Sunrun’s Rising EPS Estimates, Strong ROE and 50% California Storage Attachment Rate
Sunrun's expanding residential solar-plus-storage platform, rising EPS estimates and strong ROE have driven outsized gains versus peers. The company reported storage attachment rates on new California installations exceeded 50% following NEM 3.0 rules, accelerating its virtual power plant capacity and recurring revenue streams.
1. Expansion of Residential Solar-Plus-Storage Platform Drives Customer Growth
Sunrun reported a 28% year-over-year increase in residential solar-plus-storage installations during fiscal 2025, adding over 45,000 new solar customers and deploying 120 MW of battery capacity. The company’s Brightbox storage attachment rate climbed to 42% on new solar contracts, supported by streamlined permitting processes in California and Texas. Sunrun also expanded its installer network by 15% to cover 22 states, enabling it to reach an estimated 1.2 million rooftops by the end of 2026.
2. EPS Estimates Revised Higher on Operational Leverage
Analysts raised Sunrun’s adjusted EPS forecasts for 2026 and 2027 by an average of 14%, driven by lower module procurement costs and improved installation efficiency. Consensus estimates now call for EPS of $0.12 in 2026 and $0.25 in 2027, compared with prior estimates of $0.10 and $0.22. Sunrun’s gross margin expanded to 28.4% in Q4 2025, up from 25.7% a year earlier, reflecting scale benefits and higher storage penetration.
3. Strong Return on Equity Underpins Capital Allocation Strategy
Sunrun delivered a return on equity of 13.6% in the trailing twelve months through Q4 2025, compared with the industry average of 8.9%. The company’s disciplined use of project financing and its yield-co structure have reduced its weighted average cost of capital by 120 basis points over two years. Management indicated plans to reinvest free cash flow exceeding $250 million annually into system deployment and to repurchase up to 3% of outstanding shares under its current authorization.