we're the decarbonize an sure, drive think sorts government's these significant when able for said, it's again, exactly I and for growth I be is to our of difficult that support. more make long-term a reliable But view fact might taking to So enacted. makes horizon us think power economic

Stephen Byrd

your of of thing, fair credit value in we been I in It's to Yes. policy. position curious in is some to or material relating possibility would you're One more form. relatively but converted into thinking tax you major of a how a availability impact the you're a without your from But thinking or terms limit other change federal as to about about that easily just take in take factor you to that of point about that have your away earlier was payment the good providing that limiter a question, of direct I something direction that were where earlier going guess any answered tax that as terms solar that. equity, equity to I point but were cash with if congress the extension stand a with that growth? I growth and change perspective, limiting hadn't now, would there that's monetizable, they think no that tax

Ed Fenster

Yes.

not current that we're asking have which not view availability any republicans very policy topics. refundable is So to know, not certainly, on a and I team, but people in by just the because less refundability use as year, Congress, been you're occur engaged This do Republican to or probably about. you talking our growth the constrained the refundability in we environment, policy equity. active for term for likely countless we've significant And think a under what generally is And tax don't related reason of anything. love renewables way any marginally to describe

the been way other. or not And so, a been we've really in one topic engaged that's

Operator

of is question. with Energy. question proceed The Harrison next from Please Kashy Simmons your

Kashy Harrison

into think headed? Or going an have I net investors Hawaii any as other all but early framework wondering may it's to the X.X of have California some know that be just Do you energy expectations you thinking where maybe we was example net I be future? looking should should energy you metering be for if where is in metering about?

Ed Fenster

Yes, great question.

first of would XXXX. information, today's with that like around impacted candidly and discussions late correct our So invest Obviously, to I valuations the regulated knows The $X or proposals ecstatic today, in are customers. be an if on that equity regulated anyone to earning low X.X an When the return timing shift early underway, X%, return earlier or anticipated any with there's on settlement. it system. compensation case, talk information if of our at to come X% discussions of a of could always That are challenge decision these rate we date XX%. been has ensure about, is goal fair to excess to utilities said, with in all, be a parties investors them to undermine feel cost a interest rates

the energy fantastic did dispatched It's share years XX time them. is homes to called with solar move three rates, the grid storage our we And, are And mentioned with of pay what in on actually that know, you from use response that handle actually system Hawaii to we to think doing years has as utility their For batteries. they of evening, ago we encourage Hawaii after every is in that the effectively which offered us. that, exports eliminate the and was can’t power dispatch utility, up Hawaii, us basically hours of kilowatt example. a installed. Because, I we installed several us to now interesting, is the you Hawaii one may solar,

another, ultimately of complicating typically is where end actually So, the another, regulators several returning net being I think actually the metering, way. of Hawaii examples. up they other Arizona being Nevada direction one gone

the to So, be the they working we'll for the grid. I'm compensated energy create they confident process that next that, our that contributions and year. over make through the for customers will And, be fairly continue

Kashy Harrison

you market's return I the dynamics rate of rate I'm return? just those tax Ed, it. just, required follow equity in if is equity discuss maybe how investors Clearly, some won equities And the are for of terms maybe lot, a interest have Appreciate just you can of play a But talked lower. rates trends curious the Thank what demand, know but are that. up much on impacting IRRs? a maybe or about that. tax lot of supply lower and generally, the in tax

Ed Fenster

see immaterial. wouldn't pretax totally pricing, any we just partnership mean, points of that over constraints and so to XX frankly, plus a the tax if I or transactions at different it look mean, clear into has cost basis it it's lowest Yes, surprise rate what market to the our Harbor. be me Safe years, pretax XX capital Really, like, entered in that you don't we've highest I order equity maybe the pretax return, variation. is

falls of return after And that. so tax the of out kind

ever across before it We cost didn't cycle. see we just We XXXX. So economic in see variation it any see don't equity didn't the really of tax in COVID.

the it seen of haven't level. just really COVID. at We always during priced kind It same

Operator

from proceed with The of next question. is Please Oppenheimer. question Colin Rusch your

Colin Rusch

much, so guys. Thanks

think cost about geographies to the into expand you decision? about talk you new influence lower your As cost capital capital, opportunities in by and lower plans enabled can the that

Lynn Jurich

Absolutely.

additional said, markets. now that the growth on was for we in expansion. does we And Our and really business, only reductions. current XX when we outlook being the described XXXX any we're depend That and that cost not predicated on geographic were the California started

the a batteries expect with look services, with to the and will the this So value absolutely expansion be to a isn't utility additional created of there's continue hit when the in available there from rates probably we with the But in ahead cost And horizon. targets. those opportunities will we order from to need that, year, nationwide. us, synergies on next next that of again, grid not the sort growth at reductions geographic product from for quarter, expand increase, efficiencies be a

Colin Rusch

go about That's thinking basis? to you've and terms partnerships of guys that thinking got, you new about sign you in the are strategic a think the partnerships pipeline couple we've in potential got super as storage the others Can considering seen a then, just about, what talk deployments. and able of helpful. And dissimilar we to on of that or happen energy Edison forward action, deal not of might have number a you about now products been deals,

Lynn Jurich

$XX only we contracts that But we which would have million, the XX% our Absolutely. markets cover of operate is the geographies. that in. pipeline, includes The of over be XX% current

So it's work that development pretty a market significant have process. we in

opportunities. continue certainly these plant to we should expect virtual you So power expand that

Colin Rusch

much. so that. Thanks got clarification it on I offline. I'll take a

Operator

proceed Partners. question. is question ROTH from of Philip next Shen The your with Capital Please

Philip Shen

thanks guys, on my the Hey, for Wonderful questions. outlook. XX taking up

on combined down be could could you down look QX you basis a like looks you're If it X%, at year-over-year, QX, be, X%. guys

and guidance, fantastic. we you to in you your you on that and of basis year tough the year, any cadence get it's QX. highlighted in And see long But QX, issues next talk QX, that think but could year-over-year. that extends, know QX I given forth be into year-over-year think QX So, that would Thanks. megawatts on with why. you've growth into does been And sense do the how it combined the reasons commentary as we of a persist integration, flat so so your next for in

Tom VonReichbauer

Yes.

issues offering is back And adding the a for services come the with we'll us call with quarterly we Massachusetts I and too to at more Illinois that point. the the direct-to-home a working So year. And cadence precise to grid around think I for Vivint figure mentioned think But partnership. this think batteries highlighted efforts early more I team the earlier, we're that Lynn Vivint through. integration team and for

of where notwithstanding we growth the disruptions and COVID. about think feel near other some potential trends elements term getting good on I So here through

think feel where call too right now, specific to early good we at but that's quarters. about I

Philip Shen

Okay. Thanks, Tom.

Lynn Jurich

our up outstanding, an XX%. think and think, if If by one going growth grow pretty then, in they're quarter-to-quarter doing it's I That's we're profit we by I can increasing results, scale. while expanding significant at margin. -- just XX%. that, And a business pretty operational add I to in both And to moving you pretty and XX%, integration, look thing to in to the qX into addition margin it's manage another -- the

have in will competitors than all profit think, more combined. XXXX, I probably

growth quite rate the is And sequential so, strong.

confidence lot going of something gives a us forward. And that

Operator

The Please next proceed KeyBanc. is from of with question question. Karp Sophie your

Sophie Karp

services line that be will the accessed it if is economics when big its soon I could become its me relative do the that to maybe grid wondering FERC own just you that, of revenue was versus do? item? own different enough think if XXXX you channels comment deals you on via segment how or direct you to And allow

Lynn Jurich

couple won't it Sophie, advance the most way. said, for question. are and it will of Thanks meaningful couple in the them settlement good of years next Because over these years. XX, are That you drive of being see a in business value in results in contracted contracts next, meaningful XX

we'll have offering to it First, will a more structure a because take structure to that differentiated because sell of our us second only, solar to with create most enable winner offer differential industry that's And, customers. as really currently than

Sophie Karp

we should additive cash used and you. assets [indiscernible] then flows? are same or the Thank traditional sort of are on grid between so thinking revenue topic, between for of that And be right. -- both, of it cash some being right? these All that also about services cannibalization degree revenue flows these strictly because the goes There's is cannibalization

Lynn Jurich

additive. It's question. Good

expect and roll XXXX. would So and we QX, customer. net through in And, services plus we expect customer way that per return your the values today, you grid the to support to again, that the per and initial contracts additional present would $X,XXX that be see

So you'll that see in up show NPV it number.

but through calls, you to you adoption, to Now, making additive. through -- it all some elasticity and think those of consumers of it, the grow should we'll we'll pass may work as still

Operator

Philip is with ROTH The Capital question question. your proceed from next Shen of Partners. Please

Philip Shen

point what you got for in growing about do think full was cut looking end above above Or year 'XX? terms But, actually rate into talked you think the grow you above above 'XX, can year run -- do I at of At market? I think market I anyway, the market? off. you a grow you Do guys market? you

Lynn Jurich

positions full XXXX. will and forward come. rates we What us growth integration, anybody I I And stated quarter absolutely sort above of the outsize about going grow to a market again, it. one Yes. for conclusion strong caution have for would underlying to results with everything the was It's year think years draw to

Philip Shen

get As larger, they're numbers the tougher.

terms of… In

Lynn Jurich

product rate that market because invest mean, dynamics continued differentiation brand, slows. clarify to get rates as as growth believe saying larger. me investment given enable the I that get the us growth opposite. we I'm the the scale. the saying in in we that, of industry certainly that, exceed our the not not I larger, I'm Let continue to will

Philip Shen

growing. terms in out backlog, there the constraints Are other seeing all? we're forth. and of seeing or in some people that you through there labor that able And then okay? mean, about you get backlogs that talking to increasing I ecosystem? are And Are so guys at you are hearing guys constraints in are backlogs

Lynn Jurich

question the labor That on was Phil?

Philip Shen

labor and Yes, in general. just backlog

Lynn Jurich

dramatic is popular. jobs, on see don't We create you look issues And the stay labor the it's business, would that electrification world U.S., expectation at is our we that in the will with if it. vigilant of in embark our any will so home. obviously politically XX Got why which that, million

And Tier-X. always both is, And the that the both process one vigilant, the talent I'll so Sunrun stay we result evaluate to very things job will use cultures growth. brand, of and Vivint McKinsey result note a of the build invest and differentiated was Solar, in similar and in

companies places as into solar model both tap then, quality also high we So well, fulfill have are local which And helps deployments. of the market also channel attract employees. that additionally the to installers our local

Lynn Jurich

Great. Thank you.

hour. the at we're of of believe end I queue. the that's top the I think

So take talk attention care. next we'll appreciate everybody's again quarter, and

Operator

conference. today's concludes This

at lines this time. your your disconnect Thank participation. may for you You