Pavel Molchanov: Very useful context. Appreciate that.
Badri Kothandaraman: Thank you.
Operator: Our next question comes from Jeff Osborne from TD Cowen. Please go ahead with your question.
Jeff Osborne: Hey, Badri, thanks for squeezing me in. Just two quick ones. On the — given the channel inventory somewhat normalized, I imagine your lead times are down. I was just curious what level of visibility you folks are getting from the distributors and if that’s changed?
Badri Kothandaraman: Well, yeah, as you can imagine, in good times, we will have nine-month visibility. In bad times, we will have approximately three-month visibility. Those are the ranges.
Jeff Osborne: Got it. And I think in the prior several earnings calls, you had talked about being booked above the high end of guidance in response to, I think, Josh’s question, I forget who it was that asked. But is that not the case anymore?
Badri Kothandaraman: No. I mean I’m not saying that, but we have to be sensitive to installers. We — even though our orders are non-cancelable, for that quarter, the installer situation, considering their cash situation is important, so we might accommodate push out requests, et cetera. So that’s why even if we are fully booked, I don’t — I didn’t — I answered his question that way.
Jeff Osborne: Got it. Thank you. That’s all I have.
Operator: Our next question comes from Sophie Karp from KeyBanc. Please go ahead with your question.
Sophie Karp: Hi. Thank you for taking my questions. So I wanted to ask you about California versus the rest of the country where the challenges are distinctly different and this seems like in California it’s a transition to NEM and the rest of the country is more interest rates and diversity security rates equation. So if you were to speculate about where you’re going to see the most meaningful improvement as it relates to your business in the second half of the year, would that driver be the rest of the country, or California adjusting to the new NEM regime that is going to pull you forward a little bit? Thank you.
Badri Kothandaraman: A hard question for me to answer. I expect the rest of the country to get incrementally better as we go. I do expect — I do see NEM 3.0, I do see that there is a simple, clear value proposition. I do see California having very high utility rates, I do see a clear payback of six to eight years with solar plus storage. So, — but I also do see a time — it will take us some time, maybe not much, to train installers in order to sell NEM 3.0. So, I’m optimistic on both fronts, actually.
Sophie Karp: Okay. And then if I may, on the battery, like the third-generation battery, would you — was it fair to say that this is going to be the main product for California market at this point? Are you still training installers to use the current generation of the battery? Just kind of curious how you think about this, like double transitioning, if you will, right, the new NEM regime and the new battery that like — or just start training them on the new generation of battery because it’s a high-value proposition product, or how should we think about the timing of this?
Badri Kothandaraman: Right. Both batteries are equally good in terms of quality, in terms of commissioning now, in terms of performance. The nice thing about the Generation 3 is the double — the continuous power. What happens because of that, it allows you to export the same amount of energy in half the time. And therefore, when you have — for example, when you have one particular hour in California, where your rates are going to be high, you maximize it with our battery. So, yes, to answer the question, over the long-term, I would expect this battery with a high charging rate to uniquely help California.
Sophie Karp: Okay. Thank you.
Badri Kothandaraman: Thank you.
Operator: Our next question comes from Biju Perincheril from Susquehanna. Please go ahead with your question.
Biju Perincheril: Thanks. Thanks for taking my question. Badri, you have some internal sort of top of the funnel indicators from the software platform that you just went through. And can you sort of talk about the trends that you’re seeing from there as far as installer demand is concerned?
Badri Kothandaraman: Yes, I mean we usually talk about them if they are meaningful enough. Right now, our solar graft platform, it is over 1,000 installers. We’ll break out a lot more trends as we go through the year. But it’s safe to say that, that platform showed — I’m not sure how statistically representative that is, but that platform did show the originations in California for Q1 were quite high. It also showed that the originations outside California in Q1 was a little better than Q4.
Operator: And ladies and gentlemen, with that, we’ll be concluding today’s question-and-answer session. I would like to turn the conference call back over to Badri Kothandaraman for any closing remarks.
Badri Kothandaraman: Thank you for joining us today and for your continued support of Enphase. We look forward to speaking with you again next quarter. Bye.
Operator: And ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We thank you for joining today’s conference call. You may now disconnect your lines.
