Note 3—Inventories

Inventories consisted of the following:

The Company's renewable energy credits are used to satisfy specific state-mandated requirements and, to a lesser extent, our customer portfolio. Required levels of renewable energy credits vary based on the mix of customers, type of products purchased, number of customer of each type and energy consumption. Depending on the state, compliance typically occurs either in the first quarter for calendar year compliance periods and late in the second or early third quarter for energy year compliance periods of June to May. Renewable energy credit inventory will increase based on the schedule of deliveries of renewable energy credits by the third-party vendors and decrease based on the aforementioned compliance satisfaction.

In the six months ended June 30, 2026, the Company recorded an inventory valuation reserve of $0.9 million to the cost of revenues to write down the carrying value of solar panel inventories to the estimated net realizable value. There were no inventory valuation reserves recorded in the six months ended June 30, 2025.