Sunrun (RUN) 6 Aug 242024 Q2 Earnings call transcript

Good afternoon, and welcome to Sunrun's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded and that 1 hour has been allocated for the call, including question-and-answer session. [Operator Instructions] I will now turn the call over to Patrick Jobin, Sunrun's Investor Relations Officer. Please go ahead.

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

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

made update Please also obligation and to or we them. today, note these as statements disclaim of are revise being any

measures, substitute our financial we current also investors evaluation GAAP with be be facilitated for discussing prior provide During or supplemental believe period a an measures today's call, meaningful results. basis supplement should non-GAAP a considered financial can performance we will regarding comparable periods. as certain the business meaningful These which information for a performance of to of superior isolation on to from non-GAAP a not and and

non-GAAP in afternoon discussed filings we additional will measures each of our in regarding posted this issued financial release which on call the website. today's and the press SEC, You disclosures with find our our

over prepared remarks Mary the Officer, Sunrun's the the now minutes for Relations including On Mary. XX audio today's Paul Investor session. supplemental today available is call. call, a transcripts, materials. are of Relations the along call, the and me of Sunrun's session. Investor today's with turn Chair; including website, Co-Founder allocated replay today's will with Chief for Sunrun's and We've Fenster, on with An Powell, after the call Co-Executive let along to Abajian, CEO; And be and and to Dickson, along The Q&A presentation shortly website President the question-and-answer posted copy are CFO; call also Ed Revenue Danny Sunrun's Q&A call on Sunrun's

quarter-over-quarter all for records delivering value rates, storage of and Sunrun's Patrick, end joining In you net America strong for set installation the energy you, team beloved is high our provider and clean Sunrun's the installation quarter, thank of beating trusted solid strategy households become attachment subscriber across results. to installation second us the solar the delivering and today. storage and for while growth. guidance Thank

We also tax noted recouping delivered QX, transfer million the investment credit $XXX capital generation in in related working cash strong of QX.

is leader, differentiation, and additional to growing business focus our primary and launching values margin and come. to expand customer-focused for in services generation Our the accelerating products cash lifetime disciplined remaining years customer the

cash We guidance increasing are and generation our our on generation track exit to cash we XXXX. achieve XXXX as objectives for

exceed as full high We guidance even year on this than our we pays storage installation dividends on the are end to faster of expected. track storage year also our focus products

our now margin-focused of and activity the as pacing consumer be XXXX lower by soaring entrants than our continues end rates. strategy Nevertheless, solar sequential expected, in we are for initially range. expect build Driven seeing strong hot with lower summer we electricity at over our this sales slightly to we growth volumes guidance to order

on their hot bills and focus energy and driving to and home on continue the customers. large We summer consumers most costs. high accretive use related utility are The to focus

low range, prior our in reflect solar the products year, installation end value from excellent increasing and our of year. experience down the customers dynamics, storage we proposition. shareholders the guidance Driven installation to these while return is are geographies strategy strong Our growth to Sunrun and Sunrun are capacity on guidance a earn an focus XX% XX% for approximately by we can approximately XX% where to our approximately narrowing

double-digit to QX. and expect see growth in QX sequential solid resume in year-over-year QX solar We high-teens into and installations growth to

of guidance $XXX in reiterating cash million million our to generation are We $XX QX.

continue business million. higher are even The million XXXX $XXX rates declining. to storage of to are guidance we Utility for $XXX to rise, of cash generation addition, initiating fundamental accelerate. costs equipment while our In continue drivers

to efficiency ultimate what operating their in energy pew control to States. study issued independents. eager polls June Democrats resilient A for remain needs the of the solar favor United and with in power take continues improve. expanding solutions have power Customers Americans, customer affirmed years: lives, Republicans, majority the to experience and said independents their Our of affordable and in

This industry. storage-first, the business also and us capitalize faster lays allowed future ago, creation year foundation a grid for strategy the value Over the increases we regulatory proposition to from on which in oriented to changes better the and others be services. value customer has than

year differentiator. while attachment have providing for clear a new of margins of ago installing storage customers, we our installed XX% in control, installed the XXX% higher levels quarter. resiliency selling, installed increased from in on experience a for achieved QX, systems in prior a and Sunrun. X-point any We hours an Storage up the up most Sunrun's we in QX, increase from storage storage from rate enhance XXX-megawatt In monetizing XX% customer QX. and value and to and grid is the provide year

X.X-gigawatt networked XXX,XXX has systems installed. hours of reached fleet capacity Our storage with

in continue power to dispatchable country. of programs resources, operating dozen We still prove energy across the early advance a have we which than plants While potential. stages virtual commercializing valuable, more now their these value the

from outage. also up stored program. the program their has participation back-up will solar their to on Sunrun scale event high provide retaining consumption. the while of compensated of be incremental capacity will with announced Customers their will already while for a this stored during a earn to a batteries revenue in homes portion power Texas. energy recurring to Tesla for program of afternoon, enrolled periods The customers rapidly in at-home energy the dispatching increase and grid Just we power

our are customers. value same for resources providing These tremendous

customers homes power obvious outages as can hours provide. we were than without demand and keep than the value prolonged with their more Texas During more businesses Beryl, Hurricane the are solar aftermath XX,XXX of X million able strong in the by back-up service Houston Greater to area power, their of energized seeing provided X,XXX and in in energy With over our seeing are storage systems. homes many Sunrun

vehicle-to-home nation's plant forward-thinking F-XXX program small electric Baltimore and largest the first all-electric utilizes Maryland's Just utility, this of trucks of during Ford summer to power Gas week, regulation by a demand operation with bidirectional power last Initiated Electric, and in customer-owned peak vehicles. Lightning partnership this we the using announced deliver group times.

plant are regulators to build programs we actively by many These support being virtual others program used California's is on initiated power Side Grid California. Demand including Support operating, power in This grid. the

month, average systems a costly heat capacity during in supplying California. megawatts during night storage peak Sunrun solar-plus power customers' exceeding peaker the XX several last polluting dispatched Just gas-fired each the hours, over wave, and of with an of XX,XXX plants grid

regulation, resources and cost could overall are solar battery the grid electric all users. for lower systems Home of and grid. With strengthening the the modernizing these forward-thinking

are X% As plants of the less a reminder, than of megawatts time. California that used power has XX,XXX

the becoming of heavily easy-to-finance quickly are our customer to customers future. providing into company way. a a to to opportunities service in a are By energy services provide clean continuing We multi-product monetize leader suite products for in a invest we to able base of additional experience, customer offers leading decades large that to and bundled, our consumers --

points, Promoter increase time are year. in the which Net up We X at approach, the Scores a our past reached in proud by over installation, this continued of customer of XX points customer-first evidenced quarter

charging have energy and to to from inform X, On our batteries energy demand, our to strong existing equipment installing meet invested plants provide customers harness time renewals, even repowering opportunities. focus, or we develop We learn power virtual traction. form customers we products these to electric solutions, for that pilots Slide resources vehicle are resilience providing highlight solar-only bidirectional best systems and to new increased networking seeing and including strategy with

have by X,XXX add batteries. existing For over we orders instance, to customers

with While share we've this, a launched a and I their to and just industry who minute to growing a way. an This continue gain announced for rapid recently in discussing orders market are measured financially presents public exit at leadership restructuring. peer want spend our Sunrun recently at a opportunity disciplined rate. developments

partners and conversations vision share provide customer are in selectively engaged onboarding to are their of commitment former advanced with experience. our many dealers that We and

the national with are announced years new We we In strong new addition homes the and industry SunPower. the platform. business Sunrun have X homes at recently and July, an the business large joining of engaging established leader about leaders in led veterans, been most many homebuilders for many who

a We reliable, homeowners. eager and well, the trusted by opportunities leadership expect being in financing for driven coming track for new the in strategic growth homes in as quarters, segment partner expanded our will for platform, new of competitors especially record entrants segment long provide volume. dislocation This a the leading team

as and of they gained pricing We and pricing accordingly. continue are immature also have new the but that irrational some seen experience, entrants, adjusting more some to from indications see control have controls they

to partner and hear they led partners deeply and our reliable largest value partners that Sunrun vision from these We of sustainable, most of partners. shared long-term and has that success, value to relationships. being strong our some particularly our continue longest-standing We a from

quarter. the to as to who celebrate desire power customers experience, quality, our leading over and connect the to and much to moment Adler, Thanks incredible handing people battery of Jon, for sales members, Angeles. our results some Los team to our Rich to energy Danny, and a some Before want Thank delivering earth. rates energy direct-to-home this safety, you on I to always, customer of team on cleanest in clean so truly take delivering the attachment embrace

much, innovating With meet States, the someone's equipment The entire our standards. domestic independently-run our entire let and premium financial solar call installation United Sunrun, the and is update. help to me helping efficiency the Danny proudly Troy, that, creating those at racking the to turn busy the content across including is ramping want of Charles, team celebrate U.S.-made improve team. team in the industry, Aroon jobs over Thanks and also manufacturing of the to so for SnapNrack, which I industry. production business activities and

on Today, Mary. performance markets in an will outlook. and the our capital operating you, with along I Thank our activities update and cover quarter, financial

XX. the the Turning results first to for on quarter Slide

storage storage XXX,XXX installations with We have XX% during nationally solar now systems, quarter. over reaching the installed of rates attachment and

We of level to or above remain around expect storage attachment this remainder at year. the rates the

subscriber storage offerings carry higher This to continues as net back-up higher drive margins. higher mix values of storage

and the an During XXX-megawatt compared quarter, of the of hours the quarter increase XXX% our above to of guidance storage last same high installed year. well end capacity, we

capacity now hours. networked Our total ultimately X.X-gigawatt storage is

XXX was XXX range megawatts, the additions. capacity to quarter, approximately were of XXX guidance subscriber within approximately second energy our In approximately XX,XXX solar megawatts. including Customer additions installed XX,XXX,

year-over-year. XX% XXX,XXX X.X years. XX% approximately XXX,XXX and We representing XX% energy of solar last ended deployments mix of customers subscribers, quarter in an in with the again, level and capacity, the networked a subscription period, increase Our highest increase reached many from QX gigawatts

most with the annual contracts for up of revenue recurring we over life end or QX, energy significant of green under XX- provide. had average years. generate year. At same $X.X at billion, revenue, or ARR, subscribers stood Our nearly XX remaining the We period XX-year last the our XX% contract almost an recurring

was value cost XX. subscriber a Slide result was to $XX,XXX This approximately In and from Turning of growth creation attachment $XX,XXX, and $XX,XXX. efficiency strong delivering approximately rates, was volumes. higher QX, subscriber value sequential battery in net

slightly system per-watt subscriber value Although higher on per sizes. to QX from decreased a reverse system a for in average this QX trend expect subscriber watt we value size increased average to QX. to smaller measured QX slightly in size, relative system and normalize to If QX, basis due with

blended and value approximately and number is systems, subscriber the portion a the $XXX subscriber credit by our communities deployed value in second the net adders. investment of was multiplied Our value net quarter. of the low-income Total period, qualifying again subscriber the XX%, energy tax generated, additions value reflect which the subscriber reflecting million in for QX of ITC

already Our X% current capital, using X.X% discount our was which underwriting but approximately are rate, value-based our in metrics QX. cost presented of present for financial a accounts

unit do current rate As rates, a deployments. calculate reflect frequently. interest cash the advance on we reminder, update across ranges not net to we comparison to of investors obtainable the enabling ease Instead, margins periods, provide enable our that rate generally discount

using observed costs the capital In net addition, quarter. pro we subscriber a the value provide forma for

a discount $X,XXX, was net At value X.X% generated and total was rate, $XXX value subscriber million.

value subscriber factors: in the We hardware realization ITC leverage variety adders; growth. volume labor following increased favorable of lower from mix; business of prices; efficiency tailwinds net expect from and operating to sequential periods future strong more additional

realized recognized in strong adders equivalent Proceeds On tailwinds the content Slide energy for be low-income half to the the QX, average of of a approximately adders. adder. we domestic updated we a should to the encouraged our including ITC quarters expected are ITC qualify approximately to our of the of level allow year-to-date installations. ITC XX, guidance weighted systems May, from detail In retroactive qualifying coming communities from few XX%, for weighted monetization or the quarters, were our within of increase portion We for XXXX. see of a in adder this and the in XXXX a to around which XX% XXXX installations average majority and

Turning prior were quarter, gross at assets the approximately subscribers all the now partners, net Net $XX.X assets to maintenance is equity and Net end debt. were operating on and assets, measure project assets of equity second partners Slide quarter. cash, a costs, end quarter. is and the balance billion the up earning earning unlevered the to second Gross the our tax earning plus receive cash we flows all $X.X earning Gross of financing XX. million gross at assets to net assets discounted $XXX earning X% cost. distribution billion at and from of data distributions from expect earning over time, to of less sheet

Net interest in creation rate fluctuations. net earning capital enter related not additional The of additional derivative rate value expect with other which fixed-coupon loans The future customer we interest include been rate selling debt to opportunities assets swaps, reflected services swaps. upside or into assets hedged long-dated from adverse base is our floating or assets majority our to rate that grid does services represent either of construction interest all to these our programmatically and insulate We not or progress costs have vast metrics. value. and products our and securities are from near-term hedges inventory

As rate our do adjust to the used earning capital for match new such, not we discount in installations. net costs assets

included proceeds transfers. million the reduction result to Cash $XXX quarter quarter. transition an of million ended recovery credit prior We of the Most in compared notably, million $X items. $XXX over which in the equity from of cash, was in to QX with $XXX timing-related the the increase tax billion generation total traditional QX, the tax as

our capital to activities. Turning markets

and additions we discussed sheet navigate very arranging support have As in optimizing extending volatility, prudent and last To to extend our and we active potential we [ maturities. facilities by our capital been QX growth unexpected further economic call, and were balance early to proactively. ]

second expected capacity over beyond tax executed and of to term deployed today, us the project As megawatts was quarter. sheets of provide closed transactions subscribers with what fund equity XXX for through

of unused We revolving non-recourse also over have would in billion fund unused available commitments XXX $X in our senior for subscribers. warehouse megawatts amount loan. approximately projects This

rate to capital servicer term-out performance provide ABS the access of capital. Sunrun's start as selective assets debt strong we Our year, originator solar us to closed and run be to of industry-leading allows transactions. deep X Since transactions. the continues attractively in have priced residential timing an

and ABS for In June, industry. Sunrun million transaction, securitization residential largest closed we an solar ever $XXX the the representing

both the A our tranches, precedent was publicly represented portfolios. higher transactions a A+ with on advance non-recourse of the The Kroll. comparable The comprising Class debt, transaction by a We our improvement rates, notes September on portfolio. privately from basis than higher rating of public The point evidencing A had XXX and rated spread also the ABS basis financing comparable previous subordinated XX quality ABS tranche arranged in a Class XXXX. points placed

the XX% for A financing. when Class portfolio the cumulatively additional including subordinated XX% rates advance on the The were notes and

have This July. in $XX of notes date, over noted, $XXX amount XXXX XXXX convertible repurchased commenced can million repurchases includes of previously To our million of or in convertible As X/X $XXX notes. repurchases million our notes. in February, concurrently XXXX convertible in and due issued we we

to continue repurchases. be with will and disciplined selective our We

about cash dates, is asset-level and finance appropriately and producing prioritize the we use sheet, and flexibility. costs to our creditworthy balance think lowest When highly provides a interest position sized strategy debt and strong use of maturity debt that This we cash recourse non-recourse backed to by assets balances, financing. capital consumers parent cash flow cost

throughout long-term adoption costs. In market to decade. and Turning on customer by underpenetrated this The confidence growing our XX. can through storage is cash nature strong to reducing our outlook to and our services and other higher-value increase this continuing robust of priority sustain gives growth now generate by products we Slide backdrop, demand us our values

Storage XXX- be installed a capacity of range to midpoint. to in This is expected growth hours in year-over-year QX. XXX-megawatt at approximately XX% the represents

at For to to X,XXX the the from full growth megawatt hours, year, storage our we increase guidance representing are hours. range X,XXX of an midpoint, XXX guidance our XX% a range to X,XXX prior of increasing megawatt

XXX the range Solar growth megawatts a energy At in represents between and installed in from XX% to expected XXX QX. be capacity this is midpoint, QX.

the we our energy believe with of prior by low expect range. approximately installed line our For guidance still approach. solar XX%, go-to-market share and We our this capacity represents disciplined underpinned full decline guidance of market in strength year, offering subscription end to the gains the

We also to QX. be positive year-over-year in starting expect growth

higher mix, subscriber our our through half the the we and be additional least meaningful in of focus total unit higher expect generation strategy. cash subscriber QX Because adders materially to ITC be have percentage net increasing solar efficiencies, remain will than on Given product been levels. we increasing relative points disciplined growth growth generated execute second year growth. we as values installation margin-focused cost at values our to driving economics, value net We committed will XX and

are generation QX. our cash We reiterating outlook for

$XXX solar-only systems, starting qualify later our XX, $XXX and now our in that systems, the domestic sensitivities in year XXXX. would outlined in to large affect expect generation be XXXX. this for our related a adder now into key addition achievement. storage of million Slide content cash portion to in to We and $XXX positive to On variables will QX. have million We to we million QX expect $XX million

We amounts coming of expectations will during timing adders provide initial more domestic receipt quarters. concrete and of for the content

Our ITC. it let XX% me back turn XXXX reflects cash that, to With approximately generation an guidance average Mary.

Thanks, Danny. to continued my appreciation express to of for all customers what our the and us clean, stakeholders value to create forward. want with lives drives affordable and energy providing our team, entire power your commitment I again to Sunrun is their communities to

Our let's rapid the and Operator, customers. questions. is extending line company differentiation, transition enhanced to delivering driving margins a best to value the our open for storage-first

line of comes Sachs. [Operator the Instructions] from Goldman with Our first Brian Lee question

Kudos on a are just you here. thinking as you focus and such how market about on cash think first guess the about. now it's as significantly the the capital gen solid well, you're levels And absolute for allocation into cash now generation question given front, the wide that you I XXXX for talking priorities, then just given especially of higher about overall and what's of range, of of end have not factors in cash 'XX et targets? control outlook to gen? kind And mix, then a some potential cash handicap what of trying control. for I it to biggest your sort the in of generation reach Just your follow-up. If we're are higher swing some rates? the it those versus cetera? the what's your Is for Is

primary Brian, capital just to realization it's question the the rate Slide take in battery refer presentation ITC rates. we of on part X of they think I'll sensitivities, the and cost zero-in of to Danny. of generally I'll where do are for trying second we're kind If the the the factors. XX first,

we or point are And we've in point the X the in those each as highlighted degree quarter per change past sensitivity. we of of think those, -- the I indicated of principal well.

X. for I'd you there those refer big So

mostly some of the timing, entirely our incentive times, timing. all capital so items markets at There are variability intra-quarter bucket could noted I around that of around have a always within other in monetization, not say, control, would bunch

we a turn transactions X as gave out a out year. general to Just reminder, X

So X And rate rebates, in ITC put the to matter. transaction, incentives, run timing the addition the capital, factors. for cash budgets all the in generally, by will received working those other timing monetization, mentioned those I timing the of I'll

available will drive to On the better options the up continue the disciplined that clean -- deleveraging balance focus become sheet will drive a use other the that. capital the allocation that sheet, And best higher will evaluate meaningfully which available us and parent that will be question, balance the we'll to position liquidity, around remain into and the to the we think we balance consideration. best will uses do with time. value Buybacks put at shareholder as get being remainder, determined then

which considering the of would of Board-level decision best some a the course, time. Of use be

remarks, Okay. some it developments That's potential you. for the awesome. Great up for real-time marketplace, color. in share doing very gain for one of Mary since she Maybe just peers, prepared brought not obviously your in your well around

as on on the of better you about talked flow in the Given and on that side adding for factor capital storage you obviously, growth you gaining allocation kind some How money already. spending very cash side, prospects, 'XX? in share. well the incremental priority solar would Just a

But this about the year, it given are exiting at 'XX. might growth you're priorities/needs talking might back there? into solar have looking to being be Like what also sort year-on-year of double-digit you spending tailwind like the a you seems

Brian, chat you. good Yes. with to

So just approach reiterate our disciplined and to we're going strategy. margin-focused continue again, to

So what is opportunity providing happening some yes, us, market opportunity. is for some certainly,

homes talking really really to market. the X most As mean, my remarks, are joined we I some in said our really new the were thrilled and of and significant industry veterans to team, have we in leaders builders I

looking and And we continue margin volume conversations so right, and to those our which can we're generation. at and delivers measured margin-focused that progressing after, of way in way, ways we're is cash grow kinds what

-- So is change. you're really to drive to That's we on see efficiencies in business. what that drive not focus while continue -- continue also is like going any the our to

side an perspective, also of efficiency experience of has I'm we have the company. also from but in what the from operations perspective, as NPS done an team So the really both on proud customer done the

with for in the We've business time. working in really been homes business of important partners. been some the We've new

of affiliate So us. we also partners number reach see a to had some We've opportunity. out

to we to pleased again, and build And towards, margin momentum in continuing we're the the having profitable growth. have those conversations out accretive, be so that business again, really

if know So don't you anything Paul, want add to I to there's that.

people about our overpay similar Much where for the price, homes more to new us just with we've sources maintain where demanding one other attract the coming in business, and we're talked knows and past dealer business Sunrun and these and on market [indiscernible] our historically. to seeing is don't view some the and do migrate of predictably harbor safe reliable of conversations harbors, the Maybe -- safer the SunPower's situation partners as and come this to people of volume. side of we had volume how the foundation looking to service that has, They're that [indiscernible]. deliver for consumers in

So that take we've definitely seen place.

don't investing resuming contributes think We specifically. not in it however, that double-digit chasing consumes of capital, growth a anticipate we volume towards that product we do and in QX. lot are, mid-teens And but It exercise. year-over-year expansion

question of the next Julien from with Our line comes Dumoulin Jefferies. Smith

we Brian Nicely off here, done if it can. pick here. where indeed Maybe gen up on the left cash

constructive. positive look does beginning forward full Just full here I looking obviously, rolling and 'XX? reflect inflection QX. year of said, to in What looks solar to just you volumes very to year, as but decline, seeing an in on mean, expecting to the the volumes that here, gen cash You terms

-- well, follow reflected? you here? volumetrically and Just with related up you the across I'll I'll forward And you how that about a do let clarification. What's as think actually, space look

cash related growth. it to Julien, the volume on which I'll double-digit gen, give is answer as short

Getting the holding in think script. That's beyond in at I and that remark anticipation. on QX industry the objective the that as well. level made view double-digit to with line QX like longer-term and the is mid-teens we growth potential level

little for was to right. I try can, passing right. If I on just this I ask granularity, always more further

market specifically solar-only the guidance, XX% a being for is statement big nationally to relatively seeing domestic an I driver you and Is eligibility on are of NEM specifically, XX%. California that interesting storage that right? you dynamic guys in think you're despite volumes systems on on think a what a here, by here raising content statement still well, fact as storage here So is right, California? the doing about California that's

statement well for across specifically shareholders. a It's value as what see provides America for we incredible all customers our on as

multiproduct ours, into it company we products really really also value the other a is for provides has the talk sell the it a just storage for but a terms value not well, resilience, our made we've the future what continue as key with to provides focus see So strategy. going of been storage-first of grid shareholders, is to because about. of be unlock, we customers in to value but which that continue services We

challenges it capacity just I So of become capacity cost fleet building a on challenges States allows as going the be over time utilities to is us really in energy that United valuable stored not think well. but to as increasingly rising face

Our with line next question comes from the of Moses Sutton BNP Paribas.

the top and such competitor context competing from former flood providers for transferability and in for demand from markets, capital, hybrid of your Congrats others is to also successfully pushing on deeper think who loan market? rising tax seller update. possibly How but these funds of equity you this trying into do into particularly

Moses, pretty is We feel Danny. well positioned. this

they've particular, right, added, the universe in X-figure are in whom to set many ability buyer been think, many over ZIP years, traditional where in implement hybrid been transactions. that's structures us code size individual pretty rapidly buyers, of stable we're combining with how the years of transferability expanding many for given check the the a the very buyer I universe for

kind the positioned. overall think demand But for buyer is We're well is supplementing the build material of feel aware it very I the us. for being balanced in for of universe the seen us deal given sizes with think year, we the the way momentum radically I well equity. over from expanding coming just available tax that supply in we've a very, corporate that's

say our to Moses, done. the Dozens need of I feel amend really is so counterparties, the both have funds I long with side, but I is list providers. tax being that capital think, a lack that capital of think think to all transactions, team, Ed. nonrecourse very for of top all And I we've those fantastic the the multiple for, this been the providers good acute particularly reputation those I for the company, the on they of contribute across working think, us on quality the who would counterparties with company's has we the equity it. of things, of And performance, about

side Yes. flow exercise person on a predictive well. one as of -- the tax leads new think rate then planning And seeking just and other of that's like point reliable predictability the very on the understood that, reliable and business the our the high -- tax nature by market. I for credits

very How that And million? I of sort equity. think one you've far SolarCity's I that. swapped new of gen? tax separately. remember pass-through as I as million a I I proven repayment But you're guess Was out competing of [ that know sort days, cash early so project $XXX that kind that noticed ] what's that's financing. was in reflected $XXX helpful. happening of with there form former that is of more

Moses, of repayment part question. Is I equity it tax the Sorry, financing repayment -- of missed are to the the you of referring the obligation?

pass-through the financing repayment of noticed No, $XXX early of million. I

quarter also. last $XX had million You

that style Yes, tax -- that of fund buyout point. those the was equity reached older its

had we've rolling I equity of a buyouts. tax amount think

is think eventually done up this that. tax structure cleaned connection capital equity no is different. asset The I the with gets in

for life in the type that's of end So just funds kind us. of reach of kind activity buyout of a terms think to point. getting of ordinary I These just course

Right.

though? was reducing that how generation Was cash paid? that Sorry,

the assets with with been a would debt connection It [indiscernible] concurrent in have financing paid of

Our of Osha next comes Joseph from line Guggenheim with question the Partners.

any transferable if of there's I'm where difference might something question, as us can then if in commentary to credit on credits in looking those and concerned, on same? be And the insofar like of give and energy as a wondering rough Or Moses' you're communities, terms market, aggressive at everything on Following also stacking priced is I'm clearing more the that some transactions curious are for pricing. content is market domestic XX%? perceived of the kind you the little as whether top

generation cash clarify the $XXX I simple. to Are QX I for 'XX you my the sure then follow-up, the million? QX make million comps. just just And I'm you about to I'll year. to right -- $XXX to next talking 'XX is give for which my want want thinking super on

part. first taking the So

So that's XXs in cents of And think really, credit express data a in credit the -- the paid. point pricing the low is range. in dollar being I per per been XXs primary price low

urgent that out especially they're demand. later think kind year, in a move and incrementally, think, to those I looking up has the moved we over moment the see course just pricing the could the fill year, of for of in for year I

see that some back now we're the of materialize of it. of So year. in Potentially, more the seeing we'll half activity

universe play. repeat Generally, where we the But we're could value seeing point the because pick or fire both see time, in ticking long-term expectation over it's of the play value then and the incrementally kind buying up is coming differentiation a activity where expands. see credit mature reliability per that price to we we up not to the

retroactive credits. of monetization [indiscernible] there be will

a reaching. on So pricing [indiscernible] we're isn't how the for. there's It's the a can credit between adder question. paid of there different type little depending dollar be distinction because far -- distinction. of no back that's it's transfer, being And bit part

kind There's high Yes, of they're you're was recapture People question. perceived my of paying any stacking are if level credits. not multiple just kind that what of paying.

mean, their in paying they're investors their that's are diligence. of right. diligence I generally and consideration I doing think

second think prices can that. part, then I me the And you follow-up? the reflect remind the

that exit think where of cash 'XX? I 'XX that then a want I make sure Yes, clarification to it's just understand... where you you simple 'XX target, exit can I as generation and

the year. the generation cash in simply more That's

all through up. X quarters So added

All right.

that So like-to-like, to clear. number versus that has I'm exiting what sure 'XX comping for 'XX exiting want imply if just What been? does make I I'm

Right.

to XX next And that's $XXX annualize for And have we guidance. is the to simply X, by So $XXX full it's XXX QX that million by then million. for multiplying exit year to the pace. million the year, $XXX is $XXX million you if

between to want -- I XXXX, the Yes. the higher should and Is you exiting saying balance XXXX. cash I I'm $XXX this. than million cash year the are $XXX exiting that clarify -- sorry, be balance million guess exiting

unrestricted. correct, That's

Our next with line Andrew of Percoco Morgan the question from comes Stanley.

a benefiting ask expected adders. some of to here I cash meaningful just just slightly question top to where of misreading We'd just the guiding. credits and be related on just jump another year generation sensitivities? this love thinking would of customer? guess, ITC. as want have goes do additional there's to ITC XXXX next or quarter that I some I around end that not million end or range slightly mean, upside Is would for content the XX%, I more believe guess, above you expected of conservatism? a $XXX additional you don't top that million the to the you those your at I some I of you're potentially fourth provided I through the like fully of some pass whether to I domestic that Am you're to $XXX that realize that If contemplated color in year the this have XX% if some from about how

the growth year the on we the will. you based implied amount free implies digits of north XX% margin, single volume so if of high to expect mix to of adders, a $XXX volume cash the flow yes, next Andrew, $XXX type to slightly million million and see

appropriate the taking for the all which financing margin business -- So we indexing, as business the as we flow for year, against proceeds raised next just we of an consumer the pricing as areas the view free the to level piece some us. the battery in in how as target cash might go-to-market where lower market, to be the opposed market adoption, especially with accruing benefits there domestic out figure adders, content by especially to have

we we it's as expect. level X% XX% growth, appropriate like feel target resume net for as like to an margin through, things through all of to and working watch considered that that's area capital even we consideration Like

Understood.

of of switching in Battery versus That's You in today helpful? second. or or Texas And you maybe can terms attach data compare XXXX give would gears, you anecdotes X. for coming of market points very, any us are Maybe outside what California? just you're just California XXXX, that contrast battery rates mentioned storage maybe helpful. then seeing Can the a obviously, you already. elaborate, your NEM those markets just where some on on Okay. be attach part of But just and very back battery under storage strong. to rates business

Yes.

we in we market overall, have in see stronger batteries, rates. consumers battery every expressing really attach but think pockets I interest that have our

Hawaii we has talked -- in under storage the been nearly XXX% and we've XX%. So the attached. really in as XX% steeply battery trending or Texas past. up Puerto XXX% inside is the backup about well obviously, Rico, have California

you today, we really So kind strategy for across The being relatively have this us, for lot a grid opening is of Mary East Coast, props. value us it. alluded low of the the heavy to consumer a lot have penetration focus that markets was deeply future see but core see opportunity markets. of of a because And additional attractive needs up that

Our it. sell sell to people are eager

cracked other for the So where as I good kind But pockets that's markets with the on nationwide, that come. it would strong cities, a and we've additional are we demand different work emerging. and would growth the strategy, utilities policy, market of say, that and code

back significant existing build program base. potential really would I also retrofit to on we saying that And our in our going Yes. see just customer by just

well. see So again, as real expect growth there we to

question comes the of from line Harrison Sandler. Our next Piper with Kashy

And gen. on cash the congrats

commentary really you comment peers the customer, guys gives benefits your combine we the what the domestic the think up question eliminating of that that ITC with then first we you pretty and guys up won't hasn't come If pricing. a relatively the that the back that my content to just cost and fact, it OEMs So makes this in competition lease what available similar just end retain you for surrounding confidence end irrational goes and have the much year? but you as board will the that excess the position take benefit higher everyone, of that like can, value, the in the cash across and fact down

Yes. Great question.

today, generating cash. out reality think, that we're the I in So proving we're that

there we to the still the differential and And have is sales price have and we a We large operating competition. our do, we component dealers than see and the volume higher we than of and points selling returns out with growth rates market price the and out, have. they're consumers than go see more who power struggle go on thoughtful the they see of kind just get more other paying. pricing around competitors selecting and And merits that we as we sort

our competitive complication that think is advantage. also We

as as other us consumer so considerations and as able that we different a differentially have markets that get markets absolutely more advantage complete to to more anticipate a structures And more deliver complicated, complicated becoming and our rate and batteries result. value being price view require

as pass-through mentioned, considered. is some customer then Danny And to the

looking to yes, on harder that has recent we and built through some I built even We with story servicing. at how SunPower that where very, at our tell. harder further which definitely we They're that I Yes. drive is looking a the will sure, are for is are just for seeing to in sure. just think And again, very probably this something mean, the recent, a is disruption benefit Sunrun strong assumption are relationship the said, would building -- customers home most customers flow where, what more long-term guidance. Paul without doubt, we

current a my due for maybe -- spreads implied than bit Do let's answer. faster just there faster question, anticipates, in how the faster deterioration project But I financing could have rates And yield market than tricky the currently any economy. you a trend? it. be what's curves significant in little historical the more then to follow-up color reference more from theoretical, bit to answer, may appreciate Got little more say decline everyone. to a difficult

higher under answer deal offset go you scenario? benchmarks, net to by be credit you I'm they're think basically difficult trying a that you if but ahead potentially spreads? if lower until you or it's would and that to entirely to too benefit a Or get just do understand if

That's seen this prior like a cycles points markets. capital and through to And I great We've and question. play role, out cycles. the assuming different

you a seen seeing -- and impact. spread in period change down. capital right there in happen of reset, suspect couple they've a when last And momentarily I credit we're might price You an what spreads go the even, Those can see transactions, price subsequent back We discovery. where sudden come over short-lived. through years be have in and relatively of it We've might moved. markets little of bit is now immediate base transactions rates,

So of that. we've planned all for

think the credit at conservatively plan cash rates appropriately generation planning and I the as of sides equation, the we're we taking base out spreads and for both of looking business.

that And As month, When rates rate. far rate protect is weaker environment to that the effectively where we approach, and we rate until is base we're relative hedge as cycle -- in, depending base the life asset asset installed lock install. when we fall, of or we the even monthly, in the the weekly, the base on

borrowing happy quite as that the pullback can and -- to been of So treasury, very by the and the we've you start imagine, with we've indexes a [indiscernible] down with any decision our bit been cost, rates. -- ahead recently reducing that's the in short-term quite X-year

benefiting already that. from we're So

how credit approach we markets. the we'll very be about On thoughtful spread environment,

future rises come spreads when down. refinancing spreads turn back has point short-lived than commercial transactions So market, we've in in the noncallable the doing rather bank momentary for flexibility past credit markets, where which the seen credit might out in it capital in a

So playbook for well the in experience through cycle. in of playing different that scripted points we've out got a

Our next Evercore from line ISI. James question comes of the with West

on slowly that I better? it the these smaller competitors? this. had context sloppy business? are mean Mary, environment. better, how the it Are I wanted was pricing a these it Are what's more was is competitors getting out larger competition to to you And getting going overall like pricing just changing environment? competitors? get been a mentioned little helping your some -- I in current quickly that Are ask know about these little of

Yes.

a for versus we I giving view So size it were as like an update shift. question. more the mix you thanks

move with third-party-owned say into model I space been space. since been, lot So the rapid Reduction loan, there versus would there to entrants financing-only Act, -- the has a particularly the of has the been, there's in inflation

So I as giving an do we it were update. more

Paul, space maturation what you definitely entrants specific cash. or are relative But any very, as very which a add this want would learn see is we is color happen, different his that to some do than to thought We glad loans question? to

Yes.

is the add them, comes a would controls, entrant in new to of come in with a scale, low attractive with they them and been buy playbook X tax handful I pricing And the and well only their and trying Danny as things several assets, them that up and market of more nearly over decades. credits built small share. individual big [indiscernible] that think thing I there's when but pretty financial to or finances were about grow owning we've XX-year that scripted

a closer were are controls migrates those lot in a they it bringing and implementing playing back to things, repricing they have as of us. As volume that that happens, in the field. level place, And we already to

And it's readily making with so the tax we in more it of more of quantity out have not but the these scaling, credits -- groups seen them and available. transferability marketplace see people these don't

question line Capital next Shen comes Philip Our from the with Partners. of ROTH

on Robert line. Phil's is This

the domestic First for battery content. procurement question for strategy just is inverter

degree Second the equity are transfers what GAAP equity you then tax is originations months you tax credit Philosophically, and tax about transferability? next making you does you're over tax versus how how and XX tax the credit bit expensive the if that and which touched earlier, transfers? on any that of would kind improve tax a helpful. between more financials know could transfer provide is color, and additional be I tax thinking To decision leveraging equity? between credit

yes. Yes,

of it's our weighted benefit that I We are -- the shout of out called get gave In or whether a XX% content business think next inverter, think SnapNrack systems the case they question, qualification on part majority the that the solar including primarily guided that level for solar-only. storage on in of we qualifying, There components, out contribution racking. first the to implied solar-only, a ITC the call. from -- vast average will combination year domestic the of is the only. it is will

manufactured using battery have been side, U.S. in have batteries the that the On we been

industry of line well. on good batteries think I there's as wide sight

hybrid we'll a in of portion a the fund. see transferred of both, of credits we'll participation on equity like participants financing, fund even the definitely also it equity the see of and brokering the format out traditional think part look I will be the the traditional On and will players does mix and second active tax tax out a of mix where large be transfer

So of part value participating parties we'll each a And and of stream. where mix the expect credits. different of we'll a transfer see participant takes out deal in a probably that hybrid by we're good the arrangement us format, structures an third of

a more It often single had transaction What that we size equity much traditional is the there's a it involved transfer think would size. takes not greater transaction. credit tax in have will I us to of with raise player. tax in bilateral it allows fund the does a be that than

for benefit key to of year. throughout have deals do the the the course us a that's think I and to So of number we consider

question Our comes of from the next Maheep Mizuho. line Mandloi with

Or growth Could sizes, help the system cash rate California and just on sort Firstly, batteries shift driven here. and just then follow-up larger seeing us more storage on you in understand maybe attach of whether are a it's generation. by you had growth? backup

attachment I backup. as definitely talked fact customers we've by hold a well mean driven as on as want that the about, that rate, now seeing many we're higher it's

more and for seeing the customers batteries. we're with So more desire multiple

again, So some in X, cases, X.

is rate the of is on the system to for the per that number But well size big attachment individual customer. part products customer. both what Sometimes the a of tied the solar that larger growth. driving as and rate It's attachment storage and is depending sure, a

for that the seasonality, said versus linear Any there Got on year. appreciated? it weaker, past you. in the cadence thoughts Is or but any QX cash some more generation think, on thoughts run early just just And next QX rate? I

than to especially think -- that of a that for you cash obviously, year, of if that QX, We QX, we start you cash this sort we our adjusted other extraordinary decline. see in generation, up I look pick And onetime QX. normal more in materially seasonality. has will get at expect volume shape items, generation. historically, see

we go. we'll that but will think get continue, more as I specific

Research. line Nassano Wolfe Our comes Dylan the next with from of question

on do qualifying stands the to potentially shift prior and in the point? it changes current equipment as equipment. could you content mix questions back the to mix And at the how be? now back the going How Just of realize revert domestic plan adders some more to a half to just is of follow-up Would this permanent year? those you kind then back much

Yes.

current I set have the think products domestic flowing currently out our are qualified. that content installs into inventory and established we

underway. So and been that is has

Our with next question Oppenheimer. comes from of Rusch the Colin line

new risk how secondly, about these you're utility piece? potential talk on uptick especially aggregated you on portfolios? much market programs, Can taking to partners you pricing with with start capacity given are interconnection going seeing what's from And any

of question, sure you not talking Could you it. beginning the I'm about followed the the I Are repeat

we the about Yes, how through And you as with we and taking should next how through risk model this flowing market on the much balance VPPs, are think year the of that pricing? year? go the into

the market taking not with We're risk pricing.

really much And positive and for low Sunrun. it's play combined combined the value is don't happening, second publicized about to So projects for your that the of you with, the future the the talked with mentioned, parts But and demand. country tied as, we're initial the seeing inherent all the of weather in out not power for the some capacity for highly value customers question acutely are plant doing over growth demand than where to virtual as we're in actively think in we're the just engaging more so have value that like of again, positive Sunrun. I potential customers electrification of are again, it part of again, meet utilities the country, but course, events others, AI, really, what all

to resources years. our value have that in see coming the going continue we X increased economic So are to to X

the concludes has Q&A. been time That you. Thank allocated that for

disconnect. now may You