Sunrun says the net subscriber values for Q4 2024 were its highest to date
This was thanks to the growing share of battery storage as well as a blended ITC of 39.8%
It was also the 3rd consecutive quarter of positive cash generation for the company
Sunrun expects robust growth in storage installations for FY2025, but flat growth for solar energy deployments
The one defining feature for US residential solar and storage systems company Sunrun during Q4 2024 was the ‘all-time’ high storage attachment rate and capacity installed. The company deployed 392 MWh of storage in Q4, a 78% year-on-year (YoY) increase, for 62% of its new customers – an improvement of 17 percentage points from a year ago.
Thanks to this, its net subscriber values were the highest for the company to date, at around $19,177. A blended Investment Tax Credit (ITC) of 39.8% also contributed to this.
For solar, the 242 MW installed during the reporting quarter was within the guided range, taking its total networked solar energy capacity to 7.5 GW. Sunrun’s total installed solar and storage systems capacity now exceeds 156,000, representing more than 2.5 GWh of stored energy capacity.
Its new customer additions were close to 32,900 for the quarter, including approximately 30,700 subscriber additions. Storage customer additions rose by 50%, with around 20,400. At the end of Q4, Sunrun had nearly 1 million customers and 889,000 subscribers.
The management also reported Q4 to be its 3rd consecutive quarter of positive cash generation with $34 million after safe harbor equipment purchases.
“Sunrun completed a $350mn equipment purchase while consuming $18mn in cash in 4Q24 to lock in the 10% domestic content bonus tax credit. The purchases mitigate risk for one year of solar deployments and 6 months of storage deployments,” according to Jeff Osborne of TD Cowen.
“We have a strong balance sheet with no nearterm corporate debt maturities and have paid down recourse parent debt by $186 million since March, including a $132 million paydown using excess cash in Q4,” said Sunrun CFO Danny Abajian. “As we increase our Cash Generation, we will continue to further pay down parent recourse debt and are committed to a capital allocation strategy beyond this initial de-leveraging period that drives significant shareholder value.”
Nevertheless, Sunrun suffered a net loss of $2.81 billion during the reporting quarter, representing a significant increase from $350.12 million in Q4 2023. For FY2024, the net loss widened from $2.68 billion in FY2023 to $4.35 billion (see Sunrun Installed 227.1 MW Solar Energy In Q4/2023).
Sunrun’s creation cost of $36,634 for the reporting quarter was down 1% on a YoY basis. It includes installation costs, sales and marketing costs, gross profit, and general and administrative costs. Efficiency improvements and hardware cost declines largely offset the increased costs associated with increasing storage attachment rates, shared the management.
According to Sunrun, its virtual power plants (VPP) successfully supported power grids across the country with a combined capacity of around 80 MW.
ROTH’s Philip Shen sees Sunrun doing well in the current market conditions for residential solar, where some established companies have been forced to exit the market or declare bankruptcies.
“The RUN platform appears to be stable and strong with healthy/robust liquidity. We believe management navigated the transition to hybrid tax equity deals—which can put a strain on working capital—smoothly,” explained Shen. “The company, in our view, is well on the other side of any working capital tightness that the transition may have caused and has built up a robust, repeat investor base.”
Guidance
For Q1 2025, Sunrun was cautious in its guidance as it expects to install 170 MW to 180 MW capacity representing approximately flat YoY growth at the midpoint. Storage capacity, on the other hand, will increase by 30% at the midpoint within the range of 265 MW to 275 MW, according to the management. Cash generation is forecast between $40 million and $50 million for the quarter.
For FY2025, the company expects cash generation of between $200 million and $500 million. While the management did not provide any specific range, it expects YoY robust growth in storage installations but flat growth for solar energy deployments.