Key Factors Affecting Our Performance
We compete in the C&I scale renewable energy space with utilities, developers, independent power producers, pension funds and private equity funds for new investment opportunities. We expect to grow our market share because of the following competitive strengths:
•CBRE Partnership: Our partnership with CBRE, the largest global real estate services company, provides us with a clear path to creating new customer relationships. CBRE is the largest manager of data centers and 90% of the Fortune 100 are CBRE clients, providing a significant opportunity for us to expand our customer base.
Cost of Solar Energy Systems
As of June 30, 2022, our pipeline of opportunities totaled over one gigawatt and is comprised of approximately 50% potential operating acquisitions and 50% projects under development. The operating acquisitions are dynamic with new opportunities being evaluated by our team each quarter.
As of June 30, 2022, with respect to the half of our pipeline made up of development projects, approximately 23% of these projects are currently in construction or pre-construction, 36% of these projects are still in the contracting or due diligence phase, and the final 41% represent projects from our client engagements which are progressing toward an agreement in principle.
As of June 30, 2022, with respect to the half of our pipeline made up of potential operating acquisitions, approximately 19% of these projects are currently in the initial engagement phase, 61% of these projects are in negotiation, and the final 20% of these projects are in the closing phase.
terms to bring to commercial operation. Given the supply chain challenges and permitting and interconnection delays described above, as of June 30, 2022, these historical timelines are currently pushed out by approximately 3 to 6 months.
Government Regulations, Policies and Incentives
Impact of the COVID-19 Pandemic and Supply Chain Issues
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus ("COVID-19") a pandemic.
Key Financial and Operational Metrics
Cumulative megawatts installed increased from 362 MW as of December 31, 2021, to 369 MW as of June 30, 2022.
Megawatt hours ("MWh") generated represents the output of solar energy systems from operating solar energy systems. MWh generated relative to nameplate capacity can vary depending on multiple factors such as design, equipment, location, weather and overall system performance.
Megawatt hours generated increased from 109,000 MWh for the three months ended June 30, 2021, to 137,000 MWh for the three months ended June 30, 2022.
Megawatt hours generated increased from 172,000 MWh for the six months ended June 30, 2021, to 223,000 MWh for the six months ended June 30, 2022.
We define adjusted EBITDA margin as adjusted EBITDA divided by operating revenues.
Reconciliation of Adjusted EBITDA margin:
Components of Results of Operations
utility to allocate to the customer based upon a schedule. The transfer of credits by the Company to the customer can be up to one month after the underlying power is generated. As a result, revenue related to NMCA is recognized upon delivery of net metering credits by the Company to the customer. As of June 30, 2022, NMCAs have a weighted-average remaining life of 18 years.
Rental income. A portion of the Company's energy revenue is derived from long-term PPAs accounted for as operating leases under Accounting Standards Codification ("ASC") 840, Leases. Rental income under these lease agreements is recorded as revenue when the electricity is delivered to the customer.
Other Revenue. Other revenue consists primarily of sales of power on wholesale electricity market which are recognized in revenue upon delivery.
Other (Income) Expense, Net. Other income and expenses primarily represent state grants and other miscellaneous items.
Interest Expense, Net. Interest expense, net represents interest on our borrowings under our various debt facilities, amortization of debt discounts and deferred financing costs, and unrealized gains and losses on interest rate swaps.
Results of Operations - Three Months Ended June 30, 2022, Compared to Three Months Ended June 30, 2021 (Unaudited)
Depreciation, amortization and accretion expense
Acquisition and entity formation costs
Gain on fair value remeasurement of contingent consideration, net
Change in fair value of redeemable warrant liability
Change in fair value of alignment shares liability
Other expense increased by $0.5 million during the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, primarily due to increases in miscellaneous income items.
redeemable noncontrolling interests, $0.3 million of state income tax expense, and $0.5 million of income tax expense associated with the remeasurement of contingent consideration.
Results of Operations - Six Months Ended June 30, 2022, Compared to Six Months Ended June 30, 2021 (Unaudited)
Revenue under power purchase agreements $ 10,912 $ 7,784
Revenue from net metering credit agreements 11,722 10,465
Solar renewable energy certificate revenue 17,506 10,099
Depreciation, amortization and accretion expense
Depreciation, amortization and accretion expense $ 13,685 $ 8,858
Acquisition and entity formation costs
Acquisition and entity formation costs increased by $0.1 million, or 49.1%, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, primarily due to costs associated with the Merger.
Gain on fair value remeasurement of contingent consideration, net
Change in fair value of redeemable warrant liability
Change in fair value of alignment shares liability
redeemable noncontrolling interests, $0.2 million of state income tax expense, and $0.3 million of income tax expense associated with the remeasurement of contingent consideration.
Net (loss) income attributable to redeemable noncontrolling interests and noncontrolling interests
As of June 30, 2022, the Company had total cash and restricted cash of $299.3 million. For a discussion of our restricted cash, see Note 2, "Significant Accounting Policies, Cash, Cash Equivalents, and Restricted Cash," to our condensed consolidated financial statements.
The Company has operating leases for land and buildings and has contractual commitments to make payments in accordance with site lease agreements.
Amended Rated Term Loan Facility
Construction Loan to Term Loan Facility
For the Six Months Ended June 30, 2022, and 2021
The following table sets forth the primary sources and uses of cash and restricted cash for each of the periods presented below:
Net cash provided by (used for):
Net decrease in cash, cash equivalents, and restricted cash $ (30,989)
Critical Accounting Policies and Use of Estimates
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