Emeren Group Ltd

Hello ladies and gentlemen, thank you for standing by for the Rennie Solar Powers First Quarter 2022 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. To ask a question at that time, you'll need to press star 1 on your telephone. Please note that we are recording today's conference call. I'll now turn over the call to Mr Yujia Zai. Senior Director of the Blue Shirt Group, Asia. Please go ahead, Mr. Zai.

Thank you, Operator, and hello, everyone. Thank you for joining us today on today's call to discuss our first quarter 2022 results. We released our shareholder letter after the market closed today, and it's available on our website at ir.renesolopower.com. There is 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. Yuen Lu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, and Mr. Chen 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, and other information that might be considered forward-looking. These forward-looking statements represent Venezuela 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 obligated to update you on any revisions to these forward-looking statements. Also, please note that unless all figures mentioned during the earnings call are in U.S. dollars. With that, let me turn the call over to Mr. Yimeng Liu. Yimeng?

Thank you, Yujie, and thank you everyone for joining our conference call. As we published our shareholder letter and the supplemental earnings stack already, I would like to keep my comments high level around the microenvironment and our business update. Then Ke will cover our financials. I will take your questions. We will be joined by John for Q&A. Overall speaking, our results in Q1 were in line with our outlook provided last quarter. Revenue was $3.5 million as a result of our IPP assets in China and U.S. Gross margin was 32.5%, and adjusted EBITDA was $0.6 million. As we guided last quarter, the timing of this year's project sales is concentrated in the second half of the year. Looking forward, we continue to be excited about our revenue ramp towards the end of this year and beyond, driven by our strong project pipeline. The global microenvironment has created severe dislocations in markets and industries worldwide and has impacted everyone. For us, We are benefiting from a favorable tailwind and extremely strong demand for solar in our largest market, Europe, but are also seeing some slowdowns in the US and China due to supply chain disruptions and the recent government access. We will go into these three markets in detail. Starting with Europe, our largest market, the solar industry continues to receive extremely favorable policy support. to accelerate renewable energy growth, to reduce dependence on Russian fossil fuels, and to tackle the climate crisis. For example, in May, the European Commission introduced the EU Solar Energy Strategy, which aimed to more than double the EU's current solar capacity to 320 gigawatts by 2025 and 600 gigawatts by 2030. We also saw a proposal to recognize renewable energy projects as an overriding public interest and cut permitting time for major renewable energy projects by half, which would significantly accelerate our project development process. At the country level, for example, in Germany, renewable energy policy has become one of the most important national agendas as they aim to make Germany's power system 100% based on renewable energy by 2035. In our recent draft legislation, Germany laid out a plan to modern triple solar capacity to 200 gigawatts by 2030. We have tenders and improved support for smaller solar projects. There are many more other examples of policies and plans favoring solar market in Europe. I will not list them all for the interest of time. Moreover, we saw European PPA prices for solar in Q1 increased by 27.5% year over year, largely driven by demand directly attributable to the conflict between Ukraine and Russia. driving up energy prices across Europe. Additionally, we are also seeing an increase of retail electricity providers purchasing spare capacity to meet their own decarbonization and sustainability goals and provide green electricity offerings to their customers. To put it simple, With the context of our largest market, Europe, benefiting from favorable policies, as well as higher PPA prices, we are excited to see the value of our pre-NTP and NTP project pipeline in Europe increasing. Our mid to late stage project pipeline in Europe in Q1 increased by 107 megawatts from last quarter, with most pipeline increase in Hungary, Spain, and UK. In the US, our second-largest market, solar installations in Q1 increased 11% year-over-year. However, utility-scale solar installations slowed due to continued pandemic-related challenges in supply chain, inflation, trade risks, and lack of regulatory certainty. While this situation has severely impacted large solar-price developers, we have not seen any delays to our U.S.-based projects that we expect to close this year, as the majority of our projects are focused on small to medium-sized utility scale and community solar projects, which are targeted to reach COD in 2024 and beyond. However, one of our mid- to late-stage projects was impacted by interconnection challenges during the quarter as a result of the increasing cost and schedule delays. Despite these near-term challenges, the long-term trend towards renewable energy in the US remains intact as solar continues to be the leading technology in the clean energy pipeline, accounting for over 50% of all clean power capacity in the development in the US. On top of this, We certainly welcome Biden administration's decision to waive tariffs on solar panels from four Southeast Asian nations for 24 months. In China, the COVID lockdown in April and May has impacted economic activities and caused severe supply chain disruptions. We expect a portion of our previously planned new IPP projects in China to be impacted and therefore anticipate our year-end new IPP project target in China to be closer to 50 to 70 megawatts. In 2022, we continue to expect to build on our strong pipeline growth momentum and close the year at 3 gigawatts with a significant portion of the growth coming from Europe. as a result of the favorable policy support. We target to grow the company's mid- to late-stage pipeline to 5 gigawatts by the end of 2024, with a significant portion of the growth coming from Europe. With that, I'll now turn the call over to Ridley Solar Power CFO, Kuo Chen.