Notes Receivable

9 Months Ended

Sep. 30, 2012

Notes Receivable

5. Notes Receivable

The Company agreed to advance to one customer predevelopment and site acquisition costs related to an EPC contract between the customer and the Company and recorded the amount in the account notes receivable. The terms of the EPC agreement require repayment of the advance upon final completion of the SEF, which is expected to occur in the first half of 2013, and bears interest at the rate of 5% per year that is payable at the time the principle is repaid. The credit quality indicators considered related to this note receivable were the customer’s position as one of largest privately held independent power producers on the East Coast, their financial condition and forecast, and their credit history. At September 30, 2012 and December 31, 2011, the balance of the note receivable from this customer was $7.0 million and $5.9 million, respectively.

On April 27, 2012, the Company made a secured loan of $1.0 million to Solar Hub Utilities, LLC (“Solar Hub”), to be used for pre-development costs, and recorded the amount in the account notes receivable. On June 8, 2012, the Company agreed to advance Solar Hub up to $9.0 million under a new $9.0 million secured promissory note, which refinanced the original $1.0 million advance and bears a six percent annual interest rate. This note receivable is secured by the project assets. Repayment in full of all borrowed amounts is due on December 31, 2013. As of September 30, 2012, the balance of the note receivable from Solar Hub was $6.0 million.