Good day, thank you for standing by, and welcome to the Q4 2021 Ameresco, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one on your telephone or touch- tone key. Please be advised that today's conference is being recorded. If you require any operator assistance, please press star zero. I would now like to hand the conference over to your speaker today, Leila Dillon. Thank you. Please go ahead, madam. Thank you, Nikka, 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, Executive Vice President and Chief Financial Officer; and Mark Chiplock, Senior 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 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, and good afternoon, everyone. The fourth quarter capped an outstanding year of growth and profit for Ameresco as our dedicated employees, in cooperation with our customers, executed in a difficult operating environment to deliver record results. We achieved excellent growth across our entire platform this quarter, led by very strong increases in both our projects and energy asset business lines. In addition to these excellent results, we have entered 2022 with a record of $5 billion in revenue visibility across our lines of business, including over $3 billion of total project backlog. This, coupled with over 400 MW of assets in development, supports our tremendous confidence in Ameresco's multi-year growth trajectory. We continue to see proposal activity picking up as customers seek solutions that address their increasing energy costs, resiliency needs, and carbon reduction goals. With the addition of the Southern California Edison battery project, our contracted project backlog ended the year at $1.5 billion, almost doubling sequentially and increasing 68% compared to last year. While the Southern California Edison contract was a major win for the company, there are several other large opportunities with complex solution requirements that we are pursuing and winning. Our energy asset business had another exceptionally strong quarter, with revenues up 35%. We ended the year with 343 MW of assets in operation, growing our base by 22%. We also continued to aggressively backfill, bringing our assets in development and construction to 414 MW. The clear acceleration in our growth is being driven by expanding addressable market opportunities, both related to continued industry trends as well as Ameresco's investments in energy experts and new technology and solution offerings, coupled with flexible financial solutions. A good example of this expanding addressable market is demonstrated by our increased partnership opportunities with electric and gas utilities. In addition to providing renewable electricity utility industry clients to help them reach their renewable portfolio standard goals, we are now also helping them increase the resiliency of their grid through the use of innovative microgrids and energy storage solutions. The Southern California Edison project, the largest in Ameresco's history, is a perfect example. At Ameresco, we continue to invest in people and advanced technology solutions to ensure that we are in a strong position to capture these emerging opportunities. For instance, in the last six months, we made an opportunistic investment in hiring over 20 senior biogas engineers and construction managers in our renewable gas group, more than doubling the development staff in this business unit. With 17 RNG plants in development, we believe these additional resources could help us accelerate the number of plants that could reach mechanical completion in 2023, from four plants to potentially as many as five or six, depending, of course, on permitting. As a reminder, we do not expect any meaningful revenue from these plants in 2023, but it provides a foundation for continued visibility and future growth. Over the years, we have built Ameresco organically and through opportunistic acquisitions. Our recent acquisition of Plug Smart is a great example of this strategy. This acquisition expands our existing solutions and pipeline in the smart building sector. We see a rapidly growing opportunity to provide a complete portfolio of smart building solutions to our existing and future customers by integrating controls and automation with our core clean tech solutions. An integrated smart building is the best solution for our customers seeking to maximize employee productivity while minimizing their costs and their environmental footprint. Our continued investment in the large and growing smart building market further expands Ameresco's addressable market opportunities, while also providing our customers with a one-stop shop for their needs. I also want to highlight that we recently published our 2021 ESG report, entitled Doing Well by Doing Good: Innovation, Action, Integrity. ESG is core to our corporate DNA, and there are many company-wide efforts underway to achieve our ambitious goals. While great attention is paid to all aspects of ESG, I want to note some major environmental achievements, and more importantly, goals that we set out in the report. Since going public in 2010, Ameresco's renewable energy assets and customer projects have delivered a cumulative carbon offset of 60 million metric tons of carbon dioxide. We expect this number to grow significantly as a result of the energy efficiency solutions we deliver and the renewable assets we place in service. We also have pledged to achieve net zero carbon operations by 2040 for both Scope 1 and Scope 2 emissions. Third, we will establish goal for greenhouse gas emissions reductions through the Science Based Targets Initiative by 2025 to validate net zero targets with objective certification. We are very proud of the positive impact that Ameresco makes every day in providing clean tech solutions to a broad range of customers, and we are committed to adhering to the highest standards of corporate citizenship. During the quarter, Ameresco was also the recipient of a number of awards and recognitions highlighting the strength of the Ameresco team. Our excellent work was again recognized by S&P Global Platts and by the U.S. Energy Storage Association, which highlighted Ameresco strategies and accomplishments in the battery energy storage systems market. I will now turn over the call to Doran to provide some comments on our financial performance and guidance. Doran? Thank you, George, and good afternoon, everyone. Please refer to our press release and supplemental slides that have been posted to our website for additional financial information. The fourth quarter clearly demonstrated our platform in action with all four of our lines of business contributing to our robust revenue and profit growth. The diversity of our geographic footprint and project profile, coupled with the stability of our asset and O&M businesses, makes Ameresco uniquely resilient and capable of handling the impact of COVID and supply chain related issues. While we face many of the same challenges as others, our top-notch team was able to overcome these once again to deliver record results. Just as important, we continued to pursue opportunities and win new business, allowing us to end the quarter with a record $5 billion in revenue visibility, positioning us well for another year of strong results as reflected in our 2022 guidance. The impressive growth in our Q4 total revenue was led by our project business, including the front end of the large SCE contract. The year-over-year increase in revenue from our energy asset business was once again driven by improved performance from our existing operating assets and strength in rent prices. We continued to grow our operating asset portfolio each quarter by bringing additional assets in development online. Our other long-term recurring revenue stream, the O&M business, also had a strong quarter of growth as we attached long-term O&M contracts to our completed project work. Consolidated gross margin was in line with our expectations given the impact of the lower gross margin profile of the SCE design build contract. Despite the lower gross margin, this project helped drive phenomenal year-over-year growth in adjusted EBITDA. The SCE contract is a prime example of our strong operating leverage in practice, demonstrating our ability to add gross profit dollars without substantial OpEx growth. Now, I'll move to our project backlog. We were very pleased to have increased our total project backlog 29% sequentially and 38% year-over-year to a record $3 billion, including the SCE project. Customer interest and bidding activity remains strong, and we are pursuing many other large complex projects. We have a proven track record and customers recognize our expertise. This positions us as one of the leading clean tech integrators in the market. During the quarter, we placed 26 MW of assets into operation while also backfilling our assets in development with an additional 33 MW, including both solar and batteries. Our 343 MW of operating assets have approximately $1.1 billion in long-term contracted revenue and incentives. Together with our $1.1 billion O&M backlog, we continue to have considerable long-term visibility to these higher margin recurring revenue streams. I'll turn now to our full year 2022 guidance and also provide some additional color around the quarterly cadence as detailed in our press release. We expect 2022 to be a year of unparalleled growth with anticipated revenues, adjusted EBITDA, and non-GAAP EPS growing 52%, 34%, and 26% at the midpoints of our guidance. During 2022, we anticipate placing between 60 MW-80 MW of energy assets into service while investing $225 million-$275 million in capital, the majority of which we expect to fund with non-recourse debt. While we do not typically provide expectations on quarterly performance or comment on specific contracts, we do feel it is necessary to provide some color here due to the significant impact of the SCE contract on our results. We expect that the 2022 quarterly cadence will be meaningfully different from the historical pattern. We discussed linear revenue recognition for the SCE contract back in November before finalizing procurement and construction contracts. With more clarity on the schedule in hand, we anticipate first quarter consolidated revenue will be sequentially flat with our strong fourth quarter, with total gross margin at approximately 14.5%. Revenue from the SCE project is expected to peak during the second quarter, driving an approximately 40% sequential total revenue increase, with total gross margin for the quarter expected to be closer to 14%. Third quarter total revenue is expected to look similar to the first quarter, but total gross margin is expected to be approximately 17.5% due to project mix. We have assembled an internal best-in-class execution team to tackle this SCE project without compromising Ameresco's business development and execution capabilities elsewhere in the company. Our procurement techniques have allowed us to navigate supply chain issues, and we are pleased to report that the project is progressing as planned. Now, I'd 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 the entire Ameresco team for their dedication and outstanding execution during a very challenging 2021. We also want to recognize the ongoing support of our customers and long-term stockholders. We entered 2022 in the strongest position in our history, with over $5 billion in revenue visibility and a rapidly expanding addressable market. I believe that both our near-term and long-term prospects have never been better. Finally, I'd like to remind everyone that Ameresco will be holding its first Investor Day in person in New York City on March 23rd. During the event, we will be featuring interactive presentations and panels by a broad representation of our leadership team. Discussions will focus on key growth opportunities, highlighting our portfolio of innovative solutions, which make Ameresco the industry's preferred partner for the most complex and comprehensive advanced clean tech solutions. The event is designed to provide analysts and institutional investors with a deeper understanding of Ameresco's powerful integrated business model and long-term growth opportunities at the nexus of cost savings, energy resiliency, and carbon footprint reduction. We look forward to seeing you there in person. Operator, I would like now to open the call to questions. As a reminder, to ask a question, you will need to press star one on your telephone. Again, star one on your telephone. Please limit yourself to one question and one follow-up only. To withdraw your question or if your question has been answered, press the pound or hash key. Your first question comes from the line of Noah Kaye from Oppenheimer. Your line is now open. All right. Thanks for taking the questions, everyone. You know, wanted to ask you in follow-up to your prepared remarks around the contracting environment and underlying backlog trends. You know, George, I think you mentioned several large projects with complex requirements. I think you said you were winning some of those. So, first, can you give us a flavor of the types of applications or technologies that you're referring to here? And second, which underlying backlogs are they up sequentially ex-SCE? And, do you think you can be kinda back at 2019 levels as you exit this year? By this year, I mean 2022. Apologies. There were several questions there. Yeah, I know. Sorry. I mean, first, should we tackle the technologies that we're looking at in the backlog? Okay. Now, basically battery storage, microgrids, more green gas plants, the comprehensive smart building solutions is getting to be bigger and bigger play of our portfolio, s ome hydrogen. A nd, you saw some announcements that we made. Basically, the comprehensive list of what we call advanced technologies. Yeah. I mean, I think, if I think about the backlog and what's been coming in on the awarded side and the conversions, certainly, and to echo what George just said, seeing a concentration with microgrids, certainly that's been a big part of what we've been seeing. The second piece, lighting continues to be an important part, s treet lighting especially. We've got some fairly large street lighting projects coming through, which involve, you know, controls as well. Then, as per usual, there's, you know, the traditional energy efficiency, as well. I think, you know, as is typical for a lot of these customers, they wanna fold in generation as well. We have the, you know, central plant solar, along with the batteries coming in. That's the technology question. If you'll move to the next one, Noah. Oh, he said he just got dropped. Oops. It was on the backlog. Operator, can we move to the next question? I think we have technical difficulties. Sure, sir. Your next question comes from the line of Stephen Gengaro from Stifel. Your line is now open. Thanks and good afternoon, everybody. Good afternoon. Two things from me. Can you just give us a quick update on where, you know, in your energy asset portfolio, where the rollout of the RNG projects stands as we go through the next couple years? Yeah, as I pointed out, we had three mechanical completion this year, and then we increased, we accelerated the level for the year after to five or six. One of the biggest issues that we have with accelerating those projects was the team, we did an excellent job building up the team, and now we wanna get to building about six plants a year. That's gonna take us about next year, and probably fully operational the year after that. Permitting some of the plants, especially a couple plants in California, got delayed due to permits. We substituted them with a couple other projects that we were able to get the permits. Yes. Steve, I can go through the rundown with you a bit here. 2022, the expectation is three plants reaching mechanical completion. Those represent about 22 MW, 1.8 million MMBtu per year. As George mentioned, you know, we had a couple plants in California where the permitting process is slowing things down, but because of the depth of our development pipeline, there were actually a couple of others that actually caught up and pulled ahead with the permitting. In 2023, again, based on building up the team, we expect to, you know, pull in some additionals, depending on permitting. You know, we're trying to get to five to six plants in mechanical completion in 2023, and that's about 45 MW-55 MW or 3.6 million MMBtu -4.4 million MMBtu. Great. No, that's helpful. Thank you. Then, as we think about the, you know, the environment we're in. You know, obviously there's an inflationary environment we're dealing with, and you're also dealing with high oil and gas prices in general. I'm just curious how that impacts your A, the contracting of new projects, and B, sort of how you think about the impact of inflation and on the margin front as we go forward. I know labor's been tough. Just kinda trying to get a sense for how you're approaching that, and what kind of impact we should be thinking about. I'll start with the project business. On the project business, there's some important pieces of Ameresco's operating practices that I'll point out here. One is to ensure that we hold the right amount of contingency on projects. The second is that prior to signing contracts in the traditional public procurement process, because the cycle going from awarded to contracted is sufficiently long, we have the ability to pre-negotiate most of our subcontracts and procurement prior to signing the contract to allow us to protect our margins. That's one side. The second side of it is on the contracting side, the origination side. As these energy prices have gone up, the overall cost of energy that we are attacking with our energy efficiency measures is going up. That means our energy efficiency measures-- because we focus on reducing units of energy used, gallons of water, whatever it might be-- the value of those will expand. There's sort of an incentive there for the customers to actually pursue more work because of the fact that the amount of the savings from the units of energy that we're talking to them about is actually increasing. You know, it's our view that that is certainly beneficial and will help on the origination side. Hopefully, that answers your question, Steve. No, exactly right. Effectively, when you're saving energy, you're saving more money, right? I mean, the value proposition is even greater. That is exactly right. The value proposition becomes much better. Great. Improves a lot. Thank you, gentlemen. Yeah. Thank you for the call. I appreciate it. Yep. Your next question comes from the line of Tim Mulrooney from William Blair. Your line is now open. Good afternoon. Good afternoon. Hi there. The question on backlog from Noah was, you know, if you exclude Southern California Edison project from your backlog, how does that number look on a year-over-year basis? Excluding that project, when would you expect to see backlog potentially get back to 2019 levels? That was the question. We still have shown some growth in the contracted backlog. The thing that we monitor and we watch very carefully what's happening to the marketplace is the fact that our awarded year to date had a 17% growth for last year. We saw a good pickup. As it turned out, I think our growth the last three years on the top line is on average 15%. Our awarded growth over the year, 17%, pretty much has matched for the last three years' growth. Yep. Okay. That's fair. The other thing we wanna point out, as I point, the proposal activity is picking up. The thing we have to remind ourselves is that we were operating in a COVID situation, that we did not have access to the customers as well as we could possibly have. Last quarter, even though it was the winter quarter, which is usually the slowest one, we saw a pickup in the proposal activity. This quarter, the trend is continuing. You're seeing a pickup because folks are emerging from the pandemic and you- Correct. What we said earlier, the energy prices going up, is people are concerned about energy costs. Of course, our value proposition becomes better and better. It has improved tremendously. Even though the interest rates have gone up a little bit, that doesn't have anywhere near the positive impact coming with the energy prices going up. It has an adverse impact, but it's much better for us. Yep, that makes sense. You actually touched on my next question, so let me just see if I can flesh it out a little bit. I mean, with the interest rates expected to increase this year, as we think about your value prop, you know, how should I think about that impacting ESG contracts generally? It impacts it a little bit, but it's very small basis point. You know, what we've been able to do so far-- I can use an example that a project we locked the rate this week, basically. Then, we had to reprice the rates, the energy prices, the project grew. Otherwise, we could afford to have a positive cash flow with the updated energy costs. Even though the interest rates went up a couple of basis, at about 20 basis points, 25 basis. I mean, I think that's the most clear, current example, you know, of a situation. It's anecdotal, but that project, we locked in a rate reflective of the, you know, current interest rate environment. But then, the overall calculations based on the revised energy costs and projected energy costs, the project actually grew. If we're focused on interest rates, we're missing the forest for the trees. It's really about energy prices right now. Yep. All right. Thanks, guys. That's great. Thank you so much. Thank you. Your next question comes from the line of Eric Stine from Craig-Hallum. Your line is now open. Hi, everyone. Thanks for taking the questions. Hi. Sure, Eric. Hey, just on the energy storage, the big one, the contract with SoCal Edison. You know, just curious what that has kind of meant in terms of, you know, maybe growth of the pipeline, interest level, because that does clearly put you in a different league. Or, I mean, it's such a high profile project, just curious. You know, maybe that, and as we think about projects moving forward or going forward, I mean, should we think of contracts of this size or would it be more, you know, some smaller contracts, but you'd be in the mix for, you know, a greater number of them? That's a good question. The activity level or the request by various utilities and also by some of the smaller cooperatives out there that do not have the expertise, it has picked up considerably. Now, whether we will get another contract of the similar size, we would love to. We would love to tackle it. I will say this much now, that we know much more about this, more about that project. We feel pretty comfortable with its execution, that is as planned and feel very good. You will see more EPC. Look, as you see more and more solar plants, wind farms and so on, otherwise more of the electric capacity comes from renewable resources. Those have got to be backed up somehow. Battery storage in the short term is the means to do it. Down the road, we might have clean fuels and so on that we will build, probably plants that they run for 24/7. But, right now, battery storage, it's a key market for us. This project placed us in a different pool of competitors. Our expertise, it's helped us a lot to win this project. We have many more projects like that. Not the same size, but smaller size, quite a few. Don't be surprised. Many of them will be EPC, whether utilities or other companies own them. Some of them will be on assets we own. Because I know we have three or four of them that we're working on, but ultimately we will own them. Do you wanna add any more color to that, Doran? No, I think that's the punchline, is that there's-- our approach to customers is flexibility with respect to how they wanna execute. It's execution track record that's gonna get us the deals and our ability to provide either, you know, PPA stock, capacity contract, what have you, as an asset that's on our own balance sheet versus a design build contract for the customer. You know, we can provide both. We see the backlog filling with, you know, with both. Gotcha. Okay. That's very helpful. Maybe last one for me. Just in terms of, you know, component shortages and, you know, you having to deal with what everyone else is in the industry, you know, just curious, I mean, the fact that you're equipment agnostic, is that something that's helpful? Maybe, just some of the steps that you've taken, and how you see that going forward. No question about it. The fact that we're technology agnostic, it has a lot of traction in the marketplace because people either wanna be captive. We can go out shopping, and that's one of the competitive advantages that we brought to the table on this Southern Cal Edison project, that we have much more flexibility than other people that we're tied, in than some other people. It's definitely a tremendous advantage. Got it. Thanks. Your next question comes from the line of Craig Irwin from Roth Capital. Your line is now open. Hi. Good evening, and thanks for taking my questions. George, I wanted to ask you a question. I had heard, maybe six months ago, that you doubled the size of your green gas project development group. Now, if that's true, that's actually a really positive thing that gives them more time in the seat, and it's good that you're talking about them now. Bu,t can you maybe confirm when the new people were added? And, maybe, talk a little bit about their experience base, and the timeline to make these new resources productive, and for the group to capture new projects and execute faster, et cetera. Yeah. I will start from the end and going backwards. They were productive immediately because they were senior executives and all senior people. All of them, they've been added the last six months. I would say some of them in the last month or so, two months. I don't know if, you know, if you have any more color. No, I think, Craig, so you're good. We've got, you know, on the engineering side, the development side, you know, legal, finance, just folks that are really familiar with these projects and the market, up and down. You know, of course, much of this is opportunistic, and we, you know, as George mentioned, a lot of these folks came in the last month or so and have really hit the ground running. Okay. Excellent. Excellent. That's really good to hear. I would- Specifically, they were working for green gas plants before, developing them, operating them, building and so on, and financing them. Yeah. It's not engineers that we try to convert them from another field to this field. That's why I put in my remark, RNG experts. Understood. There's a lot of flimsy RNG startups in the market. It's probably not hard to steal talent from some of those. You know, I'm happy to hear that you're bulking up there. My second question- Thank you. ... this is really about the SCE project. Typically, construction companies, now I know you're a performance contracting company, but typically peer construction companies, when they have projects that are, you know, more than 10% of revenue in a year, will break out the percentage of completion for investors, so we can monitor this on a quarterly basis. You did give us quarterly revenue progression, but no specific revenue in there. Was wondering if you might be able to give us a little bit more color on the cash flow cycle there. You know, if you could talk a little bit more extensively about what you've done to risk manage this project. You know, a lot of storage projects out there have been canceled in the last six months because battery costs going up, a lot of the other complications in the market. Sure. Any operating details around how you risk manage this would be really useful to know. Thanks. Okay. Go ahead. On the quarterly cadence, the specific reason why we didn't wanna go through percentage complete on a quarter-by-quarter basis here is simply because of the fact that, you know, there's always a quarter end. You know, equipment deliveries or, you know, activities on the sites, you know, may shift to kind of across a quarter here and there. As we discussed it, you know, ultimately things get lost a little bit in the ranges that you might have to provide, and we thought that taking the approach that we took in the script today was the best approach to give you all the best information that we could give. I think we'll leave it at that. In terms of risk management, on this project, which I was directly involved in, we followed many of the exact same risk management techniques we do on other projects. That means satisfactory contingency, locking in pricing, holding our suppliers to account for delivery dates and for their other obligations, you know, technical or otherwise, under the contracts, and that applied to both suppliers and subcontractors. That's the approach we've taken, and that's the approach we continue to follow as we carry through this project because this, you know, the spotlight is on, and SoCal Ed knows it, and I think that we're executing accordingly. Great. Hey, congrats on another great quarter. Thank you very much. Thanks. Your next question comes from the line of Jed Dorsheimer from Canaccord Genuity. Your line is now open. Hey, guys. Congrats, and thanks for taking my question. I guess I want to just ask a high level. I guess they're both high level. My first question is just, you know, if we look at the capital intensity of primary energy generation, it's gone up such that, you know, like taxes directionally there's only one way that energy costs are going absent, you know, short-term aberrations. I'm wondering in terms of the conversations that you're having with customers, how many have come to terms with accepting the fact that that vector is directionally going up as it relates to, you know, the trend of digitization and electrification within the context of efficiency? Then I have a follow-up. Yeah. I can take the first one, and then the follow-up can go to Doran. The customers are beginning to accept, and you see that on rates, on the PPA agreements that we might be selling to a particular customer. Because electric rates, energy costs are going up. For example, let's say before the average rates, they were $0.15, and we were selling solar energy at $0.09 or $0.10. But you can see them creeping up because people are realizing that everything went up. Capital costs are going up, and, of course, the corresponding rates are going up. They are beginning to. Now, are they 100% there yet? No. But I see a little bit understanding of where we are and what's going on in the market. What makes them react, though, the fact that the energy prices are going up and up, and that gives them an incentive to move. I feel like, I was just gonna say, I feel like it's a little bit of scenario planning as opposed to, you know, solidly going with higher costs. Yeah. Right? I think it's scenario planning. They certainly are starting to recognize that it's mixed, and that the inflation versus other geopolitical forces, there's a lot of uncertainty there that they need to plan for. Yeah. It's a scenario plan. Yeah. Well, I can give- Yeah- ... another example, a particular customer, large project that we had priced, I would say, a couple of years back. They did decide not to move, and then they said, "Oh, we wanna move now." We went back, of course, with an updated cost, and they said, "Wow, what happened here?" I said, "You waited two years. That's what happened." But they didn't take us out. They said they are considering it right now, and most likely they will go ahead. Yeah. Thanks. I asked a question, and I'm sure, you know, I don't wanna steal any thunder from your Analyst Day, but this seems rather apropos for, you know, the moment of time of how you look at your business. If you look at the business over a three-year period of time, you see a very steady, what would be, you know, a steady growth versus sort of the moment in time, which seems rather appropriate, you know, because of this big contract that you have with SoCal Edison. Again, I'm sure you'll be addressing that. Just one. My follow-up, if I could sneak this in, is- Sure. You know, the largest backup generator company talked about virtual power plants and kind of energy as a service in the context of existing equipment that's out there in the field and about 40 GW that's out there. As utilities are faced with the squeeze of having to go through a rate case and the process to bring new assets online, it would seem like that business of turning on sort of the virtualization, if you will, of existing assets would be something of a focus for your project business. I'm just curious in terms of, you know, the discussions that you may or may not be having around, has that started to be something that's seen as attractive by your customers, either on the selling side or the buying side of the utility? I mean, we are looking at some virtual power plant, renewable power plants ourselves, where various customers, they will be buying for a particular solar plant or down the road, probably green gas plants. We are looking into it, no question about it, and I think you will see it evolving. We have a couple industrial customers or commercial customers that basically, they have facilities around the country, and we will develop solar plants in certain locations. We will get power to them through a virtual power scenario. Yeah, I think the only thing I would add there is that we're relatively consistently approached by a number of parties who are looking to partner with us- Yeah. .. who provide the kind of software solutions associated with DERs. Yeah. The approach of using DERs in the markets where they can add value, economic value to the customers. We're, of course, considering that. The second piece is that, of course, we have a business that consults utilities on DER programs, and they're certainly seeing an uptick in their activity in that space for program administration and software. That's the Applied Energy Group. Thanks, guys. I look forward to the Analyst Day. Thank you. Thank you. Your next question comes from the line of George Gianarikas from Baird. Your line is now open. Hey, guys. Thanks for taking my question. Hey, George. Hi, George. You know, I'd like to ask a little bit about-- there's been a lot of regulatory disappointment, but underneath the surface, I think, the Biden administration signed a directive of, well, executive order around the federal purchases of renewables. I'm curious as to whether you could share any color or any potential momentum you've seen in your business, specifically around that, the executive order. No, I mean, we see a considerable pickup associated with that. Whether that Build Back Better plan passed, it would have helped us even more. Even without that, we see a considerable activity around the executive order. I mean, no question about it. Every base now, they're more interested in doing not only renewables and energy efficiency, but resiliency and so on. Maybe as a follow-up. Please go ahead. Well, basically considerable uptick. It takes some time for those guys to move, but on the other hand, though, in the long term, no question about it, it's a considerable pickup. Even after the executive order came out, we had the people before, but we increased our capabilities through personnel in order to take advantage of that opportunity. Maybe as a follow-up, you know, there's been some recent M&A in the sector, and I'm curious as to whether you could refresh us on your philosophy and thoughts around M&A. Thank you. I will start, and then probably Doran will add some. Look, we have done about 22-23 acquisitions with the company. We did a small one, which is accretive. Not only that, but it helps us a lot in the smart building technologies and taking advantage of that expanded market opportunity. We are looking at several, but we are not at the point we can talk with any one of them. You will see us growing organically at the rates we have talked in the past, you know, top line around 10%, EBITDA line around 20%. Don't be surprised that we will complement that with accretive acquisitions. We are always in the market. Yeah, I'll just close it. It's opportunistic. Yep. You know, the business has to make sense. The story has to make sense. The management team has to make sense for our organization. The strategy needs to be clear as to how we're going to make it part of the Ameresco story. Yeah. Thank you. Your next question comes from the line of Julien Dumoulin-Smith from Bank of America. Your line is now open. Hi, guys, this is Anya stepping in for Julien. My first question is, what should we expect in terms of updates at the Analyst Day? Specifically, how could disclosures improve relative to what you've provided historically? Do you want me to take this? Yeah. Yeah, I'm asking George's permission. The Analyst Day, presenting the guidance for 2022 like we did today, that is what we plan to do all along. The Analyst Day is intended to focus more on addressable markets, long-term growth strategy, how we go about tackling the markets, and actually give investors and analysts a little bit better of a face-to-face view with a number of executives inside the company, so they can see kind of how these folks tick. We don't anticipate making that a day to start publishing numbers. That's not what it's about. Okay, that's fair. Secondly, as a follow-up, what kind of RNG pricing is factored into your 2022 EBITDA guidance? How hedged are you at present for this year on RNG? Entering the year, we're right about 70% hedged. Yes. Slightly. Okay. Yep. We're somewhat conservative in terms of determining our guidance, but not meaningfully away from current market prices on those D3 RINs. Okay, perfect. Thank you very much. Welcome. Thank you, Anya. Your next question comes from the line of Pavel Molchanov from Raymond James. Your line is now open. Thanks for taking the question. First one dovetails a little bit with what you were asked a few minutes ago about the White House executive order. I'm asking about the U.S. Army Net Zero strategy, and given that federal revenue, I think, is still, you know, 1/3 of Ameresco's sales, I'm curious what kind of opportunities, specifically in the defense area, you're gonna see, you know, beyond the work you've already been doing with the Marine Corps and so on. It's very hard to quantify it, but on the other hand, I wouldn't be surprised if it doubles, but it probably will take us two to three years to get to that level. Because I tell you, some Petaluma, couple of the sites that we're already working on it, by 2024, we will have them at net zero between battery storage, solar, energy efficiency measures, and so on and so forth. It's doable. Many of those sites, as we know, they have excess land, which we can put a substantial amount of solar and the battery storage. What's going on, you know, resiliency, whether it's hospitals, colleges, universities, the federal bases. Just about every base that we are talking to right now, not only net zero, but they want resiliency, and because of what's going on with the climate change. Like I said before, weather will take out all the solar, will take all the wind, so we have to have some kind of a backup, and they recognize that, and they wanna do something about it. To quantify it, though, it's early. On the other hand, 'cause we know we get them up to 50% where they wanna be with the way we've been doing it in the past. If they were willing to accept or contribute some of their own money, we get them to 100% much sooner. No question about it, that business will accelerate. The good thing that I will say that we are number one in that market. We will capture our good percentage of the federal market. Yep. Appreciate that. Let me turn to the other side of the Atlantic. Even before the war began, we had record natural gas prices, $25 per MMBtu- Yeah. ... in Europe, record electricity prices. Europe has never been a big slice of your revenue, but I'm curious if, you know, you're gonna see uplift both from an efficiency, you know, contracting standpoint and potentially as an RNG developer, since if you're displacing $25 gas, that seems like a no-brainer in that context. No, it's a good question, and I think I will say as much as I can. Even in the U.K. business, we saw a tremendous pickup this last year. They had an excellent year. They have a great backlog, even though we don't separate them out. There are several projects that we cannot talk about them yet, but the traction is going to be very good, and for the reason we articulated. Energy prices are going up, and we are looking to expand the European operations, especially in U.K. and the southeast part of Europe. Thank you very much. Appreciate it. Yeah. Thanks, Pavel. Your next question comes from the line of Chris Souther from B. Riley. Your line is now open. Hey guys, thanks for taking my question here. I was curious, you know, given the big win with SCE, can you give us a sense of the battery pipeline for projects, you know, either gigawatt standpoint or you know, just the ones that you guys are kind of bidding on? It sounds like they're not necessarily the same size, but there's multiple ones that you guys are looking at. You know, within the energy asset development pipeline, any, you know, color you could provide on the 259 MW that are in there as far as, you know, standalone storage or, you know, solar plus storage, you know, kind of the storage breakout would be helpful. Sure. Just to tackle the assets and development piece first. We've got about 266 MW of solar and battery. And there's probably 60 MW of battery in there, 45 MW of which is standalone. Again, that's megawatt, not megawatt hours, to be clear, because sometimes- Right. ... those are two hours. Some of them are two, some of them are four, some of them, you know, you get the point there. Importantly, again, you know, SoCal is, obviously, that's a project, that's a design build project, has nothing to do with our asset and development metric. Yeah. It's just important to make that clear. I think that if you talk about pipeline, there's proposals. Those proposals come large and small. I'm always a little bit reticent to talk about the kind of huge whatever the funnel is, because it's something that we don't measure. Like, when we measure this asset and development metric, we've got 90% plus confidence in those things being placed in service. Everything that goes before that is stuff that's in proposal stage, you know, and even in award stage where we're still working through site and permitting and et cetera. I think it's important to point out that we'd like to stick with that as far as publishing measures. You know, George, if you wanna talk about the- Well- ... the depth of that funnel, though. I mean, that's it. It's a big funnel. It's very large. It's several magnitudes of what we have on the development backlog- Yes. ... for the assets in development. Like Doran said, it's very hard to give specific numbers if it has not gone. We haven't done all the screening to go into the awards category. The pipeline, it's several magnitudes larger than what we have right now in the assets in development. Yeah. One last thing I'll add, and I mentioned it before, is that when we're in the early stages of negotiation with these battery projects, there's still quite a bit of discussion as to ownership of the battery. Yeah. You know, if the ownership of the battery sticks with us, then it ultimately becomes part of our assets and development. If it doesn't, then it just flows into our project backlog. There's sort of two different business lines working in the same with that technology. Okay. No, that makes a lot of sense. Then just a little bit on project size. Obviously, the big battery is an outlier, but you know, as the scope of what you guys are doing on some of these projects is increasing, I'm getting a sense that, you know, the average project size has been increasing pretty significantly for you guys with some of the large streetlight projects and military base work. You know, is that something you guys are, you know, tracking as far as, you know, the trajectory of that? Or are we starting to get, you know, a lot more small projects, you know, in the pipeline and in awards as well? It's increasing, no question about it. The projects are getting larger and larger, and that plays right into our strength 'cause they are more complex, and they include microgrids, battery storage, combined heat and power, the full spectrum of energy efficiency measures. A specific number, I don't know, do you have any? Overall, I think we're probably still in that seven to 10 range because of the increase in smaller projects. Yeah. By project count, right? You know, in some of these, you can almost call pilots. There are certain markets where we take smaller projects that are $1 million or less even, sometimes, just so we can get one on the books to establish the track record in a technology. You know, we're still seeing kinda seven to 10. Okay. That's helpful. Thanks, guys. Your next question comes from the line of Chip Moore from EF Hutton. Your line is now open. Hi, guys. Thanks. Hi Chip. Follow up there on the pickup and proposal activity you've been talking about in regards to visibility on timing, right? Obviously, way too premature for any sort of 2023 outlook, but there will be something of a tough compare, and this might be more for the Investor Day. Just sort of high level, how to think about some of those dynamics. I think we will focus more on what the market opportunities are, and we'll probably break it down by the charging stations and so on, battery storage. We might comment a little bit about the activity level, but I don't think we'll be giving any specific numbers to that effect. Yeah. But, we will give a good idea where our market share is and how we stand against the competition. I think from that, we can extract what we will be able to achieve. We feel very good where the market is going and our position in the marketplace right now. And, and- Yeah, fair enough. I spoke about this a bit before, Jim, but just to be clear, that we're- Yes. There won't be any guidance updates or guidance beyond 2022, anything like that coming at the Analyst Day. Again, we're focusing on the qualitative aspects of our addressable market, our capabilities, and giving people a view into the executives. Absolutely. No, that's fair. If I could just sneak one more in, supply chain COVID delays, I think there was $30 million or so pushed out last quarter. Are you all caught up there? Are you still seeing any sort of impacts, and are you embedding anything in the outlook? Wherever it gets pushed out, we get that revenue in later quarters. Typical with our business, sometimes we accelerate some contracts, but because of COVID-19, COVID situation, I would say, more were pushed out rather than being accelerated. The point that I wanna reemphasize is the fact that we will see those revenues in later quarters. The other thing, you know, on the first quarter, especially some of the states and up in Canada, they, still in the first couple of months, they had issues with access on the various facilities, and the same with Northwest a little bit. We see some pushout, but not losing the business. The value proposition doesn't change. All right. Well, congrats on the momentum. See you in New York. Thanks. Thank you. Thank you. Your next question comes from the line of Greg Wasikowski from Webber Research. Your line is now open. Hey, good afternoon, guys. Thanks for fitting me in. Most of mine have been answered, so I'll just keep it to one. Could you talk a little bit more about the labor constraints, or lack thereof, and how it has or how it could affect each of your business lines, and particularly around the SCE deal? Just how you've been able to avoid any project slippage there as it relates to any sort of labor constraints. Thanks. I will talk about the internal, you know, which is our labor, and so far so good. The fact that we're doing innovative projects and having a great culture, we have been able to get the talent that we want and actually experienced talent, as I pointed out in the RNG business. That's going with the battery storage. We got some great experts coming into our company. As far as other labor, I will let Doran talk about it, especially the Southern Cal project, because he's immersed in it day and night. I'll just compare it because, you know, if you think about us as a design build project and think about design build projects, a piece of real estate, a building that has to be built that has a contract size of, you know, like something like what we have with SoCal Ed, requires a multiple of the number of people on site that we require, right? Energy infrastructure is not as labor intensive from a dollar cost perspective as, say, building a building, right? I think that that's a differentiation that sometimes is lost on people with Ameresco because we, you know, yes, we are a project manager. George has talked about the fact that we've been able to retain and attract a lot of the staff that we need, and then our labor requirements from our subcontractors are smaller than a lot of the labor force issues that are faced in the broader construction industry. Because of the fact that this is energy infrastructure, it doesn't actually require as much on-site laborers as others. In fact, it's a fraction. It's probably the best way for me to answer that question. Oh, yeah. That's helpful. All right. Thanks, guys. Your next question comes from the line of Kashy Harrison from Piper Sandler. Your line is now open. Good afternoon, and thanks so much for taking the questions. Sure. With respect to the energy asset portfolio and development and under construction, I was wondering if you could just maybe refresh us on how to think about EBITDA per watt for these opportunities by category, how to think about, you know, the CapEx per watt as well. Sure. Then, finally, you know, you had indicated that, you know, most of the capital would be funded via project debt, but I was wondering if you had maybe a long-term framework for how to think about the appropriate ratio of project debt to, you know, to energy assets on a more long-term basis. I'll let Doran. They haven't changed much from the previous numbers. Start with the kind of CapEx figures. Solar averages around $2 a watt. RNG somewhere between $5-$6 a watt. Battery, also similar to solar, kind of a couple of dollars a watt. Obviously, you know, battery pricing themselves, like, you know, there's ups and downs of battery pricing that you have to consider there, but that's that's just a general indication. Across our entire asset and development metric that's updated now, you're talking about approximately $1.2 billion of CapEx. That cycle for asset and development metric, you know, that's four years probably, maybe five, like four plus, between four and five. That's the way to think about the cadence. I think that we're sort of on average between 80% and 85% debt. Think about it as 15%-20% equity over the long term. Nothing's really changed in that sense from our perspective. Those are the same numbers we've been giving for a while. In terms of EBITDA contribution, batteries and solar are similar, probably talking about $200,000-$250,000 of EBITDA per megawatt per year. That's kind of in the 75% EBITDA margin range for solar and batteries. On the RNG side, it's higher per megawatt, which, you know, matches the higher CapEx. Something between $750,000-$1.5 million of EBITDA per megawatt. Obviously a wide range, but there's a reason for that, of course, with the value of the attributes moving around, and as of late, value of brown gas moving around. That's probably a 50% margin, so you're talking about $1.5 million-$3 million of revenue per megawatt. Those are kind of the round figures per megawatt. Oh, that's super helpful. Thank you. All my remaining questions are on TAM, so I'll look for the Analyst Day to get more of that information. Thank you. There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.