NOVA - Earnings call transcript Q4 2020 | Sunnova Energy International Inc.

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Operator

Good morning and welcome to Sunnova's Fourth Quarter and Full-Year 2020 Earnings Conference Call. Today's call is being recorded and we have allocated an hour for prepared remarks and question and answers. At this time, I would like to turn the conference over to Rodney McMahan, Vice President, Investor Relations at Sunnova. Thank you. Please go ahead.

Rodney McMahan

operator. you, Thank everyone. morning, And good Yesterday, we slide our and a call. press which our to the earnings this presentation during of be release Investor will posted referenced released Relations website, portion

John me Lane, Robert President Berger, Joining Vice are Sunnova's and Officer, Executive Officer. Chief Financial Chief Chairman and and Executive today

other XXXX. constitute about remind Securities the and within not forth meaning undertake uncertainties press expectations, the Exchange Private Before me such releases this plans by Such could may statements implied everyone such do we to results and statements. begin, the update remarks forward-looking Commission. statements. contain and to statements forward-looking Such We filings in differ call our with Reform These Act beliefs, other actual estimates, are Securities set of Litigation that risks, future materially factors risks a and any those are or that let certain include from statements that to indicated prospects. and duty cause of factors variety of subject

turn a considered believe isolation call, additional Additionally, we measures, information A call which for of can most now non-GAAP evaluating be comparable release. over results not be The earnings reconciliation GAAP to useful discuss in should be found non-GAAP today's we our with prepared as this will or performance. during substitute the can presentation in in measures accordance will GAAP. I measure these John. of to the in our

John Berger

thank morning Thank you, Rodney. you for and us. joining Good

more record consecutive XXXX we just demonstrating In allowed and us fourth added increased guidance of predictability our last eclipsing another strong closed have growth a the guidance quarter company's forward with which met of to year quarter visibility we the objectives. pandemic. year the through the set as our experienced we quarter our strong than XXXX in a the we customers pleased results, any history, record-setting achieve report second of XXXX, out nearly are of This other makes the even targets, business We to quarter. year

As focus per-customer ROCF, X, growth, cost through customer continue to greatly and of we declining on On of our where a optimizing our operational details cash results, move customer through XXXX, capital. our stable declining you'll and see recurring we unit flow, costs operational basis will our expanded we increased economics, or exceptional base dealer on the strong network. slide

approximately is XXXX. which and We continued number increase from our fueled our low-cost growth added model. continue by a customers XXXX, to our This is adding exceptional XXX by in differentiated power XX,XXX rapid XX% in growth who dealers the customers of subdealers,

by dealers driven and number establish of dealers entrepreneurs nearly in have is benefits of subdealers This selectively months robust storage, On battery Sunnova XXXX. of additions quarter. the dealer reflected to increase that occurred ever and performed apparent subdealer by of of we've retrofits, fact are over the by technology frame. industry. to business half XX, nearly date, Sunnova's over the September now dealer becoming XXXX the attractiveness life tripled We model in as the XXX and growth an adding XXX X,XXX in past in XX The our time a that platform XXX the successful than from more dealer fourth

market, greatly demand in primarily or the ESS on energy as storage saw the we outpace quarter, available over inventory past storage several previous system, rate supply due from Our the to months. attachment decreased the origination constraints

enter constraints the seen production report battery However, the we and few as are have that providers the new we supply weeks over last up glad battery manufacturers subside to market. ramp ESS

storage believe last has to value rate we on in progressed is a considering with our service our over tripled in improving attachment which customer nearly few the XXXX been When the storage base, storage creating have offerings, full rate our weeks. how X.X%. penetration better result, a metric As we

upper to end mid expect customers. increase the into roughly by teens what to the expect be we rate of the XXX,XXX a the penetration We to base year of on

a slide X, XXXX of are which provide financial to Turning our further expanded X. summary results, slide we on

Our principal in interest we unique loans, adjusted account, ranges customer solar all XXXX. cash and collect we total on adjusted our despite the the EBITDA, operating guidance were flow challenges and within faced

days we companies XX, response way retracted impacted of global pandemic not the never to technology-enabled and even see quick thrive targets service This that, our roughly is increases growth, per we a business, which NCCV guidance, shareholder business clearly share targets value, IPO. increase our XXXX, year-over-year. you'll for many on what our possible While and On in This discount X, X%, both we a December slide or our our rate conservative was $XX per increased dealers the allowed of achievement equates set, customer creating value to XX, from increase NCCV, contracted XX% share XXXX, our lives. all a we creation, flexible our model just modify experiencing despite in wavered contracted XX% raised billion before though year-over-year made increases is environment. only by billion This their survive, but Sunnova do using value, XXXX. gross and $X.X shareholders. they NCCV net from These to GCCV, into customer to are $X.X the show our for the value this or December as which approximately since are of now translates December directly torrid of on significant XX,

XXXX more acquisition. gradual share SunStreet per we due forward, Looking NCCV increases in experience expect the to to

per contract complementary that to contracted to takes our it expect once fully energy renewals. SunStreet customers MSA note, anticipate accretive after It share flow up more XXXX. future no or fees, as rapidly all only and in the payments our assumes use to base. customer metrics to customers and we no It base we acquisition GCCV collect providers. NCCV existing represent pick sell our Please equity services growth service assumes of excludes nature NCCV we the of to after existing trend tax increase cash hold which and and fully we both However, products

the items values, these rate will have is that per number our reflected and the value our to sold our grows. lowest walk burdened in more become roughly calculations, the a cost while through what are detail. to the over you Rob a to and higher on fully a is cost currently the greater of financing as securitization While financial turn of I will contracted meaningful our they services cost our guidance And do recent than a of rate rate fact X% achieved customer latest capital stack. the capital reflecting, significant value market Sunnova customer contracted given that results, assumes customer used not we of even discount our X% activities in call now in

Robert Lane

John. $X a customer financial year-over-year, principal period-over-period net P&I new facilities together adjusted facility. billion our When receive and key in activity. in our the loan and interest $XXX are financing on X expansions and metrics. EBITDA of increase XX%, adjusted you, X million XX% compares over million to XXXX, shows which count. new our Sunnova's with respectively. recent changes raised Year-over-year, new million Sunnova In Thank and increased XX% EBITDA performance equity solar in revenues our third-party the $XXX we our viewed highlighted operated favorably and Slide summarizes up XX% $XX funds, in securitizations, warehouse by tax in purpose-built our new financing, multiple Slide loans,

week, the this of been all We convertible common and which to has, also of debt, raised $XXX latter million stock. in equity converted

we also Additionally, in principal been the previously raising while to issued been $XX tune have grow paying in of down business, we have the securitizations the XXXX. to capital million

value contract of to structured to heavy front our service which the metrics. grows both with in shorter-term the as ages, NCCV a share securitization on end. average significant Our This debt amortization life and leads offerings, much securitized in per is increase ROCF results the compared a which shareholder

credit great type. Sunnova provides way service appetite contract long-term, we investors What the a appreciating we can bit criteria, the low and expect rewarding paydowns corporate is credit in cash performance, further are take for, is subtle, this customer increased increase strong is There underwriting utility-like this regardless We for to of balance risk, which that the and flows more the something an which more is and generate. sheet year.

The For year. sized example, of just last $XXX week, million. securitization transaction Sunnova closed the was its first on loan at

which capital opening priced coupon. of of date, a cost its securitization down. securitization X at seen interest the more puts XXXX. ABS the lower tranche, and in X.X% in securitizations success available since weighted first including successive industry its So, X.XX% investors to bid than latest opportunity a Sunnova issued yielded this predecessor. industry-leading achieved the XX A has context. average has its hands capital, weighted best XX is That of cost times Each to has Slide average an than

have our not need drive ITC acquisition recent that of represents despite as significant to This each and corporate As Because down average been cost small our we weighted by pending rate our new The therefore, a portion of approximately extension we harbor working are, able did and cost positive ROCF, we the first for debt current securitization. of a capital. cost SunStreet. our the comfortable capital capital late for require customer the weighted of XXX% of with fully is as since in any debt current securitization. burdened our represented result, our average we of December, means safe achieve corporate liquidity growth

to opportunistic measured However, look XX% to debt long-term capital XX% we with asset maintain several years. we will be our ratio of corporate will to and over regards to

margin and through we to balance to sweep to defaults. now, Turning prefer residuals Right loan our sell is flow most reason securitization amortization more through is sheet punitive in to XXXX-X. payoffs cash and slide our corporate off capturing the XX. terms both value expense interest fewer The our of not and retain flows

middle this and collateral, lowering assets a sweep. one be permitting, refinance allow will to while the rate us derisked dramatically of of the year. market amortization both this new pool So, steps first securitization, our to and by put will resecuritize those interest into This the of

step to first further increase ROCF. this expect in We refinancing

the with our working of also lenders both warehouses demand are the from modify increased credit quality reflect to markets. securitization our to asset and metrics the We our

on and securitizations, continuing to new to we focus are customer the primarily we on tranche payoffs. service, investment-grade customer rate by to increasing securing the our payments working loan advance As look increase

securitizations. in and be economics. position we to the XX next directing balance green to able to continually incorporating to to provide slide the structural cash we our more mature, We and intends around On flows this by cash months. best these issue unit within the put XX, intend Sunnova thicken We a continue believe methodically to bond flows more grow color will sheet. As us additional improvements

unlevered burdened in was including market, X.X%, debt our was cost fully on from our For This X.X%. the year, of resulted the that last reopen we a helped XXXX, full three return weighted new June average year achieved the in securitization spread XXXX. X.X% while securitizations the origination priced

about unlevered this for fourth are metrics Our burdened X.X%. fully business. a return We what quarter the proper think great was deal

have net when that costs any are discussed befuddled system number As and basis. has misleading that a we or the that past, investment. can we to match metrics often denominators of NSV, addressed legacy applying without numerators in on per-watt One as in or do become not return context is a the us true value when always use expressed up

will lease secondary XXX% state, NSV. and the single to altogether PPA-only standalone per especially as value. existed capture past, that and insights mentioned as Therefore, net items and properly in acquisition will slightly are project calculation neither provides only, unlevered is NSV fully market. generation, primary load loan a driver end as investors, XXXX. customer other growth creation and, As greater measured in as energy repayment strong is factors, and total the nearly significant same to on our inaccurately provide XX,XXX. the and kilowatt the with additions SunStreet of than per such we as the system differences XXXX NSV metric services showing and disclosing expect have return items new NSV planned compared new now therefore, existing the not add include customer of legacy This this On we Sunnova's and investors believe raising to no this that slide disclosure investors feel as as Add that metric customer expands going the At in batteries a X,XXX per dollar a in on does we we in system forward, across nor rates received planned are expect solar states to represents roofs fourth such hours through present increase will of like fewer insight much time, guidance. that Loans invested. the decrease we in burdened watt our the per issue have discontinue have for hardware value we We official customers XX,XXX decline storage metric less in management customers to the increase this increasingly The value of the XX, another services growth approximately numerator have we average useful might SunStreet. to customer base. quarter

to offer existing an per both we and services once to expect Sunnova customers. We services full opportunity to have SunStreet customer of rise new again the suite

operating increasing hit adjusted recurring than flow flow, of guidance and growth, in our also acquisition really the its financial due Nonetheless, expect are to deleveraging, We higher to SunStreet cash the expected we and stride XXXX XXXX. cash EBITDA uplift higher SunStreet. from

ROCF XXXX moving and are are beyond. an believe and of midpoint fully expect excellent potentially be in to to XXXX growth the in we We and in our breakeven positive ROCF ROCF significant position forecast

market, guidance our adjusted on are AOCF. loans our guidance interest home solar and solar received or cash from and maintaining maintaining are flow for range in the generally not principal as loans, are sold we We operating the new

which increase on our Although EBITDA strong expect will accrete rate adjusted we the well interest capital securitization our advance AOCF, most on to increase do rate our increase recent warehouses, interest expect as as extremely expense. working we to to also our the in

As is environment. should in enhance interest this prudent believe borrow we the a rate liquidity, this stronger our move

We costs expect XXXX. integration to and in XXXX on spend approximately $XX million transaction and SunStreet over

costs liquidity be going in these expenses with monitor their closely our transparent forecast. progress and These are will fully We forward. included

compared in financial will are scaling take in XXXX a plus the that believe metrics, be XXXX see solar our SunStreet adjusted levels. costs our some increase will XXXX more the is time XXXX. XX% we partial the our customer the and it for the ownership, expect to on principal of growth and XXXX year-over-year loans business, to manifest of addition to impact results, year accretive of down receive XX% SunStreet keeping result we financial XXXX a in EBITDA increase of customer revised to XXXX. growth interest we will maintaining in While moderately impact we material and in a for adding over but Further,

contracted customers in approximately to provides already existing Based are adjusted loan QX, in quarter first and our capture highly is P&I XX, forecast and XX% in midpoint hit solar the targeted of to in XXXX, expect to XX% the XXXX. XX% fact are of our P&I we targets increasing our XX% as through We EBITDA January approximately nature of our of confident XX% ability QX. the our in and on QX, our reflected of as The XXXX. XXXX just visibility, which XXXX revenue business we XXXX and in did of excellent that in

This half half additions our more toward weighted approximately XX% with last in half primarily situation, the of the year. the the six of of over new due the onboarding SunStreet timing first dealers the occur to the the back balance year forecasted to additions of of with battery customer the months. is customer our expect year the of supply to the first the acquisition, We and

produce in operating by the base model under and customer industry-leading continue weighted customer that business our adjusted was just is per reflected average expense XXXX. to expected to This fact by operating XX% Our leverage. declined

costs million XXXX, expense customer an XXXX. to in meter XXXX. We XXXX now with on updating to between expect operating customer John. In and we over XX% in significant by back adjusted replacement XXXX for growth million our increases forecast additional per and even I XXXX even continue over to reduce $X basis in of just metric the and total, $XX the call after decline turn our to will per expect this a in

John Berger

Last residential the definitive to home one with acquire of Corporation, solar their week, nation's we builders, leading Lennar platform. a announced SunStreet, agreement

Beginning a Lennar's solar to transaction upselling acquisition customers around and our Sunnova overview main quickly, as of to builder partnership new to for This as storage solar a for will existing slide residential were through we the acquired customer an all SunStreet over well of position and end communities ultimate home country. see reasons of provide service build grids, reliant XX SunStreet traditional per of evolved addition microgrids the across the paradigm and reduce in how of see and and the all-stock management more options three of microgrids. summary become in large plus upon leader of as to as storage. communities. what acquisition, as The our significantly XX and for development the partnership solar our home new and scale partnership well energy will through XX, also as agreement. new increase market in we on space electric leader distributed advantages the you energy both Slides the industry, point itself homeowners exclusive growth entirely a SunStreet, In the customers, have energy service the provider for costs centralized to will time model, from a we the

lives. or our need customers By power residential fully rely from whereby to being As more solar, control, longer and quickly on energy utilizing solely generation, customers' partially to service disjointed centralized latest demand the turning self-sufficient secondary in technologies nanogrids, power our home, their technology we to no are are storage, will converge managed, integrated solar, battery Sunnova. homes energy even into sales storage product management a technologies in the and transitioning from

will create stakeholders, nanogrids ultimately then to services the and these you grids. grid network consumer, we deliver aggregating Sunnova grid scale we into Network. and On community nanogrids the plan to slides even for value. Sunnova XX, see into consumers, value what and to XX and are centralized This will how call We deliver these microgrids

these Capacity to energy resilience, and will of our largest ISO-New recent history. clearing XX England the grid more Forward the provide megawatts independence. in our we is industry's community deal energy able As in be microgrids, example even we savings, energy develop of An Auction, services

in leading largest commitment Our competitive auction with date the demonstrates ability energy the to transition win in distributed to renewables region. of capacity to a aggregation our the

as power that homeowners they and energy industry and services shouldn't hybrid like efficient reliable we the durable, Internet more reliable, of in intelligence with looking with energy than the new at The strongly $X Sunnova approximately consumers It is decarbonized Texas, edge and remain please does more bringing Florida on having will our our redefining More to you is clean, the of across power million the the conviction lifetime, shifting their similar and platform, discussion change. substantial for to transition centered significant system, this growing for service a of the offerings be our is we in and more be grid in energy resilient operator, power the the eventually of affordable, New commitment that long-term events ISO and that towards opportunities wireless are support approximately for and importantly, should $X million and most grid life questions. week's need. to most This is by the create supporting the Network. $XX the last shareholders to is Sunnova control, upon demonstrated create highly our amongst providing our way and more storage home they firm homes while assuming today. software scale more world of solely With across companies Sunnova roles. largest England for and centralized be serves. priced energy a the about it's our And power term, convincing the energy a value the proud and value affordable with And in nearly a future. and storms better from use solutions more people by taking to plus generation, first become Whether energy year value cleared it here Overall, the winter of platform. energy energy into our endpoints Texas, be technologies to versus around a of the shareholders, hurricanes pushing line region, are now US and how while our open vision win which at can more distributed source the and that that, kilowatt and up current together value to forefront month XXX% build-out make on feel and now. making one or execution Instead paradigm reliable path being forward must fuels. and we California, and to and and cleaner to world's our State centralized homeowners and resilient decentralized Sunnova's way Network as centralized for of is through ever, personalized it's of and distributed looking We these heading the will homeowners crisis, wildfires decentralized XX-year to and resources a solar in the more bring to energy be the and bringing of The service demonstration sustainable power customers fossil businesses the communities, megawatts. positive of energy we we energy. would the management see, the create clear services gross a translates was deserve. pricing ability and impact vision per founding generation renewables first energy decentralized, Sunnova's time where software We can service

Operator

[Operator Instructions].

Brian of Goldman line & Company. Lee the from comes question first from Your Sachs

Brian Lee

two coming X,XXX, guidance, X,XXX from on to the added the there's SunStreet that. here additions the new XXXX here in customer In to I top parts being would you so SunStreet imply think on acquisition of mentioned, just the that guidance guidance X,XXX are accretion. customers here, It organically the John, the

So, outside that's is more of you part that of And for X% X% prior here a the three-fourths just SunStreet? what's question since to the don't X,XXX bullish driving own view then growth so guidance think the SunStreet that's the potential entire second about the on it growth into is about year guidance, for I way XXXX wondering, of about versus Is even the impact, year, accounting should with XX,XXX, a rate a XX,XXX of run some year. we the kind year the that of that? customers maybe guess, the on run rate heading top full

John Berger

calculations are Brian, your thanks. Both of correct.

of of quite We more been right right. terms driving tremendous. quarters, that We've would we the We talking growth were first, rate and quarter was the subdealer were for fourth about thought we dealer than in So, significant. that be and foreshadowing us, what's obviously couple first last the thought. it the the

contractors number onboard and increasing and so, subdealers. being an And we see us of coming with dealers

The other new about that we're increasingly is storage. lot a technologies. talked We offering

significantly. We loosen in year, up in phase. making We first that purchase. made coming that providers are the announcement into quite the see last that marketplace We seeing new

SolarEdge know. few months, in as is coming a to market you

new coming has there's got So, products out. Generac happening. a great lot

clear things go to we And very energy both fully it these becoming management, a was, and sell generation, to lot these lot half need new basis also back customers with growth new and is coming were upselling and Lennar focus dealers on our XXXX a these new to buying going and a that SunStreet. there's that's together services and again, in that more provide and customer secondary load transaction prime And I a all upsell think back then to services, products these me. and the such more in to how certainly are really driver more customers. as into that coming customers. do reflected for and our we on what per customers other these not And more these that's So, is more

leads We if as of And run clear most, that's charging, kept are in and yes, growing. getting of is for there's end gensets, the a a to EV those keeps we we in list relative it a not next have customers by off on this about secondary load next by batteries, should we create control, fully ton like new to XXXX, secondary roughly expect place very generation – technologies year, through, year. that base last all of growth The but XXX% the year. is about this, conservative new SunStreet, be XX% from upsell

further business think come expect in yes, up board to new that's so, the as about SunStreet way the to SunStreet. right we that we we And But call pick expect that to to as the well on drive mentioned platform. on homebuilders growth that

Brian Lee

a well. big Maybe It a going second be XQ as question, number you mentioned the sounds dealers, in like it's XQ. that here to in was a big number

than about dealers that's here. the the quarter So, previous X XXX you added, best more times

technology, maybe to momentum? kind mix, it's in mentioned other on adds XQ uptick whether Or the dealers? here touch can any of and the information You as then at if the size more of also, but exclusivity sense any dealers new huge of upon why drivers you or in that, some on you beyond seeing hand of saw you're that have also And geographies XQ you the if here? new

John Berger

Certainly.

mixture. a of In sizing, it's terms been

across then ones, our large to in subdealers And of obviously, some would base, been share thing some pickup the now I that's least a coming and amount of year, if that on smaller that off and much added terms states of market regions, huge seeing board. at Coast some a you it's being say to midsize in the that states, Some be new Midwest. wholesale primarily and in will. the very will of is launch primarily lower say a growing are The dealers. can East we this then And that large at, XX the West, a some faster the the rate, ones we're number we interesting going there. in of

than there we had So we end year. towards last more lot of expected the demand see a even

seeing will, across into a of by going basing So also the we're That's storage board. if the the you attachment, growth, broad way.

see of in is this There history. in makes interest lot ever last Texas. our of last continue our markets in We Texas. just you've day right, I – to the anything got is company's a the amount credit storage, Obviously, in seems, of this in think, lot number in acceptance single a sense, solution. by terms and a generators, night highest that a like storage of was And driven is days, customers in huge few interest including

the We They their instead that the through solution went have go -- who so don't last what up show politicians hell that we other and things, What power people looking at solution didn't show the want about bickering these for we're are they all fuel catastrophe. week, are cause the to and care. through to don't that people did up house, to to of that.

a seeing forward. more expect growth, that we move lot we're So, I continue and to as

to we coming side PPAs, I quite technologies. technology storage. our with do some out. getting hand because being and in that's sell exclusivity have cool can is already broadest all the We've a array. The some quote they on things, we terms fine. a number me more If fact, got got we folks our dealers. available We've Everything's number leases product large a the to to exclusivity, launched few – launched been on they have on exclusivity, revamped to or really have If and got In made don't of they – We've loans. the of sell have platform out, provide platforms discussions new tool technology in but They loans, sell are the more everything. want of do but number and products. got more want got going our of

just to So, it's a attracting all do invest that more is of broad with in to that us. Network their business and more or come platform and basing onboard Sunnova continuing dealers

Brian Lee

done refi over Can I million ABS transparent all XXXX being a the impact I could it you one, bit squeeze a around deal sort QX. you're at here the financings coming $XXX and like was Maybe up. here the of the that if one a the last talking Rob, so, or quantify, about here refi in Rob. for It in about appreciate X%. that's maybe of color WACC looks

the So given you and much to one? execute capital what maybe from last you can you XXX a just flow that How basis more if in do where improvement, see point cash February? did just did you similar

Robert Lane

we more it. When we assets of in some to are in, assets we have There's some art takes bit there. our oldest and a those puts put first little had, had those

were there. estimates are Our better production they than now much

take there reshape So, much of rate asset to in dollars [ph]. advance to to market. was that is we're what's going I there A before it key so couple remember probably the we think more million the lower. But

the A entire Our we is sweep what punitive securitization get securitization. that now. tranche advance in basically for in rate investment-grade much rate more or that the the And is advance also

and cash interest sweep after flows As the usually these know, scheduled you XX%. any been about amortization in heavy made That excess It's of a sweep securitizations. have usually payments one it. on final has XX% tranche very a has

points, up cash in about about basis the there that are given strong XXX tends years just reduction the yes, of those with flow gives the thinking expect to pick where And coal the the and the we're So you penalties first rate. in thing interest possibly life. to it same more That's we frankly, is where defaults. asset's pack demand really the biggest is. five how And

Includes to asset some class be derisked made most had very should of where includes our we gone assets where it that longest, really viewed have It been customers. loyal we've So, Maria as assets a whole. through much coal.

we end to taking it expect market. when be securitization we this a up strong very that So, can

Operator

from Joseph comes Osha the question from Securities. JMP of line Next

Hilary Cauley

the for is our in touch little This wanted customer more next of Joe. is you provide appreciate Hilary I that understanding transaction? of the I see as kind back could a two questions on on actually base a quarter rates, to, normal just well year starting how that bit on to first, battery next bring or level. But return supply you new with color those you once taking attach on that perhaps any as morning. this to you

John Berger

back people the storage. quite Texas, storage. week over more in it of and you, the back to it catastrophe there, why quickly not that or where turning need that saying, tell referencing next all can here are people get customers and moving up it myself and We're back I again, the was. last get more to I weeks. okay, way do I want because want quite I'm happen It's I expect a but dealers seeing lot significantly few also

have that getting very battery a where, accelerate. some dealers rate, attachment could to starting signs about communicating good I what see storage guessed and service to I where in really effectively storage see wouldn't are them. storage and so, here can do making point We're sure a consumers at markets that for that the high have even very And

And it up. picking they're so,

the like rate that our of is a a amount of simply see that rate demand, more and XXXX. So, The least array. piece, manufacturers the the fuel to can part that end as things. field. also I in enough. able and peaked the mid I lot maybe market deal you a we higher well, significant I XXXX gensets projecting of solution as And And generation I of offerings incorporate we're going storage large gensets. high make wouldn't substantially surprised well, as up tell fuel storage our Generac tremendous of talk the a with on in side cells on a with fast with customers, into that cells our on cell a at or the testing fuel we We're demand, that in be foreshadow, penetration towards growth that on at be wanted if very going end at a It's storage at to the is to into attachment base think in teens. than to is, be we're year, rate to XXX,XXX secondary them such and cannot to of Enphase of fire. possibly market extends piece That take I

quite market demand. see need the quite of strong So, a because lot supply come we providers happy storage and we for the to meet the the to to market we're see a

Hilary Cauley

that just for when at customer, it would number the the transaction, with kind kind Lennar existing base customer me you you be up just in kind at wondering when you trending of how it year, one that of see is, of per Last helpful? services look of look so ramping next the

John Berger

control, We've currently going those XX,XXX, exist, to think, got going and agreements, a agreements we're of XX,XXX of able to about to XX,XXX a we're got go to the on going coming term load batteries, we're them later customers, lease do. them going none a a be under well. of are gensets, We've lot EV lot and little of because north have looking take at to bit that XX,XXX, charging I sell as batteries to sell opportunity. to and We're

and a attracted and brand. getting them. lot our our expect it lead those dealers, roof. should see from a we or is of than are triple we tremendous coming even through just customers bought we of last leads in in Lennar and never A customers. leads those more and counting as more dealers solar, of people to so, We're to double, another going lot are And the are as it's more we're going flow the which And not more a is, Sunnova reason, lead XXX,XXX is that through, flow that mentioned a I amount and coming. to then more more have I we of and this year. And to have earlier, feeding small partners year have Plus showing customers fast up opportunity even we're increase. upsell lot can that

are the our we're in, upselling now. in and a upsell of that what potential these base XXX,XXX strong addition base bases to both to opportunity already we is, customers And And the with in our is what Lennar. that and existing friends of so, have all at giving coming very that us roughly coming new existing course, customers doing customer

of going get of a lot work So a lot opportunity, after and it. to to and do we're

Operator

question Your Aric from Lee BofA. from next comes

Aric Lee

resi the storage I just consumers markets, you're it call home, from not have talking markets the many and these just across solar, increased historically instance, increasingly, in et on you anchor not attached solar entry storage is the is the multiple broader in right into say, about about potentially product seen storage markets? it, even Texas, for like plus sale way becoming wanted would to trends, to storage of, cetera, ask Florida, where you the might for demand think

John Berger

there yet. think we're don't I

like dealers what And get okay, quarters, there is to hard we expect this do a going understand of of quickly. we're money say, to consumers seeing next fairly It's this. I think and want change. onboard finally we're see over the here, let's I that, lot couple can make People again, more and go would some change. to don't and

your have bigger You really involved a the change The operations. to dealer, it's process.

This what I what they is this much This so is demand. same at better the a time, But service. is people And energy understand. want.

an be absolutely have will So, we case. of increasing year, by the will that think XXXX, I that a do next – states large number

our wildfires to Florida, the like rates see disasters have experience in from and now, California attachment markets in to XXX% interest Texas, more with areas attachment recently end rate have continue experienced of rates As consumers attachment and rising natural all rapidly we a we and as do have that well.

Aric Lee

and partnership, $XX,XXX those and you around to about customer that? to strategy the post-acquisition per increasing And acquisition just and opportunities by Does your timing you upsell talk On from could close? do expectations this accelerate $XX,XXX about of XXXX? acquisition think the SunStreet $XX,XXX deal Lennar NCCV how customer

John Berger

Certainly.

provide storage to been able not is provide, management, primarily, that in of we're about, or see, provide charging about, that if will going do secondary with the be not-too-distant all, load that generation, to services speaking customers. as some our the asked EV do to you the driven we other by I've we and just opportunities, upsell future either software and So,

that see do we coming. so, And increase

close Hilary's As the answering question, coming we I on mentioned, the from SunStreet. soon immediately as as with get customers just will that are in transaction we

number increase value, see XXXX. so, We in will, we'll in that you half that in see hope per start certainly back of something the the be customer. And if year, will the to to

of unlevered returns. the other The that part is

and concerns You'll the think capital relates cost about And it I a see that's we notice particularly, Those in so are our decent that pretty amount of strength answer expect it dropping I'm there. do to much. to was the there I there's continue decent to from expect a a the continue know of And proper because to jump margins. of those that's some burdened, interesting of risk-free more happy costs rise out answer to lot we as scale fully questions and and drop do forth more But fully our that more was unlevered to operations therefore, rate increase returns. concerns providing And and the and and put them. to another us and and, burdened in ability our so SunStreet context our us gave scale. see thing of

So, and way like it, strong at trend. we any which margins pretty are the you look

Aric Lee

beyond discussions services would here is need potential that One from utilities, engaging you're on? Could partnerships power to any my markets? you partnership last CPower you are pass then and software meaning end there queue directly with here. be else to back wholesale needed What talk question to the with pursue contract I'll And it about CCAs? able what further to just grid your in

John Berger

incorporate do. do don't necessary that or a coming about expect most we're we to are day, right But the what will successful likely, be have and months of we the a talk as transactions we not that's could that we next our expect so. it's platform we year certainly if that over of partner those, now, on which winning working want software and But partnerships. something the we the software announce part would in that the Well, so. we part But as in number there of are. And we end But, yes, to well. as at certainly, of

people. a there's not add lot need So, other now need that to than more we right we

quite England join to continue higher platform to and operators rate looking customer and folks build of utilities. more that, team And independent have got Sunnova like the great base a that lot base We're ISO it. fantastic. other to really a building growing and a valuable We come and and a we've to is have on higher a strong is just of lot as we are But excited penetration than And the other we system hard-working customer that have rapidly. folks New family. storage,

Operator

Partners. of line Capital from Philip the from comes ROTH Shen question Next

Philip Shen

But obviously, First you one on California, in in growth saw is and your geographies XXXX the in you think we look of tremendous Puerto about a guidance. States flat, growth XXXX, Rico, non-SunStreet in were COVID. back rates at also to do through year, clip? that to the to Puerto when due grow Puerto that continue Rico growth And Rico and you're you about attach seeing think expect this at geographies the can non-SunStreet you in you California other specifically? talk When your QX in for but lot

John Berger

First in of Rico. attachment have XXX% do Puerto all, rate we

of even very quarter-over-quarter looking But that. close trends break Hawaii or be others those is careful over attachment the else It way. that that and information very started that one you is in in XXX% and not constriction give would the to and months state, you about trends. does, territory. US to conservatively And as six we the fourth quarter, well can a by or put loosen to you like, these do would quarter in to no you service. up one that be that I the can able deceptive cautioned months And therefore, again, tell the third either had we're we and way happy and, customers state six supply battery provide batteries I we in that think in in out that, in we're Saipan. somewhat past, have the that, if this got Guam, that pretty count We know, rate customers, we

service. as long last of in soon So of to still in earlier got those sales time in We put were were that the prior part made batteries, some we the backlog. that And have to a we year. as them

that service. have answer tremendous a don't customer already a and we We of So customer. of that, count be a paying that in go forecast already us we is, our competitors' until that amount it sold again, out definition in to backlog question tells you, when would customer, is

our can like a And Rico. supply And from quarter to so, happened customer exactly Puerto move battery metric in next. a the becoming that's one things issues customer what with

You'll you battery of customers to that get here backlog we by kind if up, expect probably QX caught do until we in which again see will, quarter. the of that next

Philip Shen

for slide thanks the for for unit also, year on the XX And full XXXX. detail economics

how unlevered the And trailing spread to answer on the question, fully ultimately, a to does to that and spread where answer XX-month trend, do alluded provide are to premiums. that by given prior you the ahead, rising reduction full Looking And going you perhaps implied or you prior where trend? basis? in burdened, do how continue this expect color that but in expect or offset return are to year rising the rates rates

through talk that can, on basis. Just a a slide look-ahead you if bit,

John Berger

Thanks for that noticing and pointing out.

That's that basis getting that continue return, we're up. burdened our more Obviously, and We will to that fully We do provide been provide a scale that. that the of range. that and will as update and more maybe range as in that do somewhere on – in unlevered trailing XX%, in costs, it's we everything can will we well expect we'll push roughly again, as the continue X.X% our expectation. we'll that to to probably stay to

us equity a in as cost giving terms that is there, capital. better on and and lower We reflected tax better the are getting, of marketplace,

that penny time flow a that's the between of continue, unlevered we'll just in we out point spent, trends the continue staying strong view every to getting want and everybody margin point all see view. and recurring fully is these that burdened And this fully that visibility. to operational we provide and I the So, to at expect complete complete cash in returns,

And corner metric answer non-GAAP your The full I it's is on the the interest so, someplace There's there's a nothing put in think this lot is some question or a very mentioned not of else picture. and other materially it's you misunderstanding metrics, on goes to side, that in important. giving rate here.

points want straight. to several record here. I set the do So, I have

of can call of as risk that have all on we our playback, that's opening a view, achieve to phone value the points in that we you is we So, our left, at so this majority you don't securitization take will all basis on But least with mentioned an Rob the comments, obviously that still notes. industry have, risk premium and be have the excess long-term asset view still XXX In this class. the that record even premium. recorded

that is amount weighted a there our we got where significant debt Again, therefore, and, So, a I understanding. paying full think this, front-end Rob our don't of off is And heavily pace. mentioned very cushion. we're here's debt a at brisk

for average XX really we're our weighted we years. debt, When to years. you look term due not closer refinance of once six debt about debt any at securitizations, of to term life going over to XXXX-X, X is X. It's Our have the

So, we've is locked heavily debt in, it and a lot of this front-end weighted.

XX-year to the XX-year XX-year treasury of looking X correct. treasury out It's in range. So, more not at towards a looking is or somewhere

just our securitize the like cost for in seven-year quickening that payoff term did you five loan the of it, when that rate, we So, few are did all locking one if on majority, potentially out especially debt we our as days we to vast given securitizations and ago. range, a not, terming of

is value customer to don't understood. hydrocarbon I Our essentially fully think power. indexed centralized and

of why like part to or and to to incentive if up financial huge And reason, therefore, the power that's rates up, it's growing instance, the more a as us. is pushing oil to our they were So price inflationary of delinquency in Hawaii, more grid continue plummet, for have customers pay to pressures, the continue continue that's push and improve. default rates,

cash, more move going before And unlevered Growth to market increasing about revenues any an I'll sort of morning XXX this faster want again, not or interest cash. so, more more rates are off even so additional forecasting earnings services, at necessarily point risk-free points Look the decade basis we're of returns in to is into more is of contract from that's and equity getting baked service important out. roughly basis of that I is the this And not that coming higher. than just or – in last example a to to grid any of even XX points from and the debt or pay financing. our and MLP our And faster. or our this. to XX-year point

accelerating additional getting off debt. several that. services are times. Payoffs made our customers to through are we've on Rob also gone We as reference

the continue materially move through move goes in industry that raise We as interest an forward as And to our prices we time, expect to that We up. accelerate we risk-free if we hedge warehouses. year. the rates as then can in

we've have there hedges. actually, out hedging, flow possibility So, cash We could is because had year, Last for we it. as that plan been some don't upfront. a that went flow additional the as cash broke we we

You pay those you out term securitization. do as the

of move It's of all make not referenced. certainly as for mention have And I us up. sort it's some as will bad So, others rates any also this. catastrophe not

points. looks, that moved of has is XX-year look the at basis on treasury it but our you spread XX-year between XX basis the And rate up, of reference the X-year securitization If five-year treasury, the the points. XX now was spread the and course,

We've out, printed rising to in XX-year not we're putting conservatism here calculations took mainly and XX We're X%. the you're due of we any So, and X%. massive the talking about basis points, about that rates. a even got at a discounting if of concern headroom you almost amount and at

that to certainly few a of before plenty surprise ours more have on cap course next of think, first few rates months. me We I have cause rates material wouldn't impact our the in will put the a economy we over and and, and the would competitors and the it next a both companies lot other And parts come on see over issue rise risk impact premium other therefore, for here. faster and securitizations, room to of

lot a in. cushion of got we've built So,

Operator

Strouse J.P. question Morgan. from of comes the line next Our from Mark

Mark Strouse

from left? you just the but your is was now harbor you helpful. might Realize it's you remind regarding have inventory forward how safe Can plans for remaining. has as are extended? going have I end And just that ITC much done how question XXXX, that John, one much the the that been over much XXXX? extremely And left had us at what inventory. of still not

John Berger

possible Rob? plans to as think I deploy our reduce interest fast it our are But costs. as as to

Robert Lane

of left. we've XX% Yes, got to that XX% about

into. – those we're think one I that going to we've acquisition assets deploy thing another the area to that got great about SunStreet is

we up was I use thought to We of we anything faster to So had bought to we we're be what year. than much about end get going would when expected. be of probably that two-and-a-half going if worth had we less very years' the this surprised inventory.

Operator

line comes Ben next Kallo Baird. Our the of question from from

Benjamin Kallo

I have a few questions.

the was customer, per XX,XXX the like $XX,XXX they math on deal, the for it, did John, way First, homes. do pricing the that Lennar I quick

on the that about you earn-out. $XXX paid rate, how $XXX And for the did my that follow-up run homes, I the keep you So I around math first – there? million only million in know stock, year questions I of guys guess, then X,XXX it's of but if is just

the give through and – read growth. that's to talk how for you five-year could follow-ups. And a have on slow, but it's earn-out couple that trying could us means been us I've any what the color So, But think targeted? K. of I'm you I customer a to I

John Berger

Certainly.

I three-year earn-out. think a it's that Is right?

Robert Lane

production, It's yeah. on a earn-out four-year

John Berger

Okay.

a get So and the with us in earn-out these we that hit demand, Lennar laid and targets as and time you and to continued as the it's full forward there. out these – to targets it's expect, being we've and, that tie saying, essentially But have move is growth obviously, look, equity, with you are conservative Ben. align ourselves

many do we're And essentially, a also with it's master-planned of close. market in Executive relationships what relationship I but move And Miller, something – Lennar, with clear, this stock transaction. This be was, So, we again, thought going anytime about the stock. very the again, way to to Chairman way it about pay not we is that's made Stuart think as soon, on And it, he can working know microgrids we exactly it. will post long-term just as do this about with do blunt we the community immediately a us excited investment. it for see to it's this long-term as this about into a we be with Sunnova. don't and And Lennar. can see when, we'll sees

of the part earn-out as that's well. So,

think not microgrids. I it's said, look, doing and going happen. the where make money highly or doesn't earnout about happen talk, is We're so, And got interesting. Stuart our just mouth to to I, this philosophically We and our we've put

So, Lennar to that incentivized very happen. is making

to you're rest the I that point So fairly earnout this paid we is, quickly. essentially, piece for And out. want the right, of acquisition

that get upsell, the customers free, it's all existing lot that. lot say directionally of essentially fairly Your right? not ascribed the that is but count needed wouldn't to get correct. math that's doesn't be there's a to That value a to opportunity I we that. clear of We

opposed the a As customer of pricing. our and on our valuations pretty in bit reflected significant existing possibly equity and valuations base to what's optionality certainly competitors' with valuation current equity

hands Sunnova this and good for shareholders, tremendously here. the a is Rob So, frankly, think myself includes obviously which transaction transaction, down I

from valuation out saw very, a there in anything we the it's very else So, marketplace. compelling

Benjamin Kallo

three two have I more. more,

Could you, that Maybe Lennar. interest I if and that on talking the the then equity the talked Lennar? sorry? who's million Rob. I'm you I of you about the Just $XXX for impacts about rates, how know And equity, talk unrelated how just, cost about to missed, that, but staged, tax saw with tax I don't that's

Robert Lane

Happy it. both One, place We're SunStreet used some getting tax to to take capacity terms, to on it always as equity important but they've in on commercial us. terms exercise basically commercial of tax the with of past. Lennar, a was arm's their length very

to as tax equity And that. the lower well. cost we'll consumer want the help continue for us, So, continue we're and to to preserving we to that use certainly, to do

both to. of So, that we in we'll it's on basically, overall us And and as funds we sort deadline need funds of cut something really commitment, benefits multiple an the have ways. really

on our most is So, equity timing when our tax funds. close our based of of off able really to securitizations we're

Lennar And on have point it's we as tax like use I same the little time, really other flexibility Lennar at can a homebuilder commitment. a equity think space certainly minimum more that out, would also, I we well. more. timing. funds have that And with bit the

John equity. far is every rates, But have increase for sure thing again lows okay, we that lows. that – an to priority happens interest interest of impact. as them make that that have really What and as And to we is, that Exactly has back give right happen. at that now. We've we idea we the make one think fewer very there's priority Our going interest for is, one heard have to homes hear the goes to historic the homebuyers. of had have we're been might you really going time. still now don't is And rates low made, rates points you really, or think Lennar's an quite some a the if tax single much at home all it's that to historic immediate

market for even folks interest For up, not John time, And of interest up at the really of rates. doesn't to interest as buying capital, to years, the anything to really And homebuilder low past go said. rates cost sense to to not be same getting new dramatically affect going finance going anymore it's where really our homes. rates has several only increased historically going egregious because folks it We're also from if do make the either, it's the not homes. to prevent

John Berger

Ben, I plummeted. to would tax any didn't decline cost we equity certainly add as that, rates is in see

would to as to competitors made to some expect up, our come So it. And I been commentary they that we see why that. have immune really just it's think So, back right?

the The share have a And we rate. have, such rate low an a very other then as acquisition, homebuilder within about industry, market thing we is, with there. market penetration even – small this

a at rapid So, forth, things and just could rates and catch still and go industry we industry growing the to wrong be penetration decent as some have as in an a lot homebuilding overall economy up a and we trying company. of rate, can so

So, confident move. we about feel the

Benjamin Kallo

these as it's offering of think their into and is, impediment and way I going to what different excited grow guess there? earlier or jurisdictions, the forward. different with I a because asked customers are you about is think making about them agreements people that services? bilateral ever services, the with opportunity – I utilities an on think because lot battery solar opportunities be house I of the it do or system it for margin part And all grid their I the their And wonder see that someone

John Berger

move as will as question, in right, do as on a on the do out be energy, figured it a lot that these system the forward some you so you have nanogrid, there control just, this again, help the I time, customer's home there's some That's could really the forth. is to grid about services as your and say when able too, transaction, of transaction. we market to far to microgrid, and of other so neighbor a of would over we share But great capacity economics, Ben. not What be maybe out type was think

One was pumping block, block, power, of at the my and half the out just – deficits, entire I not by powering was my personally, of least almost way, much I so my solar a acute need. have was flow, they been shame. was that that and information power, and was shouldn't CenterPoint down or have circuit that's generation, ERCOT by didn't in that obviously, shut That

at, pulling got those then margin, accretion, we we've well you're you still already we what we're load have new and particularly the all nice doing and XXX% addition – if together, can margins but gensets, with to prior solar, now so, some better the is right, technologies on economics this will, have batteries, customer to an in And very through we're do went job management, with a pretty with we margin, seeing can as regards still these share of which and questions.

do I you're good terms going So, if I cash in you're that, see of economics. think don't not like a network, that this to to that's customer part sale on a something the look or very if to of trying

part think for have really compelling the of you're to have the proposition going to a to network be a network like the customer. Sunnova I

So, big another towards minute, a fully wait this that's and industry needs these forth like providers service I be to going and provide saying, consolidation talked explored, is think so more Sunnova. more area the about to that in

Benjamin Kallo

and partnership, And in my have And think continue grow, Generac got running your ability SunStreet, been I'll front? capital that of market I through about Board that you've maybe the last maybe to and what throttle you acquisition with guess, on does two, to it there. all kind your of activity, leave the just

John Berger

are statistics right? good the not on that You across not the M&A of these Look, accretive shareholders, almost to ultimately. learn are economy, three-fourths

a to alongside right stock took with – think that with group took there needs with we degree right us. deal years and always even partner and me us, invested us I the are fantastic went right took the for particular. they're But long sometime this great why company withholding pricing find for – of healthy to maybe a run they fear there was So, took the just in through that's right? people years, apprehension, so eight govern as be the Lennar. for It it of years. like And a to CEOs, CFOs

compelling, compelling make wasn't made that So, not all of this. to hugely it that of sense to And had that do kind I'm me for it. if really going to something sense, do

to trust continuing other at look us the the grow me are opportunities. interested terms board, on They board that. in of So, in and

stick pricing. not about going We're to disciplined our to doing going I've these go integrate doing in that. to not talk also going to to Obviously, we're and understand to rough also We it acquisition. going we detail and strategic very in start are companies. very we going off business do are been going any are an to efficiently. very very clear, that. well, But be And model we how We're the plan. our We're

is in You're on to not always the signed John can't off very company. someplace going or on that to go, going will. believe be this. This It a wake always morning, board world signed I this the disciplined it up off and been, one has

Operator

from Suisse. Weinstein comes question next from Credit Michael Your

Michael Weinstein

mix, Lennar XX%. more visibility up to about XXXX equity about about much – talked On are talking to leases But loans a XX% have And mix, back about talked involved? you versus you XXXX, how we originally with for the maybe higher loan loan leases, for to anyway? returning mix tax going a do you loan Lennar, XX%

John Berger

a done On equity extremely tax are comfortable. job. side, the hell of Rob's a we

Lennar capital have a equity. tax that close, amount This is we'll was equity. on with and runway out a just there, that minimum amount. of able multiple to minimum tranching post that, We relationship. And obviously, be and in continue equity there. equity multiyear as expect runway grow tax tax exist anybody got It's our Rob gives Lennar deal to us with said, very fully good more start to else I'm And relationship aware. tax possible we they using have provided not the of having transaction, years a the if

And equity tax in is for done but out in point tax partners, go and shape. there. on continue search runway and has job to we're a we our equity So, more at awesome this time, there fantastic great Rob

can't of as doing year. In and, mix, be. actually it's lease/PPA demand that a a talk and a thing some on return or say our by returns our are make returns, witnessed we great therefore, we that predict we're And we of improvement of that. good that in that certainly unlevered the talked loan to we whether making lease. kind mix terms would will that I about it's October last of as is I only The XX in more what mid-XXs, loan we unlevered

Our contract language even side is around across services types. the grid consistent

– we've here. is this the done on really making to where and and And you not on want know, just and want go know and or I so, are. financing industry And think want are going really the know should And to burdened type. I investors a to you to money we you're industry point a agnostic to have led fully basis? entire to

back So, in I of if split little of we're we in that bit on leases to inclination attractive not And but if quite market, care. will PPAs. bit because, homebuilder going very to loans get continues more loan. to market take the would as I mix to XX%/XX% push of continue or there accelerate, expect stay know side, of is, so to don't would are a a the market that could versus loan into and something rate rate, the And right the that of an higher roughly roughly about to say lower well. than We we're now. that, lease? of in be we the leasing that's nature. actually, say is I it's the Could away to on in XX% don't going where mix couple forecasting going expect we us and because homebuilder? going But be loans us, down as be rather yes, possible the the end the payoff frankly, really of Supposedly, little what That's to be a to we go I more quarters from could. to are

John Berger

industry P&I, financing. at the considered. little analysts high, view thing add without to P&I that, looking that your together on earnings that at even to the on as other all bit some us, that revenue of agnostic models, all look we've pick covering on keep that, most know a when we all pre-IPO be We sorry, focused you us are to only not the to piece, in analysts higher it be -- but meetings, because And stated as the and as a right, EBITDA appreciate mind see should really lot of loan the quite start the of in things that means you build we and in is that honorable is the do I'd continue up having you expect on

Michael Weinstein

year the maybe break out is how from amount of you of Also, XX% the from growth much Lennar could other this and sources?

John Berger

You're talking about for XXXX?

Michael Weinstein

Yes, yes, exactly.

Sorry.

John Berger

Yes, sure.

out of some would as rest the -- the well. I broken homebuilder business expect that would business at roughly But then XX%, grow at and the grow We that yet. haven't that would the at

the I the end that XX%, really hurdle guess said, where a were would to of get had a at looks more, we've But because to trajectory." trend existing pretty off probably just **** good take looked So If we on of and day, non-answer. business it comes we'd that's it much look, this "Hey, bigger. much I the say retrofit feel the -- at so it's about we if

in that works part. but way, math my be, that I guess, the So, would on

Michael Weinstein

to I And guess, join about of on you and to it in needed a grid Network lease aggregated or future? be you for services in be spoke and guys order the Sunnova briefly grid people be by owners get the the part to of giving – services Is beneficial to release advantage network. possible

John Berger

that. led we've And Absolutely.

have the or little to you loan – actually, And see so correct that bit a language, is lease we Michael, there, same we PPA.

one to or us. So, you really get the to don't have the choose other with benefits here

other with with do to You people, us. have do that don't have you but

Michael Weinstein

day just and as we get every maybe a Sunnova or other such advantage equipment Do an will the And time, the leases? or be one clients. better debate, just – you one as seem you or think for financial do think prices on loans versus loan over to which question into lease than et the advantage other, you future. one Is tax final for see cetera, the look down, or programs into SunStreet, Sunnova do that come cutting as – you with

John Berger

are to I what think so the which or happens estimate in in Washington world, year guess that right? has and Tell going to increasingly versus me what is – forth. you have the harder this to do, politicians next year do

right? And so, permanent goes PPA. not There's that There's the loan. ITC and into in lease the a in ITC,

and think I least be and when corrected hope for for they at I expect five next extension that years. ITC that do to an the

like a or loan side different cash the make regards the So done. be the lease of think a period With PPA. flows over roughly on to I cash get equivalent do attributes versus policy more loans of a done will that the financing I do you think to. tend things you But from of time or that flow be long-term company or I cash like again, those which I would leases, – standpoint, and should mix. a as contracted with the

much tend to get you cash faster. the that things, loan On side of

debt to down to paying cash we're equity therefore, faster. flow putting our sorry, our so, the – equity We're And faster.

that again, combination, the it's point full also unique We to that out I And it. so, capturing love us. want just spread. to we're And

see I industry customers data so asset So, selling trend, it keeping They see whether we're And PPA, level is the be off. the we're spread better, flip an what the when are in, lease selling going of we know to payoffs. it you not originating that We folks collecting delinquency faster pricing and on whether loan lower. more loan originate and a and something they're you're equity think the stupid. and somebody lease you because they're and and keeping, to cash of that we're therefore, out doing. ones else, or care the asset, that PPA, a out the that wringing it than will it's or taking default lower cash and only They're it's that this

obviously, thought crisis more Michael. And we And fantastic but the about us, the of and assets capital debt went through the through any us working. appreciating entire right, not the the with far a pace showing so, are what last and that's market industry, just I think far year going quicker of the than performance with pandemic investors at paper,

equity. tremendous lead cash to going of to clearly is that a of our amount all think to I

so, working it's capitalization and strategy well. is phenomenally And the working

Operator

Your James. last Raymond the from Price line of question Graham comes from

Graham Price

This is Graham Molchanov. Price on for Pavel

in Texas East referenced way just to of mind, participate already doing the You the plan wondering, And the you services we're with you're on ERCOT the recent market, grid crisis. Coast? grid that in kind do

John Berger

time. going is, changes enough we our are in active there, the out in our which attention lot big point a we that have are ERCOT. in to through cetera. for be We that it in and customers. won't solution. so need lot to footprint, base politicians there, some time it's But some market don't certainly make to we're they'll it pay the solution, part market. to, involved been ERCOT understand in. they hopefully, go trying is sense and probably all us a provides service customer out like the It's things get markets particularly Austin that and deals Sunnova that that a safe solution distributed floated lot capacity fits the if of to ought say, to et We than by the There's more have have in those power, There's of at the facilitate, go market, of other of this of the But that a to us

which event. we it we valuable. in week's here become there to government, Texas prevails, prevails, logic know think and So, last think more provide that If what actually, I logic but in was catastrophe we there's than particularly always will then doesn't if the a opportunities more prior do, that, Texas with lot

are solution. is thing other The understand about lot that people a we the more that

leads and regardless fellow exploded like service. few as for they're direction So, I interest really does, And my of said, and last government what you days folks, the our to Texans. from expect see moving the looking into would coming of number has over and

Graham Price

discussions if any progress, any ITC see you you I guess, more a for of how broadly, have the just Congress in might if maybe expectations extension curious there? chance long-term

John Berger

We still do.

not likely, an in a Most it's of the if bill few separate bill to think I matter a happens. sometime it next probably like going looks in or months. that happen it's when, either infrastructure

Democrats and first lot are that a such pressure this the could putting of that cause of something lot of So lot a majority plan. the is as of a the rage any passed There's monkey death because year. the to issue get upon turmoil so of that member or like of half a margin themselves things of really thin sort the

I the as that more, well. to the and later. happen going impetus is also than think that to more I is So, something do rather think refundability sooner And

permit be if see it more or possible, much would I think roughly talked extension. be the ownership, or think side years, but get personal but fair. XX%, I've it the about also XX% a I don't we that. things the surprised could less be that loan part and, heard PPA, XX%. more certainly, long-term XX%. so could right of of to really a permanent. extension not if be way happens, heard that go five do long-term to lease and We really that I I will provide either been would the something that's on at about that know would I have that just wasn't it's of a

think we or least at I refundability two. will a get year for

Operator

turn There time. for questions remarks. are Mr. call closing Berger to further the no at this now I John back will

John Berger

Thank A here. couple on things you, end everyone. to of

and and be all before thank last without to really, their have capital then raise in, and sell year. to know guidance to a of the home my and us, job an from through having dealers still to is the my my year completely wanted dealers. I lot hardships to the the markets, you're apart, numbers debt and to able my To that And to I hit fell First, bottom going equity both fantastic employees not of and all of effort how the to upon and unbelievable went unbelievable. persevere right for just fall employees a markets go heart, crisis pandemic have sacrifice appreciate the

Secondly, it fellow was for Texans, utter catastrophe gives last we what Texas week meaning and an to in here and my do.

of we go you over this And and combined you. are want that we're with energy services better load which the to hope Texas a and to these are. Then that this new system have when energy week, a what looking serving as as Texans what solar, produce service had a at fast, together Thank service. support company. gensets, a Texans, the what – the we forward we're do. my fashion inverters, simple Americans integrating we're and who of all is putting delivering of energy fellow all that better for it's in all That's things And customers, price. supplies with our technologies service happened a all solution them all should can next warning the in must secondary they new efficient change, these we wrong, That's years. like batteries, will fuel service way cells, technologies management, few are We together last generation I and forward those

Operator

this Ladies you We conference. for today's conclude does your participation. and gentlemen, thank

all You disconnect. may now

Sunnova Energy International (NOVA) 1 Mar 212020 Q4 Earnings call transcript