Emeren Group Ltd (SOL) 2021 Q2 法說會逐字稿

Hello, ladies and gentlemen, and thank you for standing by for ReneSola Power's Second Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note that we are recording today's conference call.

I'll now turn the call over to Mr. Gary Dvorchak, Managing Director of the Blueshirt Group Asia. Please go ahead.

Thank you, Tara, and hello, everyone. Thank you for joining us on today's call to discuss second quarter 2021 results. We released our shareholder letter after the market closed today. It's available on our website. There's also a supplemental slide deck posted on the website reference that we will reference during our prepared remarks. On the call with me today are Mr. Yumin Liu, Chief Executive Officer; Mr. Ke Chen, Chief Financial Officer; and Mr. John Ewen, CEO of North America.

Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates or other information that might be considered forward-looking. These forward-looking statements represent ReneSola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ReneSola Power's filings with SEC. Please do not place undue reliance on these forward-looking statements, which reflect ReneSola Power's opinions only as of the date of this call. ReneSola Power is not obliged to update you on any revisions to these forward-looking statements.

Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu. Yumin?

Thank you, Gary, and thank you, everyone, for joining the call. I will summarize our financial performance and review our operating highlights in the quarter. I will then turn the call over to Ke, who will cover financial results in more detail, and will also provide 2021 guidance. We will then open the call to questions.

In Q2, we, again, focused on profitability and delivered excellent bottom line performance. Gross margin of 61%, was well above expectations, which demonstrated solid execution of our strategy to focus on product sales at NTP. GAAP operating income was $7.3 million, up significantly both sequentially and year-over-year.

EBITDA of $9.5 million increased by more than 140% from Q1. Importantly, we reported our first consecutive quarter of profitability with net income of $7 million or $0.10 per ADS.

Q2 also marks the most profitable quarter since we divested the manufacturing business to become a pure-play project developer in the third quarter 2017. You will notice that revenue was down both sequentially and year-over-year. Why are we so excited about our results when revenue was lower? Our excitement, emphasizes the most important point we're able to make about how we run our business, pure and simple.

We focus on the bottom line. While we can never guarantee it, we intend to be profitable every quarter, whether our revenue is up or down. We are confident in our ability to do this because of our unique fortified business model. First, NTP sales drive growth in our business. We have realigned our strategic focus to make more sales at NTP. The margins are better.

Project sales are large but somewhat unpredictable and will vary as you saw this quarter. But over time, as we grow our pipeline, we expect product sales to drive strong and sustainable growth to the bottom line.

Second, our IPP segment provides a baseline of stable and highly profitable electricity sales, quarter in and quarter out. This foundation delivers consistent income and enables us to plan our business. As shareholders, you'll also judge our performance the way we judge ourselves. We should be profitable, whether the revenue is up or down, pipeline should be growing handsomely over time and gross margin should be trending up over time as we shift more product sales to NTP. In addition, you should see our operating expenses growing in line or a bit lower than pipeline growth. Pipeline is closely tied to the investment we make in development and sales. So these 2 metrics will always be closely correlated.

Let me now discuss recent operating highlights in more detail. First, our development pipeline remains strong. We grew our mid-to late-stage project pipeline from 1.3 gigawatts in Q1 to 1.6 gigawatts by the end of Q2. The expanded pipeline of business activity indicates greater demand for projects as well as greater execution by our team in a still COVID-challenged environment. Our focus is profitable markets, including the U.S. and Europe, where we see tremendous growth opportunities with high-quality projects.

Second, we successfully closed the sale of our 38-megawatt portfolio of solar projects in Poland and a 5-megawatt portfolio of projects in Maine and recognized revenue for both sales in Q2. The Poland projects were sold to Obton, a leading international solar investment company based in the Denmark. The projects were sold at NTP stage, and ReneSola Power is responsible for EPC management, project financing and final delivery of the projects to Obton at COD. Against that success, closing of the Spain product sale was delayed from its scheduled time in the first half of 2021, causing our revenue to be lower than originally planned. The sale is expected to be closed within next months and will be recognized for revenue in the third quarter of 2021.

Third, we were awarded 29 projects with a capacity of 1 megawatt each, and 1 small utility scale project with a capacity of 4 megawatts in Poland's electricity auction in June. These 30 projects are under Poland's CFD regime and eligible for a 15-year guaranteed tariff. The projects are expected to be connected to the grid within the next 2 years.

Fourth, we further strengthened our financial position by paying off short-term debt of $11.8 million in the quarter. As a result, we further enhanced our capital structure with a debt-to-asset ratio of 16%, down from 19% in Q1. We have a healthy balance sheet with a strong cash position of $286 million. We intend to use our cash to expand our solar project pipeline for working capital and for potential strategic M&A opportunities.

Speaking of M&A, we are actively pursuing several opportunities. We are making progress and intend to provide more details on our next earnings call. We believe the capital raised at the beginning of 2021 will enable us to execute our long-term strategic growth plan as we further consolidate our transformation into an asset-light solar project developer.

Fifth, subsequent to Q2, we signed a strategic partnership agreement with Emeren, a U.K.-based project developer focused on the development of renewable energy power plants. As part of the JV agreement, ReneSola Power and Emeren intend to develop projects in a broad range of sizes across Italy, with a target of reaching 110-megawatt shovel-ready projects by 2022. We are excited to partner with Emeren. The co-development agreement aligns with our growth strategy, enabling us to expand our project development activities in Italy. Italy is the first market for the JV to tap into, and we look forward to pursuing other opportunities to co-develop projects across the rest of Europe.

Moving on, I will now update you on our project pipeline. At quarter end, our mid-to late-stage pipeline was 1.6 gigawatts, up from 1.3 gigawatt last quarter. As we grow our pipeline, we are allocating resources to the markets with the best profit potential. Our objective is to add incremental project pipeline in our core markets to reach 2 gigawatts by the end of 2021, and we are on track to achieve this target. Let's review highlights from certain key geographies. First, let's turn our attention to the U.S., shown on Slide 7. Our late-stage pipeline are 470 megawatts, of which 82 megawatts are community solar in Maine, Minnesota and New York.

Additionally, we have projects under development with a mix of corporate, municipal and utility off-takers in other states, such as California, Pennsylvania, Florida and Illinois. Meanwhile, we operate 24 megawatts of small utility scale projects in North Carolina.

In Poland, shown on Slide 8, our key asset is a portfolio of project rights. We have a pipeline of 339 megawatts of ground mounted projects under development under construction. Slide 9 refers to Hungary, where we also invest in small-scale DG projects. Our pipeline has a combined capacity of 42 megawatts in the country. Those projects are under development. Slide 10 and 11 detail our pipeline in France and Spain.

We have 100-megawatt in France and have expanded our pipeline in Spain from 180 megawatts to 260 megawatts. We continue to gain traction in Germany, where we are building quality projects. As shown on Slide 12, we have a project portfolio totaling 62 megawatts, up from 50 megawatts last quarter. In the U.K., shown on Slide 13, we have a project pipeline of 281 megawatts, including solar-plus-storage projects. Additionally, we intend to capture opportunities in other European countries, such as the Czech Republic. We will provide more details on these new opportunities when appropriate.

In China, as highlighted on Slide 14, we have a late-stage pipeline of 88 megawatts of commercial rooftop projects located in various provinces. In addition to our development pipeline, we operate a portfolio of 170 megawatts of solar projects that generate high-margin recurring revenue. As you see on Slide 16, our operating assets, including 146 megawatts of commercial rooftops in China and 24 megawatts of utility solar in the U.S.

In China, we intend to expand our IPP assets in the Yangtze delta area, which has attractive electricity terms. We are being cautious and deliberate as we prepare to build and operate commercial rooftop projects. We are very disciplined about profitability and are only selectively pursuing high-quality, profitable projects. In summary, the momentum we are seeing in our business continues to reflect solid demand in the markets we serve. The resiliency of our business model and the outstanding execution of our team.

In addition to growing our business, we are also looking for ways to build a better ReneSola Power for our employees, customers, partners, shareholders and society in general. We recognize that our role in shaping the future of sustainability brings important responsibilities. We are committed to building a sustainable and fair future. We are helping address global issues such as climate change and focus on the need for social justice, equality and human rights.

Importantly, we are making progress in the areas of environmental stewardship, social solidarity and corporate governance. With that, we believe that now is a good time to provide our first ESG report, which we will issue in the second half of the year, taking such initiative reflects our commitment to becoming a more sustainable and socially responsible business and we look forward to your input once our report is publicly available.

Let me now turn the call over to our CFO, Ke Chen, for comments on our financial performance. Ke?

Thank you, Yumin, and thanks, again, everyone, for joining us on the call today. Our shareholder letter and the supplemental slides contain all the figures and the comparisons you need. I'm not going to repeat every number. Instead, I'm going to focus on the factors that influenced results.

As I speak, please keep in mind that we will discuss certain non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors, along with the GAAP measures. Non-GAAP -- to GAAP reconciliation is included in our shareholder letter. Let's begin with our Q2 financial highlights on Slide 18. Revenue of USD 18.5 million was down both sequentially and year-over-year. The decline was due to the Spain project sale moving into Q3 from Q2 as we originally planned. As we noted regularly, our revenue can vary quarter-to-quarter because of timing of sale closings.

Most importantly, we judge our success over a long time period based on bottom line profit and pipeline growth. Revenue this quarter was mainly from the scale project in Poland and in U.S., and from power generation in China, more than 70% of revenue was from the U.S. and Europe. Gross profit of USD 1.3 million was up from last quarter and up from the same period last year. Gross margin was 61% compared to 30% in Q1 and 28% in the same period last year.

Q2 gross margin was came well ahead of our guidance range of 36% to 39%. The increase was due to higher contribution from NTP sales. Moving down to P&L. Non-GAAP operating expenses up 30% sequentially and up 6% year-over-year. G&A expense were up due to the increased employee-related expenses. Note that G&A expenses were up just 9% from Q1 level.

While our middle to late stage project pipeline grew by more than 20%. This demonstrates significant operating leverage in our business. Non-GAAP operating income was USD 8.8 million compared to $4.6 million last quarter and $6 million in the same period last year. GAAP operating income was USD 7.3 million and GAAP operating margin was 36 -- 39%. Nonoperating income was USD 0.2 million compared to nonoperating expense of $2.9 million in last quarter and non-operating expense of $0.9 million in the same quarter last year.

We had a foreign exchange translation gain, which caused by appreciation of euro and rand against U.S. dollar. This led to an exchange gain on the balance sheet. All this resulted in GAAP net income attributed to ReneSola Power of USD 7 million, net profit margin was over 37%.

Earnings ADS on a GAAP basis was $0.10. This is a record level since we became a pure-play project developer. Now let's review the balance sheet shown on Slide 21. At quarter end, we had cash and equivalents of more than USD 286 million. As Yumin mentioned, we paid off our high-interest short-term debt of $11.8 million in Q2. Our long-term borrowing of $69,000 was flat when compared to Q1. Please note that literally all our debt is project-based and nonrecourse. Also, I would like to highlight that our debt-to-asset ratio is only 16%, further improvement in our capital structure. This also represents as well the lowest debt-to-asset ratio when compared to other solar industry players.

On Slide 22, we generated cash flow from operation of $600,000 in Q2. And we do expect to generate positive cash flow from operating activity for the remainder of 2021. Now let's cover 2021 guidance as shown on Slide 26. For full year 2021, while we continue to expect total revenue in the range of USD 90 million to USD 100 million, we are raising our gross margin outlook and expect gross margin to exceed 30% compared to prior guidance of over 25%, and we estimate a profit for full year 2021 with significant profit growth compared to 2020.

For the third quarter, we are guiding revenue in the range of USD 19 million to USD 21 million, and overall gross margin in the range of 36% to 40%. Our 2021 outlook has 2 key factors. First, the COVID lightening and global economic conditions remain highly uncertain. We continue to monitor how the health aspect of the delta variants are playing out as well as the effect on the economy. While we anticipate some slowdown in activity in some geographical regions, we expect to see good recovery in several key markets, around the world in the second half of the year.

In sum, I believe it's prudent to factor in broader variability in our outlook. Second, we consider the normal fluctuations typical of the project development cycle. We focus on 3 better solar markets, Europe, U.S. and China, and we are optimistic about the long-term profitable goals.

We would now like to open up the call for any questions that you may have for us. Operator, please go ahead.

(Operator Instructions) Our first question comes from Amit Dayal at HCW.

With respect to sort of your projects in China, what are the plans to go beyond sort of the 100 megawatts that you have planned for declining by the end of this year? Just in a larger sense, what are your ambitions for China are? And what type of projects you might consider pursuing in that market going forward?

Okay. It's a very good question, Amit. We do set up our goal early this year to build 100-megawatt of projects, we so called light IPP in China. And as I mentioned earlier, we are being cautious and delivering as we prepare to build and operate those commercial rooftop projects in China. In fact, we are very proud of our disciplined approach. The disciplined approach includes the most important 2 factors. One is profitability and one is the sensitive Yangtze delta area, is the focus, okay? The -- since early this year, the development conditions have changed.

Now we think we are revising our target to build in China. We plan to build 100 to 150 megawatts of projects at end of 2022. We still consider China as an important market for us and with the great support from the Chinese government on the renewable energy, we believe China will become the important contribution to our both the top line and bottom line.

Understood. And then just going back to the second quarter margin performance, really strong margins this quarter. Was this associated with any 1 or 2 projects? Are you enjoying sort of these high margins across all NTP sales rating?

You are absolutely right, Amit. That is why over about 12, 18 months ago, we say we'll do NTP sales or we focused on NTP sales, bottom line and the high margin. It is the case that most of the NTP sales provide us a very attractive gross margin. It is absolutely the case.

And by the way, let me add another point, as I mentioned earlier that the -- in Q2, our -- we have no COD sale. We only have the Poland and U.S. NTP sales. That drives the overall margin really high on this 61% that we presented.

Understood. That's what I was trying to understand. So you had indicated that -- in the previous call that the second half would be COD heavy, but it looks like you're raising your margin guidance. So it seems you might see good contribution from NTP in the second half also?

Absolutely, yes. That's true that we continue focusing on NTP sales. But as you also have -- you can notice that the -- our Q3 profit margin we guided is definitely a little bit lower than the Q2 factual margin. One of the reasons is we do expect a sale of projects at the COD, which is the COD sale normally brings to us higher top line revenue but lower percentage of the margins. But going into the future, starting from Q4, we'll have more and more sales on NTP, not at COD anymore.

Okay. Understood. Just one last one for me. On the operating cost side, I know your operating costs are going a little bit higher. How should we think about operating costs for the remainder of the year? Should we -- are these expected to come in sort of at the same 2Q levels? Or will we see some improvements on that front?

Yes, Amit. I think from the SGI cost point of view, I think it will be similar like this quarter.

Our next question comes from Pavel Molchanov from Raymond James.

3 months ago, I remember we had a conversation about what's happening in the supply chain, with poly-silicon, steel, glass, every other input cost was escalating. And it seems like in the last 60 days we've seen a bit of a reversal in the supply chain with costs starting to come down, is that consistent with what you are observing?

Thank you, Pavel. Absolutely, that's the case. Back to 3 months ago, when we discussed about the cost increase from the supply chain, we believed it is a short-term issue. 6 to 9 months towards the later part of this year, we should see the supply chain will get picked up and the price will go down. As such, actually, the -- we also wisely or we are planning our execution level activities. As you know, for example, although we do most NTP sales, but they also help our final partner or buyer of the projects to manage the whole EPC services, including procuring modules. So for that purpose, we are managing those procurements accordingly based on our understanding.

Well, let me also ask about the project pipeline. As I look at the list country by country, Poland is now the second largest portion of your pipeline behind the U.S. What specifically about Poland has made such a significant part of your project portfolio?

Very good question. The Poland has been one of the most important contribution we received in the past years for the company. Not only we've been working there for the last more than 4 to 5 years, building our local understanding and a very strong local team, by the way, we do have the largest team in Europe in Poland. And we are doing across the board, from greenfield to the partnership of joint development and also active acquisition of projects and portfolios. And we have the local understanding. We also have very strong local reputation, that is the internal side.

And our side, Poland is one of the European countries who absolutely need strong development of the renewable energy and coal-fired power generation still stands at the majority of the power generation, over 70%. And European Union has mandated Poland to go more aggressively on the renewable energy. We see the great potential in this market, that's why we are not only building up a very strong local team, but also have put our resources, focusing on -- from the greenfield development to acquisition in the same market. We believe this market will continue its strong strength of development in the next years in the future.

(Operator Instructions) Our next question comes from the line of Philip Shen at ROTH Capital Partners.

This is Donovan on for Phil. Congratulations on the profitability for the quarter. I wanted to ask you about the implied Q4 guidance. So I get an implied revenue guidance of about $30 million to $40 million and an implied gross margin for Q4 that I think there's -- you can have a pretty good range of it. I think it would sort of need to be north of 20%, like that would be a floor to maybe 30%, but couldn't be lower than 20%. Am I thinking about that right for Q4? I just kind of wanted to check on that.

Could you repeat your question? It's not clear.

Sure. So for Q4, the implied revenue guidance, I'm getting, is about $30 million to $40 million, just triangulating between your '21 guidance and your Q3 guidance. And then the gross margin, I think, would have to be, let's call it, in the 20% to 40% range, get to know it's a wide range, but it's kind of putting some bounds on it. Am I thinking about that right?

Yes. You're right at this point.

Okay. And then the larger revenue number in Q4, I'm guessing that's reflecting maybe more COD sales. And you talked about the Spanish sales getting pushed into this quarter. I'm just wondering do you see any potential risk for the COD sales getting pushed into Q1 -- getting pushed from Q4 to Q1?

At this point, a way or not -- go ahead.

Go ahead. Go ahead. The point here, yes, as I mentioned earlier, we -- other than several projects in Europe, we are doing the COB sale. In rest of the half year of the 2021, we expect more sales will be at NTP. Definitely, project sale closing is lumpier and also sometimes unpredictable. It may get delayed from quarter-to-quarter, even going into next year. But at this time, we have confidence to close those project sales as they are internally planned. But to answer your question again, in Q4, our planned priced sales are also NTP sales.

Okay. So it's being driven by a higher volume of NTP sales? It's giving you that more significant revenue number?

Exactly. That's...

Okay. And then just last question, and then I'll pass it on. So there's talk about the infrastructure bill in the United States, and I know you guys really have kind of a niche in terms of the size of the projects and everything that you go after. So I'm curious if you could talk about, for the U.S. infrastructure bill or talks about a reconciliation bill and potentially policies in other countries. Is there anything in them that you've seen? Or have you gone through those to see if they really kind of hit your sweet spot in terms of megawatts like maybe community solar, like maybe provisions targeted towards -- targeted to community solar or something similar to that?

You know what, to be honest, let me address one key point before I turn this one -- as you talk about U.S., I turn to John our North American CEO to address some details. We are developing actively in Europe and the U.S. and total, including China, about 9 to 10 different countries. It's very dynamic and also very different markets as we see. The margins or the market potential, in general, has been great to us.

We see very supportive government policies across the board, In U.S., in China, in every country in the Europe, okay? From that point of view, no matter you do small deals or big deals, it's been great. But definitely, the margin level will be -- will vary or will be very different, especially, we are taking different development models in different countries. For example, in some countries, including Europe -- some European countries and the U.S., we are developing greenfield, and greenfield projects normally is giving us a little bit higher margin. And also, we are in many other markets, we also do acquisitions of early stage or middle stage projects. And from that point, the margin can be shared with us by the original project developers.

But in general case, that's the beauty of the operation of this company that is we have experience of developing smaller deals like DG, commercial rooftops and community solar in those territories. But also, we are going for bigger projects, including those smaller utility scale, 20, 30, 50 megawatts, all the way to 100-plus megawatts. So we do know how to do the best cost control, okay, to improve the margin level. So in any case that the -- we see the profit from both -- from all sizes of the transactions and the -- also in different territories, the margin can be all very attractive and healthy. John, could you cover some details in the U.S.?

Sure. I mean I understood the question to be mostly basically, how would the infrastructure build process affect us. And I think on the community side, it's fundamentally a local -- basically a local business, meaning politically, local PUCs, local jurisdictions. But that said, anything that starts to -- well, the obvious answer is anything that's federal, like federal ITC or if there were rule changes at FERC with how interconnection was viewed, if there was some kind of cost sharing or something like that, we'd be highly supportive of.

But on the community solar side, it's actually more local and statewide -- state governments basically that seem to influence other state governments because they see a successful program and then copy it. And then clearly, anything on the ITC front would help. But fundamentally, I think the demand for solar survives the previous political environment, it will survive and thrive probably irrespective of the infrastructure bill.

I don't want to say that we're indifferent. But there's pull for solar, and we're in the solar business. So I think it's -- I could think of things that could help us nationally, but they're more related to interconnection, FERC rules, maybe for bigger utility projects and then maybe tax incentives. And then we'd have to get more specific state-by-state on the community side.

Congratulations on the profitable quarter.

Our next question comes from Marisa Hernandez at Sidoti & Co.

Congratulations on the quarter. A couple of questions. First off, on your China business, can you give us an update on when do you expect first revenue from those 100 megawatts that you are building? I believe you said last quarter that we could start something in the third quarter.

Yes. The -- as I mentioned earlier that we are very disciplined in the development of new projects in China, as we focus on the high-quality and profitable market or profitable projects. We revised our general China target from completing 100 megawatts within this year to building 100 to 150 megawatts at end of next year. We do have over 10 megawatts under construction and we have completed already several megawatts and target to finish -- the China construction time frame is around 1 month to 6 weeks for those small rooftop projects, okay?

We expect around 10 plus, 10, 50 megawatts will contribute to the Q4 power generation -- to Q4 top line and bottom line revenue from the power generation and more installations will be completed in Q4 in the next 4 months contributing to next year. So the -- I would say, for the overall contribution of the both revenue and profit for this year will be a little bit less. Probably maybe 10, 15 or maybe below 20 megawatts.

So you mean just to make sure I understand what you're saying about your disciplined approach there. So 100 to 150 megawatts, so you're pushing the target up, but you are doing it over a longer time frame, meaning that would be the target by the end of '22?

Yes. And one of the things to happen...

Okay. And the -- Sorry.

Go ahead. Go ahead.

Sorry, I didn't mean to interrupt. There's a little bit of a delay. So what does it mean in terms of how you're thinking about what percent of your overall business, the IPP business and specifically the China IPP business would be? As of right now, the way I thought about it, it was about 20% of revenues, give or take, but will that change?

It will remain to be the same or similar at least for 2021.

Well, I mean with the addition of 100 to 150 megawatts in '22, would it still be around those metrics with the growth in project development in '22? Or do you anticipate a significant deviation?

The -- percentage wise, I think it will be very similar as the growth, the real growth of our development pipeline as in U.S. and Europe. While we are building up or installing all those, what we call -- so-called light IPP assets in China, that will take time. While we have less than 100 megawatts projects in our hand, going through all different level of permits or approvals, and start put them into construction in the next 4 months or even going into next year. But while the China IPP portfolio grows in the next, let's say, 18 months or so, the development pipeline asset of China will also grow rapidly. So percentage-wise, we'll be very similar.

Okay. And then on the project development side, a couple of questions here. One, follow up on the supply chain question that Pavel was asking. So you're also seeing an improvement on the cost side. It sounds like -- have you observed any pushouts or delays in your business -- project development business into 2022 due to supply chain issues or you didn't suffer that?

In general, such a delay or impacts has a very minimum impact on us, or at least not on our current plan or product sales. As the majority of our projects will be on the NTP sale. And as long as we complete our approval or development process or permitting process of the projects and turn the project into the NTP ready stage, the buyers are eager to take the title and buy it from us, okay? But that means the COVID-challenged environment, many potential cause of delays. As we mentioned earlier about the closing of the Spain project sale, that 1 was originally planned for last year closing, but then to the Q2 closing, now we are expecting to close it in Q3. So that is the 1 typical case that COVID environment can still cause delay even when we are at the NPP sales scenario.

This time -- one last thing is, at this time, we don't expect much delays for our plan.

Okay. That's great. Then on the project development side, I think in the first half of the year, I have you having sold 66 megawatts, give or take. Wondering if you can provide an update on what could be the range of number of megawatts sold for project development for the full year 2021. I believe in the past, you've mentioned 250 to 300 megawatts. And that's looking a little bit stretched on the first half numbers.

Yes, we are looking at 200 to 300 megawatts sale, project sales within this year. We are -- our teams still are working hard and working on closing some major project sales in both U.S. and Europe. And we have 4 months to go. I hope we can get to that target.

But it's more than 130 megawatts that we are talking about, just to make sure we're talking about the same thing on the project development side on the second half of the year.

The total sales, as we discussed for the whole 2021, it should be over 200 megawatts at the minimum.

Okay. Purchased development only, correct?

That's right. Not including the light IPP assets we are building in China.

(Operator Instructions) We have a follow-up question from the line of Philip Shen at ROTH Capital Partners.

Donovan, again, Donovan Schafer on for Phil. I thought I'd take the opportunity to ask you guys to think about the side of the business and kind of what trends and opportunities you're seeing there in terms of development. Are there added challenges in doing NTP sales when you're including storage? And just kind of any updates or trends, maybe what's happening in different geographies. It would be great to hear your thoughts on that.

Okay. I'll cover the first couple of points. And John can take over from the U.S. perspective. We are doing the solar plus storage since about a little less than 12 months ago. And we have solar-plus-storage projects in both the U.S. and Europe.

In the countries, in Europe, for example, in U.K., we do have projects for planned already for solar-plus-storage and also a couple of other countries to in Europe. And in the U.S., as the -- if you follow -- remember, we signed on small-scale solar-plus-storage PPA in California and last year. And we are also in negotiation in the final stage for a couple of other solar PPAs, okay? The -- but the NTP sale can happen for solar-plus-storage deals. We don't see any challenges in this scenario as solar-plus-storage becomes normal, virtually a normal practice for any developer or any owner of the solar assets. John, could you take over?

Yes. I mean, I'm not sure I'll add anything other than echo that storage is part of our everyday life here. It's part of RFPs that we are part of. We oftentimes will -- even in the solicitations, we will respond to both solar and solar-plus-storage RFPs that are part of the same RFP, meaning that they -- it's literally a check box where you can include storage in your bid and price your deal a certain way or you can exclude storage and price your deal. And neither are handicapped, it's really a matter of -- the primary energy is the attribute that the RFP solicitor is usually looking for. But then storage adds a component of time, which might or might not be valuable at that particular location or for that particular RFP solicitation. But it's part of our everyday life.

It's interesting. I wouldn't necessarily say it's -- that it's growing, although it is true that it's -- I don't want to say anything too surprising, but it's just part of the normal way of doing things, and we see some RFPs with storage, some without. I would say that talking about supply chain stuff, it's probably true that it's going to be hard to buy a battery in the next couple of quarters or more because a lot of those are already spec-ed in, and there probably are some that supply is spoken for, but that's not news to anybody on the phone necessarily. So I don't have anything else to add, but we can talk specifics if there's interest.

Our final question comes from Eric Fuller at Hilltop Park.

Just a quick question. Can you talk about prices you're realizing on the business you're doing now?

Say it again, I'm sorry, I did not really pick up your question.

Maybe I'm not phrasing what I'm trying to ask, well. But what kind of demand are you seeing with -- in terms of just the projects that you're working on and getting bids on? What are you seeing? How strong is pricing?

Okay. John, I think you can pick this up.

Yes, Eric. I think the quick answer is depends on which bids you're talking about. We are receiving strong bids for our projects that we have for sale. On the flip -- on the other side of the equation, we are seeing, if anything, some more robust pricing for the solar projects themselves in terms of the energy that we're able to charge at the project level. So another way to say that is we're seeing a little bit of upward movement in PPA prices and rebate rates in community solar, there's actually some upward pressure, which you could equate to a lot of things, but let's just call it, there is some inflationary pressure on energy prices that we see, but we benefit from that. And there could be a number of drivers of that, supply and demand, it could be...

There are no further questions. So I'll hand back to Yumin for closing comments.

Okay. Thank you, operator. To conclude, we are committed to growing profitability, managing our operations efficiently and strengthening our financial position. We are energized by the opportunities in front of us and are looking forward to updating you on our progress again in a few months. Thank you all again for your participation. This concludes our call today. You may all disconnect.