Balance Sheet Components

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventories

The components of inventory consist of the following (in thousands):


	September 30,		December 31,
	2022		2021

Raw materials	$	156,163	$	80,809
Finished goods	61,376		30,668
Work-in-progress	37,356		31,893
	$	254,895	$	143,370

The inventory reserves were $17.6 million and $13.9 million as of September 30, 2022 and December 31, 2021, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	September 30,		December 31,
	2022		2021

Receivables from employees	$	7,949	$	5,463
Prepaid hardware and software maintenance	5,079		3,494
Prepaid managed services	4,291		2,480
Tax receivables	3,259		1,518
Prepaid workers compensation	3,114		5,330
Deposits made	1,425		817
Prepaid deferred commissions	794		724
State incentive receivable	214		427
Other prepaid expenses and other current assets	20,364		10,408
	$	46,489	$	30,661

Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following (in thousands):


	September 30,		December 31,
	2022		2021

Energy Servers	$	669,606	$	674,799
Machinery and equipment	132,965		110,600
Construction-in-progress	91,301		43,544
Leasehold improvements	68,369		52,936
Building	49,240		48,934
Computers, software and hardware	24,100		21,276
Furniture and fixtures	9,123		8,607
	1,044,704		960,696
Less: accumulated depreciation	(397,936)		(356,590)
	$	646,768	$	604,106

Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2022 was $15.5 million and $46.2 million, respectively. Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2021 was $13.3 million and $40.1 million, respectively.

Property, plant and equipment under operating leases by the PPA Entities was $362.0 million and $368.0 million and accumulated depreciation for these assets was $153.8 million and $139.4 million as of September 30, 2022 and December 31, 2021, respectively. Depreciation expense for these assets was $5.8 million and $17.3 million for the three and nine months ended September 30, 2022, respectively. Depreciation expense for these assets was $5.9 million and $17.6 million for the three and nine months ended September 30, 2021, respectively.

PPA IIIa Upgrade

In June 2022, we started a project to replace 9.8 megawatts of second-generation Energy Servers (the “old Energy Servers”) at PPA IIIa Investment Company and Operating Company (“PPA IIIa”) with current generation Energy Servers (the “new Energy Servers”) (the “PPA IIIa Upgrade”, the “PPA IIIa Repowering”). The replacement was ongoing as of September 30, 2022. See Note 11 - Portfolio Financing for additional information.

Change in Estimate

In June 2022, due to the replacement of old Energy Servers as part of the PPA IIIa Repowering, we revised the expected useful life of the old Energy Servers. As a result, the expected useful life of old Energy Servers decreased from 15 years to approximately 0.5 years. We recognized accelerated depreciation of $0.2 million in electricity cost of revenue on the revised carrying amount of the old Energy Servers after impairment loss in our condensed consolidated statements of operations. There is no effect from this change in accounting estimate on future periods.

Other Long-Term Assets

Other long-term assets consist of the following (in thousands):


	September 30,		December 31,
	2022		2021

Long-term lease receivable	$	8,131	$	7,953
Prepaid insurance	7,969		9,534
Deferred commissions	7,229		7,569
Deposits made	2,694		1,923
Prepaid managed services	2,533		3,010
Deferred tax asset	885		954
Investments in subsidiaries	—		1,819
Prepaid and other long-term assets	8,875		8,311
	$	38,316	$	41,073

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	September 30,		December 31,
	2022		2021

Compensation and benefits	$	30,002	$	38,222
Sales-related liabilities	10,374		6,040
Delaware grant	9,495		—
Accrued installation	6,032		13,968
Accrued legal expenses	5,513		1,765
Current portion of derivative liabilities	3,053		6,059
Accrued consulting expenses	1,423		1,731
Sales tax liabilities	1,359		1,491
Interest payable	719		2,159


Option to acquire a variable number of shares of Class A Common Stock (Note 5)	—		13,200
Other	34,040		29,503
	$	102,010	$	114,138