Unidentified Analyst: Thanks. Good afternoon. So you mentioned PG&E looks like they’re on track for a 13% rate increase. Just wondering how that impacts your pricing strategy in California? Do you envision kind of raising prices in lockstep with PG&E or leaving pricing unchanged and maybe benefiting from a higher pace of installs, just trying to understand maybe how you think about capturing that benefit in January?
Mary Powell: Well, I would say, first and foremost, it makes what we are currently selling a lot more attractive to customers. So I think first and foremost, that’s really important. Secondly, I think as I’ve described on other calls, we have a very flexible pricing strategy. I mean, we are very opportunistic, but we’re also always evaluating it from a whole host of different factors. So no decisions have been made. And I would say, again, we’re going to keep our nimble, flexible approach to every single market and geography within every market that we’re in. And we’ll make the right decisions at that time focused on sustainable, profitable growth.
Unidentified Analyst: Got it. And then maybe just switching to the tax equity market. I guess, are you seeing any constraints from your end in terms of accessing the tax equity market, given some of the proposals that are out there and uncertainty? And then, if so, is that impacting your growth plans at all? And then I guess longer term, obviously, I assume there’s going to be a mix shift here to ITC transfers. Any sense in terms of what that mix looks like over the next few years?
Ed Fenster: Sure. This is Ed. I’ll speak to this in a couple of ways. So first, it’s definitely not constraining our growth. The market is growing rapidly both on the supply and demand side for tax equity, but we don’t have any concerns about clearing the market. I think you were indirect with also referencing the potential Basel rules, those that only affect 2025 and future. So it’s certainly not showing up for residential funds at the moment. In my conversations with the tax equity investors who are having the direct conversations with the regulators regarding Basel, it seems pretty clear that the proposed treatment for tax equity was viewed as a myth and they’re papering the file to fix that. There’s obviously no guarantee that that will happen, but people are starting to feel pretty comfortable that that will occur.
Unidentified Analyst: Got it. Thank you.
Operator: Our next question is from Julien Dumoulin-Smith with Bank of America. Please proceed.
Unidentified Analyst: Hey, guys. It’s Alex on for Julien. Just — you guys give a lot of color when you’re talking about the pivot into storage as sort of a whole company, in addition to this more measured sort of growth profile. I’m curious, right, I mean, does that also come when we sort of think about the current backdrop, with any sort of reassessment of the overhead that you guys need to be carrying, again, with sort of like eye on the cash generation targets, heading into that sort of 4Q run rate next year?
Danny Abajian: Yeah, I think getting the transition to storage is a key element affecting the near term. So dealing with — also if you look at our value creation metric, like the speed at which we recognize storage projects, obviously, that affects the subscriber value we book in period relative to the expenses we book in period, but also we capture proceeds on that at the point of install. So there’s just a, I would call it, like an order to cash cycle realization element in there, that’s an efficiency. And I think getting — and then cycle time being the point here. Getting cycle times accelerated for storage, thinking about how we design those systems to streamline their operation along the dimensions that Ed was talking through earlier, like home upgrades, electrical work, how do we design the backup configuration to simplify all that?
So those are all part of the picture. And then you also mentioned overhead. Overhead we’ve been managing quite well. It’s really operating cost leverage on the overhead by getting more units through to install in an accelerated fashion. I would say it’s the bigger lever than bringing down the gross dollars of overhead, which we’ve been doing. We’ve been at that for forever, but over the last several quarters, we’ve been pretty aggressive on containing and cutting overhead where we can throughout the business.
Unidentified Analyst: Got it. Yes, super clear. Just on the pro forma adders you guys are indicating. Sort of a housekeeping point. One, do you expect this will be a cash true up as those rules are finalized? And then, I mean, I guess, when we think about the net subscriber value metric that you guys are expecting to guide to, would that include this sort of true up or pro forma for what you expect it to be or sort of what it is realized in period. Thanks.
Danny Abajian: Great. So definitionally, in the past, we have not put in the catch up into the net subscriber value unit metric. We have generally floated that just through cash, and we’ve indicated to people what the dollar amounts of catch-up have been as we’ve claimed them through our tax equity fund. So that will be the case, again, for energy community adders, which we did report in the metric in the period. We are actively claiming on tax equity, and there is a sub-portion for systems that will get retroactive treatment that we will claim through tax equity. So we haven’t yet done a lot of that activity. That will probably be over the course of Q4 and Q1. And we’ve given information on that in the past. So energy communities does have a retroactive catch-up element to it.
That’s live, low-income. As we noted, the application window opened. We are well underway in submitting our initial batch of applications and the award when it comes in there should be an initial lump sum element that is a catch-up, and then we should run rate going forward as the future windows for applications open up. And any true-ups will not be in net subscriber value, just to make sure I’m clear on that. We will not go restate prior metrics, and we will not put them in the prospective metric for the unit margin as far as the catch-up element to any of these. Domestic content, not yet live, will also have the potential to be retroactive, but we’re still awaiting final guidance and rulemaking on that.
Unidentified Analyst: Got it. Appreciate the clarification, guys. We’ll take the rest offline. Thanks.
Danny Abajian: Thank you.
Operator: Our next question is from Colin Rusch with Oppenheimer & Company. Please proceed.
