Contractors installing Sunrun solar panels on the roof of a home in San Jose.
Bloomberg
Solar developer Sunrun is growing fast, but supply-chain woes and Covid-related problems hurt its results in the fourth quarter, causing earnings to fall below analysts’ expectations.
The company said supply issues caused it to deliver fewer battery systems than it had initially expected, and it projected that it would add less solar capacity in the first quarter than it did in the fourth.
Its shares (ticker: RUN) were down 2.6% in after-hours trading Thursday, after falling 6%, to $23.13 earlier.
Sunrun added 29,870 customers in the fourth quarter to close out a year when it sold or leased solar power systems to more than 110,000 new households. It grew solar capacity by 31%, the fastest growth rate in five years even though the company was starting from a much larger base. Sunrun is the largest solar developer in the U.S., having bought competitor Vivint Solar in 2020.
But several factors appear to be hampering Sunrun’s profitability—some of which are likely temporary. Covid-related absences affected the company’s productivity in the quarter as the Omicron variant spread, and supply-chain shortages that have hurt other solar companies appear to have also affected Sunrun. The average value of each subscriber the company added fell to $7,064 in the fourth quarter from $7,605 in the third.
The company lost 19 cents per share on $435 million in revenue. Analysts had been expecting a loss of 10 cents a share and $409 million in revenue.
If Sunrun can keep up with its orders, it could see fast growth in 2022, too.
“We are entering 2022 with a record backlog of orders and are working hard to install systems for our customers as quickly as possible,” the company’s chief financial officer, Tom vonReichbauer, said in a release.
Traditional power prices are rising quickly around the country as inflation spikes, giving Sunrun an opportunity, the CFO added. Sunrun tends to offer customers a discount to fossil-fuel powered electricity in their areas through special solar lease or power-purchase deals. If traditional power prices rise, then Sunrun could raise its prices and still offer customers a relative value proposition.
Write to Avi Salzman at [email protected]
