Sunrun Withdraws 2020 Financial Guidance

Sunrun Withdraws Financial Guidance For 2020 & Undertakes ‘Labor-Related Cost Actions’ Owing To Uncertainty Created By COVID-19
04:38 PM (Beijing Time) - 08. April 2020

After residential solar installer Sungevity in the US was reported to have laid off 387 workers due to coronavirus crisis, Sunrun has also reportedly let go off 100 workers, according to Business Insider. Sunrun has withdrawn its 2020 forecast. (Photo Credit: Sunrun/Twitter)

Key Takeaways

  • COVID-19 impact on its business has forced Sunrun to withdraw its guidance for the year 2020
  • Company says it has undertaken several labor-related cost actions to bring down its quarterly costs
  • A report in Business Insider claims the company has let go off at least 100 or staff and furloughed 65 more

Earlier this year, leading US residential solar and storage installer Sunrun shared its Q4/2019 financial results claiming a return to profitability with $12.5 million net income while growing its 2019 deployment by 11% on annual basis. It claimed to be insulated against any supply disruptions arising out of coronavirus pandemic thanks to safe harboring equipment to claim 30% investment tax credit (ITC).

The management had also guided for Q1/2020 deployments to add up to 102 MW and annual deployments to grow by 15% (see Sunrun’s 2019 Deployments Increased By 11%). A month down the line, the US company has withdrawn its guidance due to ‘uncertainty related to the impact of COVID-19’ on its business.

In preliminary and unaudited results declared by the management for Q1/2020, Sunrun says it managed to deploy 97.4 MW and ended the quarter with $366 million in total cash, $3 million more than the previous quarter including $286 million in unrestricted cash.

The management says it has already taken actions to significantly lower expenses primarily from ‘various labor-related cost actions’ to bring down its quarterly costs by $30 million compared to Q1 levels. What Sunrun doesn’t specify, and news outlet Business Insider does, is that the company has laid of ‘at least 100 or so staff’ and ‘furloughed at least 65 more through a series of Google video calls’.

“We believe these cost actions strike an appropriate balance that considers the welfare of our employees, protecting the business against possible downside scenarios, and preserving our ability to grow quickly as the situation stabilizes,” the company stated.

Meanwhile, Sunrun sees an opportunity to be explored in the current scenario with people forced to be indoors and using more electricity during daytime. Having a rooftop solar system with storage claiming it can offer more certainty during uncertain times, greater financial value and more protection for families. Management has launched a new marketing messaging and product targeting the current times offering rooftop solar with or without storage for zero down payment and $1.00 monthly payment for first 6 months.

Philip Shen of Roth Capital Partners called the company’s announcement as a positive and added, “Similar to the findings on our US resi solar call last week, Sunrun has pivoted quickly to contact free sales and installation. We believe this change could result in inefficiencies and higher costs near-term, but accelerate the reduction in soft costs in the medium term. With $366mn in total cash and $286mn in unrestricted cash, we believe the company has sufficient liquidity for near-term general purposes, while closed tax equity and debt commitments capable of funding ~216MW at above 90% of project value positions the company to continue to fund asset growth, in our view.”

Another residential solar installer Sungevity laid off 387 workers at the end of March 2020, citing coronavirus and other business conditions, according to a GTM report.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani