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Sunrun (RUN)

Participants
Patrick Jobin Senior Vice President, Finance and Investor Relations
Lynn Jurich Co-Founder and Chief Executive Officer
Ed Fenster Co-Founder and Executive Chairman
Tom VonReichbauer Chief Financial Officer
Michael Weinstein Credit Suisse
Brian Lee Goldman Sachs
Mark Strouse JPMorgan
Stephen Byrd Morgan Stanley
Tristan Richardson Truist Securities
Aric Li Bank of America
Joseph Beninati Oppenheimer
Philip Shen ROTH Capital Partners
Call transcript
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Operator

Greetings, and welcome to the Sunrun Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Patrick Jobin, Senior Vice President, Finance and Investor Relations. Please go ahead, sir.

Patrick Jobin

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

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

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

Lynn Jurich

Patrick. Thanks,

we customer globally the solar as last and a top gigawatts four will head targets for expands XX,XXX we time rate beat first our pro are the is outlook the excited company. the our team strong We with We XXXX, that's priorities XX% customer than At results XX% a position twice well, same advantages. scale strategic quarter services more million to and experience, already margins. added through batteries cost which the and margins the fourth strengthening we to year, Solar. capacity. to without progressing left current acquisition organization. growth customers. in year to expectations. improvements grid's solar our our in set improved unprecedented next position reach, significantly to week our the talent, ended structure, growth operating our to environment assets combined competitive batteries. our last unmatched Sunrun's the vulnerability quarter. I'm grid solidifies local and networked that our three to at with with from increase competitor pleased against Vivint advantages In customers, as power accelerate from Texas during of scale more yet competitive energy initial owner XX% exceed cost The baseline our in brand than improving market dynamic results, scale time, solar the significant our winter progress and sales saw as quarter, synergies, our fourth integration the again exposed Solar We and adapted storm share forma for XXX,XXX include a and The nearly an people swiftly We the start increasing of Vivint we and of continued share In XXXX. and expect year-over-year investment and our single with and structure superiority the

During our the offset grid, on additional to own their helped produced and behind electricity blackouts. customers extreme the the for demand solar meter from power the need

supply. appointments outages past reported of systems circuits power a It and For day. were with storm. that increased number hours We and winter in with surprise Solar more doubled we each able the quarter. California. our systems. the during weather our Nationally, in Accelerating [Audio stayed Utilities another energy shut-offs attachment than our continue And in Texas, centralized single The over XXX% fourth power continue Brightbox than no last have over website that in wildfires power drive XXX% Sunrun Brightbox Furthermore, rates and to following extreme solar, trend events sales uninterrupted in XX $XXX teams similar batteries solar consumers Vivint to power battery prove customers in our a we accelerate year, to with continued will blackouts batteries. installed yet grid choose solar homeowner's to recharge warm. billion XXXX failing. is a heat Even to and through and saw expected and installations invested the continue storms, to the over traffic days waves helped Dip] record more keep few as grow now the is of Brightbox able critical constraints in we XX,XXX expect on. to CapEx customer despite customers were

deadly electricity. and to value happening the dynamic in on spending utility year continue years. which rise, X% per outages our customer that the This the to expands energy risk average are California XX costs. their with across the return, including falling that additional is upgrade next residences X% homeowners launched increased markets across costs their is As and increasing with ignite and compounded they on infrastructure of for has bring PG&E equipment areas utilities will the forecast two we country, to homeowners. addressable manage Utility San demand This hit these month, rate capital December, that increase by with years retail offering to increases Florida, the be a will to over rate market. Miami, improvements an country announced the Antonio think of to spend Texas to rates its way guaranteed customers the said we This In of our in and last average its can power reduce fact of is wildfires. through for pay for pandemic XX% more

Turning now to our sustainability efforts.

lead American acquisition combined to company the of employees. enables fastest the accelerate sectors proud has growth. The economy, now job one Vivint approximately full-time in are We Solar and the to X,XXX us growing

also companies justice initiatives Spouse the one Military benefits. XXX part first environmental least announced to its X be and solar strengthened employees talent employees participating expand access We over of Department wages of to XXX with Groups. of company Partnership. In solar In at November, only have and communities our per Employee in fourth Resource our six the total $XX we hour. we quarter, to committed all to providing our selected Sunrun the Employment Defense of was of

than environment tons of create XXXX, COX. for Finally, In retiring estimated fossil prevented we want by metric million GHG aggressively an XXX plants. fuel totaling In megawatts XX networked XX,XXX systems generations next prevent XXXX, years. over are healthier metric future over of installed These expected we XX solar emissions to X.X tons to our the capacity customers. energy over million of solar the to a of emissions more COX

Before Ed. Ed, over team quarter. I fantastic Over to another I to to turn it great thank our want you, for

Ed Fenster

our Today, I'll evolving federal some policy recap Thanks, structure runway. Lynn. robust capital on capital developments, our and strategy touch recent

the was political more extended year tailwinds December enjoy years. continue we for tax quarter, Over we advocated victories, and in last investment for credit and two achieved area. to On numerous XX, and the have this

As this Republican-controlled signed by support, Senate bipartisan a passed measure before, with passing president. a Republican through and

we Biden energy, investments during an demonstrating now renewable interest, XX% investment combination specifically with tax energy and last not administration soft that through as up XX, rebuilding genuine That for XXXX. pleased to infrastructure distributed year's President in reduction. harbor debates just in of with our also Biden solar and critical credit is Taken cost clean are capabilities, but energy our batteries cited the said, home December enjoy safe we technology.

tax of the credit longer-term success Given think and investment of we support, solar the extension its bipartisan is track probable. record

through DOE soft steps cost Now for development. support the reduction training Biden funding is administration to continued also software and taking

funding previously by to solar plant us Rico's this Puerto in open repairing our In appropriated and us combining an electric Congress capital for offer market the installations. number home to expanded addition, modernizing of reducing with use in the significant releasing for are Meanwhile, Biden We paths several begun along island funds virtual for administration opportunities even believe may and grid. has a costs further. battery power factors

We guidance cash evaluating believe an upfront the available distributions long-term and will market providing flows note leverage Lenders into ratings common are during that these Our increased over new COVID. we our of shareholders. capitalization capital in flow at have taken cash XXXX this also time, strategies an generally can just cost cash interest our low green we following in increase and we acquisition that the markets. opening part are Vivint cash in provide capital collections In different time. scale, actually are for various doors We're agencies versus to seeing increase not because profitability lender most us. combinations unprecedented and of updated Solar improved bonds structure factors

share updates action. of strategy course the review the next finalize we We as over on will however, the two quarters,

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

provide to fund of As all-time to tax cost expected at credit both megawatts equity turn transactions equity of for XXXX. project We're I'll Tom. over February over executed now XX, capacity clearing tax debt low XXX near or capital. subscribers term and and in the markets closed it sheets and us

Tom VonReichbauer

Sunrun operational The and fourth The breakout and Solar. integration year while company a margin of deliver Ed. team volume to scale a XXXX. the up off improvements advantage Sunrun. quarter growth sequential increased expansion combination The capped continued for of have for our continued the set from beginning transformative Vivint strategic Thanks,

As a nomenclature our Vivint presentation, we our the we and metrics and can our see to of operating definitions Sunrun metrics, summary we use. made between to changes key previewed the last Solar, converging the Slide reflecting updates this On on various clearly X earnings quarter, you have of call, and methodologies of business more post-acquisition.

in of now our figures the to and present value it and of subscribers, continued of cost We basis per given a we discount available business. our watt We agreements X% subscriber to harmonizing debt, as capacity operating less are method subscriber and total understand. the to a basis earning and solar the the of along solar now nature represents X%. and nonrecourse reflecting now the NPV refer drivers make of on lower of value generated better present Per the subscriber deployed the the increased presenting capacity. refer instead We energy as to will our a megawatts value with and value also value as of of deployed the to subscriber below acquisition. at project upfront energy by customers we under as environment now mix relationships. reporting our within and subscriber with business or instead per reflecting Net Solar's cost, ability cash believe net to Vivint result metrics and Further, present is recurring total aligns of rate, recourse business value includes value of and well now supplemental includes flows the customers of but installed, improve while value is cash. to uncapitalized as For lease on cumulative capital subscriber and direct former to still energy assets gross now expenses additions. example, power customer unit long-term capital raise now materials, using purchase cost the recurring assets from per metrics present rates a Megawatts changes capacity. as referred burdensome net earning referred multiplied creation both is network these solar usefulness referred

to quarter, now approximately In subscriber XX,XXX, additions. Turning XX,XXX approximately volumes. customer additions fourth were the including

XXXX, XXX of the megawatts Solar full increase quarter quarter in energy the a XXXX. fourth capacity installed XX% for sequential megawatts XXX was the and in year third

of X.X subscribers, year. at energy networked both Our capacity the and prior nearly over We gigawatts the year-over-year. compared XX% QX XX% XXX,XXX of XXX,XXX solar customers end increase was with ended QX, to growing an

clean $XXX remaining years. was QX, value approximately recurring a with visibility over subscriber average our an net life most already customers subscriber end value of billion and under ARR, $XX In significant at contracts XX-year we $XX,XXX, we annual million $XX,XXX the of XX- for have. from generate cost provide. was subscribers revenue, stood revenue approximately delivering just year, contract At the or recurring creation in the $X,XXX. revenue XX with or of Our energy That's

still metrics we These While if that have customer metrics. desired. modeled calculated investors on a now, can we per are be appreciate per many watt basis presenting metrics

For watt to watt used NPV used be solar energy call quarter. $X.XX what value for or subscriber subscriber per we the would was instance, or capacity to Net watt in per subscribers per what we value of call $X.XX installed value. project

resulted have we and changes in the the made earlier, takes. in discussed As some metrics puts

million method a made improvements subscriber business appropriate following financing increased the reported we the net have prior reporting rate of the $XXX that have Total quarter. for aligning our expenses acquisition For of we generated, is value subscriber accounting servicing made direct discount the Under of Solar, the was we uncapitalized to of against the the given and increased believe last with fourth $X,XXX, now, internal target. which the reduced subscriber our period, additions fleet costs, X% while by changes from provided which former had the have cost been methodology, approximately the number quarter, We mix guidance inclusion Vivint operating in value in value exceeding within environment are Vivint figure. expenses. subscriber moving net creation instance, would values, multiplied Solar's

gross gross over the time, and which GAAP and $X.X net fourth billion items quarter to and of represents end a growth net maintenance Solar many ended in quarter, distributions approach Net were partners last of the given treatment debt. reflecting partners end earning existing $XXX financing balance an to earning cash in from an are we results. the a look assets sheet. for statement note of generated simple to and of subscribers. Total prior project to earning at our of GAAP assets accounting equity X% with on at assets the cash. assets less cash, A earning from from WACC. earning assets, of quick the structures, the of of $X.X purchase onetime million growth at $X.X few plus value debt. on income expect value now A is Gross year. earning flows billion times net unlevered quarter $X.X We business is Vivint partnership-flip new There near-term net operating multiple, fourth increase prospects at valuation assets plus the assets receive a the Turning value periods. and of with that expenses total reflecting earning billion of all depress quarter, increase along our tax discounted upcoming fourth were measure subscribers way Gross is billion year. customers a the the Net equity the

$XXX expense purchase costs accounting stock-based quarter, costs resulted of Vivint closing awards deal-related Operating include of increase to acquisition compensation higher value vested. standards a nonrecurring which in awards such prior quarter under periods. million. the also a upon resulted the GAAP, stock from the This price of of Solar significant an equity restructuring expenses outstanding of operating costs stock-based was employees on with million, step-up close. and reevaluated acquisition, are in because the such This $XX.X of and step-up value of included fair this the expenses of for fully awards Consistent noncash compensation until the date

energy value over flows $X.X of result billion on of fair approximately assets, useful estimated purchase of customer how assessment, in the additional solar obtain than the These our contracts. which by offset systems no cash of adjustments Additionally, based Vivint the value effect life a performance have expense measure business. write-off was depreciation value was the to book our higher recorded to the accounting a and we on at the will date acquisition noncash and cost partially Solar's

to now outlook. Turning our

Vivint with earlier, well. Lynn Solar exceedingly integration is the noted As going

that year. million in we rate are exiting synergies cost confident this now cost While in rate realize we can run we run million $XX initially targeted synergies, $XXX

for brand, in believe positioned clean strong be growth to growth us in full have innovation to value for for investment product energy generated in year. enables over solar sales the our the transformation million channels in expected combination Furthermore, synergy our the strong in XXXX be invest margins XX% and the reliable Total capture a us XXXX. to in customer increased forecast experience We capacity XX% of expectations full ahead. strengthening $XXX to is installed maintain to well both year. We year range XXXX and energy and of consumer underlying also business expanded cost in and interest

to of structure net in the return as seasonality expect thereafter. very in half accelerating growth energy XXXX. our higher to slightly in subscriber solar While year-over-year post-acquisition are our and on cost near-term, we with of of the focused QX synergies in shape we second the lower first half realized, because the expect installed growth in Similarly, capacity see margins and we a integration margins are business in

and products, we an believe in of please. mentioned this open demand consumer we and the and energy and for against capabilities questions, call, the As Lynn to XXXX have let's that, demand is beginning old, operational infrastructure alternatives With increasing, at line deliver dirty model the the business for expensive beyond. to

Operator

[Operator you. Instructions] Thank

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

Your line is now live.

Michael Weinstein

issuances I for you forms ABS the beyond going the picking used maybe of Ed, could to? Hi, that bonds all that question. interest to more something green we've guys get Hey about, think thanks about talked alternative some gotten up financing – starting forward. in Is you talk

Ed Fenster

what generally think there's side a energy. I of that just loans That's and investor companies just question. to lot Sure. in the is I a say in was lender ESG trying from And great on renewable and

as lot obviously green including ways that may cost a of significantly places But than to subordinated bond is we might debt company our likely difference in the capital. be the think rating be actually might the historically have to a that of various probably – places getting I structure would scale an raise and and capital. company make capital, so for rated a a capital cap, cheaper the not been the of market ESG we've be different opportunities the going for that of business given

or all investigation we'll be discovery options So We we're have of there. through. that going interesting that's a process I I do updating two teased, quarter the and in And further information there. number a as with of you think next

Michael Weinstein

you guidance. flow able you're right. be give you'll on Can – when to timing you strategy still use And a more give year. little strategy All working you for that cash the think us that? color you said timing your on this And think cash I is what of or

Ed Fenster

Sure.

the again, of more. in quarters, we'll think, couple I know next So

business – more two the different and two could capitalize on one an suggest a cost x percent, we cost the advance might to trying instruments. One take have rates. they percent, was would bit call, might with credit different I As than little example, x different

we're it impact versus today. flesh will trying tomorrow. two how do possible particular solution figure company, much to cash to leave may cash coming that what for further to two like those by the want for borrow cash do on the before out obviously, as shows of co-solve on sort today maximize have long-term those the optimal less for So is offset, And we flows distribution strategy time. in what's today, showing we some for the up over that it there out amount be we'd dynamics, And up more But significantly if cash it. guidance of was best giving

Michael Weinstein

initiatives And terms makes me. And of administration some of ITC credits, one cetera? additional we in – from – additional That when perhaps thinking – see sense. from an what from the the hearing about, one might refundability, are other Democrats the mean, tax battery, you tax Biden you're and extension? credit that's last I or of maybe et Or timing

Ed Fenster

a likely can bills obviously be ways That's infrastructure I bills. these to dedicated different more question. There forward. of second the is are can in bills, move do sorts lot of bills, a in move forward it half. great spending think They

want. Sometimes you that's in the rather than you front bill the bill of use you

difficult discrete policy, there's XX But moment it any very some months, over often I think on based developments. a when good next three possibility any comes think particular a we to prediction So really in piece definitely do like time. to legislation to interesting in predicting of that make it's of we've said the federal

Michael Weinstein

guys. Thanks Great.

Lynn Jurich

Thank you.

Operator

Thank you.

Next from Goldman question Brian coming Sachs. is Lee from today

is live. line Your now

Brian Lee

on off naming good growth for capacity XX% XX% the just afternoon. things I because taking megawatts clarification, the Hey know in to Maybe changing guys, for targeted questions, the and that's first a release. installed the XXX XXXX, thanks of conventions different XXXX. in The based you're of some off,

anything growth roughly capacity So if that for in new low is megawatts in Just XXXX? to mid-XXX installed to wanted convention. changed clarify

Tom VonReichbauer

XX% you're is off – XXX the Yes baseline. XX% Brian, The to no, correct.

Brian Lee

Great. Okay.

convention. is, And value than you of But to have changed wrong Great. that generation mentioned you million I math million over $XXX maybe megawatts I my against haven't XXX maybe that. in or subscribers the again, So wrong, of question greater guess, $XXX second new or then, is XXXX. related this might

here to So maybe new on that PVX I than synergies that Why but raised with it's to know here, convention? convention, don't in range. or but here, being around the you the you be are a versus basis, dollar would XQ. $X seem that missing want cost falling I'm per Again, something would be PVX stick watt $X.XX given less did

be down that So why wondering number coming in XXXX. might

Tom VonReichbauer

Yes. Good question, Brian.

we're value than sort our full margin QX is we seasonally year to quarter providing on first, more our And had harbor is a than of strong That's investments. $XXX full year. million result. generator that results of which dollars. performing from our XX% of think guidance – be So total best safe benefit QX XXXX annualized, more aggregate the ITC here tends year also of the of really

And than so of then range more you've got saying some shift outcomes there. Obviously, we're And volume. there's on $XXX there a million.

in total year-over-year a be also an also possible which fastest XX% years in acceleration of So will seeing that. outcomes to XX% moving to history. recent our above here, of performance, growth growing We're one range

then total customer, may note XX% cash is growth around is move to to lease part some and mix we're turn the across megawatt growth. too. a investing the XX% I'll into per different margin But between and that So that this when mix around profile. able And move that while it really the channels last bit loan maintain you a also the being of of strong in

basis, So really basis, not a a thinking about customer if per helpful. it that's subscriber on per

Brian Lee

Okay.

that's… So

Lynn Jurich

Yes.

watt. So would It just would to under – $X it, be fine a calculation not the not a put $X definitely on be would apply under a watt. point

Brian Lee

a under out come $X watt. won't It

Okay.

Lynn Jurich

Correct.

Brian Lee

it – for going generation? should thinking XXXX? for there did might part it up call. have per range over through is I number Tom, subscriber you that we or guidance a about early value in range – of Okay. the to What $X,XXX And a the during subscriber little per it of Is Is be is on But missed QX. $X,XXX balance that, $XX,XXX? $X,XXX the maybe, –

Tom VonReichbauer

didn't no, the of timing – margin dollars Yes we but of think really of because did color of generated, about of it. way aggregate the to we subscriber rather I on will those lower the average synergies half the accelerating, half, that seasonality higher the we those the as especially than have be in little first year. average as the mention well any the second realized best that provide as natural a realization that and is the we per bit the amount, think some see than which synergies throughout in

Brian Lee

lot. pass Okay. color. appreciate I Thanks a the I’ll it on.

Lynn Jurich

Brian. Thanks,

Operator

Thank you.

is Next from JPMorgan. Mark Strouse from question today coming

line Your now is live.

Mark Strouse

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

up following past, energy per Under services, you Brian's that more you about PVX, there, storage, time. which think $X,XXX different about from question had to over the household the per growing had on grid on synergies buckets, cost mid-teens of the Just talked Vivint, I value kind low from longer-term the somewhere getting talked the in in subscriber. number

can an with little a XQ higher point I'm on over just that give if and PVX you starting $X,XXX, under update Now curious from bit bridge.

Tom VonReichbauer

Yes.

a note of I'll So here. things couple

As in Brian be comments the I quarter mentioned our year on of seasonally performing to there, highest tends QX to margin. the

direct we PVX, of and down being $X,XXX there reflective our businesses, of are that the impacts. to improvements from. costs is So prior of around all direct mentioned, not proud that these definitely Then to has which side, the on Then back moved $X,XXX we number extrapolate made as noncapitalized under But that – point a as methodology. I those really bit. had that or incurred the above bring inclusion positive linear included more the Vivint previously,

we're margins while our at walk think we continue accelerating I really scale. the to hold investing from strong also and to won there, that here I growth able – believe

providing on previously of now growth estimated. had we what guidance higher we're So than

to some I to continue investments in other so the and And technology we've there invest differentiated also think Long-term, hold quite and from things pack. talked the brand well. and continuing our about

continue margin more The also So And we as as accretive And we throughout be those for more those agreements contracts there. be opportunities as to here. deploy are accretive cost grid the then heavily win deploy mix, margin and services into XXXX synergies batteries realized will us. well.

and XXXX margins the our in certainly year a position. strong expect So average year-end exiting better than continued, be really to

Mark Strouse

can That's cost Okay. follow-up so, million just at $XXX I driving just those bit confirming Vivint synergies. into quick color to what's a the And million, more that? then you helpful. instead And that. just give mean synergies then now entirely of are a $XX still if

Tom VonReichbauer

Yes.

are that cost to synergies those referring So we're here.

our As cost drive operations, cost in are able to growth more saw on five have synergies. bit be Definitely then higher the integration and in And taking a we're of more corporate of we belts, place in XXXX the to G&A. stack to going going there, overheads. that dug And sales, our provide get deeper expectations some our and really confidence under to against now entire negotiations for of more also able some months additional lot we're leverage fixed in a what costs almost we improvements deliver. up down

to So update from seeing to here $XXX the up have given happy it sprinkled across, but $XX million. million

Mark Strouse

All right.

Okay, Thank rest offline. you. I’ll take the

Operator

Thank you.

from Next Morgan is coming from question Stanley. Byrd Stephen

now is line live. Your

Stephen Byrd

questions. my taking for Thanks afternoon. good Hi,

Lynn Jurich

Of course.

Stephen Byrd

because guess, value a did how presume But – about back I just sort mind credit would in tax could of getting just little your going talking providing fairly to that? talking the we're around could questions customer be little federal more so legislation, rates, commentary. business? already as If storage, the that just it customer to per a be value, a of side I sort Would per you bullish Lynn, separate a the would the credit. just mind Just terms for further see think about we storage very appears I subscriber you color. the the adoption would bit from you guess, and But stand-alone net high, further go mind demand of impacts, to you up. to whether impacting tax your

Lynn Jurich

it Sure. that. would open from to with will This is constraints. And me battery easily installed we do some seeing standpoint, let – a we of be the – – be rate this And so growth are demand XXX% believe we able year achieve higher. absolutely even that

with surprise I generally. the manufacturing that's and no think semiconductor just anybody shortage to

So with we and to just the we're given market we're a in supply, the that's match input But is the in U.S. – dropped contracts have what we well seen do to the profile. put really that really think long-term leader, that with long-term the constraint that as competitive fact positioned, going that battery environment suppliers, the haven't we've because prices to consumer the are. good of where end prices the order the

will, that exceed short-term, challenge the far mix, growth. – into the next for would a that think really primed more But even will not unleash in I XXX% we take really think will be issue. but would It quarter think we and growth. if or demand that to the I to providers quarters I So then which that's happen, get two is a few

I Texas think in just what call, give one of overnight, early anecdotes, XXX% seeing kind of the increased on just the some we're as we indication mentioned ground. as to traffic website the in just you

Stephen Byrd

about sure I'm about adoption in seeing period kind to time, I in but just as are practical you the you as a likely the And thinking the about terms of back trends stepping of multiyear for You've kind to time, a high, know is sure over storage preference importance consumer talked you on make there constraints I know past be just rates. over aside, storage rates. What very guess a what the I I put over period to say, of of storage? I'm lot of do a That's easy guessing issues. way are attach that But thought and I of very want to think likely there is helpful. time. make correctly. lot let's think which of multi

Lynn Jurich

out will in geographically and/or roll And Very really resiliency It there different where on XX%-plus. local California Northern prices real California, high. of just and/or it's high power And a or these rates. value bit kind places is or Hawaii place based issues proposition. like a type

that net revenue think, extremely $X,XXX-plus. you much is – brings attach grid the benefits get be very we It belief you for cost of of to because that drive just couple a indications kind ubiquitous, unit the you will be it's thousand it get of going for to our down the that dollars, for of as So early how The if that or around pretty can resiliency. attractive rates. $X,XXX can off high battery $X,XXX, is will outlay services

our internally, that it one – it attached to single should our battery solar vision is every term. medium our over systems So pretty the have much of

Stephen Byrd

from That's seem grid place I does Texas helpful. the reinforce data that you. And all Yes. a That's like view. Thank had. in to the certainly

Lynn Jurich

Great, you. thank

Operator

coming from is Securities. you. next Richardson from Thank Tristan question Truist The

Your line now live. is

Tristan Richardson

evening, Good questions. the opportunity for appreciate

offering? comments Just a service think your question term expect accelerate with stand-alone should to low-cost quick near the there? penetration a primarily state. in we Or as we power on retail think activity respect a is of I to still case? it Texas. storage think Is we opportunity that Texas Should generally generally generally

Lynn Jurich

of that the mean You solar plus battery?

Tristan Richardson

Right.

Lynn Jurich

battery. with to sense Yes. that I the solar makes – pair no, believe it would I more

customers just use outages. many multiple example, So who to had we an multi-day had

was to battery run the and day the then through so with recharge the next solar. night And able

power and uninterrupted XX hours. customers worked who lost we for So had

want on already some really of mean the a Plus, felt you competitive the given piece be pass-through we've aspect quite $X.XX that the to variable a of now. fixed with about it's price in much that plans. really will solar $X.XX the That's think is the think on traditional I to – I solar fact rate – I also were now, pricing that people sold attractive more So so really kilowatt-hour these pain competitive rate plans. who And rechargeability. Texas. the for many that

Tristan Richardson

see the whether know That's to And outages? temporary to there. respect the downside, Or a in perspective it we could see But just from first quarter? expect disruption then I could disruption-wise is the in the anything be just low that we base helpful. Texas, to weather with anything relatively installed

Lynn Jurich

even back with even more winds high No. had remember and That's – issue. I we [Audio super Dip] maintenance mean, the resilient. mean, Hurricane this do. I you But if look you than Sandy, to may I zero Ed,

Ed Fenster

maybe company state it, and just exposure as is none power a our are we rate this as on to rates to have And of and well. wholesale plans Ed, no expressly floating customers

Lynn Jurich

correct. Yes,

Tristan Richardson

you it. Appreciate helpful. guys Thank much. very That’s

Operator

Thank you.

Aric Li Bank coming from is today question Next of America. from

Your line is live. now

Aric Li

questions. Good thanks afternoon taking for and the

the upon touch to guidance wanted just growth So again.

growth your you, growth as expectations XX%, with still two, talk So broader XX% XXXX? XX% is one, for and solar full in XX%, annual megawatts that long-term XXXX, about growth; could resi year your into market for step expectations, we

Lynn Jurich

Great question.

think cost it's and I the COVID – new situation entrants this of so year and capital given is just things. and dynamic,

call XX% so in rate share-taker. We market what to and be. will market – we think XX% we a too feel will early to our is that we're be hit We believe position our I growth the growth. feel confident it able confident it's that think to I

we're So us. a that. that encouraged we is growth make the those at I is other are doing rate large on such I an it clearly think And scale think one would very for this do by things of now. the acceleration we're statements

look competitor of integration, confidence lot a put – could gives rate as what But large now. right which growth had makes out an at to scale us historically. of twice doing we're Sunrun, and you too next if exceed the So accelerating as that the growth, call we the we're early potentially yet us

Aric Li

than for also would let it. how x your on expectations, XXX% on storage, clarify storage? Got I'll units units than Brightbox greater many growth And and it Is equate to Sorry, greater to? guide first. clarify like you just

Lynn Jurich

given last in We've have we not disclosed XX,XXX But operation. that had the we we specific Sure. – year's number. have

the installed cumulative. are So XX,XXX

Aric Li

install lead and to equipment constraints a – installer storage it's of terms some in, storage And to installers storage. in But the good for that taking the much then to only. you you. supply times Got to get – a prioritize know for I currently? We're hearing solar amount just an longer how that's is longer meaning constraint mentioned of

Lynn Jurich

Yes.

I that's pointing think – thank you out. for that

I channel light like go-to-market why really think strategy. have we that's to a

company workforce. we very our effective. installation think think sales that and the – as we're both I well direct I have And own has been dealers as only it's

we being that up that on you're get start a happen. And able storage have the of part to able long is a the I tail. to suffer train that's, your versus think such out are I that growing learning direct maybe sales to why few pains think, fast and curve, people, install channel

So – yes, does product. have educate it's installers. complicated a It more you to

which battery permitting departments. accelerate we're why, educate really where believe through they is there. again, constraints down should our we've to that, We already loosens when to we up win have But been lead be. to primed You when come prices

Aric Li

of opportunities? that in for and expect one in pursuing shift towards to these talked expanding me, from rest last something this year? is customers you upsell that it. to Got of Is the with line the But about offline. now, the the see should we And I'll middle take what time advantages just XXX,XXX terms upsell then over question customer to your

Lynn Jurich

In in, what retrofitting terms batteries or back specifically going of things? you that mean? other Is

Aric Li

other that and mentioned. Batteries things Yes. you've

Lynn Jurich

Yes. That opportunity. is certainly an

retrofit is that. so better not available constraints because, Today, have we and the to more much Brightbox way because option that time do again, that and some there's be quarters. installation, the We prioritized technology in prioritized new will to consumers same at much one all just improving the it's be we've coming efficient will it that believe

expect plan the but the corporate part that, been be will priority retrofit, so year do it our So a this of that but – not far. has we

Aric Li

Got it, thank you.

Lynn Jurich

you. Thank

Operator

Oppenheimer. Our from is coming Thank Instructions] next you. [Operator Rusch Colin question from

Your line now live. is

Joseph Beninati

in Are bills the potential that Hi, on included of could for of the year? be It's federal in lieu any for spending there. on you seeing this Joe any discussion. policy Colin. tax potentially cash credits Circling back

Ed Fenster

is Great it's is but been effort. that intensely law, certainly a into be surprised if some we've not is question. Ed. have been would this that I really of sort on, topic Yes, that This and part of lobbying enacted policy possible.

Joseph Beninati

like sense into geographies, well. into rollout is on any the to it then looking going Got sounds it make Does move geographies really it. Texas additional the new And XXXX?

Lynn Jurich

markets I – you The Miami – the And competitive. that two continuing rates as recently again, we're will we have do more we are this announced that. think the were question. and you expansions see Antonio ones continue just announced. are up to quarter, to more decrease, Good opening are our utility San continuing that costs and to fact getting and fact rise that and

think market expansions do a I where than you XXXX So see we will more be new previously. year thought will

Now we massive the there – – stated any to so geographic of require would that do not same-store, the to out sort It's our growth target. sort targets us incremental growth more put of expansion. that be

Joseph Beninati

you side. power virtual capabilities? development Got enhance more the on Are would that anything could it. And the the I storage seeing if one sneak in on technology front plant

Lynn Jurich

the primary Just example, mean for down, announced think of the these – think, we quarter, rolling earlier just the in the one. fact grid the out announced borne keeps okay, that I that's we it's Southern I is, that California program, mean I the blackouts. as going Edison, I in that

a notice more And utilities so be able is regulator and grid battery be I just think the necessity more for when to at to interest dispatch there's taxed. moment's the coordinated to

Joseph Beninati

much. so thanks Great,

Lynn Jurich

Thank you.

Operator

you. Thank

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

is live. line Your now

Philip Shen

an in get From for then that Hey, the XXXX? XXXX standpoint, we do do taking generate think revenue absolute you as how think you you questions. and Thanks into guys. could dollar And grid how much trends service XXXX?

Lynn Jurich

– we've markets able grids announced know So far on, lead we far that XX we're hey, services do as working in can been access. on. and away get we believe grid services geographies open as we open we're – we've programs, how And so really many the which up to many we're up we as

near-term we're results. like been now, just announced scale of our at not of foundation The in sort financial huge the terms and building kind to we have building most the So have they're programs the for contributors of market. the that part

beyond will, sort I committed. have contributors, its mean, – big assets we more color pilot, it's But we do now, in will of because sort say more when we really – So to still become of But for provide they in it's decent would it's start still of a innings. early definitely expect they which I a amount there.

Philip Shen

you as about think first… And Okay. the

Lynn Jurich

clarify. me Let

any there that sort would one or clarify change pay any sort because fees about has point in being an other have that of to me after directionally Let that past, has to enticement $X,XXX of still think customer additional customer talked operate, you we net have that there, Sunrun – to no the the and to per been outlook. we value

Philip Shen

demonstrated contracts capability you that of allow your you and your or contracts over want that contracts, percentage clients' checked, have capability example, of in kind generate vast ramp here. just the does you – up to for nicely? you Okay. the and you a have PPA Great. question leadership if of ramp is provide definitely give the to half time, of box ability And those to to grid as talking we that the of this just have refinement, guys services how with have Because Are majority? to terms legal leased And about what revenue? understand that to

Lynn Jurich

– I question. you the wasn't quite Ed, following I Tom, – maybe were

Ed Fenster

Yes.

the of over the of I side legacy without the is answer in to percentage our allow permission, several for customer And think question customer contracts the last what grid about it certainly they have. think enrollment the that house, would is I years subsequent express Sunrun on services. all

number it's customers. working of But I the think very, we course very action. still with of our like maybe customers material a better is feel

Lynn Jurich

Correct.

Philip Shen

guys. on. pass Great, okay. it I’ll Thanks

Lynn Jurich

Phil. Thanks,

Operator

you. Thank

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

Lynn Jurich

Take we'll All care. thank right. to Well, you, another quarter. in talk again everybody, and you

Operator

you. Thank does conclude That today's teleconference.

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