U.S-based solar energy, battery, and storage service provider Sunrun incurred a net loss of $87.8 million in the first quarter (Q1) of 2024 due to the company transitioning from traditional tax equity to tax credit sales, causing it to invest $181 million in working capital.

The company expects to recover this investment in the next quarter as cash from tax credit sales is recovered via arrears, while cash from tax credit allocation is earned back at the time of installation.

In the last quarter of 2023, the company reported a loss of $350.1 million against $63 million in Q4 2022, caused by lower sales, higher interest expense, and a non-cash investment charge.

The total revenue for Q1 was $458.2 million, down $131.6 million, or 22%, from Q1 2023. Total operating expenses were $641.3 million, a decrease of 22% year-over-year (YoY).

The decreased upfront revenue was attributed to the increasing mix of subscribers, with the company claiming that revenue is recognized over the life of the customer agreement, ranging from 20 to 25 years.

The company’s total operating expenses fell from $817.5 million in 2023 to $641.3 in 2024 for the quarter ending in March due to a reduction in the cost of solar energy systems and product sales.

The customer agreements and incentives revenue rose 31% YoY to $323 million, while solar energy systems and product sales revenue decreased by $208.2 million or 61% YoY from Q1 2023.

The company also installed 207 MWh of storage capacity in the first quarter of 2024, registering a 192% YoY growth. This boosted the company’s total networked storage capacity to 1.5 GWh.

The company has installed 102,000 solar and storage systems to date. In Q1, Sunrun installed storage on 50% of its new customers, a 15% YoY increase from the attachment rate in 2023. The company installed 207 MWh of storage in the same quarter, three times the number in Q1 of 2023.

The company expects the installed storage capacity to be 215 to 226 MW in Q2.

“We continue to see decreasing prices for key hardware components, which are gradually flowing through our reported costs as we finish consuming the highest cost inventory,” said Danny Abajian, Sunrun’s CFO.

The company announced two new “record-setting” grid service programs in the earnings call. “For the second year in a row, Sunrun will set a national record for the largest number of residential solar-plus-battery systems enrolled in a virtual power plant. This year, we are launching a statewide Demand Side Grid Support program that is about twice the size with more than 16,000 Sunrun customers,” said Mary Powell, CEO of Sunrun.

Last year, Sunrun closed $835 million in non-recourse financings to help the company maintain its growth trajectory across various segments in its business, including energy storage and the diverse services it offers to its customers.