Thank you for standing by, and welcome to the Q1 2021 Ameresco, Inc. earnings conference call. Now I'd like to introduce your host for today's program, Leila Dillon, Vice President, Marketing and Communications. Please go ahead. Thank you, Jonathan, and good afternoon, everyone. We appreciate you joining us for today's call. Joining me here are George Sakellaris, Ameresco's Chairman, President, and Chief Executive Officer. Doran Hole, Senior Vice President and Chief Financial Officer, and Mark Chiplock, Vice President and Chief Accounting Officer. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. This call contains forward-looking information regarding future events and the future financial performance of the company. We caution you that such statements are predictions based on management's current expectations or beliefs. Actual results may differ materially as a result of risks and uncertainties that pertain to our business. We refer you to the company's press release issued this afternoon and to our SEC filings. These documents discuss important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. We assume no obligation to revise any forward-looking statements made on today's call. In addition, we will be referring to non-GAAP financial measures during this call. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A GAAP to non-GAAP reconciliation, as well as an explanation behind the use of non-GAAP financial measures, is available in our press release and in the appendix of the slides, which can be downloaded from our website. I will now turn the call over to George. George? Thank you, Leila, good afternoon. I hope everyone is staying healthy and safe. The Q1 marked another excellent quarter for Ameresco as we posted great financial results and completed our first equity raise since our initial public offering over 10 years ago. While the Q1 began slowly with inclement weather in some of our project sites and operating plants, our focus on execution, coupled with the improvement in weather conditions, led to improved performance throughout the period. The results far exceeded our expectations, with revenues increasing 19%, net income increasing 80%, and adjusted EBITDA up 40%. With this strong start, we are raising our annual guidance. Now, I also want to take this opportunity to thank our employees for their tremendous dedication and hard work despite these challenging times. Our project business had another strong quarter, while our energy assets again posted solid results. While we continue to focus on project execution, we were very pleased to see a meaningful pickup in awards during the quarter, which will lead to future growth in our contracted backlog. We were also very pleased to have successfully executed an equity offering, bringing in over $120 million in proceeds to the company. While we historically have funded our long-term growth primarily through internally generated cash flows and non-recourse project financing, we decided the timing was right to accelerate our growth by raising additional outside capital. For many years, we have been growing our energy asset portfolio to provide highly profitable recurring revenue that increases our long-term visibility and profitability. Over the last few years, our team has been so successful that our assets in development and construction are now greater than our current operating asset base. In particular, we will accelerate the development of a number of financially compelling renewable natural gas, RNG assets. With this new capital, we now anticipate building three RNG plants for commissioning during 2022 and another four during 2023. Over the last few years, we have seen a tremendous increase in interest in using RNG from a number of end customers, including large transportation and logistic companies, natural gas utilities, and distributed energy resource owners. Just the other day, Washington State announced a low-carbon fuel standard joining Oregon, California, and British Columbia. Back in 2010, Ameresco became one of the first companies in the country to commission an RNG plant. Currently, RNG is the most natural path to reaching a reduced or zero carbon footprint for many of these companies. With our current operating RNG assets and those that we will be adding over the next few years, Ameresco will remain a leader in this environmentally important and profitable technology. Many of the early policies, actions, and statements from the new administration in Washington support this increased interest in RNG. Additionally, we believe that Ameresco is in an excellent position to benefit from the new administration's focus on low-carbon future. Already, we have seen the U.S. rejoin the Paris Agreement, and most recently, the announced goal to cut U.S. greenhouse gas emissions by up to 52% from 2005 levels by year 2030. The administration plans to directly fund and invest in the country's low-carbon future through a number of bills currently working through the legislative process. A good example of this targeted investment is the approximately $1 trillion of the $2.3 trillion infrastructure package, which will target projects designed to mitigate climate change. This includes expansion of solar and wind power, charging stations for electric vehicles, technologies to capture and store carbon pollution, and equipment to make infrastructure more resilient against severe weather and other contingencies. We are already seeing traction with state and local governments and in the C&I, as commercial and industrial markets, where we have filled in a number of requests from companies looking to report and demonstrate progress on ESG initiatives to reach carbon reduction targets. Ameresco is well-positioned to thrive in this new environment. We were recently ranked the number one energy as a service provider in the Guidehouse Insights Leaderboard report. This highlighted our ambitious energy as a service vision, expertise in technology solutions, track record of success across customer segments, and our ability to provide financing for energy as a service projects. The strong Ameresco brand and our reputation as the industry's leading provider of distributed energy resources should enable us to benefit from the very attractive growth opportunities in our clean technology markets. I will now turn the call over to Doran to provide some comments on our financial performance and our increased guidance. Doran? Thank you, George. Good afternoon, everyone. I'll ask you to please refer to our press release and supplemental slides that have been posted on our website for additional financial information. We clearly demonstrated our momentum in the first quarter, showing strong growth in revenue, net income, and EBITDA. As you may recall, we were somewhat cautious at the beginning of the quarter given the poor weather in key markets around the country. While the weather did have some impact, it was more than offset by strong execution and better business conditions in general, leading to progressive improvement throughout the quarter. Revenue increased 19% year-on-year, again, led by the excellent performance of our Federal group. We also had strong results in our energy asset business due to several factors, namely, the increase in the number of operating assets, favorable production levels, and an increase in RIN pricing in our renewable natural gas operations. This better-than-expected revenue performance, along with tight expense controls and increased operating leverage, drove an impressive 80% growth in our net income to approximately $11.2 million and 40% growth in our adjusted EBITDA to approximately $30 million. As George mentioned, we were very pleased with the more than 35% year-over-year growth and 15% sequential growth in our awarded backlog, which now stands at $1.5 billion. The uptick in origination activity and customer engagement we're experiencing now not only helps build the awarded backlog, but also provides a more normal cadence for converting awards to contracts. We are confident that our lower contracted backlog, which was attributable in large part to strong execution over the past several quarters, will be more than replenished over the next several quarters. Our assets in development had another quarter of impressive growth, ending the quarter at 386 megawatts, represented by multiple technologies and geographies. Our 287 megawatts of operating assets have approximately $940 million in long-term contracted revenue and incentives. Together with our $1.1 billion O&M backlog, we are continuing to grow our higher-margin recurring revenue businesses, providing us great long-term visibility. Ameresco's liquidity has never been stronger, and we have ready access to the resources needed to execute our aggressive growth strategy. We have significant cash balance of $81 million and over $100 million of capacity on our revolver. We have broad access to non-recourse project financing and tax equity, as well as the ability to monetize development assets. For example, during the quarter, we expanded one of our committed sale leaseback facilities from $150 million to $350 million. On the back of our outperformance in the first quarter and the noticeable improvement in business conditions, we are raising our 2021 guidance. Our new revenue range is $1.11 billion-$1.16 billion. EPS is now expected to be between $1.22 and $1.30, and we are forecasting EBITDA of $140 million-$150 million. I would like to turn the call back over to George for closing comments. Thank you, Doran. In closing, I want to again take a moment to thank our employees, partners, and customers for their continued commitment and cooperation. Together, we have been able to show tremendous resilience in the face of challenges. With favorable federal policy momentum and our enhanced financial position, Ameresco is uniquely positioned for accelerating long-term growth as our customers continue to prioritize cost savings and resiliency, as well as lowering their carbon footprint. Operator, I would now like to open the call to questions. Thank you. Certainly. Ladies and gentlemen, if you have a question at this time, please press star then one on your touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue, please press the pound key. We also ask that you please limit yourself to one question and one follow-up. Our first question comes from the line of Noah Kaye from Oppenheimer. Your question please. Good afternoon. Thanks for taking the questions. Good afternoon, sir Noah. Hi. Hey. The first one on the project side of the business. I think it was really nice, the execution in the quarter. Can you give us some color on what enabled you to capture some of the project revenues in the quarter, a little bit higher than previously thought? What was just logistics getting easier? Was there any sort of pull forward? Is there any kind of evidence here of prioritization being given to these projects, just given sustainability considerations? Yes your thinking for the remainder of the year? Yes. That's a very good question, Noah. I would say we pulled in, and Mark can add some more color to it, about $30 million from the balance of the year. Otherwise, for Q2, Q3, and Q4. The primary reason for it, even though we had some weather delays in the central region, in the federal group, we were able to, especially on the large projects, the Norfolk Naval Shipyard, were able to get the permit about two and a half months ahead of schedule. In addition to that, some of the approvals associated with that particular project, they came in a little bit faster. As a matter of fact, we are about $25 million ahead of our advanced schedule in payments coming out from that project. Then we had a couple of delays at New York on the approvals, New York housing, that is. Primarily, it was the Federal Group that they had the ability to pull in some additional revenues, about $30 million. Which of course, it came off the other quarters. That's great color. Let me ask one about regulation and decarbonization. It strikes me that one good way to decarbonize is actually to regulate carbon. Just a couple of weeks ago, it was announced that the EU is going to be introducing a package in June that adds buildings to the sectors where there is an emissions trading system, where pricing on carbon is actually being captured here. There's even some movement afoot in some states in the U.S. to do that as well. I guess, are you perhaps more incrementally bullish on the EU market opportunity, just given that dynamic? Then, do you see actual regulation of carbon and the carbon emissions of buildings becoming a tailwind for the company in the future? Yeah. I will comment a little bit and then Doran might add. Look, I think what's going on in the EU, it's no question about it's great tailwind for our business. I wouldn't be surprised that, or don't be surprised, we might accelerate the business in the EU community, use the U.K. as a base and then move from that. More importantly than that, what we are hearing from Washington, D.C. and what's happening in this country, we have a great tailwind on the regulation, and especially on some of the states that's coming out of the United States and especially Canada, too. That's why, in my commentary, I feel very, very good about this business, where we are right now. Otherwise, the stars are lining up to our benefit. There's no question about it. For us, it's to be cautiously optimistic but diligent in growing the business in a wise manner. The opportunities are there. I wouldn't be surprised that you will see us expanding in Europe in the near term. Well, great. Thank you, George. Looking forward to that. I'll turn it back over. Thanks, Tom. Thank you. Our next question comes from the line of Julien Dumoulin-Smith from Bank of America. Your question, please? Excellent. Thank you. Congratulations to the team here. Nicely done at the start of the year. Thanks, Julien. If I can, and you permit me, several things here, if I can. First off, you note the additional RNG facilities now in 2022 and 2023. How are you thinking about this reconciling in terms of the total contribution of EBITDA growth incrementally? Certainly, your target of double-digit EBITDA growth, if you will, certainly seems fairly well-founded on these almost alone. I'm curious on how you would characterize that piece of it, if you don't mind. Well, so- Good question. Julien. Yeah, Julien, it's Doran. As you know, we don't give guidance beyond the current year, right? We'll have to start with that. The EBITDA contributions, I think we've talked about before with a reference to megawatts and with this question, I'll take the opportunity to talk a little bit about that. We had talked about 750,000 - $1.5 million of EBITDA per megawatt equivalent. Translating that into MMBtu, that's about $8.50 - $16.50 per MMBtu. That's of course dependent upon RIN prices. It depends on LCFS participation, right? Midpoint representing around a 50% margin. In revenue terms, that's $1.5 million - $3 million of revenue per megawatt or $17 - $33 per MMBtu. When I look at the cadence of the 2022 plants and the 2023 plants, I think 2022, those three plants total probably around 36 megawatts-ish or 3 million MMBtu, which by the end of 2022, that's two and a half times what we have now. Right? I think it's an important point when you're looking at the cadence. I think based on all of that, we continue to take a conservative approach toward the company's medium-term growth, right? We look at that. Now we're into the low double digits on revenue growth, a little bit over 20% on the EBITDA growth, and of course, we're hoping to see that cadence continue. Clearly our investment in these RNG assets is hopefully going to give us a boost. Excellent. Since you bring up some of the metrics here, can you talk about your hedge position right now on RINs, et cetera? Obviously, RINs has seen a nice uptick. I think earlier you guys hadn't been fully hedged. Can you talk about how that contributes here to your higher guidance and as well as relative to the math you just described on future projects? Yes. As we pointed out last time, we have about 40% what I would call forward sale. Actually, we executed some contracts as they go out as five years. As we grow, you will see us executing contracts in the short range, though. I think the RIN prices and the market overall is developing now. We are in the early stages, we don't want to sign long-term contracts because we think we sacrifice too many economics. Hedging about or having short-term contracts about five years or so for about 50% of the output of our plants, it gives us very good project financing, and we think the economics are better. However, as all these new markets, whether it's the gas utilities or with the universities or hospitals where they have combined heat and power plants, and they want to reduce their carbon footprint, they are ideal candidates for longer-term contracts. I know some people in the industry, they're quoting long-term contracts. Some of them, we have looked at them, and we negotiated for some time, but we passed because we thought that we are in early stages of this market development. We're going to be watching very carefully. However, because we are adding, like Doran said, 12 megawatts next year and about that much, about 30 megawatts the following year on the plants that we add in. We will hedge about 50% of that output of those plants. For a shorter period of time, but if, let's say six months from now, if we have a good deal and goes out 10 years or 15 years, we will do it. The other thing I want to add, by raising the equity, we have a little bit more flexibility now than we had before, and that's why we felt more comfortable in going ahead and accelerating the development of these assets because we have a tremendous backlog on that. Okay, we're building six assets now on the RNG, and we have another six in the development pipeline. Forget what we have in the actual pipeline. Yeah, that's right. Right. Julien, sorry, just because it was part of your question. I think the impact on RINs for the quarter probably a couple of million dollars higher. RNG overall probably contributed $3 million to sort of, we'll call it overperformance. One of that was just pure output. I mean, the plants just had improved production, higher production, and then a couple of million dollars from the higher RIN prices. Permit me just in brief, if I can. How are you guys thinking about your disclosure package as you think about the disparate businesses involved? You talked about Europe, you talked about RNG. How are you thinking about updating and providing perhaps more specific disclosures on different parts of the business here? By the way, Doran, thank you for the heuristics just now on the RINs and the RNG side. Obviously, as you get yourself involved in different sides of the business here, have you given much thought to that? Yeah. Julien, I think we are continuing to give thought to that. At this point in time, we're staying the course with the you'll see the supplemental slides, the way that we present the material graphically. I think we felt very good about providing additional color during the Q&A, like I've just given you. Kind of beyond that, I think we're just going to take it one step at a time. Excellent. Well, again, I emphasize, congratulations and best of luck. Thanks, Julien. Thank you, Julien. Thank you. Our next question comes from the line of Craig Irwin from Roth Capital. Your question, please. Hi. Good evening. Thanks for taking my questions. Hi, Craig. George, can you remind us the half dozen plants that you have confirmed into your pipeline on the RNG side? What is the schedule of those build-outs? Where and when do you expect to build these? How should we expect those to come on over the next couple of years? Yeah, Craig, why don't I take that? Just as we've talked about, we've got the one plant this year, right, which is 12 megawatts or about 1 million MMBtu. In 2022, we're now kind of scheduling three plants, total of 36 megawatt equivalents or 3 million MMBtu. Right. And those are the three California plants we've talked about before. Right. 2021, we're expecting that to be kind of fully commissioned before the end of Q2 this year. In 2023, we've got four more. They're a little bit smaller, 29 megawatts total, 2.5 million MMBtu. And then we've got in our asset and development pipeline, six more plants with signed gas and land rights to them. And as you can imagine, there's quite a lot more in the kind of the development and negotiation stage behind that. But that's the cadence. We're not ready to talk specifics about the timing within the year 2022 or 2023 as far as those plants are concerned. We do feel pretty comfortable with that cadence in those years. Thank you for that. There's been a little bit of controversy out there over the last couple of months about the cash flow off the assets, right? Ameresco has greatly improved the disclosure around the assets, and helped us understand these quite a lot over the last few years. Can you maybe describe for us what you expect as far as cash generation off these assets over the next couple of years, this year, 2022 and beyond? I'm not asking for specific numbers, but maybe hurdles that you look at internally, and then how much of the capital budget, and if you have specific numbers for us in 2021 and 2022, is going to go towards the asset build-out for these projects. sorry, starting with the very end of your question, which is these projects. I think that we dropped some numbers in the press release about our expectations for the rest of the year in terms of CapEx on energy assets overall, RNG plus solar plus microgrids, plus whatever else, energy as a service. That range is $165 million-$215 million remaining for the year. As far as the cash flow question, Craig, I don't think we're in a position today to start formally disclosing cash flow or net income kind of on a energy asset category by energy asset category basis. It's something that we are looking at to try to provide a little bit more clarity. As you know, unlike yieldcos or other dividend-paying stocks, we are investing all this cash flow that we're pulling in off of these assets. As we grow the portfolio like we're doing and increasing our plans for the next few years, much of that cash flow information will largely be driven by ultimately the revenue mix associated with the offtake and the type of project financing or non-recourse financing we apply to these assets. More to come. Appreciate the question. I understand its importance. We're going to work on that. Okay. Last question, if I may. With the successful IPO of Montauk, and the obvious success at Ameresco with your green gas portfolio, it seems like there's dozens of these green gas companies out of the woodwork. Many of them don't have much as far as an experience base, but are trying to raise cash to acquire projects in different stages of development. I do know that there are projects that are being shopped, but most of these are items that people actually have to go out and find themselves and develop the way Ameresco has. Can you maybe give a little color on how challenging it is to get a project up and running beyond the initial paperwork of just maybe filing some permits or initial agreements? Yeah Handicap for us what these new entrants are really looking at as far as longer-term execution challenges? That's why some of these companies sometimes, when they're forecasting some numbers, it's very challenging, especially in California and quite a few other states, to permit the sites as well as get the pipelines in order to interconnection with the gas companies and so on. That's a great differentiator that we have in the marketplace. Not only we have the development capability because we have the relationships with the various landfill owners, we've been doing this for the last 21 years. In addition to that, we've been designing, building them, operating them, and maintaining them. From the time that you get started, let's say you identify the customer and sign a letter of intent, and then negotiating the agreement, let's say, whether it's a gas agreement and so on, by the time you get the plan up and running, I would say it's a three-year cycle. I can tell you in California, a couple of our earlier projects, it was even longer than that, the permitting. As the regulatory and the environment changes a little bit, things might change, shorten that cycle a little bit. That's why we feel very, very good. We see a lot of money going to the RNG and a lot of funds and so on, but we think we have a competitive advantage because we've been there. We have the relationships, we have the development backlog. Even if we didn't sell another project, we are good till 2024. I was figuring the other day, 2025. I know in our pipeline, we have quite a few more. We have not only built them, but we operate and maintain them, and they are pretty complicated. I give you an example and why we're a little bit cautious on this quarter numbers when we made the annual report. We had three of our plants out. The San Antonio, because of the freeze up down there, we were estimated it's going to be about three - four weeks out. Our guys, they got it back within 10 days. We had the Woodland plant out, estimated for two weeks. We got it back with less than a week. The other plant, the Mackay Road, that's in construction, we had to demobilize because of the freeze up and so on, and we thought it might be out a couple of weeks. We lost four days. We have the capability, and that's very, very important to build these assets. They are very complicated. They are not like solar, that they are much easier. We feel very good about this. On the other hand, you probably read the book by Andy Grove, "The Paranoid Survive". With all this money coming into this market, I am paranoid, and I always try to stay ahead of the competition. Great. Well, we have no doubt you're going to stay ahead of the competition. Congratulations on the really impressive performance here, George. Thank you. The whole team at Ameresco. This is impressive execution. Thank you. Great. Thanks, Craig. Thank you, Craig. Thank you. Once again, ladies and gentlemen, as a reminder, please limit yourself to one question and one follow-up. Our next question comes from the line of Ben Kallo from Baird. Your question, please. Hi. Thank you. Good evening. My partner, George, wanted me to say happy name day to you, George, for yesterday. Thank you. And I guess my question is- Thank you. You're welcome. For me, too. With the new capital, you mentioned it, the 10 years you haven't raised any capital until now. I think that all the questions have kind of, or a bunch of them are focused on the renewable natural gas opportunity. I just wonder about the different opportunities. You just said this is more difficult than solar. I wonder for the next step of things, or maybe that's not how you look at it, of batteries or microgrids or what have you, if this capital opens up that opportunity. No question about it. I know we emphasize the RNG probably more than any other ones, but I think somewhere we made the statement and all other renewable assets or microgrids. Look, combined heat and power is here to stay. Distributed generation, I think it's the way of the future. Some people, they think it's going to be by building more transmission lines for resiliency. At the end of the day, they will find out that it will be microgrids and distributed generation, and that's why we are very excited about energy as a service. We're getting some very, very good traction because basically that's another asset class that we will have. We're talking to some commercial industrial customers that they're going down that direction. No, this capital. That's why when we made the decision, this is what we looked at, where the business is going, not only on the green gas, but also the solar, that would get accelerated as well. We have talked that in the past, I thought, and that's why we didn't emphasize as much. The distributed generation, the energy as a service, and the microgrids, I think is the way of the future, and you're going to see us play more and more role in that particular market. I envision very good traction as well, because we have the capabilities. How are the customer set the same or different? How do you attack them between those different opportunities? I guess because you've been good at what you're good at, and so to open up a new opportunity, how do you pivot, or do you not have to because it's the same customers? No, we do not. The energy as a service, we've been doing that for the last 10 years. Basically, it's no different than what we call energy savings performance contracts, because on those, all gets financed through a third party, and the debt shows on the customer's balance sheet. Energy as a service, it does not show generally on the customer. It's off-balance sheet financing. We guarantee on the savings on the other contracts, on the energy performance contracts, and we get paid out of the savings on the energy as a service contract. By the way, back in 1981, the first contract that I did, it was energy as a service down by the Quincy Market, American tall wolf building, that we were getting over 50% of the savings, and we're making over 40% margin. We help customers, that they can pivot from the performance contract to energy as a service contracts. Yeah. Ben, I think the asset ownership opportunity will also follow the clean energy goals and the carbon reduction goals that are- Yes kind of proliferating across the market. That's both MUSH market, as well as obviously the federal government plus the corporate market. I think that's going to drive a lot of demand. We're going to continue to offer flexibility in the way these things get financed. If the customer wants an energy as a service that we put the asset on our balance sheet or a PPA or what have you, we're going to be standing ready to do that. I think this equity deal provides us with more firepower to just go after it. Last one, and thank you guys very much for that. Just on the balance sheet, anything else you guys can do or looking at doing from maybe a debt perspective or anything like that, just continue to expand your reach. Thank you guys very much. Sure. Ben, I think on the debt side, I'm not going to project forward, but obviously we're continuing to work on non-recourse financings that are meaningful for the company based on the asset portfolio. We'll continue to do that, and certainly, if we decide to do more, we'll be talking about it in the future. Thank you. Our next question comes on the line of Tim Mulrooney from William Blair. Your question, please. Good afternoon. Thanks for taking my questions. Sure, Tim. Hi. Hi, Tim. Hey. I know you're working with a long sales cycle here, but curious if the recent winter freeze in Texas has kicked up more conversations around distributed generation and energy security with your customers or potential customers? Yes, no question about it. It started with a Hurricane Sandy way back from, especially at New York and New Jersey. More recently now, it has become pretty much a way of life, I would say. Every base that we are doing a project with right now in the U.S., it has some kind of resiliency solution. Take the Norfolk Naval Shipyard, it has a combined heat and power and battery storage. Take the Parris Island, the same thing. We're talking to some clients, commercial and industrial customers. I cannot talk about which particular ones, but they do. Colleges. We have three colleges right now that they are committed to have resiliency. Look at it this way, and I think I mentioned this before, I was doing the generation planning for New England Electric System all the way till 1979. Yes. Back then, we were looking at the single contingency, then we went at a double contingency, basically losing 10% of the load at New England, which that would be two nuclear units, Seabrook and Millstone. That would give us a loss of load probability, one in 100 years. Now, with 30% of the load coming either wind farms or solar, you get almost 30% of the load going out on a single contingency. There is no way transmission lines going to recover that or anything. It's going to be distributed generation and battery storage and microgrids. People will realize it will be the way to go. Got it. Thank you. We are getting traction. Okay. Thank you. With all the recent headlines around ESG and corporate responsibility, in conjunction with the new administration taking over. Curious if you're starting to see an uptick in interest from C&I clients, even relative to, say, this time last year. No question about it. incremental traction. What about for Energy as a Service offering, for example, George? Yeah. We're getting some very good traction associated with that Energy as a Service. I think I mentioned it in the last call or told somebody that first time that we had calls from C&I customers say, "Hey, guys, we need help. We got to do something about our carbon footprint reduction," and we have the software to tell them where they are and so on. That's why I made it in my comments. I had it in my comments that we do get some activity. Great. Thank you so much. Thanks, Tim. Thank you. Our next question comes from the line of Eric Stine from Craig-Hallum. Your question, please. Hi, everyone. Hey, Craig. Hey. Maybe just sticking with C&I, since that's an area that you're starting to get traction in, obviously. As you look out three to five years, what kind of mix do you think that can be of your overall business? Do you expect that to fall more on the project side, or do you think that that's something that you'd look at more on the energy asset side? What do you think about that going forward? Right now, we have more on the project side than we do on the asset. We can talk about this, Wells Fargo, the bank, we started out, we're going to own the 30 megawatts of solar. At the end of the day, they said, "No, you develop it, design it, build it for us. We will own it." We have seen that. On the other hand, there are a couple deals that we will be talking hopefully in the near future that they're going the other way. I think it's too early to tell, but I will reserve judgment until we get a little bit more information, unless Doran wants to add something to that. I think that it's going to be driven by what the customer's looking for in terms of their financing capacity, and it'll probably differ depending on whether you're talking about a large, strong corporate with a high credit rating and access to low cost of funds or something that is a little bit more down the credit spectrum. It'll depend. Got it. Then just in terms of mix, do you think three to five years out, this is a very meaningful part of your mix? Or do you think that the majority of your business will still be more traditional? I think of the project business, I think it will be meaningful. Yeah, I think it'll be meaningful. It'll certainly increase. However, I would say that the municipalities and our traditional MUSH market and federal government customers are equally increasing their cadence on proposals and RFPs and carbon reduction goals, et cetera. Yeah, corporate's certainly going to grow faster than the others, but the others are still growing. Okay, that's great. Thanks. Certainly. Thank you. Thank you. Our next question comes from the line of Jed Dorsheimer from Canaccord Genuity. Your question, please. Hi, thanks. Congratulations on strong execution, guys. Thanks. Thank you. I guess first question, just curious, we're seeing inflationary pressures on the materials side of things. I'm just wondering how you're thinking about that in terms of project business. I'm assuming based on structure or contract, you're able to push those prices onto the customer in a cost-plus type relationship. At some point, do you see any negative impact in terms of getting over a certain threshold where the project gets canceled or given where you're at? No. Yep. Not to the point that projects will be canceled, just the payback period changes. We do see some pressures in the pricing and then some equipment delays, especially on some of the microgrids and some of the sophisticated controls for streetlights. We had some delay on equipment there. On the battery storage. So far, it hasn't had a significant impact in the overall business or performance of our company. The other thing is, remember, we manage that risk very well because we price the jobs, then we sign the contract. Generally, we have bought the equipment, and then many times we have executed the subcontracts. On the other hand, some of the contracts that take longer periods of time, we do have some exposure there, and we are watching it very carefully. Got it. Pre-buying panels, lights, and so on. The only thing I'll add there is that we don't have any particular components that contribute such a large portion of our supply chain, our needs, our procurement needs, right? One inflationary pressure is on steel, for example, right? Was there an impact? Sure, there was an impact. Most of our contracts get negotiated, so we've got margin protection. At the same time, even there, that does not represent a substantial portion of our spend. On the cost of execution and our cost of goods sold. I think we're somewhat protected by the diversity of the types of equipment that we're buying. Great. Then just as a follow-up question, on the C&I in particular, as companies are preparing to go back to the office or some type of structure, I'm wondering, the occupancy of most of the buildings are rather low on the commercial office side, and also on the industrial side, I would think that the ERCOT has brought resiliency top of mind. I'm wondering if you could just parse out for me the delta in terms of the driver. Is it more resiliency that's driving some of that project business, or offering features and functions to an office like a charging station in the parking garage, or better HVAC system? How are the projects kind of categorized in terms of the driver on the C&I? I would say primarily getting back to the office. It's around the charging stations and then maybe some filtering or new HVAC systems to make sure the people get back and they have a safe environment and so on. Now you're talking to a data center or a bank or something like that, then the driver is resiliency. I know we're developing some solar. We won a couple of projects because they wanted solar, but then they realized that we do the microgrids and the battery storage, and that's how we got selected, because we gave them a more comprehensive solution. That's great. Thanks for the color. Congrats again, guys. Thank you very much. Nice to see things work out. Thanks. Thank you. Our final question for today comes from the line of Pavel Molchanov from Raymond James. Your question please. Yep. Thanks for taking the question. Hi, Pavel. We've talked about the infrastructure proposal from Biden, some of the rhetoric as well. I have a specific question in relation to the Department of Defense. Have you noticed any kind of concrete changes in the contracting approach or the willingness to adopt efficiency solutions by the DoD or the Army Corps of Engineers if we just think about the last 100 days? That's an excellent question because I asked Nicole Bulgarino the same question last week when she was here. Give you a perspective. Last year, for the first six months, we had zero requests for RFPs coming out of the federal government. Far this year, we have five. That's for energy savings performance contracts. We have other ones, design build, many, but specifically, which is the main driver of our business, the energy savings performance contracts, this year we got five. Last year, for this time, plus another three months because the Q2 of last year was pretty much dead anyway, because everything was closed down. The attitude, which is a driver, and that's why we made it in a comment, it's much more positive. In addition to that, incorporating not only resiliency, but renewables. I think you will see that even the previous administration, they wanted the infrastructure upgrade because these projects, they didn't have to come up with any money. Now, the new administration, not only will want the infrastructure upgrades, the resiliency, but renewable components on the various projects. Some of the things that we're working on this infrastructure bill will help considerably so that we have the option whether to do it, let's say, a solar farm under the energy savings performance contract, or they can take it out and do it under a PPA, power purchase agreement. Give them more flexibility to achieve their goals. Yeah, that's an interesting year-over-year comparison, and I appreciate the detail on that. One more DoD-themed question. The contract that you specifically highlighted in Norfolk, $173 million. I think it's the largest in Ameresco's history, correct me if I'm wrong. What's the sequence of recognizing that revenue between this year and next, kind of the allocation? It's not the largest one. It's Savannah River. Way back that we did, we took an old 25 MW coal fire cogeneration plant, demolished it, and built a brand new wood chips power plant, and it was done under the energy savings performance contract. About a couple hundred million dollar project. Close enough anyway. That was a transformative project for us. The $173 million, we get paid as a percent complete. Actually, they have a schedule. It's about two years right now? Yeah, about two years. Yep. It's just under percent complete. As we deliver the project, we'll recognize that as we're constructing it under the percent complete, and then we'll move into the O&M phase once that project's been delivered. Right. There is an external O&M contract on that particular project once it's completed. Right. Half and half this year and next? Yeah. I don't know if I'd say- No, I would think less than half this year. Yeah, probably less than half this year, and then more. More next year. Yeah. The reason behind it is because we just, like I said, we got the permits early March. We started moving equipment and so on. Yeah. It takes some time to start to really ramp up. Yeah. Yeah. I think we'll see more of it next year. Yeah. Okay. Understood. Thank you very much, guys. Okay, thank you. Thank you. This does conclude the question and answer session, as well as today's program. Thank you for your participation. Ladies and gentlemen, you may now disconnect. Good day.