You’ll start to see some of those benefits happen in Q4 and on into Q1 as we start leveraging that liquidity pool. So — but you’re right. I look at it as fungible, right, to fund our plans, and we’ve talked about what our focus is. And we’re certainly focused on a range of solutions and some of the more near-term ones could include things like the ABL or restricted cash advance facility like we had with Generate before or some of those other structures. But I think we’re in a good position given the positive effect of that working capital between receivable conversions and inventory as well as that low period of CapEx that allows us to be a little bit more thoughtful as we move through this quarter and into next quarter about what we do and when we do it and picking the best solutions for Plug.
Hopefully, that helps, Andrew.
Andrew Percoco: Yeah, it is helpful. And maybe as a follow-up question, just related to your electrolyzer business. I think you guys have said over a 2-gigawatt backlog. Can you maybe just help us think about how many of those projects have reached FID? Just trying to get a sense of how we should underwrite that 2 gigawatts we’ve seen, obviously, across wind, solar, battery storage some issues as it relates to financing and supply chain. I’m sure it’s the same for hydrogen. So I’m just wondering how many of these projects have reached FID at this point? Thank you.
Andrew Marsh: Sanjay, do you want to take that one?
Sanjay Shrestha: Yeah. Happy to do that, Andy. So Andrew, it’s a very good question. So let me give you some context on that, right? In that backlog, we have a lot of 5-megawatt system, right? And these are for a lot of different customers. So they obviously have all gone to FID and that represents at least about 30 of those 5-megawatt system. Second, we talked about a big project with a customer in Europe that’s already gone through FID, and that’s 100-plus megawatt opportunity. And this preferred supplier deal that we’ve talked about, that project is expected to go to FID before the year is over. Then we have another project that is actually looking for an offtake that is for the sustainable aviation fuel expected to go to FID sometime next year, right?
So keep in mind though, the way the revenue works for us in our electrolyzer business is we have a standard stack sale, that’s a direct sale, right? Then we have 5-megawatt product system, that’s a direct sale. And with the project business, we end up doing it on a percent of completion basis, which actually really builds that base of business for us as you start to think about Q4, as you start to think about ’24 and also 2025. And there are some other pretty substantial projects here, Andrew, that were actually — that we have been working on for six months to nine months. I mean we have funding in place and some of these projects are really looking for some clarity from the guidance standpoint. And we do expect that look by either by the end of this year or early next year, you will start to actually see some of this project also move ahead and becomes a pretty meaningful contributor to revenue.
Again, these are mega projects that will be multiyear and really start to build that base of business. And one other thing that I think is worthwhile highlighting here as well is both on our product side as well as on our project side of the business in all the new bookings as Andy and Paul alluded to, we’ve been very focused on cost down, margin expansion, and that’s the trend. It’s not just the top line. We will also start to see that margin progression as you go into ’24 as well as into 2025, and that’s how we’re looking to plan all those things.
Andrew Percoco: Great. Thank you. I’ll take the rest offline.
Andrew Marsh: Thank you.
Operator: Thank you. Our next question comes from Ameet Thakkar with BMO Capital Markets. Please proceed with your question.
Ameet Thakkar: Hi. Good evening. Thanks for taking my question. I just wanted to follow up, Paul, I guess I’m not as familiar with the restricted cash facility you had before. One, like for any of the $1.15 billion restricted cash you have right now kind of basically work its way into unrestricted bucket? And then how does that facility work? And I’ve got one follow-up.
Paul Middleton: Andy, I assume you want me to take that.
Andrew Marsh: Yes.
Paul Middleton: So as we’ve done in the 10 years I’ve been here, probably $2 billion worth of sale-leaseback transactions to monetize tax credits on our — on some of our programs with some of our customers. Some of our customers like to own the assets, so like a CapEx model and buy. Some like to access our solutions and effectively lease it from us. And so what we do is we package it and sell it to a bank. And in those cases, the best place to monetize those credits is the most efficient place as in the traditional bank market like a Wells Fargo or those kind of institutions. But they’re the most regulated as well. And so they often make us collateralize some of the tax — investment tax credit in there. So that’s what that most — a lot of that represents.
And so it does get release to us about 20% per year. So out of that, balance that $900 million, $950 million number that we have, probably around $200 million gets released, including $50 million in Q1. Well, it’ll be $50 million this quarter, it will be $50 million in Q1, that’s kind of — it’s up to about a $50 million per quarter release rate.
Ameet Thakkar: Okay. And then you guys have, I think, said this a couple of times in this call, maybe some of the other calls that you guys have kind of a — you’re working through kind of several options for financing and trying to pick the best one. But it looks like you guys added concern language in the 10-Q, and I was just wondering if that like kind of maybe narrows the options that you were exploring previously?
