Joseph Osha : Sure. And I guess, kind of the — just the follow-on, it’s the second part of the same question. And look, this debate has been going on a lot and some companies that are kind of comparable to you like some of these residential solar businesses. It is a question of how you balance growth and cash flow generation. So I guess I’ll just ask you or George or whoever, is there a point when it’s a $2 billion company or a $3 billion company or whatever you say, okay, we’re going to maybe take a slightly different view of how we think about growth versus generating cash flow and maybe ultimately return of capital to shareholders. I’m just trying to get a sense as to the philosophy here that underpins how you’re making the decision.
George Sakellaris: Well, that’s why the philosophy, especially in this higher interest environment. That’s why we want to monetizes a good part of the assets we develop and then focus more in the project business, which generates very good cash flow and basically rather than issuing new stock, to finance potential assets we own, it comes all from internally generated cash flow. And in addition to that, I think the guideline that we will be using going forward that even that we will not invest all of that asset — all that cash flow generated from projects and existing assets and O&M, we will retain some of it to delever the company.
Operator: Our next question or comment comes from the line of Julien Dumoulin-Smith from Bank of America.
Julien Dumoulin-Smith : Just following up on a couple of things here. First off, how do you think about the time line for these projects to get back on track? Obviously, bringing down ’23 and ’24 by roughly 50. I mean, is there a catch-up here in ’25? Or are you thinking that categorically, we’re rolling the ball forward across the forward look here when do we get kind of that view on ’25? And then as you think about kind of capping back up here, is there an element of higher OpEx that needs to play into this to get things back on track? Or where — is there any other risk on the SG&A? And then maybe also just to clean up on that last — on payments and cash. Do you want to clarify a little bit more about payments on the batteries here and the time line there —
Doran Hole: First answer, no on the OpEx. OpEx will remain under control. We don’t need to grow our OpEx in order to grow the company. We had $700 million in new awards come in the door this quarter, and 1.7 for the year. The business is going to grow. The — I don’t necessarily view this as a catch-up when you look at 2025 or beyond, obviously, we don’t talk about periods in detail that far into the future. But what we’re observing is the time lines are stretching with respect to the sales cycle and the construction cycles, right? Macroeconomically, everyone understands the labor shortage issues that are in the market. We’ve got to continue to watch those. However, the IRA and the amount of awards coming through, the overall growth of the business is potentially still there.
It doesn’t necessarily mean that we need those time lines to compress to really continue to grow at our kind of 20% per year EBITDA, that’s what we’re trying to get to. So that’s the response. First, with respect to SoCal, basically, when we hit substantial completion, we’ve got 60-day payment terms that’s in the contract that’s public, people can see that. So you can assume that in while we’re talking about 2 of the projects being completed in Q4 and then a third one in the first half of the year kind of project forward from there. We’re not going into deep detail about those cash flows, Julien.
Julien Dumoulin-Smith : Right. And just time line-wise here, are we confident that you guys have a real sense of when the new time lines are for the project push? I mean it seems like this has materialized relatively recently. I mean quarter-over-quarter here. Just curious, I mean, how do you know the depth of these delays here, if you can speak a little bit more specifically to it, considering some of the larger projects like RNG and how lumpy they can be?
George Sakellaris: I mean I would say that from what we have seen so far like the RNG projects, 6 to 8 months delay pretty much. And then on the other projects in construction, we just to say we have a 1- to 2-year construction schedule. Now it looks more than 1.5 to almost 3 years of construction on $100 million-plus projects. I mean something that happened. Projects that they were in construction, and we deliver the equipment to the particular air base. And then because we’re doing work on the North Wall somehow, some way, the stuff didn’t get loaded into the plane, and that’s a 6-month delay in the particular project. We’ll sell million of revenue but it wasn’t lost. But things like that happen is left and right, and that’s why we felt it to put on our part to try to incorporate as much of all this stuff into our forecast.
But the business is not lost is there, and it will be done. And I think that 20% target that we have on the EBITDA in a 5-year growth, I think we feel very comfortable with that.
Operator: Our next question comment comes from the line of George Gianarikas from Canaccord Genuity.
George Gianarikas : So I just wanted to hit on the same points. You talked about delays in contract conversions. And I think I heard during the call that you mentioned that you don’t think any of those delays are related to the changes in the interest rate regime. Is that correct? Is that what we heard on the call?
George Sakellaris: That is correct.
Doran Hole: That’s accurate.
George Sakellaris: That is correct.
George Gianarikas : So can you then explain.
George Sakellaris: Some of them just administrative. The Boards do meet or people don’t show up or bureaucratic nightmare in some of the federal contracts. But on the other hand, the award of that $700 million, 1/3 of that is fetal contracts. It’s — we’re getting them, but they’re moving them the next stage is getting tougher and then implementing them is getting even more tougher.
George Gianarikas : So from the top of the funnel when you have this awarded project backlog that is now stretched to $2.5 billion, it’s just converting that to contracted. It’s strictly a function of just administrative delays and then somehow project delays are impacting that conversion as well? Is this just where the administrative issues are showing up?
Doran Hole: No, that’s really the administrative side of it, what George was just mentioning the project delays are post execution of the contract, certainly, the construction time lines, the adulation time lines and the schedules are stretching out a bit based on labor and material availability.
George Gianarikas : And so this — you have one of your slides is 12 to 24 months the contract, I think you said it’s more like 18 to 36 months now and on track, is that right?
George Sakellaris: I will let Mark answer the question better than…
Mark Chiplock: I mean we’re still seeing in that range, but — and it’s not impacting every one of our award. But what we’ve been talking about is we have several large awards that are in kind of more mature stages of the contracting process, but these administrative delays are dragging them out. So on average, we’re still within that range overall, but it’s really been several large projects that we had expected to convert to get into that next stage of active construction where we’ve seen the delays. And then to the other points we’ve made once they have contracted that implementation period is starting to take a little bit longer to get we need to get the workforce mobilize, get materials to the worksite. That is all and taking time. So it’s all really kind of stretching between the conversion and then the ramp-up in the implementation, which is causing a lot of the push.
