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Table of Contents
<br />AMERESCO, INC.
<br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<br />(In thousands, except per share amounts)
<br />price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a
<br />cumulative catch-up basis.
<br />O&M
<br />After an energy efficiency or renewable energy project is completed, we often provide ongoing O&M services under a multi -year contract. These services include operating,
<br />maintaining and repairing facility energy systems such as boilers, chillers, and building controls, as well as central power and other small-scale plants. For larger projects, we
<br />frequently maintain staff on -site to perform these services.
<br />Maintenance revenue is recognized using the input method. In most cases, O&M fees are fixed annual fees and we record the revenue on a straight-line basis because the on -site
<br />O&M services are typically a distinct series of promises and those services have the same pattern of transfer to the customer (i.e., evenly over time). Some O&M service
<br />contract fees are based on time expended and, in those cases, revenue is recorded based on the time expended in that month.
<br />Energy Assets
<br />Our service offerings include the sale of electricity, heat, cooling, processed biogas, and renewable biomethane fuel from the portfolio of assets that we own and operate. We
<br />have constructed and are currently designing and constructing a wide range of renewable energy plants using biogas, solar, biomass, other bio-derived fuels, wind, and hydro
<br />sources of energy. Most of our renewable energy projects to date have involved the generation of electricity from solar PV and the sale of electricity, thermal, renewable fuel, or
<br />biomethane using biogas as a feedstock. We purchase the biogas that otherwise would be combusted or vented, process it, and either sell it or use it in our energy plants. We
<br />have also designed and built, own, operate and maintain plants that take biogas generated in the anaerobic digesters of wastewater treatment plants and turn it into renewable
<br />natural gas that is either used to generate energy on -site or that can be sold through the nation's natural gas pipeline grid. We typically enter into a long-term power purchase
<br />agreement ("PPA") for the sale of the energy where we own and operate energy producing assets. Many of our energy assets also produce environmental attributes, including
<br />renewable energy credits and RINs. In most cases, we sell these attributes under separate agreements with parties other than the PPA customer.
<br />In accordance with specific PPA contract terms, we recognize revenues from the sale and delivery of the energy output from renewable energy plants over time as produced and
<br />delivered to the customer. Environmental attributes revenue is recognized at a point in time when the environmental attributes are transferred to the customer in accordance with
<br />the transfer protocols of the environmental attributes market that we operate in. In the cases where environmental attributes are sold to the same customer as the energy output,
<br />we record revenue monthly for both the energy output and the environmental attribute output, as generated and delivered to the customer. We have determined that certain PPAs
<br />contained a lease component in accordance with ASC 840, Leases, prior to the adoption of Topic 842. We recognized $10,687, $10,904 and $11,726 of operating lease revenue
<br />under these agreements during the years ended December 31, 2023, 2022, and 2021, respectively.
<br />Other
<br />Our service and product offerings also include integrated-PV, engineering, consulting, and enterprise energy management services, which we recognize over time as the
<br />services are provided. We recognize revenue from the sale of solar materials at a point in time when we have transferred physical control of the asset to the customer upon
<br />shipment or delivery.
<br />Performance Obligations
<br />A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. Performance obligations are satisfied as of a
<br />point in time or over time and are supported by contracts with customers. For most of our contracts, there are multiple promises of goods or services. Typically, we provide a
<br />significant service of integrating a complex set of tasks and components such as design, engineering, construction management, and equipment procurement for a project
<br />contract. The bundle of goods and services are provided to deliver one output for which the customer has contracted. In these cases, we consider the bundle of goods and
<br />services to be a single performance obligation. We may also promise to provide distinct goods or services within a contract, such as a project contract for installation of energy
<br />conservation measures and post -installation O&M services. In these cases, we separate the contract into more than one performance obligation and allocate the total transaction
<br />price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance
<br />obligation.
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