Annual report pursuant to Section 13 and 15(d)

Energy Assets, Net

v3.22.4
Energy Assets, Net
 12 Months Ended
Dec. 31, 2022
Other Assets [Abstract]  
Energy Assets, Net ENERGY ASSETS, NET
Energy assets, net consisted of the following: 
December 31,
  2022 2021
Energy assets (1)
$ 1,493,913  $ 1,120,712 
Less: accumulated depreciation and amortization (312,388) (264,181)
Energy assets, net $ 1,181,525  $ 856,531 
(1) Includes financing lease assets (see Note 8), capitalized interest and ARO assets (see tables below).
 
The following table sets forth our depreciation and amortization expense on energy assets, net of deferred grant amortization:
Year Ended December 31,
Location 2022 2021 2020
Cost of revenues (1)
$ 49,755  $ 43,113  $ 38,039 
(1) Includes depreciation and amortization expense on financing lease assets. See Note 8.
The following table presents the interest costs relating to construction financing during the period of construction, which were capitalized as part of energy assets, net:
Year Ended December 31,
2022 2021 2020
Capitalized interest $ 13,050  $ 2,814  $ 4,341 
During September 2021, there was a triggering event which caused us to perform an impairment analysis on an energy asset group within the Alternative Fuels segment. This triggering event was related to a decision by the applicable state environmental agency to discontinue an environmental permit. This action materially modified the obligation of the landfill owner to continue maintaining the wellfield, therefore, we plan to decommission the impacted landfill gas plant. As a result, we recorded an impairment charge of $1,901, which fully impaired this asset group.
During August 2020, we performed an engine overhaul on one of our energy assets, however, the engine consistently failed to achieve emissions compliance and we considered the engine unsalvageable. As a result of this event, we performed an impairment analysis on this energy asset group within the Alternative Fuels segment and recorded an impairment charge of $1,028, which fully impaired this asset group.
The impairment charges are included in selling, general, and administrative expenses within the consolidated statements of income for the years ended December 31, 2021 and 2020.
We assessed the impact that the supply chain challenges, development of the COVID-19 pandemic, war in Ukraine, evolving relations between the U.S. and China, and other geopolitical tensions has or is expected to have on the business, and concluded that it was not a triggering event for impairment purposes and there was no indication of impairment of long-lived assets, except as indicated above, for the years ended December 31, 2022 and 2021.
We include certain customer energy asset projects in our energy assets, as we control and operate the assets as well as obtain financing during the construction and operating periods of the assets. We also carry a liability associated with these energy assets as we have an obligation to the customer for performance of the asset. Provided that performance criteria is met, the customer is responsible for repayment of the liability to the financing party. As of December 31, 2022 there were five energy asset projects which were included in energy assets and as of December 31, 2021, there were four.
The liabilities recognized in association with these customer energy assets were as follows:
December 31,
Location 2022 2021
Accrued expenses and other current liabilities $ 261  $ 245 
Other liabilities 27,168  12,827 
Total customer energy asset projects liability $ 27,429  $ 13,072 
In order to expand our portfolio of energy assets, we have acquired energy projects, which did not constitute businesses under the guidance discussed in Note 2.
We acquired and closed on the following energy projects:
December 31,
2022 2021
Number of projects 2 1
Purchase price (1)
$ 11,022  $ 3,461 
Remaining deferred purchase consideration on previously closed projects (1)
$ —  $ 303 
(1) In 2021 amounts were included in accrued expenses and other current liabilities.
Our ARO assets and ARO liabilities relate to the removal of equipment and pipelines at certain renewable gas projects and obligations related to the decommissioning of certain solar facilities.
The following tables sets forth information related to our ARO assets and ARO liabilities:
December 31,
Location 2022 2021
ARO assets, net Energy assets, net $ 2,359  $ 1,939 
ARO liabilities, current Accrued expenses and other current liabilities $ —  $ 6 
ARO liabilities, non-current Other liabilities 3,052  2,342 
$ 3,052  $ 2,348 

Year Ended December 31,
2022 2021 2020
Depreciation expense of ARO assets $ 146  $ 113  $ 78 
Accretion expense of ARO liabilities $ 146  $ 123  $ 93