Sunrun (Nasdaq: RUN), the nation’s leading provider of residential
solar, storage and energy services, today announced financial
results for the first quarter ended March 31, 2021.
“This year is on track to be the best in the company’s history.
With an accelerating growth rate and expanding market reach, Sunrun
is leading the country to a clean energy future,” said Lynn Jurich,
Sunrun’s Chief Executive Office and co-founder. “Now is the time
for us to move to a distributed energy system to meet the increased
demands placed on our energy system from broad-based adoption of
electric vehicles and improve the resiliency of our aging energy
system.”
“Our momentum in the fourth quarter has continued into 2021,”
said Tom vonReichbauer, Sunrun’s Chief Financial Officer. “The
Sunrun team delivered seasonal volume records at strong margins,
while meeting the demands of our ongoing integration with Vivint
Solar. We expect to accelerate our growth even further while
improving the value we bring to our partners and customers. Our
execution, scale advantages, differentiated service offering, and
leading competitive position give us confidence to increase our
full-year growth guidance to 25% to 30%.”
Growth & Market Leadership
The growth opportunity for the solar industry is massive. Today,
only 3% of the 77 million addressable homes in the US have solar.
The US residential electricity market is over $187 billion per year
and ongoing utility spending has resulted in escalating retail
rates, increasing our value proposition and expanding our
addressable market. Households that adopt electric vehicles consume
approximately double the amount of electricity, increasing our
market opportunity and value proposition even further. In addition
to delivering a superior electricity service, we are increasingly
working to network our dispatchable solar and battery systems to
provide resources to the grid, such as virtual power plants, to
also serve the $120 billion annual market for utility capex. These
virtual power plants offer greater potential for resiliency and
precision than bulky centralized infrastructure.
Owing to network effects and density advantages, increasing
operating scale efficiencies, growing brand strength, capital
raising capabilities, and advanced product and service offerings,
we believe Sunrun will continue to expand our leadership position.
Here are a few highlights from the last quarter:
- In 2021 Sunrun expects to accelerate its growth rate to 25-30%,
an increase from the prior guidance of 20-25%. This growth is from
a baseline scale that’s already twice the next competitor, with
strong customer margins. Sunrun’s expanding customer value
proposition, growing brand strength, differentiated talent brand
and increasing competitive advantages are delivering share gains.
Sunrun delivered an all-time record Q1 volume in our direct-to-home
sales channel, in our channel partner business, and in our home
builder business.
- Severe weather caused by climate change continues to uncover
vulnerabilities with the electric grid’s aging infrastructure,
leaving millions of people without power. Sunrun has now installed
nearly 20,000 Brightbox systems nationwide, which offer homeowners
the ability to power through multi-day outages with clean and
reliable home energy. Brightbox also optimizes when power is
purchased or supplied to the grid, helping manage constraints on
the grid during peak times. Attachment rates of Brightbox batteries
have increased again in Q1 to a record level. We continue to expect
Brightbox installations to increase more than 100% in 2021 compared
to the prior year.
- We are delivering increased value to Channel partners from our
platform. This quarter we set an all-time record in volume in our
channel business. Sunrun continued to grow the selective group of
partners we work with by over 20% in Q1. Nearly all of the new
partners have agreed to exclusive agreements to sell Sunrun’s solar
service offering.
- Sunrun's new home business is starting to scale. We grew this
segment by more than 50% in the first quarter compared to the prior
year, pro-forma for Vivint Solar, and are working with 20 of the
top 30 homebuilders in California. Our pipeline of new homes is at
record levels and spans hundreds of communities which have been
awarded or are already under construction across the country.
- In January, Sunrun issued $400 million of 0% coupon convertible
senior notes and entered into a capped call transaction, increasing
the effective conversion price to $157.22 per share.
- In March, Sunrun closed a $201 million securitization of leases
and power purchase agreements at record-low financing costs. The
market increasingly recognizes the high quality of residential
solar assets and Sunrun’s industry-leading performance, especially
over the last year, allowing the company to enjoy yet another step
down in capital costs. The securitization consists of a
single-tranche of A- rated notes with a $201 million initial
balance, representing an 80.0% advance rate. The notes priced at a
yield of 2.46%, representing a spread to the benchmark swap rate of
135 bps. This is an improvement in the spread of approximately 40
bps from the securitization issued by Vivint Solar in September
2020, the previous low water mark.
- Politicians continue to recognize the importance of investing
in clean energy as a way to address climate change, create jobs and
improve the resilience of our energy infrastructure. Following the
two-year extension of the Investment Tax Credit (ITC) in December
2020, within the first 100 days of being in office President Biden
has proposed a 10-year extension of the ITC as part of his
infrastructure plan and has called for significant investments in
renewable energy and improving the resilience of our energy system.
Further, members of Congress have proposed specific legislation
that would extend the ITC for 10 years and make standalone or
retrofit storage eligible for the ITC. The ITC has a proven track
record of bipartisan support given the economic and environmental
benefits.
Innovation & Differentiation
The world has the technologies to move to a decentralized energy
architecture today. Home solar and batteries can operate
economically at small scale and can therefore be located where
energy is consumed, leveraging the built environment instead of
relying on expensive, centralized infrastructure whose design
specifications do not meet today’s weather reality. Sunrun is
effectuating this transition through continued business model
innovation and a superior customer experience. We provide
fixed-rate solar as a service subscriptions, whole-home backup
power capabilities, and participation in virtual power plants. We
are investing in efforts to further electrify the home, including
electric vehicle charging infrastructure and converting gas
appliances to electric. These efforts will increase Sunrun’s share
of the home energy wallet and enhance our value to customers. The
following recent developments highlight our innovation and
increasing differentiation:
- We continue to innovate and set the stage for increased
customer values by building larger systems and offering additional
services. We are actively exploring opportunities for Sunrun to
provide value for customers that have adopted electric vehicles and
expect to accelerate these partnerships and commercial
opportunities in the near future. Homes with electric vehicles
consume approximately double the amount of electricity. Home solar
and batteries are needed to meet this increased strain on the
electric system and Sunrun is well positioned to be the provider of
these services given our expertise managing and installing at-home
energy infrastructure, our national footprint, and reputation as a
trusted provider of clean energy services.
- Our business development and policy teams are actively
educating more utilities and grid operators on the valuable
services networked distributed energy resources can provide. Sunrun
has already forged 12 virtual power plant opportunities and has
continued growing our pipeline. We now have over $75 million in
expected revenue from grid service opportunities that have been
awarded or are in late-stage discussions. These opportunities
provide incremental recurring revenue and offer an enhanced
customer value proposition while also further differentiating
Sunrun’s offering from companies that lack the scale, network
density, and technical capabilities to serve this market. We
estimate that over 10% of geographies we serve today have beachhead
virtual power plant opportunities in place, which is expected to
expand to over 50% of our geographies in the coming years.
ESG Efforts: Embracing Sustainability & Investing in
Communities
Sunrun’s mission is to create a planet run by the sun and build
an affordable energy system that combats climate change and
provides energy access for all. We proactively serve all
stakeholders: our customers, our employees, the communities in
which we operate, and our business and financial partners.
Investing in our people and providing meaningful career
opportunities is critical to our success. As the country embarks on
upgrading infrastructure and rewiring our buildings, the demand for
skilled workers will increase substantially. We are focused on
developing a differentiated talent brand and providing
opportunities to train workers to be part of the clean energy
economy. The following recent developments highlight our commitment
to sustainability, investing in people, and investing in our
communities:
- In Q1 Sunrun launched a set of initiatives and programs, under
the Sunrun Academy, to expand job opportunities and increase career
advancement opportunities. By investing in our people, we can
attract and retain the best workforce with the skills needed to
electrify homes across the country. As part of this initiative,
Sunrun launched a program to further the development of our people
whereby all employees have access to an expanded tuition
reimbursement program to build skills needed for their career. This
program will help us train the next leaders, especially with
critical in-demand skills like electrical work. The Sunrun Academy
will be expanded in the coming months to provide core functional
skill training, leadership curriculum and provide more
opportunities for apprenticeships and licensing programs.
- Sunrun is accelerating efforts to hire those who have served
our country. In Q1, Sunrun was selected to be the first national
solar company to participate in the Department of Defense’s
SkillBridge program. The program provides opportunities to launch
careers after returning from active duty, for both servicemen and
women. In addition, Sunrun became the first solar company to be
approved for the Military Spouse Employment Program (MSEP) to
provide opportunities to spouses of our serving servicemen and
women. In the first few weeks of approval, we have already hired
dozens of transitioning service members and spouses under both
programs.
- In April, Sunrun unveiled sustainability goals in its fourth
annual Impact Report. These goals include offsetting more than 600
million metric tons of carbon emissions from the systems we will
deploy over the next decade. We also set a goal to achieve net zero
carbon emissions from our operations by 2040, to transition our
vehicle fleet to one third electric or hybrid within five years,
and to deploy at least 500 megawatts of solar to lower-income
people across the country by 2030.
- Sunrun continues its commitment to lead the industry on pay
equity by upholding the California Equal Pay Pledge and The White
House Equal Pay Pledge, as well as providing a wage of at least $15
per hour to all employees. Sunrun established a Human Rights
policy, building on Sunrun’s commitment to fair and equitable
treatment.
- Sunrun is committed to building an inclusive and diverse
workforce. As of December 31, 2020, women make up 50% of our
executive management team and 44% of our Board of Directors. Nearly
one quarter of all Sunrun employees are women. Sunrun is aiming for
gender representation parity in director and above roles by 2025
and race/ethnicity representation parity in manager roles by
2025.
- The solar systems we deployed in Q1 are expected to prevent the
emission of over 3.9 million metric tons of CO2 over the next
thirty years. Over the last twelve months, Sunrun’s systems are
estimated to have offset more than 2.4 million metric tons of
CO2.
Key Operating Metrics
Note that the following operating metrics are presented
pro-forma to include operations from Vivint Solar during the entire
period, unless otherwise stated.
In the first quarter of 2021, Customer Additions were 23,556,
including 20,087 Subscriber Additions. As of March 31, 2021, Sunrun
had 573,634 Customers, including 498,997 Subscribers.
Annual Recurring Revenue from Subscribers was $683 million as of
March 31, 2021. The Average Contract Life Remaining of Subscribers
was 17.2 years as of March 31, 2021.
Subscriber Value was $35,673 in the first quarter of 2021 while
Creation Cost was $27,476. Net Subscriber Value was $8,197 in the
first quarter of 2021.
Total Value Generated was $164.7 million in the first quarter of
2021.
Gross Earning Assets as of March 31, 2021 were $8.1 billion. Net
Earning Assets were $4.2 billion, which includes $813 million in
total cash, as of March 31, 2021.
Solar Energy Capacity Installed was 167.6 Megawatts in the first
quarter of 2021. Solar Energy Capacity Installed for Subscribers
was 144.5 Megawatts in the first quarter of 2021.
Networked Solar Energy Capacity was 4,052 Megawatts as of March
31, 2021. Networked Solar Energy Capacity for Subscribers was 3,551
Megawatts as of March 31, 2021.
Outlook
Management now expects Solar Energy Capacity Installed growth to
be in a range of 25% to 30% for the full-year 2021, pro-forma for
Vivint Solar, an increase from management’s prior outlook of 20% to
25% growth. Total Value Generated is now expected to be above $750
million in 2021 for the full year, an increase from the prior
expectation of over $700 million.
Management continues to expect cost synergies derived from the
acquisition of Vivint Solar to be approximately $120 million in
run-rate synergies by the end of 2021.
First Quarter 2021 GAAP Results
Note that the following GAAP results include Vivint Solar,
unless otherwise stated, and are not presented pro-forma to include
Vivint Solar prior to the closing of the acquisition on October 8,
2020.
Total revenue was $334.8 million in the first quarter of 2021,
up $124.1 million, or 59%, from the first quarter of 2020. Customer
agreements and incentives revenue was $174.6 million, an increase
of $75.5 million, or 76%, compared to the first quarter of 2020.
Solar energy systems and product sales revenue was $160.2 million,
an increase of $48.6 million, or 44%, compared to the first quarter
of 2020.
Total cost of revenue was $294.4 million, an increase of 73%
year-over-year. Total operating expenses were $513.3 million, an
increase of 88% year-over-year.
Included in operating costs for the first quarter of 2021 were
$2.2 million of non-recurring expenses, primarily restructuring and
deal costs related to the acquisition of Vivint Solar. Operating
costs also include stock-based compensation expenses of $78.0
million in the first quarter of 2021. In the first quarter, cash
outflows related to capped call transactions, debt discounts,
expenses related to the issuance of the convertible notes, and
non-recurring integration related expenses were approximately $43
million.
Consistent with purchase accounting standards under GAAP, the
fair value of outstanding equity awards for Vivint Solar employees
was reevaluated upon the closing of the acquisition, which resulted
in a step-up of the value of such awards, which will result in an
increase to non-cash stock-based compensation expense until such
awards have fully vested. Additionally, the value of Solar Energy
Systems was recorded based on a fair value assessment, which was
approximately $1.1 billion higher than the book value at the date
of the acquisition, and will result in additional non-cash
depreciation expense over the estimated useful life of the assets,
partially offset by a write-off of Vivint Solar’s Cost to Obtain
Customer Agreements.
Net loss attributable to common stockholders was $23.8 million,
or $0.12 per share, in the first quarter of 2021.
Financing Activities
As of May 5, 2021, closed transactions and executed term sheets
provide us expected tax equity and project debt capacity to fund
over 540 megawatts of Solar Energy Capacity Installed for
Subscribers beyond what was deployed through the end of the first
quarter of 2021.
Conference Call Information
Sunrun is hosting a conference call for analysts and investors
to discuss its first quarter 2021 results and business outlook at
2:00 p.m. Pacific Time today, May 5, 2021. A live audio webcast of
the conference call along with supplemental financial information
will be accessible via the “Investor Relations” section of Sunrun’s
website at https://investors.sunrun.com. The conference call can
also be accessed live over the phone by dialing 877-407-5989
(toll-free) or 201-689-8434 (international). An audio replay will
be available following the call on the Sunrun Investor Relations
website for approximately one month.
About Sunrun
Sunrun Inc. (Nasdaq: RUN) is the nation’s leading home solar,
battery storage, and energy services company. Founded in 2007,
Sunrun pioneered home solar service plans to make local clean
energy more accessible to everyone for little to no upfront cost.
Sunrun’s innovative home battery solution, Brightbox, brings
families affordable, resilient, and reliable energy. The company
can also manage and share stored solar energy from the batteries to
provide benefits to households, utilities, and the electric grid
while reducing our reliance on polluting energy sources. For more
information, please visit www.sunrun.com.
Forward Looking Statements
This communication contains forward-looking statements related
to Sunrun (the “Company”) within the meaning of Section 27A of the
Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of
1995. Such forward-looking statements include, but are not limited
to, statements related to: the impact of COVID-19 on the Company
and its business and operations; the Company’s financial and
operating guidance and expectations; the Company’s business plan,
market leadership, competitive advantages, operational and
financial results and metrics (and the assumptions related to the
calculation of such metrics); the Company’s momentum in the
company’s business strategies, expectations regarding market share,
customer value proposition, market penetration, financing
activities, financing capacity, product mix, and ability to manage
cash flow and liquidity; the growth of the solar industry; the
Company’s ability to manage supply chains and workforce; factors
outside of the Company’s control such as macroeconomic trends,
public health emergencies, natural disasters, and the impacts of
climate change; the legislative and regulatory environment of the
solar industry; and expectations regarding the Company’s storage
and energy services businesses, the Company’s acquisition of Vivint
Solar (including cost synergies), the Company’s capped call
transaction, anticipated emissions reductions due to utilization of
the Company’s solar systems, and expectations regarding the growth
of home electrification, electric vehicles, virtual power plants,
and distributed energy resources. These statements are not
guarantees of future performance; they reflect the Company’s
current views with respect to future events and are based on
assumptions and estimates and are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different
from expectations or results projected or implied by
forward-looking statements. The risks and uncertainties that could
cause the Company’s results to differ materially from those
expressed or implied by such forward-looking statements include:
the impact of COVID-19 on the Company and its business and
operations; the successful integration of Vivint Solar; the
availability of additional financing on acceptable terms; changes
in the retail prices of traditional utility generated electricity;
worldwide economic conditions, including slow or negative growth
rates in global and domestic economies and weakened consumer
confidence and spending; changes in policies and regulations
including net metering and interconnection limits or caps; the
availability of rebates, tax credits and other incentives; the
availability of solar panels, batteries, and other components and
raw materials; the Company’s ability to attract and retain the
Company’s relationships with third parties, including the Company’s
solar partners; the Company’s continued ability to manage costs
associated with solar service offerings; the Company’s business
plan and the Company’s ability to effectively manage the Company’s
growth and labor constraints; the Company’s ability to meet the
covenants in the Company’s investment funds and debt facilities;
factors impacting the solar industry generally, an and such other
risks and uncertainties identified in the reports that we file with
the U.S. Securities and Exchange Commission from time to time. All
forward-looking statements used herein are based on information
available to us as of the date hereof, and we assume no obligation
to update publicly these forward-looking statements for any reason,
except as required by law.
Citations to industry and market statistics used herein may be
found in our Investor Presentation, available via the “Investor
Relations” section of Sunrun’s website at
https://investors.sunrun.com.
Consolidated Balance
Sheets(In Thousands)
|
|
March 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
Assets |
|
|
|
|
Current
assets: |
|
|
|
|
Cash |
|
$ |
649,493 |
|
|
$ |
519,965 |
|
Restricted cash |
|
163,792 |
|
|
188,095 |
|
Accounts receivable, net |
|
125,499 |
|
|
95,141 |
|
Inventories |
|
289,772 |
|
|
283,045 |
|
Prepaid expenses and other current assets |
|
40,098 |
|
|
51,483 |
|
Total current assets |
|
1,268,654 |
|
|
1,137,729 |
|
Restricted cash |
|
148 |
|
|
148 |
|
Solar energy systems, net |
|
8,460,443 |
|
|
8,202,788 |
|
Property and equipment, net |
|
58,168 |
|
|
62,182 |
|
Intangible assets, net |
|
17,109 |
|
|
18,262 |
|
Goodwill |
|
4,280,169 |
|
|
4,280,169 |
|
Other assets |
|
801,270 |
|
|
681,665 |
|
Total assets |
|
$ |
14,885,961 |
|
|
$ |
14,382,943 |
|
Liabilities and total
equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
212,230 |
|
|
$ |
207,441 |
|
Distributions payable to noncontrolling interests and redeemable
noncontrolling interests |
|
27,726 |
|
|
28,627 |
|
Accrued expenses and other liabilities |
|
312,566 |
|
|
325,614 |
|
Deferred revenue, current portion |
|
106,749 |
|
|
108,452 |
|
Deferred grants, current portion |
|
8,238 |
|
|
8,251 |
|
Finance lease obligations, current portion |
|
10,707 |
|
|
11,037 |
|
Non-recourse debt, current portion |
|
103,498 |
|
|
195,036 |
|
Pass-through financing obligation, current portion |
|
17,121 |
|
|
16,898 |
|
Total current liabilities |
|
798,835 |
|
|
901,356 |
|
Deferred revenue, net of current portion |
|
700,382 |
|
|
690,824 |
|
Deferred grants, net of current portion |
|
210,863 |
|
|
213,269 |
|
Finance lease obligations, net of current portion |
|
11,185 |
|
|
12,929 |
|
Convertible senior notes |
|
388,960 |
|
|
— |
|
Recourse debt |
|
180,197 |
|
|
230,660 |
|
Non-recourse debt, net of current portion |
|
4,601,570 |
|
|
4,370,449 |
|
Pass-through financing obligation, net of current portion |
|
322,110 |
|
|
323,496 |
|
Other liabilities |
|
193,168 |
|
|
268,684 |
|
Deferred tax liabilities |
|
86,095 |
|
|
81,905 |
|
Total liabilities |
|
7,493,365 |
|
|
7,093,572 |
|
Redeemable noncontrolling
interests |
|
536,294 |
|
|
560,461 |
|
Total stockholders’
equity |
|
6,165,560 |
|
|
6,077,911 |
|
Noncontrolling interests |
|
690,742 |
|
|
650,999 |
|
Total equity |
|
6,856,302 |
|
|
6,728,910 |
|
Total liabilities, redeemable noncontrolling interests and
total equity |
|
$ |
14,885,961 |
|
|
$ |
14,382,943 |
|
Consolidated Statements of
Operations(In Thousands, Except Per Share
Amounts)
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
Customer agreements and incentives |
|
$ |
174,596 |
|
|
|
$ |
99,124 |
|
|
Solar energy systems and product sales |
|
160,198 |
|
|
|
111,607 |
|
|
Total revenue |
|
334,794 |
|
|
|
210,731 |
|
|
Operating expenses: |
|
|
|
|
Cost of customer agreements and incentives |
|
160,277 |
|
|
|
78,277 |
|
|
Cost of solar energy systems and product sales |
|
134,082 |
|
|
|
91,598 |
|
|
Sales and marketing |
|
126,113 |
|
|
|
70,270 |
|
|
Research and development |
|
5,872 |
|
|
|
4,046 |
|
|
General and administrative |
|
85,630 |
|
|
|
28,074 |
|
|
Amortization of intangible assets |
|
1,345 |
|
|
|
1,483 |
|
|
Total operating expenses |
|
513,319 |
|
|
|
273,748 |
|
|
Loss from operations |
|
(178,525 |
) |
|
|
(63,017 |
) |
|
Interest expense, net |
|
(74,270 |
) |
|
|
(49,924 |
) |
|
Other income, net |
|
34,347 |
|
|
|
50 |
|
|
Loss before income taxes |
|
(218,448 |
) |
|
|
(112,891 |
) |
|
Income tax benefit |
|
(14,126 |
) |
|
|
(3,342 |
) |
|
Net loss |
|
(204,322 |
) |
|
|
(109,549 |
) |
|
Net loss attributable to noncontrolling interests and redeemable
noncontrolling interests |
|
(180,533 |
) |
|
|
(81,590 |
) |
|
Net loss attributable to common stockholders |
|
$ |
(23,789 |
) |
|
|
$ |
(27,959 |
) |
|
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.12 |
) |
|
|
$ |
(0.23 |
) |
|
Diluted |
|
$ |
(0.12 |
) |
|
|
$ |
(0.23 |
) |
|
Weighted average shares used to compute net loss per share
attributable to common stockholders |
|
|
|
|
|
|
|
Basic |
|
202,562 |
|
|
|
119,220 |
|
|
Diluted |
|
202,562 |
|
|
|
119,220 |
|
|
Consolidated Statements of Cash
Flows(In Thousands)
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
Operating
activities: |
|
|
|
|
Net loss |
|
$ |
(204,322 |
) |
|
|
$ |
(109,549 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization, net of amortization of deferred
grants |
|
91,955 |
|
|
|
51,021 |
|
|
Deferred income taxes |
|
(14,126 |
) |
|
|
(3,342 |
) |
|
Stock-based compensation expense |
|
78,029 |
|
|
|
7,309 |
|
|
Bonus liability converted to RSUs |
|
— |
|
|
|
11,636 |
|
|
Interest on pass-through financing obligations |
|
5,394 |
|
|
|
5,877 |
|
|
Reduction in pass-through financing obligations |
|
(10,219 |
) |
|
|
(9,689 |
) |
|
Other noncash items |
|
(28,451 |
) |
|
|
11,442 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(32,311 |
) |
|
|
11,044 |
|
|
Inventories |
|
(6,727 |
) |
|
|
2,957 |
|
|
Prepaid and other assets |
|
(88,469 |
) |
|
|
1,115 |
|
|
Accounts payable |
|
1,479 |
|
|
|
(55,604 |
) |
|
Accrued expenses and other liabilities |
|
14,113 |
|
|
|
(51,667 |
) |
|
Deferred revenue |
|
8,008 |
|
|
|
10,565 |
|
|
Net cash used in operating activities |
|
(185,647 |
) |
|
|
(116,885 |
) |
|
Investing
activities: |
|
|
|
|
Payments for the costs of solar energy systems |
|
(357,012 |
) |
|
|
(207,360 |
) |
|
Purchases of property and equipment, net |
|
(39 |
) |
|
|
(3,105 |
) |
|
Net cash used in investing activities |
|
(357,051 |
) |
|
|
(210,465 |
) |
|
Financing
activities: |
|
|
|
|
Proceeds from issuance of recourse debt, net of capped call
transaction |
|
579,694 |
|
|
|
43,475 |
|
|
Repayment of recourse debt |
|
(258,160 |
) |
|
|
(45,000 |
) |
|
Proceeds from issuance of non-recourse debt |
|
431,633 |
|
|
|
191,751 |
|
|
Repayment of non-recourse debt |
|
(293,409 |
) |
|
|
(12,997 |
) |
|
Payment of debt fees |
|
(15,360 |
) |
|
|
— |
|
|
Proceeds from pass-through financing and other obligations |
|
2,486 |
|
|
|
1,762 |
|
|
Payment of finance lease obligations |
|
(3,087 |
) |
|
|
(2,953 |
) |
|
Contributions received from noncontrolling interests and redeemable
noncontrolling interests |
|
247,693 |
|
|
|
170,904 |
|
|
Distributions paid to noncontrolling interests and redeemable
noncontrolling interests |
|
(47,913 |
) |
|
|
(18,992 |
) |
|
Acquisition of noncontrolling interests |
|
(4,195 |
) |
|
|
— |
|
|
Net proceeds related to stock-based award activities |
|
8,541 |
|
|
|
2,419 |
|
|
Net cash provided by financing activities |
|
647,923 |
|
|
|
330,369 |
|
|
Net change in cash and
restricted cash |
|
105,225 |
|
|
|
3,019 |
|
|
Cash and restricted cash,
beginning of period |
|
708,208 |
|
|
|
363,229 |
|
|
Cash and restricted cash, end
of period |
|
$ |
813,433 |
|
|
|
$ |
366,248 |
|
|
Key Operating and Financial
Metrics
In-period volume
metrics: |
Three Months EndedMarch 31,
2021 |
Customer Additions |
|
23,556 |
Subscriber Additions |
|
20,087 |
Solar Energy Capacity Installed (in Megawatts) |
|
167.6 |
Solar Energy Capacity Installed for Subscribers (in Megawatts) |
|
144.5 |
|
|
In-period value
creation metrics:(1) |
Three Months Ended March 31,
2021 |
Subscriber Value Contracted Period |
$ |
32,620 |
Subscriber Value Renewal Period |
$ |
3,053 |
Subscriber Value |
$ |
35,673 |
Creation Cost |
$ |
27,476 |
Net Subscriber Value |
$ |
8,197 |
Total Value Generated (in millions) |
$ |
165 |
|
|
|
|
In-period
environmental impact metrics:(1) |
Three Months EndedMarch 31,
2021 |
Positive Environmental Impact from Customers (over trailing twelve
months, in millions of metric tons of CO2 avoidance) |
|
2.4 |
Positive Expected Lifetime Environmental Impact from Customer
Additions (in millions of metric tons of CO2 avoidance) |
|
3.9 |
|
|
|
|
Period-end
metrics: |
March 31, 2021 |
Customers |
|
573,634 |
Subscribers |
|
498,997 |
Networked Solar Energy Capacity (in megawatts) |
|
4,052 |
Networked Solar Energy Capacity for Subscribers (in megawatts) |
|
3,551 |
Annual Recurring Revenue (in millions) |
$ |
683 |
Average Contract Life Remaining (in years) |
|
17.2 |
Gross Earning Assets Contracted Period (in millions) |
$ |
5,488 |
Gross Earning Assets Renewal Period (in millions) |
$ |
2,633 |
Gross Earning Assets (in millions) |
$ |
8,122 |
Net Earning Assets (in millions) |
$ |
4,227 |
Note that figures presented above may not sum due to rounding.
For adjustments related to Subscriber Value and Creation Cost,
please see the supplemental Creation Cost Methodology memo for each
applicable period, which is available on investors.sunrun.com.
Definitions
Deployments represent solar energy systems,
whether sold directly to customers or subject to executed Customer
Agreements (i) for which we have confirmation that the systems are
installed on the roof, subject to final inspection, (ii) in the
case of certain system installations by our partners, for which we
have accrued at least 80% of the expected project cost, or (iii)
for multi-family and any other systems that have reached our
internal milestone signaling construction can commence following
design completion, measured on the percentage of the system that
has been completed based on expected system cost.
Customer Agreements refer to, collectively,
solar power purchase agreements and solar leases.
Subscriber Additions represent the number of
Deployments in the period that are subject to executed Customer
Agreements.
Customer Additions represent the number of
Deployments in the period.
Solar Energy Capacity Installed represents the
aggregate megawatt production capacity of our solar energy systems
that were recognized as Deployments in the period.
Solar Energy Capacity Installed for Subscribers
represents the aggregate megawatt production capacity of our solar
energy systems that were recognized as Deployments in the period
that are subject to executed Customer Agreements.
Creation Cost represents the sum of certain
operating expenses and capital expenditures incurred divided by
applicable Customer Additions and Subscriber Additions in the
period. Creation Cost is comprised of (i) installation costs, which
includes the increase in gross solar energy system assets and the
cost of customer agreement revenue, excluding depreciation expense
of fixed solar assets, and operating and maintenance expenses
associated with existing Subscribers, plus (ii) sales and marketing
costs, including increases to the gross capitalized costs to obtain
contracts, net of the amortization expense of the costs to obtain
contracts, plus (iii) general and administrative costs, and less
(iv) the gross profit derived from selling systems to customers
under sale agreements and Sunrun’s product distribution and lead
generation businesses. Creation Cost excludes stock based
compensation, amortization of intangibles, and research and
development expenses, along with other items the company deems to
be non-recurring or extraordinary in nature.
Subscriber Value represents the per subscriber
value of upfront and future cash flows (discounted at 5%) from
Subscriber Additions in the period, including expected payments
from customers as set forth in Customer Agreements, net proceeds
from tax equity finance partners, payments from utility incentive
and state rebate programs, contracted net grid service program cash
flows, projected future cash flows from solar energy renewable
energy credit sales, less estimated operating and maintenance costs
to service the systems and replace equipment, consistent with
estimates by independent engineers, over the initial term of the
Customer Agreements and estimated renewal period. For Customer
Agreements with 25 year initial contract terms, a 5 year renewal
period is assumed. For a 20 year initial contract term, a 10 year
renewal period is assumed. In all instances, we assume a 30-year
customer relationship, although the customer may renew for
additional years, or purchase the system.
Net Subscriber Value represents Subscriber
Value less Creation Cost.
Total Value Generated represents Net Subscriber
Value multiplied by Subscriber Additions.
Customers represent the cumulative number of
Deployments, from the company’s inception through the measurement
date.
Subscribers represent the cumulative number of
Customer Agreements for systems that have been recognized as
Deployments through the measurement date.
Networked Solar Energy Capacity represents the
aggregate megawatt production capacity of our solar energy systems
that have been recognized as Deployments, from the company’s
inception through the measurement date.
Networked Solar Energy Capacity for Subscribers
represents the aggregate megawatt production capacity of our solar
energy systems that have been recognized as Deployments, from the
company’s inception through the measurement date, that have been
subject to executed Customer Agreements.
Gross Earning Assets is calculated as Gross
Earning Assets Contracted Period plus Gross Earning Assets Renewal
Period.
Gross Earning Assets Contracted Period
represents the present value of the remaining net cash flows
(discounted at 5%) during the initial term of our Customer
Agreements as of the measurement date. It is calculated as the
present value of cash flows (discounted at 5%) that we would
receive from Subscribers in future periods as set forth in Customer
Agreements, after deducting expected operating and maintenance
costs, equipment replacements costs, distributions to tax equity
partners in consolidated joint venture partnership flip structures,
and distributions to project equity investors. We include cash
flows we expect to receive in future periods from state incentive
and rebate programs, contracted sales of solar renewable energy
credits, and awarded net cash flows from grid service programs with
utilities or grid operators.
Gross Earning Assets Renewal Period is the
forecasted net present value we would receive upon or following the
expiration of the initial Customer Agreement term but before the
30th anniversary of the system’s activation (either in the form of
cash payments during any applicable renewal period or a system
purchase at the end of the initial term), for Subscribers as of the
measurement date. We calculate the Gross Earning Assets Renewal
Period amount at the expiration of the initial contract term
assuming either a system purchase or a renewal, forecasting only a
30-year customer relationship (although the customer may renew for
additional years, or purchase the system), at a contract rate equal
to 90% of the customer’s contractual rate in effect at the end of
the initial contract term. After the initial contract term, our
Customer Agreements typically automatically renew on an annual
basis and the rate is initially set at up to a 10% discount to
then-prevailing utility power prices.
Net Earning Assets represents Gross Earning
Assets, plus total cash, less adjusted debt and less pass-through
financing obligations, as of the same measurement date. Debt is
adjusted to exclude a pro-rata share of non-recourse debt
associated with funds with project equity structures along with
debt associated with the company’s ITC safe harboring facility.
Because estimated cash distributions to our project equity partners
are deducted from Gross Earning Assets, a proportional share of the
corresponding project level non-recourse debt is deducted from Net
Earning Assets, as such debt would be serviced from cash flows
already excluded from Gross Earning Assets.
Annual Recurring Revenue represents revenue
from Customer Agreements over the following twelve months for
Subscribers that have met initial revenue recognition criteria as
of the measurement date.
Average Contract Life Remaining represents the
average number of years remaining in the initial term of Customer
Agreements for Subscribers that have met revenue recognition
criteria as of the measurement date.
Positive Environmental Impact from Customers
represents the estimated reduction in carbon emissions as a result
of energy produced from our Networked Solar Energy Capacity over
the trailing twelve months. The figure is presented in millions of
metric tons of avoided carbon emissions and is calculated using the
Environmental Protection Agency’s AVERT tool.
Positive Expected Lifetime Environmental Impact from
Customer Additions represents the estimated reduction in
carbon emissions over thirty years as a result of energy produced
from solar energy systems that were recognized as Deployments in
the period. The figure is presented in millions of metric tons of
avoided carbon emissions and is calculated using the Environmental
Protection Agency’s AVERT tool.
Investor & Analyst Contact:
Patrick JobinSenior Vice President, Finance &
IRinvestors@sunrun.com(415) 373-5206
Media Contact:
Wyatt SemanekPublic Relations Managerpress@sunrun.com
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