{
  "docId": "019dd923-622c-750b-8b97-4517b3b2214e",
  "docSlug": "00da6c52307d",
  "documentTitle": "Sunrun Inc. (RUN)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-07-28 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 12,
  "pageCount": 33,
  "prevPage": 11,
  "nextPage": 13,
  "slideType": "valuation_reveal",
  "function": "show_valuation_bridge",
  "density": "balanced",
  "nDataPoints": 4,
  "notes": "The slide argues that current industry practice regarding ITC calculation is aggressive and potentially subject to future IRS challenge.",
  "elementsJson": [
    "waterfall_chart",
    "paragraph"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-4517b3b2214e/12",
  "deckHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-4517b3b2214e#slide-12",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We believe that calculating ITCs in a recursive manner contradicts the intent of the legislation that created the ITC.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-e6e9-749a-ba76-e7e6c897210a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.31,
        "w": 0.44,
        "x": 0.28,
        "y": 0.11
      },
      "kind": "chart",
      "text": "Waterfall chart showing PV of Cash Flows, ITC, ITC Double Dip, and FMV",
      "attrs": null,
      "subkind": "waterfall-bridge",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "20a05947-6d65-44a8-ad2e-3cea69d47af1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.09,
        "w": 0.78,
        "x": 0.11,
        "y": 0.58
      },
      "kind": "paragraph",
      "text": "The chart below depicts our view of how RUN takes tangible equipment, splits the value between PPA cash flows and associated tax losses, and the ITC sold to a Tax Equity Investor. RUN's appraisals then combine both ineligible property and eligible property alike in the DCF and call it eligible equipment for purposes of calculating the ITC.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3ed46afc-2a4a-43dd-95bd-c4c57f6a18b3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.78,
        "x": 0.11,
        "y": 0.47
      },
      "kind": "paragraph",
      "text": "We believe that calculating ITCs in a recursive manner contradicts the intent of the legislation that created the ITC. ITCs are meant to subsidize or help offset equipment value, not increase it. Three solar executives explained to us that even if eligible property should not include the value of the ITC, solar financing vehicles have simply evolved this way with no IRS challenge to date. (We suspect that a challenge is coming.)",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a35c3377-86ac-418b-8034-25430cfdc99d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.62,
        "x": 0.19,
        "y": 0.44
      },
      "kind": "subtitle",
      "text": "Figure 2: The Two-Stage Impact of Including ITC Proceeds in the Tax Basis",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "927e39fc-925f-4771-8f0e-9357e06b3bb6",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.24,
        "x": 0.38,
        "y": 0.09
      },
      "kind": "title",
      "text": "Effect of the Recursive ITC \"Double Dip\"",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f339f848-efe3-4db5-b0f3-d807ca5e148c",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Waterfall / value bridge",
      "slug": "waterfall-bridge",
      "agent": null,
      "layer": "slide",
      "matchId": "d9593bd7-c586-40c5-bea5-b4cf1a4880e5",
      "evidence": "The slide includes a waterfall chart showing the calculation of the ITC 'double dip' effect.",
      "confidence": 0.7
    }
  ],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 20,
      "from": 6,
      "beatId": "cf489be1-5d4b-47b0-b96c-139ebc5df28c",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "The Struggle",
      "beatSlug": "overcoming-monster-the-struggle",
      "evidence": "RUN's business practices and financial modeling are critiqued in detail.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}