Sunrun responds to ‘deceptive’ report issued by Muddy Waters

Sunrun sets the record straight in response to another deceptive report issued by short-seller Muddy Waters. “Muddy Waters has again attempted to mislead their readers and manipulate the share price for Muddy Waters’ benefit with gross inaccuracies. It purports that data published by the Energy Information Administration and Sunrun’s reported Subscribers count is comparable, which it is not. Muddy Waters is comparing apples to oranges and even concedes that the data likely is not comparable. The fact is that volume reported to EIA is not equatable to Sunrun’s Subscriber volume reporting. Sunrun provides both figures; however, data supplied to EIA is not comparable to Subscribers for several reasons. First, as Muddy Waters acknowledges, Sunrun’s customer count is based on installations, whereas EIA data is based on assets that are already placed in operation. Because there is often a substantial lag between installation activities and ultimate operation, and an additional lag before monthly billing commences, the EIA number will always be substantially lower than Sunrun’s reported ‘Subscribers’ metric. Additionally, the EIA data excludes customers Sunrun is not actively billing, such as subscribers who elected to pre-pay their contracts. Muddy Waters has it wrong. Sunrun fully stands behind its reporting of metrics, including subscribers. Muddy Waters also insinuates that investment tax credits are somehow based on data supplied to EIA. This is also entirely incorrect. EIA data has no bearing on tax credit determinations or reporting to Sunrun’s investors. Data Sunrun reports to EIA is a compliance requirement to provide information about billing amounts to customers and nameplate capacity of solar systems currently owned by Sunrun, based on specifications provided by EIA. Muddy Waters has it wrong. In addition, Muddy Waters also demonstrates they do not understand GAAP accounting for leased systems. For Subscribers, Sunrun incurs many costs that are expensed in-period. Only certain costs are capitalized. For Customers who purchase systems, Sunrun expenses all costs in-period. Muddy Waters is trying to compare all costs incurred for Customer purchase systems to only the capitalized costs to create Subscribers. Sunrun appropriately captures the cost to install a Subscriber in our reported supplemental cost memo. Muddy Waters has it wrong. Sunrun stands by its financial statements, risk disclosures, and information provided to investors, regulators, taxing authorities, and the U.S. Energy Information Administration. Sunrun is committed to operating with the highest integrity, and utilizes industry-standard financing vehicles.”