Opening of Proposals - WWTP Solar Guaranteed Energy Savings Contract Proj. No. 124-015 - Ameresco

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Table of Contents Risks related to Regulations or Governmental Actions Our business depends in part on federal, state, provincial and local government support for energy efficiency and renewable energy, and a decline in such support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, could harm our business. We depend in part on legislation and government policies that support energy efficiency and renewable energy projects that enhance the economic feasibility of our energy efficiency services and small-scale renewable energy projects. This support includes legislation and regulations that authorize and regulate the manner in which certain governmental entities do business with us; encourage or subsidize governmental procurement of our services; encourage or in some cases require other customers to procure power from renewable or low -emission sources, to reduce their electricity use or otherwise to procure our services; and provide us with tax and other incentives that reduce our costs or increase our revenues. In addition, the U.S. government generally has not taken action to materially burden the international supply chain, which has been important to the development of renewable energy facilities at acceptable prices. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes, tariffs, duties or other assessments on renewable energy or the equipment necessary to generate or deliver it, could result in, among other things, the lack of a satisfactory market for the development and/or financing of renewable energy projects, or adversely impact our ability to complete projects for existing customers and obtain project commitments from new customers. If the U.S. Supreme Court restricts federal agencies' ability to interpret vague or broad legislation this could also negatively impact the market for the projects and services we provide and our ability to finance them. For example, recent guidance issued by the Treasury Department and the IRS specified certain types of RNG equipment that is ineligible for the ITC could negatively impact the profitability of our RNG business and our ability to finance our RNG projects. Additionally, import duties or other import restrictions could restrict the global supply of, and raise prices for, supplies needed for our business, such as polysilicon and solar products, batteries, and semiconductors. Such duties or restrictions could increase the overall cost of our product offerings and reduce our ability to offer competitive pricing in certain markets. For example, in August 2023, the U.S. Department of Commerce issued a final ruling in the Auxin Solar trade case that will lead to higher tariffs on certain imported solar products from Malaysia, Vietnam, Thailand, and Cambodia beginning in June 2024. Similarly, other changes in trade regulations or the enforcement of the Uyghur Forced Labor Prevention Act could increase demand and thereby increase prices for compliant products needed for project development. Failure to comply with trade restrictions and other governmental restrictions could subject us to fines and penalties. This could have a negative impact on our business and results of operation. Due to the uncertainty in the regulatory and legislative processes, we cannot determine the effect any such legislation and regulation may have on our products and operations. A substantial portion of our earnings are derived from the sale of renewable energy certificates ("RECs') and other environmental attributes, and our failure to be able to sell such attributes could materially adversely affect our business, financial condition and results of operation. A substantial portion of our earnings are attributable to our sale of renewable energy certificates ("RECs") and other environmental attributes generated by our energy assets. These attributes are used as compliance purposes for state -specific or U.S. federal policy. We own and operate solar PV installations which derive a significant portion of their revenues from the sale of solar renewable energy certificates ("SRECs"), which are produced as a result of generating electricity. The value of these SRECs is determined by the supply and demand of SRECs in the states in which the solar PV installations are installed. Supply is driven by the number of installations and demand is driven by state -specific laws relating to renewable portfolio standards. We also own and operate renewable natural gas plants that may deliver biofuels into to the nation's natural gas pipeline grid. Such biofuel may qualify for certain environmental attribute mechanisms, such as RINs which are used for compliance purposes under the Renewable Fuel Standard ("RFS") program. The RFS is a U.S. federal policy that requires transportation fuel to contain a minimum volume of renewable fuel. The U.S. Environmental Protection Agency ("EPA") administers the RFS program and may periodically undertake regulatory action involving the RFS, including annual volume standards for renewable fuel. Some of our biofuel may also qualify for various state incentives, such as the Low Carbon Fuel Standard ("LCFS"), the pricing or availability of which may fluctuate. We sometimes seek to sell forward a portion of our SRECs and other environmental attributes under contracts to fix the revenues from those attributes for financing purposes or hedge against future declines in prices of such environmental attributes. If our renewable energy facilities do not generate the amount of renewable energy attributes sold under such forward contracts or if for any reason the renewable energy we generate does not produce SRECs or other environmental attributes for a particular state, we may be required to make up the shortfall of SRECs or other environmental attributes under such forward contracts through purchases on the open market or make payments of liquidated damages. RECs are created through state law requirements for utilities to purchase a portion of their energy from renewable energy sources and changes in state laws or regulation relating to 19