Sunrun narrows Q4 losses as outlook this year brightens

Sunrun posted sharply improved fourth quarter and 2015 financial results, highlighting the company’s ability to drive growth and improve operating metrics as US demand surges for residential rooftop solar systems.

Fourth quarter net loss was $15m, or $0.15 per share, attributable to common stockholders on a GAAP basis, versus a net loss of $26.7m a year earlier. Revenue grew to $99.6m from $60.1m. Operating leases and incentives revenue grew 41% year-over-year to $29.5m, while solar energy systems and product sales were $70.1m, up 79%.

Sunrun booked 80MW during the quarter versus 37MW a year earlier, while deploying 68MW against 37MW.   

For the full year, net loss was $28.2m, or $0.96 per share, compared to a $70.9m net loss in 2014. Revenue increased to $304.6m from $198.6m in 2014. This included a 40% increase in operating lease and incentives revenue to $118m, a 63% jump in solar energy systems and product sales to $186.6m.

The company booked 274MW, 85% organic growth year-on-year, and deployed 203MW, a 76% increase.

Last August, Sunrun raised $250.6m through an initial public offering.  

“As industry fundamentals continue to improve, we believe that our consistent focus on customer net present value, and careful management of liquidity, positions us well in 2016 towards our goal to deliver the industry’s most valuable and satisfied customer base,” says chief executive Lynn Jurich.

Looking ahead, she told analysts on a conference call that the company’s abrupt exit from Nevada after regulators axed the state’s net-metering program, led it to remove 12MW of backlog there that would have been deployed this quarter.

Sunrun expects to achieve 40% growth this year despite “headwinds” from its departure from Nevada. It now forecasts deployment of 56MW in the first quarter, up 53% year-on-year, and 285MW in 2016.

Despite the setback in Nevada, Jurich said the company’s geographic diversity is a strength. “Outside of California which enjoys regulatory stability, no individual state represents more than 10% of our deployment forecast,” Jurich says. It does not plan to expand into other states this year.

Jurich says the company’s “road map” to reduce costs will show results this year as it winnows out less efficient contract installers and takes other steps to improve margins.

She said industry fundamentals continue to improve with the five-year extension of the federal investment tax credit. “we believe our consistent focus on net present value and careful management of liquidity positions us very well in the year.”

Jurich says Sunrun has enough tax equity commitments and non-recourse debt to finance solar systems into fourth quarter 2016.