Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Facilities, Energy Servers, and Vehicles

We lease most of our facilities, Energy Servers, and vehicles under operating and finance leases that expire at various dates through February 2036. We lease various manufacturing facilities in California and Delaware. Our Sunnyvale, California manufacturing facility lease was entered into in April 2005 and expires in December 2023. In June 2020, March 2021 and June 2022, we signed leases in Fremont, California that will expire in 2027, 2036 and 2028, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 421,000 square feet of space. In 2021, we extended the lease term for our headquarters in San Jose, California to 2031 and leased three additional floors. We lease additional office space as field offices in the United States and around the world including in China, India, Japan, the Republic of Korea and Taiwan.

Some of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease cost under such arrangements on a straight-line basis over the life of the leases. For the years ended December 31, 2022, 2021 and 2020, rent expense for all occupied facilities was $21.4 million, $16.0 million and $9.9 million, respectively.

At inception of the contract, we assess whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by us. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (financing lease) or not (operating lease). Our operating leases are comprised primarily of leases for facilities, office buildings, and vehicles, and our financing leases are comprised primarily of vehicles.

Our leases have lease terms ranging from less than 1 year to 15 years, some of which include options to extend the leases. The lease term is the non-cancelable period of the lease and includes options to extend the lease when it is reasonably certain that an option will be exercised.

Lease liabilities are measured at the lease commencement date as the present value of future lease payments. Lease right-of-use assets are measured as the lease liability plus unamortized initial direct costs and prepaid (accrued) lease payments less unamortized balance lease incentives received. In measuring the present value of the future lease payments, the discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the lessee is required to use its incremental borrowing rate. In computing our lease liabilities, we use the incremental borrowing rate based on the information available on the commencement date using an estimate of company-specific rate in the United States on a collateralized basis and consistent with the lease term for each lease. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of December 31, 2022 and 2021 were as follows (in thousands):

	Years Ended December 31,
	2022		2021
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	126,955	$	106,660
Current operating lease liabilities	(16,227)		(13,101)
Non-current operating lease liabilities	(132,363)		(106,187)
Total operating lease liabilities	$	(148,590)	$	(119,288)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,824	$	2,944
Current finance lease liabilities 5	(1,024)		(863)
Non-current finance lease liabilities 6	(1,971)		(2,157)
Total finance lease liabilities	(2,995)		(3,020)
Total lease liabilities	$	(151,585)	$	(122,308)

1 These assets primarily include leases for facilities, Energy Servers, and vehicles.

2 Net of accumulated amortization.

3 These assets primarily include leases for vehicles.

4 Included in property, plant and equipment, net in the consolidated balance sheets.

5 Included in accrued expenses and other current liabilities in the consolidated balance sheets.

6 Included in other long-term liabilities in the consolidated balance sheets.

The components of our facilities, Energy Servers, and vehicles’ lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands):

	Years Ended December 31,
	2022		2021		2020
Operating lease costs	$	25,503	$	15,850	$	9,804
Financing lease costs:
Amortization of right-of-use assets	968		1,345		51
Interest on lease liabilities	220		349		16
Total financing lease costs	1,188		1,694		67
Short-term lease costs	974		407		613
Total lease costs	$	27,665	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2022 and 2021 were as follows:

	December 31,
	2022		2021
Weighted average remaining lease term:
Operating leases	8.6 years		8.9 years
Finance leases	3.3 years		3.5 years
Weighted average discount rate:
Operating leases	10.3	%	9.6	%
Finance leases	6.9	%	7.6	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2022 were as follows (in thousands):

	Operating Leases		Finance Leases
2023	$	30,058	$	1,250
2024	26,145		1,076
2025	26,879		590
2026	26,743		371
2027	25,442		180
Thereafter	95,980		11
Total minimum lease payments	231,247		3,478
Less: amounts representing interest or imputed interest	(82,657)		(483)
Present value of lease liabilities	$	148,590	$	2,995

Managed Services and Portfolio Financings Through PPA Entities

Certain of our customers enter into Managed Services or Portfolio Financings through a PPA Entity to finance their lease of Bloom Energy Servers. Prior to our adoption of ASC 842 as of January 1, 2020, such arrangements with customers that qualified as leases were classified as either sales-type leases or operating leases. For all pre-existing Managed Services Financings or Portfolio Financings through PPA Entities, we have carried over the accounting classifications for those transactions and continue to account for such transactions as either sales-type leases or operating leases under ASC 842. Customer arrangements under Managed Services and Portfolio Financings through PPA Entities entered into after January 1, 2020 do not contain a lease under ASC 842 and are accounted for under ASC 606 as revenue arrangements.

Lease agreements under our Managed Services Financings and Portfolio Financings through PPA Entities include non-cancellable lease terms, during which terms the majority of our investment in Energy Servers under lease are typically recovered. We mitigate remaining residual value risk of its Energy Servers through its provision of maintenance on the Energy Servers during the lease term and through insurance whose proceeds are payable in the event of theft, loss, damage, or destruction.

Managed Services - Our Managed Services Financings with financiers that result in failed sale-and-leaseback transactions are accounted for as financing transactions. Payments received from the financier are recognized as financing obligations in our consolidated balance sheets. Proceeds from the financiers in excess of fair value of Energy Servers under successful sale-and-leaseback transactions are also accounted for as financing obligations. These financing obligations are included in each agreement’s contract value and are recognized as short-term or long-term liabilities based on the estimated payment dates. The lease agreements expire on various dates through 2034. For successful sale-and-leaseback transactions, we record right-of-use assets and lease liabilities and record lease expense over the lease term. The recognized lease expense for the year ended December 31, 2022 was $5.6 million. The recognized lease expense for the years ended December 31, 2021 and 2020 have been immaterial.

We recognized $20.4 million and $35.1 million of product revenue, $11.3 million and $20.9 million of installation revenue, $3.3 million and $10.0 million of financing obligations, and $12.6 million and $29.4 million of right-of-use assets and lease liabilities from such successful sale and leaseback transactions for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
2023	$	44,740
2024	42,742
2025	41,726
2026	37,138
2027	20,793
Thereafter	36,223
Total minimum lease payments	223,362
Less: imputed interest	(122,580)
Present value of net minimum lease payments	100,782
Less: current financing obligations	(17,364)
Long-term financing obligations	$	83,418

The long-term financing obligations, as reflected in our consolidated balance sheets, were $442.1 million and $461.9 million as of December 31, 2022 and 2021, respectively. The difference between these obligations and the principal obligations in the table above will be offset against the carrying value of the related Energy Servers at the end of the lease and the remainder recognized as a gain at that point.

Portfolio Financings through PPA Entities - Customer arrangements entered into prior to January 1, 2020 under Portfolio Financing arrangements through a PPA Entity that qualified as leases are accounted for as either sales-type leases or operating leases. Since January 1, 2020, we have not entered into any new PPAs with customers under such arrangements.

The components of our aggregate net investment in sales-type leases under our Portfolio Financings through PPA entities consisted of the following (in thousands):

	December 31,
	2021
Lease payment receivables, net1	$	44,378
Estimated residual value of leased assets (unguaranteed)	890
Net investment in sales-type leases	45,268
Less: current portion	(5,784)
Non-current portion of net investment in sales-type leases	$	39,484

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021.

As of December 31, 2022, there was no net investment in sales-type leases as a result of PPA IIIa Repowering. Please refer to Note 11 - Portfolio Financings for details.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2022, were as follows (in thousands):

	Operating Leases
2023	21,063
2024	21,238
2025	21,630
2026	22,092
2027	22,566
Thereafter	85,009
Total minimum lease payments	$	193,598

Leases

Leases

Facilities, Energy Servers, and Vehicles

We lease most of our facilities, Energy Servers, and vehicles under operating and finance leases that expire at various dates through February 2036. We lease various manufacturing facilities in California and Delaware. Our Sunnyvale, California manufacturing facility lease was entered into in April 2005 and expires in December 2023. In June 2020, March 2021 and June 2022, we signed leases in Fremont, California that will expire in 2027, 2036 and 2028, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 421,000 square feet of space. In 2021, we extended the lease term for our headquarters in San Jose, California to 2031 and leased three additional floors. We lease additional office space as field offices in the United States and around the world including in China, India, Japan, the Republic of Korea and Taiwan.

Some of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease cost under such arrangements on a straight-line basis over the life of the leases. For the years ended December 31, 2022, 2021 and 2020, rent expense for all occupied facilities was $21.4 million, $16.0 million and $9.9 million, respectively.

At inception of the contract, we assess whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by us. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (financing lease) or not (operating lease). Our operating leases are comprised primarily of leases for facilities, office buildings, and vehicles, and our financing leases are comprised primarily of vehicles.

Our leases have lease terms ranging from less than 1 year to 15 years, some of which include options to extend the leases. The lease term is the non-cancelable period of the lease and includes options to extend the lease when it is reasonably certain that an option will be exercised.

Lease liabilities are measured at the lease commencement date as the present value of future lease payments. Lease right-of-use assets are measured as the lease liability plus unamortized initial direct costs and prepaid (accrued) lease payments less unamortized balance lease incentives received. In measuring the present value of the future lease payments, the discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the lessee is required to use its incremental borrowing rate. In computing our lease liabilities, we use the incremental borrowing rate based on the information available on the commencement date using an estimate of company-specific rate in the United States on a collateralized basis and consistent with the lease term for each lease. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of December 31, 2022 and 2021 were as follows (in thousands):

	Years Ended December 31,
	2022		2021
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	126,955	$	106,660
Current operating lease liabilities	(16,227)		(13,101)
Non-current operating lease liabilities	(132,363)		(106,187)
Total operating lease liabilities	$	(148,590)	$	(119,288)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,824	$	2,944
Current finance lease liabilities 5	(1,024)		(863)
Non-current finance lease liabilities 6	(1,971)		(2,157)
Total finance lease liabilities	(2,995)		(3,020)
Total lease liabilities	$	(151,585)	$	(122,308)

1 These assets primarily include leases for facilities, Energy Servers, and vehicles.

2 Net of accumulated amortization.

3 These assets primarily include leases for vehicles.

4 Included in property, plant and equipment, net in the consolidated balance sheets.

5 Included in accrued expenses and other current liabilities in the consolidated balance sheets.

6 Included in other long-term liabilities in the consolidated balance sheets.

The components of our facilities, Energy Servers, and vehicles’ lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands):

	Years Ended December 31,
	2022		2021		2020
Operating lease costs	$	25,503	$	15,850	$	9,804
Financing lease costs:
Amortization of right-of-use assets	968		1,345		51
Interest on lease liabilities	220		349		16
Total financing lease costs	1,188		1,694		67
Short-term lease costs	974		407		613
Total lease costs	$	27,665	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2022 and 2021 were as follows:

	December 31,
	2022		2021
Weighted average remaining lease term:
Operating leases	8.6 years		8.9 years
Finance leases	3.3 years		3.5 years
Weighted average discount rate:
Operating leases	10.3	%	9.6	%
Finance leases	6.9	%	7.6	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2022 were as follows (in thousands):

	Operating Leases		Finance Leases
2023	$	30,058	$	1,250
2024	26,145		1,076
2025	26,879		590
2026	26,743		371
2027	25,442		180
Thereafter	95,980		11
Total minimum lease payments	231,247		3,478
Less: amounts representing interest or imputed interest	(82,657)		(483)
Present value of lease liabilities	$	148,590	$	2,995

Managed Services and Portfolio Financings Through PPA Entities

Certain of our customers enter into Managed Services or Portfolio Financings through a PPA Entity to finance their lease of Bloom Energy Servers. Prior to our adoption of ASC 842 as of January 1, 2020, such arrangements with customers that qualified as leases were classified as either sales-type leases or operating leases. For all pre-existing Managed Services Financings or Portfolio Financings through PPA Entities, we have carried over the accounting classifications for those transactions and continue to account for such transactions as either sales-type leases or operating leases under ASC 842. Customer arrangements under Managed Services and Portfolio Financings through PPA Entities entered into after January 1, 2020 do not contain a lease under ASC 842 and are accounted for under ASC 606 as revenue arrangements.

Lease agreements under our Managed Services Financings and Portfolio Financings through PPA Entities include non-cancellable lease terms, during which terms the majority of our investment in Energy Servers under lease are typically recovered. We mitigate remaining residual value risk of its Energy Servers through its provision of maintenance on the Energy Servers during the lease term and through insurance whose proceeds are payable in the event of theft, loss, damage, or destruction.

Managed Services - Our Managed Services Financings with financiers that result in failed sale-and-leaseback transactions are accounted for as financing transactions. Payments received from the financier are recognized as financing obligations in our consolidated balance sheets. Proceeds from the financiers in excess of fair value of Energy Servers under successful sale-and-leaseback transactions are also accounted for as financing obligations. These financing obligations are included in each agreement’s contract value and are recognized as short-term or long-term liabilities based on the estimated payment dates. The lease agreements expire on various dates through 2034. For successful sale-and-leaseback transactions, we record right-of-use assets and lease liabilities and record lease expense over the lease term. The recognized lease expense for the year ended December 31, 2022 was $5.6 million. The recognized lease expense for the years ended December 31, 2021 and 2020 have been immaterial.

We recognized $20.4 million and $35.1 million of product revenue, $11.3 million and $20.9 million of installation revenue, $3.3 million and $10.0 million of financing obligations, and $12.6 million and $29.4 million of right-of-use assets and lease liabilities from such successful sale and leaseback transactions for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
2023	$	44,740
2024	42,742
2025	41,726
2026	37,138
2027	20,793
Thereafter	36,223
Total minimum lease payments	223,362
Less: imputed interest	(122,580)
Present value of net minimum lease payments	100,782
Less: current financing obligations	(17,364)
Long-term financing obligations	$	83,418

The long-term financing obligations, as reflected in our consolidated balance sheets, were $442.1 million and $461.9 million as of December 31, 2022 and 2021, respectively. The difference between these obligations and the principal obligations in the table above will be offset against the carrying value of the related Energy Servers at the end of the lease and the remainder recognized as a gain at that point.

Portfolio Financings through PPA Entities - Customer arrangements entered into prior to January 1, 2020 under Portfolio Financing arrangements through a PPA Entity that qualified as leases are accounted for as either sales-type leases or operating leases. Since January 1, 2020, we have not entered into any new PPAs with customers under such arrangements.

The components of our aggregate net investment in sales-type leases under our Portfolio Financings through PPA entities consisted of the following (in thousands):

	December 31,
	2021
Lease payment receivables, net1	$	44,378
Estimated residual value of leased assets (unguaranteed)	890
Net investment in sales-type leases	45,268
Less: current portion	(5,784)
Non-current portion of net investment in sales-type leases	$	39,484

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021.

As of December 31, 2022, there was no net investment in sales-type leases as a result of PPA IIIa Repowering. Please refer to Note 11 - Portfolio Financings for details.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2022, were as follows (in thousands):

	Operating Leases
2023	21,063
2024	21,238
2025	21,630
2026	22,092
2027	22,566
Thereafter	85,009
Total minimum lease payments	$	193,598

Leases

Leases

Facilities, Energy Servers, and Vehicles

We lease most of our facilities, Energy Servers, and vehicles under operating and finance leases that expire at various dates through February 2036. We lease various manufacturing facilities in California and Delaware. Our Sunnyvale, California manufacturing facility lease was entered into in April 2005 and expires in December 2023. In June 2020, March 2021 and June 2022, we signed leases in Fremont, California that will expire in 2027, 2036 and 2028, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 421,000 square feet of space. In 2021, we extended the lease term for our headquarters in San Jose, California to 2031 and leased three additional floors. We lease additional office space as field offices in the United States and around the world including in China, India, Japan, the Republic of Korea and Taiwan.

Some of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease cost under such arrangements on a straight-line basis over the life of the leases. For the years ended December 31, 2022, 2021 and 2020, rent expense for all occupied facilities was $21.4 million, $16.0 million and $9.9 million, respectively.

At inception of the contract, we assess whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by us. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (financing lease) or not (operating lease). Our operating leases are comprised primarily of leases for facilities, office buildings, and vehicles, and our financing leases are comprised primarily of vehicles.

Our leases have lease terms ranging from less than 1 year to 15 years, some of which include options to extend the leases. The lease term is the non-cancelable period of the lease and includes options to extend the lease when it is reasonably certain that an option will be exercised.

Lease liabilities are measured at the lease commencement date as the present value of future lease payments. Lease right-of-use assets are measured as the lease liability plus unamortized initial direct costs and prepaid (accrued) lease payments less unamortized balance lease incentives received. In measuring the present value of the future lease payments, the discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the lessee is required to use its incremental borrowing rate. In computing our lease liabilities, we use the incremental borrowing rate based on the information available on the commencement date using an estimate of company-specific rate in the United States on a collateralized basis and consistent with the lease term for each lease. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of December 31, 2022 and 2021 were as follows (in thousands):

	Years Ended December 31,
	2022		2021
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	126,955	$	106,660
Current operating lease liabilities	(16,227)		(13,101)
Non-current operating lease liabilities	(132,363)		(106,187)
Total operating lease liabilities	$	(148,590)	$	(119,288)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,824	$	2,944
Current finance lease liabilities 5	(1,024)		(863)
Non-current finance lease liabilities 6	(1,971)		(2,157)
Total finance lease liabilities	(2,995)		(3,020)
Total lease liabilities	$	(151,585)	$	(122,308)

1 These assets primarily include leases for facilities, Energy Servers, and vehicles.

2 Net of accumulated amortization.

3 These assets primarily include leases for vehicles.

4 Included in property, plant and equipment, net in the consolidated balance sheets.

5 Included in accrued expenses and other current liabilities in the consolidated balance sheets.

6 Included in other long-term liabilities in the consolidated balance sheets.

The components of our facilities, Energy Servers, and vehicles’ lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands):

	Years Ended December 31,
	2022		2021		2020
Operating lease costs	$	25,503	$	15,850	$	9,804
Financing lease costs:
Amortization of right-of-use assets	968		1,345		51
Interest on lease liabilities	220		349		16
Total financing lease costs	1,188		1,694		67
Short-term lease costs	974		407		613
Total lease costs	$	27,665	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2022 and 2021 were as follows:

	December 31,
	2022		2021
Weighted average remaining lease term:
Operating leases	8.6 years		8.9 years
Finance leases	3.3 years		3.5 years
Weighted average discount rate:
Operating leases	10.3	%	9.6	%
Finance leases	6.9	%	7.6	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2022 were as follows (in thousands):

	Operating Leases		Finance Leases
2023	$	30,058	$	1,250
2024	26,145		1,076
2025	26,879		590
2026	26,743		371
2027	25,442		180
Thereafter	95,980		11
Total minimum lease payments	231,247		3,478
Less: amounts representing interest or imputed interest	(82,657)		(483)
Present value of lease liabilities	$	148,590	$	2,995

Managed Services and Portfolio Financings Through PPA Entities

Certain of our customers enter into Managed Services or Portfolio Financings through a PPA Entity to finance their lease of Bloom Energy Servers. Prior to our adoption of ASC 842 as of January 1, 2020, such arrangements with customers that qualified as leases were classified as either sales-type leases or operating leases. For all pre-existing Managed Services Financings or Portfolio Financings through PPA Entities, we have carried over the accounting classifications for those transactions and continue to account for such transactions as either sales-type leases or operating leases under ASC 842. Customer arrangements under Managed Services and Portfolio Financings through PPA Entities entered into after January 1, 2020 do not contain a lease under ASC 842 and are accounted for under ASC 606 as revenue arrangements.

Lease agreements under our Managed Services Financings and Portfolio Financings through PPA Entities include non-cancellable lease terms, during which terms the majority of our investment in Energy Servers under lease are typically recovered. We mitigate remaining residual value risk of its Energy Servers through its provision of maintenance on the Energy Servers during the lease term and through insurance whose proceeds are payable in the event of theft, loss, damage, or destruction.

Managed Services - Our Managed Services Financings with financiers that result in failed sale-and-leaseback transactions are accounted for as financing transactions. Payments received from the financier are recognized as financing obligations in our consolidated balance sheets. Proceeds from the financiers in excess of fair value of Energy Servers under successful sale-and-leaseback transactions are also accounted for as financing obligations. These financing obligations are included in each agreement’s contract value and are recognized as short-term or long-term liabilities based on the estimated payment dates. The lease agreements expire on various dates through 2034. For successful sale-and-leaseback transactions, we record right-of-use assets and lease liabilities and record lease expense over the lease term. The recognized lease expense for the year ended December 31, 2022 was $5.6 million. The recognized lease expense for the years ended December 31, 2021 and 2020 have been immaterial.

We recognized $20.4 million and $35.1 million of product revenue, $11.3 million and $20.9 million of installation revenue, $3.3 million and $10.0 million of financing obligations, and $12.6 million and $29.4 million of right-of-use assets and lease liabilities from such successful sale and leaseback transactions for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
2023	$	44,740
2024	42,742
2025	41,726
2026	37,138
2027	20,793
Thereafter	36,223
Total minimum lease payments	223,362
Less: imputed interest	(122,580)
Present value of net minimum lease payments	100,782
Less: current financing obligations	(17,364)
Long-term financing obligations	$	83,418

The long-term financing obligations, as reflected in our consolidated balance sheets, were $442.1 million and $461.9 million as of December 31, 2022 and 2021, respectively. The difference between these obligations and the principal obligations in the table above will be offset against the carrying value of the related Energy Servers at the end of the lease and the remainder recognized as a gain at that point.

Portfolio Financings through PPA Entities - Customer arrangements entered into prior to January 1, 2020 under Portfolio Financing arrangements through a PPA Entity that qualified as leases are accounted for as either sales-type leases or operating leases. Since January 1, 2020, we have not entered into any new PPAs with customers under such arrangements.

The components of our aggregate net investment in sales-type leases under our Portfolio Financings through PPA entities consisted of the following (in thousands):

	December 31,
	2021
Lease payment receivables, net1	$	44,378
Estimated residual value of leased assets (unguaranteed)	890
Net investment in sales-type leases	45,268
Less: current portion	(5,784)
Non-current portion of net investment in sales-type leases	$	39,484

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021.

As of December 31, 2022, there was no net investment in sales-type leases as a result of PPA IIIa Repowering. Please refer to Note 11 - Portfolio Financings for details.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2022, were as follows (in thousands):

	Operating Leases
2023	21,063
2024	21,238
2025	21,630
2026	22,092
2027	22,566
Thereafter	85,009
Total minimum lease payments	$	193,598

Leases

Leases

Facilities, Energy Servers, and Vehicles

We lease most of our facilities, Energy Servers, and vehicles under operating and finance leases that expire at various dates through February 2036. We lease various manufacturing facilities in California and Delaware. Our Sunnyvale, California manufacturing facility lease was entered into in April 2005 and expires in December 2023. In June 2020, March 2021 and June 2022, we signed leases in Fremont, California that will expire in 2027, 2036 and 2028, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 421,000 square feet of space. In 2021, we extended the lease term for our headquarters in San Jose, California to 2031 and leased three additional floors. We lease additional office space as field offices in the United States and around the world including in China, India, Japan, the Republic of Korea and Taiwan.

Some of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease cost under such arrangements on a straight-line basis over the life of the leases. For the years ended December 31, 2022, 2021 and 2020, rent expense for all occupied facilities was $21.4 million, $16.0 million and $9.9 million, respectively.

At inception of the contract, we assess whether a contract is a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by us. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (financing lease) or not (operating lease). Our operating leases are comprised primarily of leases for facilities, office buildings, and vehicles, and our financing leases are comprised primarily of vehicles.

Our leases have lease terms ranging from less than 1 year to 15 years, some of which include options to extend the leases. The lease term is the non-cancelable period of the lease and includes options to extend the lease when it is reasonably certain that an option will be exercised.

Lease liabilities are measured at the lease commencement date as the present value of future lease payments. Lease right-of-use assets are measured as the lease liability plus unamortized initial direct costs and prepaid (accrued) lease payments less unamortized balance lease incentives received. In measuring the present value of the future lease payments, the discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the lessee is required to use its incremental borrowing rate. In computing our lease liabilities, we use the incremental borrowing rate based on the information available on the commencement date using an estimate of company-specific rate in the United States on a collateralized basis and consistent with the lease term for each lease. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of December 31, 2022 and 2021 were as follows (in thousands):

	Years Ended December 31,
	2022		2021
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	126,955	$	106,660
Current operating lease liabilities	(16,227)		(13,101)
Non-current operating lease liabilities	(132,363)		(106,187)
Total operating lease liabilities	$	(148,590)	$	(119,288)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,824	$	2,944
Current finance lease liabilities 5	(1,024)		(863)
Non-current finance lease liabilities 6	(1,971)		(2,157)
Total finance lease liabilities	(2,995)		(3,020)
Total lease liabilities	$	(151,585)	$	(122,308)

1 These assets primarily include leases for facilities, Energy Servers, and vehicles.

2 Net of accumulated amortization.

3 These assets primarily include leases for vehicles.

4 Included in property, plant and equipment, net in the consolidated balance sheets.

5 Included in accrued expenses and other current liabilities in the consolidated balance sheets.

6 Included in other long-term liabilities in the consolidated balance sheets.

The components of our facilities, Energy Servers, and vehicles’ lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands):

	Years Ended December 31,
	2022		2021		2020
Operating lease costs	$	25,503	$	15,850	$	9,804
Financing lease costs:
Amortization of right-of-use assets	968		1,345		51
Interest on lease liabilities	220		349		16
Total financing lease costs	1,188		1,694		67
Short-term lease costs	974		407		613
Total lease costs	$	27,665	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2022 and 2021 were as follows:

	December 31,
	2022		2021
Weighted average remaining lease term:
Operating leases	8.6 years		8.9 years
Finance leases	3.3 years		3.5 years
Weighted average discount rate:
Operating leases	10.3	%	9.6	%
Finance leases	6.9	%	7.6	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2022 were as follows (in thousands):

	Operating Leases		Finance Leases
2023	$	30,058	$	1,250
2024	26,145		1,076
2025	26,879		590
2026	26,743		371
2027	25,442		180
Thereafter	95,980		11
Total minimum lease payments	231,247		3,478
Less: amounts representing interest or imputed interest	(82,657)		(483)
Present value of lease liabilities	$	148,590	$	2,995

Managed Services and Portfolio Financings Through PPA Entities

Certain of our customers enter into Managed Services or Portfolio Financings through a PPA Entity to finance their lease of Bloom Energy Servers. Prior to our adoption of ASC 842 as of January 1, 2020, such arrangements with customers that qualified as leases were classified as either sales-type leases or operating leases. For all pre-existing Managed Services Financings or Portfolio Financings through PPA Entities, we have carried over the accounting classifications for those transactions and continue to account for such transactions as either sales-type leases or operating leases under ASC 842. Customer arrangements under Managed Services and Portfolio Financings through PPA Entities entered into after January 1, 2020 do not contain a lease under ASC 842 and are accounted for under ASC 606 as revenue arrangements.

Lease agreements under our Managed Services Financings and Portfolio Financings through PPA Entities include non-cancellable lease terms, during which terms the majority of our investment in Energy Servers under lease are typically recovered. We mitigate remaining residual value risk of its Energy Servers through its provision of maintenance on the Energy Servers during the lease term and through insurance whose proceeds are payable in the event of theft, loss, damage, or destruction.

Managed Services - Our Managed Services Financings with financiers that result in failed sale-and-leaseback transactions are accounted for as financing transactions. Payments received from the financier are recognized as financing obligations in our consolidated balance sheets. Proceeds from the financiers in excess of fair value of Energy Servers under successful sale-and-leaseback transactions are also accounted for as financing obligations. These financing obligations are included in each agreement’s contract value and are recognized as short-term or long-term liabilities based on the estimated payment dates. The lease agreements expire on various dates through 2034. For successful sale-and-leaseback transactions, we record right-of-use assets and lease liabilities and record lease expense over the lease term. The recognized lease expense for the year ended December 31, 2022 was $5.6 million. The recognized lease expense for the years ended December 31, 2021 and 2020 have been immaterial.

We recognized $20.4 million and $35.1 million of product revenue, $11.3 million and $20.9 million of installation revenue, $3.3 million and $10.0 million of financing obligations, and $12.6 million and $29.4 million of right-of-use assets and lease liabilities from such successful sale and leaseback transactions for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
2023	$	44,740
2024	42,742
2025	41,726
2026	37,138
2027	20,793
Thereafter	36,223
Total minimum lease payments	223,362
Less: imputed interest	(122,580)
Present value of net minimum lease payments	100,782
Less: current financing obligations	(17,364)
Long-term financing obligations	$	83,418

The long-term financing obligations, as reflected in our consolidated balance sheets, were $442.1 million and $461.9 million as of December 31, 2022 and 2021, respectively. The difference between these obligations and the principal obligations in the table above will be offset against the carrying value of the related Energy Servers at the end of the lease and the remainder recognized as a gain at that point.

Portfolio Financings through PPA Entities - Customer arrangements entered into prior to January 1, 2020 under Portfolio Financing arrangements through a PPA Entity that qualified as leases are accounted for as either sales-type leases or operating leases. Since January 1, 2020, we have not entered into any new PPAs with customers under such arrangements.

The components of our aggregate net investment in sales-type leases under our Portfolio Financings through PPA entities consisted of the following (in thousands):

	December 31,
	2021
Lease payment receivables, net1	$	44,378
Estimated residual value of leased assets (unguaranteed)	890
Net investment in sales-type leases	45,268
Less: current portion	(5,784)
Non-current portion of net investment in sales-type leases	$	39,484

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021.

As of December 31, 2022, there was no net investment in sales-type leases as a result of PPA IIIa Repowering. Please refer to Note 11 - Portfolio Financings for details.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2022, were as follows (in thousands):

	Operating Leases
2023	21,063
2024	21,238
2025	21,630
2026	22,092
2027	22,566
Thereafter	85,009
Total minimum lease payments	$	193,598