Zvi Lando : Yes. So I’ll try and hit on all of them. First of all, the recent softening that I mentioned for the U.S. is on residential, commercial, we’re seeing still strong demand and anticipating meaningful growth. On residential, I wouldn’t speculate right now as I discussed, it’s a combination of the interest rates and NEM 3.0, which was impacting California. Now true California is meaningful in our business, but it’s not a huge percentage of our business, but the general interest rate environment is affecting residential across the United States. And I think the recovery will be a function of stabilizing the demand once the — everyone understands the implications of NEM 3.0 and get set up for them properly in terms of offering and installation capability, et cetera, and the general stabilization of the environment.
So I don’t think we have a very different outlook than those that you can see and those that you are providing from other from other areas in terms of when things will begin to pick up at a higher rate. But with the predictability of the ITC post IRA and the attractiveness for solar installations, we’re confident that it will recover and come back to nice growth, but exactly when that is happening, when that’s going to happen and at what rate, I’m not going to venture to predict.
Operator: And we’ll move next to Mark Strouse with JPMorgan.
Mark Strouse : I wanted to start with one on C&I visibility. I think at the Analyst Day last March, you talked about 5.5 gigawatts that was in your backlog at that time. Can you provide an update on that as well as kind of your ability to — or what percentage of that backlog you might be able to deliver on this year?
Zvi Lando: So it’s a good memory, Mark. Our current C&I backlog is more than double than it was in the beginning of 2022. So it’s very healthy looking into 2023. And as I answered earlier, we’re very focused to be able to deliver on that backlog. The dynamics that I described in the prepared remarks in terms of the overall market environment and the adoption rate of our solution and the completeness of the portfolio is really putting us in very good momentum. And the backlog and the demand are there, and we’re focused on increasing capacity to meet it.
Mark Strouse : Okay. And then I think just a clarifying question for me. With regards to the U.S. production, you mentioned that you’re looking into both owned and using contract manufacturers. Is that just planning ahead for whatever comes out of treasury? Or is there a potential scenario where you might have both?
Zvi Lando : Yes, there is a potential scenario where we might have — where we might have both in order to maximize the flexibility and the benefit out of the legislation.
Operator: And we’ll move next to Corinne Blanchard with Deutsche Bank.
Corinne Blanchard : I want to go back on the U.S. manufacturing. Is there any more detail you can provide in terms of the capacity that you’re looking at? And maybe a little bit more on the timing. And then the second question is on the guidance and which FX rate have you taken into consideration for the margin?
Zvi Lando : So regarding the production timing, as I mentioned, is we will — we believe that we will begin to manufacture and deliver products from the U.S. factory in the — within the third quarter of 2023 and being able to ramp quickly is part of the reason that we’re going in the direction of the combination of own and contract manufacturing that I mentioned before.
Ronen Faier : In terms of gross margin, since there are many moving parts, at this time, I would only say that we guided based on exchange rate that we feel very comfortable right now.
Operator: And we move to Jordan Levy with Truist.
