The outlook for solar panel company Sunrun is more uncertain in 2023, according to Barclays. Analyst Christine Cho downgraded shares to equal weight from overweight, and lowered her price target, citing the likelihood for weaker demand ahead for U.S. residential solar energy. "We think overall US residential growth will come in somewhere in the mid-teens range for 2023, but could be more muted in 2024 as the impact of NEM 3.0 won't be felt until year-end 2023 and the first half of next year," Cho wrote in a Wednesday note. "We are aligning our ratings to reflect our expectations for the installers to fare in this dynamic backdrop consisting of NEM 3.0, the IRA and rising rates," Cho added. The analyst said Sunrun will continue to be a market leader, benefitting from broader tailwinds in the solar industry. Sunrun shares are higher by more than 8% in 2023, after underperforming the previous two years. The stock dropped roughly 29% in 2022, and 50% in 2021. Still, the analyst noted that "much of RUN's growth in recent quarters stemmed from CA, and so we expect its growth to be negatively impacted in the near term from this exposure." The analyst's $35 price target, dropped from $44, still implies more than 34% upside from Tuesday's closing price of $26.09. Shares dropped more than 4% in Wednesday premarket trading. Separately, the analyst downgraded shares of SunPower to underweight from overweight, and lowered her price target to $18 from $26. SunPower shares also dropped more than 4%. —CNBC's Michael Bloom contributed to this report.