How Sunrun Can Become a Giant in Renewable Energy

When Sunrun (NASDAQ: RUN) announced it was acquiring Vivint Solar (NYSE: VSLR), my first reaction was that it saw Vivint as something of a value in the solar market. Sunrun was more highly valued in relation to the retained value (a proxy for the present value of all solar installation cash flows) each had on their balance sheet, so it could be seen as an arbitrage opportunity.

As time passes and the dust settles, I think there's more to the move than that. Sunrun has seen its bargaining power with suppliers shrink, sales costs are skyrocketing, and new products like virtual power plants may need more scale than Sunrun currently has. Put it together and Sunrun is trying to take power back in the solar industry and build the future of renewable energy stocks in the process.

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