The acquisition of Vivint solar firm by Sunrun revealed the hidden value of the former company as a possible game-changer in the solar market. The current value of Sunrun bases on the cost of each installation made to the clients. Sunrun’s acquisition of Vivint would thus exhibit an advantage in risk arbitrage investment in the firm.
Sunrun’s negotiating strength with suppliers has declined, distribution costs are soaring, and emerging technologies will require more capacity than the company has. These adjustments have thus pushed the company towards setting up a solid foundation in running its solar operations. The stocks in the renewable energy sector will hence balloon in the future as the industry advances.
In the past several years, the peculiar trend is that domestic solar installations soared rather than decline. Installation costs should reduce in the future due to advancements in technology that would make it efficient to erect solar structures for residential clients.
The theoretical reason behind the possibility of Sunrun to dominate rests on the positive trajectory of reduced sales and marketing costs as opposed to other firms. The firm’s mitigated costs in sales would be a result of the firm’s upscale operations by pumping in extra resources through Vivint’s acquisition. Additionally, the firm will downshift its hardware costs by increasing its market network. Thus, the company will obtain an advantage over the major suppliers like SolarEdge that possesses a larger market capacity than Sunrun.
Another subsequent benefit for Sunrun would be its collaboration with other firms on the virtual power grid investment. The firm will be capable of investing in electrical grids focused on solar energy to aid in energy storage. Its flexibility in adapting to the power industry changes will help the company provide efficient services to the residential structures.
In a decade, the company will thus be dominant in providing sustainable solar services.
Sunrun’s attempt to upscale its operations will shield it against constant funding from external investors. Hence, the firm will generate accurate values of its shares, which in the last few years have been volatile. Thus, the company will be favored since its share index will be reasonably consistent in all the quarters of the year.
In conclusion, Sunrum’s pursuit to upscale its operations will benefit its long-term services. Hence, the company will survive the economic downturns and maneuver into becoming a solar energy provider for residential structures.