Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

Facilities, Energy Servers, and Vehicles

For the three and nine months ended September 30, 2023, rent expense for all occupied facilities was $5.7 million and $17.0 million, respectively. For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	September 30,		December 31,
	2023		2022
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	127,973	$	126,955
Current operating lease liabilities	(16,666)		(16,227)
Non-current operating lease liabilities	(133,602)		(132,363)
Total operating lease liabilities	$	(150,268)	$	(148,590)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,899	$	2,824
Current finance lease liabilities5	(1,142)		(1,024)
Non-current finance lease liabilities6	(1,956)		(1,971)
Total finance lease liabilities	$	(3,098)	$	(2,995)
Total lease liabilities	$	(153,366)	$	(151,585)

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 condensed consolidated balance sheets.

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

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

The components of our facilities, Energy Servers, and vehicles’ lease costs for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease costs	$	8,408	$	6,097	$	24,373	$	17,962
Financing lease costs:
Amortization of right-of-use assets	294		230		689		750
Interest on lease liabilities	72		53		203		160
Total financing lease costs	366		283		892		910
Short-term lease costs	384		538		1,561		699
Total lease costs	$	9,158	$	6,918	$	26,826	$	19,571

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, 2023 and December 31, 2022 were as follows:

	September 30,		December 31,
	2023		2022
Weighted average remaining lease term:
Operating leases	7.9 years		8.6 years
Finance leases	3.4 years		3.3 years
Weighted average discount rate:
Operating leases	10.4	%	10.3	%
Finance leases	9.3	%	6.9	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, 2023 were as follows (in thousands):

	Operating Leases		Finance Leases
Remainder of 2023	$	8,513	$	357
2024	29,803		1,289
2025	29,863		839
2026	29,769		598
2027	28,500		412
Thereafter	99,736		98
Total minimum lease payments	226,184		3,593
Less: amounts representing interest or imputed interest	(75,916)		(495)
Present value of lease liabilities	$	150,268	$	3,098

Managed Services and Portfolio Financings Through PPA Entities

Managed Services - We recognized $15.8 million of product revenue, $4.8 million of installation revenue, $2.7 million of financing obligations, and $9.3 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the nine months ended September 30, 2023. There were no successful sale and leaseback transactions for the three months ended September 30, 2023.

We recognized $0.9 million of product revenue, $0.6 million of installation revenue, $0.3 million of financing obligations, and $0.6 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the three and nine months ended September 30, 2022.

The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2023 was $2.6 million and $7.0 million, respectively. The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2022 was $1.3 million and $3.9 million, respectively.

At September 30, 2023, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
Remainder of 2023	$	11,466
2024	43,368
2025	42,358
2026	37,778
2027	21,441
Thereafter	37,237
Total minimum lease payments	193,648
Less: imputed interest	(103,046)
Present value of net minimum lease payments	90,602
Less: current financing obligations	(39,093)
Long-term financing obligations	$	51,509

The long-term financing obligations, as reflected in our condensed consolidated balance sheets, were $410.4 million and $442.1 million as of September 30, 2023 and December 31, 2022, respectively. We expect the difference between these obligations and the principal obligations in the table above to 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 were 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.

In August 2023, we sold our PPA entity, PPA V. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.

Leases

Leases

Facilities, Energy Servers, and Vehicles

For the three and nine months ended September 30, 2023, rent expense for all occupied facilities was $5.7 million and $17.0 million, respectively. For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	September 30,		December 31,
	2023		2022
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	127,973	$	126,955
Current operating lease liabilities	(16,666)		(16,227)
Non-current operating lease liabilities	(133,602)		(132,363)
Total operating lease liabilities	$	(150,268)	$	(148,590)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,899	$	2,824
Current finance lease liabilities5	(1,142)		(1,024)
Non-current finance lease liabilities6	(1,956)		(1,971)
Total finance lease liabilities	$	(3,098)	$	(2,995)
Total lease liabilities	$	(153,366)	$	(151,585)

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 condensed consolidated balance sheets.

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

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

The components of our facilities, Energy Servers, and vehicles’ lease costs for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease costs	$	8,408	$	6,097	$	24,373	$	17,962
Financing lease costs:
Amortization of right-of-use assets	294		230		689		750
Interest on lease liabilities	72		53		203		160
Total financing lease costs	366		283		892		910
Short-term lease costs	384		538		1,561		699
Total lease costs	$	9,158	$	6,918	$	26,826	$	19,571

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, 2023 and December 31, 2022 were as follows:

	September 30,		December 31,
	2023		2022
Weighted average remaining lease term:
Operating leases	7.9 years		8.6 years
Finance leases	3.4 years		3.3 years
Weighted average discount rate:
Operating leases	10.4	%	10.3	%
Finance leases	9.3	%	6.9	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, 2023 were as follows (in thousands):

	Operating Leases		Finance Leases
Remainder of 2023	$	8,513	$	357
2024	29,803		1,289
2025	29,863		839
2026	29,769		598
2027	28,500		412
Thereafter	99,736		98
Total minimum lease payments	226,184		3,593
Less: amounts representing interest or imputed interest	(75,916)		(495)
Present value of lease liabilities	$	150,268	$	3,098

Managed Services and Portfolio Financings Through PPA Entities

Managed Services - We recognized $15.8 million of product revenue, $4.8 million of installation revenue, $2.7 million of financing obligations, and $9.3 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the nine months ended September 30, 2023. There were no successful sale and leaseback transactions for the three months ended September 30, 2023.

We recognized $0.9 million of product revenue, $0.6 million of installation revenue, $0.3 million of financing obligations, and $0.6 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the three and nine months ended September 30, 2022.

The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2023 was $2.6 million and $7.0 million, respectively. The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2022 was $1.3 million and $3.9 million, respectively.

At September 30, 2023, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
Remainder of 2023	$	11,466
2024	43,368
2025	42,358
2026	37,778
2027	21,441
Thereafter	37,237
Total minimum lease payments	193,648
Less: imputed interest	(103,046)
Present value of net minimum lease payments	90,602
Less: current financing obligations	(39,093)
Long-term financing obligations	$	51,509

The long-term financing obligations, as reflected in our condensed consolidated balance sheets, were $410.4 million and $442.1 million as of September 30, 2023 and December 31, 2022, respectively. We expect the difference between these obligations and the principal obligations in the table above to 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 were 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.

In August 2023, we sold our PPA entity, PPA V. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.

Leases

Leases

Facilities, Energy Servers, and Vehicles

For the three and nine months ended September 30, 2023, rent expense for all occupied facilities was $5.7 million and $17.0 million, respectively. For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	September 30,		December 31,
	2023		2022
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	127,973	$	126,955
Current operating lease liabilities	(16,666)		(16,227)
Non-current operating lease liabilities	(133,602)		(132,363)
Total operating lease liabilities	$	(150,268)	$	(148,590)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,899	$	2,824
Current finance lease liabilities5	(1,142)		(1,024)
Non-current finance lease liabilities6	(1,956)		(1,971)
Total finance lease liabilities	$	(3,098)	$	(2,995)
Total lease liabilities	$	(153,366)	$	(151,585)

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 condensed consolidated balance sheets.

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

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

The components of our facilities, Energy Servers, and vehicles’ lease costs for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease costs	$	8,408	$	6,097	$	24,373	$	17,962
Financing lease costs:
Amortization of right-of-use assets	294		230		689		750
Interest on lease liabilities	72		53		203		160
Total financing lease costs	366		283		892		910
Short-term lease costs	384		538		1,561		699
Total lease costs	$	9,158	$	6,918	$	26,826	$	19,571

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, 2023 and December 31, 2022 were as follows:

	September 30,		December 31,
	2023		2022
Weighted average remaining lease term:
Operating leases	7.9 years		8.6 years
Finance leases	3.4 years		3.3 years
Weighted average discount rate:
Operating leases	10.4	%	10.3	%
Finance leases	9.3	%	6.9	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, 2023 were as follows (in thousands):

	Operating Leases		Finance Leases
Remainder of 2023	$	8,513	$	357
2024	29,803		1,289
2025	29,863		839
2026	29,769		598
2027	28,500		412
Thereafter	99,736		98
Total minimum lease payments	226,184		3,593
Less: amounts representing interest or imputed interest	(75,916)		(495)
Present value of lease liabilities	$	150,268	$	3,098

Managed Services and Portfolio Financings Through PPA Entities

Managed Services - We recognized $15.8 million of product revenue, $4.8 million of installation revenue, $2.7 million of financing obligations, and $9.3 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the nine months ended September 30, 2023. There were no successful sale and leaseback transactions for the three months ended September 30, 2023.

We recognized $0.9 million of product revenue, $0.6 million of installation revenue, $0.3 million of financing obligations, and $0.6 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the three and nine months ended September 30, 2022.

The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2023 was $2.6 million and $7.0 million, respectively. The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2022 was $1.3 million and $3.9 million, respectively.

At September 30, 2023, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
Remainder of 2023	$	11,466
2024	43,368
2025	42,358
2026	37,778
2027	21,441
Thereafter	37,237
Total minimum lease payments	193,648
Less: imputed interest	(103,046)
Present value of net minimum lease payments	90,602
Less: current financing obligations	(39,093)
Long-term financing obligations	$	51,509

The long-term financing obligations, as reflected in our condensed consolidated balance sheets, were $410.4 million and $442.1 million as of September 30, 2023 and December 31, 2022, respectively. We expect the difference between these obligations and the principal obligations in the table above to 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 were 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.

In August 2023, we sold our PPA entity, PPA V. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.

Leases

Leases

Facilities, Energy Servers, and Vehicles

For the three and nine months ended September 30, 2023, rent expense for all occupied facilities was $5.7 million and $17.0 million, respectively. For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively.

Operating and financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	September 30,		December 31,
	2023		2022
Operating Leases:
Operating lease right-of-use assets, net 1, 2	$	127,973	$	126,955
Current operating lease liabilities	(16,666)		(16,227)
Non-current operating lease liabilities	(133,602)		(132,363)
Total operating lease liabilities	$	(150,268)	$	(148,590)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	$	2,899	$	2,824
Current finance lease liabilities5	(1,142)		(1,024)
Non-current finance lease liabilities6	(1,956)		(1,971)
Total finance lease liabilities	$	(3,098)	$	(2,995)
Total lease liabilities	$	(153,366)	$	(151,585)

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 condensed consolidated balance sheets.

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

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

The components of our facilities, Energy Servers, and vehicles’ lease costs for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease costs	$	8,408	$	6,097	$	24,373	$	17,962
Financing lease costs:
Amortization of right-of-use assets	294		230		689		750
Interest on lease liabilities	72		53		203		160
Total financing lease costs	366		283		892		910
Short-term lease costs	384		538		1,561		699
Total lease costs	$	9,158	$	6,918	$	26,826	$	19,571

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, 2023 and December 31, 2022 were as follows:

	September 30,		December 31,
	2023		2022
Weighted average remaining lease term:
Operating leases	7.9 years		8.6 years
Finance leases	3.4 years		3.3 years
Weighted average discount rate:
Operating leases	10.4	%	10.3	%
Finance leases	9.3	%	6.9	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, 2023 were as follows (in thousands):

	Operating Leases		Finance Leases
Remainder of 2023	$	8,513	$	357
2024	29,803		1,289
2025	29,863		839
2026	29,769		598
2027	28,500		412
Thereafter	99,736		98
Total minimum lease payments	226,184		3,593
Less: amounts representing interest or imputed interest	(75,916)		(495)
Present value of lease liabilities	$	150,268	$	3,098

Managed Services and Portfolio Financings Through PPA Entities

Managed Services - We recognized $15.8 million of product revenue, $4.8 million of installation revenue, $2.7 million of financing obligations, and $9.3 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the nine months ended September 30, 2023. There were no successful sale and leaseback transactions for the three months ended September 30, 2023.

We recognized $0.9 million of product revenue, $0.6 million of installation revenue, $0.3 million of financing obligations, and $0.6 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the three and nine months ended September 30, 2022.

The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2023 was $2.6 million and $7.0 million, respectively. The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2022 was $1.3 million and $3.9 million, respectively.

At September 30, 2023, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):

	Financing Obligations
Remainder of 2023	$	11,466
2024	43,368
2025	42,358
2026	37,778
2027	21,441
Thereafter	37,237
Total minimum lease payments	193,648
Less: imputed interest	(103,046)
Present value of net minimum lease payments	90,602
Less: current financing obligations	(39,093)
Long-term financing obligations	$	51,509

The long-term financing obligations, as reflected in our condensed consolidated balance sheets, were $410.4 million and $442.1 million as of September 30, 2023 and December 31, 2022, respectively. We expect the difference between these obligations and the principal obligations in the table above to 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 were 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.

In August 2023, we sold our PPA entity, PPA V. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.