Sunnova Energy International (NOVA) 28 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Rodney McMahan	Vice President-Investor Relations
John Berger	Chairman and Chief Executive Officer
Robert Lane	Executive Vice President and Chief Financial Officer
Philip Shen	ROTH Capital
Brian Lee	Goldman Sachs
Julien Dumoulin-Smith	Bank of America
Joseph Osha	Guggenheim Partners
David Peters	Wolfe Research
Ben Kallo	Baird
Kasope Harrison	Piper Sandler
Maheep Mandloi	Crédit Suisse
Sean Morgan	Evercore
Pavel Molchanov	Raymond James
James Bardowski	GLJ Research

Call transcript

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Operator

Good morning and welcome to Sunnova's First Quarter and Full Year 2022 Earnings Conference Call. Today’s call is being recorded. And we have allocated an hour for prepared remarks and questions and answers [Operator Instructions] At this time, I would now like to turn the conference over to Rodney McMahan, Vice President of Investor Relations at Sunnova. Thank you. Please go ahead, sir.

Rodney McMahan

operator. you, Thank

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

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

John Berger

our excellent we on we quarter strong our Despite noted found be summary made goals macro-economic expected a previous our that posting XXXX results, as financial progress persistent by capture we first the first of call, goal. loans results I to ahead the the to collect from full-year earnings interest target, XX% Adjusted for solar in Slide with EBITDA, On quarter. happy against of we X. can year which headwinds, that financial am principal exceeded approximately that and report combined we were actual of

that in summarizes line battery in added been compared array approximately year. Triple-Double Slide Many stage first X into to XX% Sunnova's expenses network. incredible first of full our our and the XX,XXX quarter are growth of Triple dealer we opportunities the not baked an customers, in of XXXX, take While the find to front of in In the and increase quarter profitable customers, with of growth evolution penetration, advantage plan. are last of increasingly us. increased have they at these opportunities our intotal, expectations, of necessary this have we the growth

year still years, additions As to and our we in meet expect to prior XX,XXX. additions our XX,XXX customer customer calendar expect to XXXX the we guidance of throughout escalate full-year

the This and services our demand services electric strong increased accelerating existing we for services, energy solar. sales such and new beyond demand includes experiencing demand vehicle to addition customers. for includes as, load In energy solar generators, are to charging, managers, and for both batteries, also

services Sunnova also the It solar are surprising their us. value a in to our to with these generation seeing customers. from customers rise the We is surge "up-power" full its realize positioning or that capacity is of ancillary option in demand types increase of

our services to our to turn end While of Value XXXX. or of this closer count, customer, customer will our activity basis, NCCV will per per by $XX,XXX in moving not increase it us Net our NCCV in Contracted per customer a increase Customer unique on $XX,XXX customer and target the

software to importantly As accurate XX, XXXX, we our To total of adjustment recently customer or period deployed This XXXX. XXXX any guidance customer not modifications customer properly did business, them. loss for was This has specific only analyze XX, relationship are are ensure resulted reduction whom and driven for and analysis we as ongoing provide was the any X,XXX count in a fewer one but to was March our reduction was data. ensure by or change services honest count, number This nearly an December XXXX. new in rather of NCCV this in customer customers have Sunnova in to per issued as reported our to a tightening in across blended of been than definition the regardless from only what once, we economic have customers not of of we customer any with customer in counted account most require to appetite, and decade previously an to homeowners result our counted we of NCCV and $XX,XXX.

its us count will created new through to more value to industry. one per was accurately increase little consistency more understand Since that base. the new to drove there these We disclosure a basis customer industry. metrics basis, this the the increasing continue is value flow up residential allow typically of public, being per "up-powered" per driving Management has with gone non-GAAP focused by growing solar track, Sunnova installing and as customer Additionally, a across energy previously or on services. well "up-powerings" on in coincide try addition we that stringent on definitions is that customers share these the customer It customer overall unfortunately cash as customer in adjustment. transparency

accurate that a encourage way strongly We result, As know that make of or sure providers creation. a of customer customer than value some same all of service our a an our stockholders definition. customer determining investors more and residential we the our similar of definition definition is gives management but energy to conservative use peers,

days rate on has origination been drop battery XX%. issue battery in over attachment was a first rate our was attachment origination our the on This attachment battery as for was unexpected timing XX%. Our XXXX rate quarter last the but of XX

we Homes March. to life battery by as reached our battery driven have delay importantly, was over of a as is improved in XX, a date. as first and and grow Sunnova planned, from XX.X% surge our continued rate battery March volumes to X,XXX this penetration under-writing installed northeast huge of XXXX, supply our sales retrofits inclusive Much the New in more The region the sales processing timing and by quarter in issue caused

March homes by rapidly as XXXX network sub-dealers, our expanding dealer which and Our growth XX, be at continues dealers, of installers. stood XXX to driven new

target We months. dealers X,XXX of expect to XXXX the in eclipse year-end our coming

X life and on contract cash Slide updated expected have our on Finally, information we customer inflows.

to XX.X the million. last to years customer in Earlier steps expected and inflows taken months next we month, report, second strategy equaled over the the XX, ESG annual over March contracts ESG published has twelve life XXXX, on contract of months detailing the reporting. remaining the As we weighted average cash our our $XXX enhance and increased have our twelve

nine titled a found topics new priority for other report, vendors, to of into XX more With will identified that groups have oversight goals the to important core topics We integrating These Triple strong progress. investors, employees, as allow as to Building can our our formal in we engaged priority society. describes our we develop across ESG-related report. XXXX. report strategy. topics. tons to this this and From assessment to to were start the practices drive goals others outcomes assessment seen stakeholders. to customer our we this our first new Triple-Double in consider growth year, ESG our by year complement these offset best year-end our we to and materiality step material. business "Charging the forward-looking impact to are topics us process, multi-year ESG next of drive to we million identify conducted The our COX topics growth and our Our business how metric our base was our Ahead", well our of for assess most positive from that also and this off establish business planned assessment, whereby be ESG ensure growth a business, leaders organization our and engaged community results partners, we defined, To of our strategy last

to our guidelines. Finally, Scope our is our categories aligned TCFD, X demonstrating our frameworks. alignment and Financial inventory an with climate reporting complete reporting important made a ESG set climate a it Force In reporting Task by action was To XXXX, leading our with energy year-end This for we commitment all we continue progress leading step on Climate-Related or in TCFD with to to formal also enhancing in as XXXX. aligning recommendations, data targets goal and the Disclosures, company. material

will be assess results our and to for analysis We look climate better forward future climate opportunities We reports. working sharing conduct to in business. risks these also scenario to

can and new forward with have continuing do. encourage of which team will to is or integrate read we Rob. to report, we into hand to to ESG date the I ESG look I to you current now progress over engagement on pleased our be our relations strategy. any investor welcome we and call our everything questions the website, section Our found made the on

Robert Lane

well-timed you, Thank of completed activity transactions summarizes our X closed $XXX recent X.X%. date a to in a and tax financing coupon John. million XXXX The as Slide blended securitization in February with million as liquidity well financing $XXX equity funds include late position.

of million million Our working these restricted for Included and liquidity from available draw due flows numbers requirement of as the seasonality planned cash, total March liquidity collateralized tax of down XX, XXXX $XXX as well and facilities. unrestricted as driven capital million, equity March our the as upon to but of was increased up by and $XXX could growth. XXXX. This liquidity primarily XX, utilization cash are $XXX December the XX, we of credit was warehouse XXXX, as from from our expected both in

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

collateral, any X.X% capacity That fully will burden funds, On March funds. billion available of of over on another of securitization XX, additional months. Beyond later based warehouses represents available equity a as this origination Slide see exclusive in closures, that, and had tax return on additional year. $XXX or trailing million of equity subject new open warehouse liquidity we tax was expansions to XX $X.X our you our XXXX, X,

so too our in an reduction to increased While in from our anticipated debt, last our cost implied resulting of returns quarter spread did X.X%.

have XXX range spread we guidance implied long-term the basis average a As targets. discussed our our to we point before, estimate for model in

call, the earning will to we've mentioned cost we our to increase increased dealers on our and pricing continue offset As been and of last have capital.

are and continued this the price energy keep leverage implied company margins position these the in to back additional industry and towards range XXX services near-term increasing of the our together, year. in operating basis spread wider point growth our will increases, Taken push a youth our

XXXX. quarter and see price unlevered QX. per value progress NCCV million expect we of XX, returns XX As as XXXX both further Slide March prior just of three $XXX $XX.XX as to NCCV. went fully billion of increased or time, the gross years improvement contains these our contracted you burden XX, from quarter $X.X increases, the to customer March in GCCV or from can our and share first In

way option value or what proper discount discussed maybe, down appreciation is we incentive in regardless Remember in the other contractual quarter, growth. renewals, NCCV for cash customer us Q&A the punitive any blow or and value and As NCCV gives growth or still last of zero Sunnova's flows value a upside. platform, includes for national thus state upsells, our only excludes locked uptimes, to view rate value

even view to against generated way contracted view estimate. pencils continue on flow and undiscounted tax energy discount is to This That XX% is and equity XXXX, we over services service the against for provide XX, is out rate distributions, of billion Another by is to an NCCV, defaults all premium why at estimated our full a to as approximately cash $X.X current March justified actuals. costs flows. cash we look principle, which the $X.X X% a NCCV based expense, debt residual estimate approximately interest the believe inflows billion cash nominal

understandably While to mind. in you about things we investors rates, encourage three interest concerned are rising keep

expense interest XXXX. any scheduled on our in and is debt First, existing not have debt we the corporate do maturities locked of until our

unlevered to continue rates. returns increased will and our manage managed burdened with a have offsetting interest view fully we towards Second,

Sunnova more levered the originates acquisition Third, will matter increase profitably, what fact discount value, rates, remain primary cash is their retained assets by quickly high, more returns than unlevered other our in and our rate and but utility competition, accelerating industry. long-term company the is increase one driven is in ability flows no valuation, the any has the to which more of uses in

of maximizing a such, shareholder increasing We enabled business As capital power price, per is company customer sold to invest can is customer of providing of power from Sunnova with cash shareholders. they monopoly less reason margins, giving would profitably that utility at by customers to XX% base contractual increase to than focuses services a being to we customer, energy amount a their every technology a their to the customers they pay us service. over increases in better better for defaults. Sunnova to energy value essential losses growth to utility growth, minimizing customer flows sold healthy overturn power them than or paying and rates. on through the maximize further customer our homes Currently wireless significant due half balancing their for use service service a

on of any metric Beginning guidance, as Triple you delinquency among that as the major we consumer XX, our as the We ask Slide keeping major XX% customer default lowest expect our year, to growth the that these class. already resulted that will to changes plan, last detailed find percentage unchanged massive on guidance XXXX as Slide This call. from they rates for and utilities could were increases. as in Triple-Double base an continue are industry-leading service, our our is in together as forecast lowest as includes rate with XX asset are through our where plan. no estimates targets next early our our earnings There liquidity our industry peers customer reach are high that of and

revenue the midpoints on solar our into of same principle John. us existing in interest and locked day, I'll now as loans customers reaffirming XXXX targeted we call was of respectively. over XXXX, expect to what of is XXXX the approximately of As turn back XX, today. our and to XX% and visibility collect guidance This and gives XX% that March comfort

John Berger

and in consumer Changing energy embracing urgency service insure to security and aid issues an change affordable, provider sustainable providing their and energy this climate the Rob. reliable, the balanced energy power choose transform industry. energy are they independence. the to Thanks, creating practical To we future are need. equitable, Sunnova homeowners homeowners an by global critical is energy global energy evolution, demands, To

ourselves and the distinguish differentiates competition, Enabling to One of our a that At what aggregation. Sunnova, to software utilities. is combination customers, in this best-in-class investment service we from the including than dealers, on our our ability superior more reliable We provide energy service. aggregation. and for software strive us focusing and substantial will more to competition, affordable a by is the continue with service, centralized for provide customers

functions hires, of of undertaking Some level platform. service only of the need serve is productivity expanding for displace to can and dealers rapidly these base. additional customer by significant logistical and and for utilizing the be software employees automate software investments and one the that required a increase a operational managed our industry this technological, Providing next-generation

with by software peers. operating software our together and with enables employees, and capabilities, customer provides Sunnova this billing and efficient and huge Our advantage collections performed leverage platform management, chain logistics service aggregation. team supply all is us in-house operations, of our that It tremendous a combination over

to As value we customers can together, even $XX with multiple service additional scale, we obtain place expand to aggregation enable an years, increasing the creates customer-centric Currently, expansive contracted more amount estimated and an programs Bringing future. vision the of of programs in million XX certain grid which we pipeline both our for these better utilize for over Sunnova. this combination the capabilities next with amount. modes our that revenue competitive fulfills in have

unparalleled service integrates our solar more positioned questions. emission opportunities service With can electric build charging, almost building energy the Sunnova for management, execution on the offering home please open Adaptive a a in and technologies, us our by the through the give that and vehicle and terms line that, see and of core their operator, of to we per customer help customers vision power, control Home the our for decade we energy credit secondary advantage of the and capabilities, concept generation, metering out customers provide roofing, needed for reliability After no making Adaptive the that future Sunnova management of and capabilities reality. continued battery net a take We to well homes. Home Adaptive Sunnova as are drives an as With the of energy growth Home, fulfills storage, both basis. the absolute we ahead

Operator

from Thank Capital. Philip you. question. ask from line Philip, open. [Operator Instructions] Our comes Please is first question ROTH your Shen your

Philip Shen

Everyone, questions. thanks my for taking

talk might guys the able that business. us be terms be on In if you wondering anti-circumvention seeing of case to the impacts through was might the you

has suggests pre XX% resi pricing increased work XX% Our versus module levels. to anti-circumvention

up What So think couple QX have you do of QX? month lot. a guys QX, kind availability months impact in of you kind sounds you gone large And and a in holding what seeing, of pricing's It the in. players or if a module showing number Thanks. a or just are like I just Korean or off company terms a for exited share curious that of shipping think can have includes, impacts there. so you

John Berger

go with through of earning what phase I'm prior is not the the call. – Phil, to going was John. next calls through thanks. going the all in This

is job would been explaining media I CEOs I or there’s investigative out view our been that the good week what some last the think over of both so. reporting in a that’s case. to of add the did

let’s the to that’s this it is, I is think it case the in that fraudulent somewhat fact something points of call terms itself.

way going other do it’s And get I as the think CEOs as in so resolved that did. sense for country to well the makes a

had a be that let’s Europe, view coal a hydrocarbon globally in So all, in us and would to war the there as oil first we some increased going into of get year, be gas would well. and there prices

quantities. you be with in We demand were our bullish over we now started $X.X out have that equipment along we dealers. so And turns don’t to accurate. on stockpiling see firm And contracts very that to billion ago. in the equipment balance batteries, panels large do And cash partners, encouraged dealer we we’re flows secure with our sheet using our that months inverters, our partners to our balance sheet, and in

securing our that dealers. insurance did XXXX that we aggressive an moving policy is we’ll to equipment. comfortable equipment this for into continue add And things. I of in would of very very, they so feel so on side the And be terms so,

if contracts anything we’ve there be that. you that are we’d they some on sheet secured I So equipments does can well, for the that have in their as – our in and apart have don’t inventory sure think falls their And else these inventory, we to in what that industry anybody as equipment make balance see them.

out feel side and we battery right a We we’re the exactly at on great we’re better good things. a foremost, on like equipment deliveries, are be. add others, the we some weeks thought in in pace but with pretty and very we were thought shape first ended on would good the we just where than front battery So of side I’ll shape battery comfortable.

to the equipment shape look be side great across we now. in on so And

CEO, Badri change, said, securing we’re watching And equipment As the all I we like think looking very, particularly comfortable, now for into certainly I mentioned, we’re as the Enphase XXXX, shape. feel we in can things the great some few but certainly months. that, next very right over feel

On the a we that. things, pricing side checked price seen big increase. I’ve haven’t of

to confident not able that could based have think we it, happen, it’s could maybe see completely yet absolutely going has possible We of offset an demand also pricing we’ll move at our rates that. move but I utilities in as demand? so country, year, forward that I XX% percentage think Yes, rates I’m about haven’t more raise than this talk kind the but that industry massively but we’ll XX%, up I to raising gone up. because much it to in be do again, seen increasing to the and of sector way And across are we some seen to rates anticipate the with retail the as is the go just on utilities

comfortable So company. feel with extremely are where I we I are a and industry, we feel comfortable as an as where very

Philip Shen

John. have next to you and question Great. raising for my pricing around there. customers space leads Thanks, the That me

How to customer pricing average you that that maintain come serve? think last done like have you the rate the and be could you’ve pricing, despite talk thus Have increased customers? paying of pricing What Can and what utility amount room more a can seems half through seems your you you space far? base much percentage You rising raise So fair of your increased to very that like increase? and there’s based the been talked of you do only spread. much it half costs markets on us how about What’s on not maybe you of XXXX? a with healthy remarks, but prepared income call.

John Berger

Yes, Phil.

months last base locked So part – would I’ll customer could more base, go that less of about. utility address is that we’ve in been right? ago. So few customer half very and they have ago we’ve customers in but years in locked have would signed have terms could debt the what paying been our first, towards up, that those as is few clear a the it pay been of It that that a than portion what

Why inclined in are delinquency keep pay So so lower. and economically low spread fault already will, keeps was And does very to It increasing. a going locked customers increasing? if rate for that the that’s you it keeps so our us, more right? Because industry. more

For at – a therefore our in main some So couple cash. was, a side a our better, your we contracts basis, you same of basis lose there better service to drop a get shareholders real look, least we’re deal, not of the right? forward making getting paid, On just that entire paid providing across question seeing that’s Board. increased our we’re think but value point rate. says, contract value, we hey, default can the price speak and but of on pricing are are cash to ourselves. have so where better don’t cost we’re we When that’s I will equity, the seeing peers means really on better, of that customers And forward that phenomenon, the We think get the deal. a which a that okay,

increase We’ll to opportunities that. continue other to price. do some have We

here. move few give next I’ll of bit months the in you weeks here As and and little we forward numbers a

the recently, as And good increase well XX. previous the tell as the to of snap we we one to that to can We in way XXX leads. We remarks we already continue its increase spread. that number got in has. a Rob Sunrun’s that’s out can basis some is of return the opening see the points including a said opening a do. and bit reported on made are comment to ABS you going aiming that of X.X% We QX I can recent that was it obviously little then a that March at look

trajectory you can see so a return. there increasing unlevered of And the

So take about how hour. have? do at much bps about unlevered room XXX per we return or look there it, equivalent If at kilowatt forever $X.XX was you give is of to

across varies is. roll rate be on increase seen this in baked high Now terms a region. of hour rough about we’ve rather their our respective to kilowatt POCs there’s from it’s really more, like and region, but but estimated we it’s of $X.XX, It a to lot it moving we varies low the utilities about thumb. be the base or kilowatt in whether already. $X.X to so rate like And going increases, what up, just the $X.XX far, an or particular that’s a that know utility And could asking seen have across $X.XX one,

you at starting high QX have number, increase was the that look would So of eights point say call points to needed if to to basis more that. room obviously the kind returns. enough XXX than we the unlevered do I it we

to increase it. room to we where more that And need back than continue ample have spread so to we get

of kind cost bit continues good deal. the does capital with of like P the a which little to tier So lead increase, that spreads it look

was next transaction inside and little a the that better. bit did think I

classes, paper et the cetera. the and unsecured, of the baby a market to really water expect as the with the bath market asset Solar the solar with threw other commercial market banking We out the heal lot of the autos, terms in with the ABS consumer mortgages, –

pay And got They’re so into stands. as the even paying power a recessionary to comes paper, utility to the performance as point right of this the paper, us, where back quality up, you go I’m to and house. the investors. high moves going the People go rates the is country data to as are the bill that realizing very at

this accretive so much deal, better And it’s a and folks. economically actually is to

will tougher, the they get market willingness that ABS to accordingly. us in spread pay times in as a So down have come

ample comfortable. room been we’ve rates feel we so. raise, very There’s doing to So to continue raise

the maintaining focused on probably think profitability. we’re doing our I But we’re on that. leading industry very

Philip Shen

Great. Appreciate the color. Thanks, John.

John Berger

Thank you.

Operator

comes Our from next Sachs. open. Brian from is Brian, Goldman Lee line question your

You may your question. ask

Brian Lee

is? John, slash for remind pricing the timing, Hey where if it half the up you in of does And the how you’re the months few Board I topic just and just a a a a it quickly through systematic basically pricing set how within in a and then penny quarter of flow in it Or every pricing second. time is where just ever work Thanks dynamic you’re penny, of guess how just staying guys, April. us raising you’re does Does how quickly good morning. maybe the flow dealers terms works it the each market into of going raising on sort and show by what pricing and or for within bar it sort questions. across prices letting Could through? real is, kind on kind dynamic that taking level basis of to strategy your going us evolving increasing paradigm? as is more strategy

John Berger

Yes.

have the weeks We launching call substantial. the how And we’re and in of it’s in few next launching how services. contract many that for points quite indeed, launched new we’ve new we’re in one services so regions and months, main out always types just out different is out, many many services new new this

every Brian answer the question, single at your we’re So is looking to going to day. be constantly pricing that

makes team offering out dealer, entire we’re there sure to for makes sense pricing customer, sense a have makes that We our just what make sense for that, for the us.

months. I think moving cost price that to of where do lightly. in okay, then don’t so across up, rates saying, as pretty fact. the we that by And all and rates the to utility and way, – at really that I cost answer four response we’re the types That’s into think you my and the look, does into main our don’t it that $X.XXX, up is have And I we spend Phil’s but we or not and first Board, time And three is question. it effort still like, over a last going we to you up way and look these consumer said, increases I in we your just agree and we big So we gave that. capital’s double spend would and gone moving dealers moved go them that great of more, a can do deal. pay response a wanted if significantly to up And could, it capital more the of fact. $X.XX, often, like responding utility to lift time can look and going very what they’ve the And

up. rates to inflation. pushing up is push So need we significant this as know we fed nobody’s It’s pretty to all in fault. response The

is and forth. costs same work at And freight and to out end but work going of capital of costs And materials that of it offsetting obviously raise together. want the they increased it up labor having equipment we is companies product of manufacturing together. the is, day, et not increase costs cetera. other Sunnova, equipment, it’s what cost all so assembly It’s and so – And for are to that do, money to the it’s price different really going we as this necessarily plus we to nothing the and different

because ability cost manufacturer. dealer same and on the for have the do us do to hey, the we do price the we and across to dealer And that saying, we there’s – so, need and across we board the for but it’s for with dynamic, dealer gone work the up together it and and consumer. by raise an So equipment

Brian Lee

Yes, fair early And ABS, you a in enough. in saw of lot the you February. blended plus securitization I Makes rate mentioned sense. X% Rob then did on the the think that call, the

to nine seen Sunrun months. as kind the the lower already, XXX guys past spread the versus close bps couple did a over of was think was one think I bps XXX had six five you and times yield I we’ve over to mentioned recently,

might of next. you other kind into February where here, as the think you view maybe year, the to securitization forms a about, better on be get the what of I maybe you’re of pricing. questions and you’re planning think latest and a So attractive course looking then you paper couple you just just of of Thanks what then been guess, terms? guys. are Just in you ones where able Or over did next is that about the at bigger picture to in financing you kind your timing thinking have moving how

John Berger

to answer over more and I’ll in to turn Rob briefly answer detail.

customers. we that. locked on We’ve our in have very debt been existing So our clear about

on So warehouses. it’s on will really a remind we I everybody hedges basis. do our have that forward

hedges – so have And obviously, significantly. we those appreciated

us Rob out securitization commercial So we’re do increase say And does we the rate to the making and there’s willing whatever. bank for hedge that. job market money amount. before like on to term sure or or constantly firms lend any in scouring very do interest would a a less I that good deal nobody we’re that

very So on whatever’s have that full we’re the going view we very, of marketplace. a confident

make want sure to we lock in also a We terms.

months rates really think mean, to figure to I I Because So locking next short we’re trade very in to or and really in. market lock out years. the go figure out don’t go to here not going where to not that the want interest they’re and debt. try anybody few going in where bond go are can over ahead today. We interested we’re term

done. at we’ve when So look you that,

think interest very near-term the weeks, hedging things. sort a of of risk any of rate on I good months side job

doing you the can should over and spread end additional the as I at be before, it it’s think fine a question for as Rob, answered push the to unlevered you returns about to And those any long turn of comments. it. day deal to way you continue I’ll the a so is to

Robert Lane

as that, John that well, I it’s out sorts implying other there are there good Yes, think I’d a the to all point at about that of looking that options. say you market. makes are And

remains what think the ABS have market I still is very that we found that attractive.

is to the find market. opportunities this attractions as There’s than think ABS what But have pricing up some those side as sense there’s some about would ABS does loans the And on well. point, where be in put math bank those going does this into the to make front that loans that the market term instead that to that monetize think I we more still we’ve talked its we better loan with well. of at it market.

out the deal, spread PPA it’s lease apples transactions. wider it really So price had TPO that That really with last will also also ABS a was all deal. come – big into at Sunrun the a and to about to I but the was biggest slightly I really options. that have tend The market. we longer apples really are That a at looking duration. transactions think say was, loan and not

So apples. necessarily apples it’s not to

price deal the say done thought duration. there expected with that We deal outside market. they a five-year had that a still, out the in good loan of I But was

I look loan is – the and the our you of there we us really thing The is on really and delinquency rates. versus take more trading market, critical higher and lot what rates a a I’d other this at on go is on really refinancing more they’re sort say this competition our a their in lot out think if that trading happens with that we low default are side we

have take refinance ability to than their faster So arms it go refinancing that and in-house loan solo and the ours.

help the them something rate that in interest necessarily won’t but environment. that’s them, think helps I rising

a going you default I it if from And an creates the does value For holders and our really able default in only us the that as this, thing think take delinquency that makes we’ve to By to what equity rates look asset but cumulative not a away it keep long-term is about default holders, well. the take obviously difference. as to base, rates. our will remarks being debt crush well, it’s in rates, that the equate comments the down. and prepared one John’s And side, here say, talked

apparent very interest just is of finally, that in these off hidden bat. last did the sort deal the the So making going goodness yield that we rates, right the interest deal, attractive And point was Really rate we savings. we locked market still year. we’re back locked when made, the that point bond made John we It to today. thank then really isn’t but remains in that hey, did the that, high the

Brian Lee

All right. Thanks guys.

Operator

Our next question comes of from is Julien, line Julien Bank Dumoulin-Smith your America. open. from

Julien Dumoulin-Smith

Hey, there. just to bit increases question Can some time impact ultimately this the a one little you alluded of to point, at in morning of ABS. as the balancing against for good and the earlier in about the Thanks the well the opportunity. Phil’s panels, as back going responses talk and Hey, as team. increase you point the price so inverters

much trend? As think you your to this I points, to quarter-to-quarter through How think as we feathering that their able to and think ability of the price through latitude specifically weighted sequential course in returns. of in like, about you about is effectively? going the alluded about XQ improvement that into price inventory again, are it you that the to think how balances price average to continue your that do you year, continue be see seeing year,

John Berger

that as like the price a to forward will already the and move Yes. made Yes, up again, year. of that through sooner Julien, than we’ve see this return moves. rather lot Obviously, have continue move you to we is John. later,

But far QX to think that opportunities. going look versus to other I we’re would So assumption as looking that at as make, be to for QX. continue a good

say move of times MMBtu instance, aware I’m take it like from right. rate right. you heat a a multiply know natural gas gas better as any most into For than baked is rule not this of the probably point at it be will roughly Rough that per X,XXX in rate, natural thumb, [indiscernible] time, utility a move price is but dollar

looking at pretty rates. $X.XX, the That of baked top of $X.XX, a that. number $X.XX, gas had, these on not just that, we’ve depending into move, utility not the on So if for good move than you’re more that’s

per So rate roughly I we’ve already out, base. said XXX bps, kilowatt I a $X.XXXX as hour. $X.XX laid roughly like across is, increase our about Every seen it call

price accordingly. in accordingly equipment the move look relative been to room continue not on you up top the more so bigger, When much, of things, done resi side And scale, speak to utility ultimately high, so, some not been you utilities digesting cost and increase more right. the fairly In side. increase look at which you increases to I That’s a much able lot prices a dramatically as to impact the will have continue that. bigger have the we our we’ve and on the EPC at that’s up business. ample do to resi know, can’t than move overall when that’s so. as costs, that And to obviously increase we we there’s of see room and of and but

Julien Dumoulin-Smith

clarify to that. just you And it. Got around

around conversation implications what’s battery right as your a obviously your raising and Just backdrop. side, the today rate How versus the like you also seems impact. inventory similar here have some how well. rebuilding, you what’s on And of kind attached front thinking are And you then sequentially that level position prices cost the here. think about position considering on about that’s the declining do

John Berger

that, really, looking Yes, of I a commerce it’s we’ve done I and department think the that anti-circumvention. can’t unfortunate very up tell good doing ahead. taking it’s doing I the what is job most you

And think mean a for including I objections part of labor. it’s any doesn’t any disaster the total whatsoever country. for the country,

down not I’m again, to this So going go road.

globally know indeed that that, was is over I We last the call a days calls well peers. last lot thought I treaded coming. been I right. earnings it happen. is, would would because war of was so. move what they the that utility big were We of part think a looked of that’s strongly we say But the that that demand particularly And in because from ahead, we couple or the our rates is up thought XX

we And side volume so – pricing and got on pretty locked some the the things. some in of we deals nice

that up haven’t more move to the really not be do as And with we too to much that side get work But and maybe we they equipment inflation into so. our we on to room ample in seen, enough we’re see the users time. XXXX, to to do need going than able if have we so as move forward and

to go on want So back inventory I line. just the

for in is as $X.X show on mentioned contracts balance inverters, firm for have, for billion that to panels for sheet. question our not Phil’s I and equipment, answering of We batteries, over going up

it our are say able going to there’s not for our to in dealers equipment lot they who for dealers. insurance that and dealers. But we the it is policy is to for are because out And there a secure there’s marketplace our We’re confidentiality. do

a as see job So sure can done that to we that of and I around up. And maybe coming accordingly. other address looking see make risk we’re big and seeing we risk move the some things didn’t making curve to good we’ve the some doing pretty everything think address a to that

Julien Dumoulin-Smith

leave it fair right, there. enough. All I’ll

Operator

comes Our from from open. your next Joseph question is Joseph, line Osha Partners. Guggenheim

Joseph Osha

everyone. morning, of slightly John, way. I to this different of cost issue Good a Thanks. to return in wanted capital, just again,

value as the things equal, expensive. it. being to You you have bit obviously little said more Because it’s that rather the of that’s a all and in I monetize past little think gotten retain expensive would opposed a

not try else. something’s famously your something also cows, name working, don’t said, You’ve if

what you the especially with wondering monetize of to to pull I’m how thinking versus the contracts in strategy at we market context in the seems retain moment, be Could equity them? of terms price? see regard and you So your the shift in

John Berger

was of and Rob deal answer big huge PPA. to shareholders. when And too. and the flows first board, it and lease I’ll that. right really able goes as really that was is been time this let cash across a assets whatever directly question. John in year. the sheet mentioned bond for given But that answer is yes, you a me And a a We last of do issue that retained Joe, the I’ll all That built our the Look, credits, it’s Yes, retained balance only earlier. retaining stands. all we and industries that’s and quoted well we the really we’re win We win. – enabled that And Rob still all what’s emission

and discount contracted we rate, it. whatever not we’re rate and to regardless going there you anybody what your a We flow else value like move cash you it give Now discount basis into to a of can or or huge take $XXX have use use, NCCV want get colleagues able base, out. figure every enough $X.XX be you it, Basically, out point of to share. XXX information million can add to

we that want. will you rate, So but whatever help use move the we discount

but be any makes And and And firmly transaction right. this We’ll probably money we Our year. we cash And Rob, of are the believe is invest choosing long-term advantage sense assets. pick to but cows. returning cash our much the on that optionality. said, grows basis per we’re contracted the being have lot a point growing a per generate a not then where the invest we to that I as that on NCCV should at assets. With we portion some us and And now of sometime been. is know. is shareholders it This share cash in. you these it, I and the cash always I’ve basically give spend have see optionality. flows. got or times you’re cash this earnings, have we’ll sense contracted flow certainly makes really way it it and have investment, we’re said, get flows look time either going They of an either that think it your sell you’re always probably for to some our a shareholders. so or not still like the back share only are in that back And it’s sell that customer to as places fashion. If balance matters And anything it per and and take accretive loans, some coming to of thing we cash is name open comments? shareholders a basis in Or and to will more earnings. we sheet, going – that give And more rapid take business there and more in we’re out rate it we I don’t that. we’ll you more

Robert Lane

investors it. I make think for back there’s of about sure the John just asset asset doing part going that up a is to value. says, to then cash long-term goes and a that short-term sometimes cash flow is cash. of not but what the we are short-term the what about you it long-term, lot of at it’s value are mean, be most short-term into day, being But that is math It’s that’s And make we going what to build I that No. going – to cash. the that’s end cash – we cash

going what’s in to of we’re do shareholders. make sure best So to interest the the

Joseph Osha

other one just Excellent. Thanks. question. And then

what your interesting of was in run is Thanks. where down about of APS out go. of any assets you’re willing that run One bit a terms the wondering to not profile obviously, going there terms we’re and things the got the you’ve rich you’re that to all I’m people what philosophy go seeing FICO eventually. of FICO in for or

John Berger

a have a much. rich say really some. of pay down money don’t don’t lot everybody bills FICO make know want a day. there to down – a I huge as difference And was makes to that can’t bills find seem are of a of their every their think are And that but good way what plenty and performance folks I people from was plenty that it don’t a reminder there high But I a don’t payment to that It that score. pay would that this we’ve I remind on Yes. that think I bit, seen.

is So a to ability pay the FICO your bill.

instance, remind And just customers. about that, to XX% we our want so of LMI customer estimate folks base as for I

on a that of people reasons. competition potential rate make people of need to and that’s obviously this right, money, where global crisis, a of lot what’s give are And to i.e., bills Joe towards ability a Florida yesterday more vetoed increasingly DeSantis the cut one time save rapidly these to think elimination them really is reasons of in the governor to turning increase energy in know that a people I the and that the they so monopoly, it that more we – I they’re the energy going give that So money have escalating. one don’t are of key offering. their

that means So securitization that that I don’t There’s of high that anything customers out of plenty out FICO we’re think there. or running nature.

coal, seeing again, the increases, bullish and In back these spread that more natural anything customers ability across on we’re can rate going fact, demonstrated into utility price have translating increases massive pay bills geographies, demand and oil, if as as crazy, gas, and into they that time. in their pulling those like and far more that’s

So healthy think the I regard. is that I speak industry extremely it can to from Rob? overall

Robert Lane

would we to look add tend also ways though help at that I underserved that we communities. can do

FICOs market. talking And we’re And to a consistent like basis. in have a But communities where a a of made solar industry we’ll that others would are of as look headwinds. our that do lot that we that not big way finding and weighted projects it’s way actually negative of more time, do – stuff would not at these the our lot doing. So start those releases trying on and a of same we a are at places not have FICO broaden the as on I that that bring look and industry to – average whole sign. we has sort remained the a there little underserved about things. very at are press I a lowering traditionally we targeting to But bit

in or we underwriting is of originate will with can’t will lot as a part paying customer really easiest you off and FICO, customer whole a customer to going determine well good to FCO. be have a that is I’m at our talking things but use you and it can we’ve – for great the that a things analysis other paying got be delinquency investment a of about. but and try be that that part that not a pay to a made just here, we that that customer. the one best rate of sure there goes There’s to that it’s you lot it’s done that’s make And the lot, One we’ve customer you. other really a to And goes that in is make are team there us. to right that sure look is default and The – whether

Joseph Osha

you. Thank

John Berger

Thanks, Joe.

Operator

question next David, Our Wolfe please Peters ahead. David from go Research. from comes

open. is line Your

David Peters

morning. Good

on expectation Just the path on the when X.X, pop this NEM curious and your calendar. up for proceeding guys’ forward the might CPUC’s back

I think would take wrong. form Assuming Florida I’m bill Tell an the metering if of governor’s the comments alternate on just of to that in the And PD. would that net be related me great? then detail

John Berger

is with for what I consumers down. And additional an Yes. energy. to extremely competition you know, or some witnessed DeSantis do by challenging time at that anytime for but do what This soon look commission needs say centralized for consumer would that And how members I and thing revenues. I how the slow think is think governor going utility last as what to California for both this the public don’t is monopoly right you the stop think and assume to that’s I knows, But allowing I choice night, do to I don’t consumers allowing the and for did don’t then accommodate that is balance John. know. regards anybody

I think time. move it gets in worse as forward we

None baked I my gas but utility think is really the those move to into seen comments. yet, of for rates goes instance, into coming. we've and baked that’s natural it's price prior already recently

hard. name, looking governor, ability come are sorry. utility to better to the go and at a competition I'm called a So, a choice trying who I state better they They especially choice. they're I'm think have are choose I'm make go, at people the versus and trying choose going a and also And price. that what's for make working I'm do I'm that called I going make against please union. that are ends going energy and constituency and monopoly, And the They're and this November, going I'm of its not to best if service meet, them going I'm that with the people a have another paying I'm I'm the going a bills. sure people. voters. running to

I is example more and decision, see will does. Florida. right He's in now the that, some And actually think that something I that's a so so right we business, and with channels shiny a sometimes people. the more on so we'll on really and make and really we'll It's that, and California politics on And what's right see hope hopefully make think the that got governor, the competitive. forth, market for it the based of government stop the board solar based, get I forward folks a Republican do decision. the he the and side move news

made didn't pick gas, we'll well we'll So, reference makes doesn't load and they're tell it price make battery which California think forth, do up bit as as business a earlier, management. lot right you something I so that still with sense, these sense, but someplace as but I think out going happen, generator ask, a EV and is to just makes that actually coal, we'll where decision, more come will if increases, always, origination there else service a sell charging, dangerous, I'll there but, it answer you what, utility little and the I'll question oil, natural the given and

So, right but and on it's need fine to I well, their turn be our going they out do we'll for state side. what's think increasingly,

David Peters

I basis per so. then trending in on specifically the to with over customer in coming that could year a growth other sense to plan, double And Great. do give triple I the the take those of you OpEx was purposefully triple see when I you included materializing? was or of you respect you if had opportunities. see advantage prepared the NCCV just mentioned or growth wondering the think One appreciate just you not question a where just hire start that. remarks, opportunities,

John Berger

at Yes, made it increase the looking there. spending I looking if because I'm does this, looked I'm at have I SunStreet that that comment, year-over-year, at in and

say, that know, I shareholder, to trend So goes what's put directly increase? out at well, And one dropping. in of as spending and it's that we have the on you What's question. per reasons And our list am which the I customer okay, that's, a shoes of a disclosures. point here? out your the I that to that's obviously try look bit, we of basis, to But I the big that been want myself a in

that looking at amount wanted drop, of of I I aggregate see continue what And a that can't We lot out right to I'm opportunities I growth point or to but nominal are now. spending. say just the these

Sunnova they'll service markets It they in that acquisitions. Again, triple. – make I the of it we not and baked additional once be additional disclosed be those be international and any services significant get up. and probably – forth hiring so additional We the sort any triple, additional acquisition up. public, services. be additional moving they're be could that that but and could haven't will verticals probably done sort International’s double, Energy different we into implementation It could software, And they're destiny, the our market. of of think fulfilling possible those, there's we opportunities implementation could of that open open be It growth

just to that investing it spending return availability we're a that in lot wanted point that's now. have and and will that or cut generate I it. out a right to directionally will will intelligently there's I that So here shareholders, of is going that things we where an spending spent And be the for

David Peters

Great. Thank you.

Operator

Ben your is from from Baird. Ben. open. Kallo comes question next line Our

proceed. may You

Ben Kallo

the visibility stand and thanks Rob. Hey, thank the information, you thought talk all where my good Thanks and Hey, everyone. maybe versus John Could and you for taking into enter would you. question, for just morning, customer you year? about you where

John Berger

point in this have on adjusted we and there good terms on out, little wish EBITDA I but and such. want and we Yes. better field. think I so things Ben, forth. John. job flows and the the have pretty But cash we I job. did of could I maybe Yes. customer a customer seasonality, P&I, trials that done saying are Think seasonality in side that exceed the on a could The always to additions did on plus tribulations of

As even more of than in of the that a different more just areas origination and into cash QX, holiday in vacations others. quarter hangover, issues it's country forth, and so you seasonal difficult And winter obviously are with QX weather go from low right. generation, service certain

really that make say So, other QX much to the the of I'd of you notice customers offerings. dropped in from wouldn't fact I than I'd retooling or terms only that and service other we're line our QX. service, of line back look service the the of some

You customers great through and doing going service through Right. dealers they're happy probably only saw release contracts in making doing are sales but service on on our services, again, Sunnova out repair our paying selling job, those services desk some selling a and facilitating of direct be terms a the happy customers and which we're and selling our for more the of more service, technicians, customers.

So it's really more about that.

eliminating the that maybe right then I we contracts, customer New by is, in just customers, if customer. be there then So that see count gotten personally thing expectations quarter that would've wish the or here would've one move two And that dropped. I last line husband, considerably. case. should you pretty as line about would change which to us with the not we up end some that two do customers, should one the up in that a is But for information my in the more be saw next quite that probably or shouldn't customer And by that possibly powering I have QX. wife we customers one's the the in up Jersey week, way there. account one's additional definition two few The it's signing in thought the dropped so was was again, the XXX

and impact was an I honest was it thing did, that's do thought and in as customer. but the ahead well, and was to right that of thing some to say, So do what went one

the customer to and right? the up. value flow gone the the And company, cash value the Now, is, same per is indeed has

far had far being forward, with of pleased a April April. month amount was origination probably up end in as QX history, seen as they what company's will we've I'm it. we've huge very As very with biggest sales. so pleased in look our in the

seeing we far call. a bit, in So a of amount huge talked this demand. raising quite price And we're about right? So,

And so that's with that.

forward, I on entire July, all this XXXX. working As year, for customers the I I'll then say we'll have look need sometime and that in start

storage able end ahead customers I where esteem is and be we've dealers saw may of the looking far about where the fine what to towards to into overall And we'll I growth good the as Come such even XXXX. so shift, attract looking no ahead And and of you forward business. then the of think our the I matter trajectory pretty of we'll on through – solar side got head of that. policy like to dealer account. our things, out be basically as And of We're XXXX terms a additions. we're on more feel rate. growth good that in the up, continuing I really solar think be shape We're dealer I expect would in slightly to in as XXXX,

Ben Kallo

the is you're see do customers how adding sophisticated how competitive maybe new forward? to going getting that? just, it And how or how dealers, them helping more on and you And how are that's they changed selling on and

John Berger

from be businesses, don't we trend electricians, great HVAC. a This down. Yes, in. home we've seen slowing a industries, roofing, And various general see contracting, of continued entry security different number of contractors business is that to

And back you of fashion that lot have shouldn't in much. office. of And dealers is lot about that the something we're something can so And really, of don't to a of more the seeing as lot that have contractors back the right. office a that worry dealers, sophistication level don't is scale. pop-up and a increasing get they a And frankly,

are, out. set dealer a of that aware origination want got that's want of have trying where We've you. to you a built to up if We fine, building want of a you I quote it, be So, we're want then adaptive that, is to they out fine. they and to design, there to, out catalyst that stuff on and you're and we're if tool, type they it processing, think, platform only, take but want as new launched keep whatever permitting, things that's doing, more all platform more don't for

only, If you that's be install to want fine.

You set for up got things you.

that origination to We does be fine. both for that's you dealer you. If smaller installed, want a it got

these be origination want I'm states large to If going are scale but do and too. I states, say, you some of other dealer want other do want everything, that's installation fine or in in dealers states, be. seeing origination you these it do whatever multi-state a And in course, may large well, even we install to these

some So and generator out point. matches well. also growth mix as lot seeing And there's we're partnerships there of a my EB installers dealers a dealer then the of dealers charging and

seeing making need different know And So, huge and into think they I have of industry needs. I our and all challenge, strides. objective we're and different folks we're lot come really course, the their this really to individual a we of needs is et platform cetera, the to may each of want to whatever to that they services, software are the business model and build go on a dealer, be. cater

Ben Kallo

gain you whomever and where Are Sunrun with to dealers that your SunPower, and you finish out other bumping between much. working and or companies our companies, up I it thank is against switching guess point the dealers thank off, just you. to some there very they’re how all

John Berger

Yes.

think it I goes to that.

could better directly. of done question So I probably job answering have a

building dealer the services, these requirements on out we’re So I’ll so will competitive, not we’re that now, competition. we’re moat, competitive to is more widen out that we do just building it price. capabilities you could be And these all that the meet if seeing software against

just I to business. think you’re if that’s trying a challenging only say, contract, one challenging, of type really, do really and I think financing financing

understanding financing not that something a company. a we’re we’re financing’s an And enabler, about service consumers a And so it’s increasingly are again, provider, service. the

I Absolutely, competition. more And So the course, we’re competition? we see dealers. respect lot of we do. over winning Do a

lot direct origination can are new influx from get and and of else. directly sign buy others. us dealers every own But say, contractors. everything that. more look, forth. to entirely that sign better and on in dealers Sunnova’s come will versus seeing more but than up installs more Some we’re – and going to in seeing absolutely their everything. don’t before so focused We trying they we we’re we’re we have not just Sunnova, us And And with do, believe a with anybody And up

If that investments. went to facilitate them. We’re we’re contractor owner, dealer not something we event facilitate owner, it’s when a will help some not for a – we’ll life to here happen

dealers. been that, We’re their very and friend, but to that. not we’re we’re We’ve against going to inception, That’s there do. that come about do out buying going maintained to since start clear our we’ve not and competing just we’re something going not

need shareholders to shareholder out spend that means dilute stock partner. dealers. right buy So the cash don’t and we’re and very go that that in comfortable We we’re to

I that’s current taken friends money. a that. – dealers. use We’re shareholder good very our be not do going would that to poorly And don’t something think and it’s very by of

don’t we demonstrated that. not need it. going And do we we’re to like and feel to do it, We’ve so

Ben Kallo

much. Thank you very

John Berger

Thank you, Ben.

Operator

comes question Sandler. from Piper your Kasope, line from Harrison Kasope Our open. next is

Kasope Harrison

morning. details thus Hi, all taking for Thanks questions and the good far. my

see attachment from supply improving origination, still over starting XX% or one XX originations first rates pretty last said equipment talk about on I you’re providers to John, or some remarks, your my tight? So to Can whether have is days prepared risen you storage think you supplies in finally your so. the

John Berger

We saw Yes, improving supplies. Kasope.

that’s continued As in for quarter us we last And call to said ramp delivered as obviously this saw QX all I most the we It’s think a, in and QX. expected, this earnings had move across – that the forward earnings we battery time. the suppliers. – previous see call to as in up you in

comments think increasing well, And chain him. comments we I heard nimble that well about he’s you’ve others kudos some and the And Badri for fairly made so supply managing capacity. see instance, where right, being as has some quite to

a insurance and and backstop, a of. in front on but then to taken done manufacturing we’re that optimistic. lot well growth globally. again, in more as equipment, cautiously we action are a of And not contracting dealers aggressive to batteries, and particular taken production continue in but just it’s We’ve care make modules battery our and sure availability So obviously the see inverters an

good remiss optimistic of be you, caught we tell it that, see up shape. where at and still that we cautiously like time, at and our taken things have But bit have cushion, point, in to to I but action backlog. accordingly, the supply. off We’d we’re with little to be would we’ve races So we’re like more as are added cautiously we far optimistic I as battery I said – up not a would a right. we’re this this point caught to And in we’re but

Kasope Harrison

seen except the same is tax change equity. you That’s very meaningful talking equity you equity, since wondering appreciate of might the helpful. about to spent then we on rate. about maybe And of rising the or you commentary seen – be sorry, capital more but Fed there ABS, it started on I on any and equity all anything Have sorry cost cost was raising if generally of could capital. changes the the Have tax any side? preferred guys I still over know preferred the speak seeing time changes you cost

Robert Lane

a when equity moved capital. about with moving really cost and up from rates No. hasn’t rates of much move back remained Tax didn’t the It it up. went down same down really

there’s leases speaking, more around the bit to obviously in that’s that more for but it’s and tax push And mean, is ITC thought much just, favors a that So the cost market capital. shift I really we other be making providers. going consistent. push, the of think which that fairly capital of not I the and service in us a just I equity generally a making think of drive of We’ll towards PPAs a cost general, remaining think back

John Berger

agnostic just push already that back have we’re on spoke seen that loan just towards we’ve to with want I but we seen versus that to. it, the Rob XX And point last out days. Again, TPO over

Kasope Harrison

much. Helpful. Thanks very

Operator

Mandloi life from is comes Crédit Maheep open. question next Suisse. Our Maheep, from your

Maheep Mandloi

How kind and me and Home could how generally versus you a the of differentiates Adaptive to morning good understand more to the just those? Thanks. your the for trying squeezing in John, Sunnova Hey, were how do – here. some what provide some versus around versus of trying offer details the then differ combined that OEMs differentiated thanks does solution?

John Berger

Maheep, Yes, this is to Happy John. do that.

I effectively tell I and fundamentally And that mark a idea just we’re break So items those it selling really reference something towards box charging, inverters, this EV as moving boxes that And integrating it’s from hadn’t really boxes. and are the that or charging, industry the solar competitors systems, that or a panels, early storage anybody load core lot we’re kit about this energy many think homeowner’s changes To the that we’re selling me And you like we into about EV putting case. management, plugging looking it’s smart before service. gotten two, pushed let but don’t roof, right. an not traction batteries, on which management, them some that. were appliance and modules, generators have items, and all in it where else, the industry some worry different – yes, you’re right – the of not manufacturers already amongst hardware that’s direction, days, doesn’t you some we’ve power, customers, well. it’s specifically, across these the you’re like in the And really about right. the just the moving that and kind tells to And putting but of load of selling should other the Adaptive but Home, of our see energy indeed generators, just at. to really think which that say of And can

do next that to weeks expect We months. few and

demand For instance, there’s there a from consumers. lot of

will, a that trying address roll over again over provider, operate something if is. truck from down the roll we we If mini and we We that that grid to goes considerably bring nano are as where So service portal, do it that putting together to a – wrong. that phone, truck you that’s portal. it we’re utility, time can’t the Sunnova customer that, try

satisfaction to your of does more focus expect metrics into other fast to How that. is that. time make what problem. out on than so reporting progress I you is that response goes about like must to good you And directly because basically service making start a We’re all customer got I some solve the to metric on need satisfaction, customers, think in it we our right? we to, Sunnova company the power And flow, sure

house So of Jersey our and putting the worked pieces in impressed our crews different these New very them. a manufacturers. all field hard. service And bunch was in different again, I I what quite was one was with together in I customers really of that saw with

if I So reality. that have SolarEdge, understand Generac, were know not to that’s cetera. one anytime reality the we Enphase, Tesla, to become that’s be running but of my companies, all friends want I as the et in would And just was I soon. to well, my running I equipment don’t names that going box every think the box

it and long as picking so we’ve others. more on which will are deal and into and we hardware what that rigorous is coming and it feel So our partners and those out serve go from plugged ahead that all and consumers make have equipment software on is so there four equipment testing, and dealers the working can platform all we sure it more what as we are and Then they forth adopt and we best with our they customers. – to the get us passed best can

So pane here for the we’re and glass single We home, the interface have to and razzle-dazzle, want want customer. attractive power and the customer’s make problem. not to that. like automation, an We and management flow just solve all to the

what’s home customer’s fix of gear have the the in mines way what’s everybody’s a of and full equipment regardless of make think having a problem in customer made immediately. in more to the customer as and – happy that going happy so regardless meeting seeing and of the a we’re and to to And understanding the on is more I we’re manufacturers, the who on that the going interest because best make

The care more of. need to more clear, think absolutely must the the clear. service very involve make and number manufacturers So involve becoming a is of flow. is has very the understood in and providers and that it’s to well more are model Again, sure the and I to more market’s that power going business together and customer taken integrating

Maheep Mandloi

color definitely apologize just about here. and talked is the Appreciate already it. for and Could last integration if me you a this. housekeeping Got challenge And talk one just about like to rest many cadence how customers QX were direct understand editions the up just held through of terms and Sunnova Thanks. its wanted in Northeast like of and in year? the the you customer

John Berger

good I repair wouldn't if of up of of of I that make pick our again customer regions need. additions, we the say was say seeing more and re-launching that more you that desk on quarter. and Yes. we then wanted I a on. would a being services, with direct would only, margins the the so which sold bit technicians more other pivot say us But that in we have the bucket that some did. I'd a service I that other services the customers cost some particular field, customers that it lot

July referenced now customers booked in have fact, year. the right earlier In and booked, sometime either all entire I or the service we'll and that in installed for

for than, the more about be now exactly where years you than I that's approaching business. more in XX – to guess So my want

there. – guys you to two, we'll far you half. we and you what customers that we to XXXX, looking but description as have looking on-track only give where earlier that we of the as but then about gave another out where and but not about just XXXX have balancing feel good some booked from always I are off we're as in half well as into we're three good think this months Maybe we pretty well. to that very that some so are we I still more more need need shape get just some at comfort at quarter, I backlog as first there, So to the more bleed to in would the good second I third customers make if can far love just feel easy,

Maheep Mandloi

for your Thanks the time. thanks for color. And

John Berger

Thank you.

Operator

next question Sean Morgan The Evercore. open. your comes from Sean, is line from

Sean Morgan

John, Hey, in guys. squeezing for thanks Thanks me here.

on Going back issue, like more was wasn't maybe an but I in prepared that equipment question. to it it availability rate the underwriting really remarks of said down storage, the basically think think little the I and a an bit you attach and

guess rest So customer have we make kind of acquisition. some, guidance look the I at to improvements the growth acquisition the of for customer year on or rate going we're to

you on? sure the customer manner are that a quality doing to credit acquisition, down obviously that you're risk for going not in under how So making that writing that going on on the it customers solve doesn't process to but slow you're taking

John Berger

Yes. to contract underwriting, misunderstanding customer through get Sure, a identification have but signed Sean. all It probably underwriting, there. need a clear a in that go the count little and the respective they We they all until the bit of they're materials forth. so we so don't markets

frustrating in just staffing can that's flow going area. huge customers, obviously certainly And and they customer see so okay, it be honest see so flowed but very and it staffing and through – and those flow will growth service be following we in – wasn't do be the those in these definitely it not wouldn't we're is is. well to but And that Underwriting up. was signed change. more service is through what customers customer so. process, the the automation continue March customers it where our they're That the not to contracts are you a said, We're did. you centers. is And in We're why putting – It rate. April surge we're software wouldn't

way platform. customer at to can customer talking through center our we looking somebody any software instance the for are service in directly also validate a without that We could

And Sunnova So it's up customers, lot a right. making attachment but a new to speed lot of are to we need just We issue. more making we're there and have to more more that rate Sunnova the we've homes markets of Northeast I'm new new timing in origination, do – the to a to those get battery progress homes. great particularly have enhancements and up, great made on

And me. to we of you days timing that's part on we really timing of it think made a QX it be point in I so to was was forward to February didn't, issue, just it seeing. earnings up. a why of But was planned. back rate, slight call. as I issue. the as as when just making thought move more bit say, just out a so that up point I time down. of that's that gave then told just measured it's a was that literally and in will it's I just that move don't matter I storage going worry the a April It the wrong, it And moved and a solution going trend last attachment In we in

Sean Morgan

Yes.

on one storage. Just more up follow

maybe at So as of then attach and north view blue sort people the origination kind sky tax rates. of Germany XX% kind rates of U.S. a, of look a scenario,

of of us do what markets in sort what regulators So what, how do you like two they've already structurally those view converging the achieved? or things and versus terms there needed that the Germany sort of so and U.S. adoption towards that storage their of makes is high to

John Berger

rates It's and Jack and fast really utilities money. Its utility rates are possible. work, much hard at as and are as

a lot a ago, I've I money got we rates already we're rising of I right. never that I nothing now the over see seen year of do the to factor business But Sunnova obviously up. I've guess solar me I over an – And to is but got was I've how about a rate solves constructive of the dates I in the are hard never, more see utilities – of increases that a into that to it's don't a room What big continue working battery? this And And century, people versus seeing about, part far us quarter power rate ones. that. lot mix that me ago, as said just And a that lot war. I been over does retail offering the rates, market So I've stopping lot. So any problems, and the year problem. a EV, thought And happened for than those here? never see push a solve faster the can and right? will boy go, what the I've that where well, rate that it utility rate, eye how for in as that

management where that's of of So are here and up drive and seen the going at to other a and already other so we've powering storage things adoption such load services looking people forth. as lot that and

different I here. here, as utility you but And I going parts about with and so couple to in I over parts the you're to energy right, look are at country, I what good, could the to going you Obviously what's to agree to in happen happen the the what's take do you differing rates of different see Europe think given different think here, going is but of a don't coal years. and rate the my Canary thesis think metaphors that and – country, – Europe if a will mined mix to it's of

start country I to attach going see to think significant a pickup on this you're real rates. in storage

Additional services continue. we're increases we already move utility seeing year it forward rate into the as and

Sean Morgan

Thanks, John. Okay.

John Berger

Thanks.

Operator

Our line is James. Pavel, Pavel Molchanov from comes your next Raymond open. question from

Pavel Molchanov

Thanks the for question. taking

the pace uncertainty installations how suggest essentially the out you can timetable of of its before back running could kind industry baseline Is long AD go me if Let there modules, CBD. continues? to a of sustain for

John Berger

a John. bear, is is, utility have portion I killer big Pavel, is but And I scale a don't the of you really the just this outrun the respective the and me answer question. is What to I have reminds heard say industry on here the panels good would that the important problem, pay like the is you. adage, that's I it's very all portion outrun to more. into And we for appreciate it that those much of the a that in on where of of call And fine. residential pool will industry industry definitely smaller is the flow another at felt There also heard the of it panels call you've price. residential somebody a because industry. the part

your We this rapidly we're have of morning. to questions several are retail answering the gone that higher willingness as rates through and offsetting pay because rising I've

have aggressive don't shall availability it energy using maybe know not I on I've side sheet. unfortunate, don't I we better and think personally think there's how not solar you don't on that. this more things, in a We've that as of crisis people where and the of issues don't detail as going time some balance much I in been having the gets global storage I say have laid country the the scale it to worse. to scale and business. we're So wind issue, much to provide out we're navigate. about is in and utility know of limit have gets our – don't a I to soon, I think just can It's a that that you But of utility see very anytime massively continue I that's

in want up we've strong go is and months our than seeing equipment dealers with supply we did contract are there I dealers did dealers, our dealers, making our And they've have this ago do that cash our on so. than balance a particularly that there to to case. out the to fill for more We we on much themselves. and and make have up. they modules, point. more so, stocked encouraged told we to sure facilitated us insurance all policies do procure under that so on sheet just them there's equipment get they you're with help and what supply flows to been got go our lot out And directly equipment Our able exactly asked for we on of dealers

time XXXX. way with point be So but all some feel pretty lot the there, here we've it point of equipment. a surrounded at going feel good think I ourselves hiccups in this at we and there'll sure and about I'm into

So at we look the if this other resolve uncertainty back be be the And to whatever that XXXX, of the may half year, be. as the lifted fine. will in will government but in one time this not, I in into or that probably point we're way going think

Pavel Molchanov

a Rico Puerto me lot a Okay. and of specifically, more and let feedstock zoom in response Hawaii above that U.S. two markets Well, power fuel, beyond cost where they're only with above petroleum, $XXX a a as by the you a is consumers paying pump? what are those barrel to, at on attuned in are, the oil the seeing geographies key

John Berger

Yes. a meet and and increased of just have the across fragile, islands how, centralized the the saw would don't obviously systems they are most unfortunate the in media dramatic And that and response across in issues an that A had very explosion We plant. power say particular world of the the reliability. I reliability a needs in also a Puerto Rico. really reminder the for fashion increasing major consumers country, how at

come the XX you're will markets for and higher, to natural say that Saipan to, across I they've is Tinian they lower so you so. the absolutely, a, rates and faster others. And And what add and move would surge to I again would so utility our know have we right just most to But they and that started the to oil gas of a math matter wanted timing already are than Guam, as in that, included. what's are do in country harbinger prices of But there sure make zoomed prevail. tend it's a

residential Ford of massive know, expect we're And kind but rate large of not gives the anytime solar them increases. with what stop is growth these the that's confidence seeing you that we industry us do on soon. So to

Pavel Molchanov

much. the perspective. you Thank Appreciate very

John Berger

Thank you.

Operator

Johnson from Gordon, Research. Gordon from open. line comes question your next is Our GLJ

James Bardowski

for morning for Gordon. guys. James squeeze Hey, Bardowski good Thanks in me. is This

to tertiary mean debt your cost had but – Just prices, couple on the of a questions I don't just beat dead or had horse the a there.

how incremental increase pass terms on can debt in of you debt So to customers? cost, the new in quickly any your

Robert Lane

We the pass return do the don't cost earns. really is, as about we've What our customers. of unlevered increase on we talked is

thing very on do increase can a have a make communicating as through, we says, to it's on it, John if we're at what's a going we the in But it we system pushing we just they sure and into up we the that price surprise that this of matter one dealers see nothing as rapid a that and real us So basis, basis really going ends is them. do to want could so happening to timely do comes time.

James Bardowski

the then high of blended And cost helpful. X% would That's Okay. your noting trajectory that the how your have rate? to before rise discount debt – reassess you costs, noting of debt

Robert Lane

that's, what at We've Again, end X% we're of the decision. looking, the you the we've letting we're at. that day, just make you rate guys because discount given we'll, looked

remains there. debt of Our weighted below average cost

we a debt it's and number. concentrated So we looking that the spreads as the on we we cash day, debt, it. still That's way show debt though, because end number It's flows. And why think to the number good cash the to on that it's state really cash we we, up of cash look return on understand end day, at a why unlevered we're of of the flows. cost At paying. cash prepared also sort at comment, can that's end look the the that that way we're what of at from versus a very our at show in punitive you what, the still the cash a

see there's day, in job or really our continuing And, as existing is for long years good you locked which an long controls end we positive, know, necessarily to we a next which that the costs? remains build the debt, this as as is do four have that don't all issue. debt continue five as as any which long a The if ally best of spread because the in became debt, it the full be to we of matched raise balance at So, as reason scale look flows whatever up And, to raise locked for only sheet that there which are they own for of already really the headroom their cash origination returns. levered have new our against utilities we're a, for of here difficult able it. with industry, ones continue us gives to rates, contracted to that

feel So really fully it's business end we a, really go at day, look our we're not at would But anything the manage we're such going and is be to temporary to model burden as to positioned more returns. able thing we a of our thing through within to best continue be unlevered really that. the that than the that

of things doing regardless creative that that we're what rate are is, and shareholders. profitable the So interest the

John Berger

basis, that one would laid and we've as blow say, I'd a up your I And of contracted that's all like Because look it option or the all a customers, value whatever basis. basis cash look or that And which at, I add that every and blow a that at rate you. peers, and issue to value. share share the we've is want comp to The out discount shares you a of investors is ways all see we the take at encourage just to out the we else, on real down stock down, done what per take per on down Take stop with NCCV at customer and intelligent right. and all not thing take cash, per think to out flows. time that you'll our blow say, think return that coming find we the couldn't full peers would, it, the invest look based And would is that off, margins something the out across customer value. we per cash just you and blow just best. profitability then have will down, a at Look I look what's it spend renewal, the see If and it all shareholders. are industry we're period that contracted to base, capital, flows take it best in and capital we use, take dilutes unequivocally,

James Bardowski

it. Got That helpful. is

one it on. just finally then and more pass And Okay. I'll

are is as the of or rate rates you've defense increases You there been that is there in did just growth your organic raising this in margins mention well?

John Berger

in We're the that be say, would sale of on it's seeing margins. some I that, gain terms organic our only can and material at powerings equipment price the we're price, of service, in point capital in up It's but to in and more specifically the increases. doing for raising see cost of growth more but revenue. opportunities of that defense this time, on we

James Bardowski

Okay, great. Thanks a lot. I appreciate the time.

John Berger

you. Thank

Operator

have Thank your we questions. will closing now any to John, hand back host, go John Currently, please for you. ahead. no further I remarks.

John Berger

Operator. you, Thank

our the about that quarter, customers look see we back supply and managing and partners is problems first to our fears whatsoever solve in there dealers. any our with in the you Sunnova working to in can As equipment availability chain very aggressively to the

ample are do increasing We price and to room have so.

opportunity our additional but customers cash for We're seeing rapidly. of and lock long opportunity ahead a ability This And in and There us, year. that services we're ahead amount great expanding growth has demonstrated good offered. term somewhat in a cost surprising, from additional much to of time investing a We a that interest in much so capital in the been have the and to of flows. powerings in of forward There's rising intelligent us. and significant up fashion. start we're surprise, an and move address

in quarter call fact, the running the the In you. looking calls we're of of many second And Thank year the years strongest on the year. this future start is has forward this to and you that to seen again in been seeing business. I've

Operator

today. with call. today's lovely you day ahead. and concludes for us Ladies Thank conference Have being a gentlemen, this

your lines now. You may disconnect

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