09:38 AM EDT, 06/18/2025 (MT Newswires) -- Sunrun's ( RUN ) return to full-year positive cash generation could take time after the US Senate proposed to end tax credits for residential solar leasing, RBC Capital Markets said in a Wednesday client note.

The Senate Finance Committee recently proposed ending most tax breaks for residential wind and solar leasing, in line with provisions in President Donald Trump's tax bill approved by the House last month.

RBC believes Sunrun's ( RUN ) long-term value proposition is in cash generation, which is "more than eliminated" with the removal of solar tax credits. The brokerage forecasts a challenging path for the residential solar energy provider to return to positive cash generation under the current industry cost structure.

Shares of Sunrun ( RUN ) fell 2.3% in Wednesday trade after closing the previous trading session down 40%.

Last month, the company reported cash generation of $56 million for its first quarter ended March 31. At the time, the firm reiterated its full-year 2025 cash generation outlook range of $200 million to $500 million, while RBC currently estimates $245 million. Cash generation was negative for 2023 and 2024, according to data provided by the brokerage.

"We believe austerity measures are needed across the industry and (Sunrun's ( RUN )) scale and market positioning puts them in a favorable position to compete," RBC analyst Christopher Dendrinos wrote in the note. "But the path and timing back to positive cash (generation) could take time, and we are unsure of industry's longer-term cost structure and demand."

Residential solar costs in the US are "well above" expenses in other regions, mainly due to bloated soft costs, which include higher customer acquisition costs, permitting and inspection fees and overhead costs, RBC said. Average system costs are 30% to 50% higher in the US versus the European Union, the brokerage added.

RBC downgraded Sunrun's ( RUN ) stock to sector perform and lowered the price target to $5 from $12.

Price: 5.77, Change: -0.02, Percent Change: -0.26