Sunrun Inc.

Previous wording

We are engaged in the design, development, installation, sale, ownership and maintenance of residential home battery storage and solar energy systems (collectively, “Projects”) in the United States. We provide solar energy and on-site battery storage often at savings compared to traditional utility energy with the additional benefit of protecting households from grid outages through battery backup. Our primary customers are residential homeowners. We also sell our products and services to certain commercial developers through our multi-family and new homes offerings. After pioneering the residential solar and home battery storage models and recognizing their enormous market potential, we have built the infrastructure and capabilities necessary to rapidly acquire and serve customers in a low-cost and scalable manner. Today, our scalable operating platform provides us with a number of unique advantages. First, we are able to drive distribution by marketing our solar-plus-storage service offerings through multiple channels, including our diverse partner network and direct-to-consumer operations. This multi-channel model supports broad sales and installation capabilities, which together allow us to achieve capital-efficient growth. Second, we are able to provide differentiated solutions to our customers that, combined with a great customer experience, we believe will drive meaningful margin advantages for us over the long term as we strive to create the industry’s most valuable and satisfied customer base.

Current wording

We are engaged in the design, development, installation, sale, ownership and maintenance of residential home battery storage and solar energy systems (collectively, “Projects”) in the United States. We provide solar energy and on-site battery storage often at savings compared to traditional utility energy with the additional benefit of protecting households from grid outages through battery backup. Our primary customers are residential homeowners. We also sell our products and services to certain commercial developers through our multi-family and new homes offerings. After pioneering the residential solar and home battery storage models and recognizing their enormous market potential, we have built the infrastructure and capabilities necessary to rapidly acquire and serve customers in a low-cost and scalable manner. Today, our scalable operating platform provides us with a number of unique advantages. First, we are able to drive distribution by marketing our solar-plus-storage service offerings through multiple channels, including our diverse partner network and direct-to-consumer operations. This multi-channel model supports broad sales and installation capabilities, which together allow us to achieve capital-efficient growth. Second, we are able to provide differentiated solutions to our customers that, combined with great customer experience, we believe will drive meaningful margin advantages for us over the long term as we strive to create the industry’s most valuable and satisfied customer base.

Previous wording

Our core solar-plus-storage service offerings are provided through our power purchase agreements and leases, which we collectively refer to as our “Customer Agreements,” and which provide customers with simple, predictable pricing that is insulated from rising retail electricity prices. They also provide customers with the benefit of increased resiliency from backup energy and enhanced energy management capabilities. While customers have the option to purchase home energy systems outright from us, most of our customers choose to buy solar and storage as a service from us through our Customer Agreements without the significant upfront investment. With our solar-plus-storage service offerings, we install energy systems on our customers’ homes and provide them with the solar power produced by those systems and integrated batteries for typically a 20- or 25-year initial term. In addition, we monitor, maintain and insure the system during the term of the contract. In exchange, we receive predictable cash flows from high credit quality customers and qualify for tax and other benefits. We finance portions of these tax benefits and cash flows through tax equity, non-recourse debt and project equity structures in order to fund our upfront costs, overhead and growth investments. We develop valuable customer relationships that can extend beyond this initial contract term and provide us an opportunity over time to integrate additional solar, battery storage, electrification and distributed home-to-grid power plant offerings into a smart solution for each home and community. Since our founding, we have continued to invest in a platform of services and tools to enable large scale operations for us and our partner network, and these partners include solar integrators, sales partners, installation partners and other strategic partners. The platform includes processes and software, as well as fulfillment and acquisition of marketing leads. We believe our platform empowers new market entrants and smaller industry participants to profitably serve our large and underpenetrated market without making the significant investments in technology and infrastructure required to compete effectively against established industry players. Our platform provides the support for our multi-channel model, which drives broad customer reach and capital-efficient growth.

Current wording

Our core solar-plus-storage service offerings are provided through our power purchase agreements ("PPAs") and leases, which we collectively refer to as our “Customer Agreements,” and which provide customers with simple, predictable pricing that is insulated from rising retail electricity prices. They also provide customers with the benefit of increased resiliency from backup energy and enhanced energy management capabilities. While customers have the option to purchase home energy systems outright from us, most of our customers choose to buy solar and storage as a service from us through our Customer Agreements without the significant upfront investment. With our solar-plus-storage service offerings, we install energy systems on our customers’ homes and provide them with the solar power produced by those systems and integrated batteries for typically a 20- or 25-year initial term. In addition, we monitor, maintain and insure the system during the term of the contract. In exchange, we receive predictable cash flows from high credit quality customers and qualify for tax and other benefits. We finance portions of these tax benefits and cash flows through tax equity, non-recourse debt and project equity structures in order to fund our upfront costs, overhead and growth investments. We develop valuable customer relationships that can extend beyond this initial contract term and provide us with an opportunity over time to integrate additional solar, battery storage, electrification and distributed home-to-grid power plant offerings into a smart solution for each home and community. Since our founding, we have continued to invest in a platform of services and tools to enable large scale operations for us and our partner network, and these partners include solar integrators, sales partners, installation partners and other strategic partners. The platform includes processes and software, as well as fulfillment and acquisition of marketing leads. We believe our platform empowers new market entrants and smaller industry participants to profitably serve our large and underpenetrated market without making the significant investments in technology and infrastructure required to compete effectively against established industry players. Our platform provides the support for our multi-channel model, which drives broad customer reach and capital-efficient growth.

Previous wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of June 30, 2025, we operate the largest fleet of residential solar energy systems in the United States. We have a Networked Solar Energy Capacity of 7,949 megawatts (“MW”) as of June 30, 2025, which represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of June 30, 2025 were approximately $19.8 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Current wording

We have experienced substantial growth in our business and operations since our inception in 2007, as well as through our acquisition of Vivint Solar on October 8, 2020. As of September 30, 2025, we operate the largest fleet of residential solar energy systems in the United States. We have a Networked Solar Energy Capacity of 8,188 megawatts (“MW”) as of September 30, 2025, which represents the aggregate megawatt production capacity of our solar energy systems that have been recognized as deployments, from our inception through the measurement date. Gross Earning Assets as of September 30, 2025 were approximately $20.9 billion. Please see the section entitled “Key Operating Metrics” for more details on how we calculate Networked Solar Energy Capacity and Gross Earning Assets.

Previous wording

During fiscal year 2024 and the first six months of fiscal year 2025, we observed market uncertainty, including as a result of recently announced tariffs, inflationary pressures, rising interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry and supply constraints. In particular, rising interest rates, including recent historic increases starting in 2021, have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain Funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new solar energy systems. These market dynamics, some of which we expect will continue into the foreseeable future, have impacted and may continue to impact our business and financial results.

Current wording

During fiscal year 2024 and the first nine months of fiscal year 2025, we observed market uncertainty, including as a result of ongoing announcements related to tariffs, inflationary pressures, rising interest rates, the market impacts of proposed or newly enacted regulatory frameworks in markets within which we do business and within our industry and supply constraints. In particular, rising interest rates, including historic increases starting in 2021, have resulted and may continue to result in a decrease in our advance rates, reducing the proceeds we receive from certain Funds. Because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new solar energy systems. These market dynamics, some of which we expect will continue into the foreseeable future, have impacted and may continue to impact our business and financial results.

Previous wording

At the federal level, tax policy and associated regulations have a direct impact on our business. The most notable recent tax legislation affecting our business is the One Big Beautiful Bill Act ("OBBB") that President Trump signed into law on July 4, 2025. The new law adjusts tax policies that Sunrun relies upon, including the Section 48E Clean Electricity Investment Credit and its associated “bonus” credits. While the law maintains the full Section 48E credit for energy storage through 2033, it shortens the availability of the 48E credit for solar facilities to the end of 2027. The law also applies new “Foreign Entity of Concern” (“FEOC”) restrictions to the Section 48E credit, which could potentially deny tax credits to projects that use certain components or receive “material assistance” from FEOC entities, thereby potentially increasing costs and potentially reducing demand. Further, the law ends the Section 25D Residential Clean Energy Credit starting in 2026. Changes in the law relating to the Section 45X Advanced Manufacturing Production Credit could also affect Sunrun indirectly, through our suppliers. The implementation of the law through the federal regulatory process could also directly affect our business. For further information regarding certain of the impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.”

Current wording

At the federal level, tax policy and associated regulations have a direct impact on our business. The most notable recent tax legislation affecting our business is the One Big Beautiful Bill Act ("OBBB") that President Trump signed into law on July 4, 2025. The new law adjusts tax policies that Sunrun relies upon, including the Section 48E Clean Electricity Investment Credit and its associated “bonus” credits. While the law maintains the full Section 48E credit for energy storage through 2033, it shortens the availability of the 48E credit for solar facilities to the end of 2027. The law also applies new “Prohibited Foreign Entity” (“PFE”) restrictions to the Section 48E credit, which could potentially deny tax credits to entities owned, controlled, or influenced by certain specified foreign entities, and for projects that use certain components or receive “material assistance” from PFE, thereby potentially increasing costs, reducing demand, or restricting access to tax credits. Further, the law ends the Section 25D Residential Clean Energy Credit starting in 2026. Changes in the law relating to the Section 45X Advanced Manufacturing Production Credit could also affect Sunrun indirectly, through our suppliers. The implementation of the OBBB through the federal regulatory process could also directly affect our business, including from uncertainty prior to the issuance of guidance or formal rulemaking processes, which may result in delays for monetizing tax credits. For further information regarding possible impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.”

Previous wording

State legislative and regulatory frameworks also have a direct impact on our business. For example, on April 15, 2023, California implemented changes to its net metering policy by adopting a net billing tariff (“NBT”), which presented a significant change to the rate structure for new California customers, and has partially limited the financial attractiveness of our offerings in certain regions of the state, particularly for solar-only systems. However, under this new policy, the value proposition of storage offerings is significantly enhanced in California. We believe that California will be predominantly a solar plus storage market going forward and the vast majority of California sales now consist of either our Sunrun Shift product or our backup battery offerings. As the demand for solar plus storage offerings grows, we anticipate facing additional operational challenges associated with the complexity of deploying storage solutions. For example, solar plus storage offerings tend to have longer cycle times due to factors such as lengthened permitting and inspection times and potential need of a main panel upgrade. Any such factors that extend the timeframes from customer signature to installation have historically resulted in increased operational challenges and correspondingly lower realization rates, and any future instances may continue to do so. Accordingly, this may adversely affect our financial performance, as well as the timing and magnitude of our installations and the recognition of the associated revenue.

Current wording

State legislative and regulatory frameworks also have a direct impact on our business. For example, on April 15, 2023, California implemented changes to its net metering policy by adopting a net billing tariff (“NBT”), which presented a significant change to the rate structure for new California customers, and has partially limited the financial attractiveness of our offerings in certain regions of the state, particularly for solar-only systems. However, under this new policy, the value proposition of storage offerings is significantly enhanced in California. We believe that California will be predominantly a solar plus storage market going forward and the vast majority of California sales now consist of our backup battery offerings. As the demand for solar plus storage offerings grows, we anticipate facing additional operational challenges associated with the complexity of deploying storage solutions. For example, solar plus storage offerings tend to have longer cycle times due to factors such as lengthened permitting and inspection times and potential need of a main panel upgrade. Any such factors that extend the timeframes from customer signature to installation have historically resulted in increased operational challenges and correspondingly lower realization rates, and any future instances may continue to do so. Accordingly, this may adversely affect our financial performance, as well as the timing and magnitude of our installations and the recognition of the associated revenue.

Previous wording

The United States is on the precipice of a once-in-a-generation transformation of our energy system due to a dramatic increase in demand for electricity from data centers, artificial intelligence, and manufacturing, as well as the opportunities of electrification of the American economy with clean energy. We anticipated this critical need for more dispatchable electrons on the grid and is assisting grid operators with on-demand, home-to-grid energy to help meet demand. Meeting America’s energy needs to power the economy requires adding more dispatchable capacity to the grid.

Current wording

The United States is on the precipice of a once-in-a-generation transformation of our energy system due to a dramatic increase in demand for electricity from data centers, artificial intelligence, and manufacturing, as well as the opportunities of electrification of the American economy with clean energy. We anticipated this critical need for more dispatchable electrons on the grid and assisting grid operators with on-demand, home-to-grid energy to help meet demand. Meeting America’s energy needs to power the economy requires adding more dispatchable capacity to the grid.

Previous wording

The transition in both the White House and Congress following the 2024 election has created a dynamic policy environment that may impact our business and financial results, including those related to federal tax credits, tariffs, and other regulatory measures. The recent legislative changes to ITCs under the OBBB, or Executive Orders issued by the President of the United States, as well as any other elimination, reduction or delay in policies that support the residential solar industry, could have an adverse effect on our business. For further information regarding certain of the impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.” Additionally, these and other changes in the United States’ government could contribute to a higher interest rate environment, which may further negatively impact our operations and financing costs. While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty and change in the near term. However, we believe our diversified business model and flexible operational framework position us to adapt to potential adverse changes in the regulatory landscape and to continue building on the robust bipartisan support for residential solar policy.

Current wording

The federal policy landscape in 2025 has created a dynamic environment that may impact our business and financial results, including via changes to federal tax credits, tariffs, and other regulatory measures. The recent changes to ITCs under the OBBB, or Executive Orders issued by the President of the United States, as well as any other elimination, reduction or delay in policies that support the residential storage and solar industry, could have an adverse effect on our business. For further information regarding certain of the impacts of the OBBB on our business, see Part II, Item 1A. Risk Factors—"Risks Related to Regulation and Policy—Federal tax policy impacts the competitiveness of our service offerings to customers and our market” and “Risks Related to Taxes and Accounting—Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with fund investors who seek particular tax and other benefits” and “—Our business depends in part on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives on the federal, state, and/or local levels. We may be adversely affected by changes in, and application of, these laws or other incentives to us, and the expiration, elimination or reduction of these benefits could adversely impact our business.” Additionally, these and other changes in the United States’ government could contribute to a higher interest rate environment, which may further negatively impact our operations and financing costs. While it is difficult to predict specific outcomes at this time, we expect a period of regulatory and policy uncertainty and change in the near term. However, we believe our diversified business model and flexible operational framework position us to adapt to potential adverse changes in the regulatory landscape and to continue building on the robust bipartisan support for residential solar policy.

Previous wording

As of June 30, 2025, we had 62 active Funds, which are described below. We have established different types of Funds to implement our asset monetization strategy. Depending on the nature of the Fund, cash may be contributed to the Fund by the investor upfront or in stages based on milestones associated with the design, construction or interconnection status of the solar energy systems. The cash contributed by the Fund investor is used by the Fund to purchase solar energy systems. The Funds own a Sunrun subsidiary for the solar energy systems, Customer Agreements and associated incentives. We receive on-going cash distributions from the Funds representing a portion of the monthly customer payments received. We use the upfront cash, as well as on-going distributions to cover our costs associated with designing, purchasing and installing the solar energy systems. In addition, we also use debt, equity and other financing strategies to fund our operations. The allocation of the economic benefits between us and the Fund investor and the corresponding accounting treatment varies depending on the structure of the Fund.

Current wording

As of September 30, 2025, we had 58 active Funds, which are described below. We have established different types of Funds to implement our asset monetization strategy. Depending on the nature of the Fund, cash may be contributed to the Fund by the investor upfront or in stages based on milestones associated with the design, construction or interconnection status of the solar energy systems. The cash contributed by the Fund investor is used by the Fund to purchase solar energy systems. The Funds own a Sunrun subsidiary for the solar energy systems, Customer Agreements and associated incentives. We receive on-going cash distributions from the Funds representing a portion of the monthly customer payments received. We use the upfront cash, as well as on-going distributions to cover our costs associated with designing, purchasing and installing the solar energy systems. In addition, we also use debt, equity and other financing strategies to fund our operations. The allocation of the economic benefits between us and the Fund investor and the corresponding accounting treatment varies depending on the structure of the Fund.

Previous wording

For further information regarding our Funds, including the associated risks, see Part II, Item 1A. Risk Factors— “Our ability to provide our solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with Fund investors who seek particular tax and other benefits”, Note 10, VIE Arrangements, and Note 11, Redeemable Noncontrolling Interests to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Current wording

For further information regarding our Funds, including the associated risks, see Part II, Item 1A. Risk Factors— “Our ability to provide our storage and solar service offerings to customers on an economically viable basis depends in part on our ability to finance these systems with Fund investors who seek particular tax and other benefits”, Note 10, VIE Arrangements, and Note 11, Redeemable Noncontrolling Interests to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

•Subscribers represent customers subject to Customer Agreements for solar or storage systems that have been recognized as Deployments, whether or not they continue to be active.

Current wording

•Retained Subscribers represent customers subject to Customer Agreements for solar and/or storage systems that have been recognized as Deployments and recognized as solar energy systems on Sunrun’s consolidated balance sheet, whether or not they continue to be active.

Previous wording

•Purchase Customers represent customers who purchased, whether outright or with proceeds from third-party loans, solar or storage systems that have been recognized as Deployments.

Current wording

•Purchase Customers represent customers who purchased, whether outright or with proceeds from third-party loans, solar and/or storage systems that have been recognized as Deployments.

Previous wording

•Contracted Cash Flows represent (x) (1) scheduled payments from Subscribers during the initial terms of the Customer Agreements, (2) net proceeds from tax equity partners, (3) payments from government and utility incentive and rebate programs, (4) contracted net cash flows from grid services programs with utilities or grid operators, and (5) contracted or defined (i.e., with fixed pricing) cash flows from the sale of renewable energy credits, less (y) (1) estimated operating and maintenance costs to service the systems and replace equipment over the initial terms of the Customer Agreements, consistent with estimates by independent engineers, (2) distributions to tax equity partners in consolidated joint venture partnership flip structures, and (3) distributions to any project equity investors. For Flex Customer Agreements that allow variable billings based on the amount of electricity consumed by the Subscriber, only the minimum contracted payment is included in Contracted Cash Flows.

Current wording

•Contracted Cash Flows represent, (A) for Retained Subscribers, (x) (1) scheduled payments from Subscribers during the initial terms of the Customer Agreements (provided, that for Flex Customer Agreements that allow variable billings based on the amount of electricity consumed by the Subscriber, only the minimum contracted payment is included in Contracted Cash Flows), (2) net proceeds from tax equity partners, (3) payments from government and utility incentive and rebate programs, (4) contracted net cash flows from grid services programs with utilities or grid operators, and (5) contracted or defined (i.e., with fixed pricing) cash flows from the sale of renewable energy credits, less (y) (1) estimated operating and maintenance costs to service the systems and replace equipment over the initial terms of the Customer Agreements, consistent with estimates by independent engineers, (2) distributions to tax equity partners in consolidated joint venture partnership flip structures, and (3) distributions to any project equity investors, and (B) for Non-Retained or Partially Retained Subscribers, (x) contracted proceeds from the full or partial sale of related assets, plus (y) the share of Contracted Cash Flows described in clause (A) of this definition which are allocated to Sunrun pursuant to the terms of each sale agreement or partnership agreement.

Previous wording

•Non-contracted or Upside Cash Flows represent (1) net cash flows realized from either the purchase of systems by Subscribers at the end of the Customer Agreement initial terms or renewals of Customer Agreements beyond the initial terms, estimated in both cases to have equivalent value, assuming only a 30-year relationship and a contract renewal rate equal to 90% of each Subscriber’s contractual rate in effect at the end of the initial contract term, (2) non-contracted net cash flows from grid service programs with utilities and grid operators, (3) non-contracted net cash flows from the sale of renewable energy credits, and (4) contracted cash flows from Flex Customer Agreements exceeding the minimum contracted payment. After the initial contract term, our Customer Agreements typically automatically renew on an annual or multi-year basis, for example 5 years, and the rate is initially set at up to a 10% discount to then-prevailing utility power prices. For Flex Customer Agreements that allow variable billings based on the amount of electricity consumed by the Subscriber, an assumption is made that each Subscriber’s electricity consumption increases by approximately 2% per year through the end of the initial term of the Customer Agreement and into the renewal period (if renewed), resulting in billings in excess of the minimum contracted amount (which minimums are included in Contracted Cash Flows).

Current wording

•Non-contracted or Upside Cash Flows represent (A) for Retained Subscribers the (1) net cash flows realized from either the purchase of systems at the end of the Customer Agreement initial terms or renewals of Customer Agreements beyond the initial terms, estimated in both cases to have equivalent value, assuming only a 30-year relationship and a contract renewal rate equal to 90% of each Subscriber’s contractual rate in effect at the end of the initial contract term, (2) non-contracted net cash flows from grid service programs with utilities and grid operators, (3) non-contracted net cash flows from the sale of renewable energy credits, and (4) contracted cash flows from Flex Customer Agreements exceeding the minimum contracted payment (provided, that for Flex Customer Agreements that allow variable billings based on the amount of electricity consumed by the Subscriber, an assumption is made that each Subscriber’s electricity consumption increases by approximately 2% per year through the end of the initial term of the Customer Agreement and into the renewal period (if renewed), resulting in billings in excess of the minimum contracted amount (which minimums are included in Contracted Cash Flows)), and (B) for Non-Retained or Partially Retained Subscribers, the share of Non-contracted or Upside Cash Flows described in clause (A) of this definition which are allocated to Sunrun pursuant to the terms of each sale agreement or partnership agreement. After the initial contract term, our Customer Agreements typically automatically renew on an annual basis and the rate is initially set at up to a 10% discount to then-prevailing utility power prices.

Previous wording

Customer Agreements and Incentives Revenue. Customer agreements and incentives revenue is primarily comprised of revenue from our Customer Agreements and sales of ITCs and solar renewable energy credits ("SRECs") to third parties.

Current wording

Customer Agreements and Incentives Revenue. Customer agreements and incentives revenue is primarily comprised of revenue from our Customer Agreements and sales of solar renewable energy credits ("SRECs") to third parties.

Previous wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the six months ended June 30, 2025 would have been less than $4.5 million. Our estimated production shortfall reduced revenue during the six months ended

Current wording

Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidated damage provisions under SREC contracts in the event minimum deliveries are not achieved. Customer Agreements with a performance guarantee provide a credit to the customer if the system’s cumulative production, as measured on various PTO anniversary dates, is below our guarantee of a specified minimum. Revenue is recognized to the extent it is probable that a significant reversal of such revenue will not occur. If our estimate of the future production shortfall amount for Customer Agreements with a performance guarantee was 10% higher, the additional reduction to revenue in the nine months ended September 30, 2025 would have been less than $4.7 million. Our estimated production shortfall reduced revenue during the nine months ended September 30, 2025 by approximately $9.8 million more than the prior year’s period. We have historically estimated an immaterial amount of liquidated damages pursuant to SREC contracts, and actual damages have not been materially different from estimates, nor material in amount during the nine months ended September 30, 2025 and 2024.

Previous wording

Solar Energy Systems and Product Sales. Solar energy systems sales are revenue from the sale of solar energy systems directly to customers. We generally recognize revenue from solar energy systems sold to customers when the solar energy system passes inspection by the authority having jurisdiction, which inspection generally occurs after installation but prior to PTO, at which time we have met the performance obligation in the contract. For solar energy system sales that include delivery obligations up until interconnection to the local power grid with permission to operate, we recognize revenue at PTO. Certain solar energy systems sold to customers include fees for extended warranty and maintenance services. These fees are recognized over the life of the service agreement.

Current wording

Solar Energy Systems and Product Sales. Solar energy systems sales are revenue from the sale of solar energy systems directly to customers. We generally recognize revenue from solar energy systems sold to customers when the solar energy system passes inspection by the authority having jurisdiction, which inspection generally occurs after installation but prior to PTO, at which time we have met the performance obligation in the contract. For solar energy system sales that include delivery obligations up until interconnection to the local power grid with permission to operate, we recognize revenue at PTO.

Previous wording

The carrying values of our long-lived assets, including solar energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and six months ended June 30, 2025 and 2024, there were no indicators of impairment and therefore no cash flow analysis was performed.

Current wording

The carrying values of our long-lived assets, including solar energy systems, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that we consider in deciding when to perform an impairment review would include significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of these assets is measured by comparison of the carrying value of each asset group to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, we amortize the remaining carrying value over the new shorter useful life. During the three and nine months ended September 30, 2025 and 2024, there were no indicators of impairment and therefore no cash flow analysis was performed.

Previous wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of June 30, 2025 would be a reduction of $22.1 million.

Current wording

The calculation of HLBV does not require estimates since each HLBV calculation is based upon the liquidation provisions of each fund’s contractual agreement. The calculation of the redeemable noncontrolling interest balance involves estimates such as a discount rate used in net present value calculations, and customer default rates. If the assumptions used for each of these were 10% higher, the impact to the aggregate redeemable noncontrolling interest balance as of September 30, 2025 would be a reduction of $20.9 million.

Previous wording

Customer Agreements and Incentives. The $75.4 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from July 1, 2024 through June 30, 2025, plus a full quarter of revenue recognized in 2025 for systems placed in service in the second quarter of 2024 versus only a partial amount of such revenue related to the period in which the assets were in service in 2024. Revenue from incentives consisted primarily of sales of SRECs. The $24.7 million decrease related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $89.8 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2024 through September 30, 2025, plus a full quarter of revenue recognized in 2025 for systems placed in service in the third quarter of 2024 versus only a partial amount of such revenue related to the period in which the assets were in service in 2024. Revenue from incentives consisted primarily of sales of SRECs. The $4.1 million decrease related to the timing and volume of SREC sales, which were responsive to market conditions.

Previous wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decrease by 31% compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $7.3 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales increased by 249% compared to the prior year primarily due to a transaction that Sunrun entered into in the third quarter of 2025 whereby certain storage and solar energy systems subject to newly originated Customer Agreements are sold to a third party, while Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers. Product sales decreased by $16.0 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Previous wording

Cost of Customer Agreements and Incentives. The $46.7 million increase in Cost of Customer Agreements and Incentives was primarily due to the new systems placed in service in the period from July 1, 2024 through June 30, 2025, plus a full quarter of costs recognized in 2025 for systems placed in service in the second quarter of 2024 versus only a partial amount of such expenses related to the period in which the assets were in service in 2024.

Current wording

Cost of Customer Agreements and Incentives. The $7.4 million increase in Cost of Customer Agreements and Incentives was primarily due to the new systems placed in service in the period from October 1, 2024 through September 30, 2025, plus a full quarter of costs recognized in 2025 for systems placed in service in the third quarter of 2024 versus only a partial amount of such expenses related to the period in which the assets were in service in 2024.

Previous wording

The Cost of customer agreements and incentives decreased to 75% of customer agreements and incentives revenue during the three months ended June 30, 2025, from 77% during the three months ended June 30, 2024. This decrease is primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 64% of customer agreements and incentives revenue during the three months ended September 30, 2025, from 76% during the three months ended September 30, 2024. This decrease is primarily due to customer pricing increases catching up to costs.

Previous wording

Cost of Solar Energy Systems and Product Sales. The $26.0 million decrease in Cost of solar energy systems and product sales was primarily due to the corresponding net decrease in the solar energy systems and product sales discussed above.

Current wording

Cost of Solar Energy Systems and Product Sales. The $40.2 million increase in Cost of solar energy systems and product sales was primarily due to the corresponding net increase in the solar energy systems and product sales discussed above.

Previous wording

The Cost of solar energy systems and product sales decreased to 94% of revenue from solar energy systems and product sales during the quarter ended June 30, 2025, from 96% during the quarter ended June 30, 2024, primarily as the result of customer pricing increases catching up to costs.

Current wording

The Cost of solar energy systems and product sales decreased to 71% of revenue from solar energy systems and product sales during the quarter ended September 30, 2025, from 95% during the quarter ended September 30, 2024, primarily due to the increase in system sales to a third party related to the transaction Sunrun entered in Q3 2025 discussed above.

Previous wording

Sales and Marketing Expense. The $0.8 million increase in Sales and marketing expense was primarily attributable to an increase in employee compensation. Included in Sales and marketing expense is $23.3 million and $17.3 million of amortization of costs to obtain Customer Agreements for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Sales and Marketing Expense. The $2.3 million increase in Sales and marketing expense was primarily attributable to an increase in costs to acquire customers through our sales lead generating partners. Included in Sales and marketing expense is $25.8 million and $20.9 million of amortization of costs to obtain Customer Agreements for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Research and Development Expense. The $2.2 million decrease in Research and development expense was primarily attributable to a decrease in headcount driving lower employee compensation, as well as decreased support related consulting costs.

Current wording

Research and Development Expense. The $1.1 million increase in Research and development expense was primarily attributable to an increase in headcount driving higher employee compensation.

Previous wording

General and Administrative Expense. The $16.8 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs, as well as increased employee compensation costs.

Current wording

General and Administrative Expense. The $5.0 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs.

Previous wording

Interest Expense, net. The increase in interest expense, net of $39.9 million was primarily related to additional non-recourse debt entered into subsequent to June 30, 2024. Included in net interest expense is $18.7 million and $16.9 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Interest Expense, net. The increase in interest expense, net of $50.2 million was primarily related to additional non-recourse debt entered into subsequent to September 30, 2024. Included in net interest expense is $9.6 million and $8.8 million of non-cash interest recognized under Customer Agreements that have a significant financing component for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Other (Expense) Income, net. The decrease in other (expense) income, net of $78.9 million related primarily to losses on derivatives recognized in the three months ended June 30, 2025, as well as to gains on extinguishment of debt during the quarter ended June 30, 2024, with no such comparable activity in the three months ended June 30, 2025.

Current wording

Other Expense, net. The decrease in other expense, net of $64.7 million related primarily to a decrease in losses on derivatives recognized in the three months ended September 30, 2025, compared with losses recognized during the three months ended September 30, 2024.

Previous wording

The increase in income tax benefit of $84.0 million was primarily attributable to increased benefit from transferring investment tax credits.

Current wording

The decrease in income tax benefit of $11.6 million was primarily attributable to decreased benefit from transferring investment tax credits.

Previous wording

The increase in net loss attributable to noncontrolling interests and redeemable noncontrolling interests was primarily the result of an addition of six new investment funds since June 30, 2024, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several years after fund formation.

Current wording

The decrease in net loss attributable to noncontrolling interest and redeemable noncontrolling interests was primarily the result of the addition of new investment funds later in the year in fiscal year 2025 as compared to fiscal year 2024, for which the HLBV method was used in determining the amount of net loss attributable to noncontrolling interests. Investment funds generally allocate more loss to the noncontrolling interest in the first several periods after fund formation.

Previous wording

Customer Agreements and Incentives. The $152.6 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from July 1, 2024 through June 30, 2025, plus a full six months of revenue recognized in 2025 for systems placed in service in the first six months of 2024 versus only a partial amount of such revenue related to the period in which the assets were in service in 2024. Revenue from incentives consisted primarily of sales of SRECs. The $2.5 million decrease related to the timing and volume of SREC sales which were responsive to market conditions.

Current wording

Customer Agreements and Incentives. The $242.4 million increase in Revenue from Customer Agreements was primarily due to new systems placed in service in the period from October 1, 2024 through September 30, 2025, plus a full nine months of revenue recognized in 2025 for systems placed in service in the first nine months of 2024 versus only a partial amount of such revenue related to the period in which the assets were in service in 2024. Revenue from incentives consisted primarily of sales of SRECs. The $6.5 million decrease related to the timing and volume of SREC sales which were responsive to market conditions.

Previous wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales decreased by $42.4 million compared to the prior year primarily due to an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $16.2 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Current wording

Solar Energy Systems and Product Sales. Revenue from solar energy systems sales increased by $75.2 million compared to the prior year primarily due to a transaction that Sunrun entered into in the third quarter of 2025 whereby certain storage and solar energy systems subject to newly originated Customer Agreements are sold to a third party, while Sunrun continues to maintain the customer experience and servicing relationships and can sell future goods and services to these customers, partially offset by an increase in the proportion of customers choosing to enter into a Customer Agreement versus purchasing a system outright using a loan, likely due to increased interest rates. Product sales decreased by $32.1 million, primarily due to the lower average sales price of solar energy products, as well as lower sales volume of solar energy products to installers of solar energy systems compared to the prior year, due to easing of supply chain constraints.

Previous wording

Cost of Customer Agreements and Incentives. The $85.8 million increase in Cost of Customer Agreements and Incentives was primarily due to the new systems placed in service in the period from July 1, 2024 through June 30, 2025, plus a full six months of costs recognized in 2025 for systems placed in service in the six months of 2024 versus only a partial amount of such expenses related to the period in which the assets were in service in 2024.

Current wording

Cost of Customer Agreements and Incentives. The $93.2 million increase in Cost of Customer Agreements and Incentives was primarily due to the new systems placed in service in the period from October 1, 2024 through September 30, 2025, plus a full nine months of costs recognized in 2025 for systems placed in service in the nine months of 2024 versus only a partial amount of such expenses related to the period in which the assets were in service in 2024.

Previous wording

The Cost of customer agreements and incentives decreased to 76% of customer agreements and incentives revenue during the six months ended June 30, 2025, from 80% during the six months ended June 30, 2024. This decrease was primarily due to customer pricing increases catching up to costs.

Current wording

The Cost of customer agreements and incentives decreased to 72% of customer agreements and incentives revenue during the nine months ended September 30, 2025, from 79% during the nine months ended September 30, 2024. This decrease was primarily due to customer pricing increases catching up to costs.

Previous wording

The Cost of solar energy systems and product sales decreased to 94% of revenue from solar energy systems and product sales during the six months ended June 30, 2025, from 106% during the six months ended June 30, 2024, primarily as the result of a$22.1 million increase in inventory reserves related to the wind-down of the AEE Solar operations during the six months ended June 30, 2024, with no such comparable activity in the six months ended June 30, 2025.

Current wording

The Cost of solar energy systems and product sales decreased to 82% of revenue from solar energy systems and product sales during the nine months ended September 30, 2025, from 102% during the nine months ended September 30, 2024, primarily as the result of a$22.1 million increase in inventory reserves related to the wind-down of the AEE Solar operations during the nine months ended September 30, 2024, with no such comparable activity in the nine months ended September 30, 2025, customer pricing increases catching up to costs, as well as to the increase in system sales to a third party related to the transaction Sunrun entered in Q3 2025 discussed above.

Previous wording

Sales and Marketing Expense. The $5.5 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation. Included in Sales and marketing expense is $45.4 million and $34.3 million of amortization of costs to obtain Customer Agreements for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Sales and Marketing Expense. The $3.2 million decrease in Sales and marketing expense was primarily attributable to decreases in headcount driving lower employee compensation. Included in Sales and marketing expense is $71.2 million and $55.2 million of amortization of costs to obtain Customer Agreements for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Research and Development Expense. The $4.3 million decrease in Research and development expense was primarily attributable to a decrease in support related consulting costs, as well as a decline in employee compensation.

Current wording

Research and Development Expense. The $3.2 million decrease in Research and development expense was primarily attributable to a decrease in support related consulting costs, as well as a decline in employee compensation.

Previous wording

General and Administrative Expense. The $10.3 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs, as well as increased employee compensation costs.

Current wording

General and Administrative Expense. The $21.8 million increase in General and administrative expenses was primarily attributable to increases related to information technology related consulting costs, as well as increased employee compensation costs.