Sunrun (NASDAQ:RUN) executives said the company delivered “strong operating and financial results” in 2025 and reached an “inflection point” as it oriented the business toward higher upfront returns and structural cash generation, while increasing its emphasis on storage-first offerings and distributed power plant capabilities.
Strategy centered on storage and distributed power plants
CEO Mary Powell said Sunrun’s approach is centered on improving the customer experience by combining solar generation with storage, then leveraging those assets as a distributed power plant. Powell highlighted that the company dispatched 425 megawatts (MW) to the grid in 2025 and added 1.5 gigawatt hours (GWh) of dispatchable generation capabilities during the year. She also said Sunrun exited 2025 with storage attachment rates at 71%, up 9 percentage points from the prior year.
Sunrun also discussed expanding partnerships tied to dispatch and retail electricity integration. In the fourth quarter, the company announced a partnership with NRG that pairs Sunrun’s solar and storage with optimized rate plans, and management said uptake has been strong, with batteries already delivering energy back to the grid during multiple dispatch events. Powell added that Sunrun expects to launch additional partnerships in 2026, referencing existing programs that include Tesla in Texas.
Operational and financial performance: higher attachment rates, cash generation
CFO Danny Abajian said subscriber additions were approximately 25,000 in the fourth quarter, bringing full-year 2025 subscriber additions to 108,000, roughly flat year over year. Storage attachment rates rose to 71% and helped drive a 26% increase in storage capacity installed, while average system size increased 4%, leading to similar growth in solar capacity installed.
Abajian said Sunrun generated $187 million of cash generation in Q4 and $377 million for full-year 2025. He also said the company paid down $81 million of parent-level recourse debt in Q4 and $148 million for the full year. Management noted it increased unrestricted cash by $248 million over 2025 and grew net earning assets by $1.8 billion.
On unit economics, Abajian said fourth-quarter Subscriber Value was about $50,200, down 2% year over year. The company benefited from a higher storage attachment rate and a 42% weighted average investment tax credit (ITC) level (up 3 percentage points year over year), and used a 7.1% discount rate in the period. These positives were partially offset by dilution from asset sale activity, he said.
Creation costs increased 8% year over year, which management attributed primarily to larger system sizes and higher storage attachment rates that required more hardware and labor. Installation costs per subscriber rose 7% year over year, and sales and marketing costs per subscriber addition were up 4%. Abajian said these factors contributed to a roughly $3,800 year-over-year decrease in Net Subscriber Value to about $9,100.
Financing mix shifts: asset sales, joint ventures, and GAAP impacts
Management emphasized diversification of funding sources, including a growing role for asset sale structures and joint ventures. Abajian said about half of Q4 subscriber additions were monetized through a financing vehicle launched in Q3 that results in upfront revenue, up from 10% in Q3. He said GAAP revenue, gross profit, and operating income were “meaningfully higher” in Q4, but non-GAAP value creation metrics were lower because they do not include future cash flows from customers monetized through the asset sale vehicle, even though Sunrun retains a service relationship and grid services rights.
Powell said Sunrun evolved its asset sale structure into a strategic joint venture intended to provide efficient capital formation while allowing Sunrun to retain a long-term share of project cash flows and maintain customer relationships. She also highlighted a new partnership with Hannon Armstrong, which she described as a first-of-its-kind structure for residential storage and solar financing.
Abajian provided additional detail on capital activity during 2025, including:
- $2.7 billion in traditional and hybrid tax equity added
- $2.8 billion raised in non-recourse project debt
- $684 million of revenue recorded from sales of non-retained or partially retained subscribers
He said closed transactions and executed term sheets provide expected tax equity capacity (or equivalent) to fund about 499 MW of projects beyond what was deployed through Q4. He also said Sunrun had over $600 million of unused commitments in its non-recourse senior revolving warehouse loan at the end of Q4, and that an amendment extended the facility’s availability period through 2029 and maturity to 2030, increased the commitment by $70 million, and added a component allowing partial advances against expected future ITC proceeds.
2026 outlook: direct growth, affiliate contraction, and cash generation range
For 2026, management said Sunrun expects high single-digit to low double-digit growth in its Sunrun Direct business, with Q1 expected to be the low point and sequential improvement through the year. However, Powell said the company is reducing affiliate channel volume, with management expecting affiliate volumes to fall by over 40% in 2026, leading to slight declines in overall volume.
Abajian attributed the affiliate decision to increasing complexity in selling and installing storage, navigating utility rate structures, operating distributed power plants, and maintaining ITC compliance. Sunrun said the direct model provides greater operational control and better customer credit profiles.
For 2026, Abajian guided to:
- Aggregate Subscriber Value of $4.8 billion to $5.2 billion
- Contracted Net Value Creation of $650 million to $1.05 billion
- Cash Generation of $250 million to $450 million
He said the expected year-over-year decline in value creation metrics is driven by lower volume and dilution from a higher mix of assets sold or financed through joint venture structures. However, he said Sunrun does not expect the higher asset sale or JV mix to dilute Upfront Net Subscriber Value and cash generation because the activity increases the average advance rate.
For Q1, the company expects Aggregate Subscriber Value of about $850 million to $950 million and Contracted Net Value Creation of $25 million to $125 million, with the decline driven in part by fixed-cost absorption in what management described as the lowest volume quarter seasonally.
Management also said it expects to repay more than $100 million of parent recourse debt in 2026 and be below its target recourse leverage of 2 times Cash Generation. Executives added that the company is evaluating additional ITC safe harboring investments ahead of an early July deadline, estimating a potential cash allocation of $50 million to $100 million, which is not included in the cash generation outlook.
Q&A: key headwinds and tax credit market commentary
In response to analyst questions about why cash generation guidance did not increase more, Abajian cited lower overall volume due to affiliate contraction, a “slightly lower view” on ITC pricing due to supply-demand dynamics, higher insurance costs, and equipment pricing pressure as Sunrun shifts to domestic sourcing.
Asked about FEOC (foreign entity of concern) guidance and tax equity market conditions, Powell said the initial guidance aligned with Sunrun’s expectations and “played to Sunrun’s strength” as a vertically integrated operator. Abajian said the company views the FEOC guidance as “incrementally helpful,” but noted the market still awaits further clarity on prohibited foreign entity and foreign-influenced entity rules, which has sidelined some participants. He added that tax credit transfer activity grew significantly year over year from 2024, while pricing expectations have softened, and said Sunrun still sees sufficient market participation to meet its needs.
About Sunrun (NASDAQ:RUN)
Sunrun, Inc (NASDAQ: RUN) is a leading provider of residential solar energy systems in the United States. The company designs, installs and maintains rooftop solar panels and battery storage solutions for homeowners under flexible financing arrangements. Customers can choose from leasing, power purchase agreements or solar ownership models, all of which are supported by Sunrun’s network of installation partners and service technicians. Sunrun also offers integrated home energy management services, including its Brightbox battery storage product, which enables customers to store solar energy for use during peak hours or power outages.
Founded in 2007 by Lynn Jurich, Ed Fenster and Nat Kreamer, Sunrun is headquartered in San Francisco, California.
