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Why Sunrun Inc.?

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Sunrun Inc. (RUN)

Fossil fuels have dominated the global energy market, accounting for 60-70% of global power generation since the 1970s. Between 2018 and 2050, Bloomberg foresees a dynamic shift that will heavily favor clean power. They estimate that $8.4T will be invested in wind and solar energy and another $1.5T in other zero-carbon power technologies.1 These assumptions are based on continued technological innovation in these markets that will bring down installation and maintenance costs. Sunrun Inc. (RUN), a provider of solar panels to residential homes, has been identified by Kensho's methodology as a leader in this area.

Based in San Francisco with more than 200,000 customers,2 RUN is uniquely positioned to benefit from California's recently passed legislation that requires most new construction homes to be powered by solar energy. RUN offers a variety of layouts and payment plans (either full ownership or leasing of solar panels) and boasts about their customized process of installing, connecting and maintaining solar panels. When a home does not use all the power its solar panels generate, the homeowner can sell excess power back into the grid, offering RUN customers even more significant long-term cost savings.

In addition, RUN manufactures BrightboxTM, a solar energy battery. This storage system allows homeowners to store excess power in their homes and use it at night or during periods of weak sunlight. And, because it is refilled by solar power, Brightbox offers a clean alternative to fossil fuel burning generators to power homes in the event of a blackout or natural disaster.

Figure 1: Sunrun Inc. (RUN)

Market Cap ($M) $1,380
GICS Sector Industrials
GICS Industry Electrical Equipment

Source: Bloomberg Finance L.P., as of September 28, 2018.

Ormat Technologies Inc. (ORA)

While solar and wind energy generate the majority of headlines in the clean energy sector, geothermal energy is often overlooked as an investment opportunity. Geothermal energy is heat that is typically stored in the earth's crust. Unlike solar and wind power, geothermal power harnesses the energy our planet constantly produces and is unaffected by weather conditions.3 While announcing up to $14.5 million in new funding for advance geothermal power, the Department of Energy called it "a reliable, baseload renewable energy source with firm and flexible operation" to provide a range of essential services that contribute to our nation's grid stability and resiliency."4 According to JPMorgan, while geothermal energy generation currently accounts for just 0.1% of total electricity generation, as much as 8% of global demand could be satisfied with geothermal power. In addition, as many as 40 countries could be 100% geothermal if its potential is fully tapped.5

Ormat Technologies Inc. (ORA), a core holding in the Kensho Clean Power Index, is one of the few US-listed companies focused primarily on geothermal power. With over 150 geothermal power plants in 25 countries generating more than 2,100 megawatts of capacity, ORA is the sixth largest owner and operator of geothermal assets globally.6 ORA also diversifies CNRG's portfolio by providing exposure to the very low emission geothermal sector. The geothermal power process requires no burning of fossil fuels, making it a strong addition to any clean power portfolio.

Figure 2: Ormat Technologies Inc. (ORA)

Market Cap ($M) $2,740
GICS Sector Utilities
GICS Industry Independent Power & Renewables

Source: Bloomberg Finance L.P., as of September 28, 2018.

CNRG: View Fund Page

Other Stock Stories

  • 1 Bloomberg, "New Energy Outlook 2018", June 19, 2018.
  • 2 Sunrun.com, October 4, 2018.
  • 3 INPEX, "Sustainability Report 2016", September 15, 2016
  • 4 Energy.gov, "Department of Energy Announces $14.5 Million to Advance Geothermal Drilling Technologies", April 23, 2018.
  • 5 JP Morgan Research, "Ormat Technologies", August 9, 2018.
  • 6 JP Morgan Research, "Ormat Technologies", August 9, 2018.

Centralized Systematic Valuation Aggregated Cash Flow (ACF) File

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