Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Document Information [Line Items] | ||
Document Type | 20-F | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2022 | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Entity File Number | 001-33911 | |
Entity Incorporation, State or Country Code | D8 | |
Entity Address, Address Line One | 100 First Stamford Place, Suite 302 | |
Entity Address, City or Town | Stamford | |
Entity Address, State or Province | CT | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 06902 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | EMEREN GROUP LTD | |
Title of 12(b) Security | American Depositary Shares | |
Trading Symbol | SOL | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0001417892 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Accounting Standard | U.S. GAAP | |
Entity Common Stock, Shares Outstanding | 602,748,412 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Auditor Name | Marcum Asia CPAs LLP | GRANT THORNTON ZHITONG CERTIFIED PUBLIC ACCOUNTANTS LLP |
Auditor Firm ID | 5395 | 1487 |
Auditor Location | New York | Shanghai, People’s Republic of China |
Business Contact [Member] | ||
Document Information [Line Items] | ||
Entity Address, Address Line One | 100 First Stamford Place, Suite 302 | |
Entity Address, City or Town | Stamford | |
Entity Address, State or Province | CT | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 06902 | |
Contact Personnel Name | Ke Chen | |
Contact Personnel Email Address | ir@emeren.com |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Current assets: | ||
Cash and cash equivalents | $ 107,104,714 | $ 254,065,589 |
Restricted cash | 182,544 | 316,777 |
Accounts receivable trade, net | 21,670,452 | 34,348,925 |
Accounts receivable unbilled, net | 43,882,041 | 11,473,590 |
Advances to suppliers | 1,016,895 | 276,737 |
Value added tax receivable | 5,929,157 | 4,600,213 |
Project assets, current | 25,969,148 | 9,587,254 |
Prepaid expenses and other current assets, net | 14,973,918 | 14,518,651 |
Total current assets | 220,728,869 | 329,187,736 |
Property, plant and equipment, net | 170,477,361 | 125,646,486 |
Deferred tax assets, net | 0 | 776,261 |
Project assets non-current | 26,589,906 | 6,550,583 |
Goodwill | 1,022,567 | 1,022,567 |
Operating lease right-of-use assets | 22,687,986 | 16,944,867 |
Finance lease right-of-use assets | 21,669,428 | 24,557,562 |
Investment in U.S. treasury notes+ | 10,046,645 | 0 |
Other non-current assets | 20,627,622 | 24,582,137 |
Total assets | 493,850,384 | 529,268,199 |
Current liabilities: | ||
Accounts payable | 7,117,891 | 3,764,839 |
Advances from customers | 3,640,881 | 81,611 |
Amounts due to related parties | 1,475,254 | 9,531,450 |
Long-term borrowings, current portion | 1,007,886 | |
Income tax payable | 862,045 | 843,923 |
Salaries payable | 539,580 | 339,883 |
Operating lease liabilities, current | 1,211,706 | 726,842 |
Failed sales-leaseback and finance lease liabilities, current | 9,993,277 | 11,366,707 |
Other current liabilities | 17,448,789 | 8,443,963 |
Total current liabilities | 43,297,309 | 35,099,218 |
Long-term borrowings | 22,518,272 | 61,510 |
Operating lease liabilities, non-current | 20,855,209 | 15,778,063 |
Failed sales-leaseback and finance lease liabilities, non-current | 14,962,505 | 29,916,924 |
Deferred tax liabilities, non-current | 3,573,146 | |
Total liabilities | 105,206,441 | 80,855,715 |
Commitments and contingencies | ||
Shareholders' equity | ||
Common shares (800,000,000 shares and 1,000,000,000 shares; no par value, authorized at December 31, 2021 and 2022; 717,316,622 shares issued and 671,510,912 shares outstanding at December 31, 2021;651,121,762 shares issued and 602,748,412 shares outstanding at December 31, 2022) | 806,283,220 | 847,378,968 |
Additional paid-in capital | 13,500,452 | 12,396,170 |
Treasury stock, at cost (30,904,110 and 33,471,750 shares as of December 31, 2021 and 2022, respectively) | (19,999,997) | (18,446,119) |
Accumulated deficit | (437,376,829) | (432,705,128) |
Accumulated other comprehensive loss | (15,113,859) | (4,618,323) |
Emeren Group Ltd shareholders' equity | 347,292,987 | 404,005,568 |
Noncontrolling interest | 41,350,956 | 44,406,916 |
Total equity | 388,643,943 | 448,412,484 |
Total liabilities and equity | $ 493,850,384 | $ 529,268,199 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Common shares, par value (in dollars per share) | $ 0 | $ 0 |
Common shares, shares authorized | 1,000,000,000 | 800,000,000 |
Common shares, shares issued | 651,121,762 | 717,316,622 |
Common shares, shares outstanding | 602,748,412 | 671,510,912 |
Treasury stock (in shares) | 33,471,750 | 30,904,110 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Net revenues: | ||||
Total net revenues | $ 61,290,816 | $ 79,661,792 | $ 73,502,883 | |
Cost of revenues | (45,954,951) | (48,236,951) | (56,817,101) | |
Gross profit | 15,335,865 | 31,424,841 | 16,685,782 | |
Operating (expenses)/income: | ||||
Sales and marketing | (421,079) | (304,933) | (433,121) | |
General and administrative | (17,202,061) | (16,998,675) | (14,512,631) | |
Other operating income (expenses), net | (345,562) | (1,108,681) | 6,472,463 | |
Impairment loss of assets | 0 | (360,151) | (1,432,296) | |
Total operating expenses | (17,968,702) | (18,772,440) | (9,905,585) | |
Income/(loss) from operations | (2,632,837) | 12,652,401 | 6,780,197 | |
Other (expenses)/income: | ||||
Interest income | 657,390 | 1,654,614 | 975,719 | |
Interest expense | (3,166,901) | (5,153,794) | (6,206,076) | |
Investment gain | 897,955 | 0 | 0 | |
Foreign exchange gains (losses) | 1,613,443 | (1,764,349) | 769,183 | |
Total other (expense) income, net | 1,887 | (5,263,529) | (4,461,174) | |
Income/(loss) before income tax | (2,630,950) | 7,388,872 | 2,319,023 | |
Income tax expense | (1,917,206) | (774,412) | (163,036) | |
Income/(loss), net of tax | (4,548,156) | 6,614,460 | 2,155,987 | |
Less: Net income (loss) attributed to non-controlling interests | 123,545 | (247,413) | (622,668) | |
Net income/(loss) attributed to Emeren Group Ltd | $ (4,671,701) | $ 6,861,873 | $ 2,778,655 | |
Income/(loss) attributed to Emeren Group Ltd per ADS | ||||
Basic | $ (0.07) | $ 0.10 | $ 0.06 | |
Diluted | $ (0.07) | $ 0.10 | $ 0.06 | |
Weighted average number of ADS used in computing income/(loss) per ADS | ||||
Basic | [1],[2] | 64,924,455 | 68,906,139 | 49,166,354 |
Diluted | [1],[2] | 64,924,455 | 69,840,638 | 49,788,422 |
Solar power projects | ||||
Net revenues: | ||||
Total net revenues | $ 13,753,389 | $ 61,036,228 | $ 49,160,215 | |
Electricity generation | ||||
Net revenues: | ||||
Total net revenues | 21,654,175 | 17,969,727 | 23,547,162 | |
EPC services | ||||
Net revenues: | ||||
Total net revenues | 24,760,309 | 0 | 0 | |
Other | ||||
Net revenues: | ||||
Total net revenues | $ 1,122,943 | $ 655,837 | $ 795,506 | |
[1]All shares are converted to ADS, each ADS represents 10 common shares[2]Each American depositary shares (ADS) represents 10 common shares |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) | |||
Net income/(loss) | $ (4,548,156) | $ 6,614,460 | $ 2,155,987 |
Other comprehensive (loss)/income, net of tax: | |||
Foreign currency translation adjustment | (13,675,041) | (521,464) | 1,208,482 |
Other comprehensive income/(loss) | (13,675,041) | (521,464) | 1,208,482 |
Comprehensive income/(loss) | (18,223,197) | 6,092,996 | 3,364,469 |
Less: Comprehensive income/(loss) attributed to non-controlling interests | (3,055,960) | 284,344 | 1,292,169 |
Comprehensive income/(loss) attributed to Emeren Group Ltd | $ (15,167,237) | $ 5,808,652 | $ 2,072,300 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common shares | Treasury stock | Additional paid-in capital | Accumulated deficit | AOCI attributable to parent | Parent | Noncontrolling interest | Total |
Balance at Dec. 31, 2019 | $ 530,208,240 | $ 0 | $ 9,712,935 | $ (442,345,657) | $ (2,858,746) | $ 94,716,772 | $ 42,830,403 | $ 137,547,175 |
Balance (in shares) at Dec. 31, 2019 | 481,027,002 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income/(loss) | $ 0 | $ 0 | 0 | 2,778,655 | 0 | 2,778,655 | (622,668) | 2,155,987 |
Issuance of common shares | $ 41,495,212 | 0 | 0 | 0 | 0 | 41,495,212 | 0 | 41,495,212 |
Issuance of common shares (in shares) | 99,285,640 | |||||||
Other comprehensive income/(loss), net of tax | $ 0 | 0 | 0 | 0 | (706,355) | (706,355) | 1,914,837 | 1,208,482 |
Share-based compensation | 0 | 0 | 369,187 | 0 | 0 | 369,187 | 0 | 369,187 |
Share exercised by employee | $ 2,796,418 | 0 | (2,312,380) | 0 | 0 | 484,038 | 0 | $ 484,038 |
Share exercised by employee (in shares) | 1,945,980 | 1,945,980 | ||||||
Balance at Dec. 31, 2020 | $ 574,499,870 | 0 | 7,769,742 | (439,567,002) | (3,565,101) | 139,137,509 | 44,122,572 | $ 183,260,081 |
Balance (in shares) at Dec. 31, 2020 | 582,258,622 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income/(loss) | $ 0 | 0 | 0 | 6,861,874 | 0 | 6,861,874 | (247,414) | 6,614,460 |
Issuance of common shares | $ 272,729,028 | 0 | 0 | 0 | 0 | 272,729,028 | 0 | $ 272,729,028 |
Issuance of common shares (in shares) | 130,127,050 | 130,127,050 | ||||||
Shares repurchase | $ 0 | $ (18,446,119) | 0 | 0 | 0 | (18,446,119) | 0 | $ (18,446,119) |
Shares repurchase (in shares) | (30,904,110) | (30,904,110) | ||||||
Other comprehensive income/(loss), net of tax | 0 | $ 0 | 0 | 0 | (1,053,222) | (1,053,222) | 531,758 | $ (521,464) |
Share-based compensation | 0 | 0 | 2,627,032 | 0 | 0 | 2,627,032 | 0 | 2,627,032 |
Share exercised by employee | $ 150,070 | 0 | (118,844) | 0 | 0 | 31,226 | 0 | $ 31,226 |
Share exercised by employee (in shares) | 4,930,950 | 120,680 | ||||||
Contribution from non-controlling interest holders | $ 0 | 0 | 2,118,240 | 0 | 0 | 2,118,240 | 0 | $ 2,118,240 |
Balance at Dec. 31, 2021 | $ 847,378,968 | $ (18,446,119) | 12,396,170 | (432,705,128) | (4,618,323) | 404,005,568 | 44,406,916 | 448,412,484 |
Balance (in shares) at Dec. 31, 2021 | 717,316,622 | (30,904,110) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Cumulative-effect adjustment for the adoption of Accounting Standards Codification ("ASC") Topic 606 | (432,705,128) | |||||||
Net income/(loss) | $ 0 | $ 0 | 0 | (4,671,701) | 0 | (4,671,701) | 123,545 | (4,548,156) |
Issuance of common shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Shares repurchase | 0 | $ (1,553,878) | 0 | 0 | 0 | (1,553,878) | 0 | $ (1,553,878) |
Shares repurchase (in shares) | (2,567,640) | (2,567,640) | ||||||
repurchase and retirement of common shares | $ (42,000,000) | $ 0 | (123,829) | 0 | 0 | (42,123,829) | 0 | $ (42,123,829) |
repurchase and retirement of common shares (in shares) | (70,000,000) | |||||||
Other comprehensive income/(loss), net of tax | $ 0 | 0 | 0 | 0 | (10,495,536) | (10,495,536) | (3,179,505) | (13,675,041) |
Share-based compensation | 0 | 0 | 1,739,337 | 0 | 0 | 1,739,337 | 0 | 1,739,337 |
Stock units issued to employees for prior year performance compensations | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Stock units issued to employees for prior year performance compensations (in shares) | 2,405,140 | |||||||
Share exercised by employee | $ 904,252 | 0 | (511,226) | 0 | 0 | 393,026 | 0 | $ 393,026 |
Share exercised by employee (in shares) | 1,400,000 | 1,400,000 | ||||||
Balance at Dec. 31, 2022 | $ 806,283,220 | $ (19,999,997) | $ 13,500,452 | $ (437,376,829) | $ (15,113,859) | $ 347,292,987 | $ 41,350,956 | $ 388,643,943 |
Balance (in shares) at Dec. 31, 2022 | 651,121,762 | (33,471,750) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Cumulative-effect adjustment for the adoption of Accounting Standards Codification ("ASC") Topic 606 | $ (437,376,829) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income/(loss) | $ (4,548,156) | $ 6,614,460 | $ 2,155,987 |
Adjustments to reconcile net income/(loss) to net cash used in operating activities: | |||
Depreciation | 6,817,331 | 6,794,404 | 7,342,327 |
Allowances for credit losses | 774,419 | 2,314,201 | 6,667,963 |
Write-off of current assets | 0 | 0 | 353,418 |
Share-based compensation | 1,739,337 | 2,627,031 | 369,187 |
Deferred tax provision | 4,349,407 | 418,462 | (303,000) |
Loss on cancellation of project assets | 224,580 | 1,300,620 | 1,460,104 |
Impairment loss of assets | 0 | 360,151 | 1,432,296 |
Loss on disposal of property, plant and equipment | 171,347 | 333,821 | 767,879 |
Gains on disposal of property, plant and equipment | 0 | (65,589) | (16,278,095) |
Investment gain from treasury note | (174,380) | 0 | 0 |
Changes in working capital: | |||
Accounts receivable, trade and unbilled | (15,373,423) | (27,642,606) | (6,774,212) |
Advances to suppliers | (740,157) | (128,932) | 92,070 |
Value added tax recoverable | (3,136,238) | (923,299) | 1,609,650 |
Prepaid expenses and other current assets | (1,907,115) | (1,281,659) | (6,897,176) |
Project assets | (35,331,947) | 10,035,195 | 11,619,676 |
Other non-current assets | 1,425,195 | 2,064,699 | (7,581,870) |
Accounts payable | (2,348,997) | (2,703,731) | (12,969,701) |
Advances from customers | 3,559,270 | (790,180) | 778,151 |
Amounts due to related parties | (108,293) | 1,763,018 | (252,886) |
Other current liabilities | 6,373,344 | (7,141,701) | 6,702,455 |
Income tax payable | 19,069 | (119,566) | (156,747) |
Salary payable | 199,697 | 70,533 | (171,915) |
Net cash used in operating activities | (38,015,710) | (6,100,668) | (10,034,439) |
Investing activities: | |||
Purchase of property, plant and equipment | (37,616,815) | (11,617,137) | (8,247,790) |
Acquisition of business | 0 | 0 | (3,896,627) |
Proceeds from disposal of property, plant and equipment | 2,620,412 | 31,273,922 | 7,538,516 |
Proceeds from lending by related parties | 433,285 | 0 | 1,218,840 |
Lending to related parties | 0 | (433,285) | 0 |
Purchase of U.S. treasury note | (9,984,765) | 0 | 0 |
Proceeds of interest income from U.S. treasury note | 112,500 | 0 | 0 |
Net cash (used in)/provided by investing activities | (44,435,383) | 19,223,500 | (3,387,061) |
Financing activities: | |||
Proceeds from banks and other third-party borrowings | 95,802 | 61,510 | 9,968,028 |
Repayment of banks and other third-party borrowings | (713,342) | (30,204,213) | (19,166,536) |
Contribution from non-controlling interest holders of subsidiaries | 0 | 2,118,240 | 0 |
Proceeds from issuance of ordinary shares | 393,026 | 290,000,000 | 44,999,330 |
Share issuance costs | 0 | (17,270,972) | (3,504,118) |
Repurchase of shares | (43,677,707) | (18,446,119) | 0 |
Proceeds from bonds | 0 | 2,358,546 | 8,427,712 |
Repayment of bonds | 0 | (11,261,572) | (2,544,062) |
Borrowings from related parties | 203,111 | 1,272,143 | 12,827 |
Repayment of borrowings from related parties | 0 | 0 | (1,174,295) |
Repayment of finance lease obligations | (5,434,620) | (7,207,081) | (2,174,035) |
Repayment of failed sale-lease back financing | (11,147,078) | (6,779,968) | (4,667,878) |
Net cash provided by/(used in) financing activities | (60,280,808) | 204,640,514 | 30,176,973 |
Effect of exchange rate changes | (4,363,207) | (4,057,291) | (722,416) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (147,095,108) | 213,706,055 | 16,033,057 |
Cash and cash equivalents and restricted cash, beginning of year | 254,382,366 | 40,676,311 | 24,697,153 |
Less: Cash and cash equivalents and restricted cash reclassified as assets held for sale | 0 | 0 | (53,899) |
Cash and cash equivalents and restricted cash, end of year | 107,287,258 | 254,382,366 | 40,676,311 |
Supplemental disclosure of cash flow information | |||
Interest paid, net of capitalized interest | 3,166,901 | 5,196,490 | 6,193,484 |
Income tax paid | (1,310,546) | (366,352) | (509,493) |
Non-cash investing and financing transactions | |||
Payables for purchase of property, plant and equipment | (14,321,740) | (5,533,545) | (8,958,993) |
Payable for finance leases | (7,597,631) | (14,187,759) | (19,852,094) |
Right-of-use assets obtained in exchange for lease liabilities | $ 5,252,612 | $ 145,795 | $ 814,811 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
ORGANIZATION AND NATURE OF OPERATIONS | 1. ORGANIZATION AND NATURE OF OPERATIONS Emeren Group Ltd, rebranded from ReneSola Ltd. in January 2023, was incorporated in the British Virgin Island on March 17, 2006. On January 29, 2008, Emeren Group Ltd and its subsidiaries (collectively, the “Company”) became listed on the New York Stock Exchange (“NYSE”) in the United States. The Company is a solar project developer and operator, a solar downstream player. The Company develops and sells solar power projects or sells project SPVs (project development business); provides engineering, procurement and construction business (EPC business); and owns and operates solar power projects and sells the electricity generated by the operated solar power plants (IPP business). The Company conducts the IPP business, EPC business and project development business in a number of countries, including United States, Poland, Hungary, Spain, France, UK, Germany, Italy and China. |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements have been prepared and presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to generate cash flows from operations, and the Company’s ability to arrange adequate financing arrangements, to support its working capital requirements. (b) Basis of consolidation The consolidated financial statements include the financial statements of Emeren Group Ltd and its subsidiaries. All inter-company transactions, balances and unrealized profits and losses have been eliminated on consolidation. A non-controlling interest is recognized to reflect the portion of a subsidiary’s equity which is not attributable, directly or indirectly, to the Company. Consolidated net income (loss) on the consolidated statements of operations and comprehensive income (loss) includes the net income (loss) attributable to non-controlling interests when applicable. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company’s consolidated balance sheets. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows, when applicable. (c) Fair value measurement The Company estimates fair value of financial assets and liabilities as the price that would be received from the sales of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants. When available, the Company measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. When observable market prices are not readily available, the Company generally estimates the fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. (d) Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting periods presented. Actual results could materially differ from these estimates. Significant accounting estimates are susceptible to changes with the acquisition of the information, which include revenue recognition for sales of project asset rights, percentage of completion of EPC services, EPC warranties, allowances for credit losses, valuation of deferred tax assets, and recoverability of the carrying value of long-lived assets and project assets. Management bases its estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. (e) Cash and cash equivalents Cash and cash equivalents represent cash on hand and held with banks, including demand deposits and money market fund, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. (f) Restricted Cash Restricted cash consists of cash and cash equivalents held by various banks to secure certain of our notes payable and other deposits designated for the payment of amounts related to loan interest. Restricted cash also includes cash and cash equivalents held in frozen bank accounts due to judicial property preservations. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets as of December 31, 2021 and 2022 to the total of such amounts as presented in the consolidated statements of cash flows: At December 31, 2021 2022 Cash and cash equivalents $ 254,065,589 $ 107,104,714 Restricted cash 316,777 182,544 Total cash, cash equivalents, and restricted cash $ 254,382,366 $ 107,287,258 (g) Accounts Receivable, trade and unbilled Accounts Receivable Trade, net The Company records trade accounts receivable for unconditional rights to consideration arising from the performance under contracts with customers. The carrying value of such receivables, net of the allowance for credit losses, represents their estimated net realizable value. Our electricity generation revenue generally includes up to 30-day payment terms following the transfer of control of the electricity generated to the customer. In addition, The Company is entitled to the feed-in tariff(s) (FIT) that the government guaranteed and subsidized electricity sale price at which solar power projects can produce green energy. The Company recognizes the FIT as part of the electricity generation revenue when the entitlement to receipt of such FIT is fulfilled. Accounts receivable from such FIT is expected to be collected beyond 12 months, which are discounted at an effective interest rate and recorded as a non-current asset. Payment terms for sales of project assets, operations and maintenance services vary by contract but are generally due upon demand or within several months of satisfying the associated performance obligations. The Company typically does not include extended payment terms in its contracts with customers. Accounts Receivable Unbilled, net Accounts receivable unbilled represents a contract asset for revenue that has been recognized in advance of billing the customer, which is common for our project-related sales contracts and EPC contracts. Revenue may be recognized in advance of billing the customer, resulting in an amount recorded to “Accounts receivable unbilled” depending on the expected timing of payment for such unbilled receivables. Once the Company has an unconditional right to consideration, it typically bills the customer and reclassifies the “Accounts receivable unbilled” to “Accounts receivable trade.” Billing requirements vary by contract but are generally structured around the completion of certain development, interconnection, or other specified milestones. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from a financial asset’s amortized cost to present the net amount we expect to collect from such asset. The Company estimates allowances for credit losses using relevant available information from both internal and external sources. In establishing the allowances, management considers historical losses, the financial condition, the accounts receivables aging, the payment patterns and the forecasted information in pooling basis upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC topic 326, Financial Instruments - Credit Losses. The Company monitors the estimated credit losses associated with its trade accounts receivable and unbilled accounts receivable based primarily on its collection history, which it reviews annually, and the delinquency status of amounts owed to the Company, which is determined based on the aging of such receivables. Such methods and estimates are adjusted, as appropriate, for relevant past events, current conditions, and reasonable and supportable forecasts. The Company recognizes write-offs within the allowance for credit losses when cash receipts associated with its financial assets are deemed uncollectible. (h) Project assets The Company develops commercial solar power projects (“project assets”) for sale. Project assets consist primarily of costs relating to solar power projects in various stages of development that are capitalized prior to entering into a definitive sales agreement for the solar power project. These costs include certain acquisition costs, land costs and costs for developing and constructing a solar power project. Development costs can include legal, consulting, permitting, and other similar costs. Construction costs can include execution of field construction, installation of solar equipment, and solar modules and related equipment. Interest costs incurred on debt during the construction phase are also capitalized within project assets. The Company does not depreciate the project assets when they are considered held for sale. Any revenue generated from a solar power project connected to the grid would be considered incidental income and accounted for as a reduction of the capitalized project costs for development. In addition, the Company presents all expenditures related to the purchase, development and construction of project assets as a component of cash flows from operating activities. During the development phase, these project assets are accounted for in accordance with the recognition, initial measurement and subsequent measurement subtopics of ASC 970-360, as they are considered in substance real estate. While the solar power projects are in the development phase, they are generally classified as non-current assets, unless it is anticipated that construction will be completed, and sale will occur within one year. The Company capitalizes costs related to solar power projects in various stages of development prior to entering into a definitive sales agreement for the solar power project, and classifies these costs as project assets on the consolidated balance sheets when the criteria in ASC 360-10-45-9 are met. If criteria are not met, the Company reclassifies these capitalized costs to property, plant and equipment, unless the delay in the period required to complete the sale is caused by events or circumstances beyond the Company’s control. The Company reviews project assets and deferred project costs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. The Company considers a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets and the estimated costs to complete. The Company examines a number of factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental, ecological, permitting, market pricing or regulatory conditions that impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, the Company impairs the respective project assets and adjusts the carrying value to the estimated recoverable amount, with the resulting impairment recorded within operations. (i) Contract costs The Company provides EPC services including engineering design, construction contracting and management, procurement of PV modules, balance-of-system components and other components. Contract costs generally include all direct costs, such as materials, direct labor, and subcontracts, and indirect costs identifiable with or allocable to the contracts. Contract costs also include the costs related to the design, engineering, and costs of all PV modules and materials needed for the projects for the cooperation arrangements with third party to jointly construct the power projects for sale. Contract costs are accumulated and are charged to operations as the related revenue from contracts is recognized. Refer to note 2 (u) Sale of project assets constructed by a third-party EPC contractor and EPC services for the corresponding revenue streams. (j) Advances to suppliers In order to secure a stable supply of construction materials, the Company makes advance payments to suppliers for raw material supplies and advances for purchases of long-lived assets which are offset against future deliveries. Advances to suppliers for purchases expected within twelve months as of each balance sheet date are recorded as advances to suppliers in current assets and those associated with purchases expected over longer periods of time are recorded in non-current advances to suppliers. As of December 31, 2021 and 2022, advances to suppliers in current assets were $276,737 and $1,016,895, respectively. The Company does not require collateral or other security against its advances to suppliers. As a result, the Company’s claims for such prepayments are unsecured, which exposes the Company to the suppliers’ credit risk. The Company performs ongoing credit evaluations of the financial condition of its material suppliers. (k) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation is computed on a straight-line basis over the following estimated useful lives: Plant and machinery 3‑5 years Motor vehicles 4‑5 years Office equipment 3‑5 years Power stations 20-40 years Estimated useful life of land is infinite and no depreciation is provided. Power stations represent project assets that the Company owned and operate after being placed in service. The Company reports its power stations at cost, less accumulated depreciation and impairment, if any. The Company begins depreciation for power stations when they are placed in service. The Company computes depreciation expense for the power station using the straight-line method over the shorter of the term of the related PPA or 20 to 40 years depends on the estimated useful lives of the project assets. Construction in progress represents mainly the construction of solar power projects the Company will own and operate for electricity generation. Costs incurred in the construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Expenditures for repairs and maintenance are expensed as incurred. The gain or loss on disposal of property, plant and equipment, if any, is the difference between the net sales proceeds and the carrying amount of the disposed assets and is recognized in the consolidated statement of income upon disposal. (l) Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not depreciated or amortized but is tested for impairment at the reporting unit level on an annual basis, and between annual tests when an event occurs, or circumstances change that could indicate that the asset might be impaired. Under ASC 350-20, the Company has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The Company first makes a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value to determine whether it is necessary to perform a quantitative goodwill impairment test. Such qualitative impairment test considers various factors, including macroeconomic conditions, industry and market considerations, cost factors, the overall financial performance of a reporting unit, and any other relevant events affecting the Company or a reporting unit. If circumstances determine through the qualitative assessment that a reporting unit’s fair value is more likely than not greater than its carrying value, the quantitative impairment test is not required. If the qualitative assessment indicates it is more likely than not that a reporting unit’s fair value is less than its carrying value, the Company perform a quantitative impairment test. The quantitative impairment test is the comparison of the fair value of a reporting unit with its carrying amount, including goodwill. Our battery storage business represents one of the Company’s reporting units. The Company define the fair value of a reporting unit as the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. The Company primarily uses an income approach to estimate the fair value of our reporting unit. Significant judgment is required when estimating the fair value of a reporting unit, including the forecasting of future operating results and the selection of discount and expected future growth rates used to determine projected cash flows. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not impaired, and no further analysis is required. Conversely, if the carrying value of a reporting unit exceeds its estimated fair value, the Company records an impairment loss equal to the excess, not to exceed the total amount of goodwill allocated to the reporting unit. The Company performs goodwill impairment testing at the reporting unit level on December 31 annually and more frequently if indicators of impairment exist. The Company performed qualitative assessment on the reporting unit and concluded that it was not more likely that the fair value of the reporting unit was less that its carrying amount. Accordingly, no impairment loss of goodwill was recognized for the years ended December 31, 2020, 2021 and 2022. (m) Held-to-maturity The Company’s held-to-maturity investments consist of investment-grade interest bearing instruments, such as the U.S. Treasury notes, which are stated at amortized cost. The Company do not intend to sell these investment securities. Those with maturities less than twelve months are included in investment securities in the current assets section of the Company’s consolidated balance sheets. Those with remaining maturities in excess of twelve months are included in investment securities in the non-current assets section of its consolidated balance sheets. The estimated fair value of these investments approximated their carrying value as of December 31, 2022. As of December 31, 2021 and 2022, held-to-maturity investments balance were nil and $10,046,645, respectively. During the years ended December 31, 2020, 2021, and 2022, the investment gain was nil, nil and $174,380, respectively. The Company reviews its investments for other-than-temporary impairment (“OTTI”) based on the specific identification method. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Company considers, among other factors, general market conditions, expected future performance of the investees, the duration and the extent to which the fair value of the investment is less than the cost, and the Company’s intent and ability to hold the investment. OTTI is recognized as a loss in the consolidated statements of operations. (n) Asset acquisition When the Company acquires other entities, if the assets acquired and liabilities assumed do not constitute a business, or if all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar assets, the transaction is accounted for as an asset acquisition. Assets are recognized based on the cost, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s books. If the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interest issued), measurement is based on either the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The cost of a group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair value and does not give rise to goodwill. (o) Assets and liabilities held-for-sale Assets and asset disposal groups are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when management has committed to a plan of sale and the sale is highly probable, the assets are available for immediate sale in their present condition, and they are expected to qualify for recognition as a completed sale within one year from the date of classification. Assets and liabilities classified as held for sale are measured at lower of their carrying amount or fair value less costs to sell. Long-lived assets to be sold are classified as held for sale considering the recognition criteria in ASC 360-10-45-9 in which all of the following criteria are met: ● Management, having the authority to approve the action, commits to a plan to sell the asset, ● The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; ● An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; ● The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; ● The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and ● Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. (p) Interest capitalization The Company capitalizes interest costs as part of the costs of constructing certain assets during the period of time required to get the assets ready for their intended use. The Company capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. The interest capitalized for project assets forms part of the cost of revenues when such project assets are sold, and all revenue recognition criteria are met. Interest is capitalized for solar power projects that are classified as property, plant and equipment and built for the Company to own and operate for electricity generation before the projects are completed and put into operation. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. (q) Impairment of long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than originally estimated. The Company assesses recoverability of the long-lived assets by comparing the carrying amount of the assets to the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The Company recognizes an impairment loss in the event the carrying amount exceeds the estimated future undiscounted cash flows attributable to such assets, measured as the difference between the carrying amount of the assets and the fair value of the impaired assets. Impairment losses of long-lived assets for the years ended December 31,2020, 2021 and 2022 were $1,432,296, $360,151 and nil, respectively. Impairment losses of these assets represented the difference between the carrying amount and fair value less cost to sell as a result of committed sale plans of solar power plants originally owned and operated by the Company for electricity generation. (r) Leases Leases are classified as finance or operating leases. A lease that transfers to the lessee substantially all the benefits and risks incidental to ownership is classified as a finance lease. At inception, a finance lease is recorded at the lower of the present value of minimum lease payments or the fair value of the asset. Assets under finance leases are amortized on a basis consistent with that of similar useful life of fixed assets or the end of lease term, whichever is earlier. If the lease transfers ownership or contains an option to purchase the asset that the lessee is reasonably certain to exercise, the finance leases should be amortized over the useful life of the asset. At the inception of each lease arrangement, the Company determines if the arrangement is a lease or contains an embedded lease and reviews the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under ASU 2016-02, Leases (Topic 842). The Company has elected not to record any leases with terms of 12 months or less on the consolidated balance sheets. Balances related to operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities current and operating lease liabilities non-current on the consolidated balance sheets. Finance leases represent a portion of the active lease agreements and are included in finance lease ROU assets, failed sales-leaseback and finance lease liabilities current and non-current on the consolidated balance sheets. The ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation of the Company to make minimum lease payments arising from the lease for the duration of the lease term. Operating lease costs are recognized on a straight-line basis over the lease term. From time to time, the Company’s subsidiaries are asked to prepay the lease costs for over one year. As of December 31, 2021 and 2022, the prepaid rental fees of $706,693 and $898,796, respectively, were recorded in operating lease right-of-use assets. To determine the present value of future minimum lease payments, the Company uses the implicit rate when readily determinable. Presently, because many of the leases do not provide an implicit rate, the Company applies its incremental borrowing rate, which is considered as the rate that the Company would negotiate when financing for a similar period, and with a similar guarantee, to obtain an asset of a similar value to the lease asset to determine the present value of minimum lease payments. The operating and finance lease ROU assets include any lease payments made and exclude lease incentives. For a sale-leaseback transaction, when the transaction involves real estate or integral equipment, sale-leaseback accounting shall be used by a seller-lessee only if the transaction includes all of the following a) normal leaseback; b) payment terms and provisions that adequately demonstrate the buyer-lessor’s initial and continuing investment in the property; and c) payment terms and provisions that transfer all of the other risks and rewards of ownership as demonstrated by the absence of any other continuing involvement by the seller-lessee. Equipment is determined to be integral when the cost to remove the equipment from its existing location, ship and reinstall at a new site, including any diminution in fair value, exceeds 10% of the fair value of the equipment at the time of original installation. If a sale-leaseback of real estate qualifies for sale-leaseback accounting, an analysis is performed to determine if the Company can record a sale and remove the assets from the balance sheet and recognize the lease; and if so, to determine whether to record the lease as either an operating or finance lease. If a sale-leaseback transaction does not qualify for sale-leaseback accounting because of any form of continuing involvement by the seller-lessee other than a normal leaseback, it is accounted for as a financing arrangement and recorded as failed sales-leaseback and finance lease liabilities, current and non-current on the consolidated balance sheet. (s) Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but the amount cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. Legal costs incurred in connection with loss contingencies are expensed as incurred. (t) Income taxes Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Deferred tax assets and liabilities are all classified as non-current in the consolidated balance sheets. (u) Revenue recognition Solar power project development a) Sale of project assets constructed by a third-party EPC contractor The Company recognizes revenue for sales of project assets constructed by a third-party EPC contractor over time as the Company’s performance creates an energy generation asset that is owned by the customer as it is being constructed and the customer can direct all activities related to the work in progress. Furthermore, the sale of a project asset when combined with EPC services represents a single performance obligation for the development and construction of a single generation asset. The Company recognizes revenue over time for construction contracts which recognize revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. Under this business model, the EPC services are provided by a third-party service provider. In accordance with the terms and conditions of the EPC contract, the Company has the ability to direct a third party to ensure that the EPC services to the customer are performed therefore the Company acts as the principal in this arrangement and both the revenue and cost amounts paid to the EPC contractor are recognized on a gross basis. b) Sale of project assets constructed by the Company’s own EPC team Under this business model, the Company sells power projects after they have been completed or are near completion. The Company conducts the construction of the power plant and completes or nearly completes the project before it identifies a customer. When a customer is identified, the Company enters into two agreements through signing: Sale and Purchase Agreement (“SPA”) and Operations and Maintenance (“O&M”) Services Contract, which are generally signed on the same date. Such arrangements consist of two performance obligations: sale of solar project and O&M services. For sale of a solar project, the Company recognizes revenue at a point in time once control of project company is transferred to the customer as the Company has no remaining performance obligation once the control is transferred upon closing of the sale. For O&M services, the Company recognizes revenue over time, ratably over the service period, as this performance enhances an energy generation asset controlled by the customer. c) Sale of project asset rights The Company sells the project rights to |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | 3. ACQUISITIONS On September 30, 2022, the Company purchased 100% of the equity interest and obtained control of Branston Solar Farm Limited (“Project Branston”) from P&T Global Renewable Energy Ltd. Project Branston is located in Branston, Lincoln, United Kingdom and it owned a 50 MWp operational solar farm which has been operational since October 12, 2020. The output of the plant is contracted under a 40-year PPA which began on the commercial operation date. The acquisition was in accordance with the Company’s overall growth strategy. The cash consideration for acquiring Project Branston is $21,578,748 (GBP 17,867,639) which have been fully paid as of September 30,2022. Meanwhile, the Company took over a lease loan contract with Aviva Investor Infrastructure Income No.4 Ltd. of $22,530,171 (GBP 18,655,437) and received other net assets of $2,289,352 (GBP 1,895,630). This acquisition also recognized $973,932 deferred tax liabilities due to fair value adjustment of Project Branston upon acquisition. There is no other noncash or contingent consideration. The acquisition is accounted as an asset acquisition according to ASC 805 since substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset. The excess of consideration over fair value was allocated to property, plant and equipment. On October 11, 2022, the Company entered into a Shares Purchase Agreement to acquire of Emeren Ltd, a United Kingdom-based utility-scale solar power and battery projects developer in Europe. The acquisition transaction was completed on October 11, 2022 through an all-cash deal with an earn-out provision. This earn-out provision provides EUR 5,100,000 deferred consideration with target of output power for Italy projects within eight months after the acquisition and EUR 6,850,000 management incentive for the specific performance conditions for the following two years. The cash consideration for Emeren Ltd is $5,041,350 (EUR 5,100,000) with deferred consideration of $5,041,350 (EUR 5,100,000). The Company has initially assessed that the output power on the Italy projects and concluded it is probable that the output power agreed in the earn-out provision can be reached. Therefore, such relevant deferred consideration was recorded at fair value of $5,041,350 (EUR 5,100,000) by the Company at the point of the acquisition date. Meanwhile, there was Management Incentive of $6,771,225 (EUR 6,850,000) which was for specific performance conditions for certain periods ended December 31, 2022, 2023 and 2024. The acquisition is accounted as an asset acquisition according to ASU 2017-01 since substantially all the fair value of the gross assets acquired is concentrated in a group of similar assets. The excess of consideration over fair value of the assets was allocated to each specific project within project assets. During the year ended December 31, 2022, the Company recorded $49,425 (EUR 50,000) compensation cost for management incentive. On November 17, 2020 (the “acquisition close date”), the Company acquired a 100% of the equity interests of ET Cap PA Holdings LLC (“PA Holdings”) and ET Cap CA Holdings LLC (“CA Holdings”), a utility project with battery storage business under solar power project development stream from Nova Development Management, for a cash consideration totaling $3.9 million. The Company acquired PA Holdings and CA Holdings to enhance its ability to provide a more diverse product portfolio such as battery storage around the world. The Company accounted for the acquisition described above in accordance with ASC 805, “ Business Combinations The final allocation on the purchase price to the fair value of the net assets acquired is as follows: As of acquisition close date Project assets (1) $ 2,874,060 Net assets acquired 2,874,060 Goodwill 1,022,567 Total consideration transferred/Net cash paid $ 3,896,627 (1) Included in project assets are incurred cost such as consultant fee, legal fee and salaries which have been capitalized in accordance with ASC 970-360, as they are directly attributable and incurred in the development phase. The Company performed annual impairment analysis on December 31 of each year. ASC 350-20 allows companies to perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value to determine whether it is necessary to perform a quantitative goodwill impairment test. Such qualitative assessment considers various factors, including macroeconomic conditions, industry and market considerations, cost factors, the overall financial performance of a reporting unit, and any other relevant events affecting the Company or a reporting unit. The Company performed a qualitative assessment for battery storage reporting unit in each respective period and concluded that it was not more likely that the fair value of the reporting unit was less than its carrying amount. Accordingly, a quantitative goodwill impairment test for this reporting unit was not required in any period presented. |
ACCOUNTS RECEIVABLE TRADE, NET
ACCOUNTS RECEIVABLE TRADE, NET | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE TRADE, NET | |
ACCOUNTS RECEIVABLE TRADE, NET | 4. ACCOUNTS RECEIVABLE TRADE, NET At December 31, 2021 2022 Accounts receivable trade – from EPC services $ 2,640,710 $ 2,429,593 – from solar power project assets 22,995,822 8,607,742 – from electricity generation (1) 10,848,278 12,669,890 Total accounts receivable trade 36,484,810 23,707,225 Less: allowance for credit losses (2,135,885) (2,036,773) Accounts receivable trade, net $ 34,348,925 $ 21,670,452 (1) Accounts receivable from electricity generation were mainly due from China’s state grid companies. The amounts included the portion of feed-in tariff(s) (FIT) for the electricity sold to the state grid companies in the PRC in which the relevant on-grid solar power stations are still pending for registration to the Renewable Energy Subsidy Catalog, which the Company has submitted the application for its solar power stations started operation before July 2017 to be registered on the Catalog. The Company expects that a certain part of the FIT receivables will be recovered after twelve months from the reporting date, which are discounted at an effective interest rate. As of December 31, 2022, there are $10,204,802 of FIT receivables classified as current and $20,187,213 classified as non-current, which is included in the other non-current assets on the consolidated balance sheets. ACCOUNTS RECEIVABLE UNBILLED, NET At December 31, 2021 2022 Accounts receivable unbilled –from solar power project assets $ 11,473,590 $ 18,151,798 –from EPC services — 26,442,031 Total accounts receivable unbilled 11,473,590 44,593,829 Less: allowance for credit losses — (711,788) Accounts receivable unbilled, net $ 11,473,590 $ 43,882,041 During the year ended December 31, 2022, the Company contract assets classified as “Accounts receivable unbilled” are primary due to billing of certain project sales and EPC services where the Company has the right to consideration in exchange of the project sales transferred and EPC services performed. ALLOWANCE FOR CREDIT LOSSES The Company establishes an allowance for expected credit losses based on historically observed default rates over the expected life of the receivable balance and are adjusted for forward-looking information available without undue cost of effort. The Company’s management regularly reviews the allowance for credit losses to ensure relevant information about specific debtors is updated. The following table shows the movement in lifetime expected credit losses that has been recognized for trade receivable under the simplified approach. At December 31, 2021 2022 At beginning of year $ 2,427,577 $ 2,135,885 Allowance for credit losses 90,345 612,676 Written off (382,037) — At end of year $ 2,135,885 $ 2,748,561 CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS As of December 31, 2021, receivables from a solar power customer amounted to $19,153,699 (56%), which was greater than 10% of the account balance. As of December 31, 2022, receivables from a solar power customer amounted to $30,364,453, including billed receivable of $3,922,422 and unbilled receivable of $26,442,031 which accounts for 44% of the Company’s total receivables, excluding FIT receivables in the other non-current assets, which are due from government. For the years ended December 31, 2020, 2021 and 2022, a solar power customer accounted for 48%, 28% and 41% of the Company’s total net revenues, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS At December 31, 2021 2022 Receivable from disposal of property, plant and equipment (1) $ 3,714,161 $ 554,456 Deposits (2) 8,048,529 11,521,660 EPC Warranty reimbursement receivables 201,067 — Others (3) 3,989,377 4,084,797 Total prepaid expenses and other current assets 15,953,134 16,160,913 Allowance for credit losses (4) (1,434,483) (1,186,995) Total prepaid expenses and other current assets $ 14,518,651 $ 14,973,918 (1) Receivable from disposal of property, plant and equipment mainly represented disposal of Company’s solar power assets which was primarily for electricity generation revenue segment. (2) As of December 31, 2022 deposits mainly represented deposits made for interconnection, and the bidding of project asset construction rights and rooftop leases. (3) As of December 31, 2022, others mainly included $ 1,069,800 prepayment for purchasing Italy projects, $ 811,581 prepayment on Korea project development (among which, the Company has recorded 50% of prepayment as allowance for credit losses during the year ended December 31, 2021), and $ 235,627 receivable for compensation from the insurance provider for China projects. During the year ended December 2022, the Company wrote off $161,743 other receivable. (4) Allowance for credit losses mainly represented the portion of compensation receivable from Canadian authorities on closure of a certain project in Canada that the Company believes is not recoverable, unrecoverable collection from sold entities in China, and allowance for the Korea project’s prepayment which the Company deemed partially not recoverable. |
PROJECT ASSETS
PROJECT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
PROJECT ASSETS | |
PROJECT ASSETS | 6. PROJECT ASSETS Project assets consisted of the following at December 31, 2021 and 2022, respectively: At December 31, 2021 2022 Project assets - Module cost $ 1,077,213 $ — Project assets - Development and construction cost 14,631,425 51,613,275 Project assets - Others 429,199 945,779 Total project assets $ 16,137,837 $ 52,559,054 Current portion 9,587,254 25,969,148 Non-current portion 6,550,583 26,589,906 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | 7. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net: At December 31, 2021 2022 Land $ 282,000 $ 275,000 Plant and machinery 858,948 781,324 Motor vehicles 65,473 94,654 Office equipment 252,150 381,118 Power stations (1) 138,533,441 191,011,142 Less: Accumulated depreciation (19,181,277) (25,438,066) 120,810,735 167,105,172 Construction in progress 4,835,751 3,372,189 Property, plant and equipment, net $ 125,646,486 $ 170,477,361 (1) All power stations were self-constructed, except for Project Branston that the Company acquired on September 30, 2022 with an original cost of $42,793,499 (as discussed in Note 3). Construction in progress mainly represents solar power projects which are under development for self-electricity generation in China. Depreciation expense for the years ended December 31, 2020, 2021 and 2022 was $7,342,327, $6,794,404 and $6,817,331, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES The Company and its subsidiaries file separate income tax returns. British Virgin Islands Under the current laws of the British Virgin Islands (“BVI”), the Company’s subsidiary in BVI is not subject to tax on its income or capital gains. In addition, upon any payment of dividends by the Company, no British Virgin Islands withholding tax is imposed. People’s Republic of China On March 16, 2007, the National People’s Congress approved the Corporate Income Tax Law of the People’s Republic of China (the “CIT Law”) with an effective date of on January 1, 2008. The CIT Law enacted a statutory income tax rate of 25%. Pursuant to PRC tax laws, certain PRC domiciled subsidiaries of the Company are solar power generation enterprises, which are entitled to a three-year tax exemption from Corporate Income Tax (“CIT”) from first operation year and a 50% CIT reduction for the succeeding three years thereafter. United States of America Emeren Group US is incorporated in California, United States. It is subject to a federal corporate income tax rate of 21% for 2018, 2019, and 2020, effective from January 1, 2018 under the 2017 Tax Cuts and Jobs Act. In addition, Emeren Group US is subject to California state income tax of 8.84% for 2021 and 2022, and Connecticut state income tax of 7.5% for 2021 and 2022, which is deductible for federal corporate income tax purpose. The tax expense from continuing operations comprises: Years ended December 31, 2020 2021 2022 Income (loss) before income tax PRC $ 2,104,024 $ 1,589,476 $ 4,107,651 Other jurisdictions 214,999 5,799,396 (6,738,601) Total 2,319,023 7,388,872 (2,630,950) Current tax expense PRC (5,118) (348,494) (733,102) Other jurisdictions (441,495) (66,754) (466,887) Subtotal (446,613) (415,248) (1,199,989) Deferred tax benefit (expense) PRC — — (717,217) Other jurisdictions 283,577 (359,164) — Subtotal 283,577 (359,164) (717,217) Total income tax expense $ (163,036) $ (774,412) $ (1,917,206) The Company classifies interest and penalties related to income tax matters in income tax expense. As of December 31, 2021 and 2022, there were no interest and penalties related to uncertain tax positions. As of December 31, 2021 and 2022, there was no accrual of uncertain tax benefits recognized by the Company. The Company does not anticipate significant increases or decreases to its liabilities for unrecognized tax benefits within the next twelve months. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of taxes exceeding RMB100,000 (approximately $14,499) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The principal components of deferred income tax assets and liabilities are as follows: At December 31, 2021 2022 Deferred tax assets: Accrued expenses $ 13,772 $ 44,496 Net operating losses 7,214,260 11,671,895 Unrealized internal profit 776,260 717,217 Allowances for credit losses 1,209,220 1,209,220 Impairment loss of assets 126,337 126,337 Other 133,409 80,613 Total gross deferred tax assets 9,473,258 13,849,778 Valuation allowance on deferred tax assets (8,696,997) (13,849,778) Net deferred tax assets $ 776,261 $ — Deferred tax Liabilities: Asset acquisitions — (3,573,146) Deferred tax liabilities $ — $ (3,573,146) As of December 31, 2022, the subsidiaries of the Company in PRC had net operating loss carry forwards of $15,988,104, of which nil, $3,494,849, $1,584,685, $4,587,504 and $6,321,066 will expire in 2023, 2024, 2025, 2026 and 2027 respectively. The Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible for tax purposes. As a result, the Company has recognized a valuation allowance of $8,696,997 and $13,849,778 as at December 31, 2021 and 2022, respectively. Reconciliation between the applicable statutory income tax rate and the Company’s effective tax rate for the years ended December 31, 2020, 2021 and 2022 is as follows: Years ended December 31, 2020 2021 2022 PRC applicable income tax rate 25 % 25 % 25 % Change in deferred tax valuation allowance (21) % (20) % (146) % Preferential tax rate (1) (42) % (16) % 30 % Tax effect of non-deductible expenses — — (15) % Effect of different tax rate of subsidiaries 39 % 17 % (27) % Non-taxable income — — 67 % Other 6 % 4 % (7) % Effective income tax rate 7 % 10 % (73) % The following table sets forth the effect of preferential tax on China operations for the years ended December 31, 2020, 2021 and 2022, respectively: Years ended December 31, 2020 2021 2022 Preferential tax effect (1) $ 975,859 $ 1,160,939 $ 797,235 (1) Certain solar power project entities are fully exempted from the PRC CIT for three years starting from the year in which such project generates revenue from the sale of electricity and is 50 % exempted from PRC CIT for another three years. |
BORROWINGS AND OTHER FINANCING
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | |
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | 9. BORROWINGS AND OTHER FINANCING ARRANGEMENTS a) Borrowings from banks and other third parties The Company’s borrowings from banks and other third parties consist of the following: At December 31, 2021 2022 Long-term borrowings, current portion — 1,007,886 Long-term borrowings 61,510 22,518,272 Total borrowings from bank and other third parties $ 61,510 $ 23,526,158 As of December 31, 2022, the long-term borrowings of $23,526,158 were jointly guaranteed by the Company and its subsidiaries. i) Long-term borrowings In January 2021, the Company’s United Kingdom (“UK”) subsidiary obtained a long-term loan by a lender in the UK totally £45,563 ($61,510). The long-term loan has a maturity date of July 2026 with an annual interest rate of 2.5%. The proceeds from this loan were used for general working capital purposes. The long-term borrowing was interest free for twelve months. As of December 31, 2022, the balance of this long-term borrowings was $42,166. In January 2022, Project Branston subsidiary entered into a lease loan contract with Aviva Investor Infrastructure Income No.4 Ltd. The loan bears interest at 4% above the base rate time to time from Lloyds Bank Plc on the bank and will mature on April 2060. As a result of the acquisition of Branston (Note 3), the Company took over the loan. As of December 31, 2022, the long-term borrowings were $23,388,190, including current of $1,007,886 and non-current of $22,380,304. As of December 31, 2022, future minimum payments required under the lease loan contract are: USD Years ended December 31, 2023 $ 2,191,432 2024 1,183,546 2025 1,183,546 2026 1,183,546 2027 1,183,546 2028 and later 38,245,351 Total minimum lease loan payments 45,170,967 Less: Amount representing interest (21,782,777) Present value of net minimum lease loan payments $ 23,388,190 In September 2022, the Company’s RPZE 1 subsidiary entered into a shareholder loan contract with a minority shareholder of a subsidiary of the Company, RPZE 1, of $602,985. The loan bears interest at 2% per annum and will mature on December 2025. As of December 31, 2022, the balance of the shareholder loan was $95,802. b) Financing associated with failed sale-lease back transactions In 2019, certain subsidiaries of the Company (the “seller-lessee”) sold self-built solar projects (“leased assets”) with carrying amount of $4,008,534 to different domestic financial leasing companies (the “buyer-lessors”) for cash consideration of $2,793,810, and simultaneously entered into the contracts to lease back the leased assets from the buyer-lessors for 5 to 10 years. These arrangements are guaranteed by other subsidiaries of the Company and are also pledged by the shares and rights to the future power generation income of the seller-lessee. Pursuant to the terms of the agreements, the seller-lessee is required to make lease payments to the buyer-lessors over the lease period and is entitled to obtain ownership of the equipment at a nominal price upon the expiration of the lease. As the leased assets are considered integral with real estate under ASC 360, the sale-leaseback rules related to real estate are applied. The lease transactions do not qualify as a sale-leaseback transaction as these solar projects are initially invested and built up by the seller-lessee with expected useful life of 25 years and are continuingly maintained by the seller-lessee. The seller-lessee has an obligation to repurchase the leased assets upon the expiry of the lease. In addition, after the lease period, the seller-lessee will keep using the assets and has no plans to sell or for early-disposal. Accordingly, these transactions are accounted for as financing transactions in accordance with ASC 840. Internal rate of return is used in the computation of interest cost. The assets remain in the property, plant and equipment (“PPE”) and continue to be depreciated. During the years ended December 31, 2020, 2021 and 2022, the Company paid for amount included in the financing lease associated with failed sales-lease back transactions were $6,841,913, $13,987,049 and $16,581,698, respectively. As of December 31, 2021 and 2022, the Company recorded $20,383,449 and $11,702,161 under failed sales leaseback liabilities as non-current portion and $6,712,423 and $5,655,990 as the current portion, which represents principal to be paid in the next year. The weighted average effective interest rate of the financing was 7.15%, 7.02% and 6.67% and interest costs incurred during the years ended December 31, 2020, 2021 and 2022 were $3,296,613, $2,758,095 and $1,826,299, respectively. These failed sales-leaseback financings were collateralized by the underlying assets of the solar projects. c) Finance lease The Company leased module, inverter and other materials from different financial leasing companies in China. Pursuant to the terms of the contracts, the Company is required to make lease payments to the finance lease companies and is entitled to obtain the ownership of this machinery and equipment at a nominal price upon the expiration of the lease. These arrangements are guaranteed by other subsidiaries of the Company and are also pledged by the shares and rights for the future power generation income of the leased assets. The lease is classified as finance lease. As of December 31, 2021, the carrying amount is included in finance lease right-of-use assets that is being depreciated over lives of 25 years. As of December 31, 2022, the carrying amount is included in finance lease right-of-use assets that is being depreciated over lives of 25 years. The payable related to these contracts as of December 31, 2021 and 2022 was $14,187,759 and $7,597,631, respectively. As of December 31, 2022, future minimum payments required under the finance lease are: USD Years ended December 31, 2023 $ 4,520,059 2024 1,188,020 2025 1,087,426 2026 846,110 2027 829,884 2028 and later — Total minimum lease payments 8,471,499 Less: Amount representing interest (873,868) Present value of net minimum lease payments 7,597,631 Current portion 4,337,287 Non-current portion $ 3,260,344 As of December 31, 2022, future minimum payments required under the failed sale-lease back are: USD Years ended December 31, 2023 $ 5,983,227 2024 5,212,979 2025 5,237,385 2026 3,113,914 2027 867,248 2028 and later 49,131 Total minimum lease payments 20,463,884 Less: Amount representing interest (3,105,733) Present value of net minimum lease payments 17,358,151 Current portion 5,655,990 Non-current portion $ 11,702,161 At December 31, 2021 2022 Current portion of finance lease $ 4,654,284 $ 4,337,287 Current portion of failed sale and lease back 6,712,423 5,655,990 Total current portion of failed sale-lease back and finance lease 11,366,707 9,993,277 Non-current portion for finance lease 9,533,475 3,260,344 Non-current portion for failed sale and lease back 20,383,449 11,702,161 Total non-current portion of failed sale-lease back and finance lease $ 29,916,924 $ 14,962,505 d) Interest expense Interest expense incurred for the years ended December 31, 2020, 2021 and 2022 was $6,464,266, $5,272,202 and $3,522,389 of which $258,190, $118,408 and $355,488 has been capitalized in the carrying value of PPE and project assets, respectively. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
OTHER CURRENT LIABILITIES | |
OTHER CURRENT LIABILITIES | 10. OTHER CURRENT LIABILITIES The Company’s other current liabilities are summarized below: At December 31, 2021 2022 Payables for purchase of property, plant and equipment (1) $ 5,533,545 $ 14,321,740 Other tax payables 150,828 157,233 Accrued EPC warranty liabilities 198,629 — Other (2) 2,560,961 2,969,816 $ 8,443,963 $ 17,448,789 (1) Payable for purchase of property, plant and equipment as of December 31, 2022 included as payable to ReneSola Singapore Pte Ltd.’s subsidiaries. As of December 31, 2022, ReneSola Singapore Pte Ltd.’s subsidiaries did not belong to related parties. See Note 17 “RELATED PARTY BALANCES AND TRANSACTIONS” for further details. (2) Other as of December 31, 2022 mainly includes the payables for claims, audit fees and other professional service fees. |
COMMON SHARES
COMMON SHARES | 12 Months Ended |
Dec. 31, 2022 | |
COMMON SHARES | |
COMMON SHARES | 11. COMMON SHARES In December 2020, the Company was authorized to issue a maximum of 800,000,000 no par value shares of a single class via Board approval. Further as of December 31, 2020, the Company issued additional 99,285,640 common shares via offerings with several institutional investors with total net proceeds of $41,495,212 after deducting placement agent fees and other offering expenses. Net proceeds from the transaction are intended to be used for expanding new solar project pipeline and general working capital purposes. Total issued shares of the Company as of December 2020 was 582,258,622. In April 2021, the Company was authorized to increase the maximum number of shares from 800,000,000 to 1,000,000,000 no par value shares of a single class. Further as of December 2021, the Board authorized the Company to repurchase up to $50 million of shares. During 2021, the Company repurchased 30,904,110 no par value shares at the cost of $18,446,119. During 2022, the Company repurchased 2,567,640 no par value shares at the cost of $1,553,878. All repurchased shares under the repurchase program are classified as treasury shares of the Company until they are retired or reissued. Through 2021, the Company issued an additional 130,127,050 common shares, of which 125,000,000 common shares were issued via offerings with several institutional investors with total net proceeds of $272,729,028 after deducting placement agent fees and other offering expenses. Net proceeds from the transaction are intended to be used for expanding new solar project pipeline and general working capital purposes. The remaining 5,127,050 common shares are issued for the employee share option plan. On September 30, 2022, the Company repurchased 70,000,000 no par value shares at the cost of $42,123,829, including a $123,829 commission fee, from its prior shareholder ReneSola Singapore. The Company retired these shares on the same day. As of December 31, 2022, the number of total issued shares of the Company were 651,121,762 shares. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 12. SHARE BASED COMPENSATION 2007 Share Incentive Plan On September 27, 2007, the Company adopted the Emeren Group Ltd 2007 Share Incentive Plan (the “Plan”) that provides for grant of share options, restricted shares and restricted share units to employees in the Plan. A maximum of 7,500,000 authorized but unissued shares of the Company have been reserved and allocated to the Plan, whose shares were subsequently registered and are issuable upon exercise of outstanding options granted under the Plan. The Plan shall be administered by the Compensation Committee of the Board of Directors (the “Committee”). On July 27, 2010, the Company has amended the Plan so as to increase the maximum number of authorized but unissued shares of the Company to 12,500,000 in accordance with the rules of the 2007 Share Incentive Plan. On December 21, 2020, the Company has amended the Plan to increase the number of authorized but unissued shares of the Company to 22,500,000 in accordance with the rules of the 2007 Share Incentive Plan. On December 29, 2021, the Company has amended the Plan to increase the maximum number of authorized but unissued shares of the Company to 42,500,000 in accordance with the rules of the 2007 Share Incentive Plan. Except as otherwise noted in the award agreements with the employee or consultant, the options can be exercised within six years from the award date, except for participant’s termination of employment or service. The vesting schedule and the exercise price per share will be determined by the Committee and set forth in the individual award agreement. In the event of any distribution, share split, or recapitalization of the Company, the Committee shall make such proportionate and equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan and (b) the terms and conditions of any outstanding awards. Except as may otherwise be provided in any award agreement, if a change of control occurs and a participant’s awards are not converted, assumed, or replaced by a successor, such awards shall become fully exercisable and all forfeiture restrictions on such awards shall lapse. Options to Employees From January to December 2018, the Company granted 830,000 share options to certain employees with exercise prices of $0.26 and $0.27. From January to December 2019, the Company granted 5,300,000 share options to certain employees with exercise prices of $0.11 and $0.15. From January to December 2020, the Company granted 700,000 share options to certain employees with an exercise price of $0.30 on the grant date. From January to December 2021, the Company granted 8,740,000 share options to certain employees with an exercise price of 0.30, $0.16, $1.00 and $0.73 on the grant date with expected vesting periods within three years. From January to December 2022, the Company granted 6,500,000 share options to certain employees with an exercise price of $0.41, $0.30, $0.46 on the grant date with expected vesting periods within three years. The fair value of each option grant, as well as the fair value of option immediately before and after the aforementioned modification, is estimated on the date of grant or modification using the Black-Scholes option pricing model using the assumptions noted below. Average risk- Weighted average free expected option Dividend rate of return life Volatility rate yield Granted in 2020 0.09-0.1 % 1 year 104.01-119.20 % 0 % Granted in 2021 0.33-0.97 % 3 years 131.84-132.91 % 0 % Granted in 2022 2.87-3.98 % 3 years 129.34-132.67 % 0 % Expected volatilities based on the average of the standard deviation of the daily stock prices of the Company and other selected comparable companies in the same industry. The expected term of options represents the period of time that options granted are expected to be outstanding. The risk-free rate of return is based on the US Treasury bond yield curve in effect at the time of grant for periods corresponding with the expected term of the option. A summary of the option activity is as follows: Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Prices Contractual Life Value Outstanding on December 31, 2019 8,575,000 0.21 0.14 — Granted 700,000 0.30 0.97 — Exercised (1,945,980) 0.25 — — Forfeited (25,000) 0.47 — — Outstanding on December 31, 2020 7,304,020 0.21 1.49 — Granted 8,740,000 0.64 1.88 — Exercised (120,680) 0.26 — — Forfeited (280,000) 1.00 — — Outstanding on December 31, 2021 15,643,340 0.43 1.32 — Granted 6,500,000 0.40 2.26 — Exercised (1,400,000) 0.27 — — Forfeited (5,350,020) 0.58 — — Outstanding on December 31, 2022 15,393,320 0.38 1.27 $ 2,167,129 Vested or expected to vest at December 31, 2022 15,393,320 0.38 1.27 $ 2,167,129 Exercisable at December 31, 2022 8,119,970 0.29 0.65 $ 1,827,059 The weighted average grant date fair value of options granted during the years ended December 31, 2020, 2021 and 2022 was $0.70, $0.58 and $0.48 respectively. Total proceeds from options exercised were $31,226 and $393,026 for the years ended December 31, 2021 and 2022, respectively. Compensation costs of $369,187, $2,627,031 and $1,739,337 have been charged against income during the years ended December 31, 2020, 2021 and 2022, respectively. As of December 31, 2022, there was $2,364,821 in total unrecognized compensation expense related to unvested options granted under the Plan, which is expected to be recognized over a weighted-average period of 1.74 years. During the year ended of December 31, 2022, the Company issued 1,400,000 ordinary shares for the share options exercised by employees and also released 2,405,140 performance share units for prior year performance based compensations. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 13. EMPLOYEE BENEFITS In accordance with the relevant rules and regulations in the PRC, employees of the Company are covered by benefit plans established by the local government. These plans are defined contribution plans and Zhejiang ReneSola Investment Ltd. (“ReneSola Investment”), Sichuan Bo Bo Power Engineering Co., Ltd. (“Sichuan Bo Bo”) and ReneSola Shanghai Ltd (“ReneSola Shanghai”), have respectively contributed 14%, 16% and 16% of the basic salaries of their employees to such plans. In addition, ReneSola Investment, Sichuan Bo Bo and ReneSola Shanghai are required by PRC law to respectively contribute approximately 17.95%, 14.63% and 16.16% of the basic salaries of their employees for medical insurance benefits, housing funds, unemployment and other statutory benefits. Other than such contributions, there is no further obligation for payments to employees under these plans. Total contributions were $877,709, $408,632 and $420,658 for the years ended December 31, 2020, 2021 and 2022, respectively. |
DISTRIBUTION OF PROFIT AND REST
DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS | |
DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS | 14. DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s PRC subsidiaries registered as wholly owned foreign enterprise have to make appropriations from their after-tax profits as determined under Chinese Accounting Standards (“CAS”) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with CAS. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the respective company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the Company’s PRC subsidiaries registered as Chinese domestic Companies must make appropriations from their after-tax profits as determined under CAS to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under CAS. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the respective Company. Appropriation to the discretionary surplus fund is made at the discretion of the respective Company. The general reserve is used to offset future losses. The subsidiary may, upon a resolution passed by the shareholder, convert the general reserve into capital. These reserves represent appropriations of the retained earnings determined in accordance with the Chinese law. In addition to the general reserve, the Company’s PRC subsidiaries are required to obtain approval from the local PRC government prior to distributing any registered share capital. Accordingly, both the appropriations to general reserve and the registered share capital of the Company’s PRC subsidiaries are considered as restricted net assets amounting to $33,013,266 as of December 31, 2022, representing 8.3% of the Company’s total consolidated net assets as of December 31, 2022. |
EARNINGS_ (LOSS) PER ADS
EARNINGS/ (LOSS) PER ADS | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS/ (LOSS) PER ADS | |
EARNINGS/ (LOSS) PER ADS | 15. EARNINGS/ (LOSS) PER ADS Basic and diluted earnings per ADS have been calculated as follows: For the years ended December 31, 2020 2021 2022 Numerator: Net income/(loss) $ 2,155,987 $ 6,614,460 $ (4,548,156) Less: Net income/(loss) attributed to noncontrolling interests (622,668) (247,413) 123,545 Total net income/(loss) attributed to Emeren Group Ltd $ 2,778,655 $ 6,861,873 $ (4,671,701) Numerator for diluted income/(loss) per ADS 2,778,655 6,861,873 (4,671,701) Denominator: Denominator for basic earnings (loss) per ADS - weighted average number of ADS outstanding* 49,166,354 68,906,139 64,924,455 Dilutive effects of share options* 622,068 934,499 — Denominator for diluted calculation - weighted average number of ADS outstanding* 49,788,422 69,840,638 64,924,455 Basic earnings (loss) per ADS 0.06 0.10 (0.07) Diluted earnings (loss) per ADS 0.06 0.10 (0.07) * All shares are converted to ADS, each ADS represents 10 common shares The Company issues ordinary shares to its share depository bank which will be used to settle stock option awards upon their exercise. Any ordinary shares not used in the settlement of stock option awards will be returned to the Company. As of December 31, 2021 and 2022, there are 45,805,710 and 48,373,350 ordinary shares, respectively, are legally issued to the share depository bank but are treated as escrowed shares for accounting purposes and therefore, have been excluded from the computation of earnings (loss) per ADS. The Company uses the treasury method in determining whether those potential common shares are dilutive or antidilutive. That is, the number of potential common shares, after considering the shares repurchased used in computing the diluted per-share amount for income/(loss). The following ordinary share equivalents were excluded from the computation of diluted net earnings/(loss) per share for the periods presented because including them would have been anti-dilutive: For the years ended December 31, 2020 2021 2022 Share options 7,304,020 — 5,441,650 |
NON-CONTROLLING INTEREST
NON-CONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2022 | |
NON-CONTROLLING INTEREST | |
NON-CONTROLLING INTEREST | 16. NON-CONTROLLING INTEREST On September 15, 2021, the Company, Emeren Group Ltd, received contributions from selling 49% of certain Company subsidiaries shares to non-controlling interest holders of subsidiaries, Eiffel Energy Transition Fund S.L.P, with consideration of $2,118,240. Net proceeds are used for capital expenditures to construct solar energy projects. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 17. RELATED PARTY BALANCES AND TRANSACTIONS (a) Related party balances At December 31, 2021 2022 Due from ReneSola Singapore (1) $ 2,345,874 $ — Due from other Related Party (2) 433,285 — Allowance for credit losses (3) (2,244,500) — Due from Related Party balances, net 534,659 — Due to ReneSola Singapore (1) 8,793,966 — Due to other Related Party (2) 1,272,143 1,475,254 Due to related party balances, net $ 9,531,450 $ 1,475,254 (b) Related party transactions During the years ended December 31, 2020, 2021 and 2022, related party transactions with ReneSola Singapore Pte., Ltd and its subsidiaries and other related party were as follows: Years ended December 31, 2020 2021 2022 Receiving services 26,070 23,538 9,437 Payment for service (6) — — 97,148 Rendering of service to 299,626 — — Borrowing from (4) 12,827 — — Bond issued to (5) — 1,272,143 203,111 Lending to (2) — 433,285 — (1) ReneSola Singapore Pte., Ltd and its subsidiaries was a related party of the Company in that both ReneSola Singapore and the Company are under common control of Mr. Li Xianshou. The balances due from ReneSola Singapore and its subsidiaries were mainly for rendering service to them. The balances due to ReneSola Singapore and its subsidiaries were mainly for modules, raw materials that the Company purchased from them and borrowings from them. In September 2022, the Company entered into a shares repurchase agreement with ReneSola Singapore Pte. As of December 31, 2022, ReneSola Singapore Pte owned 8.33% of the outstanding equity in the Company. Affiliates of ReneSola Singapore resigned from their offices as legal representatives, directors, and officers of the Company and its subsidiaries shortly after the closing of the repurchase transaction. Ms. Crystal (Xinhan) Li and Ms. Maggie (Yuanyuan) Ma resigned from the Board of the Company immediately upon closing of the repurchase transaction. Ms. Crystal (Xinhan) Li also resigned from her executive role as the vice president of investment of the Company simultaneously. The Company assessed and concluded they were no longer classified as a related party, as Renesola Singapore’s only connection with the Company was through its ownership of shares. Subsequent to January 2023, the Company repurchased the rest of its shares owned by ReneSola Singapore Pte. As a result of Singapore Pte ceases to be a related party as of December 31, 2022, the amount due from and due to ReneSola Singapore Pte of $68,993 and $7,977,839 were reclassified into other receivable and other current liabilities. (2) During 2021, the Company entered into an agreement with Eiffel Energy Transition Fund S.L.P with the intention to develop solar projects in Europe. The Company also transacted with its non-controlling interest’s subsidiary company of Solar Nexus Limited. The balances due from other related party mainly represented borrowing provided to Solar Nexus Limited for working capital purpose. In the first quarter of 2022, the Company sold the equity interest of Solar Nexus Limited to a third party and Solar Nexus Limited is no longer a related party to the Company. The Company reclassed due from Solar Nexus Limited to other receivables. In May 2022, the Company received the full payment from Solar Nexus Limited for the due from balance. The balances due to other related party were convertible bond issued to Eiffel Investment Group for solar power development purpose. (3) Allowance for credit losses represented long-aging receivable balances from ReneSola Singapore Pte., Ltd and its subsidiaries for which the Company deemed there was a credit risk. (4) Represents borrowings under an agreement between the Company (“borrower”) and ReneSola Singapore (the “lender”). The lender grants to the borrower a loan in the principal amount of up to $200,000,000 with annual interest rate of 1% . There is no fixed repayment schedule of this loan. (5) Represents the convertible bond issued to Eiffel Investment Group up to EUR 7,030,000 ($ 7,960,000 ) with annual interest rate of 2% . The bond has a maturity date of September 2031. During the convertible period and when there is an Event of Default and Acceleration Event (failure to redeem, a material misrepresentation by the Company, or misuse of the proceeds), the bond holder shall have the right to convert the issued convertible bonds at the conversion priced into shares of the issuer. The conversion price is determined as per evaluation equal to 70% of the purchase price of the Shares. The Company accounts for convertible bond as a single debt instrument at amortized cost. In April 2022, Eiffel Investment Group issued another $203,111 (EUR 255,000 ) to a subsidiary of the Company. As of December 31, 2022, the convertible bond was $1,475,254 (EUR 1,379,000 ). (6) Represents the amount that the Company paid the cash to ReneSola Singapore Pte., Ltd and its subsidiaries for settling historical payable balance and current year service provided to the Company before October 1, 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES (a) Operating lease accounting The Company leases rooftop, land, other property, and equipment under non-cancellable operating leases whose initial terms are typically 3 As this time, a certain portion of active leases within the Company portfolio are classified as operating leases under the new standard. Operating leases are included in leases right-of-use (“ROU”) assets, operating lease current liabilities, and operating lease non-current liabilities in the consolidated balance sheet. The ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make minimum lease payment arising from the lease for the duration of the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 year to 5 years or greater. The exercise of the lease renewal option To determine the present value of future minimum lease payments, the Company use the implicit rate when readily determinable. At this time, many of the Company leases do not provide an implicit rate; therefore, to determine the present value of minimum lease payments, the Company use its incremental borrowing rate based on the information available at lease commencement date. The ROU assets also include any lease payments made and exclude lease incentives. The components of lease expenses consisted of the following: Year Ended December 31, Lease cost Classification 2022 Operating lease cost Amortization of leased assets Depreciation, amortization $ 710,151 Interest on lease liabilities Interest expense 1,029,645 Net lease cost $ 1,739,796 Lease Term and Discount Rate December 31, 2022 Weighted-average remaining lease term (years) Operating leases 23.11 Weighted-average discount rate (%) Operating leases 6.35 % Year Ended December 31, Other information 2020 2021 2022 Cash paid for amount included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,017,981 $ 1,592,403 $ 2,719,988 Right of use assets obtained in exchange for lease obligations $ 814,811 $ 145,795 $ 5,252,612 As of December 31, 2022, future minimum payments required under the operating lease are: USD Year ended December 31, 2023 $ 2,225,284 2024 1,704,494 2025 1,790,875 2026 1,987,099 2027 2,296,868 2028 and later 29,877,920 Total minimum lease payments 39,882,540 Less: Amount representing interest (17,815,625) Present value of net minimum lease payments $ 22,066,915 Current portion 1,211,706 Non-current portion 20,855,209 (b) Capital commitments As of December 31, 2022, the Company had capital commitments of approximately $18,186,105. These capital commitments were solely related to contracts signed with vendors for procurement of services or PV related products used for the construction of solar PV systems being developed by the Company. The capital commitments as at balance sheet date disclosed above do not include those incomplete purchases or acquisitions as at balance sheet dates as the agreements could either be terminated unconditionally without any penalty or cancelable when the closing conditions as specified in the agreements could not be met. (c) Legal matters In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable and the amount of the loss is reasonably estimable. The Company is a party to legal matters and claims in the normal course of its operations. While the Company believes that the ultimate outcome of these matters will not have a material adverse effect on its financial position, results of operations or cash flows, the outcome of these matters is not determinable with certainty and negative outcomes may adversely affect the Company. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 19. SEGMENT REPORTING The Company separated the solar power project segment into three reportable segments, including solar power project development, EPC services and electricity generation Ancillary revenues and expenses and other unallocated costs and expenses are recorded in other. The chief operating decision maker is the chief executive officer of the Company. The Company only reports the segment information of net revenue and gross profit, to conform to the information the chief operating decision maker receives to assess the financial performance and allocate resources. There are no differences between the measurements of the Company’s reportable segment’s gross profit and the Company’s consolidated gross profit, as the Company uses the same profit measurement for all of the reportable segments and the consolidated entity. Furthermore, the Company’s chief operating decision maker is not provided with asset information by segment. As such, no asset information by segment is presented. The following table summarizes the Company’s revenues generated from each segment: Year ended December 31, 2020 Solar power project Electricity EPC development generation services Other Total Net revenue $ 49,160,215 $ 23,547,162 $ — $ 795,506 $ 73,502,883 Gross profit $ 4,374,238 $ 11,668,935 $ — $ 642,609 $ 16,685,782 Year ended December 31, 2021 Solar power project Electricity EPC development generation services Other Total Net revenue $ 61,036,228 $ 17,969,727 $ — $ 655,837 $ 79,661,792 Gross profit $ 23,867,607 $ 7,420,366 $ — $ 136,868 $ 31,424,841 Year ended December 31, 2022 Solar power project Electricity EPC development generation services Other Total Net revenue $ 13,753,389 $ 21,654,175 $ 24,760,309 $ 1,122,943 $ 61,290,816 Gross profit/(loss) $ 5,912,822 $ 10,488,052 $ (2,038,138) $ 973,129 $ 15,335,865 The following table summarizes the Company’s revenues generated by the geographic location of customers: Years ended December 31, 2020 2021 2022 China $ 16,557,196 $ 16,901,791 $ 20,736,852 United States 4,388,241 13,895,115 13,870,048 Canada 15,557,800 — — Romania 5,709,713 — — UK 655,102 — 1,078,770 Spain — 2,839,291 (490,466) France 152,548 96,210 14,025 Poland 10,008,838 24,943,755 24,850,487 Italy — — 779,475 Hungary 20,473,445 20,985,630 451,625 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS On January 4, 2023, the Company has entered into a securities repurchase agreement with ReneSola Singapore, pursuant to which, among other things, the Company will repurchase from ReneSola Singapore 3,000,000 ADSs at a price of $4.40 per ADS, totaling US$13.2 million through a privately negotiated transaction (the “Share Repurchase”). In addition, the Company primary shareholder, Shah Capital will purchase the remaining 2,050,000 ADSs owned by ReneSola Singapore at a price of $4.40 per ADS, totaling $9,020,000 through a privately negotiated transaction. After the completion of the two transactions, the Company’s primary shareholders will be domiciled outside of China. The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements, there were no other subsequent events occurred that would require recognition or disclosure in the consolidated financial statements. |
SUMMARY OF PRINCIPAL ACCOUNTI_2
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements have been prepared and presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to generate cash flows from operations, and the Company’s ability to arrange adequate financing arrangements, to support its working capital requirements. |
Basis of consolidation | (b) Basis of consolidation The consolidated financial statements include the financial statements of Emeren Group Ltd and its subsidiaries. All inter-company transactions, balances and unrealized profits and losses have been eliminated on consolidation. A non-controlling interest is recognized to reflect the portion of a subsidiary’s equity which is not attributable, directly or indirectly, to the Company. Consolidated net income (loss) on the consolidated statements of operations and comprehensive income (loss) includes the net income (loss) attributable to non-controlling interests when applicable. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company’s consolidated balance sheets. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows, when applicable. |
Fair value measurement | (c) Fair value measurement The Company estimates fair value of financial assets and liabilities as the price that would be received from the sales of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants. When available, the Company measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. When observable market prices are not readily available, the Company generally estimates the fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. |
Use of estimates | (d) Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting periods presented. Actual results could materially differ from these estimates. Significant accounting estimates are susceptible to changes with the acquisition of the information, which include revenue recognition for sales of project asset rights, percentage of completion of EPC services, EPC warranties, allowances for credit losses, valuation of deferred tax assets, and recoverability of the carrying value of long-lived assets and project assets. Management bases its estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. |
Cash and cash equivalents | (e) Cash and cash equivalents Cash and cash equivalents represent cash on hand and held with banks, including demand deposits and money market fund, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. |
Restricted Cash | (f) Restricted Cash Restricted cash consists of cash and cash equivalents held by various banks to secure certain of our notes payable and other deposits designated for the payment of amounts related to loan interest. Restricted cash also includes cash and cash equivalents held in frozen bank accounts due to judicial property preservations. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets as of December 31, 2021 and 2022 to the total of such amounts as presented in the consolidated statements of cash flows: At December 31, 2021 2022 Cash and cash equivalents $ 254,065,589 $ 107,104,714 Restricted cash 316,777 182,544 Total cash, cash equivalents, and restricted cash $ 254,382,366 $ 107,287,258 |
Accounts Receivable, trade and unbilled | (g) Accounts Receivable, trade and unbilled Accounts Receivable Trade, net The Company records trade accounts receivable for unconditional rights to consideration arising from the performance under contracts with customers. The carrying value of such receivables, net of the allowance for credit losses, represents their estimated net realizable value. Our electricity generation revenue generally includes up to 30-day payment terms following the transfer of control of the electricity generated to the customer. In addition, The Company is entitled to the feed-in tariff(s) (FIT) that the government guaranteed and subsidized electricity sale price at which solar power projects can produce green energy. The Company recognizes the FIT as part of the electricity generation revenue when the entitlement to receipt of such FIT is fulfilled. Accounts receivable from such FIT is expected to be collected beyond 12 months, which are discounted at an effective interest rate and recorded as a non-current asset. Payment terms for sales of project assets, operations and maintenance services vary by contract but are generally due upon demand or within several months of satisfying the associated performance obligations. The Company typically does not include extended payment terms in its contracts with customers. Accounts Receivable Unbilled, net Accounts receivable unbilled represents a contract asset for revenue that has been recognized in advance of billing the customer, which is common for our project-related sales contracts and EPC contracts. Revenue may be recognized in advance of billing the customer, resulting in an amount recorded to “Accounts receivable unbilled” depending on the expected timing of payment for such unbilled receivables. Once the Company has an unconditional right to consideration, it typically bills the customer and reclassifies the “Accounts receivable unbilled” to “Accounts receivable trade.” Billing requirements vary by contract but are generally structured around the completion of certain development, interconnection, or other specified milestones. Allowance for Credit Losses The allowance for credit losses is a valuation account that is deducted from a financial asset’s amortized cost to present the net amount we expect to collect from such asset. The Company estimates allowances for credit losses using relevant available information from both internal and external sources. In establishing the allowances, management considers historical losses, the financial condition, the accounts receivables aging, the payment patterns and the forecasted information in pooling basis upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC topic 326, Financial Instruments - Credit Losses. The Company monitors the estimated credit losses associated with its trade accounts receivable and unbilled accounts receivable based primarily on its collection history, which it reviews annually, and the delinquency status of amounts owed to the Company, which is determined based on the aging of such receivables. Such methods and estimates are adjusted, as appropriate, for relevant past events, current conditions, and reasonable and supportable forecasts. The Company recognizes write-offs within the allowance for credit losses when cash receipts associated with its financial assets are deemed uncollectible. |
Project assets | (h) Project assets The Company develops commercial solar power projects (“project assets”) for sale. Project assets consist primarily of costs relating to solar power projects in various stages of development that are capitalized prior to entering into a definitive sales agreement for the solar power project. These costs include certain acquisition costs, land costs and costs for developing and constructing a solar power project. Development costs can include legal, consulting, permitting, and other similar costs. Construction costs can include execution of field construction, installation of solar equipment, and solar modules and related equipment. Interest costs incurred on debt during the construction phase are also capitalized within project assets. The Company does not depreciate the project assets when they are considered held for sale. Any revenue generated from a solar power project connected to the grid would be considered incidental income and accounted for as a reduction of the capitalized project costs for development. In addition, the Company presents all expenditures related to the purchase, development and construction of project assets as a component of cash flows from operating activities. During the development phase, these project assets are accounted for in accordance with the recognition, initial measurement and subsequent measurement subtopics of ASC 970-360, as they are considered in substance real estate. While the solar power projects are in the development phase, they are generally classified as non-current assets, unless it is anticipated that construction will be completed, and sale will occur within one year. The Company capitalizes costs related to solar power projects in various stages of development prior to entering into a definitive sales agreement for the solar power project, and classifies these costs as project assets on the consolidated balance sheets when the criteria in ASC 360-10-45-9 are met. If criteria are not met, the Company reclassifies these capitalized costs to property, plant and equipment, unless the delay in the period required to complete the sale is caused by events or circumstances beyond the Company’s control. The Company reviews project assets and deferred project costs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. The Company considers a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets and the estimated costs to complete. The Company examines a number of factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental, ecological, permitting, market pricing or regulatory conditions that impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, the Company impairs the respective project assets and adjusts the carrying value to the estimated recoverable amount, with the resulting impairment recorded within operations. |
Contract costs | (i) Contract costs The Company provides EPC services including engineering design, construction contracting and management, procurement of PV modules, balance-of-system components and other components. Contract costs generally include all direct costs, such as materials, direct labor, and subcontracts, and indirect costs identifiable with or allocable to the contracts. Contract costs also include the costs related to the design, engineering, and costs of all PV modules and materials needed for the projects for the cooperation arrangements with third party to jointly construct the power projects for sale. Contract costs are accumulated and are charged to operations as the related revenue from contracts is recognized. Refer to note 2 (u) Sale of project assets constructed by a third-party EPC contractor and EPC services for the corresponding revenue streams. |
Advances to suppliers | (j) Advances to suppliers In order to secure a stable supply of construction materials, the Company makes advance payments to suppliers for raw material supplies and advances for purchases of long-lived assets which are offset against future deliveries. Advances to suppliers for purchases expected within twelve months as of each balance sheet date are recorded as advances to suppliers in current assets and those associated with purchases expected over longer periods of time are recorded in non-current advances to suppliers. As of December 31, 2021 and 2022, advances to suppliers in current assets were $276,737 and $1,016,895, respectively. The Company does not require collateral or other security against its advances to suppliers. As a result, the Company’s claims for such prepayments are unsecured, which exposes the Company to the suppliers’ credit risk. The Company performs ongoing credit evaluations of the financial condition of its material suppliers. |
Property, plant and equipment, net | (k) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation is computed on a straight-line basis over the following estimated useful lives: Plant and machinery 3‑5 years Motor vehicles 4‑5 years Office equipment 3‑5 years Power stations 20-40 years Estimated useful life of land is infinite and no depreciation is provided. Power stations represent project assets that the Company owned and operate after being placed in service. The Company reports its power stations at cost, less accumulated depreciation and impairment, if any. The Company begins depreciation for power stations when they are placed in service. The Company computes depreciation expense for the power station using the straight-line method over the shorter of the term of the related PPA or 20 to 40 years depends on the estimated useful lives of the project assets. Construction in progress represents mainly the construction of solar power projects the Company will own and operate for electricity generation. Costs incurred in the construction are capitalized and transferred to property, plant and equipment upon completion, at which time depreciation commences. Expenditures for repairs and maintenance are expensed as incurred. The gain or loss on disposal of property, plant and equipment, if any, is the difference between the net sales proceeds and the carrying amount of the disposed assets and is recognized in the consolidated statement of income upon disposal. |
Goodwill | (l) Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not depreciated or amortized but is tested for impairment at the reporting unit level on an annual basis, and between annual tests when an event occurs, or circumstances change that could indicate that the asset might be impaired. Under ASC 350-20, the Company has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The Company first makes a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value to determine whether it is necessary to perform a quantitative goodwill impairment test. Such qualitative impairment test considers various factors, including macroeconomic conditions, industry and market considerations, cost factors, the overall financial performance of a reporting unit, and any other relevant events affecting the Company or a reporting unit. If circumstances determine through the qualitative assessment that a reporting unit’s fair value is more likely than not greater than its carrying value, the quantitative impairment test is not required. If the qualitative assessment indicates it is more likely than not that a reporting unit’s fair value is less than its carrying value, the Company perform a quantitative impairment test. The quantitative impairment test is the comparison of the fair value of a reporting unit with its carrying amount, including goodwill. Our battery storage business represents one of the Company’s reporting units. The Company define the fair value of a reporting unit as the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. The Company primarily uses an income approach to estimate the fair value of our reporting unit. Significant judgment is required when estimating the fair value of a reporting unit, including the forecasting of future operating results and the selection of discount and expected future growth rates used to determine projected cash flows. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not impaired, and no further analysis is required. Conversely, if the carrying value of a reporting unit exceeds its estimated fair value, the Company records an impairment loss equal to the excess, not to exceed the total amount of goodwill allocated to the reporting unit. The Company performs goodwill impairment testing at the reporting unit level on December 31 annually and more frequently if indicators of impairment exist. The Company performed qualitative assessment on the reporting unit and concluded that it was not more likely that the fair value of the reporting unit was less that its carrying amount. Accordingly, no impairment loss of goodwill was recognized for the years ended December 31, 2020, 2021 and 2022. |
Held-to-maturity | (m) Held-to-maturity The Company’s held-to-maturity investments consist of investment-grade interest bearing instruments, such as the U.S. Treasury notes, which are stated at amortized cost. The Company do not intend to sell these investment securities. Those with maturities less than twelve months are included in investment securities in the current assets section of the Company’s consolidated balance sheets. Those with remaining maturities in excess of twelve months are included in investment securities in the non-current assets section of its consolidated balance sheets. The estimated fair value of these investments approximated their carrying value as of December 31, 2022. As of December 31, 2021 and 2022, held-to-maturity investments balance were nil and $10,046,645, respectively. During the years ended December 31, 2020, 2021, and 2022, the investment gain was nil, nil and $174,380, respectively. The Company reviews its investments for other-than-temporary impairment (“OTTI”) based on the specific identification method. The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Company considers, among other factors, general market conditions, expected future performance of the investees, the duration and the extent to which the fair value of the investment is less than the cost, and the Company’s intent and ability to hold the investment. OTTI is recognized as a loss in the consolidated statements of operations. |
Asset acquisiton | (n) Asset acquisition When the Company acquires other entities, if the assets acquired and liabilities assumed do not constitute a business, or if all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar assets, the transaction is accounted for as an asset acquisition. Assets are recognized based on the cost, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s books. If the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interest issued), measurement is based on either the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The cost of a group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair value and does not give rise to goodwill. |
Assets and liabilities held-for-sale | (o) Assets and liabilities held-for-sale Assets and asset disposal groups are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when management has committed to a plan of sale and the sale is highly probable, the assets are available for immediate sale in their present condition, and they are expected to qualify for recognition as a completed sale within one year from the date of classification. Assets and liabilities classified as held for sale are measured at lower of their carrying amount or fair value less costs to sell. Long-lived assets to be sold are classified as held for sale considering the recognition criteria in ASC 360-10-45-9 in which all of the following criteria are met: ● Management, having the authority to approve the action, commits to a plan to sell the asset, ● The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; ● An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; ● The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; ● The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and ● Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Interest capitalization | (p) Interest capitalization The Company capitalizes interest costs as part of the costs of constructing certain assets during the period of time required to get the assets ready for their intended use. The Company capitalizes interest to the extent that expenditures to construct an asset have occurred and interest costs have been incurred. The interest capitalized for project assets forms part of the cost of revenues when such project assets are sold, and all revenue recognition criteria are met. Interest is capitalized for solar power projects that are classified as property, plant and equipment and built for the Company to own and operate for electricity generation before the projects are completed and put into operation. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. |
Impairment of long-lived assets | (q) Impairment of long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than originally estimated. The Company assesses recoverability of the long-lived assets by comparing the carrying amount of the assets to the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The Company recognizes an impairment loss in the event the carrying amount exceeds the estimated future undiscounted cash flows attributable to such assets, measured as the difference between the carrying amount of the assets and the fair value of the impaired assets. Impairment losses of long-lived assets for the years ended December 31,2020, 2021 and 2022 were $1,432,296, $360,151 and nil, respectively. Impairment losses of these assets represented the difference between the carrying amount and fair value less cost to sell as a result of committed sale plans of solar power plants originally owned and operated by the Company for electricity generation. |
Leases | (r) Leases Leases are classified as finance or operating leases. A lease that transfers to the lessee substantially all the benefits and risks incidental to ownership is classified as a finance lease. At inception, a finance lease is recorded at the lower of the present value of minimum lease payments or the fair value of the asset. Assets under finance leases are amortized on a basis consistent with that of similar useful life of fixed assets or the end of lease term, whichever is earlier. If the lease transfers ownership or contains an option to purchase the asset that the lessee is reasonably certain to exercise, the finance leases should be amortized over the useful life of the asset. At the inception of each lease arrangement, the Company determines if the arrangement is a lease or contains an embedded lease and reviews the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under ASU 2016-02, Leases (Topic 842). The Company has elected not to record any leases with terms of 12 months or less on the consolidated balance sheets. Balances related to operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities current and operating lease liabilities non-current on the consolidated balance sheets. Finance leases represent a portion of the active lease agreements and are included in finance lease ROU assets, failed sales-leaseback and finance lease liabilities current and non-current on the consolidated balance sheets. The ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation of the Company to make minimum lease payments arising from the lease for the duration of the lease term. Operating lease costs are recognized on a straight-line basis over the lease term. From time to time, the Company’s subsidiaries are asked to prepay the lease costs for over one year. As of December 31, 2021 and 2022, the prepaid rental fees of $706,693 and $898,796, respectively, were recorded in operating lease right-of-use assets. To determine the present value of future minimum lease payments, the Company uses the implicit rate when readily determinable. Presently, because many of the leases do not provide an implicit rate, the Company applies its incremental borrowing rate, which is considered as the rate that the Company would negotiate when financing for a similar period, and with a similar guarantee, to obtain an asset of a similar value to the lease asset to determine the present value of minimum lease payments. The operating and finance lease ROU assets include any lease payments made and exclude lease incentives. For a sale-leaseback transaction, when the transaction involves real estate or integral equipment, sale-leaseback accounting shall be used by a seller-lessee only if the transaction includes all of the following a) normal leaseback; b) payment terms and provisions that adequately demonstrate the buyer-lessor’s initial and continuing investment in the property; and c) payment terms and provisions that transfer all of the other risks and rewards of ownership as demonstrated by the absence of any other continuing involvement by the seller-lessee. Equipment is determined to be integral when the cost to remove the equipment from its existing location, ship and reinstall at a new site, including any diminution in fair value, exceeds 10% of the fair value of the equipment at the time of original installation. If a sale-leaseback of real estate qualifies for sale-leaseback accounting, an analysis is performed to determine if the Company can record a sale and remove the assets from the balance sheet and recognize the lease; and if so, to determine whether to record the lease as either an operating or finance lease. If a sale-leaseback transaction does not qualify for sale-leaseback accounting because of any form of continuing involvement by the seller-lessee other than a normal leaseback, it is accounted for as a financing arrangement and recorded as failed sales-leaseback and finance lease liabilities, current and non-current on the consolidated balance sheet. |
Contingencies | (s) Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but the amount cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Income taxes | (t) Income taxes Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Deferred tax assets and liabilities are all classified as non-current in the consolidated balance sheets. |
Revenue recognition | (u) Revenue recognition Solar power project development a) Sale of project assets constructed by a third-party EPC contractor The Company recognizes revenue for sales of project assets constructed by a third-party EPC contractor over time as the Company’s performance creates an energy generation asset that is owned by the customer as it is being constructed and the customer can direct all activities related to the work in progress. Furthermore, the sale of a project asset when combined with EPC services represents a single performance obligation for the development and construction of a single generation asset. The Company recognizes revenue over time for construction contracts which recognize revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. Under this business model, the EPC services are provided by a third-party service provider. In accordance with the terms and conditions of the EPC contract, the Company has the ability to direct a third party to ensure that the EPC services to the customer are performed therefore the Company acts as the principal in this arrangement and both the revenue and cost amounts paid to the EPC contractor are recognized on a gross basis. b) Sale of project assets constructed by the Company’s own EPC team Under this business model, the Company sells power projects after they have been completed or are near completion. The Company conducts the construction of the power plant and completes or nearly completes the project before it identifies a customer. When a customer is identified, the Company enters into two agreements through signing: Sale and Purchase Agreement (“SPA”) and Operations and Maintenance (“O&M”) Services Contract, which are generally signed on the same date. Such arrangements consist of two performance obligations: sale of solar project and O&M services. For sale of a solar project, the Company recognizes revenue at a point in time once control of project company is transferred to the customer as the Company has no remaining performance obligation once the control is transferred upon closing of the sale. For O&M services, the Company recognizes revenue over time, ratably over the service period, as this performance enhances an energy generation asset controlled by the customer. c) Sale of project asset rights The Company sells the project rights to customers through the disposal of project companies holding the relevant permits. For these transactions, the project companies could either own the land or lease the land under the lease term that could cover the entire power plant’s life. The Company recognizes revenue for sale of project rights at a point in time once control of project rights is transferred to customer as the Company has no further obligations related to the project rights. For sale of project asset rights, the contract arrangements may contain provisions that can either increase or decrease the transaction price. These variable amounts generally are resolved upon achievement of certain performance or upon occurrence of certain price adjustment conditions. Variable consideration is estimated at each measurement date at its most likely amount to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur and true-ups are applied prospectively as such estimates change. Changes in estimates for sales of pre-development solar projects occur for a variety of reasons, including but not limited to (i) EPC construction plan accelerations or delays, (ii) product cost forecast changes, (iii) change orders, or (iv) occurrence of purchase price adjustment conditions. The cumulative effect of revisions to transaction prices are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. EPC Services The Company provides EPC services under the EPC contracts, under which the Company provides one distinct performance obligation – design and build the power plant on customer’s site per customer’s request. The Company recognizes revenue for EPC services over time as the Company’s performance creates or enhances an energy generation asset controlled by the customer. In recognizing revenue over time, the Company follows the costs incurred method and uses the actual costs incurred relative to the total estimated costs (including module costs) in order to determine the progress towards completion and calculate the corresponding amount of revenue and profit to recognize. Costs incurred include direct materials, solar modules, labor, subcontractor costs, and those indirect costs related to contract performance, such as indirect labor and supplies. The over time revenue recognition requires the Company to make estimates of net contract revenues and costs to complete the projects. In making such estimates, significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives, liquidated damages, and other payments to customers. Significant judgment is also required to evaluate assumptions related to the costs to complete the projects, including materials, labor, contingencies, and other system costs. Although the EPC contract usually clearly states a fixed unit price and the estimated total contract amount, the total contract amount is subject to variable consideration due to the difference between actual grid-connection capacity and estimated grid-connection capacity. The Company makes a reasonable estimation of grid-connection capacity, which represents a form of variable consideration. The variable consideration is estimated at the contact inception at the best estimate based on relevant experience and historical data and updated at the end of each reporting period as additional performance data becomes available and only to the extent that it is probably that a significant reversal of any revenue will not occur. If estimated total costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known. The cumulative effect of the revisions to estimates related to net contract revenues and costs to complete contracts, including penalties, claims, change orders, performance incentives, anticipated losses, and others are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. The effect of the changes on future periods are recognized as if the revised estimates had been used since revenue was initially recognized under the contract. Such revisions could occur in any reporting period, and the effects may be material depending on the size of the contracts or the changes in estimates. As of December 31, 2021, and 2022, the Company recorded a liability associated with the loss contract of nil and $741,912, respectively. The Company bills the customer based on progress billing terms in the contract. Accounts receivable from EPC services (unbilled) represents revenue that has been recognized in advance of billing the customer, which is common for long-term construction contracts. The Company typically recognizes revenue from contracts for the construction over time using cost-based input methods, which recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. Accordingly, revenue could be recognized in advance of billing the customer, resulting in an amount recorded to “Accounts receivable from EPC services (unbilled)”. Once the Company has an unconditional right to consideration under a construction contract, the Company typically bills the customer accordingly and reclassifies the “Accounts receivable from EPC services (unbilled)” to “Accounts receivable from EPC services (billed).” Billing requirements vary by contract but are generally structured around the completion of certain construction milestones. Certain of the EPC contracts for PV solar power systems contain retainage provisions. Retainage represents contract costs for the portion of the contract price earned for work performed but held for payment by the customer as a form of security until a certain defined timeframe has been reached. The Company considers whether collectability of such retainage is reasonably assured in connection with our overall assessment of the collectability of amounts due or that will become due under the EPC contracts. After the Company has satisfied the EPC contract requirements and has an unconditional right to consideration, the retainage is billed and reclassified to “Accounts receivable from EPC services (billed)”. As of December 31, 2021 and 2022, the balance of accounts receivable from EPC services (unbilled) were nil and $26,442,031, respectively. And there were no retainages in Accounts receivable or Accounts receivable (unbilled) as of December 31, 2021 and 2022. For EPC services, the Company provides a limited assurance only warranty for the modules, materials and construction part of the power plants. Although the Company subcontracts the construction to third party developers and purchases the raw materials and modules from third party suppliers, the Company is the primary obligor for the limited warranties such as solar module product warranty for a period of five one Electricity generation The Company recognizes electricity generation generated from power plants owned and operated by the Company over time as the customer receives and consumes the benefits as the Company performs. In recognizing revenue overtime, the Company follows the output method and uses the actual electricity supplied in order to calculate the corresponding amount of revenue and profit to recognize. The electricity generation records are reconciled with the power grid companies and the price of electricity is based on a fixed unit price according to the power purchase arrangement with the power grid companies. The Company is entitled to the feed-in tariff(s) (FIT) that the government guaranteed and subsidized electricity sale price at which solar power projects can produce green energy. The Company recognizes the FIT as part of the electricity generation revenue when the entitlement to receipt of such FIT is fulfilled. Accounts receivable from such FIT are expected to be collected beyond 12 months, i.e. expected collection of accounts receivable from such FIT as of December 31, 2020 and 2021 are expected within five years and accounts receivable from such FIT as of December 2022 are expected within 3 years. Thus the Company considers that the settlement terms to contain significant financing component and accordingly the amount of consideration is adjusted for the effects of the time value of money taking into consideration the credit characteristics of the relevant counterparties and are discounted at an effective interest rate of 4.75% based on the average borrowing rate in accordance with the financial institution. The Company recorded discounted receivable and as a non-current asset accordingly. As of December 31, 2022, there are $10,204,802 of FIT receivables classified as current and $20,187,213 classified as non-current. Historically, the Company has not been exposed to material risks due to changes in interest rates and changes in estimation of collection; however, the future interest income may decrease or interest expenses on borrowings may increase due to changes in market interest rates. Also as the receivable collection relies heavily based on the PRC government policies, the estimation of collection may adjust based on the changes in government policies as well as the market conditions. Revenue from green certificates The Company receives green energy certificates based on electricity generated from the power plants in a Romanian subsidiary. The Company sells these certificates to buyers who can then meet the mandatory government quota per year for green energy produced. The Company believes that these green certificates are a government incentive and the sale of green energy certificates does not fall into derivative and lease accounting scope. The Company recognizes revenue for the sale at a point in time once the control of green certificates has been transferred to the buyers according to the green certificate purchase arrangement. The consideration of selling green certificates sold is fixed as stated in the purchase arrangement. For the years ended December 31, 2020, 2021 and 2022, revenues from green certificates were $4,178,546, nil and nil, respectively, and are included in electricity generation revenue. In 2021 and 2022, the Company did not generate revenue from green certificates mainly due to the disposal of the Company’s power plants in a Romanian subsidiary that previously sold green certificates. The Company does not anticipate generating revenue from the sale of green certificates in foreseeable future. Contract Liability Advance from customers, which representing a contract liability, represent unrecognized revenue received from customers. Advance from customers is recognized as the Company performs under the contract. During the years ended December 31, 2020, 2021 and 2022, the Company recognized nil, $819,027 and nil as revenue that was included in the balance of advance from customers at January 1, 2019, 2020 and 2021. Disaggregation of Revenue Revenues from sales of project right and green certificates are recognized at a point in time whereas other revenues are recognized over time. The following tables summarizes the Company’s revenues by recognition points: 2020 2021 2022 Solar power project development $ 49,160,215 $ 61,036,228 $ 13,753,389 Sales from green certificates 4,178,546 — — Revenue recognized at the point in time 53,338,761 61,036,228 13,753,389 EPC Services — — 24,760,309 Electricity generation 19,368,616 17,969,727 21,654,175 Others 795,506 655,837 1,122,943 Revenue recognized over time 20,164,122 18,625,564 47,537,427 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 The following table summarizes the Company’s revenues generated by the geographic location of customers: Years ended December 31, 2020 2021 2022 China $ 16,557,196 $ 16,901,791 $ 20,736,852 United States 4,388,241 13,895,115 13,870,048 Canada 15,557,800 — — Romania 5,709,713 — — UK 655,102 — 1,078,770 Spain — 2,839,291 (490,466) France 152,548 96,210 14,025 Poland 10,008,838 24,943,755 24,850,487 Italy — — 779,475 Hungary 20,473,445 20,985,630 451,625 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 See Note 19. SEGMENT REPORTING for further details. Value added tax (“VAT”) Value added tax (“VAT”) at differentiated rates on invoice amount is collected on behalf of the tax authorities in respect of the different types of revenues and is not recorded as revenue. VAT paid for purchases, net of VAT collected from customers, is recorded as an asset. |
Other operating income (expenses) | (v) Other operating income (expenses) Other operating income (expenses) primarily consists of cancellation loss of project assets, disposal gain (loss) of property, plant and equipment and non FIT government grants. |
Government grants | (w) Government grants Government grant is recognized when there is reasonable assurance that the Company will comply with the conditions attached to it and the grant will be received. Government grant for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in the Company’s consolidated statements of operations when the grant becomes receivable. The Company collected government grants of $2,667,649, $6,468,244 and $12,237,038 from feed-in tariff(s) (FIT) for the electricity sold to the state grid companies in the PRC for the years ended December 31, 2020, 2021 and 2022 respectively. The Company recognized government grants of attracting foreign investment of $3,770, $252,929 and $47,563 in other operating |
Foreign currency | (x) Foreign currency The functional currency of Emeren Group Ltd is the United States Dollar (“U.S. dollar”). The functional currency of Emeren Group’s subsidiaries in the People’s Republic of China (“PRC”) is Renminbi (“RMB”). The functional currency of the overseas subsidiaries normally is the local currency in the country where the subsidiary is domiciled. Foreign currency transactions have been translated into the functional currency at the exchange rates prevailing on the date of transactions. Foreign currency denominated monetary assets and liabilities are remeasured into the functional currency at exchange rates prevailing on the balance sheet date. Exchange gains and losses have been included in the determination of net income. The Company has chosen the U.S. dollar as its reporting currency. Assets and liabilities have been translated using exchange rates prevailing on the balance sheet date. Income statement items have been translated using the weighted average exchange rate and equity is translated at historical exchange rates, except for the change in retained earnings during the year which is the result of the income or loss. Translation adjustments have been reported as a component of other comprehensive income/loss in the consolidated statement of comprehensive income/(loss). The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Company’s cash and cash equivalents and restricted cash denominated in RMB amounted to RMB79,358,888 ($12,453,155) and RMB 147,520,618 ($21,388,424) on December 31, 2021 and 2022, respectively. |
Fair value of financial instruments | (y) Fair value of financial instruments Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). The Company utilizes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value maximize the use of observable inputs. When available, the Company measures the fair value of financial instruments based on quoted market prices in active markets, valuation techniques that use observable market-based inputs or unobservable inputs that are corroborated by market data. Pricing information the Company obtains from third parties is internally validated for reasonableness prior to use in the consolidated financial statements. When observable market prices are not readily available, the Company generally estimates the fair value using valuation techniques that rely on alternate market data or inputs that are generally less readily observable from objective sources and are estimated based on pertinent information available at the time of the applicable reporting periods. In certain cases, fair values are not subject to precise quantification or verification and may fluctuate as economic and market factors vary and as the Company’s evaluation of those factors changes. Although the Company uses its best judgment in estimating the fair value of these financial instruments, there are inherent limitations in any estimation technique. In these cases, a minor change in an assumption could result in a significant change in its estimate of fair value, thereby increasing or decreasing the amounts of the Company’s consolidated assets, liabilities, equity and net income or loss. |
Earnings (loss) per ADS | (z) Earnings (loss) per ADS Basic earnings (loss) per ADS is computed by dividing income (loss) attributable to holders of ADS by the weighted average number of ADS outstanding during the year. Diluted earnings (loss) per ADS reflects the potential dilution that could occur if securities or other contracts to issue ADS were exercised or converted into ADS. |
Share-based compensation | (aa) Share-based compensation The Company recognizes expenses for services received in exchange for awards of equity instruments based on the grant-date fair value of the award as determined by the Black-Scholes option pricing model, net of estimated forfeitures. The estimated compensation cost is recognized ratably over the period the grantee is required to provide services per the conditions of the award. For stock option modifications, the Company measures the incremental compensation cost which should be measured as the excess, if any, of the fair value of the modified award determined over the fair value of the original award immediately before its terms are modified, which is measured based on the share price and other pertinent factors at that date. See Note 12, “Share Based Compensation” for further details. |
Comprehensive income (loss) | (ab) Comprehensive income (loss) Comprehensive income (loss) is the change in equity during a period from transactions and other events and circumstances from non-shareholder sources and included net income (loss) and foreign currency translation adjustments. As of December 31, 2021 and 2022, accumulated other comprehensive income (loss) is composed of foreign currency translation adjustments. |
Concentrations of credit risk | (ac) Concentrations of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, advances to suppliers and other receivables. The Company places its cash and cash equivalents with reputable financial institutions. The Company conducts credit evaluations of customers and generally does not require collateral or other security from its customers. The Company monitors the financial condition of customers and performs credit evaluations whenever considered necessary. |
Segment Reporting | (ad) Segment Reporting The Company uses the management approach in determining its operating segments. The Company’s chief operating decision maker (“CODM”) identified as the Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company only reports the segment information of net revenue and gross profit, to conform to the information the CODM receives to assess the financial performance and allocate resources. There are no differences between the measurements of the Company’s reportable segment’s gross profit and the Company’s consolidated gross profit, as the Company uses the same profit measurement for all of the reportable segments and the consolidated entity. Furthermore, the Company’s CODM is not provided with asset information by segment. As such, no asset information by segment is presented. |
Business Combinations | (ae) Business Combinations The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total cost of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings. In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in “others operating income and expenses, net” in the consolidated statements of comprehensive income. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. |
Recently adopted accounting pronouncements | (af) Recently adopted accounting pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 - Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (or ASU 2020-04). This ASU provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (or LIBOR). This ASU applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. This guidance is effective for all entities as of March 12, 2020 through December 31, 2024.The Company is currently evaluating this guidance and does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides guidance on the acquirer’s accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer to recognize and measures contract assets and contract liabilities acquired in a business combination at the acquisition date in accordance with ASC 606 as if it had originated the contracts. This guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance is required to be applied prospectively to business combinations occurring on or after the date of adoption. This guidance is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2021-08 effective January 1, 2023 and apply the guidance to subsequent acquisitions. The adoption of ASU 2021-08 will only impact the accounting for the Company’s future acquisitions. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance (or ASU 2021-10), which provides guidance on the disclosure of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The new guidance is required to be applied either prospectively to all transactions within the scope of ASU 2021-10 that are reflected in financial statements at the date of adoption and new transactions that are entered into after the date of adoption or retrospectively to those transactions. The new guidance is effective for annual periods beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 with no material impact on the Company’s consolidated financial statements. There are no other recent accounting pronouncements the adoption of which is expected to have a material effect on the Company’s consolidated financial statements in the current or any future periods. |
SUMMARY OF PRINCIPAL ACCOUNTI_3
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Schedule of the following table provides a reconciliation of cash, cash equivalents, and restricted cash | At December 31, 2021 2022 Cash and cash equivalents $ 254,065,589 $ 107,104,714 Restricted cash 316,777 182,544 Total cash, cash equivalents, and restricted cash $ 254,382,366 $ 107,287,258 |
Schedule of property, plant and equipment estimated useful lives | Plant and machinery 3‑5 years Motor vehicles 4‑5 years Office equipment 3‑5 years Power stations 20-40 years |
Schedule of disaggregation of revenue | 2020 2021 2022 Solar power project development $ 49,160,215 $ 61,036,228 $ 13,753,389 Sales from green certificates 4,178,546 — — Revenue recognized at the point in time 53,338,761 61,036,228 13,753,389 EPC Services — — 24,760,309 Electricity generation 19,368,616 17,969,727 21,654,175 Others 795,506 655,837 1,122,943 Revenue recognized over time 20,164,122 18,625,564 47,537,427 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 Years ended December 31, 2020 2021 2022 China $ 16,557,196 $ 16,901,791 $ 20,736,852 United States 4,388,241 13,895,115 13,870,048 Canada 15,557,800 — — Romania 5,709,713 — — UK 655,102 — 1,078,770 Spain — 2,839,291 (490,466) France 152,548 96,210 14,025 Poland 10,008,838 24,943,755 24,850,487 Italy — — 779,475 Hungary 20,473,445 20,985,630 451,625 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
Schedule of final allocation on the purchase prices to the fair value of the net assets acquired | As of acquisition close date Project assets (1) $ 2,874,060 Net assets acquired 2,874,060 Goodwill 1,022,567 Total consideration transferred/Net cash paid $ 3,896,627 (1) Included in project assets are incurred cost such as consultant fee, legal fee and salaries which have been capitalized in accordance with ASC 970-360, as they are directly attributable and incurred in the development phase. |
ACCOUNTS RECEIVABLE TRADE, NET
ACCOUNTS RECEIVABLE TRADE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE TRADE, NET | |
Schedule of components of accounts receivable, net | At December 31, 2021 2022 Accounts receivable trade – from EPC services $ 2,640,710 $ 2,429,593 – from solar power project assets 22,995,822 8,607,742 – from electricity generation (1) 10,848,278 12,669,890 Total accounts receivable trade 36,484,810 23,707,225 Less: allowance for credit losses (2,135,885) (2,036,773) Accounts receivable trade, net $ 34,348,925 $ 21,670,452 (1) Accounts receivable from electricity generation were mainly due from China’s state grid companies. The amounts included the portion of feed-in tariff(s) (FIT) for the electricity sold to the state grid companies in the PRC in which the relevant on-grid solar power stations are still pending for registration to the Renewable Energy Subsidy Catalog, which the Company has submitted the application for its solar power stations started operation before July 2017 to be registered on the Catalog. The Company expects that a certain part of the FIT receivables will be recovered after twelve months from the reporting date, which are discounted at an effective interest rate. As of December 31, 2022, there are $10,204,802 of FIT receivables classified as current and $20,187,213 classified as non-current, which is included in the other non-current assets on the consolidated balance sheets. |
Schedule of Accounts Receivable Unbilled | At December 31, 2021 2022 Accounts receivable unbilled –from solar power project assets $ 11,473,590 $ 18,151,798 –from EPC services — 26,442,031 Total accounts receivable unbilled 11,473,590 44,593,829 Less: allowance for credit losses — (711,788) Accounts receivable unbilled, net $ 11,473,590 $ 43,882,041 |
Schedule of movement in lifetime expected credit losses that has been recognized for trade receivable | At December 31, 2021 2022 At beginning of year $ 2,427,577 $ 2,135,885 Allowance for credit losses 90,345 612,676 Written off (382,037) — At end of year $ 2,135,885 $ 2,748,561 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | At December 31, 2021 2022 Receivable from disposal of property, plant and equipment (1) $ 3,714,161 $ 554,456 Deposits (2) 8,048,529 11,521,660 EPC Warranty reimbursement receivables 201,067 — Others (3) 3,989,377 4,084,797 Total prepaid expenses and other current assets 15,953,134 16,160,913 Allowance for credit losses (4) (1,434,483) (1,186,995) Total prepaid expenses and other current assets $ 14,518,651 $ 14,973,918 (1) Receivable from disposal of property, plant and equipment mainly represented disposal of Company’s solar power assets which was primarily for electricity generation revenue segment. (2) As of December 31, 2022 deposits mainly represented deposits made for interconnection, and the bidding of project asset construction rights and rooftop leases. (3) As of December 31, 2022, others mainly included $ 1,069,800 prepayment for purchasing Italy projects, $ 811,581 prepayment on Korea project development (among which, the Company has recorded 50% of prepayment as allowance for credit losses during the year ended December 31, 2021), and $ 235,627 receivable for compensation from the insurance provider for China projects. During the year ended December 2022, the Company wrote off $161,743 other receivable. (4) Allowance for credit losses mainly represented the portion of compensation receivable from Canadian authorities on closure of a certain project in Canada that the Company believes is not recoverable, unrecoverable collection from sold entities in China, and allowance for the Korea project’s prepayment which the Company deemed partially not recoverable. |
PROJECT ASSETS (Tables)
PROJECT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROJECT ASSETS | |
Schedule of Project Assets | At December 31, 2021 2022 Project assets - Module cost $ 1,077,213 $ — Project assets - Development and construction cost 14,631,425 51,613,275 Project assets - Others 429,199 945,779 Total project assets $ 16,137,837 $ 52,559,054 Current portion 9,587,254 25,969,148 Non-current portion 6,550,583 26,589,906 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of property, plant and equipment. net | At December 31, 2021 2022 Land $ 282,000 $ 275,000 Plant and machinery 858,948 781,324 Motor vehicles 65,473 94,654 Office equipment 252,150 381,118 Power stations (1) 138,533,441 191,011,142 Less: Accumulated depreciation (19,181,277) (25,438,066) 120,810,735 167,105,172 Construction in progress 4,835,751 3,372,189 Property, plant and equipment, net $ 125,646,486 $ 170,477,361 (1) All power stations were self-constructed, except for Project Branston that the Company acquired on September 30, 2022 with an original cost of $42,793,499 (as discussed in Note 3). |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of Components of Tax Benefit (Expense) | Years ended December 31, 2020 2021 2022 Income (loss) before income tax PRC $ 2,104,024 $ 1,589,476 $ 4,107,651 Other jurisdictions 214,999 5,799,396 (6,738,601) Total 2,319,023 7,388,872 (2,630,950) Current tax expense PRC (5,118) (348,494) (733,102) Other jurisdictions (441,495) (66,754) (466,887) Subtotal (446,613) (415,248) (1,199,989) Deferred tax benefit (expense) PRC — — (717,217) Other jurisdictions 283,577 (359,164) — Subtotal 283,577 (359,164) (717,217) Total income tax expense $ (163,036) $ (774,412) $ (1,917,206) |
Schedule of Principal Components of Deferred Income Tax Assets and Liabilities | At December 31, 2021 2022 Deferred tax assets: Accrued expenses $ 13,772 $ 44,496 Net operating losses 7,214,260 11,671,895 Unrealized internal profit 776,260 717,217 Allowances for credit losses 1,209,220 1,209,220 Impairment loss of assets 126,337 126,337 Other 133,409 80,613 Total gross deferred tax assets 9,473,258 13,849,778 Valuation allowance on deferred tax assets (8,696,997) (13,849,778) Net deferred tax assets $ 776,261 $ — Deferred tax Liabilities: Asset acquisitions — (3,573,146) Deferred tax liabilities $ — $ (3,573,146) |
Schedule of Reconciliation Between the Applicable Statutory Income Tax Rate and the Company's Effective Tax Rate | Years ended December 31, 2020 2021 2022 PRC applicable income tax rate 25 % 25 % 25 % Change in deferred tax valuation allowance (21) % (20) % (146) % Preferential tax rate (1) (42) % (16) % 30 % Tax effect of non-deductible expenses — — (15) % Effect of different tax rate of subsidiaries 39 % 17 % (27) % Non-taxable income — — 67 % Other 6 % 4 % (7) % Effective income tax rate 7 % 10 % (73) % |
Schedule of Aggregate Amount and Per Share Effect of the Tax Holiday | Years ended December 31, 2020 2021 2022 Preferential tax effect (1) $ 975,859 $ 1,160,939 $ 797,235 (1) Certain solar power project entities are fully exempted from the PRC CIT for three years starting from the year in which such project generates revenue from the sale of electricity and is 50 % exempted from PRC CIT for another three years. |
BORROWINGS AND OTHER FINANCIN_2
BORROWINGS AND OTHER FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | |
Schedule of bank borrowings | At December 31, 2021 2022 Long-term borrowings, current portion — 1,007,886 Long-term borrowings 61,510 22,518,272 Total borrowings from bank and other third parties $ 61,510 $ 23,526,158 |
Schedule of future minimum payments required under the finance lease | USD Years ended December 31, 2023 $ 4,520,059 2024 1,188,020 2025 1,087,426 2026 846,110 2027 829,884 2028 and later — Total minimum lease payments 8,471,499 Less: Amount representing interest (873,868) Present value of net minimum lease payments 7,597,631 Current portion 4,337,287 Non-current portion $ 3,260,344 |
Schedule of components of failed sale-lease back and finance lease liabilities | USD Years ended December 31, 2023 $ 4,520,059 2024 1,188,020 2025 1,087,426 2026 846,110 2027 829,884 2028 and later — Total minimum lease payments 8,471,499 Less: Amount representing interest (873,868) Present value of net minimum lease payments 7,597,631 Current portion 4,337,287 Non-current portion $ 3,260,344 |
Schedule of future minimum payments required under the lease loan contract | USD Years ended December 31, 2023 $ 2,191,432 2024 1,183,546 2025 1,183,546 2026 1,183,546 2027 1,183,546 2028 and later 38,245,351 Total minimum lease loan payments 45,170,967 Less: Amount representing interest (21,782,777) Present value of net minimum lease loan payments $ 23,388,190 |
Schedule of future minimum payments required under the failed sale-lease back | USD Years ended December 31, 2023 $ 5,983,227 2024 5,212,979 2025 5,237,385 2026 3,113,914 2027 867,248 2028 and later 49,131 Total minimum lease payments 20,463,884 Less: Amount representing interest (3,105,733) Present value of net minimum lease payments 17,358,151 Current portion 5,655,990 Non-current portion $ 11,702,161 At December 31, 2021 2022 Current portion of finance lease $ 4,654,284 $ 4,337,287 Current portion of failed sale and lease back 6,712,423 5,655,990 Total current portion of failed sale-lease back and finance lease 11,366,707 9,993,277 Non-current portion for finance lease 9,533,475 3,260,344 Non-current portion for failed sale and lease back 20,383,449 11,702,161 Total non-current portion of failed sale-lease back and finance lease $ 29,916,924 $ 14,962,505 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER CURRENT LIABILITIES | |
Schedule of Other Current Liabilities | At December 31, 2021 2022 Payables for purchase of property, plant and equipment (1) $ 5,533,545 $ 14,321,740 Other tax payables 150,828 157,233 Accrued EPC warranty liabilities 198,629 — Other (2) 2,560,961 2,969,816 $ 8,443,963 $ 17,448,789 (1) Payable for purchase of property, plant and equipment as of December 31, 2022 included as payable to ReneSola Singapore Pte Ltd.’s subsidiaries. As of December 31, 2022, ReneSola Singapore Pte Ltd.’s subsidiaries did not belong to related parties. See Note 17 “RELATED PARTY BALANCES AND TRANSACTIONS” for further details. (2) Other as of December 31, 2022 mainly includes the payables for claims, audit fees and other professional service fees. |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE BASED COMPENSATION | |
Schedule of assumptions used to estimate the fair value of the options | Average risk- Weighted average free expected option Dividend rate of return life Volatility rate yield Granted in 2020 0.09-0.1 % 1 year 104.01-119.20 % 0 % Granted in 2021 0.33-0.97 % 3 years 131.84-132.91 % 0 % Granted in 2022 2.87-3.98 % 3 years 129.34-132.67 % 0 % |
Schedule of the option activity | Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Options Exercise Prices Contractual Life Value Outstanding on December 31, 2019 8,575,000 0.21 0.14 — Granted 700,000 0.30 0.97 — Exercised (1,945,980) 0.25 — — Forfeited (25,000) 0.47 — — Outstanding on December 31, 2020 7,304,020 0.21 1.49 — Granted 8,740,000 0.64 1.88 — Exercised (120,680) 0.26 — — Forfeited (280,000) 1.00 — — Outstanding on December 31, 2021 15,643,340 0.43 1.32 — Granted 6,500,000 0.40 2.26 — Exercised (1,400,000) 0.27 — — Forfeited (5,350,020) 0.58 — — Outstanding on December 31, 2022 15,393,320 0.38 1.27 $ 2,167,129 Vested or expected to vest at December 31, 2022 15,393,320 0.38 1.27 $ 2,167,129 Exercisable at December 31, 2022 8,119,970 0.29 0.65 $ 1,827,059 |
EARNINGS_ (LOSS) PER ADS (Table
EARNINGS/ (LOSS) PER ADS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS/ (LOSS) PER ADS | |
Schedule of Basic and diluted earnings per ADS | For the years ended December 31, 2020 2021 2022 Numerator: Net income/(loss) $ 2,155,987 $ 6,614,460 $ (4,548,156) Less: Net income/(loss) attributed to noncontrolling interests (622,668) (247,413) 123,545 Total net income/(loss) attributed to Emeren Group Ltd $ 2,778,655 $ 6,861,873 $ (4,671,701) Numerator for diluted income/(loss) per ADS 2,778,655 6,861,873 (4,671,701) Denominator: Denominator for basic earnings (loss) per ADS - weighted average number of ADS outstanding* 49,166,354 68,906,139 64,924,455 Dilutive effects of share options* 622,068 934,499 — Denominator for diluted calculation - weighted average number of ADS outstanding* 49,788,422 69,840,638 64,924,455 Basic earnings (loss) per ADS 0.06 0.10 (0.07) Diluted earnings (loss) per ADS 0.06 0.10 (0.07) * All shares are converted to ADS, each ADS represents 10 common shares |
Schedule of the computation of diluted net earnings/(loss) per share for the periods presented because including them would have been anti-dilutive | For the years ended December 31, 2020 2021 2022 Share options 7,304,020 — 5,441,650 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of amounts due to related parties comprised of amounts payable to purchase of raw materials and others | At December 31, 2021 2022 Due from ReneSola Singapore (1) $ 2,345,874 $ — Due from other Related Party (2) 433,285 — Allowance for credit losses (3) (2,244,500) — Due from Related Party balances, net 534,659 — Due to ReneSola Singapore (1) 8,793,966 — Due to other Related Party (2) 1,272,143 1,475,254 Due to related party balances, net $ 9,531,450 $ 1,475,254 |
Schedule of related party transactions | Years ended December 31, 2020 2021 2022 Receiving services 26,070 23,538 9,437 Payment for service (6) — — 97,148 Rendering of service to 299,626 — — Borrowing from (4) 12,827 — — Bond issued to (5) — 1,272,143 203,111 Lending to (2) — 433,285 — (1) ReneSola Singapore Pte., Ltd and its subsidiaries was a related party of the Company in that both ReneSola Singapore and the Company are under common control of Mr. Li Xianshou. The balances due from ReneSola Singapore and its subsidiaries were mainly for rendering service to them. The balances due to ReneSola Singapore and its subsidiaries were mainly for modules, raw materials that the Company purchased from them and borrowings from them. In September 2022, the Company entered into a shares repurchase agreement with ReneSola Singapore Pte. As of December 31, 2022, ReneSola Singapore Pte owned 8.33% of the outstanding equity in the Company. Affiliates of ReneSola Singapore resigned from their offices as legal representatives, directors, and officers of the Company and its subsidiaries shortly after the closing of the repurchase transaction. Ms. Crystal (Xinhan) Li and Ms. Maggie (Yuanyuan) Ma resigned from the Board of the Company immediately upon closing of the repurchase transaction. Ms. Crystal (Xinhan) Li also resigned from her executive role as the vice president of investment of the Company simultaneously. The Company assessed and concluded they were no longer classified as a related party, as Renesola Singapore’s only connection with the Company was through its ownership of shares. Subsequent to January 2023, the Company repurchased the rest of its shares owned by ReneSola Singapore Pte. As a result of Singapore Pte ceases to be a related party as of December 31, 2022, the amount due from and due to ReneSola Singapore Pte of $68,993 and $7,977,839 were reclassified into other receivable and other current liabilities. (2) During 2021, the Company entered into an agreement with Eiffel Energy Transition Fund S.L.P with the intention to develop solar projects in Europe. The Company also transacted with its non-controlling interest’s subsidiary company of Solar Nexus Limited. The balances due from other related party mainly represented borrowing provided to Solar Nexus Limited for working capital purpose. In the first quarter of 2022, the Company sold the equity interest of Solar Nexus Limited to a third party and Solar Nexus Limited is no longer a related party to the Company. The Company reclassed due from Solar Nexus Limited to other receivables. In May 2022, the Company received the full payment from Solar Nexus Limited for the due from balance. The balances due to other related party were convertible bond issued to Eiffel Investment Group for solar power development purpose. (3) Allowance for credit losses represented long-aging receivable balances from ReneSola Singapore Pte., Ltd and its subsidiaries for which the Company deemed there was a credit risk. (4) Represents borrowings under an agreement between the Company (“borrower”) and ReneSola Singapore (the “lender”). The lender grants to the borrower a loan in the principal amount of up to $200,000,000 with annual interest rate of 1% . There is no fixed repayment schedule of this loan. (5) Represents the convertible bond issued to Eiffel Investment Group up to EUR 7,030,000 ($ 7,960,000 ) with annual interest rate of 2% . The bond has a maturity date of September 2031. During the convertible period and when there is an Event of Default and Acceleration Event (failure to redeem, a material misrepresentation by the Company, or misuse of the proceeds), the bond holder shall have the right to convert the issued convertible bonds at the conversion priced into shares of the issuer. The conversion price is determined as per evaluation equal to 70% of the purchase price of the Shares. The Company accounts for convertible bond as a single debt instrument at amortized cost. In April 2022, Eiffel Investment Group issued another $203,111 (EUR 255,000 ) to a subsidiary of the Company. As of December 31, 2022, the convertible bond was $1,475,254 (EUR 1,379,000 ). (6) Represents the amount that the Company paid the cash to ReneSola Singapore Pte., Ltd and its subsidiaries for settling historical payable balance and current year service provided to the Company before October 1, 2022. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of components of lease expenses | Year Ended December 31, Lease cost Classification 2022 Operating lease cost Amortization of leased assets Depreciation, amortization $ 710,151 Interest on lease liabilities Interest expense 1,029,645 Net lease cost $ 1,739,796 Lease Term and Discount Rate December 31, 2022 Weighted-average remaining lease term (years) Operating leases 23.11 Weighted-average discount rate (%) Operating leases 6.35 % Year Ended December 31, Other information 2020 2021 2022 Cash paid for amount included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,017,981 $ 1,592,403 $ 2,719,988 Right of use assets obtained in exchange for lease obligations $ 814,811 $ 145,795 $ 5,252,612 |
Schedule of future minimum payments required under the operating lease | USD Year ended December 31, 2023 $ 2,225,284 2024 1,704,494 2025 1,790,875 2026 1,987,099 2027 2,296,868 2028 and later 29,877,920 Total minimum lease payments 39,882,540 Less: Amount representing interest (17,815,625) Present value of net minimum lease payments $ 22,066,915 Current portion 1,211,706 Non-current portion 20,855,209 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT REPORTING | |
Schedule of the Company's revenues generated from each segment | Year ended December 31, 2020 Solar power project Electricity EPC development generation services Other Total Net revenue $ 49,160,215 $ 23,547,162 $ — $ 795,506 $ 73,502,883 Gross profit $ 4,374,238 $ 11,668,935 $ — $ 642,609 $ 16,685,782 Year ended December 31, 2021 Solar power project Electricity EPC development generation services Other Total Net revenue $ 61,036,228 $ 17,969,727 $ — $ 655,837 $ 79,661,792 Gross profit $ 23,867,607 $ 7,420,366 $ — $ 136,868 $ 31,424,841 Year ended December 31, 2022 Solar power project Electricity EPC development generation services Other Total Net revenue $ 13,753,389 $ 21,654,175 $ 24,760,309 $ 1,122,943 $ 61,290,816 Gross profit/(loss) $ 5,912,822 $ 10,488,052 $ (2,038,138) $ 973,129 $ 15,335,865 |
Schedule of the Company's revenues generated by geographic location of customers | Years ended December 31, 2020 2021 2022 China $ 16,557,196 $ 16,901,791 $ 20,736,852 United States 4,388,241 13,895,115 13,870,048 Canada 15,557,800 — — Romania 5,709,713 — — UK 655,102 — 1,078,770 Spain — 2,839,291 (490,466) France 152,548 96,210 14,025 Poland 10,008,838 24,943,755 24,850,487 Italy — — 779,475 Hungary 20,473,445 20,985,630 451,625 Total $ 73,502,883 $ 79,661,792 $ 61,290,816 |
SUMMARY OF PRINCIPAL ACCOUNTI_4
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Advances to Suppliers and Advances for Purchase of Property, Plant and Equipment and Intangible Assets) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | ||
Advances to suppliers-current | $ 1,016,895 | $ 276,737 |
Prepaid rental fees | $ 898,796 | $ 706,693 |
SUMMARY OF PRINCIPAL ACCOUNTI_5
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Schedule of Estimated Useful Lives of Property, Plant and Equipment Stated at Cost Less Accumulated Depreciation) (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Plant and machinery | Minimum | |
Estimated useful lives | 3 years |
Plant and machinery | Maximum | |
Estimated useful lives | 5 years |
Motor vehicles | Minimum | |
Estimated useful lives | 4 years |
Motor vehicles | Maximum | |
Estimated useful lives | 5 years |
Office equipment | Minimum | |
Estimated useful lives | 3 years |
Office equipment | Maximum | |
Estimated useful lives | 5 years |
Power stations | Minimum | |
Estimated useful lives | 20 years |
Power stations | Maximum | |
Estimated useful lives | 40 years |
Power stations owned in different countries | Minimum | |
Estimated useful lives | 20 years |
Power stations owned in different countries | Maximum | |
Estimated useful lives | 40 years |
SUMMARY OF PRINCIPAL ACCOUNTI_6
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Impairment loss of goodwill | $ 0 | $ 0 | $ 0 |
SUMMARY OF PRINCIPAL ACCOUNTI_7
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Held-to-maturity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Held-to-maturity investments | $ 10,046,645 | $ 0 | |
Investment gain from treasury note | $ 174,380 | $ 0 | $ 0 |
SUMMARY OF PRINCIPAL ACCOUNTI_8
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Convertible Senior Notes, Revenue Recognition, Deferred Project Revenue, Cost of Revenues, Warranty Costs and Government Grants) (Details) | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2022 USD ($) agreement | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | |
Number of agreements | agreement | 2 | |||
Impairment losses of long-lived assets | $ 0 | $ 360,151 | $ 1,432,296 | |
Revenue from green certificates | 61,290,816 | 79,661,792 | 73,502,883 | |
Recognized government grants | 47,563 | 252,929 | 3,770 | |
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Operating Income (Expense), Net | |||
Accounts receivable unbilled, net | 43,882,041 | 11,473,590 | $ 43,882,041 | |
Proceeds of government grants from feed-in tariff(s) (FIT) | $ 12,237,038 | 6,468,244 | 2,667,649 | |
Minimum | ||||
Term of product warranty | 5 years | |||
Term of service warranty | 1 year | |||
Maximum | ||||
Term of product warranty | 10 years | |||
Term of service warranty | 2 years | |||
Green certificates | ||||
Revenue from green certificates | $ 0 | 0 | 4,178,546 | |
Advance from customers, revenue recognized | 0 | 819,027 | 0 | |
EPC Services | ||||
Revenue from green certificates | 24,760,309 | 0 | $ 0 | |
Liability on loss contract | 741,912 | 0 | 741,912 | |
Accounts receivable unbilled, net | $ 26,442,031 | $ 0 | $ 26,442,031 | |
Electricity Revenue Generation [Member] | ||||
Feed-in tariff(s) (FIT) receivables, recovery period | 12 months | 5 years | 5 years | |
Effective interest rate of feed-in tariff(s) (FIT) receivables | 4.75% | 4.75% | ||
Feed-in tariff(s) (FIT) receivables, current | $ 10,204,802 | $ 10,204,802 | ||
Feed-in tariff(s) (FIT) receivables, noncurrent | $ 20,187,213 | $ 20,187,213 |
SUMMARY OF PRINCIPAL ACCOUNTI_9
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Company's revenues (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | $ 61,290,816 | $ 79,661,792 | $ 73,502,883 |
At the point in time | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 13,753,389 | 61,036,228 | 53,338,761 |
Over time | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 47,537,427 | 18,625,564 | 20,164,122 |
Solar power project development | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 13,753,389 | 61,036,228 | 49,160,215 |
Sales from green certificates | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 0 | 0 | 4,178,546 |
EPC Services | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 24,760,309 | 0 | 0 |
Electricity generation | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | 21,654,175 | 17,969,727 | 19,368,616 |
Others | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Net revenues | $ 1,122,943 | $ 655,837 | $ 795,506 |
SUMMARY OF PRINCIPAL ACCOUNT_10
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Company's revenues geographic location (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | $ 61,290,816 | $ 79,661,792 | $ 73,502,883 |
China | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 20,736,852 | 16,901,791 | 16,557,196 |
United States | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 13,870,048 | 13,895,115 | 4,388,241 |
Canada | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 0 | 0 | 15,557,800 |
Romania | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 0 | 0 | 5,709,713 |
UK | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 1,078,770 | 0 | 655,102 |
Spain | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | (490,466) | 2,839,291 | 0 |
France | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 14,025 | 96,210 | 152,548 |
Poland | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 24,850,487 | 24,943,755 | 10,008,838 |
Italy | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 779,475 | 0 | 0 |
Hungary | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | 451,625 | 20,985,630 | 20,473,445 |
UK | |||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||
Total | $ 1,078,770 | $ 0 | $ 655,102 |
SUMMARY OF PRINCIPAL ACCOUNT_11
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Foreign Currency and Derivative Financial Instruments) (Details) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2021 USD ($) |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | ||||
Cash and cash equivalents, functional currency equivalent of foreign currency denominated amount | ¥ 147,520,618 | $ (21,388,424) | ¥ 79,358,888 | $ 12,453,155 |
SUMMARY OF PRINCIPAL ACCOUNT_12
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Restricted cash (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | ||||
Cash and cash equivalents | $ 107,104,714 | $ 254,065,589 | ||
Restricted cash | 182,544 | 316,777 | ||
Total cash, cash equivalents, and restricted cash | $ 107,287,258 | $ 254,382,366 | $ 40,676,311 | $ 24,697,153 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) | 9 Months Ended | 12 Months Ended | ||||||||||
Oct. 11, 2022 USD ($) | Oct. 11, 2022 EUR (€) | Sep. 30, 2022 USD ($) item | Nov. 17, 2020 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2022 GBP (£) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 EUR (€) | Oct. 11, 2022 EUR (€) | Sep. 30, 2022 GBP (£) item | Dec. 31, 2021 USD ($) | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Goodwill | $ 1,022,567 | $ 1,022,567 | ||||||||||
Branston Solar Farm Limited | ||||||||||||
ACQUISITION | ||||||||||||
Number of MWp operational solar farm held | item | 50 | 50 | 50 | |||||||||
Contract term for output of the plant | 40 years | |||||||||||
Cash consideration | $ 21,578,748 | £ 17,867,639 | ||||||||||
Other net assets | $ 2,289,352 | 2,289,352 | £ 1,895,630 | |||||||||
Deferred tax liabilities due to fair value adjustment upon acquisition | 973,932 | 973,932 | ||||||||||
Branston Solar Farm Limited | Takeover of existing loans | Aviva Investor Infrasture Income No.4 Ltd | ||||||||||||
ACQUISITION | ||||||||||||
Term loan amount | $ 22,530,171 | $ 22,530,171 | £ 18,655,437 | |||||||||
Shares Purchase Agreement to acquire of Emeren Ltd | ||||||||||||
ACQUISITION | ||||||||||||
Cash consideration | $ 5,041,350 | € 5,100,000 | ||||||||||
Deferred consideration | $ 5,041,350 | € 5,100,000 | ||||||||||
Threshold period from the date of acquisition for target of output power | 8 months | 8 months | ||||||||||
Management incentive consideration | 6,771,225 | € 6,850,000 | 6,850,000 | |||||||||
Period for payment of management incentive consideration | 2 years | 2 years | ||||||||||
Management incentive consideration | $ 49,425 | € 50,000 | ||||||||||
fair value of deferred consideration | $ 5,041,350 | € 5,100,000 | ||||||||||
PA Holdings and CA Holdings | ||||||||||||
ACQUISITION | ||||||||||||
Equity interest acquired (in percent) | 100% | 100% | 100% | 100% | ||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||
Project assets | $ 2,874,060 | |||||||||||
Net assets acquired | 2,874,060 | |||||||||||
Goodwill | 1,022,567 | |||||||||||
Total consideration transferred/Net cash paid | 3,896,627 | |||||||||||
ET Cap PA Holdings LLC | ||||||||||||
ACQUISITION | ||||||||||||
Cash consideration | $ 3,900,000 |
ACCOUNTS RECEIVABLE TRADE, NE_2
ACCOUNTS RECEIVABLE TRADE, NET - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ACCOUNTS RECEIVABLE TRADE, NET | |||
Accounts receivable, net | $ 21,670,452 | $ 34,348,925 | |
Number of customer with greater than 10 | 10 | ||
Accounts receivable unbilled, net | $ 43,882,041 | $ 11,473,590 | |
Electricity Revenue Generation | |||
ACCOUNTS RECEIVABLE TRADE, NET | |||
Feed-in tariff(s) (FIT) receivables, recovery period | 12 months | 5 years | 5 years |
Feed-in tariff(s) (FIT) receivables, current | $ 10,204,802 | ||
Feed-in tariff(s) (FIT) receivables, noncurrent | 20,187,213 | ||
Solar power customers | Credit concentration | Accounts receivable | |||
ACCOUNTS RECEIVABLE TRADE, NET | |||
Accounts receivable, net | $ 30,364,453 | $ 19,153,699 | |
Concentration risk percentage | 44% | 56% | |
Billed receivable | $ 3,922,422 | ||
Accounts receivable unbilled, net | $ 26,442,031 | ||
Solar power customers | Customer concentration | Net revenues | |||
ACCOUNTS RECEIVABLE TRADE, NET | |||
Concentration risk percentage | 41% | 28% | 48% |
ACCOUNTS RECEIVABLE TRADE, NE_3
ACCOUNTS RECEIVABLE TRADE, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable | $ 23,707,225 | $ 36,484,810 |
Less: allowance for credit losses | (2,036,773) | (2,135,885) |
Accounts receivable trade, net | 21,670,452 | 34,348,925 |
Trade Accounts Receivable One | ||
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable | 2,429,593 | 2,640,710 |
Trade Accounts Receivable Two | ||
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable | 8,607,742 | 22,995,822 |
Trade Accounts Receivable Three | ||
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable | $ 12,669,890 | $ 10,848,278 |
ACCOUNTS RECEIVABLE TRADE, NE_4
ACCOUNTS RECEIVABLE TRADE, NET - Accounts receivable unbilled (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable unbilled | $ 44,593,829 | $ 11,473,590 |
Less: allowance for credit losses | (711,788) | |
Accounts receivable unbilled, net | 43,882,041 | 11,473,590 |
solar power project assets | ||
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable unbilled | 18,151,798 | $ 11,473,590 |
EPC Services | ||
ACCOUNTS RECEIVABLE TRADE, NET | ||
Total accounts receivable unbilled | $ 26,442,031 |
ACCOUNTS RECEIVABLE TRADE, NE_5
ACCOUNTS RECEIVABLE TRADE, NET - Allowance for credit losses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE TRADE, NET | ||
At beginning of year | $ 2,135,885 | $ 2,427,577 |
Allowance for credit losses | 612,676 | 90,345 |
Written off | (382,037) | |
At end of year | $ 2,748,561 | $ 2,135,885 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Receivable from disposal of property, plant and equipment | $ 554,456 | $ 3,714,161 |
Deposits | 11,521,660 | 8,048,529 |
EPC Warranty reimbursement receivables | 201,067 | |
Others | 4,084,797 | 3,989,377 |
Total prepaid expenses and other current assets | 16,160,913 | 15,953,134 |
Allowance for credit losses | (1,186,995) | (1,434,483) |
Total prepaid expenses and other current assets | $ 14,973,918 | $ 14,518,651 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Deposit made to broker for Shares repurchase | $ 1,069,800 |
Prepayment on Korea project development | 811,581 |
Compensation from insurance company | 235,627 |
Wrote off of other receivable | $ 161,743 |
Percentage of prepayment as allowance for credit losses | 50% |
PROJECT ASSETS - Schedule of Pr
PROJECT ASSETS - Schedule of Project Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PROJECT ASSETS | ||
Project assets - Module cost | $ 1,077,213 | |
Project assets - Development and construction cost | $ 51,613,275 | 14,631,425 |
Project assets - Others | 945,779 | 429,199 |
Total project assets | 52,559,054 | 16,137,837 |
Current portion | 25,969,148 | 9,587,254 |
Non-current portion | $ 26,589,906 | $ 6,550,583 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2022 USD ($) item | |
PROPERTY, PLANT AND EQUIPMENT, NET | ||||
Depreciation expense | $ 6,817,331 | $ 6,794,404 | $ 7,342,327 | |
Branston Solar Farm Limited | ||||
PROPERTY, PLANT AND EQUIPMENT, NET | ||||
Number of MWp power stations acquired | item | 50 | |||
Cost of power stations acquired | $ 42,793,499 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property, Plant and Equipment Net (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Less: Accumulated depreciation | $ (25,438,066) | $ (19,181,277) |
Property, plant and equipment Before Construction | 167,105,172 | 120,810,735 |
Property, plant and equipment, net | 170,477,361 | 125,646,486 |
Land | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 275,000 | 282,000 |
Plant and machinery | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 781,324 | 858,948 |
Motor vehicles | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 94,654 | 65,473 |
Office equipment | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 381,118 | 252,150 |
Power stations | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 191,011,142 | 138,533,441 |
Construction in progress | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | $ 3,372,189 | $ 4,835,751 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |||||||
Jan. 01, 2008 | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
INCOME TAXES | ||||||||
Statutory income tax rate in PRC (as a percent) | 25% | 25% | 25% | |||||
Interest and penalties | ¥ | ¥ 0 | ¥ 0 | ||||||
Accrual of uncertain tax benefits | ¥ | 0 | ¥ 0 | ||||||
Amount of underpayment of tax considered for applicability of extended period of statute of limitations Period | ¥ 100,000 | $ 14,499 | ||||||
Valuation allowance on deferred tax assets | 13,849,778 | $ 8,696,997 | ||||||
Preferential tax rate | 30% | (16.00%) | (42.00%) | |||||
CHINA | ||||||||
INCOME TAXES | ||||||||
Statutory income tax rate in PRC (as a percent) | 25% | |||||||
Preferential tax rate | 50% | |||||||
Connecticut | ||||||||
INCOME TAXES | ||||||||
Income tax rete | 7.50% | 7.50% | ||||||
California franchise tax board | ||||||||
INCOME TAXES | ||||||||
Statutory income tax rate in PRC (as a percent) | 21% | 21% | 21% | |||||
Income tax rete | 8.84% | 8.84% | ||||||
PRC | ||||||||
INCOME TAXES | ||||||||
Income Tax Holiday, Description | Pursuant to PRC tax laws, certain PRC domiciled subsidiaries of the Company are solar power generation enterprises, which are entitled to a three-year tax exemption from Corporate Income Tax (“CIT”) from first operation year and a 50% CIT reduction for the succeeding three years thereafter. | |||||||
Net operating loss carryforwards | 15,988,104 | |||||||
PRC | 2023 | ||||||||
INCOME TAXES | ||||||||
Net operating loss carryforwards | 0 | |||||||
PRC | 2024 | ||||||||
INCOME TAXES | ||||||||
Net operating loss carryforwards | 3,494,849 | |||||||
PRC | 2025 | ||||||||
INCOME TAXES | ||||||||
Net operating loss carryforwards | 1,584,685 | |||||||
PRC | 2026 | ||||||||
INCOME TAXES | ||||||||
Net operating loss carryforwards | 4,587,504 | |||||||
PRC | 2027 | ||||||||
INCOME TAXES | ||||||||
Net operating loss carryforwards | $ 6,321,066 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Tax Benefit (Expense) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income (Loss) before income tax | |||
PRC | $ 4,107,651 | $ 1,589,476 | $ 2,104,024 |
Other jurisdictions | (6,738,601) | 5,799,396 | 214,999 |
Total | (2,630,950) | 7,388,872 | 2,319,023 |
Current tax expense | |||
PRC | (733,102) | (348,494) | (5,118) |
Other jurisdictions | (466,887) | (66,754) | (441,495) |
Subtotal | (1,199,989) | (415,248) | (446,613) |
Deferred tax benefit (expense) | |||
PRC | (717,217) | ||
Other jurisdictions | (359,164) | 283,577 | |
Subtotal | (717,217) | (359,164) | 283,577 |
Total income tax expense | $ (1,917,206) | $ (774,412) | $ (163,036) |
INCOME TAXES - Schedule of Prin
INCOME TAXES - Schedule of Principal Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 44,496 | $ 13,772 |
Net operating losses | 11,671,895 | 7,214,260 |
Unrealized internal profit | 717,217 | 776,260 |
Allowances for doubtful accounts | 1,209,220 | 1,209,220 |
Impairment loss of assets | 126,337 | 126,337 |
Others | 80,613 | 133,409 |
Total gross deferred tax assets | 13,849,778 | 9,473,258 |
Valuation allowance on deferred tax assets | (13,849,778) | (8,696,997) |
Net deferred tax assets | 0 | $ 776,261 |
Deferred tax Liabilities: | ||
Asset acquisitions | (3,573,146) | |
Deferred tax liabilities | $ (3,573,146) |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation Between the Applicable Statutory Income Tax Rate and the Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation between the applicable statutory income tax rate and the Company's effective tax rate | |||
PRC applicable income tax rate | 25% | 25% | 25% |
Change in deferred tax valuation allowance | (146.00%) | (20.00%) | (21.00%) |
Preferential tax rate | 30% | (16.00%) | (42.00%) |
Tax effect of non-deductible expenses | (15.00%) | ||
Effect of different tax rate of subsidiaries | (27.00%) | 17% | 39% |
Non-taxable income | 67% | ||
Other | (7.00%) | 4% | 6% |
Effective income tax rate | (73.00%) | 10% | 7% |
INCOME TAXES - Schedule of Aggr
INCOME TAXES - Schedule of Aggregate Amount and Per Share Effect of the Tax Holiday (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CHINA | |||
INCOME TAXES | |||
Preferential tax effect | $ 797,235 | $ 1,160,939 | $ 975,859 |
BORROWINGS AND OTHER FINANCIN_3
BORROWINGS AND OTHER FINANCING ARRANGEMENTS (Details) | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Sep. 30, 2022 USD ($) | Jan. 31, 2022 | Jan. 31, 2021 GBP (£) | |
BORROWINGS [Line Items] | ||||||||
Interest rate (as a percent) | 8.33% | |||||||
Long-term Debt, Current Maturities | $ 1,007,886 | |||||||
Interest expense | ||||||||
Interest expense incurred | 3,522,389 | $ 5,272,202 | $ 6,464,266 | |||||
Interest expense capitalized | $ 355,488 | 118,408 | 258,190 | |||||
Sale leaseback transaction | $ 4,008,534 | |||||||
Cash consideration received in sale of self-built solar projects | $ 2,793,810 | |||||||
Sale Leaseback Transaction, Lease Terms | 5 to 10 years | |||||||
Expected useful life | 25 years | |||||||
Payment for financing lease associated with failed sales-lease back transactions | $ 16,581,698 | 13,987,049 | 6,841,913 | |||||
Non-current portion for failed sale and lease back | 11,702,161 | 20,383,449 | ||||||
Interest Rate | $ 1,826,299 | $ 2,758,095 | $ 3,296,613 | |||||
Financings With Failed Sale Lease Back Transactions | ||||||||
BORROWINGS [Line Items] | ||||||||
Weighted average interest rate | 6.67% | 7.02% | 7.15% | |||||
Interest expense | ||||||||
Current portion for failed sale and lease back | $ 5,655,990 | $ 6,712,423 | ||||||
Lease loan | ||||||||
Interest expense | ||||||||
Long-term Debt | 45,170,967 | |||||||
Takeover of existing loans | Aviva Investor Infrasture Income No.4 Ltd | Branston Solar Farm Limited | ||||||||
BORROWINGS [Line Items] | ||||||||
Interest rate (as a percent) | 4% | |||||||
Long-term Debt, Current Maturities | 1,007,886 | |||||||
Interest expense | ||||||||
Long-term Debt | 23,388,190 | |||||||
Long-term borrowings, non-current portion | 22,380,304 | |||||||
Shareholder loan | RPZE 1 | ||||||||
BORROWINGS [Line Items] | ||||||||
Term loan amount | $ 602,985 | |||||||
Interest rate (as a percent) | 2% | |||||||
Interest expense | ||||||||
Long-term Debt | 95,802 | |||||||
Secured debt | ||||||||
BORROWINGS [Line Items] | ||||||||
Short-term borrowings | 23,526,158 | |||||||
Interest expense | ||||||||
Long-term Debt | $ 42,166 | |||||||
Secured debt | UK Lender | ||||||||
Interest expense | ||||||||
Interest Rate | $ 2.5 | |||||||
Long-term Debt | $ 61,510 | £ 45,563 |
BORROWINGS AND OTHER FINANCIN_4
BORROWINGS AND OTHER FINANCING ARRANGEMENTS - Schedule of Bank Borrowings (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | ||
Long-term borrowings, current portion | $ 1,007,886 | |
Long-term borrowings | 22,518,272 | $ 61,510 |
Total borrowings from bank and other third parties | $ 23,526,158 | $ 61,510 |
BORROWINGS AND OTHER FINANCIN_5
BORROWINGS AND OTHER FINANCING ARRANGEMENTS - Finance lease (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance lease liabilities | $ 7,597,631 | $ 14,187,759 | $ 19,852,094 |
Modules, inverters, and other | |||
Estimated useful lives | 25 years | 25 years | |
Finance lease liabilities | $ 7,597,631 | $ 14,187,759 |
BORROWINGS AND OTHER FINANCIN_6
BORROWINGS AND OTHER FINANCING ARRANGEMENTS - Schedule Of Finance Lease Future Payments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
BORROWINGS AND OTHER FINANCING ARRANGEMENTS | |||
2023 | $ 4,520,059 | ||
2024 | 1,188,020 | ||
2025 | 1,087,426 | ||
2026 | 846,110 | ||
2027 | 829,884 | ||
Total minimum lease payments | 8,471,499 | ||
Less: Amount representing interest | (873,868) | ||
Present value of net minimum lease payments | 7,597,631 | $ 14,187,759 | $ 19,852,094 |
Current portion | 4,337,287 | 4,654,284 | |
Non-current portion | 3,260,344 | 9,533,475 | |
Current portion of finance lease | 4,337,287 | 4,654,284 | |
Current portion of failed sale and lease back | 5,655,990 | 6,712,423 | |
Total current portion of failed sale-lease back and finance lease | 9,993,277 | 11,366,707 | |
Non-current portion for finance lease | 3,260,344 | 9,533,475 | |
Non-current portion for failed sale and lease back | 11,702,161 | 20,383,449 | |
Total non-current portion of failed sale-lease back and finance lease | $ 14,962,505 | $ 29,916,924 |
BORROWINGS AND OTHER FINANCIN_7
BORROWINGS AND OTHER FINANCING ARRANGEMENTS - future minimum payments required under the lease loan contract (Details) - Lease loan | Dec. 31, 2022 USD ($) |
Long-Term Debt, Fiscal Year Maturity [Abstract] | |
2023 | $ 2,191,432 |
2024 | 1,183,546 |
2025 | 1,183,546 |
2026 | 1,183,546 |
2027 | 1,183,546 |
2028 and later | 38,245,351 |
Long-term Debt, Total | 45,170,967 |
Less: Amount representing interest | (21,782,777) |
Present value of net minimum lease loan payments | $ 23,388,190 |
BORROWINGS AND OTHER FINANCIN_8
BORROWINGS AND OTHER FINANCING ARRANGEMENTS - future minimum payments required under the failed sale-lease back (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Future minimum payments required under the failed sale-lease back | ||
2023 | $ 5,983,227 | |
2024 | 5,212,979 | |
2025 | 5,237,385 | |
2026 | 3,113,914 | |
2027 | 867,248 | |
2028 and later | 49,131 | |
Total minimum lease payments | 20,463,884 | |
Less: Amount representing interest | (3,105,733) | |
Present value of net minimum lease payments | 17,358,151 | |
Current portion | 5,655,990 | $ 6,712,423 |
Non-Current portion | $ 11,702,161 | $ 20,383,449 |
OTHER CURRENT LIABILITIES - Sch
OTHER CURRENT LIABILITIES - Schedule of Other Current Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
OTHER CURRENT LIABILITIES | ||
Payable for purchase of property, plant and equipment | $ 14,321,740 | $ 5,533,545 |
Other tax payables | 157,233 | 150,828 |
Accrued EPC warranty liabilities | 198,629 | |
Others | 2,969,816 | 2,560,961 |
Other current liabilities | $ 17,448,789 | $ 8,443,963 |
COMMON SHARES (Details)
COMMON SHARES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2021 | |
COMMON SHARES | ||||||
Common shares, shares authorized | 800,000,000 | 1,000,000,000 | 800,000,000 | 800,000,000 | ||
Common shares, par value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Shares issued during period | 99,285,640 | 130,127,050 | ||||
Issuance of common shares | $ 0 | $ 272,729,028 | $ 41,495,212 | |||
Total consideration | $ 41,495,212 | $ 393,026 | $ 290,000,000 | 44,999,330 | ||
Shares repurchase (in shares) | 2,567,640 | 30,904,110 | ||||
Value of shares repurchased | $ 1,553,878 | $ 18,446,119 | ||||
Amount authorized for share repurchase | 50,000,000 | |||||
Common stock issued from Share option plan | $ 393,026 | $ 31,226 | $ 484,038 | |||
Common shares, shares issued | 582,258,622 | 651,121,762 | 717,316,622 | 582,258,622 | ||
Several Institutional Investors | ||||||
COMMON SHARES | ||||||
Shares issued during period | 125,000,000 | |||||
Common shares, shares issued | 5,127,050 | |||||
ReneSola Singapore | ||||||
COMMON SHARES | ||||||
Common shares, par value | $ 0 | |||||
Shares repurchase (in shares) | 70,000,000 | |||||
Value of shares repurchased | $ 42,123,829 | |||||
Stock repurchased including commission fee | $ 123,829 | |||||
Common shares, shares issued | 651,121,762 | |||||
Minimum | ||||||
COMMON SHARES | ||||||
Common shares, shares authorized | 800,000,000 | |||||
Maximum | ||||||
COMMON SHARES | ||||||
Common shares, shares authorized | 1,000,000,000 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 29, 2021 | Dec. 21, 2020 | Jul. 27, 2010 | Sep. 27, 2007 | |
Additional disclosures | |||||||||
Granted (in shares) | 6,500,000 | 8,740,000 | 700,000 | ||||||
Granted (in dollars per share) | $ 0.40 | $ 0.64 | $ 0.30 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | 3 years | |||||||
Additional disclosures | |||||||||
Unrecognized compensation expense related to unvested share-based compensation arrangements | $ 2,364,821 | ||||||||
Share exercised by employee (in shares) | 1,400,000 | 120,680 | 1,945,980 | ||||||
Employees | |||||||||
Additional disclosures | |||||||||
Share exercised by employee (in shares) | 1,400,000 | ||||||||
Options | |||||||||
Additional disclosures | |||||||||
Proceeds received on exercise | $ 393,026 | $ 31,226 | |||||||
Previously Reported | Options | |||||||||
Additional disclosures | |||||||||
Granted (in dollars per share) | $ 0.26 | ||||||||
Restatement Adjustment | Options | |||||||||
Additional disclosures | |||||||||
Granted (in dollars per share) | $ 0.27 | ||||||||
Share Option Exercise Price 0.30 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 0.30 | ||||||||
Exercise price of $0.41 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 0.41 | ||||||||
Share Option Exercise Price 0.46 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 0.46 | ||||||||
Share Option Exercise Price 0.16 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 0.16 | ||||||||
Share Option Exercise Price 1.00 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 1 | ||||||||
Share Option Exercise Price 0.73 | |||||||||
Additional disclosures | |||||||||
Granted (in shares) | 0.73 | ||||||||
Share options | |||||||||
Additional disclosures | |||||||||
Compensation cost | $ 1,739,337 | $ 2,627,031 | $ 369,187 | ||||||
Granted (in shares) | 8,740,000 | 700,000 | 5,300,000 | 830,000 | |||||
Granted (in dollars per share) | $ 0.30 | ||||||||
Additional disclosures | |||||||||
Weighted average fair value of options granted (in dollars per share) | $ 0.48 | $ 0.58 | $ 0.70 | ||||||
Period for recognition of unrecognized compensation costs | 1 year 8 months 26 days | ||||||||
Share options | Previously Reported | |||||||||
Additional disclosures | |||||||||
Granted (in dollars per share) | $ 0.11 | ||||||||
Share options | Restatement Adjustment | |||||||||
Additional disclosures | |||||||||
Granted (in dollars per share) | $ 0.15 | ||||||||
Performance Shares | |||||||||
Additional disclosures | |||||||||
Released performance compensation (in shares) | 2,405,140 | ||||||||
2007 Share Incentive Plan | |||||||||
Additional disclosures | |||||||||
Number of authorized shares | 42,500,000 | 22,500,000 | 12,500,000 | 7,500,000 |
SHARE BASED COMPENSATION - Sche
SHARE BASED COMPENSATION - Schedule of Assumptions Used to Estimate the Fair Value of the Options (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate fair value of the options | |||
Average risk-free rate of return, minimum (as a percent) | 2.87% | 0.33% | 0.09% |
Average risk-free rate of return, maximum (as a percent) | 3.98% | 0.97% | 0.10% |
Weighted average expected option life | 3 years | 3 years | 1 year |
Volatility rate, minimum (as a percent) | 129.34% | 131.84% | 104.01% |
Volatility rate, maximum (as a percent) | 132.67% | 132.91% | 119.20% |
Dividend yield (as a percent) | 0% | 0% | 0% |
Maximum | |||
Assumptions used to estimate fair value of the options | |||
Weighted average expected option life | 6 years |
SHARE BASED COMPENSATION - Summ
SHARE BASED COMPENSATION - Summary of the Option Activity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Options | ||||
Options outstanding at the beginning of the period (in shares) | 15,643,340 | 7,304,020 | 8,575,000 | |
Granted (in shares) | 6,500,000 | 8,740,000 | 700,000 | |
Exercised (in shares) | (1,400,000) | (120,680) | (1,945,980) | |
Forfeited (in shares) | (5,350,020) | (280,000) | (25,000) | |
Options outstanding at the end of the period (in shares) | 15,393,320 | 15,643,340 | 7,304,020 | 8,575,000 |
Vested or expected to vest at the end of the period (in shares) | 15,393,320 | |||
Exercisable at the end of the period (in shares) | 8,119,970 | |||
Weighted Average Exercise Prices | ||||
Options outstanding at the beginning of the period (in dollars per share) | $ 0.43 | $ 0.21 | $ 0.21 | |
Granted (in dollars per share) | 0.40 | 0.64 | 0.30 | |
Exercised (in dollars per share) | 0.27 | 0.26 | 0.25 | |
Forfeited (in dollars per share) | 0.58 | 1 | 0.47 | |
Options outstanding at the end of the period (in dollars per share) | 0.38 | $ 0.43 | $ 0.21 | $ 0.21 |
Vested or expected to vest at the end of the period (in dollars per share) | 0.38 | |||
Exercised at the end of the period (in dollars per share) | $ 0.29 | |||
Weighted Average Remaining Contractual Life | ||||
Outstanding at the beginning of the period | 1 year 3 months 7 days | 1 year 3 months 25 days | 1 year 5 months 26 days | 1 month 20 days |
Granted | 2 years 3 months 3 days | 1 year 10 months 17 days | 11 months 19 days | |
Outstanding at the end of the period | 1 year 3 months 7 days | 1 year 3 months 25 days | 1 year 5 months 26 days | 1 month 20 days |
Vested or expected to vest at the end of the period | 1 year 3 months 7 days | |||
Exercisable at the end of the period | 7 months 24 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the beginning of the period (in dollars) | $ 0 | $ 0 | $ 0 | |
Granted (in dollars) | 0 | 0 | 0 | |
Exercised (in dollars) | 0 | 0 | 0 | |
Forfeited (in dollars) | 0 | 0 | 0 | |
Outstanding at the end of the period (in dollars) | 2,167,129 | $ 0 | $ 0 | $ 0 |
Vested or expected to vest at the end of the period (in dollars) | 2,167,129 | |||
Exercisable at the end of the period (in dollars) | $ 1,827,059 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EMPLOYEE BENEFITS | |||
Total contribution | $ 420,658 | $ 408,632 | $ 877,709 |
ReneSola Investment | |||
EMPLOYEE BENEFITS | |||
Percentage of employer matching contribution of basic salaries | 14% | ||
Percentage of employer's contribution required by PRC law | 17.95% | ||
Sichuan Bo Bo | |||
EMPLOYEE BENEFITS | |||
Percentage of employer matching contribution of basic salaries | 16% | ||
Percentage of employer's contribution required by PRC law | 14.63% | ||
ReneSola Shanghai | |||
EMPLOYEE BENEFITS | |||
Percentage of employer matching contribution of basic salaries | 16% | ||
Percentage of employer's contribution required by PRC law | 16.16% |
DISTRIBUTION OF PROFIT AND RE_2
DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
DISTRIBUTION OF PROFIT AND RESTRICTED NET ASSETS | |
Appropriations to general reserve as a percentage of profit after tax, minimum | 10% |
Percentage of general reserve fund if appropriation is not required | 50% |
Percentage of appropriation to statutory surplus fund | 10% |
Percentage of registered capital when appropriation is not required | 50% |
Restricted net assets of PRC subsidiaries | $ 33,013,266 |
Restricted net assets, percent of net assets | 8.30% |
EARNINGS_ (LOSS) PER ADS - Sche
EARNINGS/ (LOSS) PER ADS - Schedule of Basic and Diluted earnings/(loss) Per ADS (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Numerator: | ||||
Net income/(loss) | $ (4,548,156) | $ 6,614,460 | $ 2,155,987 | |
Less: Net income/(loss) attributed to noncontrolling interests | 123,545 | (247,413) | (622,668) | |
Total net income/(loss) attributed to Emeren Group Ltd | (4,671,701) | 6,861,873 | 2,778,655 | |
Numerator for diluted income/(loss) per ADS | $ (4,671,701) | $ 6,861,873 | $ 2,778,655 | |
Denominator: | ||||
Denominator for basic earnings (loss) per ADS - weighted average number of ADS outstanding | [1],[2] | 64,924,455 | 68,906,139 | 49,166,354 |
Dilutive effects of share options | [1] | 0 | 934,499 | 622,068 |
Denominator for diluted calculation - weighted average number of ADS outstanding | [1],[2] | 64,924,455 | 69,840,638 | 49,788,422 |
Basic earnings (loss) per ADS | $ (0.07) | $ 0.10 | $ 0.06 | |
Diluted earnings (loss) per ADS | $ (0.07) | $ 0.10 | $ 0.06 | |
[1]All shares are converted to ADS, each ADS represents 10 common shares[2]Each American depositary shares (ADS) represents 10 common shares |
EARNINGS_ (LOSS) PER ADS - Addi
EARNINGS/ (LOSS) PER ADS - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
EARNINGS/ (LOSS) PER ADS | ||
Number of shares issued to the share depository bank but are treated as escrowed shares | 48,373,350 | 45,805,710 |
Number of shares per ADS | 10 |
EARNINGS_ (LOSS) PER ADS - Sc_2
EARNINGS/ (LOSS) PER ADS - Schedules of Computation of Diluted Net Earnings/(Loss) Per ADS (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share options | |||
EARNINGS/ (LOSS) PER ADS | |||
Antidilutive Securities Excluded from Computation of Diluted Net Earnings/(loss) Per Share | 5,441,650 | 0 | 7,304,020 |
NON-CONTROLLING INTEREST (Detai
NON-CONTROLLING INTEREST (Details) - USD ($) | 12 Months Ended | |
Sep. 15, 2021 | Dec. 31, 2021 | |
NON-CONTROLLING INTEREST | ||
Percentage of non controlling interest | 49% | |
Contribution from non-controlling interest | $ 2,118,240 | $ 2,118,240 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Lending to | $ 0 | $ 433,285 | $ 0 |
ReneSola Singapore | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties, gross | 0 | 2,345,874 | |
Due from other Related Party | 0 | 433,285 | |
Allowance for credit losses | 0 | (2,244,500) | |
Due from related parties, net | 0 | 534,659 | |
Due to related parties | 0 | 8,793,966 | |
Due to related party balances, net | 1,475,254 | 9,531,450 | |
Due to other Related Party | 1,475,254 | 1,272,143 | |
Receiving services | 9,437 | 23,538 | 26,070 |
Payment for service | 97,148 | 0 | 0 |
Rendering of service to | 0 | 0 | 299,626 |
Borrowing from | 0 | 0 | 12,827 |
Bond issued to | 203,111 | 1,272,143 | 0 |
Lending to | $ 0 | $ 433,285 | $ 0 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2022 USD ($) | Apr. 30, 2022 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 EUR (€) | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||
Interest rate (as a percent) | 8.33% | 8.33% | ||||
Amounts due to related parties | $ 1,475,254 | $ 9,531,450 | € 1,379,000 | |||
ReneSola Singapore | ||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||
Interest rate (as a percent) | 1% | 1% | ||||
Amount due to related party | $ 0 | 8,793,966 | ||||
Debt issued | 200,000,000 | |||||
Bond issued to | 203,111 | $ 1,272,143 | $ 0 | |||
ReneSola Singapore | Other receivable | ||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||
Amount due from related party | 68,993 | |||||
ReneSola Singapore | Other current liabilities | ||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||
Amount due to related party | $ 7,977,839 | |||||
Eiffel Investment Group | ||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||
Interest rate (as a percent) | 2% | 2% | ||||
Conversion price as a percentage on purchase price | 70% | |||||
Debt instrument face amount | $ 7,960,000 | € 7,030,000 | ||||
Bond issued to | $ 203,111 | € 255,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating lease accounting (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Operating lease cost | |||
Amortization of leased assets | $ 710,151 | ||
Interest on lease liabilities | 1,029,645 | ||
Net lease cost | $ 1,739,796 | ||
Lease Term and Discount Rate | |||
Weighted-average remaining lease term (years) - Operating leases | 23 years 1 month 9 days | ||
Weighted-average discount rate (%) - Operating leases | 6.35% | ||
Other information | |||
Cash paid for amount included in the measurement of lease liabilities: Operating cash flows from operating leases | $ 2,719,988 | $ 1,592,403 | $ 2,017,981 |
Cash paid for amount included in the measurement of lease liabilities: Right of use assets obtained in exchange for lease obligations | 5,252,612 | 145,795 | $ 814,811 |
Capital commitments | 18,186,105 | ||
Future minimum payments required under the operating lease | |||
2023 | 2,225,284 | ||
2024 | 1,704,494 | ||
2025 | 1,790,875 | ||
2026 | 1,987,099 | ||
2027 | 2,296,868 | ||
2028 and later | 29,877,920 | ||
Total minimum lease payments | 39,882,540 | ||
Less: Amount representing interest | (17,815,625) | ||
Present value of net minimum lease payments | 22,066,915 | ||
Current portion | 1,211,706 | 726,842 | |
Non-current portion | $ 20,855,209 | $ 15,778,063 | |
Minimum | |||
COMMITMENTS AND CONTINGENCIES | |||
Initial term of the lease | 3 years | ||
Initial term of some leases | 40 years | ||
Renewal term of the lease | 1 year | ||
Maximum | |||
COMMITMENTS AND CONTINGENCIES | |||
Initial term of the lease | 25 years | ||
Renewal term of the lease | 5 years |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of the Company's Revenues Generated from Each Segment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT REPORTING | |||
Net revenue | $ 61,290,816 | $ 79,661,792 | $ 73,502,883 |
Gross profit | 15,335,865 | 31,424,841 | 16,685,782 |
Operating segment | |||
SEGMENT REPORTING | |||
Net revenue | 61,290,816 | 79,661,792 | 73,502,883 |
Gross profit | 15,335,865 | 31,424,841 | 16,685,782 |
Solar power projects | |||
SEGMENT REPORTING | |||
Net revenue | 13,753,389 | 61,036,228 | 49,160,215 |
Solar power projects | Operating segment | |||
SEGMENT REPORTING | |||
Net revenue | 13,753,389 | 61,036,228 | 49,160,215 |
Gross profit | 5,912,822 | 23,867,607 | 4,374,238 |
Electricity generation | |||
SEGMENT REPORTING | |||
Net revenue | 21,654,175 | 17,969,727 | 23,547,162 |
Electricity generation | Operating segment | |||
SEGMENT REPORTING | |||
Net revenue | 21,654,175 | 17,969,727 | 23,547,162 |
Gross profit | 10,488,052 | 7,420,366 | 11,668,935 |
EPC services | |||
SEGMENT REPORTING | |||
Net revenue | 24,760,309 | 0 | 0 |
EPC services | Operating segment | |||
SEGMENT REPORTING | |||
Net revenue | 24,760,309 | ||
Gross profit | (2,038,138) | ||
Other | |||
SEGMENT REPORTING | |||
Net revenue | 1,122,943 | 655,837 | 795,506 |
Other | Operating segment | |||
SEGMENT REPORTING | |||
Net revenue | 1,122,943 | 655,837 | 795,506 |
Gross profit | $ 973,129 | $ 136,868 | $ 642,609 |
SEGMENT REPORTING - Schedule _2
SEGMENT REPORTING - Schedule of the Company's Revenues Generated by Geographic Location of Customers (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT REPORTING | |||
Total | $ 61,290,816 | $ 79,661,792 | $ 73,502,883 |
China | |||
SEGMENT REPORTING | |||
Total | 20,736,852 | 16,901,791 | 16,557,196 |
United States | |||
SEGMENT REPORTING | |||
Total | 13,870,048 | 13,895,115 | 4,388,241 |
Canada | |||
SEGMENT REPORTING | |||
Total | 0 | 0 | 15,557,800 |
Romania | |||
SEGMENT REPORTING | |||
Total | 0 | 0 | 5,709,713 |
UK | |||
SEGMENT REPORTING | |||
Total | 1,078,770 | 0 | 655,102 |
Spain | |||
SEGMENT REPORTING | |||
Total | (490,466) | 2,839,291 | 0 |
France | |||
SEGMENT REPORTING | |||
Total | 14,025 | 96,210 | 152,548 |
Poland | |||
SEGMENT REPORTING | |||
Total | 24,850,487 | 24,943,755 | 10,008,838 |
Italy | |||
SEGMENT REPORTING | |||
Total | 779,475 | 0 | 0 |
Hungary | |||
SEGMENT REPORTING | |||
Total | 451,625 | 20,985,630 | 20,473,445 |
UK | |||
SEGMENT REPORTING | |||
Total | $ 1,078,770 | $ 0 | $ 655,102 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 12 Months Ended | ||
Jan. 04, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |||
Number of shares repurchased | 2,567,640 | 30,904,110 | |
Value of shares repurchased | $ 1,553,878 | $ 18,446,119 | |
Subsequent Event | Securities repurchase agreement with ReneSola Singapore | American Depository Shares (ADS) | |||
SUBSEQUENT EVENTS | |||
Number of shares repurchased | 3,000,000 | ||
Repurchase price per share | $ 4.40 | ||
Value of shares repurchased | $ 13,200,000 | ||
Subsequent Event | Securities repurchase agreement with ReneSola Singapore | Shah Capital | American Depository Shares (ADS) | |||
SUBSEQUENT EVENTS | |||
Number of shares repurchased | 2,050,000 | ||
Repurchase price per share | $ 4.40 | ||
Value of shares repurchased | $ 9,020,000 |