Leases

12 Months Ended

Dec. 31, 2021

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 and in March 2021, we signed leases in Fremont, California that will expire in 2027 and 2036, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 581,000 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, Taiwan and the United Arab Emirates.

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, 2021 and 2020, rent expense for all occupied facilities was $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 initial direct costs and prepaid lease payments less lease incentives. 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, 2021 and 2020 were as follows (in thousands):

	December 31,
	2021		2020
Assets:
Operating lease right-of-use assets, net 1, 2	$	106,660	$	35,621
Financing lease right-of-use assets, net 2, 3, 4	2,944		334
Total	$	109,604	$	35,955
Liabilities:
Current:
Operating lease liabilities	$	13,101	$	7,899
Financing lease liabilities 5	863		74
Total current lease liabilities	13,964		7,973
Non-current:
Operating lease liabilities	106,187		41,849
Financing lease liabilities 6	2,157		267
Total non-current lease liabilities	108,344		42,116
Total lease liabilities	$	122,308	$	50,089

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, net of accumulated amortization.

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, 2021 and 2020 were as follows (in thousands):

	Years Ended December 31,
	2021		2020
Operating lease costs	$	15,850	$	9,804
Financing lease costs:
Amortization of financing lease right-of-use assets	1,345		51
Interest expense for financing lease liabilities	349		16
Total financing lease costs	1,694		67
Short-term lease costs	407		613
Total lease costs	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Remaining lease term (years):
Operating leases	8.9 years		6.7 years
Finance leases	3.5 years		4.2 years
Discount rate:
Operating leases	9.6	%	8.7	%
Finance leases	7.6	%	7.0	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2021 were as follows (in thousands):

	Operating Leases		Finance Leases
2022	$	13,153	$	948
2023	14,994		944
2024	13,500		771
2025	13,524		301
2026	13,061		83
Thereafter	61,636		—
Total minimum lease payments	129,868		3,047
Less: amounts representing interest or imputed interest	(10,581)		(26)
Present value of lease liabilities	$	119,287	$	3,021

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, 2021 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 liability. These financing obligations are included in each agreements' 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 recorded right-of-use assets and lease liabilities and recorded lease expense over the lease term. The recognized lease expense has been immaterial.

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

At December 31, 2021, future lease payments under the Managed Services Agreements financing obligations and the sublease payments from the customers under the related operating leases were as follows (in thousands):

	Financing Obligations
2022	$	45,117
2023	44,173
2024	42,100
2025	41,075
2026	36,477
Thereafter	55,780
Total lease payments	264,722
Less: imputed interest	(149,240)
Total lease obligations	115,482
Less: current obligations	(14,721)
Long-term lease obligations	$	100,761

The long-term financing obligations, as reflected in our consolidated balance sheets, were $461.9 million and $460.0 million as of December 31, 2021 and 2020, 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		2020
Lease payment receivables, net1	$	44,378	$	49,806
Estimated residual value of leased assets (unguaranteed)	890		890
Net investment in sales-type leases	45,268		50,696
Less: current portion	(5,784)		(5,428)
Non-current portion of net investment in sales-type leases	$	39,484	$	45,268

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021 and December 31, 2020.

As of December 31, 2021, the future scheduled customer payments from sales-type leases were as follows (in thousands):

	Future minimum lease payments
2022	$	6,110
2023	6,435
2024	6,797
2025	7,125
2026	7,491
Thereafter	11,690
Total undiscounted cash flows	45,648
Less: imputed interest	(1,219)
Present value of lease payments1	$	44,429
1 Amount comprises a current and long-term portion of lease receivables of $5.8 million and $39.5 million, respectively, after giving effect to a $0.1 million current expected credit loss reserve on the long-term portion, which is reflected as a component of the net investment in sales-type leases presented in our consolidated statement of financial position as customer financing receivables.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2021, were as follows (in thousands):

	Operating Leases
2022	44,205
2023	45,290
2024	46,533
2025	47,553
2026	48,732
Thereafter	215,286
Total lease payments	$	447,599

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 and in March 2021, we signed leases in Fremont, California that will expire in 2027 and 2036, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 581,000 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, Taiwan and the United Arab Emirates.

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, 2021 and 2020, rent expense for all occupied facilities was $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 initial direct costs and prepaid lease payments less lease incentives. 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, 2021 and 2020 were as follows (in thousands):

	December 31,
	2021		2020
Assets:
Operating lease right-of-use assets, net 1, 2	$	106,660	$	35,621
Financing lease right-of-use assets, net 2, 3, 4	2,944		334
Total	$	109,604	$	35,955
Liabilities:
Current:
Operating lease liabilities	$	13,101	$	7,899
Financing lease liabilities 5	863		74
Total current lease liabilities	13,964		7,973
Non-current:
Operating lease liabilities	106,187		41,849
Financing lease liabilities 6	2,157		267
Total non-current lease liabilities	108,344		42,116
Total lease liabilities	$	122,308	$	50,089

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, net of accumulated amortization.

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, 2021 and 2020 were as follows (in thousands):

	Years Ended December 31,
	2021		2020
Operating lease costs	$	15,850	$	9,804
Financing lease costs:
Amortization of financing lease right-of-use assets	1,345		51
Interest expense for financing lease liabilities	349		16
Total financing lease costs	1,694		67
Short-term lease costs	407		613
Total lease costs	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Remaining lease term (years):
Operating leases	8.9 years		6.7 years
Finance leases	3.5 years		4.2 years
Discount rate:
Operating leases	9.6	%	8.7	%
Finance leases	7.6	%	7.0	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2021 were as follows (in thousands):

	Operating Leases		Finance Leases
2022	$	13,153	$	948
2023	14,994		944
2024	13,500		771
2025	13,524		301
2026	13,061		83
Thereafter	61,636		—
Total minimum lease payments	129,868		3,047
Less: amounts representing interest or imputed interest	(10,581)		(26)
Present value of lease liabilities	$	119,287	$	3,021

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, 2021 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 liability. These financing obligations are included in each agreements' 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 recorded right-of-use assets and lease liabilities and recorded lease expense over the lease term. The recognized lease expense has been immaterial.

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

At December 31, 2021, future lease payments under the Managed Services Agreements financing obligations and the sublease payments from the customers under the related operating leases were as follows (in thousands):

	Financing Obligations
2022	$	45,117
2023	44,173
2024	42,100
2025	41,075
2026	36,477
Thereafter	55,780
Total lease payments	264,722
Less: imputed interest	(149,240)
Total lease obligations	115,482
Less: current obligations	(14,721)
Long-term lease obligations	$	100,761

The long-term financing obligations, as reflected in our consolidated balance sheets, were $461.9 million and $460.0 million as of December 31, 2021 and 2020, 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		2020
Lease payment receivables, net1	$	44,378	$	49,806
Estimated residual value of leased assets (unguaranteed)	890		890
Net investment in sales-type leases	45,268		50,696
Less: current portion	(5,784)		(5,428)
Non-current portion of net investment in sales-type leases	$	39,484	$	45,268

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021 and December 31, 2020.

As of December 31, 2021, the future scheduled customer payments from sales-type leases were as follows (in thousands):

	Future minimum lease payments
2022	$	6,110
2023	6,435
2024	6,797
2025	7,125
2026	7,491
Thereafter	11,690
Total undiscounted cash flows	45,648
Less: imputed interest	(1,219)
Present value of lease payments1	$	44,429
1 Amount comprises a current and long-term portion of lease receivables of $5.8 million and $39.5 million, respectively, after giving effect to a $0.1 million current expected credit loss reserve on the long-term portion, which is reflected as a component of the net investment in sales-type leases presented in our consolidated statement of financial position as customer financing receivables.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2021, were as follows (in thousands):

	Operating Leases
2022	44,205
2023	45,290
2024	46,533
2025	47,553
2026	48,732
Thereafter	215,286
Total lease payments	$	447,599

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 and in March 2021, we signed leases in Fremont, California that will expire in 2027 and 2036, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 581,000 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, Taiwan and the United Arab Emirates.

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, 2021 and 2020, rent expense for all occupied facilities was $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 initial direct costs and prepaid lease payments less lease incentives. 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, 2021 and 2020 were as follows (in thousands):

	December 31,
	2021		2020
Assets:
Operating lease right-of-use assets, net 1, 2	$	106,660	$	35,621
Financing lease right-of-use assets, net 2, 3, 4	2,944		334
Total	$	109,604	$	35,955
Liabilities:
Current:
Operating lease liabilities	$	13,101	$	7,899
Financing lease liabilities 5	863		74
Total current lease liabilities	13,964		7,973
Non-current:
Operating lease liabilities	106,187		41,849
Financing lease liabilities 6	2,157		267
Total non-current lease liabilities	108,344		42,116
Total lease liabilities	$	122,308	$	50,089

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, net of accumulated amortization.

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, 2021 and 2020 were as follows (in thousands):

	Years Ended December 31,
	2021		2020
Operating lease costs	$	15,850	$	9,804
Financing lease costs:
Amortization of financing lease right-of-use assets	1,345		51
Interest expense for financing lease liabilities	349		16
Total financing lease costs	1,694		67
Short-term lease costs	407		613
Total lease costs	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Remaining lease term (years):
Operating leases	8.9 years		6.7 years
Finance leases	3.5 years		4.2 years
Discount rate:
Operating leases	9.6	%	8.7	%
Finance leases	7.6	%	7.0	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2021 were as follows (in thousands):

	Operating Leases		Finance Leases
2022	$	13,153	$	948
2023	14,994		944
2024	13,500		771
2025	13,524		301
2026	13,061		83
Thereafter	61,636		—
Total minimum lease payments	129,868		3,047
Less: amounts representing interest or imputed interest	(10,581)		(26)
Present value of lease liabilities	$	119,287	$	3,021

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, 2021 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 liability. These financing obligations are included in each agreements' 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 recorded right-of-use assets and lease liabilities and recorded lease expense over the lease term. The recognized lease expense has been immaterial.

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

At December 31, 2021, future lease payments under the Managed Services Agreements financing obligations and the sublease payments from the customers under the related operating leases were as follows (in thousands):

	Financing Obligations
2022	$	45,117
2023	44,173
2024	42,100
2025	41,075
2026	36,477
Thereafter	55,780
Total lease payments	264,722
Less: imputed interest	(149,240)
Total lease obligations	115,482
Less: current obligations	(14,721)
Long-term lease obligations	$	100,761

The long-term financing obligations, as reflected in our consolidated balance sheets, were $461.9 million and $460.0 million as of December 31, 2021 and 2020, 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		2020
Lease payment receivables, net1	$	44,378	$	49,806
Estimated residual value of leased assets (unguaranteed)	890		890
Net investment in sales-type leases	45,268		50,696
Less: current portion	(5,784)		(5,428)
Non-current portion of net investment in sales-type leases	$	39,484	$	45,268

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021 and December 31, 2020.

As of December 31, 2021, the future scheduled customer payments from sales-type leases were as follows (in thousands):

	Future minimum lease payments
2022	$	6,110
2023	6,435
2024	6,797
2025	7,125
2026	7,491
Thereafter	11,690
Total undiscounted cash flows	45,648
Less: imputed interest	(1,219)
Present value of lease payments1	$	44,429
1 Amount comprises a current and long-term portion of lease receivables of $5.8 million and $39.5 million, respectively, after giving effect to a $0.1 million current expected credit loss reserve on the long-term portion, which is reflected as a component of the net investment in sales-type leases presented in our consolidated statement of financial position as customer financing receivables.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2021, were as follows (in thousands):

	Operating Leases
2022	44,205
2023	45,290
2024	46,533
2025	47,553
2026	48,732
Thereafter	215,286
Total lease payments	$	447,599

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 and in March 2021, we signed leases in Fremont, California that will expire in 2027 and 2036, respectively, to replace our manufacturing facilities in Sunnyvale and Mountain View, California. These existing plants in California together comprise approximately 581,000 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, Taiwan and the United Arab Emirates.

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, 2021 and 2020, rent expense for all occupied facilities was $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 initial direct costs and prepaid lease payments less lease incentives. 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, 2021 and 2020 were as follows (in thousands):

	December 31,
	2021		2020
Assets:
Operating lease right-of-use assets, net 1, 2	$	106,660	$	35,621
Financing lease right-of-use assets, net 2, 3, 4	2,944		334
Total	$	109,604	$	35,955
Liabilities:
Current:
Operating lease liabilities	$	13,101	$	7,899
Financing lease liabilities 5	863		74
Total current lease liabilities	13,964		7,973
Non-current:
Operating lease liabilities	106,187		41,849
Financing lease liabilities 6	2,157		267
Total non-current lease liabilities	108,344		42,116
Total lease liabilities	$	122,308	$	50,089

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, net of accumulated amortization.

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, 2021 and 2020 were as follows (in thousands):

	Years Ended December 31,
	2021		2020
Operating lease costs	$	15,850	$	9,804
Financing lease costs:
Amortization of financing lease right-of-use assets	1,345		51
Interest expense for financing lease liabilities	349		16
Total financing lease costs	1,694		67
Short-term lease costs	407		613
Total lease costs	$	17,951	$	10,484

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of December 31, 2021 and 2020 were as follows:

	December 31,
	2021		2020
Remaining lease term (years):
Operating leases	8.9 years		6.7 years
Finance leases	3.5 years		4.2 years
Discount rate:
Operating leases	9.6	%	8.7	%
Finance leases	7.6	%	7.0	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of December 31, 2021 were as follows (in thousands):

	Operating Leases		Finance Leases
2022	$	13,153	$	948
2023	14,994		944
2024	13,500		771
2025	13,524		301
2026	13,061		83
Thereafter	61,636		—
Total minimum lease payments	129,868		3,047
Less: amounts representing interest or imputed interest	(10,581)		(26)
Present value of lease liabilities	$	119,287	$	3,021

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, 2021 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 liability. These financing obligations are included in each agreements' 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 recorded right-of-use assets and lease liabilities and recorded lease expense over the lease term. The recognized lease expense has been immaterial.

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

At December 31, 2021, future lease payments under the Managed Services Agreements financing obligations and the sublease payments from the customers under the related operating leases were as follows (in thousands):

	Financing Obligations
2022	$	45,117
2023	44,173
2024	42,100
2025	41,075
2026	36,477
Thereafter	55,780
Total lease payments	264,722
Less: imputed interest	(149,240)
Total lease obligations	115,482
Less: current obligations	(14,721)
Long-term lease obligations	$	100,761

The long-term financing obligations, as reflected in our consolidated balance sheets, were $461.9 million and $460.0 million as of December 31, 2021 and 2020, 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		2020
Lease payment receivables, net1	$	44,378	$	49,806
Estimated residual value of leased assets (unguaranteed)	890		890
Net investment in sales-type leases	45,268		50,696
Less: current portion	(5,784)		(5,428)
Non-current portion of net investment in sales-type leases	$	39,484	$	45,268

1 Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021 and December 31, 2020.

As of December 31, 2021, the future scheduled customer payments from sales-type leases were as follows (in thousands):

	Future minimum lease payments
2022	$	6,110
2023	6,435
2024	6,797
2025	7,125
2026	7,491
Thereafter	11,690
Total undiscounted cash flows	45,648
Less: imputed interest	(1,219)
Present value of lease payments1	$	44,429
1 Amount comprises a current and long-term portion of lease receivables of $5.8 million and $39.5 million, respectively, after giving effect to a $0.1 million current expected credit loss reserve on the long-term portion, which is reflected as a component of the net investment in sales-type leases presented in our consolidated statement of financial position as customer financing receivables.

Future estimated operating lease payments we expect to receive from Portfolio Financing arrangements through PPA Entities as of December 31, 2021, were as follows (in thousands):

	Operating Leases
2022	44,205
2023	45,290
2024	46,533
2025	47,553
2026	48,732
Thereafter	215,286
Total lease payments	$	447,599