Tag Archives: run

Sunrun Unveils Tesla-Backed Storage In Net-Metering Rattled Hawaii

No. 2 residential solar installer Sunrun ( RUN ) could trigger Hawaiian solar growth with a Tesla Motors ( TSLA ) battery-backed storage offering following regulators’ 2015 decision to cut net-metering subsidies, a Credit Suisse analyst said Monday. And despite a bulkier subsidy cut in Nevada that doesn’t grandfather in existing customers, Sunrun will flare on its impressive access to capital, Credit Suisse analyst Patrick Jobin wrote in a research report. Jobin retained an outperform rating and 21 price target on Sunrun stock. Sunrun stock was up a fraction in afternoon trading on the stock market today , while shares of No. 1 installer  SolarCity ( SCTY ) were down 1%. IBD’s 21-company Energy-Solar industry group was down nearly 1%, after falling 1.5% Friday. It ranks No. 54 out of 197 groups tracked. Year to date, Sunrun and SolarCity stocks are down a respective 43% and 47%, under-performing the industry group that has fallen 22% on continued volatility in Nevada despite Congress’ late December extension to a key federal subsidy. Still, “industry dynamics continue to favor Sunrun and SolarCity and highlight increasing barriers to entry,” Jobin wrote. “Further, we were impressed with Sunrun’s ability to outmaneuver peers in the capital markets.” Jobin sees a 214% upside to Sunrun stock. Sunrun, SolarCity Curb 2016 Growth In Q4, Sunrun guided to 40% growth in 2016 vs. consensus expectations for 60%-80% growth, echoing SolarCity, which earlier indicated 44% growth vs. traditional annual growth of 80%. But Sunrun and SolarCity differ in their rationale. SolarCity is aiming to become cash flow positive. Sunrun is focusing on cost reductions and maximized returns and, this month, guided to a 15% year-over-year reduction in 2016 for its channel business . Instead, Sunrun now expects to double its direct business over the course of 2016. “The company is on the fastest path to reaching the ‘Holy Grail’ of residential solar leasing companies whereby the third-party capital can cover all upfront costs,” Jobin wrote. Sunrun also unveiled a solar-plus-storage solution coined BrightBox to reinvigorate Hawaiian solar growth, after the state suspended payments to solar customers for excess energy fed back into the grid. The state was at 17% solar penetration when that vote came down. Firms like SunPower ( SPWR ), SolarCity, SolarEdge ( SEDG ) and Sunrun have long worked to make solar storage economical. Without it, utilities must buy the excess energy fed back into the grid. In 2015, however, Nevada and Hawaii cut net-metering payments to solar customers. Within a day, SolarCity and Sunrun said they would exit Nevada, the latter threatening to file suit. Now, Sunrun has managed to reduce its solar storage costs by 50% year over year, Jobin wrote. BrightBox customers are expected to reduce their utility bills by 15%. “The adoption of solar plus storage, if economic, can mitigate the risk in other states if utilities degrade the economics of net-metered energy,” he wrote. And “a solar plus storage solution in Hawaii should allow growth to resume.” In Hawaii, neighborhood constraints have restricted new customers from adopting solar. The BrightBox solution circumvents those restrictions, allowing Sunrun to tap into the remaining 83% of the state without solar.

Glut Feeling: Chinese Solar Manufacturers Ignore ‘Bellwether’ Views

Chinese firms JA Solar ( JASO ), JinkoSolar ( JKS ) and Trina Solar ( TSL ) will force a solar panel glut in 2016, expanding capacity despite a 4.5-gigawatt demand cliff in Japan and the U.K., Credit Suisse analyst Patrick Jobin suggested Monday. Meanwhile, “bellwether” U.S. rooftop solar installers, including  SolarCity ( SCTY ), Sunrun ( RUN ) and Vivint Solar ( VSLR ), have cut their 2016 guidance by 0.6 GW, on average vs. initial expectations, Jobin wrote. European incentives and a Chinese boom oversupplied the market in 2012, causing prices to topple and manufacturers like SunPower ( SPWR ) to cut jobs. The upcoming glut puts higher-cost solar panel makers JA Solar and Trina Solar at heavy risk, Jobin says. On their Q4 earnings conference calls, all three acknowledged a potential 2016 supply glut, but “still announced capacity expansions, citing growth from efficiency improvements and higher capacity build outside China,” Jobin wrote in a research report. Jobin cut his price targets on JinkoSolar and Trina Solar to 40 from 42, and to 14 from 15, respectively. Midday, shares of Trina Solar and JinkoSolar were both down nearly 1% in early afternoon trading on the stock market today . JA Solar stock was up a fraction. Regulators in Japan and the U.K. recently announced cuts to solar feed-in-tariffs (FiT), key subsidies that triggered a surge in solar investment. In 2016, Jobin expects Japanese and U.K. demand to slow by a respective 2 GW and 2.5 GW. In the U.S., a much-lauded extension to the Investment Tax Credit (ITC) on solar installations pushed out installation of 1 GW to 2017, Jobin wrote. Globally, manufacturers see 10 GW in solar cell capacity expansions in 2016, vs. market demand for 6.1 GW. Demand is expected to slow to 11.5% growth in 2016 vs. 17% growth in 2015, Jobin wrote. Compounding that, manufacturers expect a 5%-10% decline in second-half 2016 average sales prices. “We anticipate the need for capacity expansion outside China, especially as the ITC extension improves the long-term demand outlook in the U.S., but we believe the timing and magnitude of new capacity builds may exacerbate oversupply and pressure margins,” he wrote. Among the three companies, Jobin prefers vertically-integrated JinkoSolar, which he says keeps internal production and outside sourcing costs low. But even a 1-cent per-watt decline in gross profits could reduce JinkoSolar, Trina Solar and JA Solar’s 2016 earnings by 33%, 38% and 58%, he said.

Vivint Solar-SunEdison Debacle Buoys Rivals SolarCity, Sunrun

Vivint Solar ‘s ( VSLR )  SunEdison ( SUNE ) woes benefited competitors SolarCity ( SCTY ) and Sunrun ( RUN ) in January and February, as the pair swiped market share and drove pricing up 5%, a Credit Suisse analyst wrote Thursday. Intraday on the stock market today , Vivint Solar stock sank about 6%, heading toward a four-day losing streak. Shares are down 64% for the year, including a 20% single-day plunge on March 8 when it scrapped its sale to SunEdison . Wall Street gave 1.2% back to the solar name on March 9, when Vivint Solar announced its plan to sue SunEdison for “willful breach” of contract. SunEdison stock was down more than 1% Thursday afternoon, but SolarCity was up about 1.5%, and Sunrun trended up more than 3%. IBD’s 21-company Energy-Solar industry group was up more than 1%, and ranks 48 out of 197 groups tracked. Vivint Solar’s Q4 results reinforced uncertainty that began with SunEdison’s planned acquisition in July 20, Credit Suisse analyst Patrick Jobin wrote in a research report. Jobin retained his neutral rating on Vivint Solar stock but slashed his price target to 6 from 16.50. Shares hit a year-high July 21 and then plunged through December as SunEdison cut its bid on Vivint Solar, leading Vivint to question SunEd’s ability to pay. Analysts, meanwhile, said Vivint’s fundamentals had deteriorated on the shaky M&A ground. Headcount in Vivint’s operations and sales/marketing segments have declined 17% and 9%, respectively, since Q2 2015, “validating concerns of human capital loss during the drawn-out uncertainty of the company’s acquisition by SunEdison,” Jobin wrote. That uncertainty played out in Q4 when Vivint Solar reported 59 megawatts in installations, down 3% sequentially and below Jobin’s expectations for 60 MW. But bookings jumped 54% year over year, and 13% sequentially, to 80 MW. With only enough tax equity to fund 55 MW in current-quarter deployments, Vivint Solar needs to access more tax equity funding or seek aggregation facilities, Jobin wrote. As of Dec. 31, the company had fully drawn its working capital facility, but it still had $456 million in aggregation facilities and loans. But, Jobin noted, the most recent loan — a $200 million bridge financing loan — “appears to be at onerous terms.” The first $75 million will incur a 5.5% interest rate, according to Vivint Solar’s 10-K, filed March 14. The remaining $175 million will be at an 8% interest rate.