Sunrun Inc. Liquidation Value

Sunrun Inc. (RUN) presents a deeply negative liquidation recovery posture as of March 31, 2026. Total reported assets of $22.8B are dominated by solar energy systems held under operating leases ($17.0B net, tagged as PropertySubjectToOrAvailableForOperatingLeaseNet), which under a liquidation lens receive a 50-70% haircut, implying recoverable value of approximately $8.5B-$11.9B from that asset class. Against this, total liabilities stand at $17.8B at face value, with long-term debt alone at $14.8B (predominantly non-recourse project-level financing, though it does not extinguish on windup of the consolidated entity for recovery analysis purposes). The math yields negative equity recovery to common stockholders under any reasonable haircut scenario. The MFFAIS operating liquidation value of approximately $1.9B is consistent with this directional assessment, reflecting only a partial recovery well below book equity of $3.3B attributable to common.

The primary asset-side drivers of impairment under liquidation are: (1) the $17.0B of solar energy systems deployed on customer rooftops — these are operationally embedded, geographically dispersed physical assets with limited secondary market liquidity and no readily addressable buyer pool absent a going-concern transfer; (2) $3.7B of other noncurrent assets, which include capitalized customer acquisition costs ($364M accumulated amortization on contract costs), deferred items, and equity method investments — most receive 0-50% haircut; (3) $1.05B of unbilled receivables (ContractWithCustomerAssetGrossCurrent + UnbilledReceivablesCurrent), which represent long-tenor future billings under 20-25 year Customer Agreements and would be severely discounted or uncollectable in liquidation.

On the liability side, $1.5B of deferred revenue (ContractWithCustomerLiability) and $14.8B of long-term debt sit at face value. Deferred revenue obligations do not extinguish; they represent service commitments that become cash costs on windup. The $4.4B of non-recourse project debt (subset of LongTermDebt) is structurally ring-fenced but still encumbers the asset pool available to the consolidated estate. Additionally, $730M of redeemable noncontrolling interests (RedeemableNoncontrollingInterestEquityCarryingAmount) represents redemption obligations that sit ahead of common equity in recovery.

Quarter-over-quarter, the most notable change from the December 31, 2025 10-K is the continued build in the non-recourse debt stack (MD&A cites $1.6B in new non-recourse commitments received in 2025 and a February 2026 amendment increasing the Luna credit facility from $2.63B to $2.7B), net interest expense rising to $264M for Q1 2026 (+16% YoY), and five new investment funds added since March 31, 2025 — each increasing the HLBV-allocated loss to noncontrolling interests and deepening the liability stack. Operating cash generation turned marginally positive at $10.6M in Q1 2026 vs. -$104.2M in Q1 2025, driven by the Q3 2025 third-party system sale transaction, but investing outflows remain substantial at -$428.6M. Purchase commitments of $317.8M in batteries due by Q3 2026 and $2.2B in modules/inverters/batteries through 2029 are disclosed in MD&A but not separately XBRL-tagged as a liability; these represent contingent claims that would accelerate in a wind-down scenario. The $474.3M convertible notes due 2030 (ConvertibleDebtNoncurrent) remain outstanding after the 2026 notes were repaid February 2, 2026.