Sunrun More Likely Solar Buyer Rather Than Seller, CEO Saysby and
`We would be opportunistic,' Sunrun CEO says of potential M&A
Solar company doesn't have near-term plans to sell assets
Sunrun Inc.’s chief executive officer said the company would more likely be a buyer than a seller of rooftop solar assets in a market that has been weighed down by adverse policy decisions and demand concerns.
“We don’t have any near-term plans, but we’re always opportunistic,” Sunrun CEO Lynn Jurich said in an interview at Bloomberg’s San Francisco office on Tuesday.
SunRun’s shares have plunged 57 percent in the past two months amid an industrywide rout for rooftop solar installers. In December, Nevada reduced credits to rooftop solar customers and raised fees. The U.S. Supreme Court put on hold President Barack Obama’s plan to cut emissions from power plants and deploy more renewables. Some companies’ solar installations have also trailed forecasts.
Sunrun erased earlier declines on Tuesday, surging by as much as 4.2 percent, after Jurich’s comments. It was up 1.7 percent at $5.15 at 2:57 p.m. New York time.
“If you’re looking to be a buyer in this market, there might be an opportunity to buy at favorable rates or prices," Angelo Zino, an analyst at S&P Global Market Intelligence, said of the broader solar market. "You’re more likely to stick with the position of the buyers in this market because they’ll be able to generate greater scale, greater cash flow.”
Analysts including UBS Securities LLChave speculated that Sunrun is considering selling stakes in bundles of rooftop solar assets. In a Feb. 9 research note, UBS analyst Julien Dumoulin-Smithsaid management at Sunrun “appears keen to sell-down a stake in its own portfolio” to illustrate the value of rooftop solar assets.
Jurich said the company still sees strong customer demand for rooftop solar and investors may be missing the long-term opportunities in the market, where there will continue to be a long-term shift from large, centralized fossil-fuel power stations to more distributed renewable energy production.
Jurich declined to say whether Sunrun planned to issue solar asset-backed securities, or securitizations, in the next six months. Sunrun issued an asset-backed deal in mid-2015, but has focused on project financing.
“We believe the private debt market is better,” she said.