Good morning, and welcome to Sunnova's First Quarter 2024 Earnings Conference Call. Today's call is being recorded, and we have allocated an hour for prepared remarks and the question-and-answer section of the call. At this time, I would like to turn the conference over to Rodney McMahan, Vice President, Investor Relations at Sunnova. Please go ahead. 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 as described in our slide presentation, earnings press release, and our 2023 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 Rob Lane, Executive Vice President and Chief Financial Officer. I will now turn the call over to John. Before we get started, I wanted to acknowledge Rob Lane, our Chief Financial Officer. As we stated in our 8-K yesterday, Rob will be stepping down from his role as our Chief Financial Officer to pursue other opportunities. This is a decision we have arrived at together, recognizing this is a logical time for a transition. On behalf of the Sunnova team and the board of directors, I want to recognize and thank Rob for his many contributions, including helping the company execute its initial public offering, our acquisition of SunStreet, and launching the industry's first corporate green bond. We want to express our sincere gratitude to Rob for all that he has done to support Sunnova's success during his tenure. Rob will serve as CFO through June 30th, 2024, or until his successor is named, and will remain focused on supporting the key financing activities we will discuss later in the call. This change presents an opportunity for new perspectives as we position Sunnova for continued success. Working with the board, we have retained an outside search firm to run a full search process, which is already well underway, and we expect to share further details on his successor in the weeks ahead. Thank you, Rob. We will miss you. Now, as we review our first quarter performance, I want to take a moment to remind everyone that our team at Sunnova remains focused on making clean energy more accessible, reliable, and affordable for both residential and commercial customers. As we will discuss shortly, we have an outstanding market opportunity in front of us, and Sunnova is positioned to capitalize on this opportunity so that we can deliver long-term value to all of our stakeholders as power demand continues to grow. On slide 5, we see a multiyear tailwind driven by a tremendous load growth on aging electricity infrastructure. By 2028, it is expected that the demand for power in the U.S. will increase dramatically due to the continued electrification of the economy, onshoring of manufacturing, electric vehicle adoption, and increased demand from AI, cryptocurrency, and data centers. But an aging power grid means less energy reliability, and with so much growth on the horizon, the energy services that Sunnova provides will be needed for decades to come. At the same time, we're also seeing steady increases in utility rates. As the capital needed to support and replace this aging and frequently damaged infrastructure becomes more expensive in the current interest rate environment. Inflation has had a direct impact on the cost to maintain and upgrade grid infrastructure, and public utility regulators continue to approve higher and higher utility rates. This scenario allows Sunnova to maintain a highly competitive and compelling energy offering. As evidenced on slide 7, a consistent and direct correlation exists between utility rates and the adoption of solar energy. On slide 8, we see these dynamics create strong demand for our Sunnova adaptive energy offerings. As a company, we view these macroeconomic trends as indicators of the many opportunities ahead. Through our innovative financing, servicing, and energy management offerings, we are proud to be helping our customers protect their homes, businesses, and families. To date, Sunnova has provided energy services to over 438,000 customers, managing 2.6 GW of power, backed up by almost 1.2 GWh of energy storage solutions. We have partnered with over 2,100 dealers and new homes installers in over 50 U.S. states and territories. We are doing this with industry-leading technology, both in hardware and software, which is backed by our service offerings and our entire team of dedicated employees who support our customers day in, day out. We see the demand and recognize as we continue to make improvements to the business, we remain committed to the core customer value proposition we centered our entire business around 12 years ago. As a leading adaptive energy services company, we are delivering a comprehensive, sustainable, and streamlined approach to energy services. With our platform, we are simplifying the increasingly nuanced landscape of energy so that our customers do not have to worry about the upfront costs, maintenance, or technical complexities of powering their homes and businesses. Instead, they rely on Sunnova as their trusted energy partner, accessing affordable, reliable, and sustainable energy solutions. We are more excited than ever to see what the future brings, and we will continue to innovate on our customer experience and work hard to support the growing energy needs of the country. Moving to our Q1 financial results on slide 11. Most notably, during the quarter, we generated $18.9 million in unrestricted cash, and our total cash balance remained relatively flat compared to the prior quarter, sitting at $487.5 million as of March 31, 2024. Additionally, we experienced an 11.6% decrease in adjusted operating expense per customer compared to the fourth quarter of last year. Proof that the initial steps we have taken over the last few months to reduce costs are starting to bear fruit. This quarter, we delivered $46.4 million in adjusted EBITDA, $35.7 million in interest income, and $41.9 million in principal proceeds from customer notes receivable, which were all in line with the quarterly guidance we provided on our prior earnings call. We also continue to see steady year-over-year growth in our net contracted customer value, or NCCV. Assuming a 6% discount rate, NCCV was $3 billion, an increase of 15% compared to March 31st, 2023. Our March 31st, 2024, NCCV per share was $24.34, assuming the same discount rate. Over the last few months, we have also made several exciting strategic announcements. In January, we announced the opening of our Adaptive Technology Center in Houston. Equipped with cutting-edge energy testing and integration technologies, this center allows our engineering teams to innovate and integrate various technologies seamlessly. It also empowers our service technicians to troubleshoot field issues in a controlled environment, enhancing our service response times when visiting our customers' homes. In late March, after years of working with The Home Depot to empower customers with cost-effective energy solutions and ensuring dependable and resilient power, we were thrilled to announce our strategic partnership, whereby we will now be the sole provider of solar and battery storage services in the Home Depot stores across the United States and its territories. This agreement provides consumers with access to the Sunnova Adaptive Home energy offerings in over 2,000 Home Depot stores. Lastly, in early April, we announced the growth of our virtual power plant network. Powered by our Sunnova Sentient technology platform, our customer systems and the clean power produced continues to help offset the need for utilities to use heavily polluting fossil fuel power plants during peak demand periods. In return for their demand, battery, response, and contribution, our customers are compensated for the power supplied by their batteries in most programs, creating a win-win for the customer and the community. As our customer base continues to expand, we are at a pivotal moment in enrolling customers into these programs, and we look forward to sharing more details in future earnings calls. Recognizing the current state of the industry, our immediate focus remains on increasing cash generation and maintaining our margins. This has only sharpened our focus on maximizing asset-level capital, driving cost efficiencies, further leveraging ITC adders, and refocusing on our core adaptive energy customers, all of which we will discuss in greater detail in the subsequent slides. Turning to slide 14, you will see our total unrestricted cash balance was up compared to the end of last year. We have remained active in the asset-backed securitization market with two issuances in February, totaling $453 million, and our securitizations are trading well in the secondary market, which gives us confidence in a strong ABS environment for solar. We expect to continue to access the securitization market this quarter and throughout the year as investor appetite remains strong. We also continue to be active in the tax equity market with the closure of a new $195 million fund in February and increased funded commitments of $58 million throughout the quarter to previously established funds. Additionally, where our large TEP VIII- B fund closed in December, it was not funded until March of this year, providing us with significant liquidity in the first quarter. As the shift from loans to leases and PPAs continues, driven by macroeconomic conditions and ITC adders, we expect that tax equity will make up a larger component of our total financings. We are generating more proceeds from asset -level financing than we have in recent years. We believe there are three main dynamics at play that will support this. The first is more asset-backed securitizations per year and monetizing those securitizations beyond the investment-grade credit attachment points. The second, increased utilization of tax equity driven by the shift from loan financing to lease and PPAs, and third, accelerating the overall pace of asset-level financing. First, on more securitizations. We have done 4 securitizations per year for the last three years, and we expect to complete at least six securitizations in 2024. Also, since Q4 2023, we resumed the practice of issuing beyond the investment-grade credit attachment point by monetizing the Class C notes in our asset-backed securitizations, in addition to the Class A and Class B notes. This change in our securitization approach allows us to increase our net proceeds. Second, on our customer mix shift towards more solar leases and PPAs. This is an advantage for us as leases and PPAs benefit from higher total advance rates than loans due to their ability to utilize tax equity, recently enhanced by the ITC adders. Lastly, we are focused on accelerating the pace of our asset-level financings by working with our dealers and internal resources to bring assets into service quickly. Closing securitizations at a faster pace allows us to take advantage of higher advance rates, net of hedge breakage, when we securitize. Moving to slide 16, we detail the trend in our unit economics spanning across multiple different interest rate environments in only three years. Taking a step back, our value proposition is comprised of many things, including cleaner, safer, and more reliable energy. But one of the biggest advantages to our customers is savings. Given the increase in utility rates, we've been able to continue delivering savings to customers, while at the same time increasing our pricing. This has allowed us to achieve a healthy spread in a rising interest rate environment. This dynamic is illustrated by the trend of our implied spread over the last three years. We have always said that we target a 500 basis point spread long term. In 2021, in a lower -rate environment, we delivered an implied spread of 6.4%. As interest rates rose into 2022 and 2023, so too did our cost of debt, doubling from 2021 to 2022. Though we dipped below our spread target in 2022, our pricing changes in 2023 allowed us to increase our fully burdened unlevered return and generate an implied spread of 5.6%, 60 basis points higher than our target. Over the last three years, in a host of different rate environments, we've been able to average a 5.5% implied spread while still delivering savings for our customers. We believe that this is indicative of the sustainability of our business model. Additionally, in the first quarter of this year, even as our cost of debt increased, it was more than offset by an increase in our fully burdened unlevered return, and we saw an increase in our spread back up above the 6% mark. However, we recognize that strong unit economics can only be part of the story. Therefore, we are continuing to drive further cost efficiencies in the business. In the first quarter of 2024, our adjusted operating expenses declined roughly 6% quarter-over-quarter, or $6.6 million. This decrease in total adjusted operating expense was the first decrease in this metric since 2020 and was driven by our initial efforts to reduce costs and to further drive efficiencies in our business. Moving forward, we will utilize our technology platform and scale to continue driving cost per customer down, as evidenced by the 11.6% reduction in the first quarter. Another dynamic we are monitoring is the monetization and the investment tax credit adders introduced in the Inflation Reduction Act. In addition to the base 30% tax credit, increasingly, we are seeing the ability to access the adders allocated to building and energy communities, providing service to low-income individuals, and the push for more domestic content and equipment. For 2023, we saw little uplift from these adders as the year's weighted average ITC with adders was only 31.5%. This was due to limited implementation guidance on the adders from the U.S. Treasury last year. With the guidance we have received this year, and with more to come shortly, we expect we'll be able to increase our weighted average ITC to somewhere between 36% and 40% by the end of 2024. As you can see here on slide 18, we estimate that a 1% increase in the weighted average ITC rate would generate at least an additional $30 million in cash proceeds in 2024, based on the fair market value of the lease and PPA systems we expect to place into service this year. And lastly, we are refocusing on our core adaptive energy customers. The left side of slide 19 shows our customers deployed per year. While we expect flat growth in overall customer additions in 2024, we still expect the number of megawatts we deploy this year to increase. This is due to a shift in our expected customer mix in 2024 as we refocus our capital expenditure investment on core adaptive energy customers. Also, our solar additions in 2024 are expected to be much more heavily weighted towards lease and PPA customers, which, as I discussed, is advantageous for our cash generation as well as our margins. This renewed focus on our core adaptive energy customer will help us to make progress against the priorities I previously mentioned, while also providing us the adequate scale necessary to fund the business through asset level financing. I also want to be clear, there is more than enough market demand, despite economic challenges, to continue to recognize the benefit that scale has for our business. With that, let me now turn the call over to Rob. Thanks, John. Turning to slide 21, you will see that we are tempering our outlook on customer additions for 2024 from the prior range of 185,000 to 195,000, down to 140,000 to 150,000. This reduction is in no way indicative of any lapse in demand for our offerings, but is instead a proactive move we are taking to rightsize our growth. As John mentioned earlier, scale is important to our business, but we are being much more intentional about the kinds of customers we are adding. We believe this approach to customer additions, focused on our highest value customers and offerings, while limiting growth in some areas of our business that do not provide the highest returns, will better position us to achieve our customer cost reduction and cash generation goals. Aside from our customer additions, we are reaffirming all of our 2024 guidance figures, including adjusted EBITDA, interest income, and principal proceeds. Turning to slide 22. In the first quarter, we generated $23 million in levered cash flows, which is comprised of residual cash flows from securitized customer contracts, all MSA fees, and proceeds from unpledged SRECs and grid services. The EPC costs that make up our investment in systems totaled $561 million. We generated roughly $627 million in asset level financings and used $20 million of cash on corporate interest expense, leading us to a net increase of $19 million of unrestricted cash in the quarter. Now moving to our full -year forecast for 2024 and beyond. The more focused approach to our customer additions impacts the guidance we set last quarter, reducing our levered cash flows, but also our investment in systems and the amount of proceeds from asset level financing. As we said last quarter, we still anticipate being cash neutral for 2024 and continue to expect strong cash generation in 2025 and beyond. Before I turn the call back over, John, I just want to say what an honor it has been to work beside you and the entire Sunnova team for the past five years. While I will remain a dedicated Sunnova customer and shareholder, I'm excited to close out my tenure as CFO and pass the torch in the coming months. I'll turn the call back over to John for closing remarks. Thanks, Rob. In closing, Sunnova is well equipped to manage our balance sheet through the remainder of 2024, while also setting us up for increased cash generation moving forward. Though elevated interest rates had made for a challenging short-term macro picture, overall, there is more than enough demand to continue adding to our customer base in an economic and sustainable manner. As we look to the remainder of 2024, we are encouraged by the rapid progress we've made already in the first quarter and will continue to take steps to transform the energy landscape, challenge the status quo, and offer customers a better energy service at a better price to help meet society's ever-increasing energy demands, all the while maximizing shareholder value. With that, operator, please open the line for questions. Thank you, John. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is muted locally. We'll pause here briefly as the questions are being registered. We have the first question from Philip Shen with Roth and Co. Your line is open. Hi, everyone. Thanks for taking my questions. Rob, it's been a pleasure working with you. Best wishes in your next endeavor. Yeah, best of luck and best wishes, Rob. First question is on Moelis. Ahead of your results yesterday, the stock was down 16% on this Bloomberg article about potentially you guys engaging Moelis to explore balance sheet options. What can you share about that engagement with them? Can you confirm or deny that you have engaged them? And is there any timing of any potential outcomes that you might be able to talk about? Thanks. This is John. Thanks, Phil. What I would say is that it's very obvious to us and I think to everybody how deeply discounted our corporate debt is trading. And that presents, we feel, some interesting opportunities, and we're going to evaluate those opportunities accordingly, as you would expect us to, and as we always do. Great. Okay, appreciate that. Thank you. Shifting over to the ITC adders, you talked about a 1% increase equates about $30 million in cash proceeds. So moving from your, you know, the, the start-of-the-year level of 31.5%, into maybe a 38%, an ITC value level, that suggests you could generate nearly $200 million of cash, possibly this year. Can you talk about some of the assumptions there and, and timing as to when you might, and, and how the magnitude of the cash that you might be able to generate from the ITC this year in 2024, as well as next year from these adders. Thank you, John. Yeah. Thanks, Phil. You know, I don't think this ITC adder is very well understood. You know, we have actually been collecting on this adder with the energy communities adder, for you know, quite the last few months. There was additional guidance that at the tail end of March, that the treasury gave on the energy communities adder that greatly expanded it, and we have since collected most of those monies, I would add. So the cash generation on the ITC adders has surprised us, I would say, greatly. We expect the domestic content, as well as everybody else, to come out quite possibly in the next few weeks or so, and that will further increase. So while we've been very conservative in our cash forecast, including on the liquidity forecast slide here in our comments on this call, for both 2024 and beyond, we want to see everything come together, but what we're seeing in terms of the ITC adders on our origination mix and how we're able to change our origination to pick up more of those adders is quite startling in a positive way. So we like how the cash generation is coming together with the ITC adder, and that further goes to our point about how lease and PPA is going to continue to grow share against loans quite substantially. So there's a lot of cash generation here to be had, and we're going after it. Great. Is there any way to quantify the potential impact for 2024 and 2025? I'd like to stick with what we have right now. Let's be conservative. Let's go out there and execute. Got it. Okay. Thanks very much. I'll pass it on. Thanks. Thank you. The next question is from Brian Lee with Goldman Sachs. Your line is open. Hey, guys. Good morning. Thanks for taking the questions. I'll echo Phil's sentiments as well, Rob. Great working with you. Best of luck, and hope our paths cross again. With that in mind, I guess maybe just going straight to one of your slides, your favorite slide, slide 22, follow-up to Phil's question. So John, Rob, is it fair to assume, based on your comments you just made, none of those, you know, every 1% equals $30 million of incremental cash, none of that is actually reflected in slide 22, for the 2024 cash walk or liquidity walk? No, that wouldn't be fair. We do have the energy communities adder and a little bit of domestic content in the forward years adder. But I think the full extent of what we expect and how we can change up origination profile to capture even more cash from those adders is quite possibly not reflected there. But again, this is a pretty good position to be in, and let's go out and execute and see what we can do to increase those adders and increase that ITC towards 40%, you know, maybe beyond, on an average basis. Okay. Sounds good. Fair enough. And then, on the, you know, kind of sticking with the concept of trying to maximize cash flow, you had a lot of discussion here, focused slide 15, around maximizing kind of asset-level capital, existing assets. You have this bullet point around, you know, potential additional options. I don't think you got into a lot of detail around those. Can you kind of walk us through a little bit in terms of, you know, each of those potential options, maybe, you know, amount you could potentially monetize, timing, and then what each one of those options would entail in terms of kind of go-to-market and being able to execute those transactions? Maybe just a little bit of color around those opportunities. What I would say is that there's multiple levers, given the assets that we have, and historically have underleveraged them at the asset level, especially from the years 2021 to 2023. You know, what we need to do is continue to step up our efforts to maximize the cash flow up to the corporate parent, and whatever generates the most cash will do it. So if that's a sale of an asset, we'll do that. If that's a securitization all the way through sell, you know, securitizing or selling the resid of a securitization, we'll do that as well. So, you know, I think it—the purpose here is just to lay out the multiple different options to generate cash that I don't think people have fully thought through, in terms of the capability of generating and the optionality of generating cash to the corporate parent. All right. Fair enough. Last one for me, and I'll pass it on. Yeah, you did reduce the customer additions forecast here for the year. You're focusing on kind of the core customer base, the adaptive solar customers. Why, I guess, is there no sort of impact to the P&L or cash flow or balance sheet? Just as we think about your forecasted KPI targets, I would have assumed taking down the growth forecast would have, you know, resulted in some savings in OpEx or O&M or maybe some incremental cash flow generation. Any thoughts around kind of where that might show up and in what time frame as you sort of tighten the belt around growth? Thanks, guys. Yeah, certainly. Going back, having an asset base as large as ours, at this point in the year, I would say greater than 85%, probably greater than 90% of those revenues and cash inflows from principal and interest from our loans is locked in. So it again, we have a very durable model as far as cash generation. Cost cuts, there have been quite a bit. They're starting to show up some, to some degree, actually, on a per customer basis, quarter-over-quarter, 11.6% drop in adjusted operating expense. But more have happened since even the end of the first quarter, and much more is going to happen as we move forward. So very much focused on OpEx, getting these software and automation in place, to further cut the need for operating expenditures, people, et cetera. So we're focused on doing more in the OpEx on a forward basis, and indeed, we've already had some that will show up in this quarter. Thank you. The next question is from Mark Strauss with J.P. Morgan. Your line is open. Hey, good morning, guys. Thank you very much for taking our questions. And Rob, thank you very much for all of your help dating back to the IPO. I have a couple of questions. I'll just throw them both out at the same time, on slide 15 as well. On the tax equity portion, can you just talk about the latest that you're seeing within the transferability market? And on the traditional side, is there any impact from Basel III that you're seeing yet? Yes, actually, let's just start with that. Thank you. Hey, Mark, this is John. The sale of the or transferability of the ITC is gaining a lot of traction. A lot more companies are coming into the market and willing to do that. It's a lot more quite easier to get your head around as a CFO of a major company. So we've already executed on several of those, as you pointed out, and we see that market expanding rather significantly. We have not seen any impact yet on traditional tax equity from Basel III. So the tax equity market, I would say, is not only alive and well, but it's certainly growing significantly from what we can see. If I can add one thing to that. And then on- The transferability market- Sorry. Sorry. The transferability market remains strong. It's the execution of the ITC transfers has been something that we've led on. So we've already done a significant number of those transfers with the IRS. In the IRS portal, we were one of the first to do it. We've done tens of thousands of systems that and their associated ITCs, we have successfully processed. It's amazing, you know, how much back office is really required to make that work. But that's something that we've been able to solve and get out ahead of as well, which has been a huge success to our ability to be able to speak to investors about not only, you know, just the price, which I think is where a lot of folks start, but the entire process and lifecycle as well. Okay. Okay, and then just a quick follow-up on the increased number of securitizations. So I understand the benefit of kind of getting cash in the door more frequently sooner. Are there any potential kind of downsides that you would see to that as far as, you know, maybe increased transaction fees or anything else like that that you would call out? No. In fact, there's a lot of our corporate capital that's trapped in the warehouses that need to be released on a more timely and more deliberate securitization schedule that we are now on. So we expect to have quite a bit of cash released as these securitizations are executed. Yeah. Yeah, makes sense. Okay. Thank you, guys. Thank you. The next question is from Andrew Percoco with Morgan Stanley. Your line is open. Great. Thank you so much for taking the question, and again, Rob, echo everyone else's comments. Been great working with you. Best of luck in your next endeavor. So I guess I want to start with, you know, a question on asset level performance. You know, if we just look at the numbers in the 10-Q, it looks like customer loan delinquency rates continue to grind higher. I know service has been a kind of a big component of that historically. Can you just maybe give us an update there in terms of what's driving that delinquency rate higher from here and expected trends going forward now that you've invested a little bit more in the service part of your business? Yeah, we are seeing some performance that's quite, quite good there as far as service and therefore the response by customers on paying more timely. You rightly pointed out that the loan is, you know, an outlier. Two things: one, we do take and as part of the program of Hestia with the government, low FICO customers, and so those were priced accordingly to a higher default rate and delinquency rate, and so that's one aspect of the loans. And again, a reminder, Hestia is all loans. Secondly, our origination mix has continued to, you know, decidedly transform itself from a, you know, a majority loan at one point in time to a significant majority of TPO or lease PPA. So therefore, you've got a law of small numbers that's at play there as well. Those two aspects are causing the delinquency rate to be a little bit higher. Understood. Okay, and then maybe just kind of coming back to a question on liability management. You know, can you give us any sense for timing on when we might hear more on that front? Sounds like you're engaged with some advisors there, but anything you can provide in terms of potential timing, solutions? I know asset sales are kind of on the table, so any additional color would be helpful there. Thank you. No, I wouldn't, if I had more color, I wouldn't say it. It's not our place to say who we engage on doing business with in any way. What I would say again is our corporate debt clearly is trading at very deep discounts, and we are, as you would expect, evaluating the opportunities that presents itself. I guess- Thank you. The next question is from Praneeth Satish with Wells Fargo. Your line is open. Thanks. Good morning. Let me also just echo my best wishes to Rob. Thanks for dealing with all of our questions. You know, maybe going back to the liquidity table forecast, you touched on the ITC adders, but can you just review what advance rate you're assuming in the cash generation guidance? I think you've done the last few raises at high 70s this year. So if you take that into the 80s, would that result in incremental cash versus this forecast? I think you said every 7% equals $200 million of cash, if I remember correctly. And then same thing on the frequency of ABS issuance. Does the guidance already assume six, or would this be incremental? Just trying to figure out what's baked into that guidance. The answer is that this table is assuming what we have done or what we currently see in the market, so no improvement in pricing, no improvement in advance rates, no significant improvement in the ITC adders. And so therefore, if the advance rates in your example increase, that would increase the cash generation. And so, so would additional operating expense cuts would increase the cash generation. So, again, I think this is a fairly conservative view of cash generation, and there are ample levers to go and pull and generate even more cash. Got it. And I didn't see any mention of ATM issuance in the prepared remarks versus last quarter. So just wondering, you know, now that you've got some levers here to increase the cash generation, is ATM off the table, or is that still a lever that you'd consider as kind of a backstop if some of these financing plans don't go to plan? We have not used the ATM because there is no ATM. We've not filed it. Okay. That's clear then. Thank you. Thanks. Thank you. The next question is from Pavel Molchanov with Raymond James. Your line is open. Thanks for taking the question. When we look at the slide showing customer additions, it looks like solar customers will be up maybe 20%, non-solar will be down, you know, 50%. Is the geographic mix of both of those categories the same, or are you sort of pivoting to, you know, one part of the country versus another? Hey, Pavel. The mix is about the same. We're seeing more growth in the South United States than we have historically. We still have a very small market share in California, but that's picking up a little bit. And then, the rest of our footprint is broadening out as again, as utility rates move higher, the equipment prices crash lower. The opportunity, even within, with the cost of capital, where it is, has been increasing. You know, that valuation of the customer has been increasing really everywhere. So, do we see a lot of opportunity in the marketplace and expect the market to, I think, to surprise the upside and grow. Okay. I did not see this in the slide. You may have mentioned it. What was the battery attachment rate? And just any commentary on kind of the trend in that metric? Yeah, we wanted to focus on some of the other aspects of the business, but, you know, the storage attachment rate continued to have been strong and about what we've had historically. And as the pricing of batteries is dropping, in some cases quite significantly, we do expect the natural response from the marketplace is to increase purchases, and we've seen some of that. We've seen a broadening of geographies wanting storage, for instance. So, storage is gonna be really important, especially as you get into energy services, grid services, whatever you want to call them. We're seeing a lot of opportunity there to generate additional revenues for both ourselves and our customers, and to be a part of stabilizing the overall centralized system in the local area. All right. Thanks very much. Thank you. Thank you. The next question is from Tristan Richardson with Scotiabank. Your line is open. Hey, good morning, guys. Appreciate all the comments. Maybe just one follow-up on the liquidity slide. I totally understand the customer refocus takes your investment systems down quite a bit, but it did seem that your expectations for tax equity proceeds came up a little. And so I'm curious if that is purely a function of just seeing that weighted average tick up from adders, or if actually that core adaptive customer might see that growing a little bit more than you thought, maybe in previous slides. Interesting. It's the adders and it's the origination mix. We are doing more lease PPA, far more than we expected at the beginning of the year. It's helpful. Appreciate it, John. And then maybe one more housekeeping follow-up, but, you know, maybe could you talk a little bit about terminations we saw in the quarter? Is that largely a function of this- refocus initiative, or was there something specifically going on that we saw that might be seasonal or anything to think about there? Yeah, there are terminations and payoffs, so we are seeing an increase in the constant prepayment rate, especially on some of our accessory-type loans. And so that's welcome news, if you will, and unexpected. So we wanted to make sure as soon as the customer had their loan paid off with us, and we did not owe them any more service, that we were going to properly reflect it and subtract the customer from our customer count. And so you're seeing that reflect here. It's basically our payoff rate is accelerating a bit. Appreciate it. Thank you all very much. Thank you. Thank you. The next question is from Ameet Thakkar with BMO Capital Markets. Your line is open. Hi, good morning, guys. Thanks. And just want to again echo everybody's sentiments and thank Rob for putting up with all of us, well, last few years. Just real quick on, looks like the dealer count went up, I think like another 90 or 100 dealers. I was just kind of wondering, like, what are you guys seeing in terms of kind of attrition within the dealers? I mean, you look like you're going to grow a little bit less than maybe we anticipated at the beginning of the year. Is the dealer count gonna be kind of fairly steady from here on out? I think that's probably pretty accurate. We're constantly managing the dealer network to make sure we have the best. And you know, there are things that happen in our dealers' lives because they're obviously you know, great entrepreneurs that are out there, you know, trying to make their way in the world, and things happen in life, right? Sometimes positive, sometimes negative. So you want to have a constant influx of new dealers. And this is true, whether it's in you know, the power business, the solar business, whatever you want to call it, or home security or any other business that is heavily dependent upon great entrepreneurs and dealers. So we're gonna try to maintain and bring in new blood, if you will, all the time, because we'll have some others that need to be exited. But I think we're in a pretty good spot where we are with our size of our network. Maybe, maybe it trends a little bit lower, who knows? And then it looks like, just looking through your 10-Q, that you've added some additional risk, kind of language around resource repay, the APA, TEP, EPH, and EVOP debt credit facilities. I was just wondering, like, was there something that kind of, like, triggered the additions of that language or something your auditors kind of required you to do this quarter, or is that always really there? No, it's there. There's no difference. We feel pretty good about refinancing that with our lenders, and I think it's just lawyers doing their job. All right. Thank you. Thanks. Thank you. The next question is from Maheep Mandloi with Mizuho. Your line is open. Yeah, thanks for taking the questions. Just one more question on the liquidity forecast here. Just to confirm, the reduction in levered cash flows is mainly because of the customer focus shift, right? And that is what's causing the reduction in the overhead capital and the investment needs this year, right? And I'm trying to understand, like, the levered yield on that cash flow seems pretty low, like mid-single-digit yield on that business. So any reason, like, why, how to think about the yields on rest of the non-solar customers going forward? Thanks. Yeah, it's small decreases, and this will fluctuate quarter to quarter. It could be that, you know, the weather wasn't as great in some areas of the country that have high SRECs, for instance. It could also be that, you know, these accessory loans, which is the majority of it, in this case, we don't expect to originate as much as we had in the past, or it could be asset sales of such loans and such to drive some of the revenue down. So I think you've got the right idea. Good. Thank you. That's all for now. Bye. Thank you. The next question is from Chris Dendrinos with RBC Capital Markets. Your line is open. Yeah, good morning. I wanted to focus a little bit more on the cost structure here, and notably, you made some progress in cutting that adjusted operating expense. But I guess just taking a step back and looking at how that cost structure compares against the underlying assumptions baked into your net contracted customer value calculation and the implied spreads. I think in the 10-K, you all indicate that the assumptions like, you know, $20 per kilowatt per year escalating and then $81 not escalating for the battery. So, I guess if I just think about that in the context of your customer service costs that you're operating at right now, which I think are multiple times higher than that. The first question is just, you know, how do we get comfortable underwriting your net contracted customer value if, you know, the operating cost assumptions that you're under right now are vastly different? And then second, is what would be the net contracted customer value if we were to recast those, that forecast under the current operating cost structure? Thanks. Yeah. We've done a great job on improving customer service, and in fact, we're at an all-time low, and decidedly so as far as our backlog of service tickets... if you will, on the customer base. We have started to redirect decidedly so the technicians, our service technicians, who do a fantastic job for us and our customers, over to the service-only business, and so that'll drive additional revenue and drop the cost structure. So you will see a cost structure drop that's pretty significant. We've already started to experience it. You will start to see that over the coming quarters. It'll become very visible. So, I acknowledged on the GCCV, I just wanna point that out, that that was set by the industry standards long before even Sunnova was founded, and that's something that we've used to be consistent. Our securitizations do contain some higher cost, you know, cost or basis swaps that do go, you know, into our levered cash flows. I just wanna point that out. So, we feel very comfortable being able to drop the cost significantly, especially if we were absolutely had to, in the kind of situation you were talking about. And, I wouldn't necessarily spend too much time trying to figure out what the, you know, increased spend would do. I think you can do some back of the envelope math and figure that out. But, we're very, very focused on reducing that service cost, and, do believe we'll get down to, something, that's materially lower than what we have done over the last, you know, 12-18 months. Okay. And then I guess, just as a follow-up to confirm that, you know, the unlevered rate of return calculation that you all provide, is that assuming the same sort of cost structure as in the NCCV, or is that marked against kind of what you're sort of operating at, right now? Thanks. It's, it's what we're operating at right now. To be clear, it's all service costs, it's all costs, it's all spend in the current year. So that's pretty burdensome when you're taking one marginal unit or one marginal customer in and burdening with the entire existing customer service base at the current cost structure. I think what we'll try to do in the coming quarters is, you know, look at a forward service cost estimate and then, you know, take out some of the initial upfront costs and have an alternative view of a on the return. But right now, what we have is every money, all the money that we spend on the upfront, we burden it in our unit economics and in that fully burdened unlevered return. So it, in many ways, is more punitive than it actually should be. Got it. Thank you. Thank you. The next question is from Ben Kallo with Baird. Your line is open. Hi, good morning. Thank you, Rob, for everything. Maybe two quick ones. Just on reducing expenses and really focusing on any direct sales. I know you guys do a little direct sales, but have you changed any thoughts around that, Rob? And then I have a follow-up. No, I'm decidedly, I think, still on the dealer business model side of things. Look, great entrepreneurs that we have in the dealers are, you know, they're unhirable, if you will. That's a phrase I, you know, a word I can use with you, Ben. But we've been focused on that since I founded the company in terms of the dealer model, and we have not wavered. I know others have gone back and forth, but we have not wavered and will not. We've got a little bit of direct sales, as you pointed out, but that's really about finding areas where we just hadn't had any dealer coverage, and so that will continue to be a very relatively small part of our business, but I expect it to generate a good deal of cash. Great. And just on the balance sheet, and you know, different options, the SunStrong JV with SunPower and Hannon, is there—is that something that, you know, we could possibly see with you guys, a structure like that? It's possible. We're definitely looking at our options there. The Hannon team is very strong, and they've done a lot of good things and run a good business, and so of course, we're, you know, always wanna talk to folks that run good businesses. So that's certainly possible. Great. Thank you. And thanks again, Rob. Thank you. The next question is from William Grippin with UBS. Your line is open. Thanks. Good morning. First question was just, how should we think about the impact of pulling forward some of these ABS transactions on future cash generation? And should we expect a lower level of securitization activity in 2025? Well, the way you should think about it is, as we pull forward the securitizations, we pull forward cash, and that cash is. We right now see that as significant. The way to look at 2025 is that we would be on a steady pace. And so what's the probability that we do more securitizations this year than we do in 2025? You know, I haven't put a lot of thought into that, frankly. I just we just need to have a securitization schedule that's disciplined and keeps us ahead of the markets. We take as little of the interest rate risk as we should and can in our backlog. We haven't done that in the past couple of years or so. Just and that is changing as we speak this year. And so as long as we're on a disciplined schedule where we're generating cash, I think how many securitizations we do or do not do, I don't think it really matters. But you know, it is likely that we'll just be on more of a steady state that you're kind of seeing right now, try to space out the securitizations accordingly, of course, but more of a steady state. Got it. And then, just last one here. Have you seen any impact on your advance rates or, or your financing terms relative to what you maybe would have otherwise expected, just given where the debt and stock have been trading and, and maybe some of the implied concerns there? No. All right. Thanks very much. Thanks. Thank you. The next question is from Donovan Schafer with Northland Capital Markets. Your line is open. Hey, guys, thanks for taking the questions. So I want to ask, I feel compelled to dig in a bit more deeply on the, you know, I guess it's on slide 31, terminations, payoffs, and expirations. I know some of that's service-oriented, some of it, you know, not, and there's, you know, presumably a lot of kind of moving parts there and a lot of nuance. At the same time, collectively, it's a pretty big jump. You know, I think it was approximately 2,000 last quarter, and it jumped to almost 8,000, you know, a sort of 8,000 deduct, if you will, to customer additions in this quarter. So could you unpack that a bit more and maybe get at, like, specifically, what is the cause? I mean, I can imagine, you know, maybe in some cases, if people are just worried about, you know, day-to-day expenses or something, some people with savings, like retirees or whoever, could just opt to buy out, the lease or a loan. I mean, there might be more basic things behind that. But just, you know, how, how do you expect this to trend? Like, what's the, what's the cause, all else equal? You know, do you, do you want to see that come back down or do the economics? I know, like with loans and dealer fees, sometimes it can actually improve the economics. So, you know, do you want to see this trend up? Do you not? Or maybe one of the lines, but not the other lines. Anything you can do to kind of unpack that, that would be great. Thank you. Sure. Vast majority are payoffs. So do we want that to become more negative as we move forward in time to get our money back faster on the loans? Absolutely, 110%. Okay. And I guess that gets you better economics because the dealer fee and then your financing partners, you know, maybe historically, the way people looked at, you know, mortgages or something, you could have prepayment risk impacts the, you know, duration, interest rate, sensitivity, and so forth. So, you know, is it something that they will be happy with, too? The dealer fee and such gets shared with them in a way where if it all just, you know, if all these prepayments came in the door, it'd just be everyone would be high-fiving, and it'd be fantastic? Correct. You pay off debt, you don't have to refinance that debt. Mm-hmm. Very helpful. Very helpful. I appreciate it. All right. Thank you, guys. All my other questions have been asked, so I'll take the rest of my questions offline. Thank you. Thank you. The next question is from Christine Cho with Barclays. Your line is open. Thank you for squeezing me in here. Maybe if I could just ask on the fully burdened, unlevered return. I know there are a lot of assumptions that go in here. And for the loan book, I think there are three main drivers: the dealer fee, the APR, the CPR. And I would think that the dealer fee and APR move around in your assumptions as, you know, the loan APRs and dealer fees have changed. But just curious, if the CPR assumptions have moved at all over to this time frame, or has it stayed relatively flat for consistency purposes to calculate this return number? We have moved the CPR down significantly to reflect the current market, so that would depress the unlevered return. Okay. And then, you know, you previously talked about how funding the, or cost of capital has been more expensive for the non-IG attachment points in the ABS market, and that's why you previously funded that portion other ways. Can you just talk a little more about what drove your decision to change the approach, and securitize beyond the IG attachment points? And then in the levered cash flows from the liquidity file, or the liquidity slide versus last quarter, you know, it being down, how much of this is driven by cash flows just coming in lower from your existing base versus your approach and—your change in approach and securitizing through the stack for a new origination CRM out, and so there being less residuals? I'll answer the second one first. And so, the vast majority of that, a little slightly lower cash flow, levered cash flow is due to, not as many, accessory loans, looking at how do we sell some loans off, but it's, it's much more about, on the margin, some of the origination, not the existing base, underperforming. In terms of the cost of capital between the asset level and the corporate capital, I think it's I mean, I think it's really obvious, that the corporate debt is trading at deep, deep discount. I think it's also pretty obvious that the equity is trading at a very deep discount. And so I don't think that the cost of capital on the corporate side, I don't even think you need to run a model. It's quite a bit higher than anything we can do on the asset level side. It seems pretty straightforward about why we've had to flip back to the asset-level side of things. Great. Thank you. Thank you. The last question of the call today is Corinne Blanchard with Deutsche Bank. Your line is open. Hey, good morning, and thank you for taking my question. Most have been answered, so maybe I'm going to try something different. Can you maybe talk a little bit about California? I know it has been a year since NEM 3.0, and it's a little bit less of a focus, but maybe what are you seeing in term of demand rebound as we go into the 2Q? Hey, Corinne. Again, we don't have a big presence in California, so I would leave it to my competitors, who, I think, have a very large portion of their origination in California. I think it's pretty clear that other states that are more consumer-friendly have done a better job over the past year than the state of California has with regards to consumers and the power industry. So I'll leave it at that. I think it's most unfortunate the direction that the state of California is going, and we're quite heartened to see other states take the exact opposite path and embrace giving consumers value, particularly as the power, as we all know, is in huge demand, and it keeps going up in cost. Okay, thank you. Then maybe just quickly, so which are the states that you are seeing the most potential for, like, demand, like, maybe over the next 12 months? We do list that out, as you know, in the appendix, by state. I don't think anybody else does that, so I would point you in that direction. But again, as I mentioned earlier, we're seeing a lot of growth in the southern United States, and we're seeing some growth spread out, just in general. So, I think overall, as the weighted average cost of electricity from the utilities, the monopolies, continues to increase, we should expect to see consumers look for alternatives. And with equipment pricing, whether it's modules or batteries or inverters, really crashing in cost, that presents a really nice value edge for consumers, and they're transacting. Great. Thank you. Thanks. Thanks. Thank you, everyone. This is all the questions we have time for today. I will now hand back over to John Berger for closing remarks. Thank you for joining our Q1 call. We remain focused on cutting operating expenses, increasing value from our service contracts, and closing our asset-level capital quicker, all to increase cash generation even more than we already have. I want to thank Rob for his service, and I look forward to seeing you all on the Q2 call. Thank you.