Danny Abajian: Yes. Thank you for the question. I would start by saying strategically, that is the target. That’s what we’re driving towards. That’s where we’re working towards. And in part of the commentary, we did also highlight the interest rate increases and some of the events over the last year that took us off that path, frankly. And it wasn’t just the magnitude of the interest rate increases, but it was the speed with which it happened. And then coupling that with the dramatic rise, we had an inventory balance managing to supply chain, those were prohibitive to cash gen, although we have been increasing pricing and margins and cost efficiency in the business. So as we chart out our future, kind of where we are now, and some of the assumptions we’ll make on volume, backup battery mix, ITC adders, the general environment around cost of capital where again, as Mary said and I reiterated, we do plan the business now for our current cost of capital.
So we have recuperated the effective interest rate increases. And as that has kind of maintained in a range, we look at that and a few other factors like what’s happening in the external environment on equipment cost. And as we put all that together, from a micro level, $200 million to $500 million becomes the target. And from a macro level, as we think about kind of the overall full cost stack annualized spend of the company and relate that on a percentage basis, like even net of working capital, we think that’s a reasonable range for us to target and an expectation, frankly, that we have on ourselves.
Operator: Your next question today is coming from Julien Dumoulin-Smith from Bank of America.
Julien Dumoulin-Smith: Following up on that last question on the $200 million to $500 million range here of cash over time. I mean, can you talk a little bit more specifically about how lumpy that could be? I know you disclaimed in the remarks here that you’re not reflecting anything better than the 30% tax credit. Transferability and monetization remains in flux. But how much of a step function change could we see next year as domestic content and especially attached with a higher attach rate on storage really starts to impact numbers. When you say over the next few quarters, is this really just waiting to get that clarity on the tax credits to pivot to that kind of cash?
Danny Abajian: Yes. So I think I highlighted some of the factors like backup battery mix, we observed in our sales and that’s a matter of putting that through a timing model and seeing the ramp on installs. So that is not, I would say, in the basket of things that would cause lumpiness. ITC adders are obviously, as we mentioned, energy communities are about to be up and running kind of formally in the system, if you will and we’ll talk more about that as we get that starting to get realized in the margins. And then low-income domestic content, those will phase in over time. We think low income will be a single event and domestic content would phase in over time and we do have a little bit of uncertainty on the exact timing but as we get more and more of that clarity, we will share it.
The lumpiness comment is more around the fact that we do have several term out events into the capital markets a year as we scale up deals, have them ready with fully installed pools of assets and turn them out into the capital markets. And sometimes you might have a transaction that could be November, December or January and you might get the cash event hitting in a slightly different period. So that’s not a quarterly target, that’s an annualized target. That’s why we’re speaking on an annual number, but I think the point was more to remind folks that we should look at it over many quarters as opposed to any one individual quarter.
Julien Dumoulin-Smith: Right. Certainly. It sounds like it will filter up over the next few quarters in particular. Just digging in on one of the silos here. When you think about the delta between these inventory number you cited and just broadly current market prices of equipment, and given when and what is that delta when you think about it, right? And especially when you get to that point in which you’re recognizing current market pricing?
Danny Abajian: Yes. So I’ll hit that one again. The — and we have detailed the guidance on that timing. I would say, using an example system more directionally, but you could see, again on Slide 11, the decrease happens over the balance of the year and it’s probably more heavily noticed and present in Q1 and that does recycle elevated inventory levels. We are giving those numbers as reflecting current purchasing activity in the business. So we have line of sight to the achievement that we show in Q1 with equipment prices getting substantially lower. That’s just because we record the equipment cost on the install and there’s a time lag with the elevated inventory level. So it’s a couple of quarters to see that come through.
