Sunrun installs 792MW in 2021 following strong growth rate, NEM 3.0 changes could dent 2022 outlook

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Sunrun has a record backlog of 57% following strong demand for its rooftop solar and battery storage services. Image: Sunrun

Leading US solar installer Sunrun installed 792MW of solar capacity in 2021, a 31% growth on 2020, exceeding guidance, reflecting the highest growth rate in five years and bringing its total networked capacity to 4.7GW, according to its Q4 and full year 2021 financial results.

In Q4, the company beat expectations and added 220MW of solar capacity across 30,000 new customers, a 28% increase year-on-year, as it benefited from its integration with Vivint Solar following an acquisition in June 2020.   

In Q3 2021, it deployed an analyst expectation-beating 219MW, and its management expects installs to remain in the range of the last two quarters moving into 2022, with around 200MW expected to be installed in Q1 this year.

Investment bank ROTH Capital, however, is assuming a continued impact from cost inflation and challenges related to the Omicron surge in the early part of 2022 and has thus adjusted its installation guidance down by 3MW to 198MW for Q1 2022.

The San Francisco-headquartered company had a net subscriber value of US$7,064 in Q4 2021, with each install costing US$29,898, compared with US$36,962 in subscriber value. ROTH Capital called the net subscriber score “weak”.

For the full year 2021, total revenue grew to US$1.61 billion, up US$687.8 million, or 75%, from 2020. Customer agreements and incentives revenue was US$826.6 million, an increase of US$342.4 million, or 71%, compared to 2020. And solar energy systems and product sales revenue was US$783.4 million, an increase of $345.4 million, or 79%, compared to 2020.

The company is entering 2022 with a record backlog of 57% and its management is expecting a 20% growth in installed capacity in 2022. Total value generated is expected to grow faster than installed solar capacity for the full-year 2022.

However, factors such as California’s contentious net metering changes, various proposals in Congress regarding the investment tax credit (ITC) and a volatile interest rate and inflation environment “limit our ability to provide precise guidance on total value generated in cash generation at this time,” said Sunrun CFO Thomas VonReichbauer in an analyst call.

“The demand for Sunrun’s products and services could be adversely affected if utilities or other interested parties are successful in challenging NEM policy in Sunrun’s markets,” said a ROTH Capital note.

Meanwhile, the company also finished the year installing a record number of batteries, representing over 100% year-over-year growth in 2021, although this was lower than initial forecasts at the start of the year due to supply constraints.

Sunrun said it has approved its third battery supplier in Q3 2021 and expected this to allow it to improve last year’s figure, catering to strong demand for battery energy storage systems (BESS) from its customers.

Analyst call commentary was taken from Seeking Alpha.

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