Organization and Description of Business |
3 Months Ended |
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Mar. 31, 2025 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Description of Business Spruce Power Holding Corporation and its subsidiaries (“Spruce Power” or the “Company”) is a leading owner and operator of distributed solar energy assets across the U.S., offering subscription-based services to approximately 85,000 home solar assets and customer contracts, making renewable energy more accessible to everyone. The Company is engaged in the ownership and maintenance of home solar energy systems for homeowners in the U.S. The Company’s primary customers are homeowners and its core solar service offerings to these customers generate revenues primarily through (i) the sale of electricity generated by its home solar energy systems to homeowners pursuant to long-term Customer Agreements as defined below, which require the homeowners to make recurring monthly payments, (ii) third-party contracts to sell solar renewable energy credits (“SRECs”) generated by the Company’s home solar energy systems for contracted prices, and (iii) the servicing of third-party owned solar energy systems through the Company’s Spruce Pro servicing platform, which is contracted to offer portfolio managed services to third-party owners, as well as to the Company’s portfolio of home solar energy systems (the “Portfolio”). These portfolio managed services include (a) billing and collections/asset recovery, (b) account support services, (c) financial asset management, (d) homeowner support and servicing technology, (e) asset operations, and (f) transaction and execution services related to SRECs. In addition to the Company’s core solar service offerings, the Company generates cash flows and earns interest income from customer contracts related to a master lease agreement, which is referred to in this Quarterly Report on Form 10-Q as the SEMTH Master Lease. The Company also holds subsidiary fund companies that own and operate the Company’s portfolio of home solar energy systems, which are subject to solar lease agreements (“SLAs”) and power purchase agreements (“PPAs”, together with the SLAs, “Customer Agreements”) with residential customers who benefit from the production of electricity generated by the Company’s Portfolio, which may qualify for subsidies, renewable energy credits and other incentives as provided by various states and local agencies. These benefits have generally been retained by the Company's subsidiaries that own the systems, with the exception of the investment tax credit (“ITCs”) under Section 48 of the Internal Revenue Code, as amended, (the “IRC”), which were generally passed through to the various financing partners of the solar energy systems. Historically, the Company provided fleet electrification solutions for commercial vehicles in North America, offering its systems for vehicle electrification (the “Drivetrain” business) and offering and installing charging stations to enable customers to develop charging infrastructure required for electrified vehicles (the “XL Grid” business). The Company ceased the Drivetrain and XL Grid operations in late 2022, and both are presented as discontinued operations in the unaudited condensed consolidated financial statements (see Note 14. Discontinued Operations). Liquidity The Company’s debt obligations under the SP1 Facility are non-recourse to the Company (see Note 7. Non-Recourse Debt) and have a maturity date of April 30, 2026 (the “SP1 Maturity Date”). The Company plans either to extend the SP1 Facility on its current terms with the existing lenders, or to refinance the SP1 facility with new lenders, prior to the Maturity Date and consistent with the Company’s historical financing strategy for investing in solar assets on a leveraged basis. Management has begun discussions with potential lenders for an extension or refinancing of the SP1 Facility, and based on these discussions, the Company’s management believes that such an extension or refinancing is highly likely to be completed prior to the Maturity Date. Because (i) the Maturity Date of the SP1 Facility is within twelve months from the date these unaudited condensed consolidated financial statements are issued, (ii) the Company has not yet entered into a commitment to extend or refinance the SP1 Facility although the maturity date is in April 2026, (iii) the Company has determined that it is unlikely to have sufficient cash on hand or proceeds from currently available liquidity sources to satisfy the SP1 Facility at the Maturity Date, and (iv) the Company has experienced recurring net losses and negative cash flows from operations, these conditions raise doubt about the Company’s ability to continue as a going concern. However, based on management’s discussions with potential lenders described in the prior paragraph, and the Company’s historical financing strategy for investing in solar assets on a leveraged basis, the Company’s management has determined that it is probable that the SP1 Facility will be extended or refinanced prior to its Maturity Date, and that any such doubt is alleviated by management's plans to extend or refinance the SP1 Facility prior to the Maturity Date.
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