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  "docSlug": "00da6c52307d",
  "documentTitle": "Sunrun Inc. (RUN)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-07-28 00:00:00",
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  "notes": "Includes a specific citation of a PPA agreement clause to support the argument of anti-consumer/anti-investor risk.",
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      "kind": "callout",
      "text": "This is a remarkably anti-consumer and anti-ABS investor provision buried deep in the fine print.",
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      "text": "tax claw back exposure: $0.73 / watt",
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      "text": "The effect of the excess depreciation on the insurance exposure: The total depreciable basis equals 85% of the claimed ITC, or $4.12 / watt. The excess depreciable basis is 85% of the excess ITC basis, or $1.19 / watt. The assumed tax rate is 21% federal and 5% state, or 26% total, for $0.31 / watt in taxes.",
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      "text": "The claimed ITC was 30% of $4.85 / watt, or $1.45 / watt; The ITC we believe to be supportable would be 30% of $3.45 / watt, or $1.03 / watt; The excess ITC claimed was thus $0.42 / watt, on an excess ITC basis of $1.40 / watt; The insurance was 36% of the claimed $1.45 / watt from above, or $0.52 / watt, only $.10 / watt larger than the excess ITC claimed.",
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      "text": "This $0.73 / watt leaves a shortfall of $0.21 / watt after insurance coverage. In the event the insurance does not cover excess depreciation, then the shortfall becomes $0.31 / watt.",
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      "kind": "paragraph",
      "text": "Based on our reading of a RUN PPA agreement and our discussions with the company, we believe that RUN's ABS holders could be responsible for RUN's panel removal and other customer liabilities in the event of a bankruptcy.",
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      "kind": "paragraph",
      "text": "Therefore, the total tax claw back exposure is: Excess ITC claimed of $0.42 / watt, plus depreciation tax benefits of $0.31 / watt, or $0.73 / watt.",
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      "kind": "quote",
      "text": "RUN may, without your consent, assign, lease, sublease, or transfer the Solar System and this Agreement, along with the rights and obligations hereunder, to any third party...",
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      "kind": "quote",
      "text": "“RUN may, without your consent, assign, lease, sublease, or transfer the Solar System and this Agreement, along with the rights and obligations hereunder, to any third party (each, an “Assignee”) for any purpose, including without limitation, collection of unpaid amounts, financing of the Solar System’s installation, or in the event of acquisition, corporate reorganization, merger or sale of substantially all of RUN’s assets to another entity.” — RUN BrightSave PPA Agreement Dated November 2017, p. 12",
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      "text": "45 RUN BrightSave PPA Agreement Dated November 2017, p. 12",
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      "text": "RUN's ABS Investment Could be Exposed to Liabilities, Including Panel Removal in a Bankruptcy",
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