What: Shares of residential solar installer Sunrun Inc (NASDAQ:RUN) jumped 15% in March as investors speculated that its future might get a bit brighter.
So what: Sunrun did report fourth quarter earnings during March, and there was some good and some bad news. Deployments grew 83% from a year ago to 68 MW, and bookings jumped 117% to 80 MW in the fourth quarter. But cost per watt was $3.64, which is nearly $1 above industry leader SolarCity, which is a huge challenge for Sunrun long-term.
The more encouraging news was from competitor Vivint Solar, which called off its acquisition by SunEdison. The company was supposed to be acquired by SunEdison, creating an even bigger competitor, but SunEdison's financial trouble scuttled the deal, and now it appears Vivint Solar is a weaker company than it was just nine months ago. That's a benefit to Sunrun.
Now what: The residential solar industry has a challenging year ahead given slowing growth and rising costs to acquire customers. Sunrun's cost structure is higher than that of its competitors, which is also a big concern. Investors may be rushing back into residential solar today, but if that's a space you're interested in I think SolarCity or even SunPower are better plays. Sunrun is a high cost competitor with no technical differentiation, not a position I would like to be in in solar right now.