Good morning, and welcome to Sunnova's third quarter 2021 earnings conference call. Today's call is being recorded and we have allocated an hour for prepared remarks and question and answer. At this time, I would now like to turn the conference over to Rodney McMahan, Vice President of Investor Relations. Please go ahead, sir. Thank you, operator. Before we begin, please note during today's call, we will make forward-looking statements that are subject to various risks and uncertainties that are described in our slide presentation, earnings press release, and our 2020 Form 10-K. Please see those documents for additional information regarding those factors that may affect these forward-looking statements. Also, we will reference certain non-GAAP measures during today's call. Please refer to the appendix of our presentation as well as the earnings press release for the appropriate GAAP to non-GAAP reconciliations and cautionary disclosures. On the call today are John Berger, Sunnova's Chairman and Chief Executive Officer, and Robert Lane, Executive Vice President and Chief Financial Officer. I will now turn the call over to John. Good morning, and thank you for joining us. Today, I'm pleased to report another quarter of strong results to reaffirm our 2021 guidance and to officially initiate our 2022 guidance. Slide three summarizes the growth in Sunnova's customers, battery attachment, and dealer network. In the third quarter, we added over 14,000 customers, double the number added in the same quarter last year. This growth is notable not just for its magnitude, but for the optionality it creates. Each new customer Sunnova adds presents the opportunity for additional revenues in the future as we continue to broaden our service offerings. Sunnova's battery attachment rate on origination now stands at 30%, up from 19% in the fourth quarter of 2020. Improved equipment availability has contributed to the steady improvement in our battery attachment rate. We are encouraged by the progress our equipment partners have made in delivering energy storage systems over the past several weeks and months, which has helped alleviate supply chain constraints. This is great news for the ever-increasing number of homeowners seeking reliable power service. Our growth remains powered by over 700 dealers, sub-dealers, and new homes installers strategically located across the 33 U.S. states and territories. Our dealer growth is driven by the strength of Sunnova's business model, our best-in-class technology platform, and our brand's growing ability to deliver strong lead generation to our dealers. Lastly, on this slide, we have updated our information on customer contract life and expected cash inflows. As of September 30, 2021, the weighted average contract life remaining on our customers' contracts equaled 22.4 years, and expected cash inflows in the next 12 months has increased to $330 million. On slide four, we provide a summary of our Q3 2021 financial results, Adjusted EBITDA, the principal and interest we collect on solar loans, adjusted operating cash flow, and recurring operating cash flow. Our financial results have shown strong growth over the past three years, and as I will discuss later in the call, we expect that trend to continue. Slide five outlines our unique and unparalleled service commitment to customers. Launching first in select key markets, we have established a goal well beyond that of any other residential energy service provider to provide service within 72 hours for our solar-only customers and within 24 hours for our solar plus storage customers. This responsiveness, when combined with the resilience of our storage product offering, amounts to a superior energy experience for customers who are frustrated with the increasing cost and decreasing reliability they experience with a monopoly power provider. We will accomplish this goal by accelerating the build-out of our software platform, continuing to build up our highly experienced and professionally managed service team, and continuously improve our logistics capabilities. This unprecedented service commitment will allow us to provide our customers with the power to live life uninterrupted. In time, it is our goal for the Sunnova name to be synonymous with the best energy service in the world. Slide 6 illustrates our expansive customer-centric vision for the future, the Sunnova Adaptive Home. With the Adaptive Home, our customers will have the option when it comes to staying connected to the centralized grid or not, an option many are already seeking in the wake of increased power outages and the rising cost of centralized power. We are working to achieve a service offering above what a traditional utility can provide. A service offering that integrates solar power, battery storage, possible secondary generation, electric vehicle charging, and energy control and management technologies, which will give consumers unparalleled energy reliability and capabilities for their homes. What will further differentiate Sunnova will be our ability to integrate multiple technologies from multiple manufacturers into a single software and service interface. Our vision for increased customer touch points and engagement impacts our forward-looking outlook, which is increasingly more constructive on growth. Slide seven updates expected growth in both net contracted customer value, or NCCV, and services provided on a per customer basis. Currently, we provide an average of 3.5 services per customer, which equates to approximately $10,000 of NCCV generated per customer. We anticipate both metrics to increase over time, as it is only natural the number of services per customer and the NCCV from those services increases as the technology and cost continue to improve. We estimate by 2025 we'll be providing an average of seven services per customer. This, in turn, should increase the amount of NCCV per customer into the range of $18,000-$20,000 of NCCV. Last quarter, we noted we are seeing significant opportunities in grid services. To date, we have 10 grid service programs in place with an estimated value of at least $67 million over the next 20 years and a pipeline with the potential for an additional $445 million in value. Turning to slide eight, we are unveiling our intermediate term major metric growth plan. We have dubbed this the Triple-Double Triple plan. This plan consists of the following, a doubling of our estimated year-end 2021 customer count by year-end 2023. A doubling of our estimated year-end 2021 NCCV per share by year-end 2023. A doubling of our estimated year-end 2021 services sold per customer by year-end 2025, and a tripling of our estimated 2021 full year adjusted EBITDA together with our principal and interest we collect on solar loans for full year 2023. Our expectation is that our plan will assist shareholders in understanding how management anticipates creating value for shareholders over the coming quarters. I will now hand the call over to Rob. Thank you, John. Turning to slide 10, you will see the continued improvement in our third quarter results over the past few years. Q3 2021 revenues are up 88% from Q3 2019, while over the same period, adjusted EBITDA and the principal and interest received on solar loans increased by 58% and over 200% respectively. Slide 11 contains both our gross contracted customer value, or GCCV, and NCCV discounted at 4%. As the slide reflects, we are experiencing significant increases to these metrics. In just three years' time, NCCV went from $892 million as of September 30th, 2018, to $1.8 billion as of September 30th, 2021. Overall, we deem 4% a conservative cost of capital as we continue to incur an incremental fully burdened cost of capital of 2.8% or less for our growth. Given our operations are generating flat to positive recurring cash flow, inclusive of our legacy securitizations and their heavy debt amortization profile. It is clear that our NCCV per share, as measured via 4% discount, should naturally increase over time even if our treasury bill reference rates increase. Slide 12 summarizes our recent financing activity and liquidity position. Just this week, we closed our fourth securitization of the year. This loan securitization was our third loan securitization of 2021, and like the three issuances that preceded it, was structured to include only investment-grade tranches of debt. As a reminder, investment-grade only securitizations are less punitive in their amortization than those that include high-yield tranches. This approach to generating long-lived recurring cash flows gives us strong visibility into our expected financial performance over the next several years. This capitalization strategy also gives Sunnova an advantage in the cost of capital in our industry, which aids us in capturing the full spread, resulting in Sunnova generating some of the highest margins in the industry. Our total liquidity as of September 30th, 2021, was $951 million, up from $629 million on June 30, 2021, and up from $212 million on September 30th, 2020. Included in these numbers are both our restricted and unrestricted cash, as well as the available collateralized liquidity we could draw upon from our tax equity and warehouse credit facilities. Given available unencumbered assets as of September 30, 2021, this available collateralized liquidity equaled $431 million on September 30, 2021. Beyond that, subject to available collateral, we have $578 million of additional capacity in our warehouses and open tax equity funds. That represents over $1.5 billion of liquidity available, exclusive of any additional tax equity funds or securitization closures. Turning to slide 13, we have updated our forecasted sources and uses of cash for 2021 through 2023. In addition to the takeaways from last quarter, keen-eyed investors will note that while our capital commitments have increased somewhat, so has our expected debt utilization, which is reflective of the strong reception we have received in the ABS markets in our most recent transactions. This, in turn, has decreased our expected corporate capital requirements for 2023. Again, our options for capital in 2023 are numerous. These include issuing another bullet maturity bond, service retained asset sales now that we have the critical mass of cash flows and assets have appreciated, refinancing of older securitizations, and incremental thickening of investment-grade tranches of our securitizations. On slide 14, you will see our fully burdened unlevered return on new origination remained at 9.4% as of September 30th, 2021, based on a trailing twelve months, while our weighted average cost of debt was 2.8%. This resulted in a trailing twelve months implied spread at 6.6% as of September 30th, 2021. On slide 16, you will see our guidance ranges remain unchanged for 2021. On slide 17, you will find our guidance ranges for 2022, which are customer additions of 83,000-87,000. Adjusted EBITDA of $117 million-$137 million. Principal payments received on solar loans, net of amounts recorded in revenue of $134 million-$154 million. Interest received from solar loans of $45 million-$55 million. Adjusted operating cash flows of $143 million-$153 million. Recurring operating cash flow of $39 million-$59 million. Please note that the midpoints of Adjusted EBITDA, together with the interest and principal we collect on solar loans and customer additions, are in line with how we've guided investors in previous earnings calls. This includes a forecasted year-over-year increase of 80% in full year Adjusted EBITDA, together with the interest and principal we collect from solar loans and a year-over-year increase of approximately 50% in organic customer additions. I should also note that we expect to have at least 75% of the midpoint of our 2022 targeted revenue and principal and interest collected from solar loans locked in through existing customers as of December 31st, 2021. I will now turn the call back over to John. Thanks, Rob. This could not be a more opportune time for our industry, especially for service providers like Sunnova. What was once often seen as an install and forget product sale, dealing only in solar panels and a single inverter, has now become an evolving energy service offering that contains an increasing number of pieces of equipment made by a growing number of manufacturers. Over time, this increasingly complex energy system will demand a level of service that is well beyond what our nascent industry currently provides, especially when juxtaposed with an ever-increasing consumer demand for higher energy reliability. Financing and software are enablers for this new energy service, and we now have enough financial and operational scale in these areas to drive forward our long-term vision for service. Our service response goals are ambitious, but we see what the future of service must be for our industry to truly flourish, and we are well on our way to delivering on these goals. At Sunnova, we are here to provide our customers with an energy service unlike anything they've experienced with traditional or new energy providers. With the climate crisis on our front doorsteps, we are proud to be able to provide our customers with an energy solution that not only provides them with the ability to live life uninterrupted, but to also be a part of solving the biggest crisis facing our world today, climate change. With that, operator, please open the line for questions. If you would like to ask a question, please press star one on your telephone keypad. Again, that's star one to ask an audio question. Your first question comes from the line of Philip Shen with Roth Capital Partners. Hi, everyone. Thank you for taking my questions. You know, on your unit economics slide, was wondering what you thought and how you thought the unit economics might trend ahead. You know, we're hearing about resi module pricing already reaching mid-$0.50/W for January delivery, for example, and contracts are now being structured based on an index to input costs like glass, aluminum, poly and freight. As just the friction in everything continues to increase, how do you expect that 6.6 implied spread to trend through 2022? Hey, Phil, this is John. Thank you. You know, we've, Rob and I have constantly said that, you know, the unlevered returns were very, very strong and the spread of, you know, nearing 700 basis points is a bit high, and we expect that to compress over time. To date and currently as we sit here today, that has not happened. Obviously that's good news. I do think it has a lot—I know it has a lot to do with the fact that, you know, because we have a balance sheet, because we've taken a capitalization strategy that's much more, you know, much different than anybody else out there that we compete with, our cost of capital is very low. I mean, that's pretty clear when you look at all the numbers in comparative. You know, right now we're seeing that spread maintain. You'll notice that the Q3 unlevered return is about 9.3, obviously 0.1 or even something, you know, double that or triple that. It doesn't really matter in the grand scheme of things. We continue to see quite strong spreads. The cost of capital, we do expect to drift downwards, and we've got some pretty good visibility in that as just recently closing that securitization. We think the investment grade attachment point is gonna continue to rise. We think that our cost of corporate debt, it's definitely traded up right after our issuance. It's only been a couple of months. We continue to see that that's gonna, you know, come down quite substantially. Then we see our cost scaling in terms of dropping our overall cost stack, because remember, these are fully burdened numbers. I think that we're quite likely to see this spread relatively maintained as we move forward into 2022. Indeed, as we sell more services, a lot of these services, you know, such as service only and so forth, have, you know, 50% gross margins in it. They're quite profitable for us. Some are more profitable than others, but you know, we expect the spread to hang in here, if you will, as we move into 2022. That's great, John. Thank you. You know, you talked about your cost of capital going down and the potential for that to go down some more. On the previous slide, the liquidity forecast slide, we see and saw some changes in 2023 that went in your favor. Notably, the amount of borrowings have gone up, or, you know, to $2.5 billion. I think the cost in the new systems also went up a touch from $3.5 billion to $3.6 billion. You see this net change in cash go down. Is there a scenario where we could see that go from negative to positive in 2023 as your cost of capital goes down? Can you talk us through why some of those lines, especially at $3.5 billion-$3.6 billion in new systems went up? Thanks. This is Rob. A lot of why that is going up is, one, we're seeing customers opt in for more and more services. As you know, we just released yesterday our partnership with ChargePoint, and we've seen a lot more, a big increase in battery attachment. I think the new home market, which was a market that we were probably expecting not to adopt batteries as fast, there's been a great deal of interest there as well. I think what you're really seeing there, Phil, is the average ticket rise. It's not that the cost, the unit costs themselves are rising. On the funding side, we've been able to go a little deeper into the investment-grade part of the securitization stack, picking up anywhere from about 2%-5% more, in some cases, actually even maybe a little bit more. We haven't really seen when it's gonna happen on the TPO side yet. On the loan side, we've been able to pick up more advance, even as we have been going with lower APRs on our loans. It's been moving actually in the opposite direction that we had initially anticipated. As we mentioned in the prepared remarks, there are also a number of other things, tools that we have at our disposal, to be able to postpone the use of any corporate capital. Again, as we continue to drive those efforts, we're actually seeing a lot of potential daylight on the CFADS number, which would mean that we would first turn towards new corporate debt when we're looking at that financing aspect. I think that it's probably gonna be prudent to continue to look at new corporate debt. It's just that our need and the timing of our need continues to be pushed out. Great. Thanks for that detail. Then one last thing. As it relates to your 2022 guide, you know, you mentioned in your prepared remarks that you might hit 75% of your 2022 guide as of December. When do you think you hit 100% of your guide? I mean, we probably see it in Q1 or maybe Q2 at the latest next year. Historically, you know, the trend has been very consistent. You know, the higher the growth that you project in the next year, it's just a law of numbers or math, right? You know, we might get as high as 80% going into the year of our projected cash inflows. I would say that you're right. Probably by early Q3, we should be nearing 100%. I mean, it'll be something like 98, 99, you know,% would be my guess based on past history. You know, things are very predictable. The only thing that we manage is the rate of growth, which right now is pretty heady. In fact, I would say that, as we look into 2022, you know, there are a number of partnerships. You know, Rob made mention of the partnership, which we're very excited about with ChargePoint. There's a lot that can go on there. We could talk about that later. You know, there's more coming on the partnership side, and they're imminent, and they're big. I would say that, we're very, very constructive on growth. You know, we're also the only ones that give guidance this early. As you know, most give it in March of next year. We'll have that opportunity to have a few more months here and get those partnerships underneath us and execute and look to see where our growth you know comes out after that. I do expect to beat this growth profile that we laid out, and it's already very very aggressive. I would expect as we move forward in 2023, we'll see even you know bigger increases in cash flow and just EBITDA plus P&I. Great. We'll look forward to that. Thanks very much. I'll pass it on. Thanks. Your next question comes from the line of Ben Kallo with Baird. Hey, good morning. Congrats. Just maybe John, you started talking about partnerships. You did the Home Depot deal and the ChargePoint. Maybe talk about Home Depot and, you know, we used to think about that as like one of the highest cost customer acquisition. You know, how has that changed? ChargePoint, then I have two follow-ups. Yeah, sure. Thanks, Ben. You know, you're right. The retail stores are typically your highest customer acquisition channel. The way that we do our business, though, is that we're focused on our dealers, our partners, and you know, that we're working with them. When you look at the way that we've constructed this, is that those returns are actually fairly even with our other origination. This is mostly, I think that the dealers decide that they want the additional growth, and candidly, they're paying a little bit more to acquire those leads that we generate for them with Home Depot. They're, it's pretty well down the fairway. This is the right way to do it. In my mind, it was early days in my first solar company with the Home Depot, and now we're back, and really excited and you know feel really fortunate to be with them. So we've got to execute on that. The returns are quite nice. On ChargePoint, I think this really is very interesting. We've got what we feel is an excellent partner. They've got, I think, a great business model in a space that has a lot of charging companies and solutions, as you know. You know, neither company has an exclusivity on one or the other. I think that's the right way to do things here, especially in a nascent industry. It's not only equipment. I think a lot of folks focus on that. We're putting a charger in for homeowners who are increasingly demanding that. That's a given. We're gonna do that, and they have really good equipment. But really what we're also looking for is selling more, you know, the service, solar service, storage and so forth, so more equipment, and that generates bigger returns for us. But the really interesting thing is we're gonna plug into our network into ChargePoint, and we're gonna be able to provide energy to our customers when they travel away from home. This is gonna be. Sunnova is gonna be your power provider, energy provider, not only at your home, but away from home. I think it's gonna be this really fascinating when we are able to put all the pieces together here and get this launched out next year. It's gonna be really something special for our customer base, and we think it'll actually drive more and more customers to Sunnova as well. We're very excited about this partnership. You know, I think in your remarks, and then in the deck, you know, the services comes up quite a bit, maybe more than a dozen times. I don't know if there's a way to help us understand, you know, what the different types of services are and how important this is, but it seems it's pretty important because you're highlighting it here. Yeah, that's a good eye on that. Yeah. I mean, we see ourselves as from the founding of the company as a service provider. You know, we see financing as an enabler. We see software as an enabler. We're big in both, obviously. Make great money on the financing side, but we're all about providing that service and having that customer for what effectively is life, but for the most part, 25+ years. You know, as we add batteries, and we knew this because we're early days in places like Puerto Rico and other island markets in the Pacific, you can easily see where people start to go, "This is very complex. This is power that I need to have on no matter what happens." You need to have a totally different experience, it has to be the same or better than what you experience with your monopoly power provider, right? When the power goes down, you expect them to be out, you know, five minutes ago. You know, that's something that we've been working towards for a long time. We finally have the ability, given the scale of our operations and the density of our customer base, the software platform, and then the people and the logistics capability to be able to deliver this kind of service. To give you an idea about how important this response time is and how different it is from the marketplace, we're aiming for 24 hours, within 24 hours for battery and solar customers and 72 hours with solar only. Right now we're roughly in about a couple of weeks, sometimes less than that timeframe. We got a little ways to go, but we're confident we can get there. The rest of the industry is like 60 days or 180 days to never. There's a wide gulf in response time out there. We think that needs to be closed tremendously, obviously, and get something more commensurate with what you would see out of home security, satellite cable television, cellular, et cetera. We're on the forefront of this, and we're driving towards that point. In the meantime, the number of services you've heard on some of the equipment manufacturers calls, and you will hear on the ones coming up that there is a tremendous amount of new pieces of equipment, more energy storage systems, more load managers, the EV charger, you know, the case in point, the ChargePoint relationship, generators, et cetera. There's a lot to be added here with services and upselling customers. We've laid that out quite clearly. Roughly about $10,000, which is inclusive of all of our SunStreet customers that didn't come with cash flows of NCCV, which is a PD4. We're borrowing capital fully loaded at 2.8. We feel very strongly there's a lot of value to be added there, and we've shot it down the fairway and said, if we doubled from 3.5 services -7 services by 2025, which we see doable, that we should pick up about another $9,000 per customer on a midpoint. So somewhere between $18,000 and $20,000 by that timeframe. You know, it's another way to value the company's equity, if you will, and looking at the quote, breakup value of NCCV per share, but then adding the option value times the number of customers we have, and then expect to hold us accountable for executing against that option value. Are we upselling batteries? Are we upselling EV chargers? Are we upselling generators, load managers, et cetera? I think I'm confident what you'll see as we go into 2022, we're gonna be doing all that and then some. A lot of value out there in the services and a lot of value in being responsive to the customer with service. Thank you for that. My last one, just, you know, NCCV total going up. I think per customer, it's ticked down just maybe the last two quarters. When should we see it tick back up with all the stuff you have good going on? Yeah, it's coming at cash flows, you know, mainly in the tax equity, but also in some of the other fund flows. I'll let Rob comment on that in just a second. We're, you know, I think the right way to look at it is NCCV per share because obviously investors are buying shares. You know, we do expect to see the NCCV, you know, per customer, tick up over the next few quarters, particularly as we get into 2022. If it does not, then that means the customer additions, you know, are, you know, smoking the projections for us and they're, you know, more on the single services, and some of the other, you know, services that we're launching that we have yet to announce. We do expect that NCCV customer to, you know, per customer to be ticking up per what I just laid out, particularly as we upsell batteries. One thing I want to make it very clear is we have not upsold our existing customers very many batteries and this year. That is simply because of a lack of battery availability. That is materially changing now, I mean, materially. We're already starting to engage and upsell our existing customers batteries, and we'll be accelerating that tremendously as we go into 2022, expanding that to the new home business, where we have not upsold a single battery yet. It's definitely gonna move up on a per customer basis as we upsell batteries, all other things being equal. Rob, do you want to talk about it? I think John sort of really hit on a number of points there, and I won't rehash too much of it. You know, remember that the last two quarters were the first two quarters that we added the SunStreet customers. Those customers did bring down the average ticket size on a NCCV per customer basis, mostly because they're just smaller systems and as John said, fewer services because just everything there is, it's just the solar. To John's point, we're making the turn right there as well to get those systems larger, to add more services to those systems. So that's one big catalyst. The second one, and without getting too much into the sausage making, is just really the timing of our WIP pile. The way that we're showing the NCCV is that as we put our assets into construction to progress, we're carrying those at cost. As soon as we put them into service, we get the uplift of the actual value of the system itself. Given our trajectory, we'd expect that to be a significant uplift in the fourth quarter. It mainly has to do with the fact of the supply chain on the batteries unlocking, so we're putting in those really high value systems into service in the fourth quarter. At the same time releasing the remaining tax equity on those systems, which really all just sort of is accretive to cash because we've been carrying it this entire time. Thanks, guys. Thanks, Ben. Your next question comes from the line of Brian Lee with Goldman Sachs. Hey, guys. Good morning. Thanks for taking the questions. I appreciate all the NCCV color here. Maybe thinking longer term, the triple double framework, which is new, I think you're gonna end the year at 200,000 customers. To double that, you're implying about 35%-40% more growth in customers in 2023 off the 2022 guide you just gave. You know, quite robust growth even in the out year. You're talking about tripling the EBITDA plus P&I. That's implying the metric grows close to 80% in 2022 based on the guidance, and then another 70% in 2023. I think this has to do with NCCV, but can you kind of bridge the gap a little bit as to where some of that additional leverage is coming in, even in the out year? You know, you're talking about $10,000 today. Where does that number get to in the interim? And what are kind of the pieces in the next 12- 24 months? I know you're talking about 19K midpoint by 2025, but what are you sort of embedding in the 2023 numbers? Yeah, Brian. You know, what we're seeing is an increased amount of operating leverage despite the fact that we're obviously investing, spending money to launch our new grid services, new lines of business, bring on new partnerships and an overall not only increase our growth rate in terms of the number of customers, but the number of services sold per customer, right? These are all heavy lifts, and at the same time delivering a better service experience, which has been baked into our cost structure. You know, what that shows you quite simply is, as I've always said, what you want to see is you want to see adjusted EBITDA plus P&I grow faster than your growth rate of your customer base eventually. Our challenge has been in the near term is that growing off a small base and not having as much operating leverage by definition, but having a high growth rate, we've been challenged in that a little bit. We've been close to basically breakeven or a little south of that. As we get bigger and move forward, then again, the law of large numbers starts to help us. We can gain a tremendous amount of operating leverage. That's what we're highlighting for y'all is that we're seeing it, we know we're gonna experience it, and this is exactly what you should have expected out of us. If we, you know, grow at a less of a rate on adjusted EBITDA plus P&I, then you should expect to see a heck of a lot more, you know, in profitable growth and number of customers and services sold per customer. Right now, it's pretty heady growth. Again, if there's any bias, it's definitely to the upside on that growth rate. We feel, you know, very good about the adjusted EBITDA plus P&I growing faster than the customer base. Quite frankly, we're seeing, you know, the growth that we have going back to unit economics and so forth is extremely profitable, you know, growth. That's again reflected in the adjusted EBITDA plus P&I. I guess to dig into that a little bit more granularly, though, if you're talking about the, you know, unit economics having leverage over the next couple years, I know that, you know, the target model out to 2025 is pretty well laid out, but the $10,000 you're at today on NCCV, if I look at some of the bridges you've provided to get to the $19,000 over time, you know, let's say half of your customers are doing storage and energy management by the time you get to 2023, that would imply $2,000 more per customer, so you're at $12,000 right off the bat. Any just sort of color as to where you think you'll be able to see the most amount of sort of, I guess, materialization of some of these bridges to get to the 19K by the time you're out in 2023? Just is it 10K going to 14K before we get to the 19K? Just trying to get a sense for how quickly you think you'll start to see some of these move into the customer unit economics over the next 1-2 years. Yeah, I think it's fairly linear, but there's a lot of variables to it. If we can launch out some of these other services and have them be more successful, you know, and some of these technologies are rather early days, right? Like Load Manager, then I think that we can have a little bit more of a higher slope on that escalation towards that upper number. The storage side, I would say, you know, looking at internally, we think that by 2025, our storage attachment and penetration rate will move up by a factor of 6, so 6, 60% or so. You know, we see strong uptake on the storage side of things. I think obviously that's first and foremost is how do you know, execute on upselling customers storage. I think another one that's pretty interesting is we're seeing a lot of demand for EV charging. That's not a big needle mover, but the service that we talked about in a way, I think that could be pretty interesting margin wise, and therefore NCCV, certainly recurring cash flow. Some of these others like generators and so forth, we see strong demand for the generators too. Additional upsell of more panels, more inverters, et cetera, particularly as people do get EVs, we're seeing that accelerate. More fuel to fuel up the battery, if you will, for backup power, we're seeing that. There's a lot in here, but I think that if you were to, you know, draw a gradual linear line, you know, from this period, you know, to the end of 2025, I think that's not a bad assumption. Remember, as you move forward in time, you're discounting out at 4%, but our cost of capital is really 2.8%, and we're paying the debt off at a fairly rapid rate. That's something else to remember that we'll be naturally accretive as you move forward in time and recognize that delta between the discount rate and the actual cost of capital, you know, falls out in cash flow, right? And that's our cash to the equity. That's another thing. In Rob's prepared remarks, he talked about that is naturally you should expect NCCV per share to and therefore per customer, you know, for large part as well, to increase over time even if we did nothing. All right, fair enough. I appreciate all that additional color. Last one for me, and I'll pass it on. Yeah, I guess I'm kind of surprised I'm the third caller and we're talking about supply chain this late into the call. Maybe 'cause John, you started off the call talking about the supply chain being better for you. Can you maybe get into a bit more detail? It sounded like batteries you're feeling better about. What's happening there that's giving you more confidence? And then, maybe also just your status on inverters and separately on solar panels. How much of that 2022 growth, from a supply perspective, I know from a demand perspective, you see high visibility, but from a supply perspective, how much of that is de-risked? How far out do you have supply visibility? Obviously a lot of focus around where you're getting panels, these days, just given all the different geopolitics out there. Can you kind of level set us as to how much of your panel supply is not coming from Southeast Asia today? And then how much higher you think that mix could go over time? Thanks, guys. Yeah, sure. I knew supply chain was gonna be a big topic, so thanks, Brian. Look, I'll divide things up to panels, inverters, and ES. When you look first and foremost at the panel, there's obviously a lot of, shall we say, political intervention here or government intervention, however you wanna phrase it. That's causing a lot of chaos and pushing up prices in the United States. We've been moving as our storage attachment rates have been moving up. We're continuing to see more and more customers want the higher wattage panels, which typically don't come out of China or at this point in time, which I don't think is bad, to be clear about it, but that is a fact just given the WRO, the countervailing duty issue, the 201, et cetera. We're increasingly looking pretty good going now starting to look in towards Q2 on that front. We feel pretty confident. We've got some, you know, like I said, panels secured, just in case our dealers, you know, foot fault on some of the deliveries that they were expecting or should have procured. We're on top of our dealers, working with them and helping them to secure those panels. We feel pretty good about the panel situation. It's clearly tight. We're meeting demand as an industry, but given the political intervention, we feel pretty good about where we sit. On the inverter side, we continue to see more and more, you know, really strongly, you know, well-managed firms, you know, come in and compete. We've got a number of providers that are gonna be providing ESSs with their own inverters in it, and that's gonna have a dynamic impact on the inverter market by definition. You know, the last one you go into the energy storage systems, and we're seeing an increasing amount of availability. It's literally been every two weeks we're seeing more deliveries hit our warehouses and hit our dealers' warehouses, and we continue to see a significant improvement in those delivery schedules as we move forward. I do think it will be normalizing. It looks like it will happen in Q1. At the latest, I think Q2, barring any sort of significant unforeseen supply chain issues, which would have to be really significant given how messed up things are globally. We see a rapidly improving deliverability on energy storage, particularly the big player and a couple of the biggest players. I would go as far to say that we are seeing those equipment providers who increase costs or try to raise price, and currently they will start to lose market share. There is not a huge amount of stickiness on price. There's more and more availability. There's more you know, qualified competitors that we're looking for to buy their inverters, their ESSs. There's a loosening up in the equipment side that I think is pretty significant, particularly as we get into Q1 and Q2 of next year. All right. Thanks a lot, guys. Thanks, Brian. Your next question comes from the line of Julien Dumoulin-Smith with Bank of America Merrill Lynch. Hey, good morning, team. Thanks so much for the time. Congratulations on all the continued progress. Really nicely done on the follow-through here on forward-looking guidance. John Berger, just to kick things off real quickly here, can you elaborate a little bit on the you know the pipeline, as you say, of opportunities and services? Can you elaborate a little bit more granularly on what those are that sort of comprise that $400 million plus that you talked about a second ago? Are you talking about the grid services, Julien? Yeah, exactly. Well, we can't break those programs out. That's competitive intelligence we are bidding on, so we're trying to give visibility to you and everyone else about, hey, what's the what are we working on, right? So what can you expect? You know, I gotta say, I'm pleasantly surprised in a big way of how much progress we've made on grid services and how many contracts we've locked up. I mean, $67 million, I think, is up there, especially the number of contracts at 10. I never thought we'd be in this spot. Then looking ahead, more and more programs are coming our way, and we're seeing a lot more profitability as far as the dollars that are associated with these programs. I can't break them out and for competitive reasons, but I'm trying to do everything I can to give you a window into what we're working on and what kind of money is associated with that. Hopefully we'll have big wins. Indeed. John, maybe an idea to ask it this way. What percent of your customers does that represent? i.e., is that fully monetizing your customers, or what portion do you think at this point does that represent? i.e., how much of a further upside is there to more fully maximize that opportunity? Oh, I see. You know, I'd say that's probably representative of roughly about 50% or so, maybe 60% of our customer base. I would also point out that most of these are capacity services, and so we have the ability to upsell, you know, ancillary services and in some cases, energy as well. I think that there's, you know, more grid services on top of this. We start looking into microgrids and getting that moving, which I don't expect to have material, you know, movement there next year. The following year, I think that we'll have something more to add there on the microgrid front. I think that's my best estimate I can give you right now, Julien, is probably 50%-60% covered by what we've already done and then what we have in the backlog. Got it. Just to clarify this a little bit, what you're implying for fourth quarter customer additions, off this 14K, it almost seems like you're implying something like 20,000 customers in the fourth quarter. It's a nice step up. Any nuances to what's driving the big quarter-on-quarter dynamic? Then if you can just specify, you know, I know there's a few different small nuances. What is that specific baseline for the customer count here going into 2023, if you will? Yeah, it's about 20,500. You know, the last question, I'll go ahead and answer that. I think it's just a little south of 200,000. I think 197,500, somewhere in there, 198,000. So that's what we expect. Look, you know, first to say it is, yeah, it's one heck of a climb, and we got our work cut out for us. Now we're seeing good visibility in that. We have the customers, we have the backlog. We'll take into next year. Right now, we have just south of $1.1 billion of contracts in the backlog at cost. So we've got the contracts. What's held us up is a couple things, mainly the batteries, which we're seeing accelerated delivery schedule already. We expect to see more of that delivery schedule accelerate in November and December. That's gonna, you know, a source of customers that we didn't have in Q2 and Q3. The other is that the new homes business, I think people are underestimating and it's because we talked about having roughly about 12,000 a year. That business continues to grow, so it's a little bit more than 1,000 a month, in some cases, you know, moving towards, you know, 1,500 a month expectations. The new homes business has been challenged by all the supply chain issues as far as closeouts of the new homes. You can't book those customers until those homes are closed out and sold to the customer. That's been a delay from Q3 into Q4 as well. We got the reasons, and we feel like we're in pretty good shape on both of those in terms of improvement given the supply chain improvements. But you know, we'll be working all the way up to December thirty-first to hit that number. But you know, we're working hard at it. We've got the contracts, we've got the supply chain where we want it. Now we just gotta get the work done and get it through the utility system to get the permission to operate and register the customer. Awesome. I wish you the best of luck. Speak to you guys soon. Thanks, Julien. Your next question comes from the line of Maheep Mandloi with Credit Suisse. Hey, good morning, and thanks for taking questions here. Congratulations on the progress here as well. John, maybe just talking about the 2023 guidance over here. If we kind of look at the customer growth, it kind of implies probably around 20%-25% increase in new customer adds in 2023 versus 2022. Just want to understand what's driving that growth and is the expectation that the market growth somewhat similar in line with that growth, and how should we think about the mix of loans and leases and that? Yeah. Thanks. I think the implied growth rate's a little bit higher than that, Maheep for 2023. Obviously, that's a little ways out there, but let me give you some more color. You know, as you look at what we've been originating for the last couple of quarters, and then you look at my answer on this Q4 and this quarter to Julien's question just prior, you know, you basically multiply that times four, you get it pretty close to our range, right? If not in the range exactly that we've laid out for growth for next year. As we're looking forward, we're seeing a number of these partnerships, The Home Depot, ChargePoint. We got more coming that's imminent, and just the general growth, our improvement in our technology platform. We're picking up more dealers, the number of services sold per customer and so forth. You know, we've done a pretty good job of being fairly conservative at moving off of growth, the number of customers from 2022 to 2023. Simply put, that's not in nominal terms a huge increase in number of customers from 2022 to 2023. Again, if there's any bias and there is, it would be to the upside of these growth projections on both the number of customers and the services sold per customer. Got it. Fair to say it's more kind of in line with your expectations for the market at this time, or, do you think the market's slower than that? No, I think it's in line. I think we've telegraphed, you know, I think quite nicely. We've laid out even sources and uses of cash two years out, which I know nobody else does. We're trying to get more visibility out to everybody on what we're seeing out there. You know, look, again, I referenced this earlier, Maheep. No one else gives guidance for 2022 this early, and it really is early, you know, going across the year. This is where we feel comfortable at this point in time. Candidly, you know, right now the stock is in our opinion, if you look at, you know, if you double NCCV per share as measured on a PD4 within two years, and I've already got the next two quarters start by the end of the year booked up in terms of contract backlog, sorry, WIP going into 2022, that means that we're really just kind of looking about roughly 18, you know, 18 months or so, right, of growth. We've got a high degree of predictability. What I would say is that right now we felt like you know hey look this the share price is needs to start reflecting that we can you know move something into the kind of low- to mid-30s of essentially break up value within the next 24 months. We think that's pretty cheap. That's for the market to decide. Right now this is where we sit, and this is where we had laid out for folks, and we'll update on the Q4 call. The bias is definitely to the upside. On your loan question, we're continuing to see consumers to take more loans. We see that to be roughly volatile. It continues to move up, you know, when I say volatile on a week by week, day by day basis. We are, you know, as you look forward to the policy, which we hadn't had a question yet, there's a possibility given the refundability, we think is a high degree of chance of getting done on the reconciliation bill. There's a possibility that could move more leases and PPAs. I know there's a good argument on the other side of that, but that's something to pay attention and watch. What I would also point out is that on page 33 of the deck, we've laid out for the first time, and no one else does this again, what our discount is on the loans that we get. If for those of you who don't wanna just look at principal and say that's return of capital, no, we've been clear about it. It's return of capital and return on capital, and it's pretty sizable. It's about $213 million of margin, not revenue margin, that's booked as of 9/30/2021 and roughly about 21% of our standing face value of the note. These loans are quite profitable. We've laid out if you just want to take the OID and the interest on the loans instead of taking the principal and interest, you can now do that. Obviously that's pure profit and margin. Hopefully that gives you a little bit more comfort as far as getting your hands around modeling the loan versus lease mix. Perfect. No, I appreciate it, color. Thanks. Your next question comes from the line of Mark Strouse with JP Morgan. Yeah, good morning. Thank you very much for taking our questions. Just wanted to ask the 30% storage attach rate in Q3, what would that have been without supply constraints? Just trying to think about what it looked like as the storm kind of clears here. Yeah. Hey, Mark, this is John. You know, I think that, you know, first of all, that's on all customers. You know, we would have had if it was just in the dealer channel, that would have been closer to 35, a little over 35% storage attachment rate, which would have been a new record for us. I don't wanna play games. I don't play games on metrics, so we added all the customers in even though we don't have the capability just yet. We're just now, you know, getting into that by upselling batteries to new home customers. We'll start to see that attachment rate, I would say, you know, probably Q2 or Q3 of next year start to materialize. That suppresses that number, and that's the primary drivers, the new homes customers that have no battery upsells at this point in time. We've had some, you know, many weeks of 40+% attachment rates on the dealer-only channel. It's something that is clearly moving up, and you just get a modicum of selling batteries to new homes customers, that storage attachment rate's gonna zip up. We continue to see a lot of interest from consumers and growing amount of interest in batteries. We're becoming even more constructive on the storage attachment rates as we move forward in the next few quarters. Okay, thanks. John, I know you're a football fan, so I wanna ask you a question about your supply chain, kind of as an analogy to college football, right? We've got four teams that make the playoffs every year. You know, ranked number five, ranked number six are obviously good teams as well. Thinking about that as your supply chain, I mean, in the past, you selected suppliers. There's been a company on the cusp that's been left out. You know, just given everything that's happened, you know, over the past year, how do you change that approach? Do you potentially look to diversify your supply chain by adding more, and how do you weigh that against a potentially, you know, kind of inferior product that you hadn't chosen in the past? Okay, well, I'll try to answer that. I don't know if I can wrap it into the football analogy, but you know, I would say, you know, we're seeing more really strong, and this is on a global basis, equipment providers show up with inverters, with energy storage systems, and even some that haven't been in the panel manufacturing business get into that and start to ramp that up as well. You know, I would say that our primary relationships on the ESS side with Tesla, with Generac, with SolarEdge, and then, you know, lastly, Enphase are well intact. I would say that some are doing better than others on the supply chain side of things. I think it's pretty clear that Elon and Tesla are doing very well, as you can see by their numbers that they reported. Again, I'll let them talk to their own business, but with Megapack deliveries, and therefore you would expect to see that flow into their ESS business. Indeed, that's been the case and continues to be the case with a rapidly improving supply chain. You know, some others have struggled a bit of late and continue this quarter. I do expect that to get ironed out. We're eagerly anticipating ramping up very strongly with SolarEdge. In particular, they've got some really, you know, nice products out, and we know that there are some dealers that want to start selling that immediately. It will. You know, Generac's got a lot of new products coming out, very close with that company as well. You know, I think that they're doing a great job, and we'll continue to increase our purchases quite substantially as we move into 2022. They obviously have a microinverter coming out. We're very interested in that as well. All these companies are very well-managed companies. They're obviously very well-financed companies in terms of financial capability and balance sheet. We don't see any problems with the equipment amongst these and even some others that are, you know, fairly large companies themselves in Asia and Europe. you know, we feel comfortable that we're getting, and they have to go through a rigorous process to get on our AVL, our available equipment list, but we feel very comfortable that we're seeing more and more highly qualified, good equipment manufacturers making great equipment that we can buy. That's definitely a change from the past few years, and it's obviously a great news for increasingly lower prices to consumers. Frankly, those lower prices juxtaposed against higher utility rates, which we expect to increase over the next few years quite substantially, given gas prices and other, you know, cost pressures, that will have this business and this industry overall in terms of solar and storage, et cetera, grow much more substantially than I think a lot of people are thinking at this point in time. We need all that equipment is what I'm saying, and then some. You know, we think part of that will also be some decreases in equipment pricing to incent more and more consumer demand. Got it. Thank you very much. Thanks, Mark. Your next question comes from the line of Sophie Karp with KeyBanc. Hi, good morning. Can you guys hear me? Yes, Sophie. We can. Good morning. Thank you. Thanks for taking my question. I guess a couple of questions here that I have. Can you talk a little bit about whether you are experiencing long interconnect times in any of your markets, you know, with the utility and how that might be impacting your kinda outlook? Is it an issue for you at this point anywhere? Yeah, Sophie, it's a good question. A little bit here and there. You know, there's a utility in the southeast that's been dragging their feet a little bit on some interconnections. There is one out in California and a couple, you know, one or two up in the northeast. But some others have sped up their, you know, the issuance of PTO. We're talking about days, two, three weeks, you know, that could matter. I grant you that. We're watching it closely, but we're putting a lot of pressure on those utilities as well as others in the industry, such as our dealers, et cetera, are doing to close those gaps. We can do a little better job on our end, too, of being more quick on the operational side to apply for those PTOs and then also to convert a PTO into end service and flip the system on. We've got a number of initiatives to do an improvement on our side and drop that time, if you will. We have seen a little bit, but not a huge amount of change. If anything, some of the. There's been quite a bit of improvement in the second and third quarter over the first and fourth quarters, and certainly last year that were heavily impacted by the pandemic. Got it. Thank you. John, my other question was on the kind of equipment landscape. You mentioned that there's a growing number of suppliers of various pieces of equipment that you use. Could you talk a little bit about your sort of barriers to switch, if you will? How hard is it to qualify a new supplier for you once they, you know, roll out their product? Is your bias to kind of stay with the existing ones or to price shop around if there's an offering that seems comparable and cheaper maybe than what you have currently kind of? Can you talk a little bit about your thought process here? We've had a strategy of having, basically being an open platform service provider. I know there is a strategy where if you wanna be an equipment provider getting into service business, that basically you close your world off, right? It's just your equipment and your service. Typically in other industries that are very similar to ours, that has led to frankly, much lower growth, inability to scale and a disaster, ultimately. We think that the best way to go about this, particularly as more and more capital's flowing into this industry, is to keep an open mind. There are new technology, new firms that pop, you know, crop up around the world, and it is a global business. You know, with that said, some of those traditional partners that you've seen acquire those new upstarts and firms and then integrate that technology into what they're doing. Obviously, the most recent example of that is what Generac is doing with the microinverter side of things. In some cases, we're certainly very well open to new technologies, and some of these are new technologies like, you know, electronic or digital JBox for load management and so forth. Those are different companies out there. But the traditional ones are also coming out with load manager solutions as well. I think it's keeping an open mind and looking to see when we become comfortable. We go through rigorous testing. We have engineers on staff here that do that for us. Once we become comfortable with both the equipment quality and their financial capability, then we'll start to look at how do we launch their product out. ChargePoint's a good example of that. That's a new piece of equipment, right, Sophie, that we've and service and plugging into their software platform with our software platform that we're launching out. But I think it's primarily gonna be that we're gonna stick with our core group of partners on the equipment side of things. That may narrow a bit depending upon what strategic decisions those equipment partners make. If it's not favorable, if it's to try to get into our business, then we'll stop buying equipment there. That can be a fairly very rapid change in the dealer network with us. The switching capability is actually decently, you know, decently quick, if something goes awry, so to speak. Thank you. This is very helpful. That's all I had. Thank you. Your next question comes from the line of Pavel Molchanov with Raymond James. Thanks for taking the question. We are supposedly 24, maybe 48 hours away from learning what happens with the reconciliation package in Congress, and therefore, among other things, the ITC for solar. Depending on what that tax credit extension looks like and, you know, particularly the duration of the extension, would that have any impact on, let's say, the urgency of installation in 2022 or 2023 for you directly and across the industry? Hey, Pavel. I think I spent some time, actually a few days in Washington last week, and my sense of this and our sense as a company is that there's definitely a deal that's gonna get done here. I've read some reports as recently as a few hours ago. There's some naysayers there. I just think the Democrats need to do something over the next 60 days, and clearly trying to do something between Christmas and New Year's is gonna be, you know, really challenging as always. I think it's less than 60 days. I think it's very clear, by the way, that even on both sides of the aisle, that the Investment Tax Credit is strongly supported. We see, you know, 10-year ITC at 30%, plus refundability, plus storage ITC, plus a few other things. We're also strong supporters of a domestic manufacturing bill, you know, initiative and suggestions of subsidies to locate these different parts of particularly the module manufacturing supply chain in the United States. We strongly support Senator Ossoff's proposals as part of the reconciliation. I think some of that is going to get, if not all of that gets into the bill, it's probably gonna be some. I think that there's gonna be very little pressure for accelerating pull forward, if you will, of demand from the federal angle. I think what we're gonna have is actually a fairly long runway, which is fantastic for the industry. We've never had that before, as you know. We need it to grow the business in the right way and to grow the industry in the right way and deal with climate change. I think we're on the cusp of finally getting that. Does that answer your question fully or no? Right. I guess your guidance for 2022 assumes what scenario? The kind of the urgency scenario of the law as it currently stands or an extension scenario? An extension scenario. If we were surprised, you're right, the growth would be tremendously higher than what we've laid out for 2022. I feel pretty comfortable we're gonna get a very long runway on the ITC, you know, finally. Okay. Understood. One more question on the supply chain. You alluded to, you know, some of the geopolitical complications earlier. Have any suppliers, modules or otherwise, that you directly work with, had any shipments into the United States blocked, you know, or confiscated at the border because of forced labor issues? No. Not to our knowledge. Okay. Clear enough. Thank you, guys. Thank you. Your next question comes from the line of Sean Morgan with Evercore ISI. Hey, guys. Thanks for taking my question. My first question is, I think probably for Rob, but of the three tranches on that securitization you guys just did, you know, obviously great interest rates achieved, and I think there was three different credit ratings on the three sub-tranches. I guess my question is that mainly a function of just the high FICO scores of the customers? You know, with the portfolios as large as you guys have, there's gonna have to obviously be some kinda workout or distressed, you know, customers in that portfolio. Is there like a support tranche that you guys are effectively retaining on your balance sheet to support those three investment-grade tranches? Yeah, absolutely. We're retaining a significant portion of the face value of those loans on our balance sheet. That's really what's driving the ROCF. One of the things that's allowed us to be competitive within that marketplace, in the securitization marketplace, has been the incredible track record we've had on our collections on not only keeping customers from becoming delinquent, but when they do become delinquent, we default the customers, which we do earlier than anyone else in the industry, we do that at 120 days. We actually get more than half those defaults recovered, which is also pretty unique. That's information that they take into account as well when they look at those securitizations. We've actually had a very good track record there. While we do have very strong FICOs, we find that that's been probably a little bit less of an advantage in the industry. There are some that will hold out their lower FICOs to try to get a higher FICO score. What we've really just been doing is coming back with the receipts of what our default and delinquency data is, which is for an asset class that is already very strong, we are among the strongest, if not the strongest within the industry. That's really the feedback that we're getting with our loan product. It all goes back to really what the theme is in this whole conference call on the prepared remarks, which is service. Just that focus on service and making sure that we have the systems up, and we make sure they're producing power, we make sure the customer is happy, we make sure that the customer has the moral obligation to pay. All of that is very virtuous for our ability to continue to squeeze the margins. You know, I think that actually helps our competitors as well to squeeze their margins 'cause it's beneficial to the whole asset class, but that's great. We think that's a positive thing and continues to drive more interest and more investors into the asset class. Okay, thanks. Next question, I guess probably more for John, and it goes back to this Sunnova Adaptive Home on slide 6. I think in the prepared remarks you said that the homeowners would have the option to either stay connected to the centralized grid or not. Is that something that customers are asking for or do they look at grid connectivity even despite the additional charges that they would incur as sort of almost like a second battery if they were to, you know, do solar and storage and they want, I guess redundancy that the grid offers despite the costs? Also would that impact SRECs and net metering charges? Like, would they be foregoing all that and would you see that in states like Florida where maybe net metering isn't quite as strong? Yeah, Sean, it's a good question. To be clear, we think that the best solution for everybody here is to integrate the centralized system with the decentralized resources. Again, our vision of the power industry in the U.S. and in other countries, you know, we're all starting to look sort of the same in terms of the business models and so forth, and where we think things are settling out as far as the transformation of the energy business is basically that, you know, there's going to be a hybrid approach between centralized and decentralized. Now, with that said, you know, there are demands to be able to run off the centralized system, and those demands are increasing, not in a linear fashion. Why is that? Because more and more of the centralized power service is failing more and more of the times. You know, I think that is primarily due to climate change, but it is also due to the fact is that consumer demand and behavior has materially changed, where they're no longer tolerant of a few hours of outage, certainly and become intolerant of even a few seconds of outages because everything is more digital. Basically, the work from home and the pandemic has accelerated this change in consumer behavior and taste. You've heard about that. I know Aaron over at Generac calls the home as his sanctuary, right? We see the same thing. It is a material change in consumer behavior and trend. That consumer change in behavior has nothing to do with climate change and decarbonization, except for the fact that climate change is causing some of that consumer behavior change. Simply put, this home needs to be able to run off the grid because the grid is and more often than not, as we move forward in time, not there for whatever reason. The last piece of this is, could a home continuously run off the grid if the utilities got egregious and some and for some strange reason, a public utility commission allowed them to just reap an ungodly number of profits and have really high fixed charges on folks and very punitive to consumers? I don't think that's gonna happen. I'll hold out a very recent example of Arizona. Last night, the Arizona Corporation Commission reversed a demand charge on solar-only customers. That's never been done before. I hope you know everybody talks about you know we talk a lot about California NEM and some other issues, but gosh, look at that victory for our industry. That's tremendous, and we applaud the leadership of the ACC. You know, look forward to the you know, the lack of need for consumers to really cut the cord, so to speak. With that said, technology is improving. You heard a lot of good things from Enphase and Badri yesterday about how he's gonna be able to you know, have new technology coming out the gate that enables homes to run off grid. You've got that with Generac. You've got that with Tesla. You've got that with SolarEdge and others out there. Don't underestimate technology, as strange as it may sound, to be able to have consumers cut the cord, and you're gonna need a service provider like us, obviously. We're gonna have some examples of that, of the homes being able to run off grid continuously, in the not too distant future. We may even put an analyst day around that. That's not what we see as a dominant, nor are we betting in any sort of forecast or guidance or growth initiatives on that type of customer, if you will. We certainly see the technological capability, and we expect that would keep the utilities in check and have us all play nice together and have a more integrated, centralized and decentralized power service that serves all customers in the country the best. Okay. Great. It's more of an offset to any risk that utilities I guess taking actions that are sort of anti solar consumer at the residential level, but not really a trend right now at this point. I think that's fair. That's very fair. Okay. All right. Thanks, John. Thanks. Your next question comes from the line of David Peters with Wolfe Research. Yeah. Good morning, guys. Just, again, on slide six, the Sunnova Adaptive Home. You know, it sounds great to sort of be the brains of home energy management with grid services and the like, if you will. But I think some of your peers and even some of your suppliers are trying to do similar things. Can you maybe just kinda talk to what your edge is here and kinda confidence in being able to execute in this arena to effectively double the services that you're currently providing today by that 2025 target? Yeah, certainly. So first and foremost, as you add more complexity here, and we've seen this with the battery additions, consumers naturally go, "Wait a minute, I need a service provider just like I have with my cellular, you know, service or satellite cable television or home security or even the current centralized power provider," which is, you know, typically a monopoly. It's not always a monopoly, right? So, you know, what we're seeing is that consumers are coming to and wanting, you know, one throat to choke, so to speak, on service of all these different pieces of equipment. The reality is that I know some, if not all equipment manufacturers want every piece of equipment to be theirs, right? If I was running one of those companies, that's exactly what I'd do. The reality is gonna be quite a bit different than that, from what we're seeing. Our job is to go in and assemble different manufacturer pieces of equipment into one seamless interface of software. It will be an app for consumers to enter, and also to have a single software interface to deal with us on service. If you have a service problem, a billing question, you know, I've got a production problem maybe, look at your production estimates and so forth. It's gonna be very highly interactive, and it's gonna be something that consumers are gonna be you know, able to understand very easily. We've got, we think, an advantage over trying to have a single manufacturer have one single interface with the customers. The last one is that in terms of advantage is, again, just a reminder, and Robert made mention of it earlier, even in our loan contracts, and this is unique to us, but I don't think it will remain so, we have the service to the customer built into the loan contract. We also have the grid services built in the loan contract. So we've truly made ourselves agnostic to the lease, PPA, and loan, and we truly see the financing as an enabler of our relationship with the customer. So basically, we're the only one in the value chain that has a contract with the customer. That's it. That gives us a huge leg up as we are going back to the customer and asking them, "Hey, would you like to add on a battery? Would you like to add on an EV charging plus the EV charging service away from the home?" All these different things, we feel like we have an enormous leg up on anybody out there. But the way you've couched the question, I don't disagree with it. We just have a significant advantage over others, and it's our job to continue to execute and demonstrate that advantage to our customers. Great. Thank you guys. Your next question comes from the line of Joseph Osha with Guggenheim Partners. Hi there, John. Just to return to the policy issue a little bit. I would think that the fact we're gonna have cash pay would tend to drive customers to trying to monetize that value on their own, as opposed to third-party ownership. I'm just wondering if you can amplify your comments a little bit on why you think cash pay might drive third-party ownership, and then I have a follow-up. Yeah, Joe. Well, there's two different types. I think that the most likely cash pay refundability, if you will, is gonna come in the so-called commercial ownership, or this would be a lease PPA. That would go to providers like ourselves. Obviously, this is more, maybe it's not obvious, but it's more geared towards the utility scale folks that don't have access to the tax equity or the tax equity simply just isn't enough. That's mainly what I was referring to. There is another ask out there to have, you know, consumers be able to get direct refundability. That is a different ask. That is a different part of the code. I think based on, you know, again, this may... I may have too many years on me, but there was a lot of problems with the grant period from you know the 2009 and 2010 and 2011 period of time including you know fraud including very slow payments from the treasury. The treasury was you know and the service was much better staffed relative to the job back then than they are now. I think we've all experienced. I certainly personally experienced that this year. There's a lot of problems with that. There's a tremendous amount of problems sending a checkout from the service, from the treasury to an individual and making sure that's above board and making sure that that's done on a timely basis so it doesn't create a working capital problem for that individual or a contractor. I don't think it's a good idea for that reason. I think it's better done in the current construct of where we think things are gonna go with refundability and lease PPA. You know, we'll see what happens. Regardless, you know, whether somebody's gonna get a 30% of a check directly, you're gonna need to have that balance, you know, financed and you're gonna more importantly need that service. We feel comfortable about, you know, no matter what happens, it's gonna benefit us. I think it's more likely to see that we'll have refundability on the lease PPA side, if anything, versus a full cash refund, if you will, on loans. Okay. Thank you. Just also on the policy front, seems like we are gonna get some stronger prevailing wage provisions. I think the IBEW seems to have done pretty well this time around. I'm curious as to how you think about that and the impact on your business. There is an exclusion underneath one megawatt, which obviously covers everything we do, by a large amount. That's the answer. You think that 1 MW exclusion is gonna survive? Yes. I think it's. Okay. You know, very much impractical. You don't see a lot of unions in the residential market. There's a lot of reasons for that. I'll just point out that we pay very strong wages as an industry. We're very interested in making sure people have a living wage and then some. So our industry's been very good about that. I think that will stand in terms of the 1 megawatt carve out. Okay. Thank you. Thanks. Your next question comes from the line of Elvira Scotto with RBC Capital Markets. Hey, good morning, everyone. Thanks for taking the question this late. So, just three quick ones for me. Thanks for providing the intermediate term, you know, major metric growth plan. Can you provide a little detail, like within that plan? Thanks for all the detail, but is that dependent on any certain outcome of NEM 3.0 in California? Then maybe if you can provide us any of your latest thinking around that. Then finally, my last question, I'm glad you brought up Arizona. I thought that was great news last night for the industry. Just your thoughts on how you see that driving rooftop solar growth in Arizona with that announcement yesterday. Certainly. You know, we have a good portion, I would say, you know, call it roughly 30%, some months is a little bit higher of our origination in California of our, all of our origination. Some months it's lower than that. Overall it's mid- to high 20s on a customer basis. I would say that, you know, that's quite a bit lower than anybody else that we compete with in the space. I would say probably less than half, as far as a weighting than others have. You know, we have much less of exposure, if you will. However, let me be very clear. I think that California is gonna do the right thing here. There's such a groundswell of support for solar. I think, you know, if you look at our average customer income, it's a moderate income customer because they do care about the savings, particularly in California with some of the, you know, highest utility monopoly rates in the country. It would be a complete disenfranchisement of consumers to do anything that's anywhere close to what the utilities have asked for. I think the commission's gonna do the right thing, and I've been very clear about it. I think, you know, the offset rate will go down, and so more money will flow to the utilities. You can call it a win to the utilities. I think that's appropriate, but it's not gonna be something that, you know, severely hurts us or even crimps the growth of the industry, in our opinion, and as best as we can tell right now. You know, with that said, we're continuing to diversify. I point out that, you know, we will probably be in all 50 U.S. states and on top of that, all the territories, you know, within the next 12 months or less. We've continued to diversify our geography quite substantially. I think that we're in a great position, and even if something came down as a little worse than what we were expecting on NEM 3.0 in California, I think we'd still be able to be fine with the growth that we've laid out. Because again, if anything, there is a definite bias to the upside in terms of the number of customers on a growth trajectory and the services sold, you know, per customer, on the next couple of years. Arizona, I mean, at the bottom line, again, applaud the commission for what they did. This is pro-consumer, and it's gonna have more growth. I mean, the bottom line is, I don't know how much more growth, but it's either incremental or it could be quite a bit. But yeah, that's retarded some of the growth in Arizona. There's no question about that. Now that burden's been lifted off the folks, you know, people of Arizona, and I think that we're gonna see higher growth there. It was very much a surprise and obviously a very good one. I think a lot of other commissions need to look at very seriously, including California, about the experience of when you put something punitive on people that it basically disenfranchises them and gives them less choice in their energy, particularly given the technology changes that we're seeing. I think what you're seeing is when those bad choices are made, they're rolled back. You had Nevada, now you have Arizona. There's other examples out there. I think that the folks ought to be looking more to the positive side of things as regards to policy, rather than dwelling on some of the potential negatives that we don't see happening. Great. Thank you very much. Thank you. Your final question comes from the line of Tristan Richardson with Truist. Hi, good morning, guys. Really appreciate all the comments on 2025 and the services and NCCV implications. Just looking at that slide, I mean, assuming we get that double in services per customer, can you talk about maybe some of the biggest drivers between the 18K and 20K of potential NCCV outcomes? I mean, so is that in that mix of seven, is it simply, you know, a higher storage attach rate over the forecast period versus, say, a higher mix of some of the smaller ticket items would drive the range of potential outcomes there? Yeah. I said this a little bit earlier, but you know, what I would say that the first one is that we say roughly a 60% penetration rate of storage on the base by the end of 2025. That's a big driver. We see a lot in grid services to you know, the question that Julien asked a few minutes ago. I think that's a big driver. I think anything on the generator side could be pretty interesting. Load management. EV charging and service may not be a huge NCCV per customer increase, but it certainly will provide a lot of high margin you know, recurring cash flow for us. It's certainly gonna be helpful in that regard. Then again, to reiterate the point that as we move forward in time and we rapidly pay off our debt, so the negative on that calculation is obviously debt, right? That's gonna naturally improve on a per share basis and a per customer basis if we did none of those. So there's a rising, natural rising floor, if you will, on the NCCV per share, which is really where it counts, right? But also on a per customer basis, that's gonna come with as we just move forward in time and pay our debt off in a much more rapid fashion like we have been doing. I think debt pay down this year, Rob, roughly is gonna be north of, you know, call it $110 million or so. Yeah, it's strong and it's really driven by the fact that we've been able to increase the principal payments and really increase the loan payments. The irony here is that we're issuing less of the hyper-amortizing debt that we've had before, and yet we're still able to bring down and naturally de-lever the company faster, regardless. That's helpful. Thank you, guys. Just maybe the quick follow-up there on your last comment about the 60% penetration. You know, presumably, that does include sort of going back to the existing base and sort of tapping the retrofit opportunity. Can you frame that up in terms of maybe, you know, how much retrofit penetration do you need to get to that 60%? Yeah, I think it's a combination of math on your forward attachment rate, on your origination rate. The higher that goes up, then that means you need less of the existing base to buy, right, storage service. You know, we clearly see a lot of demand. Some of our markets are 100% attachment rate on a forward origination basis and have been for years. We're seeing a lot of demand from existing customers that frankly we just haven't even booked into contracts. We're now going back in there and upselling them now that we have you know a very good signaling and actual delivery of ESS systems. We see that next year could be a big uplift in terms of selling upselling storage, you know, per customer. One thing is I'll point out is that is not a part of our customer count. This would be part of the NCCV per customer, per share increase, but is not picked up in our customer count because we just count customers. We list out services sold per customer to help track that. That's something in terms of upsell opportunity we see a lot of pent-up demand for. We're pretty excited and sort of started to go back and ramp that effort up, if you will. I see a significant amount of growth in terms of upselling our existing customers as we move forward in next year. A lot of that has not necessarily been baked into what we've laid out today. As we get further into the year, say, next earnings call, we'll be able to hopefully get a good update on that front. I strongly suspect we're gonna see a lot of uptake on as far as upsells and storage in the existing customer base. All very helpful. Thank you guys very much. Thank you. I would now like to turn the call back to Mr. Berger for any additional or closing remarks. Thank you, operator. Thanks to everybody for joining us on the call. I appreciate all the patience. The calls are getting longer as we have more and more interest in the industry and obviously in particular in Sunnova. You know, next time we'll be joining y'all, it will be a new year. I want to point out a couple of things that we're seeing as far as the overall industry attractiveness. We strongly believe that our industry and in particular the service providers like Sunnova is a real opportune time. Why is that? We expect very strong monopoly retail power rate increases over the next few years. Sitting in Houston, we have a front row seat to what's going on in the natural gas and the oil side of things, and we see a very constructive pricing environment. Obviously, it's not good for consumers, but we see strong retail power rate increases. Consumers are gonna be looking for more options against that. We see a low rate of cost of capital, even with an anticipated rise in risk-free rates. We've laid that out. We've executed on that quite nicely this year. We see that continuing as far as the risk premium continuing to compress even a little bit. We see supply and competition for key equipment increasing. We're gonna get past this issue with energy storage systems being not available. We're already seeing a tremendous insight and visibility into that, and we see a lot more equipment and therefore a lot more services per customer increasing. But overall, consumers are turning to service. They need to have one interface, one service provider that's gonna be there in a timely fashion. I'm proud to say that Sunnova's laid out a very strong vision for what the future of the industry is going to be in the not-too-distant future, and we've laid out and well on our way of executing on that plan. Thank you for joining us, and I look forward to seeing you again in the new year. Thank you for participating in today's conference call. You may now disconnect your lines at this time.