NOVA - Earnings call transcript Q3 2021 | Sunnova Energy International Inc.

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Operator

Good morning, and welcome to Sunnova’s Third Quarter 2021 Earnings Conference Call. Today’s call is being recorded and we have allocated an hour for prepared remarks and question-and-answer. At this time, I would now like to turn the conference over to Rodney McMahan, Vice President of Investor Relations. Please go ahead, sir.

Rodney McMahan

Thank you, operator.

slide note are call and XX-K. subject are in please forward-looking will uncertainties begin, release, described that press statements to our we during XXXX we today’s make that and Before our earnings Form presentation, various risks see information those may for factors additional statements. these forward-looking documents those that Please regarding affect Also, reference non-GAAP during measures certain will we today’s call. for reconciliations the of as press release well and our the non-GAAP to disclosures. as Please the presentation appendix GAAP refer to cautionary appropriate earnings

are Sunnova’s Berger, today Chief and Executive and President Officer call call I Financial Executive the On the John Vice Chairman Lane, to turn will Robert John. now over and Officer. Chief

John Berger

our the and report In to its officially this origination improvement presents rate Sunnova’s attachment for XXXX to additional opportunity notable but customers, equipment just attachment am the Good network. our broaden growth in creates. on in in you quarter Slide from year. optionality has Sunnova’s attachment, the us. over our and XX% availability the joining the continue service steady XX%, fourth rate. revenues contributed we initiate This pleased our up third now thank stands at future to XXXX same the the as Improved for Sunnova customer number offerings. another growth of dealer Today XX,XXX battery summarizes customers, strong for added Each new it battery magnitude, adds to in XXXX. added of guidance. last double I we reaffirm in battery quarter guidance, not quarter, morning quarter X and for to results, is the

is the power made which news partners for This ever-increasing reliable progress our chain of systems energy We alleviate number service. the and months, has are encouraged weeks several seeking storage equipment constraints. in supply homeowners have great past delivering helped the by over

states XX located and installers Our powered sub-dealers, and homes new the dealers, remains across growth XXX U.S. strategically territories. by over

Our model, ability the platform, strength of to dealer business brand’s by growing deliver growth to lead Sunnova’s technology generation best-in-class our dealers. our strong is driven and our

slide on and Lastly, we expected this on updated contract our customer cash life have inflows. information

Slide September of our X, we XXXX, the years and of $XXX has contract cash increased XX.X principal contracts QX on expected Adjusted and interest solar cash next the our provide loans, operating we on life customer collect a cash million. over operating equaled financial XXXX On remaining inflows XX summary adjusted XX, and EBITDA, the average As months recurring flow. weighted to flow, results.

are provider. growth hours and amounts X storage To solar customers. to will for when and cost energy decreasing reliability goal with provide within for a and they expect years experience results combined responsiveness, to our residential that the our for the our financial in solar-only who Launching select customers to the have other trend established plus with product storage provider. service superior continue. markets, the energy service in first as three we outlines strong over have and past key I unparalleled beyond of service unique we shown Our discuss any Slide well later that call, commitment frustrated within a This XX hours of a monopoly offering, with customers customers. power resilience our experience XX increasing

customer-centric the experienced the Adaptive accomplish our illustrates continuously time, life Sunnova to the it and live vision continuing uninterrupted. Home. the us our will capabilities. world. X will energy future, goal the for name In to the and This provide to up is service commitment improve managed software Sunnova accelerating expansive, our build We for customers best with to in be with power synonymous service Slide the goal platform, team, this allow our our of logistics service build-out by unprecedented professionally highly our

the will With or it power. are to increased cost of not, seeking Home the option an the staying centralized centralized in rising outages the the of many when grid already our have connected Adaptive customers wake to comes power option and

service can which ability consumers integrate will single integrates a a solar achieve provide. vehicle technologies What and what capabilities further service unparalleled above from to give to offering technologies multiple working differentiate storage, be generation, manufacturers will traditional and that charging, into energy service utility control multiple offering homes. interface. will A a reliability energy power, for their secondary software possible Sunnova our are and and management We electric battery

per million by per noted are turn, to increase the amount should NCCV. improve. This, an for and have will average in NCCV estimated XX potential of in value. place of customer. with of to per on increases X.X equates as $XXX $XX,XXX the grid growth we in we to opportunities is of value natural the vision provide $XX,XXX or next Our generated Slide To technology which provided which touchpoints of pipeline We metrics both the an an over $XX,XXX Last the approximately customer NCCV a estimate and quarter, customer an of expected services. as more NCCV the X $XX contracted be our least customer, anticipate customer of constructive services additional growth. at outlook, per We of Currently both in forward-looking XXXX customer we from and value services XX net average on million providing to increasingly with in significant service services costs range per for we continue increased it basis. those updates over impacts we seven the grid seeing and a per only and engagement number into customer. services date, programs years, NCCV time is services increase customer

Slide Turning metric are major to term intermediate X, unveiling we our growth plan.

of Triple a XXXX full-year with XXXX; year-end collect we estimated for of loans our the interest together XXXX; tripling by doubling EBITDA this XXXX; principal estimated per services and the adjusted dubbed XXXX year-end This a consists doubling year-end our XXXX NCCV following, share sold of our by the full-year per by customer our solar have We XXXX of year-end XXXX. a year-end a of customer plan on year-end and Triple-Double estimated Plan. count doubling estimated

Our understanding plan how expectation quarters. I value shareholders now the assist creating over Thank to coming for in our will anticipates Rob call management is hand you, that the shareholders John. over will Rob. Lane

NCCV, respectively. the third gross GCCV and revenues loans solar Turning XX at over XXXX, contains you EBITDA continued increased over XX% same on and contracted years. XXXX QX will discounted our XX, up principal X%. Slide the to adjusted few and received from value, see our improvement in while the period the or XXX%, and Slide QX results both interest XX% past over by customer are quarter

three conservative As we of September XX, XXXX. burdened to capital a capital we Overall, years to NCCV the our X.X% X% $XXX for incremental significant less million metrics. as as of In time of these increases reflects, XX, deem slide just went as or September cost we XXXX to cost growth. from are fully continue $X.X of experiencing an billion of incur

financing if bill that Given amortization should treasury position. our as their X% recurring XX positive by heavy share, operations our rates securitizations is are generating increase. summarizes discount, it of activity and flat debt inclusive reference measured a over Slide even NCCV our liquidity clear per our legacy cash naturally increase our time profile, recent to and flow,

fourth was loan debt. our third Just of of structured three we This the loan our to securitization like proceeded XXXX, week, closed the securitization grade issuances it, this include only of year. that investment securitization was and tranches

capital gives those amortization are investment capitalization aids us spread, our industry, cost As the performance the resulting punitive in securitizations grade-only Sunnova generating than gives strong also us our some in Sunnova the advantage to approach over several This years. in highest their capturing cash the This into which less a industry. flows expected that the in next strategy recurring in visibility generating high-yield tranches. an reminder, include margins of financial in of full long-lived,

Our upon our warehouse in on unrestricted up restricted on well total XX, liquidity million, facilities. $XXX available XX, $XXX as the XXXX, equity and Included draw from and our we of June XX, was from cash, as XXXX. from could credit and these liquidity numbers tax million September September million collateralized are both $XXX up as XXXX

this XX, Given September collateralized available XX, of September unencumbered million liquidity on XXXX. $XXX available equaled XXXX, assets as

Beyond we that, million over of equity That funds. tax billion to capacity equity closures. tax open have and collateral, $XXX liquidity available represents warehouses subject available funds securitization additional of any in $X.X additional our or of exclusive

XXXX for XX, updated uses cash Turning forecasted we through of to Slide XXXX. sources our and have

transactions. for is from reception of commitments in increased have addition so decreased in most This, last utilization, we thickening are now capital our turn, implied the of $XXX which on critical months, our loans, X.X% $XX markets our XXXX. solar while on to of EBITDA have of of spread principal operating the received has EBITDA On XX, are This our cash have requirements customer of interest and revenue Please capital resulted expected together payments cash flow remained cost additions of as to debt flows interest line will investment turn now the flows and will the of the XX% corporate to On Principal at the XX in incremental of received that XX,XXX XX to XXXX from will as collected targeted will capital with XXXX from for million X.X%. the mass reflective of and forecasted average see million of new Adjusted million. John. takeaways to of securitizations. $XXX our ABS to existing XXXX. a see million. $XXX loans and find $XXX have million. securitizations, grade quarter, ranges loans in our origination collect unchanged that sales recent full-year and on XXXX. This Adjusted XX% cash to guided Interest guidance back based customer in interest was unlevered approximately loans Slide XX, the adjusted of of bullet-maturity note investors recorded note has customer our In year-over-year collect asset includes investors we another from numerous. on expect solar Recurring EBITDA somewhat, Slide calls. strong and million have will guidance million. ranges additions. to include on Again, assets solar of debt XX% received which loans a These refinancing XX, $XXX our increase earnings also principal older previous you are adjusted the we $XX $XX we keen-eyed tranches of a year-over-year through in additions issuing amounts as burdened XXXX, together expected September remain in midpoint we trailing bond, how at for call locked XX, solar of revenue months of appreciated, should Slide to and our return serviceretained organic solar we note of I our fully you weighted $XXX in customers in million XXXX with of in for million. with midpoints principal then in our a of of while XX million XX, least you and XX,XXX. September December I trailing options increase X.X% over that Operating XXXX $XX net and

John Berger

Financing forget" seen that for Thanks, enough vision new enablers as beyond for for service demand and system more are panels now ever-increasing that Sunnova. energy provides, made Over in has number number especially operational complex areas higher inverter, reliability. long-term and like scale for contains an increasingly when be of service in of of financial drive nascent software time sale, opportune service manufacturers. energy our forward time, an pieces a for this an solar offering a service. industry, juxtaposed especially evolving is these service often our have industry and was energy and level what Rob. our will a equipment with What could providers increasing not demand energy currently become well dealing consumer an this by growing we only now "install of a once product and This single to

them our Sunnova, service what see our Our service here they to we an world with part with new we to to well our be customers on the must but traditional on the with solving energy and with that, change. be for today or the – solution energy with anything to only climate way life flourish, climate energy are future questions. to crisis front uninterrupted, At to biggest truly for doorsteps, have goals. are open are of these service our response delivering that but crisis of not facing the goals customers a an please provide on our With also we we are ambitious, industry experienced provides proud be line live ability our operator, providers. And the able unlike provide to

Operator

Instructions] of Roth [Operator line the Philip Your question Shen first comes Capital from Partners. with

Philip Shen

wondering Hi unit thought you On the questions. ahead. how for and trend was economics thought everyone. what slide, Thank you taking your my economics unit you might

We’re hearing already $X.XX freights. input an contracts having and about delivery to resi reaching module now poly for costs January aluminum, index glass, example, pricing like life and on mid structured are based for

everything X.X that just continues expect implied friction through spread the XXXX? as increase, that so and trend And you to do how

John Berger

happened nearing very, and and because know of and a different we expect basis that, that compress have date it sheet in currently obviously points today, because over balance high. capitalization take said I very were To much out much has Rob time. I not with. the else we John. is that’s the Phil, returns a lot. a we And think do Hey we to with that strategy – We’ve good that’s we to here this it that as do fact lot unlevered I has sit has news. a anybody than spread constantly compete strong that XXX the Thank there more, bit a and you.

pretty comparative. low. look all I of it’s clear cost at and capital Our is numbers you the when very mean,

drift that continue X.X things. just continue we’re that points issuance. do think right a securitization. months. see of you’ll doesn’t We cost couple are to seeing you some triple is cost definitely spread or been of really up and we in that strong our it’s pretty So, about notice we’ve the only quite our right can to after the closing got that But QX returns recently X.X, going or unlevered even to maintain, that something – of think and good that We visibility obviously capital, double to grand we attachment spreads. a the grade investment expect matter scheme now debt corporate The downwards of rise. traded It’s it

scaling We are fully that overall in that’s quite remember continue substantially. of then come dropping our to our going terms stack, And down cost to numbers. see see because these we costs burdened

as to only that of more think you this forward margins I these services indeed, quite it. So see so relatively gross XXXX. move And service as maintained we’re we into likely spread forth have as sell XX% and lot services, such in a

quite they’re for profitable us. So

more in as But others. move if will spread than to hang we profitable you expect you are Some here into XXXX. the

Philip Shen

you. John, That’s thank great,

gone – the for You into on see and saw from $XX.X about systems that billion. then or your have amount XXXX borrowings down capital that we went your to new talked changes previous $X.X the of the down go of potential up to billion. favor, in $X.X think going also the some more And cost I cost and the and slide, the up that forecast went in the in billion slide, liquidity notably –

especially talk net And goes see can you so cash a is in us negative scenario to capital that some from down? in you cost systems lines, that where why your up? down, go at as went $X.X see in Thanks. those billion to of XXXX change go And we of positive there new billion could this through $X.X

Robert Lane

this Rob. Yes, is

we’re going a seeing and up services. customers more for that is, in is lot So why opt one, more of

in a partnership battery and know, seen – a we’ve big you attachment. more we released just ChargePoint lot our with As increase yesterday

think we new market, adopt market I well. which were there expecting as a been was as batteries probably fast. that It’s to interest home of a not deal the great

X% side, on there seeing the grade little the on are cases going to what’s ticket up the the pick So the I think with into have from even on able anywhere cost, investment about funding we a able actually lower been we’ve rise. It’s in deeper of advance the part X% haven’t what little tried up costs not been really average going even seeing maybe the some stack side on yet, securitization rising. is picking then more, that the loan side, you’re as to we – But to the more are but go unitary been to we’ve really our happen a Phil TPO APRs on more we bit themselves loans.

would be So in But actually we towards when turn on I it’s out. that our potential mean our continue It’s to daylight able postpone lot the at [indiscernible] and we’re in which prudent things disposal continue actually aspect. remarks the that is it’s other to of of timing be to those the have first efforts, prepared corporate going But mentioned corporate direction we that are had And initially we’re think probably moving seeing that debt. a to as at number, the any would tools look financing to to looking drive need be to that continues a also the as opposite been number just corporate that we of again, new capital. pushed debt need use of at a our we new we anticipated.

Philip Shen

latest the of I in December. think your that for then that probably remarks last When your maybe might guide next it QX detail. see you of do XXXX Thanks Great. a you prepared XXXX your guide? in thing, as XX% guide, we it And one year? QX of XXX% mean, you as hit mentioned relates your to at hit you or

John Berger

or that we might get the next it’s year, the but, very as right? consistent projected So higher a – inflows. trend numbers the as Historically, the into you of has in high growth law of XX% going just and math, the cash year our projected been

I QX, XXX%. be only by like guess XX%, heavy. nearing past I things a would you’re So should mean, rate we thing are history. now But probably The of XX% say which manage right is that be based right would predictable. be something the pretty growth, that very on early very, there’ll we is my

lot there the would which we there’s We, of say partnership, the that they’re to and very, only there into look it eminent talk excited the on And say But year. give XXXX, we’re side about go you a and a also in ChargePoint. ones In on on fact, early coming big. partnership as constructive with partnerships. that I number that Rob next they’re could of more at There’s this very mention about very I But are later. know, we’re of March give would that growth. and we as we’re most guidance

execute have our and opportunity we’ll very more us out underneath after those So it’s to to and comes laid and have But I that. beat see aggressive. look that get here this we already out that and profile few expect do growth a months very, partnerships where growth to

So XXXX, in forward we’ll in increases see cash P&I. adjusted move bigger even I EBITDA you would expect as plus and flow

Philip Shen

We’ll Great. to it pass I’ll much. very look Thanks that. forward on.

John Berger

Thanks.

Operator

Your Kallo the line comes with Baird. next of from Ben question

Ben Kallo

Hey, Congrats. good morning.

I the maybe that the acquisition, started one talked home you talking had about followups. about the Just ChargePoint, and about as that but then of John highest how’s used like maybe did customer think changed, and two to you we ChargePoint, deal home depot then depot partnerships, in

John Berger

sure. Hi, Ben. Yes,

on you so returns we’re dealers, even we’re actually right. fairly partners, retail origination. our them. our your at The that business, our constructed, we’ve that other are those typically we our that working that and with when the do look channel. scores acquisition highest And The are focused way with your customer You’re is way –

that dealers a So paying decided the generate this more acquire additional they little I think we is bit with them and want to leads mostly, the home that growth that for depot. they’re candidly, those

really back to fairway. them. of my depot, early now it and it. And in fortunate days This company we’re the with well and feel do right is way it’s and there, to excited really be the it with first my So pretty mind the down solar was home

to nice. got charging So feel what and of things an on has are the think I of solutions interesting. it’s think you we We’ve is the But that industry. very way one to we’ve equipment. a neither excellent company returns a space think got partner. ChargePoint, in as that. execute But a that’s They’ve I companies has the model the is do got a great not – on and – quite lot On I exclusivity only in business this a other, right really, we’re especially nascent it’s know, here,

think folks of I a lot on that. focus

bigger But charger more going what for increasingly into in for a storage that have given and thing really is away is we’re we’re network they that, to a service forth, it plug home. that generates demanding us. putting returns we’re to to are our equipment, more good interesting that’s energy able and to and selling homeowners provide when into solar going service, travel do who our for We’re we’re they the be really so customers to going ChargePoint, a really also But looking equipment. so from the and

we home, provider all put for able it And out and And when to as pieces be year. so the customers but is And to I Sunnova customer this is It’s only together home. more really will be think your are it’s here get away provider, actually be this energy Sunnova think going our launched power – special at base. something next from drive and going we to going to not going well. really your more to be this fascinating to

excited pretty, we’re So very partnership. this we’re about

Ben Kallo

comes maybe up dozen than a a times. services think more deck, I in quite your remarks the in the bit,

are you’re is, don’t how pretty I us way understand of because but this to and what seems important there’s services different it types help know if a important so either? And highlighting the it’s

John Berger

we provider. we an see an We see software enabler. as Yes. founding That’s a enabler. see ourselves mean, is good service company I And as financing the Yes. eye a of that. the on as from

But all for customer We’re early days is markets plus money effectively Pacific. both places side. the on in in the we’re XX knew batteries as that that Rico service make other and part what obviously big we on Puerto most add and providing this financing like and about for the having great island years, we’re life, and we because but

where can no right. unlike go. to have see This it very with need totally same have And has start need that to better and or than not power to happens. easily a This is people provider, You your power experienced complex. different matter what on you experience, what is you monopoly I a what to be the

the power to and So We operations ago. time. expect you a five the our density ability given important and the been towards them when the customer this goes down, able base. we’ve time out, about people something service. give for an the response is how scale different long to finally And that’s you the working idea and the our is that of and The to software this be to logistics then kind platform from how of be And capability have minutes marketplace. to deliver of it

days but XX battery XX little roughly and solar for couple we’re days go, to only. or sometimes rest like The timeframe for never. confident solar a of we hours there. within about a that can to got hours get of we we’re XXX less in aiming Right XX XX ways than that hours customers with now, industry We’re is the weeks and

needs and be out there’s commensurate satellite closed that see tremendously so obviously, think cellular, something home more time et television to and a what there. We gulf cable, cetera. with And security, response you of would get out wide

and heard driving the there the And manufacturers the the that In we’re some storage a forefront the equipment case of up point, on to the of pieces meantime, services more and load the So new energy managers, charge equipment of point There’s customers. the hear amount services coming here number with calls, added systems, be charger, more you you’ve this. a et of EV relationship is generators, of in will we’re cetera. upselling point. on towards on ones lot that tremendous

was quite And so of very And about NCCB, we’ve clearly. loaded fully we’re out cash be borrowing at added services laid there of which we that we’ve roughly is shot and flows customers, a which should if pick sensory by inclusive about [ph] which midpoint. of X.X. a lot XXXX, our customer seven with fairway that all it X.X we PDX, that is feel from of services strongly, see and capital we to said, a we value another the per doable $XX,XXX, income to there We up down on doubled $X,XXX

$XX,XXX $XX,XXX between by somewhere timeframe. and So that

be another value Are Are against number it’s to number looking accountable per you so at batteries? of expect us value option option the of then for to And by then upselling executing out there we XXXX, company’s the think, NCCB the way lot services so, a the value value. in responsive equity, that EV load if of the will, times, confident some into but we of upselling we breakup the go and share, And we I as to customers with of service. adding upselling hold we’re and in am you’ll that. the customer what cetera? then and of managers, have Are a see all doing value we generators, I et lot to chargers? in And being going

Ben Kallo

going this have per up good the but going should see all you maybe stuff NCCB one back tick ticked last total that. on? the we I just two you. quarters, customer think up it Thank just with you last Thank for one, down is My

John Berger

other some Yes. And mainly priming on flows second. cash That also in is flows. that just I’ll a fund of let a a in Rob the tax but equity, comment

yet as right get we next obviously the investors we customer into in the the launching as NCCB up per up are some expect as it think does announce. expect to shares, XXXX. see we and that particularly do I the quarters, tick services per few for do a we’re to customer that customer additions single particularly for what projections just look have other be NCCB are batteries. more there, on – out I customer per to – out upsell not, services because the smoking We’re way NCCB of ticking over that to to If buying we share the the we laid then but us at But means that

already thing is it year, a and go battery to celebrating we’re customer be not so because not changing materially, we make yet. of batteries very into new we materially referring is expanding batteries, one want single business upsold we’ll existing upsold a starting So simply that any to availability that mean, this – XXXX, customers tremendously engage now. the that clear to that battery our our where I lack have existing I as and and in of sold upsell home is have we

So things it’s customer to on all talk as to upsell of basis per a the move want batteries, being Rob, about? we going up definitely equal. you

Robert Lane

there that quarters Yes. And I two think John on last much and first really sort we of number won’t I remember points a added quarters of SunStreet hit the that the it. the But two too were rehash customers. of

we’re because smaller as customers add systems. basis it’s those there a per NCCD because more is, those get did to but down turn ticket average just solar services just making mostly bring said, And And the they’re as there point systems the John John’s larger to customer fewer so to services, those just to systems. a size well everything right on

second without one timing much the pile. whip one the is getting too sausage just catalyst, really but that’s the our of into big making So

costs. as we’re progress, we our that the showing way carrying we’re the assets is put construction and So the that those to at NCCD

And service, And soon same on the tax value it has trajectory, into at carrying just itself. systems, sort the we’ve high the fact quarter. we systems the as batteries, those to in the quarter. all been we’re really on equity is because those we’re in service cash, time. of unlockings, putting the be this into time, given that accretive really uplift entire the them with chain remaining leasing it actual of which the our And fourth value significant the would of in As expect fourth do we a get system to of we the to supply uplift mainly put

Ben Kallo

Thanks guys.

John Berger

Thanks, Ben.

Operator

Goldman the Your Lee next Brian question comes line Sachs. with of from

Brian Lee

color the double guys. this the framework, – which new. questions. triple morning. Maybe is term, taking here. for Good Appreciate all thinking Hey longer Thanks the NCCD

going the you’re I year think end XXX,XXX at to customers.

growth that So just the more customers and XX about implying off to guide XX% XX% you to double you’re gave. XX in

quite then robust the out in tripling the even growth about year, but So you’re EBITDA plus talking P&I.

that’s in XXXX. on and based XXXX the close XX% metric then So another in implying guidance to XX grows the

leverage XXXX, So XX coming get NCCD, K bit to number the by but in, $XX,XXX midpoint XX a the as kind kind think in do that here, you months? with to you that some the additional XX where in to even of the of pieces has about about I out in today, and are what next I talking of little of can the where you’re to months but embedding are you’re in what XXXX is the interim know talking this numbers? gap sort does bridge

Robert Lane

of of services leverage, new we’re seeing of we’re spending lines number rate what that despite on increase – increased number amount grid bring new the investing, only Yes, Brian, is partnerships new operating customer, business, launch money the to an in of but of the obviously right. overall terms customers, sold not out per and fact services, growth we’re our an

So a cost baked been has these time, delivering better which structure. same lifts service and are the into experience, heavy all our at

plus you that to that customer EBITDA faster of I’ve than you your want want is rate adjusted So is P&I what quite your Do simply you always see. to eventually. shows said grow what see base growth

even, in has small growing rate, having a but little we’ve challenged close is or of high been We’ve near bit. help to been our the break that Then definition, operating off move much and forward. a and not leverage So as a lot starts a little law get us and a in having numbers that basically rather. to that base growth been the south of by math of bigger again, we as challenge term,

to leverage. and it operating we’re And experience of that amount what for of you seeing is this you tremendous a it, going exactly that’s we’re highlighting is gain we’re all can it. we We what us. out should know so And expect

economics of then the adjusted growth a but is should of grow EBITDA rate, forth growing number growth expect upside P&I the that’s that plus rate plus if if so that have pretty on good back Again, extremely less a customer reflected and the EBITDA we it’s about definitely there’s base. see And to the plus heck biases, customers very again the profitable to going so growth. per lot a growth a we adjusted feel EBITDA growth, any right So and faster and and you now at profitable and we’re the But to in quite more frankly of adjusted on in unit seeing, P&I, P&I. we services customer. the

Brian Lee

but having bit model to look out $XX,XXX But a K you’ve of over over I I at XX XXXX if of bridges today if you’re into talking next NCCD granularly years. to the the to guess you’re know on that little economics about out, though, leverage well some is the target couple dig the the I get that unit at more pretty laid the to provided time.

say doing are and by get you of the per customer. would XXXX, customers more your imply to that Let’s K management time storage energy X half

of at going we after to XX be unit think next of right two think into quickly to you’re of to where to start the you of but over economics the able XX, to amount these you’ll years? K trying you’re out how to a the to the as customer the a time sense before to some XX one color bridges that, by guess, K most go sort XX see sort is K XX, see these just move of you get for I materialization any get in to So the get of just some XX you’ll to

John Berger

a Yes, but there’s I it’s it. lot fairly think linear, of to variables

days, factor So that bit think a towards think if a escalation of load can by the are or the storage more strong have our that XX% so uptake move out at that we be and successful, would of and I of a We storage Then services and by little manager. of I so. But add on say some storage them see things. like these of rather some more right, we launch can rate penetration upper early side looking we XXXX, that on six, number. attachment up technologies other these will higher slope side, internally

selling think on I that’s So obviously you first and up foremost do how customers storage. execute is

demand another service demand be generators a a that needle is cash interesting about in and we mover, then could therefore charging. think but think pretty recurring I And we’re strong and like generators margin I too. not that way, interesting that’s seeing others, a pretty That’s wise see EV so for some certainly the a NCCD, flow. talked the big for lot we one these of of forth,

So people and as cetera, particularly panels, more get additional of inverters, et more upsell as EVs. do

accelerate. that seeing We’re

So battery, the up backup and will to fuel fuel if more you for power.

that. seeing We’re

at of fairly X%, a there’s we’re at you time, you’re if assumption. rapid So this a in from line cost paying think but in but bad gradual And to remember, XXXX, forward lot of discounting I capital a really rate. were that’s that I linear here, the debt draw not to think period end a X.X off a our and as you move the is

you calls be in to right, time in the forward between the our to that’s move remember that as accretive cash and discount the we’ll recognize flow, and Delta cost cash is actual in equity. something So capital else rate of that out naturally and falls

thing. another So that’s

And expect he should customer well to about part did share if and we to large therefore talked NCCB prepared naturally so that Rob’s is per remarks, increase as per over you time, even nothing. in

Brian Lee

perspective, Maybe de-risk, confidence. just from me talking much a demand you panels. high then I’m of all and growth you from chain get status talking also Last this supply about that happening of you more chain off one into a solar your How know because call. you. call All into on maybe giving late third supply but on visibility, on separately And a see you right. from I inverters perspective, pass XXXX that supply geopolitics what’s far visibility? obviously supply Fair sounded being out you’re panels of bit you’re more the do the given additional the we’re and surprised how Can getting where like out I’ll different of these then a started perspective, a all lot about about there. focus days it how around that have appreciate much for on. It supply is just better you And color. batteries, the enough. for detail? I the maybe Yes, better there. kind color. John, feeling And That’s

Southeast of So could supply makes as Thanks not can Asia overtime? you how from much guys. of your you level think then set to kind is how and coming that panel higher today us much go

John Berger

to I Yes, sure. chain a big supply Yes, was needed be topic. going

panels, So obvious thanks, Brian. and And storage attachment ESS causing shall Look, to prices lot as things rates artificially in moving you been of our and to We’ve first intervention intervention, a it, panel, chaos States. government phrase and pushing been I’ll divide say up every or is. a up. political one United of up that’s here, moved there’s we the foremost inverters at look when lot

more Southeast customers wattage out typically and come which panels, don’t higher continuing want Asia. or see of to more We’re the China

If from non-Chinese. given a family think the buy are clear is is cetera. fact to of number it’s the so members time, at from the in we any WRO, this countervailing that a And the issue, buy don’t panels if XXX, just we But duty about China point from dominant be bad which the it. is or not, et I

case some, dealers I said, the just So good have pretty some on front. on should that if deliveries we’re of look procured. that foot feel or We it’s fault were into We’ve got QX confident. increasingly now like secured starting going our expecting in to they panel looking pretty towards

secure We’re them panels. with making, we’re and them our those helping to on of dealers top working

clearly feel we about So pretty tight. It’s the situation. panel good

just, meeting pretty good industry, given the feel but we about where meeting as an sit. demand We’re we but political intervention,

a dynamic side, their have And come we more that’s compete. On the ESS strongly to well and going on of impact are inverter in managed to inverter that firms more it. in a continue inverters see real be market number providing by definition. and own going with And the providers we’ve got to

an the been so, the and seeing one, amount energy every availability. two And lot go literally you It’s systems storage increasing weeks. last into of we’re

And messed of significant hit will that’ll and seeing forward. warehouses given would we continue like happen see improvement I increasing hit which dealer’s significant couple We’re I deliverability would to things big chain really looks the improving on that providers schedules significant to any they it unforeseen do seeing we delivery particularly warehouses. our we and how currently, the market of start rapidly be think up biggest try price energy players. it as are far QX be the think at go those I say to sort equipment latest, to a storage, those lose costs have will our a we to share. as move or see more who it borrowing deliveries when issues, are supply player normalized, QX but globally, in a increase in raise

availability. more buy price. There’s not that more is looking their ESSs. there a There’s of qualified on So competitors and huge amount stickiness to their inverters, more for we’re

particularly as that get we in next QX QX think loosening is side a I up into equipment pretty and there’s the So year. significant,

Brian Lee

All guys. a lot, right. Thanks

Operator

next comes line Lynch. of Dumoulin-Smith with Merrill America from question Julien Bank of the Your

Julien Dumoulin-Smith

opportunities the are done that on what ago? good here, a and real a on all team. as on comprised the you pipeline time. sort kick bit those talked you here you can elaborate little guidance. Perhaps Hey, just of the forward-looking to plus much Thanks that for little really million things on services? nicely morning follow elaborate quickly so say that a Can the Congratulations you progress second on of XXX about bit through off continued

John Berger

services, the grid about talking you Are Julien?

Julien Dumoulin-Smith

exactly. Yes,

John Berger

get working break to bidding out. so That’s programs about, can’t visibility on, competitive hey, are everyone else are we are trying you those intelligence we and what to on, we right. Well, we

surprised the more and progress is are to we’re I especially And at mean, expect? XX. I up way we’d big dollars the in that and many a thought how a think seeing more there, then in of I’m lot with I’m what spot. these So as I this be on associated services ahead million never up. far got you pleasantly we’ve say, coming grid can profitability And locked XX how programs. looking we’ve made contracts programs I more number of much are way. as our contracts

money I’m them out but competitive give and window what to we’re of that. can’t So with reasons, for break I a do everything trying to is into what working you kind can associated I and on

we’ll So and hopefully have big wins.

Julien Dumoulin-Smith

maybe i.e. percent there your think does is of this is a at what or that And do upside of indeed ask customers, does what your represent John, that you it this fully an further point, idea more that represent way, to maximize that fully customers i.e. portion to monetizing much opportunity? how

John Berger

probably point I see, it’s these out roughly services. of that capacity or customer I’d also most representative, would that’s say XX% about are base. maybe I so our of XX%

energy well. to we in so ability And and as some cases, ancillary services upsell, the have

give I start So we’ll and moving, year. something in more is backlog. can it’s XX% probably estimate think you there’s that I services year, that I movement this. to I think But that we expect there the on And microgrid covered and that’s now. more which then there what front, looking microgrids next what following getting think done, Julien to top but best right the XX%, my I add of don’t into the have we have already have then by grid we’ve material on

Julien Dumoulin-Smith

It’s the what’s fourth clarify customers to customer almost that specific different quarter. there’s just then And quarter step it And what for of driving if small few a big specify, you can account for baseline going dynamic. I will? if What quarter-on-quarter nuances know is the you here XXXX, into any like a in fourth just it. Got XXK, this seems you’re something nice additions, this a you’re implying the off implying little to customer like bit, XX,XXX nuances.

John Berger

just XXX,XXX. somewhere Yes. It’s go ahead XXX,XXX, I little last and a about I, there, in XX,XXX. it’s answer question that. of think XXX,XXX think I’ll south And a the

the Right backlog one now, billion to in we us of our first a next have the of backlog that So expect, just have we say climb. for visibility the we cost. heck into contracts have And look cut we out It’s got of in work customers, yeah. it now take X.X year. good is, we that’s at what south we’re we’ll seeing

So of contracts accelerated a we’ve which up delivery got the the mainly held things, couple us seeing schedule already. what’s we’re is batteries,

expect that We in see [indiscernible]. of to delivery schedule more accelerate

And have going and source QX. customers that’s in didn’t to of so QX that we

roughly to about The a grow. And because think we is it’s that I about business XX,XXX homes year, that are business, having continues other people underestimating. is, the talked new

are a a of little you all issues, some customers. In been has sold book until as to the business supply a closed a month thousand challenged homes homes the month. those So than it’s out can’t the by and new homes. customers towards closeouts And as XXXX chain cases, the new those bit far and expectations, moving more

that’s from a delay So QX into been well. as QX

and the got but of And got we to chain working got all chain XXst at improvements. on We’ve hit number. it. we’re shape feel way supply the we’ll be hard it. So got the we’ve of to we good up But working December given pretty the want reasons that we like those in where contracts, we both supply we were in terms improvement the

through customer. and utility Now permission work the get it system the to we get and done just operate to get the to got the register

Julien Dumoulin-Smith

guys best you the Awesome. of Speak luck. I soon. you to wish

John Berger

Julien. Thanks,

Operator

comes the with Your Maheep line Suisse. Mandloi next from of question Credit

Maheep Mandloi

we well. guidance of implies in XXXX. look increase versus here. Congratulations kind the just in the the that around John, XX%, taking probably customer at talking here. over And morning. good questions XXXX on maybe here XX% for customer thanks new kind Hey, of growth as progress about adds XXXX If

that leases want growth. is about understand just somewhat and with to in growth mix similar and expectation line and So what’s of that the the loans that should think how growth market we that? driving And the

John Berger

the the there, color, you basically you four, look range, multiply give originating question this to get QX rates little but close you quarter you then growth on So we’ve implied and this the laid me a been not that higher at for pretty little times couple it a right? out growth ways bit XX, Julien’s you that that’s let If than in prior, quarters, growth year. at to look that our as for next of just my range and we’ve obviously last exactly out answer for I think more Maheep some what for

and seeing general So we’re growth, more a as we’re that’s technology our partnerships, platform. The forward, improvement we in Depot, and got imminent these Home number looking the our just ChargePoint, of coming

forth. picking and the customer We’re so more sold dealers, up of per number services

pretty I number conservative good think of a to we’ve growth done moving job being customers fairly off of of from XXXX. a XXXX

increase number in put, XXXX. simply from of terms, nominal a not that’s So XXXX huge to in customers

if be of upside there on would to both the and and these of per there’s it services number the any again, sold growth is, So customers projections the bias customer.

Maheep Mandloi

the fair at with say, But to it’s time? for the you your in of more that? it. kind market market do think line expectations slower this Got Or is than

John Berger

No.

line. think I it’s in

don’t out, years cash we’ve – think we’ve I out which laid two nicely, and think of I sources I anybody think I quite telegraphed does. else know even uses nobody

And across the really we’re earlier, to out know, visibility gives for Look guidance so to is trying it reference going we’re out as on this again, XXXX what there. else early everybody seeing get and early you more I year. this no

year just whip XX XXXX. double this so, NCCV on feel look this of looking end terms and backflow by So point we’re booked the of in of share our the is I’ve within up time. next That measured opinion, or back if is if going the years, where Candidly, of roughly really into we PDX sorry, in quarters or stock per you got two growth. now at months contract kind a you comfortable the two in that – means – already at right right, about

And we yet, the I policy, and a refundability by possibility done by that more can that’s to a you day right possibility the we prices pretty would that high breakup When to call. there’s reconciliation think reflecting move is had think the But we’ve PPAs. sit out leases the and to we of forward start this we cheap. see of good one I months. within We can would market is question basis. say we roughly on we be update to the move there’s question, which get. to out else deck, something what week, now the chance share into And a decide. low given is We discount But essentially loans. consumers that of this and that’s watch. can predictability And volatile, again and the like, got the on hey, argument out high that’s bias getting the as is the a a week it there’s no we day we’ll next look a hadn’t to so is yeah, we XX to laid Page we our I up. XX the degree see – and bill, kind a the value is laid the and to degree pay mid we’ve for this where on continues of is attention other And point that and say continue to take what know something now, that. side right XXs first I of time on look, for loan felt on your also that But does of QX their loans that what for folks On upside. definitely move volatile, of more needs where

at for return of capital, pretty who on of don’t So return and It’s principle and say, return capital been capital, it’s we’ve that’s no, about sizable. to of clear and those just look you want it.

million roughly value X/XX/XX, of and XX% margin, $XXX of of it’s about not about note. expanding margin the our of as revenue So booked face that’s

the So And instead profitable. that. you you take are interest, the OID on of pure out do margin. and We’ve that’s interest these and profit now obviously loans, quite a just principle can if loans the taking the want or of laid

little you a far hands So versus comfort modeling around as bit loan your the hopefully mix. as that more getting gives lease

Maheep Mandloi

color. appreciate the No, Thanks. Perfect.

Operator

JPMorgan. Strouse comes the question line of Mark next Your from with

Mark Strouse

Thank for much morning. very Good Yeah. you questions. taking our

to storage Just ask supply as would like Dip] attach [Audio the look trying kind clears have what been think the storm of XQ, to about here. in rate wanted XX% constraints? that Just

John Berger

Hey, this John. Yes. is Mark,

I customers. that’s first think all that on all, of

the in play little would’ve storage would’ve dealer on games we us. new a it for just So which would’ve want to I closer been was that record over had to I attachment don’t metrics. XX%, play rate, if a XX% channel games. been don’t

capability though yet, we’ll and probably have even upselling home start batteries don’t the just just we’re see materialize. getting into or I QX to next attachment out And QX the customers say, So we year added rate in, start to we all would that to new customers. that

that that’s of the suppresses XX%-plus on attachment drivers, weeks primary We’ve the no number So new that upsells at some that many and the battery time. have rates had this dealer customers in point only homes channel.

is moving that up. up that something just homes to modicum So selling and you zip get batteries clearly it’s to a of customers rate’s new storage attachment going

interest to amount battery. see and continue of we consumers in growing interest from lot of So a

next move on storage forward attachment becoming are more in we few the the rates So and constructive even quarters.

Mark Strouse

know Okay. then a football John, you’re Thanks. I And fan.

five, you rank that’s past suppliers cusp but been been question number six to chain your football, want I analogy on supply selected that supply But obviously playoffs rank in got company about number are as make kind four teams of about So a left good the out. Thinking year. every teams well. college to So your ask as we’ve the as right? you there’s chain, the that an a

in you weigh kind Just Do year, against to chain that’s of that you supply inferior change given how you past potentially over your by product that potentially happened do do a the And chosen hadn’t that diversify past? you look adding more? approach? everything the how

John Berger

that. things. well. would start it are I inverters Okay. to then than lastly our with say, Well, and on storage side panel show up and I providers we’re with the with football systems in can and basis, even don’t I But more, equipment a manufacturing I’ll analogy. if really know seeing into try wrap strong haven’t that side is the some global Phase business well supply Tesla, primary better that ESS intact. that with doing the and some on that this of Generac, to the with answer on been I ramp that up SolarEdge, would I in say chain say get as into would are relationships others energy

in improving this into some as the that their the and business, chain. get Tesla that’s numbers case I do and be talk clear are you that microchip bit of by others And to doing deliveries you Elon see ESS expect their And reported. with expect late struggled can continuing But continues a think ironed to very a it’s of but and case them to would have quarter. pretty And well they rapidly see to I flow business. therefore that their then, been that let out. indeed again, own I’ll supply

immediately. We’re up ramping very nice We of close products lot start know that well. it SolarEdge. that got But with Generac’s really will out. as got to are want particular, company strongly very eagerly coming a out, that And anticipating in new products with selling there – they’ve some dealers some

a out. a doing as to continue obviously we’ll purchases inverter we micro I move think substantially have and they’re XXXX. increase into They job quite that coming great our

as We’re that very in interested well.

so in well financed companies, terms very very sheet. these are They’re financial obviously well managed balance companies of And capability all companies. and

are by Europe. with even and see don’t we these problems in themselves some large and Asia companies others any equipment amongst the So fairly that

they can go So have more qualified and through highly manufacturers, a we to buy. process feel we’re to that great we more on but comfortable rigorous that and that seeing our we’re equipment feel making we get getting available comfortable list, equipment our equipment very AEL, good

more point increasingly those years, industry rates, other substantially increase and are to solar storage, lower time. pressures. and quite change in gas definitely this it’s to think against terms That this price lot past news I we and few business consumers substantially that’s a of given so this cost cetera And at et juxtaposed which prices great people utility in thinking will of in prices a lower the grow overall much years, have than frankly, the a obviously against and expect for next from few higher in

all – then saying. those and – be So equipment in also to is more And demand. part what decreases we think some equipment consumer will we I’m but incent need that of some pricing that more

Mark Strouse

you Thank very Got it. much.

John Berger

Mark. Thanks,

Operator

next Karp KeyBanc. Your of comes with Sophie line from question the

Sophie Karp

Hi, you guys morning. me? Can good hear

John Berger

morning. Sophie, we Yes, can. Good

Sophie Karp

question. Thanks Thank my taking for you.

of couple that whether Is are point with issue questions how loan of have. a might you outlook? at times utility Can this that here interconnect your little Just it a in for you bit your about you markets I anywhere? experiencing talk be impacting an and any

John Berger

little been question. good one in and in have PTO. the feet interconnections. utility little some two it’s the California here of Southeast Sophie is There’s there. a out others it’s a bit Yes, one Northeast. in the and or up A dragging some bit There issuance sped on their a So But up

pressure others days our convert We close lot it a to three about little as a in service operational are those can you And but PTOs. two, a to those weeks. talking on also in could We’re apply so do quick we’re of job as end flip That and on. I gaps. those better being putting watching and dealers, such then matter more system PTO well et as to for too, the closely, doing grant to on we’re industry, our of utilities side that, the cetera, the end,

the impacted So a improvement you drop of If pandemic. we’ve bit, do if on will. first last amount not our that have to time, anything, we’re been in got little certainly huge of a second number and fourth initiatives that quarters, seen and over change. we heavily a bit of quite But some side but a a there’s by the year the third quarter and and of improvement the

Sophie Karp

And Thank question of it. equipment you. mentioned the other kind Got then John, my landscape. on you was

to ones that thought if process currently barriers switch qualify have You stay out to number equipment to about various it new can you about around or once offer what pieces comfortable bias supplier Could you the existing they your there’s product and maybe your and of little that mentioned a of how talk their sort is than is kind an you price you a hard there’s use. of bit that roll for a you here? cheaper you to will, suppliers if and shop of kind your of, of talk with seems growing

John Berger

And that very ours right. just service. to off, ultimately. it’s similar your a I a being is a much that to your Yes, there other provider. so industries where is disaster frankly in strategy growth open basically lower an scale and platform an are basically world want provider be equipment we’ve to that business, and service your know you Typically getting to service if led inability close of strategy into had you equipment having

what business. things. doing? most into then have integrate they’re of With those think around more to traditional way technology that and the open example technology, of of and capitals best that we seen as the inverter industry what and And to that And upstarts the more up a with there are side so that is micro this keep about some is flowing it new new recent is into global new you partners, go crop is the particularly firms, mind. said, world. an that acquire this, doing And firms those Obviously, Generac

well technologies different forth. management solutions J box like as companies we’re or are of but new traditional are some these in and Those so there, some ones well. to out so digital And out very coming new electronic load cases, the load are certainly also open technologies, manager for with and

it’s become we keeping think comfortable, to I looking rigorous testing. an see through so open mind and go And when we

that engineers that have for We on staff do us. here

financial then how product equipment, capability, both we good look is start their quality And so new out. at piece launch of the once of do right. we ChargePoint and that. their a That’s a to example become we’ll equipment comfortable with

their and to service our dealer If that platform with our our software that things. partners platform going out. us. of side network of there. depending it’s those can upon get to a that business, be change we’ll that be equipment not into in and with if it’s favorable, That primarily bit, fairly, what to But then equipment to think we’re strategic stop with we’re So core decisions buying the very equipment may plugging into group launching rapid partners stick on make. going the try I a it’s software narrow And

to switching if is speak. something the So, actually capability quick so decently goes awry,

Sophie Karp

Go helpful. ahead. very It’s you. Thank

John Berger

Thank you.

Operator

Raymond comes Your next line Molchanov of Pavel James. the with question from

Pavel Molchanov

the question. Thanks for taking

the the of industry? reconciliation looks from among extension duration installation that for on, we maybe things, for XX across on the like, with would ITC So, Congress, tax Depending particularly learning any have therefore, urgency the and happens supposedly extension, XX, and in are or you XXXX let’s hours the XXXX impact the directly of away credit in say, what solar. other package that what

John Berger

sense recently some Hi, done sense is, as Christmas is week. spent be reports definitely clearly of next Washington challenging naysayers just, over my is New Year’s and Democrats really and to days our going as some XX to there. as the something to few last a a going need get in a the few deal to Pavel. days there’s hours that this something always. I’ve as trying time a and company between there’s I read ago, do actually do that’s I And here. some

at a is plus refundability, less storage ITC XX-year And we even tax I it’s the sides think I than few clear supported. very credit things. investment way aisle, by XX%, the think strongly it’s plus So, both ITC, that days. And XX the of plus other on that see

We’re the also strong supporters suggestions and subsidies of parts initiative supply these manufacturing different in module a chain to the domestic manufacturing particularly States. of of locate United

that going to strongly going gets so, some. of probably think [ph] as And I the get, not of And is reconciliation. of the bill. that be into It’s proposals Senator we some part if support all Ozouf’s

there’s So, for I going that a you the be little angle. demand if the federal very pull to forward think from will, accelerating pressure if

grow a I Does the need business what as right of and your I know. answer industry. in way, fantastic to we’re fully never question cusp change. on actually and think before, the climate had that the that. have which the for in way it right And to the the we’re industry grow finally is getting you no? deal long We’ve is that fairly going or We runway think with to

Pavel Molchanov

Right.

stands I So, law currently XXXX the for scenario, that your of scenario? guess urgency extension an the guidance of scenario or assumes what kind

John Berger

scenario. An extension

pretty you laid were you if runway long finally. to than we’ve on I the higher XXXX. what ITC, going again, the feel surprised, So, we’re a be are tremendously But out comfortable would growth for right, get very

Pavel Molchanov

United Okay border directly have earlier, understood. issues? One alluded confiscated that shipments more had chain, the suppliers, States with some into have the or of to of you complications geopolitical question any modules, the because you otherwise on forced the any work or blocked labor supply they at

John Berger

our knowledge. to not No,

Pavel Molchanov

Okay. Clear enough. Thank you, guys.

John Berger

you. Thank

Operator

from Your the Sean line next question with comes of Morgan Evercore ISI.

Sean Morgan

thanks guys Hey question. for taking my

the have, of customers is distress as to function of or FICO portfolios, that my probably just think guess be workout of But think customers did So, is Robert, you on high scores different going my for first question I obviously tranches I great with the the kind have the guys the obviously a as of guys And credit large and three just there that interest you ratings question mainly rates the some was three in securitization on achieved. portfolio. tranches. I sub three to it’s

retaining your like investment that on sheet grade to guys you tranches? So, is those are balance there support tranche a support effectively three

John Berger

Yes, absolutely.

the the what’s loans retaining really portion balance those driving sheet, significant face We’re value of of a that’s ROCF. our on

customers we not becoming delinquent, but go when than competitive as earlier the that in those we unique. the and look get information And of to We days. from incredible and collections else that they do been things securitization a do within than pretty half us become which the do also on defaults on, keeping has that’s anyone marketplace more only delinquent on default we’ve the actually we allowed that the which they One or tracker is taken when they’ve recovered account that well had industry, those customers, XXX at marketplace that securitizations.

delinquency been FICOs very for already to There very strong do had is data FICO probably is will some very the record receipts what while higher who And which we So, hold good FICOs actually lower to their the are strong. that asset track an really been there. industry. default little less we’ve get a is, we’ve coming in class with out that’s score. of What a our we that just try advantage back of we doing is find an that bit have a

not conference really it the the We really on product. the loan whole feedback service. industry. getting are this if remarks, is, prepared back the the that’s our with the goes we’re that within to strongest, and is all what strongest theme And among And call which

positive think it to we sure sure squeeze to asset making margins, more the actually and power, that make competitors great. the And whole make virtuous very have beneficial we thing I class, service continues and they’re more investors but make interest we to it’s and sure that well We the happy, customer to the the class. to margins. is producing on think obligation as up that we that focus ability customer and continue that’s that’s has pay the asset the to drive helps our their moral is squeeze into systems sure our a of for all because Just

Sean Morgan

the grid a customers would as that think they back to Okay, thanks. storage guess said goes X the cost? more the John this and I and offers sort do they to And solar that a of that I like remarks, it second then all probably the homes next isn’t like, would adaptive prepared see would in maybe guess that? like states you would Slide question, solar on I and also charges, where SRECs charges as impacts and battery, for net quite at Florida strong? be and either do And centralized for forgoing that or if they homeowners additional And stay that grid that were want have net despite that connected despite metering the almost are redundancy something the they incur you metering connectivity, Is the look asking or option not. to even grid to they

John Berger

with again best look to the good all Yes, we solution sort system the of same the that think the the there’s transformation terms the countries, of in and integrate to our in vision for a States other and as be and the things resources here hybrid is United decentralized to settling we’re And industry as clear, a and be Sean, of forth the out business business we think everybody power that’s starting centralized is to far models centralized energy the so basically decentralized. of approach where between going that in question. and are

Now failing that the there not the that? the more centralized with to to and demands able linear the and fashion. be are is said, and of demands more are those more service more off Because and times. is run know of power system increasing Why centralized

no even to because the I outage that. behavior And same you’ve is climate that of of basically is is right. change, more this to the consumer And know Aaron and material the Generac see change taste. that and has consumer climate trend. behavior some change except and change. behavior the consumer nothing and change that causing and sanctuary, for calls And and a has climate we that home as do is decarbonization, it hours think they’re and everything a where fact consumer seconds due behavior certainly of of I is thing that in about heard accelerated behavior from digital, change has the become longer a few few home outages, primarily work consumer intolerant and pandemic due also and demand but to of tolerant is the materially changed fact the it with change of

simply home often So forward grid be put, for move reason. we time, off than run as and is because grid, the more in to able to this not not whatever needs the there

the this profits so of ungodly reap run consumers. and punitive grid utility and of have strange got reason, could folks on an to them off really allowed last and egregious home fixed if just number a high And continuously utilities to for very charges the piece some is public a the commission

– that’s You last example on I’ll Arizona customers of charge reversed recent night, a out been to done very that’s the happen. going demand I a Commission before. only hold think Arizona never don’t Corporation solar

really we the about, With our California that of applaud lot need And at consumers that’s look lack about industry gosh, look a that everybody ACC. forward we for technology other improving. So but the And so said, I leadership NIM the cut of some for hope and to speak. issues, to to victory talks is cord the talk tremendous.

the of [indiscernible] lot to gate a able going grid. heard runoff phase yesterday, to You things enables coming have and he’s in that be good homes how to technology out about from new

You’ve with Generac. got that

that Tesla. with You’ve got

with that got there. You’ve others SolarEdge and out

a be So to don’t you’re cord, underestimate service obviously. able have may to technology us as strange. the sound to consumers It going need cut and provider like

will. may runoff we’re grid some are in have that able of nice on that keep put the play homes dominant we technological customer centralized of not so continuously that, Day all have We or Analyst to being too you initiatives all country the check the nor that see the that’s not the we’re and that, as have customers of and we certainly guidance future. of going sort any that best. what power a integrated, in even see but going betting if and more us growth And we hold, forecast an a service expect But capability together to decentralized would and or and we utilities examples around type the distant serves

Sean Morgan

Okay, great.

right the point. consumer I it’s level, now residential actions really sort So that a this an more utilities but anti-solar at are of trend at taking offset not guess any of to risk that

John Berger

fair. that’s very think fair. That’s I

Sean Morgan

All John. Okay. right. Thanks,

John Berger

Thanks.

Operator

next Peters David Research. Your of line the from comes question with Wolfe

David Peters

guys. Hey, Yes. good morning,

of home, grid some Just to if your sounds again the of are energy do trying but will, it like, suppliers and management the your on even similar think Sunnova services great Slide peers things. you I some to sort X, the with be of home and brains of adaptive

confidence maybe of you’re what and can kind So today here target? edge being that your to to by providing to services able the double in you is just talk in of kind this that arena XXXX execute effectively currently

John Berger

Yes, certainly.

centralized know additions, minute, I we’ve that have wait to naturally typically and are as need theirs, foremost, first these pieces not always or current some, running with is seeing a So just what reality the more choke, quite cable television speak, to a we’re that’s going from monopoly, here if And security And and service I with cellular of monopoly, manufacturers consumers what different provider the seeing. I not consumers complexity go of battery every companies, throat on or right. equipment. to one all I of that, is add different service and equipment to even exactly equipment than do. to you coming be power was like reality So of this The all a I bit one is a is piece my if right? seen be service or so we’re those that satellite provider, wanting a the home which what want

go software seamless interface enter different It to consumers in us to and an equipment also of So is interface our service. job to manufacturer assemble for one of pieces with to into have software. will deal on and single be a app

your highly have to a service be and look that at forth. It’s question production easily. estimates be maybe, are you a problem so very it’s understand able to – got billing problem, interactive consumers to if production am be something a going to I’ve So very going and going

got, think in we’ve Rob is reminder so loan The is customers. of it have it earlier, over and to an one and just have may again, unique one And but will trying advantage interface a of in even our so. advantage a mention have I manufacturer the last that we remain think don’t contracts, to is, with terms us, single this single

contract. built in the service the We the to have customer loan

services We grid loan the also have built the contract. in

the the of an made as lease we to agnostic see our enabler loan. truly customer. financing and So the PPA And we’ve ourselves relationship truly with

So customer. That’s it. basically the the we’re the only a that has value with one contract chain in

an up question, – we others significant enormous to demonstrate gives to these have things. away EV the enormous charging don’t our that home, – I a and that on as from we hey, on battery, over the the all way would like the it. us to you our it’s customers. asking add job back with an out plus charging continue couched customer and leg We are there, to so just you’ve We different service a like like huge leg execute feel and have disagree advantage would but going them, you to the anybody up And add an EV we advantage a – on have to don’t you

David Peters

Thank you Great. guys.

Operator

line Partners. Osha Your next from question with the of comes Guggenheim Joseph

Joseph Osha

Hi, there, John.

little opposed Just third-party a to to on to that that going ownership. to to I the cash as bit. think return we’re tend value customers to drive fact the a policy have trying pay would own would monetize issue their to

then on you can might just a amplify I’m why you third-party wondering and if little So I ownership, a your have comments follow-up. cash bit pay drive think

John Berger

there’s Joe. different Yes, Well, two types.

refundability have tax going most ourselves, the but simply would isn’t scale the pay PPA. tax providers equity it’s obviously, obvious, like to it’s more, geared this And commercial more equity would think is not you or lease or likely the utility come the that maybe cash just towards the folks this that don’t enough. will, to access in I is go so-called if the ownership be to

referring to mainly is so a was That to is another that out different There be is direct And refundability part have of what ask code. I that’s consumers to. there different the ask. a get able

period including they and now. treasury. including was fraud, grant service me, XXXX think on, the have staffed then XXXX of treasury And the but lot with XXXX than from too problems – – much slow of job this are there payments was on back based relative many the the very the much I again, and – period may was to years from may time, I their and a better

experienced, I year. this think personally I’ve experienced all certainly we’ve that

problems treasury a And an the making to from from And that. lot service and check There’s amount sure so sure a with problems making above a the of sending there’s timely individual. that’s basis. of board tremendous out that’s done on

a a create working doesn’t or it contractor. So individual for problem that capital

So for that I don’t good think idea it’s reason. a

I whether go to and check balance to but to get you’re need going the XX% better directly, importantly, happens, to somebody with you’re of have going regardless, think more current need is think that construct, in things going lease we financed see going we’ll that and where But a are it’s what refundability service. done to, PPA.

we’ll what if about we that will think the on I matter to the, see anything full refundability to cash side, yes, it’s PPA more on going likely So feel happens, lease if loans. have versus no comfortable a it’s benefit But us. you refund,

Joseph Osha

also Thank And seems provisions. are then you. some in like stronger the Okay. policy to we wage just get front, going prevailing

on IVW about this I well the done the to think around. think you to seems time curious how I’m have as your business. and pretty that impact

John Berger

we large amount. by which exclusion do isn’t everything underneath a covers There a megawatt, X obviously

answer. So that’s the

Joseph Osha

survive? that megawat think going is you And one exclusion to

John Berger

Yes.

very I impractical. think much it’s

in we of an as the I’ll that. residential point You There’s very wages a pay a unions for out don’t industry. see lot strong that lot just market. reasons of

We’re been living about good our very have sure very making interested some, then a in people so industry’s and wage that.

clear And above like wages law what so to of pay It’s quite increase I demand don’t needed. most pay. sort industries feel is or other way that any we

of the think I terms but one that out. megawat stand will in So, that carve

Joseph Osha

you. Thank Okay.

Operator

line Your Scotto Capital RBC comes Markets. of next question from with Elvira the

Elvira Scotto

taking Hey the everyone. Thanks late. good for question this morning,

intermediate latest brought news if my And quick thought any little great maybe the of thinking detail, you last around for industry. metric three And I’m I question, up Can for within certain you term, that any last provide ones Thanks outcome can is just thanks So but major then plan. provide was all then metering the me. us X.X for growth your plan, that finally, California? like that. of the net for dependent detail, providing a in that you on glad Arizona. night

growth see Just on rooftop solar in how driving thoughts Arizona yesterday? with announcement your that that you

John Berger

Certainly we portion, XX%. say, I’d it a roughly have good call

Some bit of months for California – origination a origination. little is all in our higher of our

months as lower far I a Overall it’s than XXs less bit Some others probably in with we is than say basis. I than space. say else that. have. half lower would that a mid-to-high as that’s quite than waiting is anybody compete customer that the would on

exposure you will. if less much have we So, of

and very support thing right for Let me going such a clear, there’s groundswell think the be solar. that here, to California’s I do

they you look think, country. it income care do be anything in income, customer in to of for. And highest the the asked our that’s the same consumers about anywhere I if a California do of because it’s the average rates some at moderate a complete disenfranchisement particularly savings, of monopoly utility customer would utilities with close with

So I think, to commission’s going the I’ve very the clear and right about been it. do thing

more utilities. and will rate think money will so the the go to offset flow I down

best us call of With now. or can point hurts be states, in utilities. That’s, right can a think not the something in of we continuing will severely that’s even that and within our the said, in it the months we’re appropriate, to U.S. – that, top all it’s to be probably all on the we’re going growth I do but crimps that opinion. You XX the to or diversify tell industry And wind as out XX that, territories next as less. going we

And so we’ve continued quite to diversify our geography substantially.

came more there’s that a to the something with line, could worse incremental great and I but some Arizona, the were retarded the Arizona. applaud have growth, we’re There’s be burden’s mean, growth NIM we if pro-consumer think bottom still I that see that bottom yes, lifted Because going the line bias growth it’s on the sold but upside or laid how And of the at they I that what I the there. mean, growth again people trajectory it’s anything, a California, services in if I little fine think a be if we’ve X.X no and to definite bit, folks, a now higher the is expecting the what and position. to of for Arizona, customers out. down on a the I number is, next growth able more on been question of So, This as years. going in either for it than did. know even we’re growth. think that. of couple we’d much terms in don’t be about customer of And quite to that’s commission again, off in

basically seriously, disenfranchises the in them I gives a their need choice of when you very we’re changes that it people that commissions much including look put surprise, to one. California, the them obviously And about on very other think So something lot good a punitive very less experience given and a technology was energy, at particularly seeing.

think rolled you’re I bad they’re there. those examples Arizona made, had what when choices out are other Nevada, seeing you there’s is back,

ought more the potential we folks looking that some regards to that rather to think be positive side to I negatives of the as dwelling see don’t than things policy, So, of happening. on

John Berger

Great. Thank you very much.

Elvira Scotto

Thank you.

Operator

with from line the comes Richardson of Truist. final question Your Tristan

Tristan Richardson

morning good the implications. guys. on appreciate Hi, Really in the and comments XXXX, all GCCV services

at mean, of drivers, outcomes? services looking between customer. I of the ticket Can some – that potential XXK Just XXK rate CCCV slide, about items the per double range we that get in a biggest but period versus forecast is it and potential talk say higher you assuming of maybe I there? of in some higher mean the mix would in simply, is of over that outcomes mix drive attach a smaller that the the said, seven, of storage

John Berger

the earlier, base on little of what say so, this see a would end Yes, roughly storage by XX% a the I rate but first XX. that the bit one is sort of that that penetration

So that’s question minutes. We few a Julian grid see that a lot to, big asked a services in the driver.

big a I think that’s driver.

a management I on lot may margin, for cash provide side recurring think customer pretty EV service interesting, charging and be the per of us. will flow be but a load high it’s certainly NCCV could not increase, huge generator anything

again, we in forward that debt. And And regard. time it point we then pay reiterate our in to the move so and helpful that be rapidly could off as certainly

obviously to those. naturally negative improve we the customer per per on basis of a that none a did is That’s basis not So going calculation and on right? share debt, if

So going there’s with rising, think a share, we right, that’s Like where in pay also be and counts, a just been to so. you off just or of, going the NCCV this rapid if it per as but on natural time we $XXX in have come which is roughly million move will, pay to much customer year, basis north our really per I call a down it rising Rob forward more debt debt fashion. on doing, floor,

Robert Lane

still Yes, it’s less and been we’ve increase we yet the that strong hyper that And the principle faster issuing increase are fact debt we’re that and loan the regardless. company and we’d the able had payments is by of irony really before. really And to the down driven de-lever to the naturally amortizing able bring air it’s payments.

Tristan Richardson

to then that the That’s comment Can on tapping maybe include helpful. you, of retrofit XX% how And maybe, the going guys. get to penetration need up that the of sort follow up just the opportunity. to you that terms your base much about you quick of Thank existing and back in presumably do does there sort retrofit penetration, frame last XX%?

John Berger

higher math Yes, all, a right? it’s of on that it’s I your Yes, rate the the means up goes existing attachment less then that on combination need origination, of think. you lot that forward we some our of a a of But, XXX% base clearly origination to buy years. attachment storage and for on service. forward see our right rate been basis market, a it’s demand have So

And haven’t demand seeing existing booked we that of contracts. into even customers so we’re just frankly, lot from a

going and we them upselling a that delivery back and there systems. now ESS We’re good actual of and, very have, signaling in now

next is And a per is see is can uplift customer. terms out One in big our upselling be not of customer part that point of that we so account. I’ll storage selling, year a thing

So customer services customer and list because increase, sold we in track this NCCV picked as per not would out but or be count customer, of is per that, account help we that. share to up just per our customers part the

lot started excited if to and will. effort a we And back a something in out you significant our year. demand pretty we we’re see of into and terms I ramp laid today. upselling we’ve start move a of forward not necessarily of amount opportunity, that’s So been growth has baked for, go up that see pent-up what And in in of terms next and lot so of existing customers as that upsell

customer get existing call, lot we the on into But a on storage further uptake as be year update to we’re as suspect far earnings base. the we’ll as and front. So good a next get I of able hopefully of to going the say see that strongly upsell

Tristan Richardson

you Thank guys helpful. very very All much.

John Berger

Thank you.

Operator

like closing additional the Berger to to Mr. turn call back not would any I remarks. or for

John Berger

we’re joining Thank interest are it on And and appreciate Sunnova, joining us we’ll so what’s all And, front be rate on to more consumers consumers, a you, new natural rise in providers to increases for of laid will strong anticipated year, see We’ve far but particular see obviously and Houston, and a years. the that good call. in low strongly few a rates. nicely. side to year. have couple competition out very, rate far continuing We in the environment. a Sunnova, quite Operator. the like that. retail industry key monopoly, a out. cost executed is the for the Thanks going bit, we as as it’s a as are We’ve premium, compress supply and next y’all, be getting patience it’s have risk even of the more to I gas see power row more as calls believe attractiveness against opportune to rise for we And a our seeing is And risk it’s see very in of even everybody power we capital Obviously options that that and over with point as things. why we real overall rate things and we that? We in that going retail looking equipment the to pricing on that we increasing. service This continued free the seat in oil industry industry. in for constructive be I strong not want longer time for expect very time. Sitting we the particularly increases see little

and out to I’m we’ve of the the need a being And our we’re more seeing vision we per have on interface, the fashion. therefore well already get one on to are So lot equipment one very services there this strong lot issue what going say storage be proud that. to that a visibility future. be increasing, of overall past to to an that more laid not that’s with energy systems executing the Sunnova’s industry service we’re see And going And customer but of timely for provider turning They available way tremendous and a and a consumers to in in into not laid service. a out going in too future plan. is distant insight

forward joining look seeing So again for in Year. New thank you us the you and to

Operator

participating for call. today’s you Thank in conference

lines your disconnect now may at this time. You

Sunnova Energy International (NOVA) 29 Oct 212021 Q3 Earnings call transcript