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Short Seller Muddy Waters Raises Concerns About Sunrun Inc

Short Seller Muddy Waters Raises Concerns About Sunrun Inc


Sunrun Inc (RUN) stock is facing downward pressure after a recent short report by Muddy Waters. This report raises some serious concerns about the company’s financials and its reporting of subscribers and earnings assets.

The Dubious Subscriber Values and Earning Assets

The short report by Muddy Waters highlights Sunrun’s highly questionable subscriber and earning asset numbers. It claims that Sunrun has been significantly inflating its non-GAAP subscribers for years, with the current overstatement potentially spanning five quarters of reported deployments.

According to Muddy Waters, Sunrun has been claiming and selling tax credits on these inflated numbers, which could amount to approximately $200 million in possible excess tax credits for 2022 alone.

Sunrun’s Business Model

Sunrun is a company that finances and sells residential rooftop solar systems. It finances 80% of its systems through power purchase agreements (PPAs) or leases, which are classified as subscribers. As of June 30, 2023, Sunrun claimed to have 724,784 subscribers through PPAs and leases.

The Discrepancy with EIA and Gross Solar Assets

The Muddy Waters report points out that even using the Energy Information Agency’s (EIA) net metering metric, Sunrun’s non-GAAP subscribers are overreported by 12.0% as of Q2 2023. Additionally, Sunrun reports subscribers that are 20.9% higher than the EIA’s data.

The report also highlights the consistent discrepancy between Sunrun’s reported subscribers and its growth in gross solar assets per subscriber.

Muddy Waters’ Analysis and Findings

Muddy Waters conducted a comprehensive analysis of Sunrun’s balance sheet and found that Sunrun’s non-GAAP subscriber numbers are misleading when compared to a ten-quarter comparison. The report also raises concerns about Sunrun claiming approximately $205 million in investment tax credits (ITCs) for 14,390 systems that did not exist in 2022.

Price Action

Following the release of the short report, Sunrun’s stock price has taken a hit, trading lower by 8.48% at $8.85 on the last check Wednesday.


The Muddy Waters report has raised significant concerns about Sunrun’s subscriber and earning asset numbers. Investors and traders should carefully consider the validity of these claims and conduct further analysis before making any investment decisions.