Annual report pursuant to Section 13 and 15(d)

Energy Assets, Net

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Energy Assets, Net
 12 Months Ended
Dec. 31, 2021
Other Assets [Abstract]  
Energy Assets, Net ENERGY ASSETS, NET
Energy assets, net consisted of the following: 
December 31,
  2021 2020
Energy assets (1)
$ 1,120,712  $ 954,426 
Less: accumulated depreciation and amortization (264,181) (225,048)
Energy assets, net $ 856,531  $ 729,378 
(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 2021 2020 2019
Cost of revenues (1)
$ 43,113  $ 38,039  $ 35,543 
(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,
2021 2020 2019
Capitalized interest $ 2,814  $ 4,341  $ 2,966 
During September 2021, there was a triggering event which caused us to perform an impairment analysis on an energy asset group within the Non-solar DG 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 Non-Solar DG 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 current macroeconomic environment surrounding the COVID-19 pandemic 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, 2021 and 2020.
As of December 31, 2021 there were four ESPC asset projects which were included in energy assets and as of December 31, 2020, there were three. We control and operate the assets as well as obtain financing during the construction period of the assets. We record a liability associated with these energy assets as we have an obligation to the customer for performance of the asset, although, the customer is responsible for payments to the lender based on the energy asset’s production.
The liabilities recognized in association with these ESPC assets were as follows:
December 31,
Location 2021 2020
Accrued expenses and other current liabilities $ 245  $ 229 
Other liabilities 12,827  10,794 
Total ESPC projects liability $ 13,072  $ 11,023 
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,
2021 2020
Number of projects 1 1
Purchase price (1)
$ 3,461  $ 1,251 
Remaining deferred purchase consideration on previously closed projects (2)
$ 303  $ 1,446 
(1) The 2020 purchase price included cash we paid in the amount of $1,031, issuance of a promissory note payable to the sellers of $204, detailed further in Note 9, and $16 of rollover equity in connection with shares of one of our subsidiaries issued to the sellers.
(2) Included in accrued expenses and other current liabilities.
We also have definitive agreements to purchase an additional eight solar projects from a developer for a total purchase price of $10,242, however, the closing on these sites is uncertain. No payments have been made to the developers of the projects.
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 2021 2020
ARO assets, net Energy assets, net $ 1,939  $ 1,468 
ARO liabilities, current Accrued expenses and other current liabilities $ 6  $ 86 
ARO liabilities, non-current Other liabilities 2,342  1,561 
$ 2,348  $ 1,647 

Year Ended December 31,
2021 2020 2019
Depreciation expense of ARO assets $ 113  $ 78  $ 45 
Accretion expense of ARO liabilities $ 123  $ 93  $ 44