The company also predicts positive cash flow for 2026 as it shifts away from affiliate partners and toward a direct model under which it sells half of the storage and solar systems it builds to a third party upon installation.
Sunrun reported its fourth-quarter and full-year 2025 financial results on Thursday, highlighting continued positive cash generation and the expansion of its “storage-first” business model.
The company reported total revenue of $1.16 billion for the fourth quarter, a 124% increase compared to the same period in 2024. For the full year, revenue reached $2.96 billion, up 45% year-over-year.
A key highlight for the residential solar leader was the generation of $377 million in cash for the full year 2025, exceeding the midpoint of its prior guidance. Sunrun says it expects this trend to continue, forecasting positive cash generation of between $250 million and $450 million in 2026.
This performance was driven by a significant increase in energy systems and product sales, which rose 114% for the full year, due in large part to a new financing structure the company employs, in which it sells some of the storage and solar energy systems it originates to a third-party, but continues to operate and maintain the systems for end users.
On the investor call that followed the earnings release, Sunrun CFO Danny Abajian said these sales allow the company to realize up-front revenue on the systems, while it retains “rights to grid services and ability to cross-sell and upsell these customers over time.”
Abajian reported that 50% of all systems sold by Sunrun were financed in this way in Q4, up from 10% in the previous quarter.
Sunrun’s storage-first model
The company reported it achieved a record 71% storage attachment rate on new installations during the fourth quarter, and says it has now installed batteries for more than 237,000 customers. Sunrun says these customers relied upon their batteries during more than 650,000 outages in 2025, totaling 3.8 million hours.
In several markets, Sunrun operates what it calls “distributed power plant” (DPP) programs — a term it prefers over the more widely used but passively-connoted “virtual power plants” — in which the company dispatches the power output of its networked battery fleet to provide capacity and grid services to electric system operators.
The company’s earnings announcement touts 4 GWh of networked energy storage capacity across 18 VPP programs — enough to dispatch 425 MW of power to the grid at times of peak demand.
During the earnings call, Sunrun SEO Mary Powell highlighted the company’s VPP partnerships with NRG and Tesla in Texas. “The success of the programs has spurred a lot of interest,” she explained, ”and we’re having very interesting talks (about future DPP programs) with partners across the country.”
Sunrun expects to have more than 10 GWh of dispatchable capacity online by the end of 2028.
Market headwinds and operational shifts
Despite the revenue and cash milestones, the report showed signs of the broader challenges facing the residential solar sector.
Subscriber additions for the fourth quarter were 25,475, a 17% decrease compared to the fourth quarter of 2024. Solar capacity installed also saw an 11% decline year-over-year during the quarter.
Sunrun reports this is partially due to its strategic move to deliberately reduce the volume installed through its affiliate channels and ramp up its vertically-integrated direct business.
The company’s affiliates are contractors that sell and/or install on behalf of Sunrun in some markets. Abajian said the company planned to reduce its affiliate business by over 40% in 2026.
“We made these changes because our direct business provides greater customer experience and operational control to manage regulatory and compliance complexity,” said Powell in the call. She went on to add that “the increasing complexity of sales processes, utility rate structures, storage integration, distributed power plants and ITC compliance requires ever increasing standards of training for our employees.”
Outlook for 2026
Looking ahead, Sunrun provided guidance for the 2026, predicting it would increase its direct business compared to the year before but projecting an overall decline in aggregate subscriber value of 11% year-on-year.
The company says it expects its margin-focused growth strategy (direct sales of half of the systems it installs to a third-party) to continue to deliver meaningful results, with between $250 million and $450 million in cash generation expected, before the company pays down its recourse parent capital and makes safe harbor purchases.
Powell said the current situation in residential solar — categorized by the temerity of many of the industry’s most reliable tax equity partners due to uncertainty around FEOC restrictions and the sunsetting of federal tax credits — actually “play(s) to Sunrun’s strengths.”
She said the company is a “sophisticated vertically-integrated player:” and that the its push to develop DPP programs in more states would yield positive results.
“Sunrun is building the next generation of power plants to deliver the critical energy our customers and the U.S grid urgently requires,” Powell said, adding that the company “can scale these resources quickly as opposed to traditional utility solutions that can take years or even decades to bring online.”
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