Solar Energy Systems, net

9 Months Ended

Sep. 30, 2024

Solar Energy Systems Disclosure [Abstract]

Solar energy systems, net consists of the following (in thousands):


	September 30, 2024		December 31, 2023
Solar energy system equipment costs	$	13,816,521	$	12,558,996
Inverters and batteries	2,366,478		1,845,580
Total solar energy systems	16,182,999		14,404,576
Less: accumulated depreciation and amortization	(2,582,654)		(2,165,171)
Add: construction-in-progress	827,558		789,466
Total solar energy systems, net	$	14,427,903	$	13,028,871

All solar energy systems, including construction-in-progress, have been leased to or are subject to signed Customer Agreements with customers. In accordance with its policy, the Company periodically reviews the

estimated useful lives of its fixed assets on an ongoing basis and recognizes any changes in estimated useful lives by prospectively adjusting depreciation expense. During the three months ended June 30, 2024, the Company completed an assessment of its battery equipment, which included review of an independent engineering report, and determined that the useful life of its batteries was longer than the estimated useful life being used to calculate depreciation. As a result, effective April 1, 2024, the Company changed its estimated useful life to reflect the estimated period these assets will remain in service. The estimated useful life of batteries previously was 10 years and was increased to 15 years. The impact of this change in estimate reduces depreciation expense and was immaterial for the three and nine months ended September 30, 2024. For batteries placed in service as of the effective date of April 1, 2024, the Company estimates the impact on depreciation for the year ended December 31, 2024 will be $14.0 million. The Company recorded depreciation expense related to solar energy systems of $146.2 million and $128.0 million for the three months ended September 30, 2024 and 2023, respectively, and $431.3 million and $365.4 million for the nine months ended September 30, 2024 and 2023, respectively. The depreciation expense was reduced by the amortization of deferred grants of $2.0 million for both the three months ended September 30, 2024 and 2023, and $6.1 million and $6.2 million for the nine months ended September 30, 2024 and 2023, respectively.