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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 03/15/2019
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2017; (iii) a $6.4 million decrease in deferred revenue related to the upfront sale of investment tax credits, as a result of the adoption of the new revenue recognition standard in 2018; and (iv) a $2.5 million reduction due to decreased REC sales to one off-taker that declared bankruptcy during the first quarter of 2018 (see Note 5. Renewable Energy Facilities to our consolidated financial statements). Incentive revenue for our Wind segment decreased by $10.0 million, primarily due to the change in revenue recognition timing for RECs resulting from the adoption of the new revenue standard in 2018. Our European Platform contributed Incentive revenue of $19.7 million in the Regulated Solar and Wind segment from the date of acquisition.

Cost of Operations

Cost of operations for the years ended December 31, 2018 and 2017 was as follows:
 
 
Year Ended December 31,
 
 
(In thousands)
 
2018
 
2017
 
Change
Cost of operations:
 
 
 
 
 
 
Solar
 
$
64,343

 
$
54,766

 
$
9,577

Wind
 
116,017

 
95,967

 
20,050

Regulated Solar and Wind
 
40,547

 

 
40,547

Cost of operations - affiliate:
 
 
 
 
 
 
Solar
 

 
10,542

 
(10,542
)
Wind
 

 
7,059

 
(7,059
)
Total cost of operations
 
$
220,907

 
$
168,334

 
$
52,573


Historically, O&M as well as asset management services were provided to us substantially by SunEdison pursuant to contractual agreements. We completed the transitioning away from SunEdison during 2017 and accordingly did not incur any cost of operations related to an affiliate in 2018; such cost amounted to $10.5 million and $7.1 million for our Solar and Wind segments for the year ended December 31, 2017, respectively.

Total cost of operations for our Solar segment decreased by $1.0 million for the year ended December 31, 2018 compared to 2017 primarily due to (i) the sale of our portfolio of solar power plants located in the United Kingdom (24 operating projects representing an aggregate 365.0 MW) in May of 2017 (the “U.K. Portfolio”) and our residential rooftop solar assets portfolio (11.4 MW of assets) in the United States that had a total cost of operations of $3.4 million for the year ended December 31, 2017; and (ii) a decrease of $2.9 million in interconnection costs. The decrease in the cost of operations in our Solar segment was partially offset by a $4.5 million loss on a note receivable from a public utility company that filed for protection under Chapter 11 of the U.S. bankruptcy code in January of 2019. Total cost of operations for our Wind segment increased by $13.0 million primarily due to (i) $4.8 million of costs related to Saeta’s projects in Portugal and Uruguay that were acquired during the second half of 2018; (ii) a $2.3 million increase in the cost of spare parts used due to in-sourcing of certain project-level services that were previously provided by SunEdison; and (iii) a $5.6 million increase in the cost of repairs of the wind fleet required prior to the commencement of long-term service agreements with an affiliate of General Electric.

General and Administrative Expenses

General and administrative expenses for the years ended December 31, 2018 and 2017 were as follows:
 
 
Year Ended December 31,
 
 
(In thousands)
 
2018
 
2017
 
Change
General and administrative expenses:
 
 
 
 
 
 
Solar
 
$
10,435

 
$
2,973

 
$
7,462

Wind
 
7,186

 
2,276

 
4,910

Regulated Solar and Wind
 
5,742

 

 
5,742

Corporate
 
64,359

 
134,625

 
(70,266
)
Total general and administrative expenses
 
$
87,722

 
$
139,874

 
$
(52,152
)
General and administrative expenses - affiliate:
 
 
 
 
 
 
Corporate
 
$
16,239

 
$
13,391

 
$
2,848



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