Sunrun’s Battery Strategy is Working: 70% Storage Attachment Rates Drive Revenue Growth in Q3 2025

Reading through Sunrun’s Q3 2025 earnings results, one number immediately stands out: 70%. That’s the percentage of Sunrun’s solar installations that now include battery storage systems, and it represents a fundamental shift in how America’s largest residential solar company operates. Based in San Francisco, California, Sunrun has essentially transformed from a solar installer into an energy storage company that happens to also install solar panels.

The financial impact of this strategic pivot is becoming increasingly clear. Sunrun reported revenue of $724.6 million in Q3 2025, marking the third consecutive quarter of revenue growth and representing a substantial 35% increase compared to the $537.2 million recorded in Q3 2024. More importantly, the company’s losses have shrunk dramatically from $412.2 million in Q3 2024 to $277.8 million in Q3 2025. While still posting losses, the trajectory is unmistakably positive, with operations actually generating a $3.7 million profit in the quarter.

What’s fascinating about Sunrun’s transformation is how quickly the storage attachment rate has climbed. Just two years ago in Q1 2023, only 14.9% of Sunrun’s solar installations included battery storage. By the first half of 2024, that figure had crossed the 50% threshold, and now it’s holding steady at 70% – a remarkable acceleration that reflects both customer demand and Sunrun’s strategic focus. The company added 412MWh of new storage capacity in Q3 2025 alone, representing a 23% increase over the same period last year.

This storage-first approach directly addresses one of the biggest challenges facing residential solar: intermittency and grid reliability issues. As of November 2025, homeowners across the United States are increasingly concerned about power outages, whether from extreme weather events, aging grid infrastructure, or peak demand periods. Battery storage systems allow solar customers to maintain power during outages and optimize their energy usage by storing excess solar production for use during peak rate periods when electricity from the grid is most expensive.

Market Dynamics and Competitive Positioning

Sunrun’s storage attachment rate of 70% significantly exceeds industry averages and puts pressure on competitors to match this offering. Tesla Energy, based in Palo Alto, California, has been promoting its Powerwall battery systems alongside solar installations, but Tesla’s residential solar business has faced challenges with installation delays and customer service issues. SunPower Corporation, headquartered in San Jose, California, has also been pushing battery attachments, but the company has struggled with financial difficulties and recently announced plans to exit the residential solar business entirely.

The competitive landscape becomes more interesting when examining regional players. Sunnova Energy, based in Houston, Texas, has been aggressively pursuing battery storage attachments and reported attachment rates of approximately 45% in their recent quarters. Sunrun’s 70% attachment rate represents a significant competitive advantage, suggesting superior sales processes, financing options, or customer education programs. This gap is particularly important because battery storage systems typically carry higher margins than solar panels alone, making them crucial for profitability.

From a financial perspective, Sunrun’s progress in monetizing tax credit transfers has become increasingly important. The company generated $1.2 billion in proceeds during the first nine months of 2025, double the $557.1 million generated in the same period of 2024. This dramatic increase reflects both the company’s growing scale and its ability to effectively navigate the complex web of federal and state incentives available for residential energy storage systems. The Inflation Reduction Act’s investment tax credits apply to both solar and battery storage systems, creating a significant financial incentive for customers to install complete energy solutions rather than solar alone.

The economics of battery storage have improved substantially over the past two years. Lithium-ion battery costs have continued declining, while utility rate structures increasingly favor energy storage through time-of-use pricing and demand charges. In California, where Sunrun has a significant presence, utilities have implemented net energy metering 3.0 policies that reduce compensation for excess solar production sent back to the grid, making battery storage more economically attractive for customers who want to maximize their solar investment.

Sunrun’s operational efficiency gains are evident in the company’s ability to scale installations while improving financial performance. The company’s revenue per installation has increased as battery attachments become standard, and the recurring revenue nature of Sunrun’s leasing model provides predictable cash flows. Unlike competitors who focus primarily on cash sales, Sunrun’s lease and power purchase agreement model creates long-term customer relationships and steady revenue streams that help smooth quarterly volatility.

Technology Integration and Customer Value Proposition

The technical integration between solar panels and battery storage systems has become increasingly sophisticated, with Sunrun leveraging smart inverters and energy management software to optimize system performance. The company’s MySunrun app allows customers to monitor energy production, battery charge levels, and grid status in real-time, while automated systems can shift the home to battery backup during outages or peak rate periods. This level of integration creates a compelling value proposition that justifies the higher upfront costs associated with battery storage.

Sunrun’s partnership with LG Chem, the South Korean battery manufacturer headquartered in Seoul, has been crucial for securing reliable battery supply chains. LG Chem’s residential energy storage systems offer 10-year warranties and proven performance in residential applications, giving Sunrun customers confidence in their investment. The company has also worked with other battery suppliers including Enphase Energy (Fremont, California) and Tesla Energy to diversify its supply chain and optimize costs.

The customer financing options available for battery storage have expanded significantly, making these systems accessible to a broader range of homeowners. Sunrun offers zero-down leasing options for complete solar-plus-storage systems, with monthly payments that are often lower than customers’ previous electricity bills. This financing approach removes the barrier of high upfront costs that traditionally limited battery storage adoption to affluent early adopters.

Grid interconnection and permitting processes have also streamlined as local authorities become more familiar with battery storage installations. Many jurisdictions now have expedited permitting processes for solar-plus-storage systems, reducing installation timelines and costs. Sunrun’s experience navigating these regulatory requirements across multiple states provides a competitive advantage over smaller regional installers who may lack this expertise.

The broader implications of Sunrun’s success extend beyond the company itself. As the largest residential solar installer in the United States, Sunrun’s strategic direction influences industry trends and customer expectations. The company’s 70% storage attachment rate demonstrates that battery storage has moved from a niche add-on to a standard component of residential solar installations, at least in markets where Sunrun operates.

Looking ahead, Sunrun’s storage-first strategy positions the company well for emerging opportunities in grid services and virtual power plants. Aggregated residential battery systems can provide valuable services to electric utilities, including peak shaving, frequency regulation, and backup power during emergencies. These grid services represent additional revenue streams that could further improve Sunrun’s financial performance while providing broader societal benefits through improved grid reliability and reduced need for fossil fuel peaker plants.

The company’s financial trajectory suggests that the storage-first strategy is not just a marketing gimmick but a fundamental business model innovation that addresses real customer needs while improving unit economics. As battery costs continue declining and utility rate structures evolve to better reflect the true costs of electricity delivery, Sunrun’s early focus on storage attachment rates may prove to be a decisive competitive advantage that’s difficult for competitors to replicate quickly.

This post was written after reading Sunrun: 70% battery storage attachment rates minimised US solar leaser’s losses in Q3 2025. I’ve added my own analysis and perspective.

Disclaimer: This blog is not a news outlet. The content represents the author’s personal views. Investment decisions are the sole responsibility of the investor, and we assume no liability for any losses incurred based on this content.