| Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. Actual results could differ from those estimates, assumptions and judgments. Significant items subject to such estimates will include determining the fair value of investments, revenue recognition, income tax uncertainties and other contingencies. The consolidated financial statements of the Company include the accounts of the LLC and its consolidated subsidiaries, GREC, GREC HoldCo, and GREC Administration LLC and Danforth Shared Services LLC, both of which provide administrative services to the Company. All intercompany accounts and transactions have been eliminated. The Company’s consolidated financial statements are prepared using the specialized accounting principles of Accounting Standards Codification Topic 946, Financial Services—Investment Companies (“ASC Topic 946”). In accordance with this specialized accounting guidance, the Company recognizes and carries all its investments, including investments in the underlying operating entities, at fair value with changes in fair value recognized in earnings. Additionally, the Company will not apply the equity method of accounting to its investments. The Company carries its liabilities at amounts payable, net of unamortized premiums or discounts. The Company does not currently plan to elect to carry its non-investment liabilities at fair value. Net assets are calculated as the carrying amounts of assets, including the fair value of investments, less the carrying amounts of its liabilities. The financial information associated with the June 30, 2021 consolidated financial statements has been prepared by management and, in the opinion of management, contains all adjustments and eliminations necessary for a fair presentation in accordance with GAAP. Basis of Consolidation As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than a wholly owned investment company or controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidates in its consolidated financial statements the accounts of certain wholly owned subsidiaries that meet the criteria. All significant intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash consists of demand deposits at a financial institution. Such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in any such accounts. As of June 30, 2021, the Company had $35,807,508 in cash presented on the Consolidated Statements of Assets and Liabilities. As of June 30, 2021, the Company does not hold any cash equivalents. Restricted Cash Restricted cash consists of cash accounts or letters of credit that are restricted for use on specific investments. As of June 30, 2021, restricted cash included $29,801,936 of collateral related to the ongoing construction of certain of the Company's pre-operational assets. Foreign Currency Translation The accounting records of the Company are maintained in U.S. Dollars. The fair value of investments and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. Dollars using the exchange rate at the end of each reporting period. Amounts related to the purchases and sales of investments, investment income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net unrealized currency gains and losses arising from valuing foreign currency-denominated assets and liabilities at the current exchange rate are reflected as part of Net change in unrealized appreciation (depreciation) on translation of assets and liabilities denominated in foreign currencies in the Consolidated Statements of Operations. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities. Valuation of Investments at Fair Value Accounting Standards Codification Topic 820, Fair Value Measurement (“ASC Topic 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value. The Company recognizes and accounts for its investments at fair value. The fair value of the investments does not reflect transaction costs that may be incurred upon disposition of the investments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is an exchange price notion under which fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability. The Advisor has established procedures to estimate the fair value of its investments that the Company’s Board of Directors has reviewed and approved. To the extent that such market data is available, the Company will use observable market data to estimate the fair value of investments. In the absence of quoted market prices in active markets, or quoted market prices for similar assets in markets that are not active, the Company will use the valuation methodologies described below with unobservable data based on the best available information in the circumstances. These methodologies incorporate the Company’s assumptions about the factors that a market participant would use to value the asset. The Company considers investments in money market funds to be short-term investments. Short-term investments are stated at cost, which approximates fair value. For investments for which quoted market prices are not available, which comprise most of our investment portfolio, fair value is estimated by using the cost, income or market approach. The income approach assumes that value is created by the expectation of future benefits, discounted by a risk premium, to calculate a current cash value. This estimate is the fair value: the amount an investor would be willing to pay to receive those future benefits. The market approach compares either recent comparable transactions to the investment or an offer to purchase an investment based upon a qualified bid: a signed term sheet and/or a signed purchase agreement. Adjustments to proposed prices are made to account for the probability of the deal closing, changes between proposed and executed terms, and any dissimilarity between the comparable transactions and their underlying investments. If multiple bids are qualified in the same valuation period, a blended market approach will be calculated. Prior to the second quarter of 2020, fair value for pre-operational assets was approximated using the cost approach. Beginning in the second quarter of 2020, our Advisor expanded the criteria whereby certain pre-operational assets are identified and qualified for the income approach, rather than the cost approach, for approximating fair value. Currently, we consider all owned assets that are fully construction ready with no impediments to begin construction and where the costs to complete such projects are well understood for the income approach. The fair value of such eligible projects is determined based upon a discounted cash flow methodology. If the portfolio has any significant portion of value that remains subject to negotiation or contract or if other significant risks to complete the project exist, the investment may be held at cost, as an approximation of fair value. These valuation methodologies involve a significant degree of judgment by management. In determining the appropriate fair value of an investment using these approaches, the most significant information and assumptions include, as applicable: available current market data, including relevant and applicable comparable market transactions, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the investment’s ability to make payments, its earnings and discounted cash flows, the markets in which the project does business, comparisons of financial ratios of peer companies that are public, comparable mergers and acquisitions, the principal market and enterprise values and environmental factors, among other factors. The estimated fair values will not necessarily represent the amounts that may be ultimately realized due to the occurrence or non-occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of the valuation of the investments, the estimate of fair values may differ significantly from the value that would have been used had a broader market for the investments existed. The authoritative accounting guidance prioritizes the use of market-based inputs over entity-specific inputs and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation. The three levels of valuation hierarchy are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets. Level 2: Other significant observable inputs that are sourced either directly or indirectly from publications or pricing services, including dealer or broker markets, for identical or comparable assets or liabilities. Generally, these inputs should be widely accepted and public, non-proprietary and sourced from an independent third party. Level 3: Inputs derived from a significant amount of unobservable market data and derived primarily through the use of internal valuation methodologies. In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of an input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. Calculation of Net Asset Value Net asset value (“NAV”) by share class is calculated by subtracting total liabilities for each class from the total carrying amount of all assets for that class, which includes the fair value of investments. Net asset value per share is calculated by dividing net asset value for each class by the total number of outstanding common shares for that class on the reporting date. For purposes of calculating our NAV, we carry all liabilities at cost. Earnings (Loss) per Share In accordance with the provisions of ASC Topic 260 — Earnings per Share (“ASC Topic 260”), basic earnings per share is computed by dividing earnings available to common members by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of the weighted average basic and diluted net increase in net assets attributed to common members per share and net investment income per share for the three and six months ended June 30, 2021 and June 30, 2020. For the three months ended June 30, For the three months ended June 30, For the six months ended June 30, For the six months ended June 30, Basic and diluted Net investment income $ 3,402,852 $ 3,580,266 $ 4,412,939 $ 8,385,606 Net increase in net assets attributed to common members $ 14,928,152 $ 8,623,813 $ 18,653,834 $ 16,568,142 Net investment income per share $ 0.03 0.07 $ 0.04 $ 0.17 Net increase in net assets attributed to common members per share $ 0.13 $ 0.17 $ 0.18 $ 0.33 Weighted average common shares outstanding 118,813,320 50,720,360 102,466,063 49,856,024 Revenue Recognition To the extent the Company expects to collect such amounts, interest income is recorded on an accrual basis. If there is reason to doubt an ability to collect such interest, interest receivable on loans and debt securities is not accrued for accounting purposes. Original issue discounts, market discounts or market premiums are accreted or amortized using the effective interest method as interest income. Prepayment premiums on loans and debt securities are recorded as interest income when received. Any application, origination or other fees earned by the Company in arranging or issuing debt are amortized over the expected term of the loan. Loans are placed on non-accrual status when principal and interest are 90 days or more past due, or when there is a reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are generally restored to accrual status when past due and principal and interest is paid and, in management’s judgment, is likely to remain current. Dividend income is recorded when dividends are declared and determined that collection is probable. The timing and amount of dividend income is determined on at least a quarterly basis. This process includes an analysis at the individual project company level based on cash available from operations and working capital needed for the project company operations. Dividend income from our privately held, equity investments is recognized when approved. On a quarterly basis at a minimum, dividends received from the Company’s project companies, which generally reflect net cash flow from operations, are declared, accrued and paid. Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments Without regard to unrealized appreciation or depreciation previously recognized, realized gains or losses will be measured as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset. Net change in unrealized appreciation or depreciation will reflect the change in investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. Payment-in-Kind For loans and debt securities with contractual payment-in-kind interest, if the fair value of the investment indicates that such interest is collectible, any interest will be added to the principal balance of such investments and be recorded as income. Distribution Policy Distributions to members, if any, will be authorized and declared by our Board of Directors quarterly in advance and paid monthly. From time to time, we may also pay interim special distributions in the form of cash or shares, with the approval of our Board of Directors. Distributions will be made on all classes of shares at the same time. The net cash distributions paid to the shareholder with respect to the Class C, P-S and P-T shares will be lower than the cash distributions with respect to the LLC’s other share classes because of the distribution fee associated with the Class C, P-S and P-T shares, which is allocated specifically to these classes' net assets. Amounts distributed to each class are allocated amongst the holders of the shares in such class in proportion to their shares. Distributions declared by our Board of Directors are recognized as distribution liabilities on the ex-dividend date. Organization and Offering Costs Organization and offering costs (“O&O costs”), other than sales commissions and the dealer manager fee, were initially paid by our Advisor and/or dealer manager on behalf of the Company in connection with its formation and the offering of its shares pursuant to now-terminated Registration Statements on Form S-1 (File No. 333-178786-01 and File No. 333-211571, respectively). The Company was obligated to reimburse our Advisor for O&O costs that it incurred on behalf of the Company, in accordance with the advisory agreement. However, with respect to the Company’s public offerings, O&O was not to exceed 15% of gross offering proceeds. Total O&O costs related to the terminated Registration Statements amounted to $9.8 million, approximately 3.8% of gross offering proceeds raised pursuant to such Registration Statements. Offering costs incurred by our Advisor in conjunction with the offering of shares of Class P-A, P-S, P-T and P-D under our current private placement memoranda are subject to the reimbursement by the Company up to 0.50% (50 basis points) of gross offering proceeds. The costs incurred by our Advisor and/or dealer manager are recognized as a liability of the Company to the extent that the Company is obligated to reimburse our Advisor and/or dealer manager. When recognized by the Company, organizational costs are expensed and offering costs, excluding selling commissions and dealer manager fees, are recognized as a reduction of the proceeds from the offering. For the six months ended June 30, 2021, $333,780 was reimbursed to the Advisor for O&O costs and $1,244,639 is a current payable, shown as Due to Advisor on the Consolidated Statements of Assets and Liabilities. Financing Costs Financing costs incurred by the Company for the issuance of debt liabilities are deferred and amortized using the straight-line method over the life of the debt liability. Financing costs related to debt liabilities incurred by the Company are presented on the Consolidated Statements of Assets and Liabilities as a direct deduction from the carrying amount of that debt liability. Return of Capital Receivable For operational assets, if the project company has inadequate cash to fund day-to-day expenses, the Company will loan funds to that project company through an equity investment. Once the project company has adequate cash, they will repay the loan by sending a return of capital distribution. As of June 30, 2021, and December 31, 2020, a return of capital receivable of $1,147,918 and $2,159,762, respectively was recorded on the Consolidated Statements of Assets and Liabilities. Capital Gains Incentive Allocation and Distribution Pursuant to the terms of the LLC’s third amended and restated limited liability company agreement, a capital gains incentive allocation was earned by GREC Advisors, LLC (the “Special Unitholder”), an affiliate of our Advisor, on realized gains (net of realized and unrealized losses) since inception from the sale of investments from the Company’s portfolio during operations prior to a liquidation of the Company. While the terms of the LLC’s amended and restated limited liability company agreement neither include nor contemplate the inclusion of unrealized gains in the calculation of the capital gains incentive allocation, the Company included unrealized gains in the calculation of the capital gains incentive distribution. This amount reflected the incentive distribution that would be payable if the Company’s entire portfolio was liquidated at its fair value as of the Consolidated Statements of Assets and Liabilities date, even though the Special Unitholder is not entitled to an incentive distribution with respect to unrealized gains unless and until such gains are realized. Thus, on each date that net asset value was calculated, the Company calculated for the capital gains incentive distribution by calculating such distribution as if it were due and payable as of the end of such period and reflected as an allocation of equity between common members and the Special Unitholder. The capital gains incentive allocation was eliminated with the adoption of the fourth amended and restated limited liability company agreement in August 2020 (as amended in November 2020, the “Operating Agreement”). Performance Participation Fee Under the LLC's Operating Agreement entered into in August 2020, the incentive fee payable by the Company was simplified to be structured with two components: the Performance Participation Fee and the Liquidation Performance Participation Fee (each as defined in Note 5. Related Party Agreements and Transaction Agreements). The Performance Participation Fee is based on the Company's total return amount during the relevant calculation period. The calculation of the Performance Participation Fee is further detailed in Note 5. Related Party Agreements and Transaction Agreements. The Performance Participation Fee is accounted for and classified as an operating expense and reflected as the Performance Participation Fee on the Consolidated Statements of Operations. Under the new agreement, a Performance Participation Fee payable of $1,312,309 and $3,540,052 was recorded as of June 30, 2021 and December 31, 2020, respectively, in the Consolidated Statements of Assets and Liabilities. The Performance Participation Fee recorded on the Consolidated Statements of Operations for the three and six months ended June 30, 2021 is $1,312,309. Deferred Sales Commissions The Company defers certain costs, principally sales commissions and related compensation, which are paid to the dealer manager and may be reallowed to financial advisors and broker-dealers in the future in connection with the sale of shares sold with a reduced front-end load sales charge and a trail fee. The costs expected to be incurred at the time of the sale of the Class C shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) when the maximum amount of sales commission and related compensation is reached under regulatory regulations; 2) the date which approximates an expected liquidity event for the Company; or 3) the expected holding period of the investment. The costs expected to be incurred at the time of the sale of the Class P-T and Class P-S shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) the date which approximates an expected liquidity event for the Company; or 2) the expected holding period of the investment. The estimated amount of the liability can be updated as management's assumption surrounding an expected liquidity event changes or if the maximum of sales-related commissions and costs under regulatory regulations is attained. As of June 30, 2021, and December 31, 2020, the Company recorded a liability for deferred sales commissions in the amount of $3,977,395 and $131,875, respectively. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on prior periods’ results. Refer to Note 3. Investments for discussion on the consolidation of certain underlying portfolios within the Consolidated Schedules of Investments. Derivative Instruments The Company may utilize interest rate swaps to modify interest rate characteristics of existing debt obligations to manage interest rate exposure. These are recorded at fair value either as assets or liabilities in the accompanying Consolidated Statements of Assets and Liabilities with changes in the fair value of interest rate swaps during the period recognized as either an unrealized appreciation or depreciation in the accompanying Consolidated Statements of Operations. On the expiration, termination or settlement of a derivatives contract, the Company generally records a gain or loss. When there is a master netting agreement with a financial institution, any gain or loss on interest rate swaps with the same financial institution are netted for financial statement presentation. The fair value of interest rate swap contracts open as of June 30, 2021 is included on the Consolidated Schedule of Investments by contract. For the six months ended June 30, 2021, the Company’s average monthly notional exposure to interest rate swap contracts was $86,127,136. Consolidated Statements of Assets and Liabilities – Fair Values of Derivatives at June 30, 2021 Liability Derivatives Risk Exposure Consolidated Statement Fair Value Swaps Interest Rate Risk Swap contracts, at fair value $ 7,090,676 $ 7,090,676 Consolidated Statements of Assets and Liabilities – Fair Value of Derivatives at December 31, 2020 Liability Derivatives Risk Exposure Consolidated Statement Fair Value Swaps Interest Rate Risk Swap contracts, at fair value $ 9,750,909 $ 9,750,909 The effect of derivative instruments on the Consolidated Statements of Operations Risk Exposure Change in net unrealized depreciation on derivative transactions for the three months ended June 30, Change in net unrealized depreciation on derivative transactions for the three months ended June 30, Change in net unrealized depreciation on derivative transactions for the six months ended June 30, Change in net unrealized depreciation on derivative transactions for the six months ended June 30, Swaps Interest Rate Risk $ (1,078,794) $ (455,524) $ 2,660,233 $ (6,772,972) $ (1,078,794) $ (455,524) $ 2,660,233 $ (6,772,972) Risk Exposure Other expenses for the three months ended June 30, Other expenses for the three months ended June 30, Other expenses for the six months ended June 30, Other expenses for the six months ended June 30, Swaps Interest Rate Risk $ 604,675 $ 456,676 $ 1,098,491 $ 655,923 $ 604,675 $ 456,676 $ 1,098,491 $ 655,923 By using derivative instruments, the Company is exposed to the counterparty’s credit risk — the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The company’s exposure to credit risk associated with counterparty non-performance is limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the Consolidated Statements of Assets and Liabilities. As appropriate, the Company minimizes counterparty credit risk through credit monitoring procedures and managing margin and collateral requirements. Regarding our investment in the Canadian Northern Lights assets included in the Other Commercial Solar Portfolio, we have foreign currency risk related to our revenue and operating expenses, which are denominated in Canadian Dollars as opposed to U.S. Dollars. Income Taxes The LLC intends to operate so that it will qualify to be treated as a partnership for U.S. federal income tax purposes under the Internal Revenue Code. As such, it will not be subject to any U.S. federal and state income taxes. In any year, it is possible that the LLC will not meet the qualifying income exception and will not qualify to be treated as a partnership. If the LLC does not meet the qualifying income exception, the members would then be treated as stockholders in a corporation, and the Company would become taxable as a corporation for U.S. federal income tax purposes under the Internal Revenue Code. The LLC would be required to pay income tax at corporate rates on its net taxable income. To the extent of the Company’s earnings and profits, and the payment of the distributions would not be deductible by the LLC, distributions to members from the LLC would constitute dividend income taxable to such members. The LLC plans to conduct substantially all its operations through its wholly owned subsidiary, GREC, which is a corporation that is subject to U.S. federal, state, and local income taxes. Accordingly, most of its operations will be subject to U.S. federal, state, and local income taxes. As of June 30, 2021, including territories and provinces, the portfolio resides in 35 jurisdictions. Income taxes are accounted for under the assets and liabilities method. Deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between items that are recognized in the consolidated financial statements and tax returns in different years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. For income tax benefits to be recognized, including uncertain tax benefits, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of the benefit that is more likely than not to be realized upon ultimate settlement. A valuation allowance is established against net deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Interest and penalties associated with income taxes, if any, will be recognized in general and administrative expense. The Company does not consolidate its investments for financial statements; rather, it accounts for its investments at fair value under the specialized accounting of ASC Topic 946. The tax attributes of the individual investments will be considered and incorporated in the Company’s fair value estimates for those investments. The amounts recognized in the consolidated financial statements for unrealized appreciation and depreciation will result in a difference between the consolidated financial statements and the cost basis of the assets for tax purposes. These differences will be recognized as deferred tax assets and liabilities. Generally, the entities that hold the Company’s investments will be included in the consolidated tax return of GREC and the differences between the amounts recognized for financial statement purposes and the tax return will be recognized as additional deferred tax assets and liabilities. The Company follows the authoritative guidance on accounting for uncertainty in income taxes and has concluded it has no material uncertain tax positions to be recognized at this time. The Company assessed its tax positions for all open tax years as of June 30, 2021 for all U.S. federal and state tax jurisdictions for the years 2015 through 2020. The results of this assessment are included in the Company’s tax provision and deferred tax assets as of June 30, 2021. The effective tax rate for the three month and six months ended June 30, 2021 is 25.5% and 27.0%, respectively. For the three month period the primary items giving rise to the 4.5% difference between the 21.0% statutory rate and the 25.5% effective tax rate are state taxes and permanent differences primarily related to expense recorded at the partnership level which are not taxable. For the six month period the primary items giving rise to the 6.0% difference between the 21.0% statutory rate and the 27.0% effective tax rate are state taxes and permanent differences primarily related to expense recorded at the partnership level which are not taxable. The effective tax rate for the three month and six months ended June 30, 2020 is 10.7% and 20.3%, respectively. For the three month period the primary items giving rise to the (10.3)% difference between the 21.0% statutory rate and the 10.7% effective tax rate are state taxes, permanent differences primarily related to income recorded at the partnership level which are not taxable and federal tax credits. For the six month period the primary items giving rise to the (0.7)% difference between the 21.0% statutory rate and the 20.3% effective tax rate are state taxes, permanent differences primarily related to expenses recorded at the partnership level which are not taxable and federal tax credits. The guidance under FASB Codification ASC 740-10-270-30 establishes the methodology, including the use of an estimated annual effective tax rate, to determine income tax expense (or benefit) in interim financial re |
