Emeren Group Ltd

Hello, ladies and gentlemen. Thank you for standing by for Rene Solopower's second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. At that time, if you wish to ask a question, you'll need to press star 1 on your telephone. Please note that we are recording today's conference call. I'll now turn the call over to Mr. Gary Dvorak, Managing Director of the Blue Shirt Group Asia. Please go ahead.

Thank you, Tara, and hello, everyone. Thank you for joining us on today's call to discuss second quarter 2021 results. We released our shareholder letter after the market closed today. It's available on our website. There's also a supplemental slide deck posted on the website that we will reference during our prepared remarks. On the call with me today are Mr. Yumen Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, and Mr. John Yuen, CEO of North America. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent Rena Sola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Rena Sola Power's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Rena Sola Power's opinions only as of the date of this call. Rena Sola Power is not obliged to update you on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumen Liu. Yumen?

Thank you, Gary, and thank you, everyone, for joining the call. I will summarize our financial performance and review our operating highlights in the quarter. I will then turn the call over to Ke, who will cover financial results in more detail, and will also provide 2021 guidance. We will then open the call to questions. In Q2, we again focused on profitability and delivered excellent bottom line performance. Gross margin of 61% was well above expectations, which demonstrated solid execution of our strategy to focus on project sales at NTP. Gap operating income was 7.3 million, up significantly both sequentially and year-over-year. EBITDA of $9.5 million increased by more than 140% from Q1. Importantly, we reported our fifth consecutive quarter of profitability with net income of $7 million, or $0.10 per ADS. Q2 also marks the most profitable quarter since we divested the manufacturing business to become a pure-play project developer in the third quarter of 2017. You will notice that revenue was down both sequentially and year over year. Why are we so excited about our results when revenue was lower? Our excitement emphasizes the most important point we want to make about how we run our business. Pure and simple, we focus on the bottom line. While we can never guarantee it, we intend to be profitable every quarter, whether our revenue is up or down. We are confident in our ability to do this because of our unique, fortified business model. First, NTP sales drive growth in our business. We have realigned our strategic focus to make more sales at NTP. The margins are better. Project sales are large and somewhat unpredictable and will vary as you saw this quarter. But over time, as we grow our pipeline, we expect project sales to drive strong and sustainable growth to the bottom line. Second, our IPP segment provides a baseline of stable and highly profitable electricity sales quarter in and quarter out. This foundation delivers consistent income and enables us to plan our business. As a shareholder, you all should judge our performance the way we judge ourselves. We should be profitable, whether the revenue is up or down. Pipelines should be growing handsomely over time, and gross margins should be trending up over time as we ship more product sales to NTP. In addition, you should see our operating expenses growing in line or a bit slower than pipeline growth. Pipeline is closely tied to the investment we make in development and sales, so these two metrics will always be closely correlated. Let me now discuss recent operating highlights in more detail. First, our development pipeline remains strong. Our mid to late stage project pipeline from 1.3 gigawatts in Q1 to 1.6 gigawatts by the end of Q2. Expanded pipeline of business activity indicates greater demand for projects, as well as greater execution by our team in a still COVID-challenged environment. Our focus is profitable markets, including the U.S. and Europe. where we see tremendous growth opportunities with high-quality projects. Second, we successfully closed the sale of our 38-megawatt portfolio of solar projects in Poland and a 5-megawatt portfolio of projects in Maine and recognized revenue for both sales in Q2. The Poland projects were sold to Optum, a leading international solar investment company based in Denmark. The projects were sold at NTP stage, and Winning Solar Power is responsible for EPC management, project financing, and final delivery of the projects to opt-in at COD. Against that success, closing of the Spain project sale was delayed from its scheduled time in the first half of 2021, causing our revenue to be lower than originally planned. The sale is expected to be closed within next month and will be recognized for revenue in the third quarter of 2021. Third, we were awarded 29 projects with a capacity of one megawatt each and one small utility-scale project with a capacity of four megawatts in Poland's electricity auction in June. These 30 projects are under Poland's CFD regime and eligible for a 15-year guaranteed tariff. The projects are expected to be connected to the grid within the next two years. Fourth, we further strengthen our financial position by paying off short-term debt of 11.8 million in a quarter. As a result, we further enhance our capital structure with a debt-to-asset ratio of 16%, down from 19% in Q1. we have a healthy balance sheet with a strong cash position of $286 million. We intend to use our cash to expand our solar project pipeline for working capital and for potential strategic M&A opportunities. Speaking of M&A, we are actively pursuing several opportunities. We are making progress and intend to provide more details on our next earning call. We believe the capital raised at the beginning of 2021 will enable us to execute our long-term strategic growth plan as we further consolidate our transformation into an asset-like solar project developer. First, subsequent to Q2, we signed a strategic partnership agreement with Ameren. A UK-based project developer focused on the development of renewable energy power plants As part of the JV agreement, Venus Solar Power and Ameren intend to develop projects in the broad range of sizes across Italy with a target of reaching 110 megawatt, sub-rated projects by 2022. We are excited to partner with Ameren. The co-development agreement aligns with our growth strategy, enabling us to expand our project development activities in Italy. Italy is the first market for the JV to tap into. and we look forward to pursuing other opportunities to co-develop projects across the rest of Europe. Moving on, I will now update you on our project pipeline. At quarter end, our mid to late stage pipeline was 1.6 gigawatts, up from 1.3 gigawatts last quarter. As we grow our pipeline, we are allocating resources to the markets with the best profit potential. Our objective is to add incremental project pipeline in our core markets to reach 2 gigawatts by the end of 2021, and we are on track to achieve this target. Let's review highlights from certain key geographies. First, let's turn our attention to the U.S., shown on slide 7. Our late-stage pipelines are 470 megawatts, of which 82 megawatt of community solar in Maine, Minnesota, and New York. Additionally, we have projects under development with a mix of corporate, municipal, and utility out-takers in other states, such as California, Pennsylvania, Florida, and Illinois. Meanwhile, we operate 24 megawatt of small utility-scale projects in North Carolina. In Poland, shown on slide eight, Our key assets is the portfolio project rates. We have a pipeline of 339 megawatts of ground-mounted projects under development and construction. Slide 9 refers to Hungary, where we also invest in small-scale DEG projects. Our pipeline has a combined capacity of 42 megawatts in the country. Those projects are under development. Slide 10 and 11 detail our pipeline in France and Spain. We have 100 megawatts in France and have expanded our pipeline in Spain from 180 megawatts to 216 megawatts. We continue to gain traction in Germany, where we are building quality projects. As shown on slide 12, we have a project portfolio totaling 62 megawatts, up from 50 megawatts last quarter. In the UK, shown on slide 13, we have a project pipeline of 281 megawatts, including solar plus storage projects. Additionally, we intend to capture opportunities in other European countries, such as the Czech Republic. We will provide more details on these new opportunities when appropriate. In China, as highlighted on slide 14, We have a late stage pipeline of 88 megawatt of commercial rooftop projects located in various provinces. In addition to our development pipeline, we operate a portfolio of 170 megawatt of solar projects that generate high margin recurring revenue. As you see on slide 16, our operating assets including 146 megawatt of commercial rooftops in China and 24 megawatts of utility solar in the U.S. In China, we intend to expand our IPP assets in the Yangtze Delta area, which has attracted electricity tariffs. We are being cautious and deliberate as we prepare to build and operate commercial rooftop projects. We are very disciplined about profitability and are only selectively pursuing high-quality profitable projects. In summary, the momentum we are seeing in our business continues to reflect solid demand in the markets we serve, the resiliency of our business model, and the outstanding execution of our team. In addition to growing our business, we are also looking for ways to build a better solar power for our employees, customers, partners, shareholders, and society in general. We recognize that our role in shaping a future of sustainability brings important responsibilities. We are committed to building a sustainable and fair future. We are helping address global issues such as climate change and focus on the need for social justice, equality, and human rights. Importantly, We are making progress in the areas of environmental stewardship, social solidarity, and corporate governance. With that, we believe that now is a good time to provide our first ESG report, which we will issue in the second half of the year. Taking such initiative reflects our commitment to becoming a more sustainable and socially responsible business, and we look forward to your input once our report is publicly available. Let me now turn the call over to our CFO, Ke Chen, for comments on our financial performance. Ke?

Thank you, Yu Ming. And thanks again, everyone, for joining us on the call today. Our shareholder letter and the supplemental slides contain all the figures and the comparisons you need. I'm not going to repeat every number. Instead, I'm going to focus on the factors that influence the results. As I speak, please keep in mind that we will discuss certain long gap financial measures. We use long gap measures because we believe they provide useful information about our operating performance that should be considered by investors, along with the gap measures. to gap reconciliation is included in our shareholder letter. Let's begin with our Q2 financial highlights on slide 18. Revenue of US dollar 18.5 million was down both sequentially and year-over-year. The decline was due to the Spain project sale moving into Q3 from Q2 as we originally planned it. As we noted regularly, Our revenue can vary quarter to quarter because of timing of sale closings. Most importantly, we judge our success over long time periods based on bottom line profit and pipeline growth. Revenue this quarter was mainly from the sale project in Poland and the U.S. and from power generation in China. More than 70% of revenue was from the U.S. and Europe. Growth profit of US dollar 1.3 million was up from last quarter and up from the same period last year. Growth margin was 61% compared to 30% in Q1 and 28% in the same period last year. Q2 growth margin was came well ahead of our guidance range of 36% to 39%. The increase was due to higher contribution from NTP sales. Moving down to P&L. Non-GAAP operating expenses up 30% sequentially and up 66% year-to-year. GNN expense were up due to the increased employee-related expenses. Notice that GNN expense were up just 9% from Q1 level, while our middle to late stage project pipeline grew by more than 20%. This demonstrates significant operating leverage in our business. Non-GAAP operating income was U.S. dollar 8.8 million compared to 4.6 million last quarter and 6 million in the same period last year. GAAP operating income was U.S. dollar 7.3 million and GAAP operating margin was 39%. Non-operating income was U.S. dollar 0.2 million compared to non-operating expense of 2.9 million last quarter and non-operating expense of 0.9 million in the same quarter last year. We had a four-exchange translation gain, which caused by appreciation of Euro and Iran against U.S. dollar. This led to an exchange gain on the balance sheet. All this resulted in gap-led income attributed to the renaissance power of U.S. dollar 7 million. That profit margin was over 37%. Earning ADS on a GAAP basis was $0.10. This is a record level since we became a pure-play project developer. Now let's review the balance sheet to show our slide 21. At quarter end, we had cash and equivalent of more than US dollar $286 million. As Yumi mentioned, we paid off our high-interest short-term debt of $11.8 million in Q2. Our long-term borrowing of $69,000 was flat when compared to Q1. Please note that nearly all our debt is project-based and non-recourse. Also, I would like to highlight that our debt-to-asset ratio is only 16%, further improvement in our capital structure. This also represents as one of the lowest debt-to-asset ratio when compared to other solar industry players. On slide 22, we generated cash flow from operation of 600,000 in Q2, and we do expect to generate positive cash flow from operating activity for the remainder of 2021. Now let's cover 2021 guidance as shown on slide 26. For full year 2021, while we continue to expect total revenue in a range of US dollar 90 to 100 million, We are raising our gross margin outlook and expect gross margin to exceed 30% compared to prior guidance of over 25%. And we estimate a profitable full year 2021 with significant profit goals compared to 2020. For the third quarter, we are guiding revenue in a range of US dollar 19 to 21 million and overall gross margin in a range of 36 to 40%. Our 2021 outlook has two key factors. First, the COVID-19 and the global economic condition remain highly uncertain. We continue to monitor how the health aspect of the Delta variants are playing out, as well as the effect on the economy. While we anticipate some slowdown in activity in some geographical regions, we expect to see good recovery in several key markets around the world in the second half of the year. In sum, I believe it's prudent to factor in border variability in our outlook. Second, we consider the normal fluctuations typical of the project development cycle. We focus on three best solar markets, Europe, U.S., and China, and we are optimistic about long-term profitable goals. We would now like to open up the call for any questions that you may have for us. Operator, please go ahead.

Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you need to cancel your request, please press the pound or hash key. Our first question comes from Amik Dale at HCW. Please go ahead.

Thank you. Good afternoon, everyone. With respect to sort of your, you know, projects in China, what are the plans to go beyond sort of the 100 megawatt that you have planned for deployment by the end of this year? Just in a larger sense, you know, what are your ambitions for China are and what type of projects you might consider pursuing in that market going forward?

Okay, it's a very good question, Amit. Thank you. We do set up our goal early this year to build 100 megawatt projects, the so-called light IPP in China. And as I mentioned earlier, we are being cautious and deliberate as we prepare to build and operate those commercial rooftop projects in China. In fact, we are very proud of our disciplined approach. The disciplined approach includes the most important two factors. One is profitability and one is the sensitive Yangtze Delta area is the focus. Since early this year, the development conditions have changed. Now we think we are revising our target to do in China. We plan to build 100 to 150 megawatts of projects by the end of 2022. We still consider China as an important market for us, and with the great support from the Chinese government on the renewable energy, we believe China will become the important contribution to our both the top line and bottom line. Understood.

And then just going back to, you know, the second quarter margin performance, really, you know, strong margins this quarter. Was this associated with any one or two projects? Are you enjoying sort of these high margins across all NTP sales right now?

You are absolutely right, Ned. That is why over about 12, 18 months ago, we say we'll do NTP sales or we focus on NTP sales bottom line and the high margin. It is the case that most of the NTP sales provide us a very attractive gross margin. It is absolutely the case. Okay. Understood. Thank you.

And by the way, I have one more point.

As I mentioned earlier that the Q2 We have no COD sale. We only have the Poland and U.S. NTP sales. That drives the overall margin really high of 61% as they presented.

Okay, understood.

That's what I was trying to understand.

So you had indicated in the previous call that the second half would be COD heavy, but it looks like you're raising your margin guidance, so it seems... you might see good contribution from NTP in the second half also?

Absolutely, yes, that's true. We continue focusing on NTP sales, but as you also have, you can notice that our Q3 profit margin we guided is definitely a little bit lower than the Q2 factual margins. One of the reasons is we do expect a sale of projects at the COD, which is the COD sale normally brings to us higher top line revenue, but lower percentage of the margins. But going into the future, starting from Q4, we'll have more and more sales on NTP, not at the COD anymore. Okay, understood.

Just one last one from me. On the operating cost side, I know your operating costs are going a little bit higher. How should we think about operating costs for the remainder of the year? Should we, you know, should we, are these expected to come in sort of at the same 2Q levels or will we see some improvements on different?

Yes, Shamir. I think from SG&A cost point of view, I think it will be similar like this quarter.

Okay. Thank you. That's all I have. Thanks.

Our next question comes from Pavel Motlenov from Raymond James. Please go ahead.

Thanks for taking the question. Three months ago, I remember we had a conversation about what's happening in the supply chain with polysilicon, steel, glass, every other input cost was escalating. And it seems like in the last, you know, 60 days, we've seen a bit of a reversal in the supply chain with costs starting to come down. Is that consistent with what you are observing?

Thank you, Paolo. Absolutely, that's the case. Back to three months ago, when we discussed about the cost increase from the supply chain, we believe it is a short-term issue, six to nine months. Towards the later part of this year, we should see the supply chain will get picked up and the price will go down. As such, actually, the way We also wisely are planning our execution level activities. As you know, for example, although we do most NTP sales, we also help our final partner or buyer of the projects to manage the whole EPC services, including procuring large modules. So for that purpose, we are managing those procurements accordingly based on our understanding.

Let me also ask about the project pipeline. As I look at the list country by country, Poland is now the second largest portion of your pipeline behind the U.S.,

what specifically about Poland you know has made it such a significant part of your project portfolio very good question the pollen has been a one of the most important contribution we received in the past years for the company not only We've been working there for the last more than four to five years, building our local understanding and a very strong local team. By the way, we do have the largest team in Europe in Poland. And we are doing across the board from Greenfield to the partnership of joint development and also active acquisition of projects and portfolios. And we have the local understanding. We also have very strong local reputation. That is the internal side. And outside, Poland is one of the European countries who absolutely need strong development of the renewable energy. It co-fired power generation, steel stands of the majority of the power generation, over 70%. and European Union has mandated Poland to go more aggressively on the renewable energy. We see the great potential in this market. That's why we are not only building up a very strong local team, but also have put our resources focusing from the greenfield development to acquisition in the same market. We believe this market will continue its strong strengths of development in the next years in the future.

Got it. Thank you very much. Sure. Thank you, Paolo.

Once again, if you wish to ask a question, please press star 1 on your telephone. Our next question comes from the line of Philip Shen at Roth Capital Partners. Please go ahead.

Hi, guys. This is Donovan on for Phil. Congratulations on the profitability for the quarter. I want to ask you about the applied Q4 guidance. So I get an implied revenue guidance of about $30 to $40 million and an implied gross margin for Q4 that I think You know, you could have a pretty good range there, but I think it would sort of need to be north of 20%. Like, that would be a floor, so maybe 30, but, you know, couldn't be lower than 20%. Am I thinking about that right for Q4? I just kind of wanted to check on that.

Could you repeat your question? It's not clear. Sure.

Sure. So for Q4, the implied revenue guidance I'm getting is about $30 to $40 million, just triangulating between your 21 guidance and your Q3 guidance. And then the gross margin, I think, would have to be, let's call it in the 20 to 40% range. Again, I know that's a wide range, but it's kind of putting some bounds on it. Am I thinking about that right?

Yes, you're right at this point.

Okay. And then the larger revenue number in Q4, I'm guessing that's reflecting maybe more COD sales, and you talked about the Spanish sales getting pushed into this quarter. I'm just wondering, do you see any potential risk for the COD sales getting pushed into Q1, getting pushed from Q4 to Q1?

At this point, we are not...

Go ahead. The point here is, as I mentioned earlier, other than several projects in Europe, we are doing the COB sale. In the rest of the half a year of 2021, we expect most sales will be at NPP. Definitely, project sale closing is rampant and also sometimes unpredictable. It may get delayed from quarter to quarter, even going into next year. But at this time, we have confidence to close those project sales as they originally planned. But to answer your question again, in Q4, our planned project sales are also NTP sales.

Okay, so it's being driven by a higher volume of NTP sales is giving you that more significant revenue number. Exactly. That's fantastic. Okay, and then just the last question, and then I'll pass it on. So, you know, there's talk about the infrastructure bill in the United States, and I know you guys really have kind of a niche in terms of the size of the projects and everything that you go after. So I'm curious if you could talk about for the U.S. infrastructure bill or, you know, talks about a reconciliation bill and potentially policies in other countries, is there anything in them that you've seen or have you gone through those to see if they really kind of hit your sweet spot in terms of megawatts, like maybe community solar, like maybe provisions targeted to community solar or something similar to that?

You know what, let me address one key point before I turn this one, as we talk about U.S., I turn to John or another American CEO to address some details. You know, we are developing actively in Europe and the U.S., and probably including China, about 9 to 10 different countries. It's very dynamic and also very different markets as we see. the margins or the market potential in general has been great to us. We see very supportive government policies across the board in U.S., in China, in every country in Europe. From that point of view, no matter you do small deals or big deals, it's been great. But definitely the margin level will vary or will be very different, especially we are taking different development models in different countries. For example, in some countries, including Europe, some European countries and the U.S., we are developing greenfield. And greenfield projects normally is giving us a bit higher margin. And also, we are in many other markets, we also do acquisitions of early stage or middle stage projects. And from that point, the margin can be shared with us by the original project developers. But in general case, that's the beauty of the operation of this company. That is, we have experience of developing smaller deals like DG, commercial rooftops, and community solar in those territories. But also, we are going for bigger projects including those smaller scale, 20, 30, 50 megawatts, all the way to 100 plus megawatts. So we do know how to do the best cost control, okay, to improve the margin level. So in any case that we see the profit from both, from all sizes of the transactions, and also in different territories, the margin can be all very attractive and healthy. John, could you cover some details in the US?

Sure. I understood the question to be mostly basically how would the infrastructure build process affect us. I think on the community side, it's fundamentally a local, basically a local business, meaning you know, politically, local PUCs, local jurisdictions. But that said, you know, anything that starts to – well, the obvious answer is anything that's federal, like federal IPC or, you know, if there were rule changes at FERC with how interconnection was viewed, if there was some kind of cost sharing or something like that, we'd be highly supportive of. But on the community solar side, it's actually more local – and statewide, you know, state governments basically that seem to influence other state governments because they see a successful program and then copy it. And then clearly anything on the ITC front would help. But fundamentally, you know, I think the demand for solar, you know, it survives the previous political environment. It'll survive and thrive probably irrespective of the infrastructure bill. I don't want to say that we're, you know, indifferent. But there's pull for solar, and we're in the solar business, so I think it's – I could think of things that could help us nationally, but they're more related to interconnection, FERC rules maybe for bigger utility projects, and then maybe tax incentives, and then we'd have to get more specific state by state on the community side.

Okay, great. Thank you, guys. Well, again, congratulations on the profitable quarter, and I'll jump back in, too.

Thank you. Thank you.

Once again, if you wish to ask a question, please press star 1 on your telephone. Our next question comes from Larissa Hernandez at Sidoti & Co. Please go ahead.

Hi, good afternoon and congratulations on the quarter.

Thank you, Marisa.

A couple of questions. First off, on your China business, can you give us an update on when do you expect first revenue from those 100 megawatts that you are building? I believe you said last quarter that we could start seeing something in the third quarter.

Yeah, as I mentioned earlier that we are very disciplined in the development of new projects in China as we focus on the high quality and profitable market or profitable projects. We revised our general China target from completing 100 megawatts within this year to building 100 to 150 megawatts at end of next year. we do have over 10 megawatts under construction and we have completed already several megawatts and target to finish, you know, the China construction timeframe is around one month to six weeks for those small rooftop projects, okay. The weight expect around 10 plus, 10, 15 megawatts will contribute to the Q4 power generation Q4 top line and bottom line revenue from the power generation and more installations will be completed in Q4 or in the next four months contributing to next year so the I will say for the overall contribution of the both revenue and profit for this year will be a little bit less probably maybe 10-15 or maybe below 20 megawatts.

So, you mean just to make sure I understand what you're saying about your discipline approach there. So, 100 to 150 megawatts, so you're pushing the target up, but you are doing it over a longer timeframe, meaning that would be the target by the end of 22? Yes, it is the case. Okay. Sorry. Go ahead. Sorry, I didn't mean to interrupt. There's a little bit of a delay. So what does it mean in terms of how you're thinking about what percent of your overall business, the IPP business, and specifically the China IPP business, would be? As of right now, the way I thought about it, it was about 20% of revenues give or take, but will that change?

It will remain to be the same or similar, at least for 2021.

Well, I mean with the addition of 100 to 150 megawatts in 22. Would it still be around those metrics with the growth in project development in 22 or do you anticipate a significant deviation?

Percentage-wide, I think it will be very similar as the growth, the real growth of our development pipeline is in U.S. and Europe. While building up or installing all those so-called like IPP assets in China, that will take time while we have less than 100 megawatts projects in our hand going through all different level permits or approvals and start putting them into construction in the next four months or even going into next year. But while the China IPP portfolio grows in the next, let's say, 18 months or so, the development pipeline outside of China will also grow rapidly. So percentage-wide will be very similar, as I see.

Okay, thank you. And then on the project development side, a couple of questions there. One to follow up on the supply chain question that Babel was asking. So you're also seeing an improvement on the cost side, it sounds like. Have you observed any pushouts or delays in your business, project development business, into 2022 due to supply chain issues or you didn't suffer that?

In general, such a delay or impact has a very minimum impact on us or at least not on our current plan or project sales. as the majority of our projects will be on the NTP sale and as long as we complete our approval or development process or permitting process of the projects and turn the project into the NTP ready stage, the buyers are eager to take the title and buy it from us. But that means the COVID-challenged environment may potentially cause delays. As we mentioned earlier about the closing of the Spain project sale, that one was originally planned for last year closing, but then to the Q2 closing, and now we are expecting to close it in Q3. So that is the one typical case that COVID environment can still cause delay even when we are at the NPP sales scenario.

Got it. Okay, that's great. Thank you.

At this time, one last thing is, at this time, we don't expect that much delays for our plan.

Okay. That's great. Then on the project development side, I think in the first half of the year, I have you having sold 66 megawatts, give or take. Wondering if you can provide an update on what could be the range of number of megawatts sold for project development for the full year 2021. I believe in the past you've mentioned 250 to 300 megawatts, and that's looking a little bit stretched on the first half numbers.

Yeah, we are looking at 200 to 300 megawatts project sales within this year. Our team still are working hard and working on closing some major project sales in both U.S. and Europe. And we have four months to go. I hope we can get to that target.

But it's more than 130 megawatts that we are talking about just to make sure we're talking about the same thing on the project development side on the second half of the year.

The total sales as we discussed for the whole 2021, it should be over 200 megawatts at the minimum.

Okay. Project development only, correct?

That's right. Not including the light IPP assets we are building in China.

Okay, that's great. Thank you so much for taking my questions.

Thank you very much, Marisa.

Just a final call. If you would like to ask a question, please press star 1 on your telephone. We have a follow-up question from the line of Philip Chen at Roth Capital Partners. Please go ahead.

Hi, guys. Donovan again. Donovan Chafer on for Phil. I thought I'd take the opportunity to ask you guys about the storage, you know, the storage side of the business and kind of what trends and what opportunities you're seeing there in terms of development. You know, are there added challenges in doing NTP sales when you're including storage? and just kind of any updates or trends, maybe, you know, what's happening in different geographies. It would be great to hear your thoughts on that.

Okay. I'll cover the first couple points, and John can take over from the U.S. perspective. We are doing the solar plus storage since about maybe less than 12 months ago. And we have solar plus storage projects in both the US and Europe. In the countries in Europe, for example, in the UK, we do have projects planned already for solar plus storage, and also a couple other countries too in Europe. And in the US, if you follow, remember, we signed one small-scale solar plus storage PPA in California. last year and we are also in negotiation in the final stage for a couple other Solar Plus Storage PPAs. But the NTP sale can happen for Solar Plus Storage deals. We don't see any challenges in this scenario as Solar Plus Storage becomes normal. be truly a normal practice for any developer or any owner of the solar assets. John, could you take over?

I'm not sure I'll add anything other than echo that storage is part of our everyday life here. It's part of RFPs that we are part of. We oftentimes will, even in the solicitations, we will respond to both solar and solar plus storage RFPs that are part of the same RFP, meaning that it's literally a checkbox where you can include storage in your bid and price your deal a certain way, or you can exclude storage and price your deal. And neither are handicapped. It's really a matter of the primary energy is the attribute that the RFP solicitor is usually looking for. But then storage adds a component of time which might or might not be valuable at that particular location or for that particular RFP solicitation. But it's part of our everyday life. It's interesting. I wouldn't necessarily say that it's growing, although it is true that it's, you know, I don't want to say anything too surprising, but it's just part of the normal way of doing things, and we see some RFPs with storage, some without. I would say that, you know, talking about supply chain stuff, it's probably true that it's going to be hard to buy a battery in the next, you know, couple quarters or more, because a lot of those are already specced in, and there probably are some, you know, that that supply is spoken for. But that's not news to anybody on the phone, necessarily. So, I don't have anything else to add, but we can talk specifics, you know, if there's interest.

Okay, thank you. Yeah, we can talk about that offline.

Our final question comes from Eric Filler at Hilltop Park. Please go ahead.

Yeah, hi, guys. Just a quick question. Can you talk about prices you're realizing on the business you're doing now?

Say it again. I'm sorry.

I did not really pick up your... Yeah, maybe I'm not phrasing what I'm trying to ask well. But, you know, what kind of demand are you seeing, you know, in terms of just the projects that you're... that you're working on and getting bids on. What are you seeing? How strong is pricing? Oh, okay. Joe, I think you can pick this up.

Yeah. Hey, Eric. I think the quick answer is depends on which bid you're talking about. We are receiving strong bids for our projects that we have for sale. On the flip, on the other side of the equation, We are seeing, if anything, some more robust pricing for the solar projects themselves in terms of the energy that we're able to charge at the project level. So another way to say that is we're seeing a little bit of upward movement in PPA prices and rebate rates in community solar. There's actually some upward pressure, which you could equate to a lot of things, but let's just call it there is some inflationary pressure on energy prices that we see, but we benefit from that. And there could be a number of drivers of that. Supply and demand, it could be, you know.

Right. Okay, great. Thanks.

Okay, all right. Thank you. There are no further questions, so I'll hand back to you, Min, for closing comments. Thank you.

Okay. Thank you, operator. To conclude, we are committed to growing profitability, managing our operations efficiently, and strengthening our financial position. We are energized by the opportunities in front of us and are looking forward to updating you on our progress again in a few months. Thank you all again for your participation. This concludes our call today. You may all disconnect.