Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal.    We are a party to a number of lawsuits, claims and governmental proceedings that are ordinary, routine matters incidental to our business. In addition, in the ordinary course of business, we periodically have disputes with dealers and customers. We do not expect the outcomes of these matters to have, either individually or in the aggregate, a material adverse effect on our financial position or results of operations.

Performance Guarantee Obligations.    The following table presents the detail of performance guarantee obligations as recorded in the Unaudited Condensed Consolidated Balance Sheets:

	As of   September 30, 2024		As of   December 31, 2023
	(in thousands)
Other current liabilities	$	3,298	$	2,667
Other long-term liabilities	$	4,576	$	4,086
Total	$	7,874	$	6,753

The changes in our performance guarantee obligations are as follows:

	Nine Months Ended   September 30,
	2024		2023
	(in thousands)
Balance at beginning of period	$	6,753	$	4,845
Accruals	3,887		3,620
Settlements	(2,766)		(2,855)
Balance at end of period	$	7,874	$	5,610

Operating and Finance Leases.    We lease real estate and certain office equipment under operating leases and vehicles and certain other office equipment under finance leases. The following table presents the detail of lease expense as recorded in general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2024		2023		2024		2023
	(in thousands)
Operating lease expense	$	724	$	754	$	2,232	$	2,138
Finance lease expense:
Amortization expense	511		308		1,402		787
Interest on lease liabilities	56		31		157		69
Short-term lease expense	90		62		292		128
Variable lease expense	318		367		911		835
Total	$	1,699	$	1,522	$	4,994	$	3,957

The following table presents the detail of right-of-use assets and lease liabilities as recorded in other assets and other current liabilities/other long-term liabilities, respectively, in the Unaudited Condensed Consolidated Balance Sheets:

	As of   September 30, 2024		As of   December 31, 2023
	(in thousands)
Right-of-use assets:
Operating leases	$	11,549	$	13,247
Finance leases	7,398		4,085
Total right-of-use assets	$	18,947	$	17,332
Current lease liabilities:
Operating leases	$	3,033	$	2,883
Finance leases	2,340		1,348
Long-term leases liabilities:
Operating leases	11,774		14,005
Finance leases	3,277		1,631
Total lease liabilities	$	20,424	$	19,867

Other information related to leases was as follows:

	Nine Months Ended   September 30,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,646	$	2,187
Operating cash flows from finance leases	$	157	$	69
Financing cash flows from finance leases	$	1,272	$	725
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	90	$	703
Finance leases	$	4,715	$	1,835

	As of   September 30, 2024		As of   December 31, 2023
Weighted average remaining lease term (years):
Operating leases	4.81		5.51
Finance leases	3.39		3.12
Weighted average discount rate:
Operating leases	4.03	%	4.06	%
Finance leases	6.05	%	6.26	%

Future minimum lease payments under our non-cancelable leases as of September 30, 2024 were as follows:

	Operating Leases		Finance Leases
	(in thousands)
Remaining 2024	$	899	$	733
2025	3,458		2,387
2026	3,240		1,575
2027	3,304		1,029
2028	3,372		404
2029 and thereafter	2,113		—
Total	16,386		6,128
Amount representing interest	(1,503)		(511)
Amount representing leasehold incentives	(76)		—
Present value of future payments	14,807		5,617
Current portion of lease liability	(3,033)		(2,340)
Long-term portion of lease liability	$	11,774	$	3,277

Guarantees or Indemnifications.    We enter into contracts that include indemnifications and guarantee provisions. In general, we enter into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include dealer agreements, debt agreements, asset purchases and sales agreements, service agreements and procurement agreements. We are unable to estimate our maximum potential exposure under these agreements until an event triggering payment occurs.

Dealer Commitments.    As of September 30, 2024 and December 31, 2023, the net unamortized balance of payments to dealers for exclusivity and other similar arrangements was $209.5 million and $166.4 million, respectively. Under these agreements, we paid $46.4 million and $55.0 million during the nine months ended September 30, 2024 and 2023, respectively. We could be obligated to make maximum payments, excluding additional amounts payable on a per watt basis if even higher thresholds are met, as follows:

	Dealer Commitments
	(in thousands)
Remaining 2024	$	5,292
2025	52,637
2026	35,000
2027	30,000
2028	—
2029 and thereafter	—
Total	$	122,929

Purchase Commitments.    In September 2024, we amended an agreement with a supplier in which we agreed to purchase approximately $163.0 million of solar energy systems from October 2024 through June 2025. As of September 30, 2024, we are committed to purchase (or have our dealers purchase) $54.2 million, $52.4 million and $56.5 million during the three months ended December 31, 2024, March 31, 2025 and June 30, 2025, respectively, for a total of $163.0 million. Based on historical experience, this supplier agreement could be modified from time to time.

Software and Business Technology Commitments.    We have certain long-term contractual commitments related to software and business technology services and licenses. Future commitments as of September 30, 2024 were as follows:

	Software and Business Technology Commitments
	(in thousands)
Remaining 2024	$	5,245
2025	10,807
2026	8,102
2027	7,405
2028	515
2029 and thereafter	515
Total	$	32,589