Sunnova Energy International Inc. (NYSE:NOVA) Q4 2023 Earnings Call Transcript

Sunnova Energy International Inc. (NYSE:NOVA) Q4 2023 Earnings Call Transcript February 22, 2024

Sunnova Energy International Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for your patience everyone. The Sunnova Fourth Quarter Full Year 2023 Earnings Conference Call will begin shortly. [Operator Instructions] Good morning and welcome to Sunnova’s Fourth Quarter and Full Year 2023 Earnings Conference Call. Today’s call is being recorded and we have allocated an hour for prepared remarks and question-and-answer. At this time, I would like to turn the conference over to Rodney McMahan, Vice President, Investor Relations at Sunnova. Thank you. Please go ahead.

Rodney McMahan: 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 Robert Lane, Executive Vice President and Chief Financial Officer. I will now turn the call over to John.

John Berger: Good morning and thank you for joining us. 2023 proved to be a formidable test for the residential solar industry. Macroeconomic challenges and a rapidly evolving landscape meant that companies who are unable to adapt and tackle these challenges head-on have struggled or exited the market. While this unfortunate reality for some may have caused apprehension and generated negative headlines. It also presents a silver lining of reduced competition for adaptable companies like Sunnova. We stand apart in this regard, fortified by our scale, robust balance sheet, agility and forward-thinking approach, enabling us to not only weather this storm but pick up market share and expand margins in the process. The past few weeks we have seen encouraging signs of improved market dynamics beginning to emerge.

Tighter risk premiums reflected in our recent securitizations coupled with an uptick in overall market demand as we transition beyond the seasonally softer period for customer originations, paints a more optimistic picture than many perceive. To better position Sunnova for the rest of 2024 and beyond, we have continued to increase our focus on cash generation by pursuing additional margin expansion, exploring potential asset sales and rapidly implementing cost-cutting measures. To achieve cost savings, we are continuing to implement a range of initiatives, primarily focused on automation-driven efficiencies. This strategic approach will enable Sunnova to sustain growth without expanding its headcount. Additionally, we’ve initiated an immediate pause in spending related to select growth initiatives such as international expansion.

While these initiatives are temporarily on hold, we will remain committed to revisiting them in the future contingent upon improved market conditions and an improved valuation of Sunnova’s equity. Factoring in these cost reductions, we now anticipate our revised cost structure will result in a decrease of at least 20% in total adjusted operating expense per customer in 2024. Slide 3, highlights our growth in Customer Count, power generation and Energy Storage Under Management, Battery penetration and expected contracted cash inflows for both 2024 and the remaining life of our customer contracts. During the fourth quarter, we placed over 34,000 Customers into service which brought our total customer count at the end of 2023 to just over 419,000, in our Megawatt-Hours and solar power generation under management 1,090 megawatt hours and 2.5 gigawatts, respectively.

Turning to slide 4, you will see as of December 31st 2023, the expected Cumulative Nominal Contracted Cash Inflows associated with our customer contracts, over a weighted average remaining life of 22 years was $16 billion. In 2024, the same contracts are expected to generate $789 million in Contracted Cash Inflows. These Inflows are the sum of all expected cash generated from customer lease, PPA, and loan contracts including those from SRECs and grid services, in-service as of December 31st 2023. Also on this slide, we provide our expectations of Levered Cash Flows which based only on what was securitized as of December 31st 2023, is expected to be $136 million in 2024 and $4.9 billion on a Cumulative Nominal basis. Cumulative Levered Cash Flows will continue to grow, as new assets are added and will grow on a per annum basis, as tax equity flips occur and debt is paid down.

I will now hand the call over to Rob, who will walk you through our financial highlights.

Robert Lane: Thank you, John. starting on slide 6, you will see our adjusted EBITDA together with interest income and principal proceeds, equaled $549 million for the year ended 2023 which included a $207 million contribution from Investment Tax Credit or ITC sales. Excluding ITC sales, 2023 adjusted EBITDA together with interest income and principal proceeds increased by $58.5 million versus the prior year. Since most expenses flow through adjusted EBITDA including those that support our loan business, we view adjusted EBITDA together with interest income and principal proceeds, as a more complete picture of our financial performance. While 2023 ITC sales were heavily back-end weighted due to delayed treasury guidance, we expect a more even contribution of this activity in 2024, as we plan to continue utilizing ITC transferability, primarily from new tax equity partnerships to diversify our funding sources.

Slide 7 highlights Sunnova’s continued ability to efficiently access the capital markets. In 2023, we added $957 million in additional tax equity funds, entered into over $1 billion in asset backed securitizations, closed a $50 million secured revolving credit facility to support procuring and selling inventory to dealers, close to $65 million Accessory Loan Facility and issued a second Green Bond which, together with a modest equity offering brought in $466 million in additional capital, after fees and expenses. We also expanded our warehouse capacity, while securing amendments to keep pace with our origination. Through February 21st of this year, we have added another $195 million in tax equity and priced to asset securitizations at the tightest spreads we have seen in the past 12 to 18 months.

In our $537 million of Liquidity as of December 31st 2023, our both our Restricted and Unrestricted cash and the available collateralized liquidity we could draw upon from our tax equity and warehouse credit facilities. Subject to available collateral, we had $835 million of additional capacity in our warehouses and open tax equity funds. Combined these amounts represent nearly $1.4 billion of liquidity available, exclusive of any additional tax equity funds, securitization closures, asset sales, in the money interest rate hedges, further warehouse expansions or other sources of liquidity during the year. On slide 8, you will find a summary of our Unit Economics. As of December 31st 2023, on a trailing 12 months basis, our Fully Burdened Unlevered Return on new origination increased to 12%, while our weighted average cost of debt decreased to 6.4%, respectively.

This resulted in a 5.6% Implied Spread over the same period, the highest since early 2022. Slide 9 provides additional information on our unit economics which have improved and continued to improve into 2024. We now estimate an implied spread on near-term origination of 600 basis points. Overall, our margins have remained stickier than expected considering the declines we have seen in the weighted average cost of debt. However, we maintain that the long-term expected spread is 500 basis points. Our weighted average cost of debt life-to-date remains just over 5% as of December 31st, 2023. As a reminder, we measure our cost of capital on a yield and issue basis rather than an interest rate basis as this more fully captures the effects of any discounts, fees, and capped call purchases.

Slide 10 reflects the strong growth we have seen on our net contracted customer value or NCCV. At a 6% discount rate and NCCV was $3.1 billion, an increase of 35% compared to December 31st, 2022. Our December 31st, 2023 NCCV at this discount rate was $25.26 per share. This represents a greater than twofold increase since we announced our Triple-Double Triple plan. Even with this significant increase, our NCCV per share ended the year lower than expected, primarily due to the timing of tax equity closures and fourth quarter customer additions coming in slightly below our expectations. At this time, we have elected to reaffirm our 2024 full year guidance on slide 12. We will reassess our guidance next quarter once our lower cost structure has had more time to operate.

We expect to capture approximately 15% of our 2024 adjusted EBITDA together with interest income and principal proceeds in the first quarter, increasing to approximately 20% in the second quarter, 30% in the third quarter, and 35% in the fourth. Customer additions are expected to be more back-end weighted, with 15% in the first quarter, 25% in the second quarter, and the balance evenly distributed over the second half of the year. This is mainly due to our new channels as well as growth in accessory and service-only sales. Thus the back-end weighting will be more driven by accessory loan and service-only customers. As of December 31st, 2023, 90% of the midpoint of our total 2024 targeted customer revenue, interest income, and principal proceeds was locked into existing customers as of that same day respectively.

We have updated our liquidity forecast for 2024 and are introducing guidance for 2025 and 2026, which can be found on Slide 13. We now expect to generate enough cash in 2024 to provide the working capital needed to hit our growth target for the year, while keeping our cash position relatively flat. This will be accomplished through a combination of securitizations and sales net of operating costs. As we exit 2024, we expect to achieve an annual run rate of cash generation between $200 million to $500 million. This significant increase in cash generation beyond 2024 is a reflection of our pricing changes and can be further enhanced towards the top end of the range through improvements in treasury rates, ever-tightening risk premiums, and final domestic content guidance.

We are electing to sunset our recurring operating cash flow metric in favor of levered cash flows in response to investor inquiries around not just the cash flows from in-service and securitized assets, but the desire to see the value and cost of our superior customer service model. Levered cash flows as a sum of expected residuals from all securitized lease PPA and loan contracts plus all MSA fees plus expected cash inflows from unpledged extracts and grid services. As John noted earlier, we have continued to focus on cost reductions. However, one area that will continue to retain its investment is our collections department to ensure we are maintaining our low per annum capital loss rate, which is unchanged at approximately 25 basis points.

Finally, while we forecast no need for corporate capital through 2026, for good housekeeping purposes, we will be putting in place a modest ATM in the coming weeks and we’ll update the market every quarter of any anticipated usage. We have discussed this ATM before. And to be clear we do not intend to utilize the ATM between now and our next earnings call. The best time to put tools like an ATM in place is when they are in fact a luxury and not a necessity. I will now turn the call back over to John.

John Berger: Thanks Rob. Sunnova is committed to delivering a comprehensive, sustainable, and streamlined approach to energy financing, servicing, and management for our customers. We are an adapted energy services company that has an unwavering focus on innovative technologies, integrated energy solutions and quality control as evidenced by our investments in our global command center and our adaptive technology center, both designed to optimize our operations and provide our customers with a strong customer experience. In a world where perceptions are manipulated, we know there are people selectively crafting narratives that paint a picture that is far from the truth, but we stand firm in our commitment to focus on transparency and integrity choosing to focus on the facts.

For example, on slide 15, you will see as of December 31, 2023, only 0.6% of our customers had an escalated concern, an improvement from 1.1% at the end of 2022. Moreover, in 2023, we saw an 80% improvement in our service response time as the average age of close work quarter went from 96 days as of December 31, 2022 to 19 days as of December 31, 2023. This marked improvement was driven by our investments in our customer service infrastructure, which enhanced and strengthened our customer service levels and capabilities. 2024 will be a year of continued growth and transformation for Sunnova with a continued emphasis on cash generation as a top priority. To accomplish this, in addition to expanding margins and the more aggressive cost reductions we mentioned, we will look to leverage asset sales as a more meaningful source of cash generation coupled with increasing our long-term levered cash flows.

Our commitment to prudent capital management and shareholder value creation remains unchanged. We remain dedicated to evaluating ways to deploy our capital with an emphasis on both maximizing returns on capital and exploring opportunities to make returns of capital over time. We will continue to evaluate the optimal allocation of our capital resources and will not hesitate to take advantage of attractive opportunities in the capital markets and in our rapidly changing industry. As we look to the remainder of 2024, we are excited about what we are seeing. While there is no denying that what we are doing is difficult. At the end of the day, we are transforming the energy landscape, challenging the status quo and offering customers greater choice to help meet society’s ever-increasing energy demands.

With that, operator, please open the line for question.

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Q&A Session

Operator: Thank you. We will now start today’s Q&A session. [Operator Instructions] Our first question today comes from Philip Shen from ROTH MKM. Your line is now open. Please go ahead.

Philip Shen: Hi, everyone. Thanks for taking my questions. Hey John, just now you highlighted asset sales a number of times. Can you give some more color on what this means? I know you have a lot of securitized loan assets on balance sheet. My guess is you would not touch any of that? Can you talk through your view of what you would do ahead? Are there any current assets available for sale? And additionally, what is the magnitude of asset sales in 2024 and 2025 that is contemplated in your guidance and outlook? Thanks.

John Berger: Yes, Phil thanks. No, I don’t — we could possibly look at Pratt’s securitizations that probably would be more in the TPO side of things would be my guess. But — and we are exploring some of those. But I think primarily in our plan, it’s really the loans, both the solar plus loans and the accessory loans that we’ve looked to see if we could sell those assets. I think that’s pretty clear that we can’t. I would expect to see some of those asset sales in the course of this year. It’s not even close to the majority of the cash generation that we’ve laid out. That is primarily through our TPO and securitizing well through our asset cautious given the spread that we’re realizing and have been realizing for the last few quarters, starting to come to into play, so to speak, as we move towards being able to securitize these assets, primarily in the back half of this year, just given the timing.

But it’s possible to have that in the latter part of the second quarter and third quarter. So, is it primarily on the cash generation side, securitization proceeds is assumed. Obviously, IDC adders are part of that. And once we get domestic content guidance, those — that’s why there’s a range there. Those cash generation for each securitization could go up meaningfully. We do have a very conservative tax equity or ITC percentage compared to peers as assumed in this. So it could be quite a bit meaningfully higher than the bottom end of that range. And then that could be supplemented with the loan and accessory loan sales. Rob, anything to add?

Robert Lane: Well, I mean that pretty much covers it, like you said. So we’ve got some phenomenal long term securitizations with some really good pricing locked in at rates that you can’t hit today and with advanced rates that you can’t it today. So it wouldn’t make sense to really touch most of what we have in our securitizations already.

Philip Shen: Great. Thanks, guys. Shifting over to OpEx, it looks like the adjusted OpEx went up meaningfully in Q4. Clearly, you’re seeing the benefit of that in your customer service quality metrics. You talked about lowering this by 20% per customer. Can you share, what the outlook is specifically for the customer service and sales and marketing line items, which were each quite high on an absolute dollar basis in Q4. Can you talk about how these line items may trend and scale ahead? Thanks.

John Berger: It feels, so some of this is and we’ve attempted to give more visibility by breaking out direct sales. And that is some of the — a good portion of the sales increase. It’s still a small minority of our origination, but it does stand out as far as the sales and marketing growth. On the service side, I’ve talked over the last few quarters about catching up on the service levels that we have promised our customers. We’ve done that now and then some. And so we’ll be able to, once we’ve cleared that backlog which we’ve done will be — we’re seeing a cost reduction on a per customer basis that’s pretty meaningful. And so you’ll see that as I said peak in Q4 outside, some bonus payments, we paid bonuses to employees in Q1.

We are already seeing some pretty meaningful cost reductions this quarter and last few months. I expect that to continue to accelerate in Q2 and beyond, but it’s too high. There’s no question about it and we’re bringing it down meaningfully and slowing growth. Clearly, you can see that in the capital budgets we’ve laid out for ’24, ’25 and ’26. That helps us to meaningfully cut costs as well and then bring in the automation. That’s been something we’ve invested in as part of the spending, a big part of the spending and expect to start realizing some of those efficiencies are a lot of those efficiencies as soon as this quarter.

Philip Shen: Great. Thanks, John. One last one here. You talked about the potential for a modest $100 million ATM. On the one hand, you’re saying you don’t need corporate capital, but then you have this announcement. Can you share more on your thinking in terms of the rationale and timing and also, how you plan to address the upcoming ’26 convert maturity? Thanks.

Robert Lane: Yes. So, like we said in the prepared comments, really this is just good housekeeping Phil. We’ve been talking about this publicly since at least the second quarter of last year. We plan to update the Street on our intended use, but we’re putting it in place now, because we don’t intend to use it now. And frankly, we wish we’d have done it a long time ago. So wouldn’t be an issue, but it is so we’re just making sure to get it done. The second thing on the converts are paying on the converts is still to be able to refinance both the converts and the high yield bond and then to use the excess cash generation that we’re planning on getting over the next few years had to pay down. So, first is, use cash to pay down.

And second is to refinance the second part of it. So between those two, we expect to be able to refinance and lower our overall amount of debt that we have on the balance sheet pro forma for that. I think it was brought up with some of our peers as well. The cost of capital that we have is still really, really low. And the timeframe that we have, this is paper that’s not due until 2026. The right time to be addressing and refinancing it is in 2025. But the right time to start preparing for it is now and that’s what we’re doing with looking at the cash generation and with other things that we’ll look to do along the way to trying to decrease that burden, as we get closer to the maturity date.

John Berger: So Phil, its John. I just wanted to highlight a few things. We have the ability to generate levered cash flows off the existing assets. We did not lever all the way through the asset. And so that’s providing meaningful cash flow that frankly no one else has. And then we’re also generating through securitizations and asset sales in my answer to your first question additional cash. And so we have two ways to generate the cash to pay down the debt and that’s what we’re focused on is it doing just that.

Philip Shen: John and Rob thanks very much for all the color. I’ll pass it on.

Operator: Our next question comes from Praneeth Satish from Wells Fargo. Your line is now open. Please go ahead.

Praneeth Satish: Thanks. Good morning guys. Just wondering if you could maybe comment at a high level on competition that you’re seeing in the financing space are you seeing any financing only companies offer aggressive or irrational pricing impacting your strategy in any way?

John Berger: Yeah. This is John. We are seeing some of that. It doesn’t last very long. I think there’s maybe one player or two in particular that is doing that. But the market, I’m surprised, been around the market for a while a long time. And I got to say the stickiness on the price increases that we and our peers have been able to put forth as surprised me too in a positive way. So I think the market is clearly very healthy. And we always have one or two folks that want to come into the market and then decide to buy market share. We certainly see that now that always ends in the trail of tears. And there’s no reason why that that would be any different here. But on the margin, clearly we’re taking share. We continue to we’re projecting that out, although slowing growth really to generate the cash. And so I don’t really see it impacting our operations much at all, we continue to see a surprising amount of pricing power.

Praneeth Satish: Got it. And then I wanted to get your general view of how spreads could trend over the course of 2024 you had a roughly 6% implied spread now, but you’ll probably continue to enjoy some tailwinds from declining equipment cost and tax credit. So I guess just holding interest rates constant, would you expect the spread to widen over the next 12 months? Or are there other puts and takes we should consider?

John Berger: No, I think it’s quite likely it will. And so if you hold the rate constant and we’re seeing some reduction in the risk premium, I think that that does continue to come in from what has been what has been historically a really high spread that materialized in 2022 and 2023. And even without that though, I think you’re hanging in the 6% plus or minus and made me a little bit north word for a couple of quarters or so this year. But again, the pricing power has been pretty sticky. And I expect that to continue.

Praneeth Satish: Okay. Thank you.

Operator: Our next question comes from Julien Dumoulin-Smith from Bank of America. Your line is now open. Please go ahead.

Tanner Di Lello: Hi. Good morning. This is Tanner on for Julien. I just wanted to ask a quick question about the EBITDA guide. Is there an assumption for 2024 for gain on sale through loan portfolio monetization? Or is this pure upside in terms of the stated guide, and do you expect this opportunity to be predictable in the sense that as we progress through 2024 you could begin to provide a target for asset sales or monetization in the year over a certain period of time? Thanks.

John Berger: Yeah that’s really upside. I think that as we get more visibility into the market and market appetite we’ll be able to give more information. You could do it really in two ways, you can do it lumpy or you can do it to programmatic forward flow type of programs. And I think that now as we enter into those programs that disclosure will help will help season that guide a little bit.

Tanner Di Lello: All right. Thank you very much.

Operator: Our next question comes from Brian Lee from Goldman. Your line is now open. Please go ahead.

Brian Lee: Hey guys, good morning. Thanks for taking the questions, and then maybe just a follow-up on the asset sales. If I look at slide 13, you’ve got the $200 million and then $300 million of cash generation in 2025 and 2026, no asset sales are being embedded in those forecasts? Correct?

John Berger: Correct. Very little, that on the margin, if you look at some of the loans there could be something on the margin there, but very little that’s primarily if not wholly securitized as well as the leveraged — flow’s.

Brian Lee: Okay, great. And so John, if you are on our base casing and I know asset sales, it sounds like you’d be opportunistic. If you do start to kind of more programmatically sell down assets and monetize them. Would you your first I guess included in the cash generation metric? And then two, how additive could it be? Are we talking like hundreds of millions of dollars a year? What kind of upside to the $200 million to $300 million figures on this slide could we be talking about if those asset sales started to show up?

John Berger: Yeah. So if you look at the cash flows that we’ve laid out I think for the first time for the first time on Slide 4, that shows pretty meaningful as you move forward in time, as we’ve been talking about the last several earnings calls cash generation after paying all the debt service off right and tax equity. So there’s that there’s a meaningful amount. I mean, the cumulative nominal levered cash flows, almost $5 billion. So there’s quite a bit there that we could do. And that’s another avenue of if we wanted to do it, it makes sense to essentially pay down the corporate debt, whether that say the converts or the or the bonds down the road. So it gives us — and again having these contracted cash flows gives us an enormous amount of optionality. I think there was anything meaningful. Rob, you can correct me. I think we would break it out for you all to show that, but..

Robert Lane: And that would be — if we did see something that was a material amount, we want to go ahead and call that out there.

Brian Lee: All right. Fair enough. We’ll stay tuned. And the second question I had was. Again, on this slide, you’ve got the investment in systems. It’s growing kind of like 10% to 15% in 2025 based on these numbers. What sort of growth are you embedding in that forecast for investment? It just seems like there’s a lot of cost deflation that we know about happening right now. So the growth in investments seem to see no fairly meaningful unless you’re implying. Is there significant growth into 2025 next year or maybe there’s a mix element in there to just any color there would be helpful on what assumptions are baked into that? Thanks guys.

John Berger: Yeah. If you look at it the CapEx which includes all of our spending on anything that we spend on IT CapEx, our software to deliver, our service, our service costs, our overhead G&A and sales costs. That’s all in those numbers. And so when you look at, it’s roughly about $4.21 billion 4.8, 4.8. And so you’re looking at very little to your point 10% to 15% growth from 2024 to 2025. So we are and then flat from 2025 2026. We are being intentionally slowing the CapEx growth. I have said before in the last earnings call, I like where we were in that $4 billion to $5 billion CapEx range. And I just want to sit here and generate some cash at this point particularly given where our debt’s trading, corporate debt is trading and where the equity is trading. So I like where we are and we’re just going to focus on how do we cut costs and expand margins and generate the cash.

Brian Lee: Yeah, John. I guess on I was talking more on like the customer growth side. So you’re doing 185,000 to 195,000 new customer adds this year on that $4.2 billion, $4.3 billion base of investment presumably $4.8 billion next year would go a lot further given some of the cost reductions you’re making as well as your own cost deflation you’re seeing on the hardware side. So trying to get a sense of 10% to 15% growth you’re modest in investment what does that kind of translate to in your growth assumptions for on new customers or however you’re quantifying?

John Berger: Yeah. Okay. So we haven’t given out obviously customer growth guidance that far out just for this year. So roughly about 190 came in roughly at about one 142 just a little north of that for last year. And so you can you can obviously the simple math there, roughly about 31% customer growth. The CapEx is roughly about 20% customer growth. And so I do feel like because of our different channels, the strong uptake in battery, only sales, upsells and load manager sales EV charger et cetera and these different channels that we now have, I think that will continue to have our customer count grow a little faster than our CapEx growth. And the other side of that or the reason for that is what you’re pointing out is declining equipment costs declining EPC. You basically get more for your buck per customer. That’s also going to contribute to having a little bit higher customer growth and CapEx growth.

Tanner Di Lello: Okay. Fair enough. Makes sense. I’ll pass it on. Thanks, guys.

John Berger: Thanks.

Operator: Our next question today comes from Ben Kallo from Baird. Your line is now open. Please go ahead.

Ben Kallo: Hey, good morning. Thank you, guys. Just real quickly on the asset sales. Just what are you seeing John and Rob in the private market, and — how does that impact your decision on sales? Just valuation, if you could talk a little bit about that?

John Berger: Yes. So we look at the private market pricing, you look at it third-party buyers, and we look at the securitization market. We put them one out next to the other. And what we see is that they have — they have different expectations that can make the pricing of certain loans more attractive for securitization and others more attractive for sale. So really it’s an optimization game for us. And then the other thing that is an impact for us is the Hestia channel and that allows us to be able to securitize certain loans that might be flat, if we were to sell them hoping can bring some cash, if we elect to securitize them instead. So it really is an optimization game. And we spend a lot of time of my finance team and the pricing team. The marketing team has been a lot of time together to trying to make sure that we’re pricing optimally, and then we’re tranching ultimately for the right — for the right outcome.

Ben Kallo: Thank you. All right. John, you mentioned in your prepared remarks just the carnage in the marketplace, but that’s the right word. But how does that affect you positively or negatively of interest and so negative impact to imagine, but could you just talk about the health of the industry and impacts you?

John Berger: Yeah. Yeah, I don’t think I use that term, Ben. But yeah, it’s been a challenging year. Yeah. Look, obviously we out executed everybody last year across the value chain and deliver the numbers. And I think that kudos goes to all the folks at Sunnova and our dealers for really just a great year now we want to focus even more about how do you get a lot more efficient, stay in this range of CapEx of $4 billion to $5 billion and generate the cash, just given where again where our corporate debt securities and equity is trading. And that gets into that, there’s an overall, clearly, negative and cloud over — over the industry, whether it’s from the debt markets, credit markets, or the equity markets, or sometimes in the media we’ve seen that.