Depreciation is calculated using the straight-line method, based upon the following estimated useful lives:
| | | | | |
| Equipment | 5 years |
| Furniture and fixtures | 3 years |
| Computer and related equipment | 2 years |
| Software | 2 years |
| Vehicles | 5 years |
| Leasehold improvements | Lesser of useful life of the asset or remaining life of the lease |
Property and equipment, net consisted of the following as of December 31, 2025 and 2024:
| | | | | | | | | | | |
| As of December 31, |
| (Amounts in thousands) | 2025 | | 2024 |
| | | |
| Solar energy systems | $ | 642,299 | | | $ | 641,245 | |
| Less: Accumulated depreciation | (81,430) | | | (52,817) | |
| | | |
| Solar energy systems, net | $ | 560,869 | | | $ | 588,428 | |
| | | |
| | | |
| Furniture and fixtures | 529 | | | 551 | |
| Computers and related equipment | 306 | | | 324 | |
| | | |
| Leasehold improvements | 113 | | | 30 | |
| Gross other property and equipment | 948 | | | 905 | |
| Less: Accumulated depreciation | (429) | | | (319) | |
| | | |
| Other property and equipment, net | $ | 519 | | | $ | 586 | |
| | | |
| Property and equipment, net | $ | 561,388 | | | $ | 589,014 | |
| | | |
About PP&E Disclosures
The PP&E disclosure details a company's physical asset base — land, buildings, machinery, and equipment — along with the depreciation methods and useful life assumptions that determine how these costs flow through the income statement. Capitalization policy thresholds reveal management's judgment on the boundary between expense and asset, directly affecting both reported earnings and asset values.
Key signals: changes in estimated useful lives or depreciation methods can materially shift reported earnings without any operational change. Compare capital expenditures against depreciation expense — when capex consistently trails depreciation, the asset base may be aging and underinvested. Watch for large asset impairments or write-downs that signal overvalued carrying amounts. Asset retirement obligations reveal future environmental or decommissioning costs that are often underappreciated. Compare PP&E intensity (PP&E-to-revenue) against industry peers to assess capital efficiency and competitive positioning.