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Greenbacker Renewable Energy

Filed: 14 May 21, 2:27pm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-55610 
GREENBACKER RENEWABLE ENERGY COMPANY LLC
(Exact Name of Registrant as Specified in its Charter)
Delaware80-0872648
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
11 East 44th Street, 12th Floor
New York, NY 10017 
Tel (646) 237-7884 
(Address, including zip code and telephone number, including area code, of registrants Principal Executive Office)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Limited liability company interestsN/AN/A
As of May 7, 2021, the registrant had 117,478,349 shares of common interests, $0.001 par value, outstanding.


TABLE OF CONTENTS

i

PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
March 31,
2021
December 31,
2020
(unaudited)
ASSETS
Investments in controlled/affiliated portfolios, at fair value (cost of $648,350,006 and $523,846,720, respectively)$738,177,183 $611,482,307 
Investments in non-controlled/non-affiliated portfolios, at fair value (cost of $46,174,918 and $37,327,690, respectively)46,174,918 37,327,690 
Investments in money market funds, at fair value (cost of $315,413,951 and $11,172,727, respectively)315,413,951 11,172,727 
Cash and cash equivalents8,947,086 4,675,836 
Shareholder contribution receivable2,581,048 6,418,454 
Dividend receivable6,048,918 7,181,629 
Investment sales receivable4,259,184 4,759,184 
Return of capital receivable439,815 2,159,762 
Other assets4,104,679 3,198,872 
Total assets$1,126,146,782 $688,376,461 
LIABILITIES
Swap contracts, at fair value$6,011,882 $9,750,909 
Deferred tax liabilities, net of allowance19,641,717 17,868,138 
Payable for investments purchased2,288,568 4,451,570 
Term note payable, net of financing costs85,410,686 86,501,654 
Management fee payable1,748,112 1,055,600 
Performance participation fee payable3,540,052 
Accounts payable and accrued expenses1,084,599 581,632 
Due to Advisor1,399,749 1,751 
Shareholder distributions payable5,306,807 2,984,521 
Interest payable8,772 
Payable for repurchases of common stock4,298,638 5,948,128 
Deferred sales commission payable4,094,869 131,875 
Total liabilities$131,285,627 $132,824,602 
Commitments and contingencies (See Note 2, Note 5, and Note 9)00
MEMBERS’ EQUITY (NET ASSETS)
Preferred stock, par value, $.001 per share, 50,000,000 authorized; NaN issued and outstanding$$
Common stock, par value, $.001 per share, 350,000,000 authorized; 113,194,789 and 62,870,347 shares issued and outstanding, respectively113,195 62,870 
Paid-in capital in excess of par value1,002,406,149 550,896,111 
Accumulated gains (losses)*(7,658,189)4,592,878 
Total common members’ equity994,861,155 555,551,859 
Special unitholder’s equity
Total members’ equity (net assets)994,861,155 555,551,859 
Total liabilities and equity (net assets)$1,126,146,782 $688,376,461 
Net assets, Class A (shares outstanding of 16,704,407 and 16,844,129, respectively)$141,781,925 $144,978,110 
Net assets, Class C (shares outstanding of 2,742,215 and 2,734,661, respectively)22,597,463 22,836,128 
Net assets, Class I (shares outstanding of 6,538,320 and 6,526,001, respectively)55,492,784 56,156,327 
Net assets, Class P-A (shares outstanding of 138,885 and 55,264, respectively)1,200,209 480,799 
Net assets, Class P-D (shares outstanding of 111,048 and NaN, respectively)990,705 
Net assets, Class P-I (shares outstanding of 53,547,706 and 36,710,292, respectively)477,780,810 331,100,495 
Net assets, Class P-S (shares outstanding of 33,396,467 and NaN, respectively)294,882,644 
Net assets, Class P-T (shares outstanding of 15,741 and NaN, respectively)134,615 
Total common members’ equity$994,861,155 $555,551,859 
*Accumulated deficit, accumulated net realized gain on investments, and accumulated unrealized appreciation (depreciation) on investments, net of deferred taxes, foreign currency translation, and swap contracts are included in accumulated gains (losses).
The accompanying notes are an integral part of these consolidated financial statements.
1


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Investment income:
Investment income from controlled, affiliated investments:
Dividend income$5,252,663 $5,207,790 
Interest income4,579 
Total investment income from controlled, affiliated investments$5,252,663 $5,212,369 
Investment income from non-controlled, non-affiliated investments:
Interest income946,010 725,288 
Total investment income$6,198,673 $5,937,657 
Operating expenses:
Management fee expense4,075,503 2,399,753 
Audit and tax expense582,607 411,825 
Interest and financing expenses722,560 729,716 
General and administration expenses173,973 66,048 
Legal expenses86,301 190,361 
Directors fees and expenses109,480 94,979 
Insurance expense48,172 34,531 
Transfer agent expense147,946 118,101 
Other expenses *611,338 293,438 
Total expenses6,557,880 4,338,752 
Net investment (loss) income before taxes(359,207)1,598,905 
(Benefit from) income taxes(1,369,294)(3,231,864)
Franchise tax expense25,429 
Net investment income1,010,087 4,805,340 
Net change in realized and unrealized gain (loss) on investments, foreign currency translation and deferred tax assets:
Net realized (loss) gain on investments(72,149)6,402,927 
Net change in unrealized appreciation (depreciation) on:
Investments2,171,448 12,100,435 
Foreign currency translation20,142 (52,248)
Swap contracts3,739,027 (6,317,448)
(Provision for) income taxes on realized and unrealized gain (loss) on investments, foreign currency translation and swap contracts(3,142,873)(6,307,218)
Net increase in net assets resulting from operations3,725,682 10,631,788 
Net decrease in net assets attributed to special unitholder(2,687,459)
Net increase in net assets attributed to common members$3,725,682 $7,944,329 
Common stock per share information —basic and diluted:
Net investment income$0.01 $0.10 
Net increase in net assets attributed to common members$0.04 $0.16 
Weighted average common shares outstanding85,937,169 48,991,682 
* For the three months ended March 31, 2021 and March 31, 2020, Other expenses includes $493,816 and $199,247 of net realized losses on swap contracts, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
2


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the three months ended March 31, 2021
(unaudited)
Common Equityholders
SharesPar
Value
Paid-in
capital
in excess
of par
value
Accumulated
deficit
Accumulated
net realized
gain on
investments
Accumulated
unrealized
appreciation
(depreciation)
on investments,
net of
deferred taxes
Accumulated
unrealized
appreciation
(depreciation)
on foreign
currency
translation
Accumulated
unrealized
appreciation
(depreciation)
on swap contracts
Common
members’
equity
Total
members’
equity
(net assets)
Balances December 31, 202062,870,347 $62,870 $550,896,111 $(60,708,055)$18,141,632 $55,759,375 $(108,971)$(8,491,103)$555,551,859 $555,551,859 
Proceeds from issuance of common stock, net50,634,032 50,635 455,771,849 — — — — — 455,822,484 455,822,484 
Issuance of common stock under distribution reinvestment plan181,245 181 1,549,824 — — — — — 1,550,005 1,550,005 
Repurchases of common stock(490,835)(491)(4,298,147)— — — — — (4,298,638)(4,298,638)
Offering costs— — (1,513,488)— — — — — (1,513,488)(1,513,488)
Deferred sales commissions— — — (4,024,725)— — — — (4,024,725)(4,024,725)
Shareholder distributions— — — (11,952,024)— — — — (11,952,024)(11,952,024)
Distributions to special unitholder— — — — — — — — 
Net investment income— — — 1,010,087 — — — — 1,010,087 1,010,087 
Net realized gain (loss) on investments— — — — (72,149)— — — (72,149)(72,149)
Net change in unrealized appreciation (depreciation) on investments— — — — — 2,171,448 — — 2,171,448 2,171,448 
Net change in unrealized appreciation (depreciation) on foreign currency translation— — — — — — 20,142 — 20,142 20,142 
Net change in unrealized appreciation (depreciation) on swap contracts— — — — — — — 3,739,027 3,739,027 3,739,027 
(Provision for) benefit from income taxes on realized and unrealized gain (loss) on investments, foreign currency translation and swap contracts— — — — — (3,142,873)— — (3,142,873)(3,142,873)
Balances at March 31, 2021113,194,789 $113,195 $1,002,406,149 $(75,674,717)$18,069,483 $54,787,950 $(88,829)$(4,752,076)$994,861,155 $994,861,155 
3


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the three months ended March 31, 2020
(unaudited)
Common Equityholders
SharesPar
Value
Paid-in
capital
in excess
of par
value
Accumulated
deficit
Accumulated
net realized
gain on
investments
Accumulated
unrealized
appreciation
(depreciation)
on investments,
net of
deferred taxes
Accumulated
unrealized
appreciation
(depreciation)
on foreign
currency
translation
Accumulated
unrealized
appreciation
(depreciation)
on swap contracts
Common
members’
equity
Special
unitholder
Total
members’
equity
(net assets)
Balances December 31, 201947,889,610 $47,890 $416,611,769 $(38,477,220)$11,963,784 $22,672,301 $(200,990)$(3,877,882)$408,739,652 $6,897,808 $415,637,460 
Proceeds from issuance of common stock, net1,874,392 1,874 16,694,020 — — — — — 16,695,894 — 16,695,894 
Issuance of common stock under distribution reinvestment plan205,060 205 1,758,881 — — — — — 1,759,086 — 1,759,086 
Repurchases of common stock(214,035)(214)(1,847,412)— — — — — (1,847,626)— (1,847,626)
Proceeds from shares transferred(254)— — — — — — — — — — 
Shareholder distributions— — — (7,171,159)— — — — (7,171,159)— (7,171,159)
Distributions to special unitholder— — — — — — — — — (1,124,000)(1,124,000)
Net investment income (loss)— — — 4,805,340 — — — — 4,805,340 — 4,805,340 
Net realized gain on investments— — — — 4,750,225 — — — 4,750,225 1,652,702 6,402,927 
Net change in unrealized appreciation (depreciation) on investments— — — — — 9,802,188 — — 9,802,188 2,298,247 12,100,435 
Net change in unrealized appreciation (depreciation) on foreign currency translation— — — — — — (52,248)— (52,248)— (52,248)
Net change in unrealized appreciation (depreciation) on swap contracts— — — — — — — (5,053,958)(5,053,958)(1,263,490)(6,317,448)
(Provision for) benefit from income taxes on realized and unrealized gain (loss) on investments, foreign currency translation and swap contracts— — — — — (6,307,218)— — (6,307,218)— (6,307,218)
Balances at March 31, 202049,754,773 $49,755 $433,217,258 $(40,843,039)$16,714,009 $26,167,271 $(253,238)$(8,931,840)$426,120,176 $8,461,267 $434,581,443 
The accompanying notes are an integral part of these consolidated financial statements.
4


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Operating activities:
Net increase in net assets from operations$3,725,682 $10,631,788 
Adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs155,334 56,530 
Purchase of investments(169,813,432)(88,300,060)
Return of capital35,051,394 37,182,463 
Proceeds from principal payments and sales of investments1,339,375 53,869,115 
Purchase of money market funds, net(304,241,224)(1,205,155)
Net realized loss (gain) on investments72,149 (6,402,927)
Net change in unrealized (appreciation) on investments(2,171,448)(12,100,435)
Net change in unrealized (appreciation) depreciation on foreign currency translation(20,142)52,248 
Net change in unrealized (appreciation) depreciation on swap contracts(3,739,027)6,317,448 
Deferred tax expense1,773,579 3,075,354 
(Increase) decrease in other assets:
Receivable for investments sold500,000 16,839,291 
Receivable for return of capital1,719,947 (10,589,219)
Dividend receivable1,132,711 (1,511,654)
Other assets(905,807)(524,638)
Increase (decrease) in other liabilities:
Payable for investments purchased(2,163,002)(3,324,557)
Management fee payable692,512 148,310 
Performance participation fee payable(3,540,052)
Accounts payable and accrued expenses502,967 473,909 
Interest payable(8,772)1,887 
Net cash (used in) provided by operating activities(439,937,256)4,689,698 
Financing activities:
Borrowings on credit facility and term note8,898,893 
Paydowns on credit facility and term note(1,246,302)(8,947,171)
Payments of financing costs(41,500)
Proceeds from issuance of shares of common stock, net459,646,314 19,110,532 
Distributions paid(8,066,157)(7,110,525)
Offering costs(115,490)
Deferred sales commissions(61,731)
Repurchases of common stock(5,948,128)(2,186,780)
Distribution to special unitholder(1,124,000)
Net cash provided by financing activities444,208,506 8,599,449 
Net (decrease) increase in cash and cash equivalents4,271,250 13,289,147 
Cash, cash equivalents and restricted cash, beginning of period4,675,836 4,081,470 
Cash, cash equivalents and restricted cash, end of period$8,947,086 $17,370,617 
Reconciliation of cash, cash equivalents and restricted cash per the Consolidated Statements of Assets and Liabilities
Cash and cash equivalents$8,947,086 $14,073,627 
Restricted cash3,296,990 
Total cash, cash equivalents and restricted cash$8,947,086 $17,370,617 
Supplemental disclosure of cash flow information:
Cash interest paid during the period$447,176 $776,284 
Shareholder receivable from sale of common stock$2,581,048 $593,364 
Due to advisor for offering costs$1,399,749 $
Deferred sales commission payable$4,094,869 $
The accompanying notes are an integral part of these consolidated financial statements.
5


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS
March 31, 2021
(unaudited)
Investments in
controlled/affiliated Portfolios (f)
InterestMaturityShares or
Principal
Amount
CostFair
Value
Percentage
of Net
Assets (a)
Limited Liability Company Member Interests in the United States- Not readily marketable
Battery Storage
Pacifica Portfolio100% Ownership$9,140,209 $9,140,209 0.9 %
Total Battery Storage - 0.90%$9,140,209 $9,140,209 0.9 %
Biomass
Eagle Valley Biomass Portfolio100% Ownership$23,686,352 $23,686,352 2.4 %
Total Biomass - 2.4%$23,686,352 $23,686,352 2.4 %
Commercial Solar
GEH Portfolio100% Ownership or Managing Member, Equity Owner$148,065,778 $157,551,976 15.8 %
Other Commercial Solar (d)100% Ownership or Managing Member, Equity Owner44,848,541 49,875,844 5.0 %
Sego Lily Portfolio (e)100% Ownership or Managing Member, Equity Owner49,933,176 72,818,599 7.3 %
Trillium Portfolio (e)100% Ownership or Managing Member, Equity Owner180,568,859 220,333,187 22.1 %
Total Commercial Solar - 50.2%$423,416,354 $500,579,606 50.2 %
Wind
Greenbacker Wind Holdings II (e)100% Ownership or Managing Member, Equity Owner$54,935,583 $66,494,635 6.7 %
Greenbacker Wind Portfolio - HoldCo100% Ownership77,005,002 78,727,426 7.9 %
Other Wind Investments100% Ownership9,540,000 8,686,199 0.9 %
Total Wind - 15.5%$141,480,585 $153,908,260 15.5 %
Pre-Operational Assets
6


Citrine Portfolio100% Ownership$29,794,816 $30,410,677 3.1 %
Total Pre-Operational Assets - 3.1%$29,794,816 $30,410,677 3.1 %
Other Investments
Other Portfolios(c)20,123,799 19,750,743 2.0 %
Total Other Investments - 2.0%$20,123,799 $19,750,743 2.0 %
Energy Efficiency in the United States
Other Energy Efficiency Portfolios(b)$707,891 $701,336 0.1 %
Total Energy Efficiency - 0.1%$707,891 $701,336 0.1 %
Total Investments in controlled/affiliated Portfolios$648,350,006 $738,177,183 74.2 %
Investments in non-controlled/non-affiliated Portfolios
Secured Loans - Not readily marketable
Encore Loan10.00%9/30/2021$9,307,725$9,307,725 $9,307,725 0.9 %
Hudson Loan8.00%11/30/20217,366,7967,366,796 7,366,796 0.7 %
Hudson II Loan8.00%11/30/20215,269,2675,269,267 5,269,267 0.5 %
New Market Loan9.00%12/31/20215,007,3505,007,350 5,007,350 0.5 %
Shepherd's Run Loan8.00%9/30/20226,322,5906,322,590 6,322,590 0.6 %
SE Solar Loan9.00%12/31/20215,005,2445,005,244 5,005,244 0.5 %
TUUSSO Loan8.00%7/31/20217,895,9467,895,946 7,895,946 0.8 %
Total Secured Loans - Not readily marketable - 4.5%$46,174,918 $46,174,918 4.5 %
Total Investments in controlled/affiliated Portfolios$46,174,918 $46,174,918 4.5 %
Investments in Money Market Funds
Fidelity Government Portfolio - Class I$78,878,486$78,878,486 $78,878,486 7.9 %
First American Government Obligations Fund - Class Z78,878,48678,878,486 78,878,486 7.9 %
Invesco Government & Agency Portfolio - Institutional Class70.0 %
JPMorgan US Government Money Market Fund - Class L78,828,48678,828,486 78,828,486 7.9 %
7


Wells Fargo Treasury Plus Money Market Fund - Institutional Class78,828,48678,828,486 78,828,486 7.9 %
Total Investments in Money Market Funds - 31.6%315,413,951 315,413,951 31.6 %
TOTAL INVESTMENTS: 110.3%$1,009,938,875 $1,099,766,052 110.3 %
LIABILITIES IN EXCESS OF OTHER ASSETS OTHER THAN INVESTMENTS: (10.3)%(104,904,897)(10.3)%
TOTAL NET ASSETS: 100%$994,861,155 100.0 %
(a)Percentages are based on net assets of $994,861,155 as of March 31, 2021.
(b)Includes capital leases and secured loans.
(c)Includes pre-acquisition and due diligence expenses.
(d)Includes the Canadian Northern Lights assets, which are located outside of the United States of America and are a Capital Stock investment.
(e)Includes assets that have not reached COD that are being recognized at their fair market value.
(f)Refer to Note 3. Investments for discussion on the consolidation of certain underlying portfolios within this Consolidated Schedules of Investments.
Interest Rate Swaps
CounterpartyPay / Receive
Floating Rate
Floating Rate
Index
Fixed Pay
Rate
Payment
Frequency
Maturity
Date
Notional
Amount
ValueUpfront
Premiums
Paid
(Received)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR1.110 %Monthly7/9/2021$2,962,222 $(8,321)$
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.261 %Monthly2/29/203216,749,471 (912,708)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.648 %Monthly12/31/203825,153,464 (2,117,499)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.965 %Monthly12/31/20383,648,413 (390,495)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.668 %Monthly12/31/203433,939,058 (2,648,910)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR1.642%Monthly6/30/20406,446,570 66,051 
$(6,011,882)$
The accompanying notes are an integral part of these consolidated financial statements.
8


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS
December 31, 2020
Investments in
controlled/affiliated portfolios (e)
InterestMaturityShares or Principal AmountCostFair
Value
Percentage
of Net
Assets(a)
Limited Liability Company Member Interests in the United States- Not readily marketable
Battery Storage
Pacifica Portfolio100% Ownership$8,839,235 $8,839,235 1.6 %
Total Battery Storage - 1.6%$8,839,235 $8,839,235 1.6 %
Biomass
Eagle Valley Biomass Portfolio100% Ownership$23,236,352 $23,236,352 4.2 %
Total Biomass - 4.2%$23,236,352 $23,236,352 4.2 %
Commercial Solar
GEH Portfolio100% Ownership or Managing Member, Equity Owner$114,253,479 $124,637,707 22.4 %
Magnolia Sun Portfolio100% Ownership or Managing Member, Equity Owner33,008,559 36,904,011 6.6 %
Other Commercial Solar (c)100% Ownership or Managing Member, Equity Owner44,410,568 47,500,424 8.5 %
Trillium Portfolio (d)Managing Member, Majority Equity Owner83,219,738 105,913,033 19.1 %
Total Commercial Solar - 56.6%$274,892,344 $314,955,175 56.6 %
Wind
Greenbacker Wind Holdings II100% Ownership or Managing Member, Equity Owner$33,834,320 $35,839,967 6.5 %
Greenbacker Wind Portfolio - HoldCo100% Ownership73,244,891 75,013,771 13.5 %
Other Wind Investments100% Ownership or Managing member, Majority Equity Owner19,986,133 20,356,806 3.7 %
Total Wind - 23.7%$127,065,344 $131,210,544 23.7 %
Pre-Operational Assets
Citrine Portfolio100% Ownership$23,523,051 $23,314,570 4.2 %
9


Greenbacker Wind Portfolio- Maine100% Ownership12,704,196 23,758,084 4.3 %
Sego Lily Portfolio100% Ownership29,178,404 62,135,652 11.2 %
Total Pre-Operational Assets - 19.7%$65,405,651 $109,208,306 19.7 %
Other Investments
Other Portfolios(b)$23,669,446 $23,291,114 4.2 %
Total Other Investments - 4.2%$23,669,446 $23,291,114 4.2 %
Energy Efficiency in the United States
Other Energy Efficiency Portfolios(f)$738,348 $741,581 0.2 %
Total Energy Efficiency - 0.2%$738,348 $741,581 0.2 %
Total Investments in controlled/affiliated Portfolios$523,846,720 $611,482,307 110.2 %
Investments in non-controlled/non-affiliated portfolios
Secured Loans - Not readily marketable
Encore Loan10.00%2/28/2021$10,606,725$10,606,725 $10,606,725 1.9 %
Hudson Loan8.00%3/31/20206,021,4026,021,402 6,021,402 1.1 %
Hudson II Loan8.00%3/31/20213,923,8733,923,873 3,923,873 0.7 %
New Market Loan9.00%4/30/20215,007,3505,007,350 5,007,350 0.9 %
SE Solar Loan9.00%2/21/20205,005,2445,005,244 5,005,244 0.9 %
TUUSSO Loan8.00%4/30/20216,763,0966,763,096 6,763,096 1.2 %
Total Secured Loans - Not readily marketable - 6.7%$37,327,690 $37,327,690 6.7 %
Total Investments in non-controlled/non-affiliated portfolios$37,327,690 37,327,690 6.7 %
Investments in Money Market Funds
Fidelity Government Portfolio - Class I$10,100,000$10,100,000 10,100,000 1.8 %
First American Government Obligations Fund - Class Z1,072,720$1,072,720 1,072,720 0.2 %
Invesco Government & Agency Portfolio - Institutional Class7$%
Total Investments in Money Market Funds - 2.0%$11,172,727 11,172,727 2.0 %
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TOTAL INVESTMENTS: 118.9%$572,347,137 $659,982,724 118.9 %
LIABILITIES IN EXCESS OF OTHER ASSETS OTHER THAN INVESTMENTS: (18.9)%(104,430,865)(18.9)%
TOTAL NET ASSETS: 100.0%$555,551,859 100.0 %
(a)Percentages are based on net assets of $555,551,859 as of December 31, 2020.
(b)Includes pre-acquisition and due diligence expenses.
(c)Includes the Canadian Northern Lights assets, which are located outside of the United States of America and are a Capital Stock investment.
(d)Includes assets that have not reached COD that are being recognized at their fair market value.
(e)Refer to Note 3. Investments for discussion on the consolidation of certain underlying portfolios within the Consolidated Schedules of Investments.
(f)Includes capital leases and secured loans.
Interest Rate Swaps
CounterpartyPay / Receive Floating RateFloating Rate IndexFixed Pay RatePayment FrequencyMaturity DateNotional AmountValueUpfront Premiums Paid (Received)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR1.110%Monthly7/9/2021$3,033,889 $(15,502)$
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.261%Monthly2/29/203217,197,263 (1,588,956)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.648%Monthly12/31/203825,672,154 (3,388,560)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.965%Monthly12/31/20383,707,924 (614,732)
Fifth Third Financial Risk SolutionsReceive1-MO-USD-LIBOR2.668%Monthly12/31/203434,695,980 (4,143,159)
$(9,750,909)$
The accompanying notes are an integral part of these consolidated financial statements.
11


GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
March 31, 2021 (unaudited)
Note 1. Organization and Operations of the Company
Greenbacker Renewable Energy Company LLC (the “LLC”), a Delaware limited liability company, formed in December 2012, is an externally managed energy company that acquires and manages income-generating renewable energy and energy efficiency projects, and other energy-related businesses, as well as finances the construction and/or operation of these and other sustainable development projects and businesses. The LLC conducts substantially all its operations through its wholly owned subsidiary, Greenbacker Renewable Energy Corporation (“GREC”).
GREC is a Maryland corporation formed in November 2011, and the LLC currently holds all the outstanding shares of capital stock of GREC. GREC Entity HoldCo LLC (“GREC HoldCo”), a wholly owned subsidiary of GREC, was formed in Delaware in June 2016. GREC Administration LLC and Danforth Shared Services LLC, both wholly-owned subsidiaries of GREC, were formed in Delaware in January 2020 and May 2019, respectively. The use of “we,” “us,” “our” and the “company” refer, collectively, to the LLC, GREC, GREC HoldCo, GREC Administration LLC and Danforth Shared Services LLC. We are externally managed and advised by our Advisor, Greenbacker Capital Management LLC (the “Advisor” or “GCM”), a renewable energy, energy efficiency and sustainability-related project acquisition, consulting and development company that is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”). The LLC’s fiscal year-end is December 31.
Pursuant to an initial Registration Statement filed in December 2011 (File No. 333-178786-01) and a second Registration Statement filed in February 2017 (File No. 333-211571), the company offered up to $1,000,000,000 in shares of limited liability company interests, or the shares, including up to $200,000,000 of shares pursuant to the company’s Distribution Reinvestment Plan (the “DRP”). Pursuant to the company's DRP, a shareholder owning publicly offered share classes may elect to have the full amount of cash distributions reinvested in additional shares. As of March 29, 2019, the company terminated its public offering of the shares as well as its privately offered Class P-A shares, which was subsequently reinstated as of October 18, 2020. While the company publicly offered three classes of shares: Classes A, C and I, currently the company is privately offering Classes P-A, P-I, P-D, P-T and P-S shares on a continuous basis. The publicly offered share classes had different selling commissions and dealer manager fees, and there is an ongoing distribution fee with respect to Class C shares. Following the termination of the company’s public offering of shares, the DRP continues to be available to existing investors who purchased shares as offered under the public offering.
As of June 4, 2019, pursuant to our Registration Statement on Form S-3D (File No. 333-231960), we offered a maximum of $10,000,000 in shares to our existing shareholders pursuant to the DRP. As of November 30, 2020, pursuant to our Registration Statement on Form S-3D (File No. 333-251021), the company is offering up to an additional $20,000,000 in Class A, C and I shares to our existing shareholders pursuant to the DRP. As of February 1, 2021, the DRP was amended to include all of the company's privately offered share classes, and thus is available to all investors as is the company's Share Repurchase Program.
As of March 31, 2021, the company has made solar, wind, biomass, battery storage, and energy efficiency investments in 12 portfolios domiciled in the United States and in Canada, as well as 7 secured loan investments in the United States (See Note 3). As of December 31, 2020, the company had made solar, wind, biomass, battery storage, and energy efficiency investments in 14 portfolios domiciled in the United States and in Canada, as well as 6 secured loan investments in the United States. Refer to Note 3. Investments for discussion on the consolidation of certain underlying portfolios within the Consolidated Schedules of Investments.
Note 2. Significant Accounting Policies
Basis of Presentation
The company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. Actual results could differ from those estimates, assumptions and judgments. Significant items subject to such estimates will include determining the fair value of investments, revenue recognition, income tax uncertainties and other contingencies. The consolidated financial statements of the company include the accounts of the LLC and its consolidated subsidiaries, GREC, GREC HoldCo, and GREC Administration LLC and Danforth Shared Services LLC, both of which provide administrative services to the company. All intercompany accounts and transactions have been eliminated.
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The company’s consolidated financial statements are prepared using the specialized accounting principles of Accounting Standards Codification Topic 946, Financial Services—Investment Companies (“ASC Topic 946”). In accordance with this specialized accounting guidance, the company recognizes and carries all its investments, including investments in the underlying operating entities, at fair value with changes in fair value recognized in earnings. Additionally, the company will not apply the equity method of accounting to its investments. The company carries its liabilities at amounts payable, net of unamortized premiums or discounts. The company does not currently plan to elect to carry its non-investment liabilities at fair value. Net assets are calculated as the carrying amounts of assets, including the fair value of investments, less the carrying amounts of its liabilities.
The financial information associated with the March 31, 2021 consolidated financial statements has been prepared by management and, in the opinion of management, contains all adjustments and eliminations necessary for a fair presentation in accordance with GAAP.
Basis of Consolidation
As provided under Regulation S-X and ASC Topic 946, the company will generally not consolidate its investment in a company other than a wholly owned investment company or controlled operating company whose business consists of providing services to the company. Accordingly, the company consolidates in its consolidated financial statements the accounts of certain wholly owned subsidiaries that meet the criteria. All significant intercompany balances and transactions have been eliminated in consolidation.
Cash and Cash Equivalents 
Cash consists of demand deposits at a financial institution. Such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits. The company has not experienced any losses in any such accounts.
As of March 31, 2021, the company had $8,947,086 in cash presented on the Consolidated Statements of Assets and Liabilities.
Restricted Cash
Restricted cash consists of cash accounts or letters of credit that are restricted for use on specific investments. As of March 31, 2021, the company did not have any restricted cash accounts.
Foreign Currency Translation
The accounting records of the company are maintained in U.S. Dollars. The fair value of investments and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. Dollars using the exchange rate at the end of each reporting period. Amounts related to the purchases and sales of investments, investment income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions.
Net unrealized currency gains and losses arising from valuing foreign currency-denominated assets and liabilities at the current exchange rate are reflected as part of Net change in unrealized appreciation (depreciation) on translation of assets and liabilities denominated in foreign currencies in the Consolidated Statements of Operations.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.
Valuation of Investments at Fair Value
Accounting Standards Codification Topic 820, Fair Value Measurement (“ASC Topic 820”) defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value. The company recognizes and accounts for its investments at fair value. The fair value of the investments does not reflect transaction costs that may be incurred upon disposition of the investments.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is an exchange price notion under which fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability.
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The Advisor has established procedures to estimate the fair value of its investments that the company’s Board of Directors has reviewed and approved. To the extent that such market data is available, the company will use observable market data to estimate the fair value of investments. In the absence of quoted market prices in active markets, or quoted market prices for similar assets in markets that are not active, the company will use the valuation methodologies described below with unobservable data based on the best available information in the circumstances. These methodologies incorporate the company’s assumptions about the factors that a market participant would use to value the asset.
The company considers investments in money market funds to be short-term investments. Short-term investments are stated at cost, which approximates fair value.
For investments for which quoted market prices are not available, which comprise most of our investment portfolio, fair value is estimated by using the income or market approach. The income approach assumes that value is created by the expectation of future benefits, discounted by a risk premium, to calculate a current cash value. This estimate is the fair value: the amount an investor would be willing to pay to receive those future benefits. The market approach compares either recent comparable transactions to the investment or an offer to purchase an investment based upon a qualified bid: a signed term sheet and/or a signed purchase agreement. Adjustments to proposed prices are made to account for the probability of the deal closing, changes between proposed and executed terms, and any dissimilarity between the comparable transactions and their underlying investments. If multiple bids are qualified in the same valuation period, a blended market approach will be calculated.
Prior to the second quarter of 2020, fair value for pre-operational assets was approximated using the cost approach. Beginning in the second quarter of 2020, our Advisor expanded the criteria whereby certain pre-operational assets are identified and qualified for the income approach, rather than the cost approach, for approximating fair value. Currently, we consider all owned assets that are fully construction ready with no impediments to begin construction and where the costs to complete such projects are well understood for the income approach. The fair value of such eligible projects is determined based upon a discounted cash flow methodology. If the portfolio has any significant portion of value that remains subject to negotiation or contract or if other significant risks to complete the project exist, the investment may be held at cost, as an approximation of fair value. These valuation methodologies involve a significant degree of judgment by management.
In determining the appropriate fair value of an investment using these approaches, the most significant information and assumptions include, as applicable: available current market data, including relevant and applicable comparable market transactions, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the investment’s ability to make payments, its earnings and discounted cash flows, the markets in which the project does business, comparisons of financial ratios of peer companies that are public, comparable mergers and acquisitions, the principal market and enterprise values and environmental factors, among other factors.
The estimated fair values will not necessarily represent the amounts that may be ultimately realized due to the occurrence or non-occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of the valuation of the investments, the estimate of fair values may differ significantly from the value that would have been used had a broader market for the investments existed.
The authoritative accounting guidance prioritizes the use of market-based inputs over entity-specific inputs and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation. The three levels of valuation hierarchy are defined as follows:
Level 1:    Unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2:    Other significant observable inputs that are sourced either directly or indirectly from publications or pricing services, including dealer or broker markets, for identical or comparable assets or liabilities. Generally, these inputs should be widely accepted and public, non-proprietary and sourced from an independent third party.
Level 3:    Inputs derived from a significant amount of unobservable market data and derived primarily through the use of internal valuation methodologies.
In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of an input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment.
Calculation of Net Asset Value
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Net asset value by share class is calculated by subtracting total liabilities for each class from the total carrying amount of all assets for that class, which includes the fair value of investments. Net asset value per share is calculated by dividing net asset value for each class by the total number of outstanding common shares for that class on the reporting date. For purposes of calculating our net asset value, we expect to carry all liabilities at cost.
Earnings (Loss) per Share
In accordance with the provisions of ASC Topic 260 — Earnings per Share (“ASC Topic 260”), basic earnings per share is computed by dividing earnings available to common members by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.
The following information sets forth the computation of the weighted average basic and diluted net increase in net assets attributed to common members per share and net investment income per share for the three months ended March 31, 2021 and March 31, 2020. 
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Basic and diluted
Net investment income$1,010,087 $4,805,340 
Net increase in net assets attributed to common members$3,725,682 $7,944,329 
Net investment income per share$0.01 0.10 
Net increase in net assets attributed to common members per share$0.04 $0.16 
Weighted average common shares outstanding85,937,169 48,991,682 
Revenue Recognition
To the extent the company expects to collect such amounts, interest income is recorded on an accrual basis. If there is reason to doubt an ability to collect such interest, interest receivable on loans and debt securities is not accrued for accounting purposes. Original issue discounts, market discounts or market premiums are accreted or amortized using the effective interest method as interest income. Prepayment premiums on loans and debt securities are recorded as interest income when received. Any application, origination or other fees earned by the company in arranging or issuing debt are amortized over the expected term of the loan.
Loans are placed on non-accrual status when principal and interest are 90 days or more past due, or when there is a reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are generally restored to accrual status when past due and principal and interest is paid and, in management’s judgment, is likely to remain current.
Dividend income is recorded when dividends are declared and determined that collection is probable. The timing and amount of dividend income is determined on at least a quarterly basis. This process includes an analysis at the individual project company level based on cash available from operations and working capital needed for the project company operations. Dividend income from our privately held, equity investments is recognized when approved. On a quarterly basis at a minimum, dividends received from the company’s project companies, which generally reflect net cash flow from operations, are declared, accrued and paid.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments
Without regard to unrealized appreciation or depreciation previously recognized, realized gains or losses will be measured as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset. Net change in unrealized appreciation or depreciation will reflect the change in investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Payment-in-Kind
For loans and debt securities with contractual payment-in-kind interest, if the fair value of the investment indicates that such interest is collectible, any interest will be added to the principal balance of such investments and be recorded as income.
15


Distribution Policy
Distributions to members, if any, will be authorized and declared by our Board of Directors quarterly in advance and paid monthly. From time to time, we may also pay interim special distributions in the form of cash or shares, with the approval of our Board of Directors. Distributions will be made on all classes of shares at the same time. The cash distributions with respect to the Class C, P-S and P-T shares will be lower than the cash distributions with respect to the company’s other share classes because of the distribution fee associated with the Class C, P-S and P-T shares, which is allocated specifically to these classes' net assets. Amounts distributed to each class are allocated amongst the holders of the shares in such class in proportion to their shares. Distributions declared by our Board of Directors are recognized as distribution liabilities on the ex-dividend date.
Organization and Offering Costs
Organization and offering costs (“O&O costs”), other than sales commissions and the dealer manager fee, were initially paid by our Advisor and/or dealer manager on behalf of the company in connection with its formation and the offering of its shares pursuant to now-terminated Registration Statements on Form S-1 (File No. 333-178786-01 and File No. 333-211571, respectively).
The company was obligated to reimburse our Advisor for O&O costs that it incurred on behalf of the company, in accordance with the advisory agreement. However, with respect to the company’s public offerings, O&O was not to exceed 15% of gross offering proceeds. Total O&O costs related to the terminated Registration Statements amounted to $9.8 million, approximately 3.8% of gross offering proceeds raised pursuant to such Registration Statements.
Offering costs incurred by our Advisor in conjunction with the offering of shares of Class P-A, P-S, P-T and P-D under our current private placement memorandum are subject to the reimbursement by the company up to 0.50% (50 basis points) of gross offering proceeds.
The costs incurred by our Advisor and/or dealer manager are recognized as a liability of the company to the extent that the company is obligated to reimburse our Advisor and/or dealer manager. When recognized by the company, organizational costs are expensed and offering costs, excluding selling commissions and dealer manager fees, are recognized as a reduction of the proceeds from the offering. As of March 31, 2021, $115,490 was reimbursed to the Advisor for O&O costs and $1,399,749 is a current payable, shown as Due to Advisor on the Consolidated Statements of Assets and Liabilities.
Financing Costs
Financing costs incurred by the company for the issuance of debt liabilities are deferred and amortized using the straight-line method over the life of the debt liability. Financing costs related to debt liabilities incurred by the company are presented on the Consolidated Statements of Assets and Liabilities as a direct deduction from the carrying amount of that debt liability.
Return of Capital Receivable
For operational assets, if the project company has inadequate cash to fund day-to-day expenses, the company will loan funds to that project company through an equity investment. Once the project company has adequate cash, they will repay the loan by sending a return of capital distribution. As of March 31, 2021, and December 31, 2020, a return of capital receivable amounts of $439,815 and $2,159,762, respectively was recorded on the Consolidated Statements of Assets and Liabilities.
Capital Gains Incentive Allocation and Distribution
Pursuant to the terms of the LLC’s third amended and restated limited liability company agreement, a capital gains incentive allocation was earned by GREC Advisors, LLC (the “Special Unitholder”), an affiliate of our Advisor, on realized gains (net of realized and unrealized losses) since inception from the sale of investments from the company’s portfolio during operations prior to a liquidation of the company. While the terms of the LLC’s amended and restated limited liability company agreement neither include nor contemplate the inclusion of unrealized gains in the calculation of the capital gains incentive allocation, the company included unrealized gains in the calculation of the capital gains incentive distribution. This amount reflected the incentive distribution that would be payable if the company’s entire portfolio was liquidated at its fair value as of the Consolidated Statements of Assets and Liabilities date, even though the Special Unitholder is not entitled to an incentive distribution with respect to unrealized gains unless and until such gains are realized. Thus, on each date that net asset value was calculated, the company calculated for the capital gains incentive distribution by calculating such distribution as if it were due and payable as of the end of such period and reflected as an allocation of equity between common members and the Special Unitholder. The capital gains incentive allocation was eliminated with the adoption of the fourth amended and restated limited liability company agreement in August 2020.
16


Performance Participation Fee
Under the LLC's fourth amended and restated limited liability company agreement entered into in August 2020, the incentive fee payable by the company was simplified to be structured with two components: the performance participation fee and the liquidation performance participation fee. The performance participation fee is based on the company's total return amount during the relevant calculation period. The calculation of the performance participation fee is further detailed in Note 5. Related Party Agreements and Transaction Agreements. The performance participation fee is accounted for and classified as an operating expense and reflected as the performance participation fee on the Consolidated Statements of Operations. Under the new agreement, a performance participation fee payable of nil and $3,540,052 was recorded as of March 31, 2021 and December 31, 2020, respectively, in the Consolidated Statements of Assets and Liabilities. The performance participation fee recorded on the Consolidated Statements of Operations for the quarter ended March 31, 2021 and for the year ended December 31, 2020 is NaN and $4,571,927, respectively.
Deferred Sales Commissions
The company defers certain costs, principally sales commissions and related compensation, which are paid to the dealer manager and may be reallowed to financial advisors and broker-dealers in the future in connection with the sale of shares sold with a reduced front-end load sales charge and a trail fee. The costs expected to be incurred at the time of the sale of the Class C shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) when the maximum amount of sales commission and related compensation is reached under regulatory regulations; 2) the date which approximates an expected liquidity event for the company; or 3) the expected holding period of the investment. The costs expected to be incurred at the time of the sale of the Class P-T and Class P-S shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) the date which approximates an expected liquidity event for the company; or 2) the expected holding period of the investment. The estimated amount of the liability can be updated as management's assumption surrounding an expected liquidity event changes or if the maximum of sales-related commissions and costs under regulatory regulations is attained. As of March 31, 2021, and December 31, 2020, the company recorded a liability for deferred sales commissions in the amount of $4,094,869 and $131,875, respectively.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on prior periods’ results. Refer to Note 3. Investments for discussion on the consolidation of certain underlying portfolios within the Consolidated Schedules of Investments.
Derivative Instruments
The company may utilize interest rate swaps to modify interest rate characteristics of existing debt obligations to manage interest rate exposure. These are recorded at fair value either as assets or liabilities in the accompanying Consolidated Statements of Assets and Liabilities with changes in the fair value of interest rate swaps during the period recognized as either an unrealized appreciation or depreciation in the accompanying Consolidated Statements of Operations. On the expiration, termination or settlement of a derivatives contract, the company generally records a gain or loss. When there is a master netting agreement with a financial institution, any gain or loss on interest rate swaps with the same financial institution are netted for financial statement presentation.
The fair value of interest rate swap contracts open as of March 31, 2021 is included on the Consolidated Schedule of Investments by contract. For the three months ended March 31, 2021, the company’s average monthly notional exposure to interest rate swap contracts was $85,225,339.
Consolidated Statements of Assets and Liabilities – Fair Values of Derivatives at March 31, 2021
Liability Derivatives
Risk ExposureConsolidated Statement
of Assets and Liabilities
Location
Fair Value
Swaps
Interest Rate RiskSwap contracts, at fair value$6,011,882 
$6,011,882 
17


Consolidated Statements of Assets and Liabilities – Fair Value of Derivatives at December 31, 2020
Liability Derivatives
Risk ExposureConsolidated Statement
of Assets and Liabilities
Location
Fair Value
Swaps
Interest Rate RiskSwap contracts, at fair value$9,750,909 
$9,750,909 
The effect of derivative instruments on the Consolidated Statements of Operations
Risk ExposureChange in net unrealized depreciation on derivative transactions for the three months ended March 31,
2021
Change in net unrealized depreciation on derivative transactions for the three months ended March 31,
2020
Swaps
Interest Rate Risk$3,739,027 $(6,317,448)
$3,739,027 $(6,317,448)

Risk ExposureOther expenses for the three months ended March 31,
2021
Other expenses for the three months ended March 31,
2020
Swaps
Interest Rate Risk$493,816 $199,247 
$493,816 $199,247 
By using derivative instruments, the company is exposed to the counterparty’s credit risk — the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The company’s exposure to credit risk associated with counterparty non-performance is limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the Consolidated Statements of Assets and Liabilities. As appropriate, the company minimizes counterparty credit risk through credit monitoring procedures and managing margin and collateral requirements.
Regarding our investment in the Canadian Northern Lights assets included in the Other Commercial Solar Portfolio, we have foreign currency risk related to our revenue and operating expenses, which are denominated in Canadian Dollars as opposed to U.S. Dollars.
Income Taxes
The LLC intends to operate so that it will qualify to be treated as a partnership for U.S. federal income tax purposes under the Internal Revenue Code. As such, it will not be subject to any U.S. federal and state income taxes. In any year, it is possible that the LLC will not meet the qualifying income exception and will not qualify to be treated as a partnership. If the LLC does not meet the qualifying income exception, the members would then be treated as stockholders in a corporation, and the company would become taxable as a corporation for U.S. federal income tax purposes under the Internal Revenue Code. The LLC would be required to pay income tax at corporate rates on its net taxable income. To the extent of the company’s earnings and profits, and the payment of the distributions would not be deductible by the LLC, distributions to members from the LLC would constitute dividend income taxable to such members.
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The LLC plans to conduct substantially all its operations through its wholly owned subsidiary, GREC, which is a corporation that is subject to U.S. federal, state, and local income taxes. Accordingly, most of its operations will be subject to U.S. federal, state, and local income taxes. As of March 31, 2021, including territories and provinces, the portfolio resides in 29 jurisdictions.
Income taxes are accounted for under the assets and liabilities method. Deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between items that are recognized in the consolidated financial statements and tax returns in different years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
For income tax benefits to be recognized, including uncertain tax benefits, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of the benefit that is more likely than not to be realized upon ultimate settlement. A valuation allowance is established against net deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Interest and penalties associated with income taxes, if any, will be recognized in general and administrative expense.
The company does not consolidate its investments for financial statements; rather, it accounts for its investments at fair value under the specialized accounting of ASC Topic 946. The tax attributes of the individual investments will be considered and incorporated in the company’s fair value estimates for those investments. The amounts recognized in the consolidated financial statements for unrealized appreciation and depreciation will result in a difference between the consolidated financial statements and the cost basis of the assets for tax purposes. These differences will be recognized as deferred tax assets and liabilities. Generally, the entities that hold the company’s investments will be included in the consolidated tax return of GREC and the differences between the amounts recognized for financial statement purposes and the tax return will be recognized as additional deferred tax assets and liabilities.
The company follows the authoritative guidance on accounting for uncertainty in income taxes and has concluded it has no material uncertain tax positions to be recognized at this time.
The company assessed its tax positions for all open tax years as of March 31, 2021 for all U.S. federal and state tax jurisdictions for the years 2014 through 2020. The results of this assessment are included in the company’s tax provision and deferred tax assets as of March 31, 2021.
Revisions to Prior Period Financial Statements
As discussed further in the notes to our financial statements contained in our Annual Report on Form 10-K for the year-ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, we identified errors related to deferred tax assets included in our consolidated financial statements for the quarterly period ended September 30, 2016 and each subsequent quarterly and annual period through the quarterly period ending June 30, 2020. We concluded that our previously issued consolidated financial statements were not materially misstated as a result of these errors, but the correction was material to the Consolidated Statement of Operations. We revised our previously reported quarterly and annual consolidated financial statements to correct for these errors in the periods in which they occurred.
Note 3. Investments
During the three months ended March 31, 2021, the company modified the presentation of the Consolidated Schedule of Investments to consolidate certain underlying portfolios. Certain portfolios that had been separately presented on the Consolidated Schedule of Investments have been aggregated with other portfolios in the same industry to be presented in a consolidated manner on the Consolidated Schedule of Investments. These consolidation efforts have no impact on the underlying portfolios or their individual cost or fair values but rather represent the aggregation of several similar investments. Certain portfolios, including those determined to be individually significant, remain presented separately. Management
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believes that the consolidation of our portfolios results in a presentation that more accurately reflects the way in which we view our overall portfolio of investments and will enhance the information reported to the users of our financial statements.
Management has recast the Schedule of Investments as of December 31, 2020 to conform with current year presentation based upon the methodology as outlined above.
The composition of the company’s investments as of March 31, 2021 by geographic region, at fair value, were as follows:
Investments
at Cost
Investments
at Fair
Value
Fair Value
Percentage
of Total
Portfolio
United States:
East Region$168,750,146 $184,863,047 16.8 %
Mid-West Region139,735,201 153,247,295 13.9 
Mountain Region182,227,199 221,026,921 20.0 
South Region89,694,997 92,776,886 8.4 
West Region112,514,245 130,709,472 11.9 
Total United States$692,921,788 $782,623,621 71.0 %
Canada:1,603,136 1,728,480 0.2 
Money Market Funds:315,413,951 315,413,951 28.8 
Total$1,009,938,875 $1,099,766,052 100.0 %
The composition of the company’s investments as of December 31, 2020 by geographic region, at fair value, were as follows:
Investments
at Cost
Investments
at Fair
Value
Fair Value
Percentage
of Total
Portfolio
United States:
East Region$148,159,362 $168,616,615 25.5 %
Mid-West Region120,709,771 127,384,880 19.3 
Mountain Region113,435,944 153,512,583 23.3 
South Region83,302,384 85,763,612 13.0 
West Region93,963,813 111,842,679 16.9 
Total United States$559,571,274 $647,120,369 98.0 %
Canada:1,603,136 1,689,628 0.3 
Money Market Funds:11,172,727 11,172,727 1.7 
Total$572,347,137 $659,982,724 100.0 %
The composition of the company’s investments as of March 31, 2021 by industry, at fair value, were as follows:
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Investments
at Cost
Investments
at Fair
Value
Fair Value
Percentage
of Total Portfolio
Battery Storage$9,140,209 $9,140,209 0.8 %
Biomass23,686,352 23,686,352 2.1 
Commercial Solar*469,591,272 546,754,524 49.6 
Wind141,480,585 153,908,260 14.0 
Pre-Operational Assets29,794,816 30,410,677 2.8 
Other Investments20,123,799 19,750,743 1.8 
Energy Efficiency707,891 701,336 0.1 
Money Market Funds315,413,951 315,413,951 28.8 
Total$1,009,938,875 $1,099,766,052 100.0 %
*Includes loans in the amount of $46,174,918.
The composition of the company’s investments as of December 31, 2020 by industry, at fair value, were as follows:
Investments
at Cost
Investments
at Fair
Value
Fair Value
Percentage
of Total
Portfolio
Biomass$23,236,352 $23,236,352 3.5 %
Commercial Solar*312,220,034 352,282,865 53.5 
Battery Storage8,839,235 8,839,235 1.3 
Wind127,065,344 131,210,544 19.9 
Pre-Operational Assets65,405,651 109,208,306 16.5 
Other Investments23,669,446 23,291,114 3.5 
Energy Efficiency738,348 741,581 0.1 
Money Market Funds11,172,727 11,172,727 1.7 
Total$572,347,137 $659,982,724 100.0 %
*Includes loans in the amount of $37,327,690.
Investments held as of March 31, 2021 and December 31, 2020 are considered Control Investments, which are defined as investments in companies in which the company owns 25% or more of the voting securities of such company, have greater than 50% representation on such company’s Board of Directors, or are investments in limited liability companies for which the company serves as managing member.
Note 4. Fair Value Measurements - Investments
The following table presents fair value measurements of investments, by major class, as of March 31, 2021, according to the fair value hierarchy:
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Valuation Inputs
Level 1Level 2Level 3Fair Value
Limited Liability Company Member Interests$$$736,059,063 $736,059,063 
Capital Stock1,728,480 1,728,480 
Energy Efficiency Secured Loans389,640 389,640 
Secured Loans - Other46,174,918 46,174,918 
Money Market Funds315,413,951 315,413,951 
Total$315,413,951 $$784,352,101 $1,099,766,052 
Other Financial Instruments*
Open swap contracts - liabilities$$(6,011,882)$$(6,011,882)
Total$$(6,011,882)$$(6,011,882)
*    Other financial instruments are derivatives, such as futures, forwards, and swaps.  These instruments are reflected at the unrealized appreciation (depreciation) on the instrument.
The following table presents fair value measurements of investments, by major class, as of December 31, 2020, according to the fair value hierarchy:
Valuation Inputs
Level 1Level 2Level 3Fair Value
Limited Liability Company Member Interests$$$609,394,039 $609,394,039 
Capital Stock1,689,628 1,689,628 
Energy Efficiency Secured Loans398,640 398,640 
Secured Loans - Other37,327,690 37,327,690 
Money Market Funds11,172,727 11,172,727 
Total$11,172,727 $$648,809,997 $659,982,724 
Other Financial Instruments*
Open swap contracts - liabilities$$(9,750,909)$$(9,750,909)
Total$$(9,750,909)$$(9,750,909)
*    Other financial instruments are derivatives, such as futures, forward currency contracts and swaps. These instruments are reflected at the unrealized appreciation (depreciation) on the instrument.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2021:
Balance as of December 31,
2020
Net
change in
unrealized
appreciation
on investments
Translation
of assets
and
liabilities
denominated
in foreign
currencies
Purchases
Cost
adjustments(1)
Sales and
Repayments
of
investments(2)
Net
realized
(loss) on
investments
Balance as of March 31,
2021
Limited Liability Company Member Interests$609,394,039 $2,152,738 $$159,657,286 $(35,051,394)$(21,457)$(72,149)$736,059,063 
Capital Stock1,689,628 18,710 20,142 1,728,480 
Energy Efficiency - Secured Loans398,640 (9,000)389,640 
Secured Loans - Other37,327,690 10,156,146 (1,308,918)46,174,918 
Total$648,809,997 $2,171,448 $20,142 $169,813,432 $(35,051,394)$(1,339,375)$(72,149)$784,352,101 
(1)Includes paid-in-kind interest, return of capital and additional investments in existing investments, if any.
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(2)Includes principal repayments on loans.
The total change in unrealized appreciation included in the Consolidated Statements of Operations within net change in unrealized appreciation on investments and foreign currency translation for the three months ended March 31, 2021 attributable to Level 3 investments still held at March 31, 2021 was $2,191,590. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of Level 3 as of the beginning of the period in which the reclassifications occur. There were no reclassifications attributable to Level 3 investments during the three months ended March 31, 2021.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2020:
Balance as of December 31,
2019
Net
change in
unrealized
appreciation
on
investments
Translation
of
assets and
liabilities
denominated
in foreign
currencies
Purchases
Cost
adjustments(1)
Sales and
Repayments of
investments(2)
Net
realized
gain on
investments
Balance as of March 31,
2020
Limited Liability Company Member Interests$449,981,086 $12,102,469 $$82,694,239 $(37,182,463)$(53,843,615)$6,402,927 $460,154,643 
Capital Stock1,611,955 (2,034)(52,248)1,557,673 
Energy Efficiency - Secured Loans479,140 (25,500)453,640 
Secured Loans - Other23,103,690 5,605,821 28,709,511 
Total$475,175,871 $12,100,435 $(52,248)$88,300,060 $(37,182,463)$(53,869,115)$6,402,927 $490,875,467 
(1)Includes paid-in-kind interest, return of capital and additional investments in existing investments, if any.
(2)Includes principal repayments on loans.
The total change in unrealized appreciation included in the Consolidated Statements of Operations within net change in unrealized appreciation (depreciation) on investments and foreign currency translation for the three months ended March 31, 2020 attributable to Level 3 investments and foreign currency translation still held at March 31, 2020 was $21,709,268. There were no reclassifications attributable to Level 3 investments during the three months ended March 31, 2020.
As of March 31, 2021, most of the company investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the company’s investments as of March 31, 2021:
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Fair ValueValuation
Techniques
Unobservable
Inputs
Range of Inputs
(weighted average)
Battery Storage$9,140,209 Transaction CostNot ApplicableNot Applicable
Biomass$23,686,352 Transaction CostNot ApplicableNot Applicable
Commercial Solar*$500,579,606 Income ApproachDiscount rate, kWh Production, potential leverage and estimated remaining useful life3.50%-8.19% (7.73%) 0.47% annual degradation in production, 8.2- 39.8 (33.4) years
Wind$153,908,260 Income Approach and Transaction CostDiscount rate, kWh Production, potential leverage and estimated remaining useful life8.00%-8.02% (8.00%) 0 annual degradation in production, 19.5- 28.8 (22.8) years
Pre-Operational Assets$30,410,677 Income Approach and Transaction CostDiscount rate, kWh Production, potential leverage and estimated remaining useful life7.79%-8.50% (8.13%) 0.37% annual degradation in production, 30.5-35.8 (34.2) years
Other Investments$19,750,743 Transaction CostNot ApplicableNot Applicable
Energy Efficiency$701,336 Income and Collateral-Based ApproachMarket yields and value of collateral10.25% No annual degradation in production 3.9-4.8 (4.3) years
Secured Loans$46,174,918 Yield AnalysisMarket yields8.00%-10.00% (8.62%)
*Includes assets that have not reached COD that are being recognized using the income approach to fair market value.
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As of December 31, 2020, all of the company’s portfolio investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the company’s investments as of December 31, 2020:
Fair ValueValuation
Techniques
Unobservable
Inputs
Range of Inputs
(weighted average)
Battery Storage$8,839,235 Transaction CostNot ApplicableNot Applicable
Biomass$23,236,352 Transaction CostNot ApplicableNot Applicable
Commercial Solar*$314,955,175 Income ApproachDiscount rate, kWh Production, potential leverage and estimated remaining useful life7.25%-8.36% (7.84%) 0.50% annual degradation in production 8.5-40.0 (33.0) years
Wind$131,210,544 Income Approach and Transaction CostDiscount rate, kWh Production, potential leverage and estimated remaining useful life7.75%-8.52% (8.25%) NaN annual degradation in production 19.7-29.0 (23.1) years
Pre-Operational Assets$109,208,306 Income Approach and Transaction CostDiscount rate, kWh Production, potential leverage and estimated remaining useful life7.86%-9.25% (8.75%) 0.00%-0.50% (0.35%) annual degradation in production 30.7-36.0 (34.8) years
Other Investments$23,291,114 Transaction CostNot ApplicableNot Applicable
Energy Efficiency$741,581 Income and Collateral-Based ApproachIncome-Based Approach and Market yields10.25% NaN annual degradation in production 4.2-5.0 (4.6) years
Secured Loans$37,327,690 Yield AnalysisMarket yields8.00%-10.00% (8.84%)
*Includes assets that have not reached COD that are being recognized using the income approach to fair market value.
GREC utilizes primarily proprietary discounted cash flow pricing models in the fair value measurement of the company’s investments. Significant unobservable inputs include discount rates and estimates related to the future production of electricity. Significant increases or decreases in discount rates used or actual kilowatt-hour production can significantly increase or decrease the fair value measurement.
Note 5. Related Party Agreements and Transaction Agreements
The company has executed advisory and administration agreements with the Advisor and Greenbacker Administration, LLC, our administrator, respectively, which entitles the advisor, and certain affiliates of the advisor, to specified fees upon the provision of certain services with regard to the ongoing management of the company as well as reimbursement of O&O costs incurred by the advisor on behalf of the company (as discussed in Note 2) and certain other operating costs incurred by the advisor on behalf of the company. As the company’s previous public offering was terminated on March 29, 2019, the former dealer manager will no longer receive any selling commissions or dealer manager fees. However, the former dealer manager will continue to receive distribution fess on Class C shares until the maximum amount of commissions and dealer manager fees permitted by applicable regulation is reached.
The term “Special Unitholder” refers to GREC Advisors, LLC, a Delaware limited liability company, which is a subsidiary of our Advisor and “special unit”, refers to the special unit of limited liability company interest in GREC. This entitles the Special Unitholder to an incentive allocation and distribution.
The commissions, fees and reimbursement obligations related to our terminated continuous public offering and ongoing private placement included Selling Commissions, Dealer Manager fees and Distribution fees payable to the former dealer manager for Class A, Class C, Class P-A and Class I shares ranging from 1.75% to 7% of gross offering proceeds from the sale of such shares. With respect to Class C shares only, the company pays the former dealer manager a distribution fee that accrues daily in an amount equal to 1/365th of 0.80% of the amount of the net asset value for the Class C shares for such day on a continuous basis from year to year. The company will stop paying distribution fees at the earlier of 1) a listing of the Class C shares on a national securities exchange; 2) total underwriting compensation in the offering equals 10% of the gross proceeds
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from the primary offering of Class C shares, following the completion of such offering; or 3) Class C shares are no longer outstanding. The dealer manager may re-allow all or a portion of the distribution fee to participating broker-dealers and servicing broker-dealers. The company estimated the amount of distribution fees expected to be paid and recorded that liability at the time of sale. The liability is included in Deferred Sales Commission Payable on the Consolidated Statements of Assets and Liabilities and fees recorded in accumulated deficit (specific to the Class C Shares) on the Consolidated Statements of Assets and Liabilities. The company continues to assess the value of the liability on a regular basis.
The company also reimbursed the advisor for the O&O costs (other than selling commissions and dealer manager fees) it had incurred on the company's behalf related to the now terminated Registration Statements, only to the extent that the reimbursement would not cause the selling commissions, dealer manager fee and the other O&O costs borne by the company to exceed 15.0% of the gross offering proceeds as the amount of proceeds increases. During the initial and secondary offerings approximately 3.8%, or $9.8 million, was charged against gross offering proceeds for O&O costs.
Offering costs incurred by our Advisor in conjunction with the offering of shares of Class P-A, P-S, P-T and P-D under our current private placement memorandum are subject to the reimbursement by the company up to 0.50% (50 basis points) of gross offering proceeds.
The fees and reimbursement obligations related to our ongoing operation of the company are as follows:
Type of Compensation and RecipientDetermination of Amount
Base Management Fees — AdvisorThe base management fee payable to GCM will be calculated at a monthly rate of 0.167% (2.00% annually) of our gross assets (including amounts borrowed up to $50,000,000) until gross assets exceed $800,000,000. The base management fee monthly rate will decrease to 0.14583% (1.75% annually) for gross assets between $800,000,001 to $1,500,000,000 and 0.125% (1.50% annually) for gross assets greater than $1,500,000,000. For services rendered under the advisory agreement, the base management fee will be payable monthly in arrears, or more frequently as authorized under the advisory agreement. The base management fee will be calculated based on the average of the values of our gross assets for each day of the prior month. Base management fees for any partial period will be appropriately prorated. The base management fee may be deferred or waived, in whole or in part, at the election of the advisor. All or any part of the deferred base management fee not taken as to any period shall be deferred without interest and may be taken in any period prior to the occurrence of a liquidity event as the advisor shall determine in its sole discretion.
 
Incentive Allocation and Distribution — Special Unitholder (effective through March 31, 2020) Under the Third Amended and Restated LLC Agreement dated June 27, 2014, the incentive allocation and distribution had three parts: Income Incentive Distribution, Capital Gains Incentive Distribution and the Liquidation Incentive Distribution. The features of this incentive fee structure were as follows:
●    The Income Incentive Distribution provided for the Special Unitholder, as a member of the company, to receive, on a quarterly basis, a cash distribution equal to a percentage of the company’s net investment income (as calculated in accordance with the Operating Agreement) for each quarter, in excess of a specified hurdle rate.
●    The Capital Gains Incentive Distribution provided for the Special Unitholder, as a member of the company, to receive, on a quarterly basis, a cash distribution equal to a percentage of the company’s realized capital gains (as calculated in accordance with the Operating Agreement) for each quarter.
●    The Liquidation Incentive Distribution provided for the Special Unitholder to receive a cash distribution equal to a percentage of the difference between the net proceeds from the liquidation of the company or the exchange listing of its shares (as calculated in accordance with the Operating Agreement) and the company’s aggregate NAV immediately prior to the time of such liquidation or listing.
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Performance Participation Fees (effective April 1, 2020 and thereafter)
Under the company's Fourth Amended and Restated LLC Agreement (the "Operating Agreement") dated November 17, 2020, the performance participation which the Special Unitholder is entitled to is calculated and payable in arrears, for an amount equal to 12.5% of the total return generated by the company during the most recently completed fiscal quarter, subject to a hurdle amount of 1.50% (or 6% annualized), a loss carryforward and a fee carryforward amount. The Total Return Amount is defined for each quarterly calculation period, as an amount equal to the sum of:

The aggregate amount of all cash distributions accrued or paid (without duplication) during such quarter on the shares outstanding at the end of such quarter, plus

The amount of the change in aggregate NAV of such shares since the beginning of such quarter, before giving effect to (x) changes in the aggregate NAV of such shares during such quarter resulting solely from the net proceeds of issuances and/or repurchase of shares by the company, and (y) the amount of any accrual of the Performance Participation Fee during such quarter.
The calculation of the Total Return Amount for each period shall include any appreciation or depreciation in the NAV of the shares issued during such period, but exclude the proceeds from the initial issuance of such shares. The total NAV of the shares outstanding as of the last business day of a calendar quarter shall be the amount against which changes in the total NAV of the shares outstanding during the subsequent calendar quarter is measured. Furthermore, the loss carryforward shall initially equal 0 and cumulatively increase in any calendar quarter by the absolute value of any negative total return for such quarter and cumulatively decrease in any calendar quarter by the amount of any positive total return. The fee carryforward amount shall also initially equal 0, and cumulatively increase in any calendar quarter by (i) the amount, if any, by which the hurdle amount (noted above) for such quarter exceeds any positive total return amount for such quarter; and (ii) the amount, if any, by which the catch-up amount for such quarter exceeds excess profits for such quarter. The fee carryforward amount shall cumulatively decrease in any calendar quarter by the amount, if any, of the fee carryforward amount paid to the Special Unitholder for such quarter. Neither the loss carryforward nor the fee carryforward amounts shall be less than 0 at any given time.
The Special Unitholder shall receive a performance participation fee as follows:

●    if the Total Return Amount for the applicable period exceeds the sum of (x) the Hurdle Amount for such period and (y) the Loss Carryforward Amount for such Period (any such excess, “Excess Profits”), 100% of such Excess Profits until the total amount paid to the Special Unitholder equals 12.5% of the sum of (x) the Hurdle Amount for such period and (y) any amount paid to the Special Unitholder pursuant to this clause (the “Catch-Up Amount”);

●    to the extent there are remaining Excess Profits after payment of the Catch-Up Amount, 100% of such remaining Excess Profits until such amount paid to the Special Unitholder equals the amount of the Fee Carryforward Amount for such period; and

●    to the extent there are remaining Excess Profits after payment of the Catch-Up Amount and the Fee Carryforward Amount (as defined above), 12.5% of such remaining Excess Profits.
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The liquidation performance participation fee payable to the Special Unitholder will equal 20.0% of the net proceeds from a liquidation of the company in excess of adjusted capital, as measured immediately prior to liquidation. Adjusted capital shall mean the company NAV immediately prior to the time of a liquidation or a listing. In the event of any liquidity event that involves a listing of the company's shares, or a transaction in which the company's members receive shares of a company that is listed, on a national securities exchange, the liquidation performance participation fee will equal 20.0% of the amount, if any, by which the company's listing value following such liquidity event exceeds the adjusted capital, as calculated immediately prior to such listing (the "listing premium"). Any such listing premium and related liquidation performance participation fee will be determined and payable in arrears 30 days after the commencement of trading following such liquidity event.

The amendments to the incentive fee structure pursuant to the Operating Agreement was applied retroactively as of April 1, 2020 and for all periods thereafter.
For the three months ended March 31, 2021 and March 31, 2020, the Advisor earned $4,075,503 and $2,399,753, respectively, in management fees. As of March 31, 2021 and December 31, 2020, the company owed $1,748,112 and $1,055,600, respectively, to the Advisor in management fees, which amounts are included in management fee payable on the Consolidated Statements of Assets and Liabilities.
The Consolidated Statements of Operations reflect 0 performance participation fee for the three months ended March 31, 2021. There was 0 capital gains incentive distribution for the three months ended March 31, 2021 as this no longer exists under the new performance participation fees methodology as discussed above. For the three months ended March 31, 2020, there was a capital gains incentive distribution of $1,124,000.
As of March 31, 2021, and December 31, 2020, $1,399,749 and $1,751 were due to the Advisor for O&O costs related to the private continuous offering, and shown as due to Advisor on the Consolidated Statements of Assets and Liabilities.
As of March 31, 2021, the Advisor owned 23,601 Class A shares and 2,776 Class P-D shares. As of December 31, 2020, the Advisor owned 23,601 Class A shares.
The company entered into secured loans to finance the purchase and installation of energy-efficient lighting with LED Funding LLC and Renew AEC One LLC (“AEC Companies”). All of the loans with LED Funding LLC, an AEC Company, converted to an operating lease on the day the energy efficiency upgrades became operational. AEC Companies are considered related parties, as the members of these entities own an indirect, non-controlling ownership interest in the company’s advisor. The loans outstanding between the AEC Companies and the company, and the subsequent operating leases, were negotiated at an arm’s length and contain standard terms and conditions that would be included in third-party lending agreements, including required security and collateral, interest rates based upon risk of the specific loan, and term of the loan. These investments have a cost of $389,640 and a fair value of $389,640, and are included in Other Energy Efficiency Portfolios in the Consolidated Schedules of Investments as of March 31, 2021. As of March 31, 2021, all loans and operating leases are considered current per their terms.
On October 9, 2020, the company made a $5,000,000 limited partner ("LP") commitment to Greenbacker Development Opportunities Fund I, LP ("GDEV"), which was increased to $6,075,000 in the fourth quarter of 2020. As the initial investor, the company was awarded a 10% carried interest participation in Greenbacker Development Opportunities GP I, LLC, GDEV's general partner. GDEV is an affiliate of GREC as GDEV shares the same advisor as GREC. As of March 31, 2021, $5,614,619 of the commitment was funded. This investment's cost of $5,614,619 and fair value of $5,607,040, is included in Other Portfolios in the Consolidated Schedules of Investments. In April 2021, the commitment to GDEV increased to $7,500,000.
On December 22, 2020 the company, through its wholly owned subsidiary, Citrine Solar LLC, entered into a third transaction with Greenbacker Renewable Opportunity Zone Fund LLC ("GROZ") to sell Gliden Solar, LLC. The asset was sold for a purchase price of $12,752,215 based upon the fair value of the investment as determined by an independent third-party appraiser. The transaction resulted in a realized gain of $1,608,644 recorded in the Consolidated Statements of Operations as of December 31, 2020. As of March 31, 2021, the remaining balance of $4,258,243 is included in the Investment Sales Receivable in the Consolidated Statements of Assets and Liabilities. The proceeds related to the Investment Sales Receivable amount of $4,258,243 presented on the Consolidated Statements of Assets and Liabilities as of March 31, 2021 were subsequently collected by April 30, 2021.
Note 6. Borrowings
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On January 5, 2018, the company, through GREC HoldCo, entered into a credit agreement by and among the company, the company’s wholly owned subsidiary, GREC, the lenders party thereto and Fifth Third Bank, as administrative agent, sole lead arranger, sole lead bookrunner and swap counterparty. The credit facility (the “Credit Facility”) consisted of a loan of up to the lesser of $60,000,000 or a borrowing base amount based on various solar projects that act as collateral for the credit facility, of which approximately $25.7 million was drawn down at closing. The Credit Facility allowed for additional drawdowns through December 31, 2018, and converted to a term loan with a maturity on January 5, 2024.
On June 20, 2019, the company, through GREC HoldCo, entered into an Amended and Restated Credit Agreement with the lenders party thereto and Fifth Third Bank, as administrative agent, sole lead arranger, sole lead bookrunner and swap counterparty. The new credit facility (the “New Credit Facility”) consists of a loan of up to the lesser of $110,000,000 or a borrowing base amount based on various solar projects that act as collateral for the credit facility, of which approximately $58.3 million was drawn down at closing. In November 2020, the company, through GREC HoldCo, entered into the Second Amended and Restated Credit Agreement, which amends the New Credit Facility to make available a non-revolving line of credit facility that will convert into a term loan facility and a letter of credit facility. The commitments of the lenders aggregate to $97,822,841 between existing term loans, future committed loans and letters of credit, of which approximately $90.7 million was drawn at closing. The New Credit Facility allows for additional drawdowns through November 25, 2021, at which point the outstanding loans shall convert to an additional term loan that matures on June 20, 2025.
The company will use the net proceeds of borrowings under the New Credit Facility for investment in additional alternative energy power generation assets that are anticipated to become projects and for other general corporate purposes. Loans made under the New Credit Facility bear interest at 1.75% in excess of the three-month LIBOR. Prior to the New Credit Facility converting to a term loan, quarterly commitment fees on the average daily unused portion of the Credit Facility were payable at a rate per annum of 0.50%.
Borrowings under the New Credit Facility are back-leveraged and secured by all the assets of GREC HoldCo and the equity interests of each direct and indirect subsidiary of the company. The company, GREC and each direct and indirect subsidiary of the company are guarantors of the company’s obligations under the New Credit Facility. GREC has pledged all the equity interests of the GREC HoldCo as collateral for the New Credit Facility.
Regarding the Credit Facility, the company has entered into six separate interest rate swap agreements. The first swap, effective July 29, 2016, had an initial notional amount of $4,300,000 to swap the floating-rate interest payments on the original facility 1 term loan for a corresponding fixed payment. The fixed swap rate is 1.11%. The second swap, with a trade date of June 15, 2017, an effective date of June 30, 2018 and an initial notional amount of $20,900,650, was used to swap the floating rate interest payments on an additional principal amount of the Credit Facility, for a corresponding fixed payment. The fixed swap rate is 2.26%. The third swap, with a trade date of January 11, 2018, an effective date of December 31, 2018 and an initial notional amount of $29,624,945 was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.65%. The fourth swap, with a trade date of February 7, 2018, an effective date of December 31, 2018 and an initial notional amount of $4,180,063, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.97%. The fifth swap, with a trade date of January 2, 2019, an effective date of September 30, 2019 and an initial notional amount of $38,203,507, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.69%. The sixth swap, with a trade date of February 19, 2021, an effective date of February 26, 2021 and an initial notional amount of $7,068,965, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 1.64%.
If an event of default shall occur and be continuing under the New Credit Facility, the commitments under the New Credit Facility may be terminated and the principal amount outstanding under the New Credit Facility, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.
On December 6, 2019, the company entered into a $15,000,000 revolving letter of credit facility agreement (“LC Facility”) with Fifth Third Bank. On January 30, 2020, the amount of $5.6 million was drawn down. On March 18, 2020, a repayment of $1.9 million was made, reducing the outstanding balance of the LC Facility. On June 9, 2020, a repayment of the remaining outstanding balance occurred. In October 2020, the LC Facility agreement was amended to increase the aggregate principal amount to $22,500,000. On April 1, 2021, the LC Facility agreement was amended to maintain cash collateral in an amount equal to 100% of the outstanding obligation. The LC Facility matures on June 6, 2021, at which time any outstanding letters of credit will be due.
The company’s outstanding debt as of March 31, 2021 and December 31, 2020 was as follows:
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March 31, 2021December 31, 2020
Aggregate Principal
Amount Available
Principal Amount
Outstanding
Carrying ValueDeferred Financing
Costs
Term Note Payable,
Net of Financing Costs
Aggregate Principal
Amount Available
Principal Amount
Outstanding
Carrying ValueDeferred Financing
Costs
Term Note Payable,
Net of Financing Costs
New Credit Facility$97,822,841 $88,899,198 $88,899,198 $3,488,512 $85,410,686 $97,822,841 $90,145,500 $90,145,500 $3,643,846 $86,501,654 
LC Facility$22,500,000 $$$$$22,500,000 $$$$
Total$120,322,841 $88,899,198 $88,899,198 $3,488,512 $85,410,686 $120,322,841 $90,145,500 $90,145,500 $3,643,846 $86,501,654 
The following table shows the components of interest expense related to the company's borrowings for the three months ended March 31, 2021 and March 31, 2020:

For the three months Ended March 31,
2021
For the three months Ended March 31,
2020
Credit Facility commitment fee$130,480 $10,742 
Credit Facilityloan interest436,746 662,444 
Amortization of deferred financing costs155,334 56,530 
Total$722,560 $729,716 
Weighted average interest rate on credit facility2.29 %3.51 %
Weighted average outstanding balance of credit facility$90,145,500 $70,465,335 
The principal payments due on borrowings for each of the next five years ending December 31 and thereafter, are as follows:
Year ending December 31:Principal Payments
2021$6,747,689 
20227,954,526 
20238,098,085 
20248,245,188 
202557,853,710 
Thereafter
$88,899,198 
Note 7. Members’ Equity
General
Pursuant to the terms of the Operating Agreement, the LLC may issue up to 400,000,000 shares, of which 350,000,000 shares are currently designated as Class A, C, I, P-A, P-D, P-S, P-T and P-I shares (collectively, common shares), and 50,000,000 are designated as preferred shares and one special unit. Each class of common shares will have the same voting rights.
Refer to Note 5. Related Party Agreements and Transaction Agreements for the commissions and fees for each common share class in connection with the company’s continuous public offering pursuant to a Registration Statement on Form S-1 (File No. 333-211571), which terminated on March 29, 2019, as well as the private offering of Class P-A.
Class P-A shares were not offered for sale from March 29, 2019 through October 17, 2020, but were reinstated as of October 18, 2020, along with the commencement of three new share classes: P-D, P-T and P-S.
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The following table is a summary of the shares issued and repurchased during the period and outstanding as of March 31, 2021:
Shares Outstanding as of December 31,
2020
Shares
Sold
During the Period
Shares
Issued
through
Reinvestment of
Distributions
During
the Period
Shares
Repurchased
During
the Period
Shares
Transferred
During
the Period
Shares Outstanding as of March 31,
2021
Class A shares16,844,129 101,402 (241,124)16,704,407 
Class C shares2,734,661 23,885 (16,331)2,742,215 
Class I shares6,526,001 55,684 (43,365)6,538,320 
Class P-A shares55,264 83,621 138,885 
Class P-I shares36,710,292 17,027,155 274 (190,015)53,547,706 
Class P-D shares111,048 111,048 
Class P-S shares33,396,467 33,396,467 
Class P-T shares15,741 15,741 
62,870,347 50,634,032 181,245 (490,835)113,194,789 
The following table is a summary of the shares issued and repurchased during the period and outstanding as of December 31, 2020:
Shares Outstanding as of December 31,
2019
Shares Sold
During
the Period
Shares
Issued
through
Reinvestment
of
Distributions
During
the Period
Shares
Repurchased
During the
Period
Shares Transferred During the PeriodShares Outstanding as of December 31,
2020
Class A shares17,210,016 12,964 436,348 (815,199)16,844,129 
Class C shares2,718,475 95,536 (66,086)(13,264)2,734,661 
Class I shares6,693,658 5,783 242,963 (429,396)12,993 6,526,001 
Class P-A shares18,109 37,155 55,264 
Class P-I shares21,249,352 16,112,855 (296)(651,619)36,710,292 
47,889,610 16,168,757 774,551 (1,962,300)(271)62,870,347 
The proceeds from shares sold and the value of shares issued through the reinvestment of distributions for each class of shares for the three months ended March 31, 2021 and March 31, 2020 were as follows:
Class A
Shares
Class C
Shares
Class I
Shares
Class P-A
Shares
Class P-I
Shares
Class P-D
Shares
Class P-S
Shares
Class P-T
Shares
Total
For the three months ended March 31, 2021:
Proceeds from Shares Sold$$$$728,428 $153,217,116 $1,000,000 $300,735,190 $141,750 $455,822,484 
Proceeds from Shares Issued through Reinvestment of Distributions$871,751 $199,310 $478,670 $$274 $$$$1,550,005 
For the three months ended March 31, 2020:
Proceeds from Shares Sold$$$$$16,695,894 $$$$16,695,894 
Proceeds from Shares Issued through Reinvestment of Distributions$1,007,024 $193,050 $559,012 $$$$$$1,759,086 
As of March 31, 2021, and December 31, 2020, NaN of the LLC’s preferred shares were issued and outstanding.
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The Operating Agreement authorizes the Board of Directors, without approval of any of the members, to increase the number of shares the company is authorized to issue and to classify and reclassify any authorized but unissued class or series of shares into any other class or series of shares having such designations, preferences, right, power and duties as may be specified by the Board of Directors. The Operating Agreement also authorizes the Board of Directors, without approval of any of the members, to issue additional shares of any class or series for the consideration and on the terms and conditions established by the Board of Directors. In addition, the company may also issue additional limited liability company interests that have designations, preferences, right, powers and duties that are different from, and may be senior to, those applicable to the common shares. The Special Unitholder will hold the special unit in the company. Refer to Note 5. Related Party Agreements and Transaction Agreements for the terms of the special unit.
Distribution Reinvestment Plan
The company adopted a DRP through which the company’s Class A, C and I shareholders may elect to purchase additional shares with distributions from the company rather than receiving the cash distributions. The DRP was amended as of February 1, 2021 to include all share classes. Shares issued pursuant to the DRP will have the same voting rights as shares offered pursuant to the company’s prior public and current private offerings. As of November 30, 2020, pursuant to our Registration Statement on Form S-3D (File No. 333-251021), the company is offering up to $20,000,000 in Class A, C and I shares to our existing shareholders pursuant to the DRP. Management plans to increase the size of the offering once the maximum offering amount is reached. No dealer manager fees, selling commissions or other sales charges will be paid with respect to shares purchased pursuant to the DRP except for distribution fees on Class C, P-S and P-T shares issued under the DRP. At its discretion, the Board of Directors may amend, suspend or terminate the DRP. A participant may terminate participation in the DRP by written notice to the plan administrator, received by the plan administrator at least 10 days prior to the distribution payment date.
As of March 31, 2021, the company issued 2,126,185 Class A shares, 340,412 Class C shares, and 977,092 Class I shares for a total of 3,443,689 shares issued under the DRP. As of December 31, 2020, the company issued 2,024,783 Class A shares, 316,527 Class C shares, and 921,408 Class I shares for a total of 3,262,718 shares issued under the DRP.
Share Repurchase Program
The company offers a share repurchase program ("share repurchase program") pursuant to which quarterly share repurchases will be conducted to allow members to sell shares back to the company at a price equal to the then current offering price less the selling commissions and dealer manager fees associated with that class of shares.
The share repurchase program includes numerous restrictions that will limit a shareholder’s ability to sell shares. At the sole discretion of the Board of Directors, the company may also use cash on hand, cash available from borrowings and cash from liquidation of investments to repurchase shares.
The shareholders' right to purchase is subject to the availability of funds and the other provisions of the share repurchase program. Additionally, a member must hold his or her shares for a minimum of one year before he or she can participate in the share repurchase program, subject to any of the following special circumstances: i) the written request of the estate, heir or beneficiary or a deceased shareholder; ii) a qualifying disability of the shareholder for a non-temporary period of time provided that the condition causing the qualifying disability was not pre-existing on the date that the shareholder became a shareholder; or iii) a determination of incompetence of the shareholder by a state or federal court located in the United States. If a member has made more than one purchase of shares, the one-year holding period will be calculated separately with respect to each purchase.
Through September 30, 2020, quarterly share repurchases were conducted to allow up to approximately 5% of the weighted average number of outstanding shares in any 12-month period to be repurchased by the company. Effective September 1, 2020, the company, through approval by its Board of Directors, adopted an amended share repurchase program, pursuant to which the company will conduct quarterly share repurchases to allow members to sell all or a portion of their shares (of any class) back to the company. The quarterly share repurchase limits for the company's new share repurchase program are set forth below.
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Quarter EndingShare Repurchase Limit(s)
December 31, 2020During such fiscal quarter, 1.875% of the weighted average number of shares outstanding in the prior four fiscal quarters
March 31, 2021During such fiscal quarter, 2.50% of the weighted average number of shares outstanding in the prior four fiscal quarters
June 30, 2021During such fiscal quarter, 3.75% of the weighted average number of shares outstanding in the prior four fiscal quarters
September 30, 2021, and each quarter thereafter
During any 12-month period, 20.00% of the weighted average number of outstanding shares

During any fiscal quarter, 5.00% of the weighted average number of shares outstanding in the prior four fiscal quarters
We have received an order for our repurchase program from the SEC under Rule 102(a) of Regulation M under the Exchange Act. In addition, our repurchase program is substantially similar to repurchase programs for which the SEC has stated it will not recommend enforcement action under Rule 13e-4 and Regulation 14E under the Exchange Act.
Note 8. Distributions
On the last business day of each month, with the authorization of the company’s Board of Directors, the company declares distributions on each outstanding class of shares. These distributions are calculated based on shareholders of record for each day in amounts equal to that exhibited in the table below based upon distribution period and class of share.
Class of Share
Distribution PeriodACIP-AP-IP-DP-TP-S
1-Nov-1731-Jan-18$0.00167 $0.00163 $0.00167 $0.00158 
1-Feb-1830-Apr-18$0.00167 $0.00163 $0.00167 $0.00158 
1-May-1831-Jul-18$0.00167 $0.00163 $0.00167 $0.00158 
1-Aug-1831-Oct-18$0.00167 $0.00163 $0.00167 $0.00158 
1-Nov-1831-Jan-19$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-Feb-1930-Apr-19$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-May-1931-Jul-19$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-Aug-1931-Oct-19$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-Nov-1931-Jan-20$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-Feb-2030-Apr-20$0.00167 $0.00163 $0.00167 $0.00165 $0.00158 
1-May-2031-Aug-20$0.00152 $0.00149 $0.00152 $0.00153 $0.00158 
1-Sep-2030-Sep-20$0.00152 $0.00149 $0.00152 $0.00153 $0.00158 
1-Oct-2031-Oct-20$0.00152 $0.00149 $0.00152 $0.00152 $0.00158 
1-Nov-2030-Nov-20$0.00152 $0.00149 $0.00152 $0.00152 $0.00158 
1-Dec-2028-Feb-21$0.00152 $0.00149 $0.00152 $0.00152 $0.00158 $0.00158 $0.00158 $0.00158 
1-Mar-2131-May-21$0.00152 $0.00149 $0.00152 $0.00152 $0.00158 $0.00158 $0.00158 $0.00158 
The following table reflects the distributions declared during the three months ended March 31, 2021:
Pay DatePaid in
Cash
Value of
Shares
Issued under DRP
Total
February 1, 2021$2,555,800 $538,241 $3,094,041 
March 4, 20213,063,308 487,868 3,551,176 
April 1, 20214,783,092 523,715 5,306,807 
Total$10,402,200 $1,549,824 $11,952,024 
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The following table reflects the distributions declared during the three months ended March 31, 2020:
Pay DatePaid in
Cash
Value of
Shares
Issued under DRP
Total
February 3, 20201,788,542 603,697 2,392,239 
March 2, 20201,733,243 561,984 2,295,227 
April 1, 20201,890,493 593,200 2,483,693 
Total$5,412,278 $1,758,881 $7,171,159 
All distributions paid for the three months ended March 31, 2021 are expected to be reported as a return of capital to members for tax reporting purposes, and all distributions paid for the three months ended March 31, 2020 were reported as a return of capital to members for tax purposes.
Cash distributions paid during the periods presented were funded from the following sources noted below:
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Cash from operations$$1,598,905 
Offering proceeds8,066,157 5,511,620 
Total Cash Distributions$8,066,157 $7,110,525 
The company expects to continue to fund distributions from a combination of cash from operations as well as offering proceeds. Due to the company’s change in investment portfolio composition to include a greater percentage of pre-operational assets, a significant amount of distributions will continue to be funded from offering proceeds.
Note 9. Commitments and Contingencies
Legal Proceedings
The company may become involved in legal proceedings, administrative proceedings, claims and other litigation that arise in the ordinary course of business. Individuals and interest groups may sue to challenge the issuance of a permit for a renewable energy project or seek to enjoin construction of a wind energy project. In addition, we may be subject to legal proceedings or claims contesting the construction or operation of our renewable energy projects. In defending ourselves in these proceedings, we may incur significant expenses in legal fees and other related expenses, regardless of the outcome of such proceedings. Unfavorable outcomes or developments relating to these proceedings, such as judgments for monetary damages, injunctions or denial or revocation of permits, could have a material adverse effect on our business, financial condition and results of operations. In addition, settlement of claims could adversely affect our financial condition and results of operations. As of March 31, 2021, management is not aware of any legal proceedings that might have a significant adverse impact on the company.
Pledge of Collateral and Unsecured Guarantee of Loans to Subsidiaries 
Pursuant to various project loan agreements between the operating entities of the company, subsidiary holding companies and various lenders, the operating entities and the subsidiary holding companies have pledged all solar operating assets as well as the membership interests in various operating subsidiaries as collateral for the term loans with maturity dates ranging from August 2021 through September 2049.
Investment in To-Be-Constructed Assets and Membership Interest Purchase Commitments
Pursuant to various engineering, procurement and construction contracts to which NaN entities of the company are individually a party, the entities, and indirectly the company, have committed an outstanding balance of approximately $257.6 million to complete construction of the facilities. Based upon current construction schedules, the expectation is that these commitments will be fulfilled in 2021 into 2022. In addition, pursuant to various membership interest purchase agreements to which the company's operating entities are individually a party, the operating entities, and indirectly the company, have committed an outstanding balance of approximately $315.2 million to membership interest purchase agreements as of
34


March 31, 2021. The company plans to use debt and tax equity financing as well as additional capital raised to fund such commitments.
Unsecured Guarantee of Subsidiary Renewable Energy Credit (“REC”) Forward Contracts
For the majority of the forward REC contracts currently effective as of March 31, 2021 where a subsidiary of the company is the principal, the company has provided an unsecured guarantee related to the delivery obligations. The amount of the unsecured guaranty related to REC delivery performance obligations is NaN as of March 31, 2021.
Pledge of Parent Company Guarantees
Pursuant to various contracts in which the company has provided a parent company guarantee, excluding those discussed above, the operating entities, and indirectly the company, have committed an additional $111.6 million in unsecured guarantees in the event of a default at the underlying entity, as of March 31, 2021.
See Note 1. Organization and Operations of the Company and Note 5. Related Party Agreements and Transaction Agreements for an additional discussion of the company’s commitments and contingencies.
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Note 10. Financial Highlights
The following is a schedule of the financial highlights of the company attributed to each class of shares for the three months ended March 31, 2021.
For the three months ended March 31, 2021
Class A
Shares
Class C
Shares
Class I
Shares
Class P-A
Shares
Class P-I
Shares
Class P-D
Shares
Class P-S
Share
Class P-T
Shares
Per share data attributed to common shares (1)
Net Asset Value at beginning of period$8.61 $8.35 $8.61 $8.70 $9.02 $8.96 $8.84 $8.57 
Net investment income0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 
Net realized and unrealized gain/(loss) on investments and swap contracts0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 
Change in translation of assets and liabilities denominated in foreign currencies (2)
— 
(Provision for) benefit from income taxes on realized and unrealized gain (loss) on investments and foreign currency translation(0.04)(0.04)(0.04)(0.04)(0.04)(0.04)(0.04)(0.04)
Net increase in net assets attributed to common stockholders0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 
Shareholder distributions:
Distributions from net investment income
Distributions from offering proceeds(0.14)(0.14)(0.14)(0.14)(0.14)(0.09)(0.09)(0.09)
Other(3)(0.02)(0.01)(0.02)0.04 0.01 0.04 0.03 
Net decrease in members’ equity attributed to common shares(0.16)(0.15)(0.16)(0.10)(0.14)(0.08)(0.05)(0.06)
Net asset value for common shares at end of period$8.49 $8.24 $8.49 $8.64 $8.92 $8.92 $8.83 $8.55 
Common equityholders’ equity at end of period$141,781,925 $22,597,463 $55,492,784 $1,200,209 $477,780,810 $990,705 $294,882,644 $134,615 
Common shares outstanding at end of period16,704,407 2,742,215 6,538,320 138,885 53,547,706 111,048 33,396,467 15,741 
Ratio/Supplemental data for common shares (annualized):
Total return attributed to common shares based on net asset value0.20 %0.29 %0.22 %0.92 %0.51 %0.17 %0.94 %0.57 %
Ratio of net investment income to average net assets0.56 %0.58 %0.56 %0.43 %0.52 %0.29 %0.53 %0.40 %
Ratio of operating expenses to average net assets3.65 %3.75 %3.64 %2.81 %3.40 %1.85 %3.43 %2.62 %
Portfolio turnover rate0.19 %0.19 %0.19 %0.19 %0.19 %0.19 %0.19 %0.19 %
(1)The per share data for Class A, C, I, P-A, P-I, P-D, P-T and P-S Shares were derived by using the weighted average shares outstanding during the period ended March 31, 2021, which were 16,879,518, 2,743,322, 6,545,397, 74,728, 44,737,061, 20,266, 7,579 and 14,929,297, respectively.
(2)Amount is less than $0.01 per share.
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(3)Represents the impact of different share amounts used in calculating certain per share data based on weighted average shares outstanding during the period and the impact of shares at a price other than the net asset value.
The following is a schedule of financial highlights of the company attributed to each outstanding class of shares for the three months ended March 31, 2020. 
For the three months ended March 31, 2020
Class A
Shares
Class C
Shares
Class I
Shares
Class P-A
Shares
Class P-I
Shares
Per share data attributed to common shares (1):
Net Asset Value at beginning of period$8.40 $8.23 $8.40 $8.44 $8.73 
Net investment income(3)
0.10 0.10 0.10 0.10 0.10 
Net realized and unrealized gain/(loss) on investments, net of incentive allocation to special unitholder0.19 0.19 0.19 0.19 0.19 
Change in translation of assets and liabilities denominated in foreign currencies (4)
Change in benefit from deferred taxes on unrealized depreciation on investments(0.13)(0.13)(0.13)(0.13)(0.13)
Net increase in net assets attributed to common equityholders0.16 0.16 0.16 0.16 0.16 
Shareholder distributions:
Distributions from net investment income(0.03)(0.03)(0.03)(0.03)(0.03)
Distributions from offering proceeds(0.12)(0.12)(0.12)(0.12)(0.11)
Other(2)
0.01 0.02 
Net decrease in members’ equity attributed to common shares(0.15)(0.15)(0.15)(0.14)(0.12)
Net asset value for common shares at end of period$8.41 $8.24 $8.41 $8.46 $8.77 
Common equityholders’ equity at end of period$147,620,207 $22,910,360 $57,888,710 $156,293 $206,443,274 
Common shares outstanding at end of period17,194,318 2,724,068 6,742,687 18,109 23,075,591 
Ratio/Supplemental data for common shares (annualized):
Total return attributed to common shares based on net asset value1.90 %1.90 %1.90 %2.02 %2.11 %
Ratio of net investment income to average net assets4.78 %4.88 %4.78 %4.75 %4.60 %
Ratio of operating expenses to average net assets4.34 %4.43 %4.34 %4.32 %4.18 %
Portfolio turnover rate11.15 %11.15 %11.15 %11.15 %11.15 %
(1)The per share data for Class A, C, I, P-A and P-I Shares were derived by using the weighted average shares outstanding during the period ended March 31, 2020, which were 17,194,318, 2,724,068, 6,742,687, 18,109 and 23,075,591, respectively.
(2)Represents the impact of different share amounts used in calculating certain per share data based on weighted average shares outstanding during the period and the impact of shares at a price other than the net asset value.
(3)Does not reflect any incentive fees that may be payable to the Special Unitholder.
(4)Amount is less than $0.01 per share.
Note 11. COVID-19 Impact
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In March of 2020, the United States declared a National Emergency concerning the COVID-19 outbreak. This came after the World Health Organization (“WHO”) declared the virus a global pandemic on March 11, 2020.
Since the outbreak of COVID-19 in the United States, the company has generally been able to conduct its business despite the turmoil in markets and the shuttering of many businesses across the country. We have and will continue to assess the current and future business risks related to COVID-19 as new information becomes available, including any potential performance risk of our PPA and construction counterparties. As of the date of the filing, we are not aware of any material impact to our financial results.
Note 12. Subsequent Events
The company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that occurred during such period that would require disclosure in the consolidated financial statements or would be required to be recognized in the consolidated financial statements as of and for the three months ended March 31, 2021 (unaudited) other than that disclosed below.
As of May 9, 2021, the company entered into an addendum to the Third Amended and Restated Advisory Agreement with the Advisor. Effective July 1, 2021, the base management fee payable to GCM will be calculated at a monthly rate of 0.167% (2.00% annually) of the net asset value until the net asset value exceeds $800,000,000. The base management fee monthly rate will decrease to 0.14583% (1.75% annually) for a net asset value between $800,000,001 to $1,500,000,000 and to 0.125% (1.50% annually) for a net asset value greater than $1,500,000,000.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the company’s consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly report on Form 10-Q.
Except as otherwise specified, references to “we,” “us,” “our,” or the “company,” refer to Greenbacker Renewable Energy Company LLC.
Forward Looking Statements
Various statements in this quarterly report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects, revenues, income and capital spending. We generally identify forward-looking statements with the words “believe,” “intend,” “expect,” “seek,” “may,” “will,” “should,” “would,” “anticipate,” “could,” “estimate,” “plan,” “predict,” “project” or their negatives, and other similar expressions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results, or to our expectations regarding future industry trends, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. The forward-looking statements contained in this report are largely based on our expectations, which reflect many estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. In addition, our Advisor’s assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will prove correct or that the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the numerous risks and uncertainties as described under “Risk Factors” and elsewhere in this report. All forward-looking statements are based upon information available to us on the date of this report. We undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks, contingencies and uncertainties associated with our forward-looking statements relate to, among other matters, the following: 
changes in the economy;
the ability to complete the renewable energy projects in which we invest;
our relationships with project developers, lawyers, investment and commercial banks, individual and institutional investors, consultants, diligence specialists, EPC companies, contractors, renewable energy technology manufacturers (such as panel manufacturers), solar insurance specialists, component manufacturers, software providers and other industry participants in the renewable energy, capital markets and project finance sectors;
fluctuations in supply, demand, prices and other conditions for electricity, other commodities and renewable energy certificates (“RECs”);
public response to and changes in the local, state and federal regulatory framework affecting renewable energy projects, including the potential expiration or extension of the production tax credit (“PTC”), investment tax credit (“ITC”) and the related U.S. Treasury grants and potential reductions in renewable portfolio standards (“RPS”) requirements;
competition from other energy developers;
the worldwide demand for electricity and the market for renewable energy;
the ability or inability of conventional fossil fuel based generation technologies to meet the worldwide demand for electricity;
our competitive position and our expectation regarding key competitive factors;
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risks associated with our hedging strategies;
potential environmental liabilities and the cost of compliance with applicable environmental laws and regulations, which may be material;
our electrical production projections (including assumptions of curtailment and facility availability) for our renewable energy projects;
our ability to operate our business efficiently, manage costs (including general and administrative expenses) effectively and generate cash flow;
availability of suitable renewable energy resources and other weather conditions that affect our electricity production;
the effects of litigation, including administrative and other proceedings or investigations relating to our renewable energy projects;
non-payment by customers and enforcement of certain contractual provisions;
risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and
future changes in laws or regulations and conditions in our operating areas.
Overview
Greenbacker Renewable Energy Company LLC, (the “LLC”), a Delaware limited liability company formed in December 2012, is an externally managed energy company that acquires and manages income-generating renewable energy and energy efficiency projects, and other energy-related businesses, as well as finances the construction and/or operation of these and other sustainable development projects and businesses. The LLC conducts substantially all of its operations through its wholly owned subsidiary, Greenbacker Renewable Energy Corporation (“GREC”).
GREC is a Maryland corporation formed in November 2011, and the LLC currently holds all of the outstanding shares of capital stock of GREC. GREC Entity HoldCo LLC (“GREC HoldCo”), a wholly owned subsidiary of GREC, was formed in Delaware in June 2016 . GREC Administration LLC and Danforth Shared Services LLC, both wholly owned subsidiaries of GREC, were formed in Delaware in January 2020 and May 2019, respectively. The use of “we”, “us”, “our” and the “company” refer, collectively, to the LLC, GREC, GREC HoldCo, GREC Administration LLC and Danforth Shared Services LLC. We are externally managed and advised by our Advisor, Greenbacker Capital Management LLC (the “Advisor” or “GCM”), a renewable energy, energy efficiency and sustainability-related project acquisition, consulting and development company that is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (“Advisers Act”). The LLC’s fiscal year-end is December 31.
Our business objective is to generate attractive risk-adjusted returns for our members, consisting of both current income and long-term capital appreciation, by acquiring and financing the construction and/or operation of income-generating renewable energy, energy efficiency and sustainable development projects, primarily within North America. We expect the size of our investments to generally range between approximately $1 million and $100 million. We will seek to maximize our risk-adjusted returns by: (1) capitalizing on market opportunities; (2) focusing on hard assets that produce dependable cash flows; (3) efficiently utilizing government incentives where available; (4) employing creative deal structuring to optimize capital and ownership structures; (5) partnering with experienced financial, legal, engineering and other professional firms; (6) employing sound due diligence and risk mitigation processes; and (7) monitoring and managing our portfolio of assets on an ongoing basis. We may change our investment policies and strategies without prior notice or member approval.
Our goal is to assemble a diversified portfolio of renewable energy, energy efficiency and other sustainability-related projects and businesses. Renewable energy projects generally earn revenue through the sale of generated electricity as well as frequently through the sale of other commodities such as RECs and EECs. We initially have focused on solar, wind and energy projects. We believe solar energy projects generally offer more predictable power generation characteristics due to the relative predictability of sunlight over the course of time compared to other renewable energy technologies, and therefore we expect them to provide more stable income streams. However, technological advances in wind turbines and other energy-generation technologies, as well as government incentives, also make wind energy and other types of projects attractive. Solar energy projects provide maximum energy production during daylight hours in the summer months when days are longer and nights shorter. Solar energy projects tend to have minimal environmental impact, enabling such projects to be developed close to areas
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of dense population where electricity demand is highest. Solar technology is scalable and well-established, and it is relatively simple to integrate new acquisitions and projects into our portfolio.
Over time, we have broadened our strategy, and expect to continue to broaden our strategy to include other types of renewable energy projects and energy efficiency projects and businesses, which may include wind farms, hydropower assets, geothermal plants, biomass and biofuel assets, combined heat and power technology assets, fuel cell assets and other energy efficiency assets, among others, and to the extent we deem the opportunity attractive, other energy and sustainability-related assets and businesses.
Our preferred investment strategy is to acquire controlling equity stakes in our target assets or to be named the managing member of a limited liability company in order to oversee and supervise its operations. We define controlling equity stakes as companies in which we own 25% or more of the voting securities of such company, have greater than 50% representation on such company’s Board of Directors, or as the managing member of a limited liability company. However, we will also provide financing to projects owned by others, including through the provision of secured loans which may or may not include some form of equity participation.
We may also provide projects with senior unsecured debt, subordinated secured debt, subordinated unsecured debt, mezzanine debt, convertible debt, convertible preferred equity and preferred equity, and make minority equity investments. We may also participate in projects by acquiring contractual payment rights or rights to receive a proportional interest in the operating cash flow or net income of a project. We may also make equity investments in or loans to parties financing the supply of renewable energy and energy efficiency to residential and commercial customers or adopting strategies that encourage energy conservation to reduce the consumption of energy by those customers. Our ongoing strategy will be tailored to balance long-term cash flow certainty, which we can achieve through long-term agreements for our projects, with shorter-term arrangements that allow us to potentially generate higher risk-adjusted returns. 
We expect to supplement our equity capital and increase potential returns to our members through the use of prudent levels of borrowings both at the corporate level and the project level. In addition to any corporate credit facility or other secured and unsecured borrowings, we expect to use other financing methods at the project level as necessary, including but not limited to joint venture structures, construction loans, property mortgages, letters of credit, sale and leaseback transactions, other lease transactions and other arrangements, any of which may be unsecured or may be secured by mortgages or other interests in our assets. In addition, we may issue publicly or privately placed debt instruments. When appropriate, we will seek to replace short-term sources of capital with long-term financing.
During the three months ended March 31, 2021, we executed 22 acquisitions of renewable energy projects: 20 added to the Trillium Portfolio and two added to the Citrine Portfolio, and had no project disposals. As our access to capital has increased, the average size of our projects increased from 3.9 MW per project in 2020 to 4.3 MW per project the three months ended March 31, 2021.
Our renewable energy projects generate revenue primarily by selling (1) generated electric energy and/or capacity to local utilities and high-quality utility, municipal, corporate and individual residential counterparties; and (2) in some cases, RECs, EECs and other commodities associated with renewable generation or related incentives. We seek to acquire or finance projects that contain transmission infrastructures and access to power grids or networks that will enable the generated power to be sold. We generally expect our projects will have PPAs with one or more counterparties, including local utilities or other high-credit-quality counterparties, who agree to purchase the electricity generated from the project. We refer to these PPAs as “must-take contracts,” and we refer to these other counterparties as “offtakers.” These must-take contracts in general are output-based and guarantee that all electricity generated by each project will be purchased.
Although we intend to work primarily with high-credit-quality counterparties, if an offtaker cannot fulfill its contractual obligation to purchase the power, we generally can sell the power to the local utility or other suitable counterparty, which would potentially ensure that revenue is generated for all solar electricity generation. We may also generate revenue from the receipt of interest, fees, capital gains and distributions from investments in our target assets.
We employ a rigorous credit underwriting process for each of our contractual counterparties, including: (1) identification of high-credit-quality counterparties with appropriate bonding and insurance capacity; (2) where available, the review of counterparty financial statements and/or publicly available credit rating reports; (3) worst-case analysis testing of assets; (4) ongoing monitoring of acquired assets and counterparty creditworthiness, including monitoring the public credit ratings reports issued by Moody’s and Standard and Poor’s; and (5) reviewing individual FICO scores in regard to residential solar where the homeowner is the counterparty.
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The following table illustrates the allocation by percentage of the company’s contracted revenue by counterparty type and creditworthiness for the three months ended March 31, 2021 and the year ended December 31, 2020.
For the three months ended March 31,
2021
For the year ended December 31,
2020
Investment grade:
Utility66.1 %64.9 %
Municipality8.2 8.6 
Corporation3.3 1.0 
Subtotal investment grade77.6 %74.5 %
Non-investment grade or no rating:
Utility15.8 %16.1 %
Municipality4.0 4.7 
Residential0.1 — 
Corporation2.5 4.7 
Subtotal non-investment grade or no rating22.4 %25.5 %
Total100.0 %100.0 %
Our PPAs, when structured with utilities and other large commercial users of electricity, are generally long-term in nature, tied to 100% of the output of the specific generating asset, and priced at a rate established pursuant to a formula set by the contract. The formula is often dependent upon the type of subsidies, if any, offered by the local and state governments for project development. Although we focus on projects with long-term contracts that ensure price certainty, we may also look for projects with shorter-term arrangements that will allow us to participate in market rate changes which may lead to higher current income.
Certain projects are structured as “behind the meter” agreements with residential, commercial or government entities. Under the agreements, all electricity generated by a project will be purchased by the offtaker at an agreed-upon rate that may be set at a slight discount to the retail electric tariff rate for the offtaker. These agreements also typically provide for annual rate increases over the term of the agreement, although that is not a necessary requirement. The behind the meter agreement is generally long term in nature, and further typically provides that, should the offtaker fail to fulfill its contractual obligation, any electricity that is not purchased by the offtaker may be sold to the local utility, usually at an equivalent wholesale spot electric rate.
We have structured some of our previous investments in residential solar with similar commercial arrangements to those of the PPAs with utilities and other large commercial users of electricity of our energy projects, as described above.
We currently finance energy efficiency projects, which seek to enable residential customers, businesses and governmental organizations to consume less energy while at the same time providing the same or greater level of amenity. Financing for energy efficiency projects is generally used to pay for energy efficiency retrofits of buildings, homes and businesses, and replacement of other inefficient energy-consuming assets with more modern technologies. These projects are structured to provide predictable long-term cash flows by receiving a portion of the energy savings and the potential sale of associated RECs and EECs generated by such installations. In each of our renewable energy and energy efficiency investments, we intend, where appropriate, to maximize the benefits of renewable portfolio standards (RPS) as well as other U.S. federal, state and local government support and incentives for the renewable energy industry.
In October 2020, Greenbacker Development Opportunities Fund I, LP ("GDEV") was launched to make private equity and development capital investments in the sustainable infrastructure industry. GREC's investment in GDEV is synergistic with the company's core business, and it is expected to retain and strengthen existing developer relationships, increase the number of developer relationships within the company going forward, generate incremental investment opportunities for the company and give the company insights into new markets and trends within the industry.
Financing Strategy
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We expect to supplement our equity capital and increase potential returns to our members through the use of prudent levels of borrowings both at the corporate level and the project level. The LLC's fourth amended and restated limited liability company operating agreement (the "Operating Agreement") does not impose limitations on the amount of borrowings we may employ, either at the corporate level or the project level. We expect that we will generally target a leverage ratio of up to $2 of debt for every $1 of equity on our overall portfolio, with individual allocations of leverage based on the mix of asset types and obligors; however, we will in no event exceed a leverage ratio of $3 of debt for every $1 of equity, unless any excess is approved by a majority of our independent directors. In addition to any corporate-level credit facility or other secured and unsecured borrowings, we expect to use other financing methods at the project level as necessary, including joint venture structures, construction loans, property mortgages, letters of credit, sale and leaseback transactions, other lease transactions, and other arrangements, any of which may be unsecured or may be secured by mortgages or other interests in our assets. In addition, we may issue publicly or privately placed debt instruments. Our indebtedness may be recourse or non-recourse, and may be cross-collateralized. In addition, we may invest in assets subject to existing liens, or may refinance the indebtedness on assets acquired on a leveraged basis. We may use the proceeds from any borrowings to acquire assets, refinance existing indebtedness, finance investments or for general corporate purposes. In addition to these financing methods, we may utilize tax equity structures to monetize tax attributes that exceed a renewable energy project owner’s U.S. federal income tax liability.
The table below sets forth the company’s investments in alternative energy generation portfolios as of March 31, 2021.
Acquisition DateIndustryLocation(s)Form of Investment***Cost**/Principal
Amount*
AssetsGeneration
Capacity in
(MW)*
Pacifica PortfolioSecond quarter 2020Battery StorageCalifornia100% Ownership$9,140,209 Operating and to-be-constructed battery energy storage facilities14.3 
Eagle Valley BioMass PortfolioSecond quarter 2019BiomassColorado100% Ownership$23,686,352 Operating biomass facility12.0 
GEH PortfolioFourth quarter 2014, First quarter 2015, Second quarter 2015, Third quarter 2015, Fourth quarter 2015, First quarter 2016, Second quarter 2016, Third quarter 2017, Fourth quarter 2017, Second quarter 2018, Fourth quarter 2018, First quarter 2019, Fourth quarter 2019, First quarter 2020Commercial SolarArizona, California, Colorado, Connecticut, Florida, Hawaii, Indiana, Maryland, Massachusetts, New Jersey, New York, North Carolina,Tennessee and Vermont100% Ownership or Managing Member, Equity Owner$148,065,778 Commercial ground and rooftop-mounted photovoltaic systems99.2 
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Other Commercial SolarThird quarter 2014, Fourth quarter 2014, Fourth quarter 2015, Fourth quarter 2017, First quarter 2018, Second quarter 2018, Fourth quarter 2018Commercial SolarOntario, Canada, Colorado, California, Nevada, North Carolina100% Ownership or Managing Member, Equity Owner$44,848,541 Commercial and residential ground and rooftop-mounted solar photovoltaic systems125.5
Sego Lily PortfolioFourth quarter 2020Commercial SolarCalifornia and Utah100% Ownership or Managing Member, Equity Owner$49,933,176 Commercial ground and rooftop-mounted photovoltaic systems120.0 
Trillium PortfolioThird quarter 2020, First quarter 2021Commercial SolarArkansas, Colorado, Maryland, New Jersey, Vermont, Washington D.C100% Ownership or Managing Member, Equity Owner$180,568,859 Commercial ground and rooftop-mounted photovoltaic systems198.5 
Greenbacker Wind Holdings IIFourth quarter 2015, Fourth
quarter 2016, Fourth quarter 2020
WindMaine, Massachusetts, Montana and Iowa100% Ownership or Managing Member, Equity Owner$54,935,583 Wind power facilities105.3 
Greenbacker Wind Portfolio - HoldCoSecond quarter 2017, Fourth quarter 2017, Second quarter 2019, Third quarter 2019WindIdaho, Iowa, Minnesota, and Vermont100% Ownership$77,005,002 Wind power facilities131.3 
Other Wind InvestmentsFourth quarter 2017WindCalifornia100% Ownership$9,540,000 Wind power facilities6.0 
Citrine PortfolioThird quarter 2020Pre-Operational AssetsCalifornia, Massachusetts, and New Jersey100% Ownership$29,794,816 Commercial ground and rooftop-mounted photovoltaic systems285.9 
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Other PortfoliosThird quarter 2018, Second quarter 2019, Third quarter 2019, Fourth quarter 2020OtherCalifornia, Colorado, and North Carolina100% Ownership or Equity Owner$20,123,799 Commercial ground and rooftop-mounted photovoltaic systems, Private equity membership interests N/A
Other Energy Efficiency PortfoliosThird quarter 2015, Fourth quarter 2015Energy EfficiencyPennsylvania, Puerto RicoSecured Loan, Capital Lease$707,891 Energy efficiency LED lighting N/A
Encore LoanFourth quarter 2019Secured LoanVermontSecured Loan$9,307,725 Loan N/A
Hudson LoanThird quarter 2019Secured LoanNew YorkSecured Loan$7,366,796 Loan N/A
Hudson II LoanThird quarter 2019Secured LoanNew YorkSecured Loan$5,269,267 LoanN/A
New Market LoanFourth quarter 2019Secured LoanNorth CarolinaSecured Loan$5,007,350 Loan N/A
Shepherd's Run LoanFourth quarter 2020Secured LoanNew YorkSecured Loan$6,322,590 LoanN/A
SE Solar LoanFirst quarter 2019Secured LoanNorth CarolinaSecured Loan$5,005,244 Loan N/A
TUUSSO LoanFourth quarter 2019Secured LoanWashingtonSecured Loan$7,895,946 Loan N/A
Fidelity Government Portfolio - Class IFirst quarter 2021Money Market FundsN/AMoney Market Funds$78,878,486 Money Market FundsN/A
First American Government Obligations Fund - Class ZFirst quarter 2021Money Market FundsN/AMoney Market Funds$78,878,486 Money Market FundsN/A
Invesco Government & Agency Portfolio - Institutional ClassFirst quarter 2021Money Market FundsN/AMoney Market Funds$Money Market FundsN/A
JP Morgan US Government Money Market Fund - Class LFirst quarter 2021Money Market FundsN/AMoney Market Funds$78,828,486 Money Market FundsN/A
Wells Fargo Treasury Plus Money Market Fund - Institutional ClassFirst quarter 2021Money Market FundsN/AMoney Market Funds$78,828,486 Money Market FundsN/A
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*    Approximate
**    Does not include assumed project level debt.
***    100% Equity ownership, majority equity owner (>50%), equity owner (<50%), Managing Member of the Limited Liability Company, secured loan, money market funds, or a capital lease.
During the three months ended March 31, 2021, the company modified the presentation of the Consolidated Schedule of Investments to consolidate certain underlying portfolios. Certain portfolios that had been separately presented on the Consolidated Schedule of Investments have been aggregated with other portfolios in the same industry to be presented in a consolidated manner on the Consolidated Schedule of Investments. These consolidation efforts have no impact on the underlying portfolios or their individual cost or fair values but rather represent the aggregation of several similar investments. Certain portfolios, including those determined to be individually significant, remain presented separately. Management believes that the consolidation of our portfolios results in a presentation that better reflects the way in which we view our overall portfolio of investments and will enhance the information reported to the users of our financial statements.
Management has recast the Schedule of Investments as of December 31, 2020 to conform with current year presentation based upon the methodology as outlined above.
The investments described above have allowed us to execute on our strategy of constructing a portfolio of projects offering predictable power-generation characteristics and generally stable income streams, which include seasonal solar generation income (generally stronger in the summer months), wind generation income (generally stronger in the winter months), biomass generation income and energy efficiency lighting investments.
The LLC conducts a significant portion of its operations through GREC, of which the LLC is the sole shareholder — both of the shares of common stock and the special preferred stock. We intend to continue to operate our business in a manner permitting us to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”). We are not a blank check company within the meaning of Rule 419 of the Securities Act of 1933, as amended (the “Securities Act”) and have no specific intent to engage in a merger or acquisition in the next 12 months.
Pursuant to the now-terminated Registration Statement on Form S-1 (File No. 333-211571), we offered on a continuous basis up to $1,000,000,000 in shares of our limited liability company interests. The primary offering was terminated on March 29, 2019. The company’s initial offering pursuant to a Registration Statement on Form S-1 (File No. 333-178786-01) terminated on February 7, 2017. As of June 4, 2019, pursuant to our Registration Statement on Form S-3D (File No. 333-231960) we were offering a maximum of $10,000,000 in shares to our existing shareholders pursuant to the DRP. As of November 30, 2020, pursuant to our Registration Statement on Form S-3D (File No. 333-251021), the company is offering up to an additional $20,000,000 in Class A, C and I shares to our existing shareholders pursuant to the DRP. Shares of the company’s limited liability company interests issued pursuant to the DRP through the period ending September 30, 2020 were being offered at the price equal to the then current offering price per each class of shares less selling commissions and dealer manager fees. Effective October 1, 2020, DRP shares are being offered at a price equal to our Monthly Share Value for each class of our shares. As of February 1, 2021, the DRP was amended to include all of the company’s privately offered share classes.
Pursuant to a Private Placement Memorandum, the company is currently offering Class P-A, P-I, P-S, P-T, and P-D shares. After the finalization of the March 31, 2021 net asset value and Monthly Share Value, the current offering price of the Class P-I and P-A shares is $8.92 and $9.39 per share, respectively. To the extent that our Monthly Share Value per share per class on the most recent valuation date increases above or decreases below our prior Monthly Share Value per share per class, we will adjust the offering prices of each class of shares as appropriate.
As of March 31, 2021, through initial purchases of shares and participation in the DRP, our Advisor owned 23,601 Class A shares and through initial purchases of shares, our Advisor owned 2,776 Class P-D shares. As of December 31, 2020, through initial purchases of shares and participation in the DRP, our Advisor owned 23,601 Class A shares.
As of March 31, 2021, we had received subscriptions for and issued 117,458,082 of our shares (including shares issued under the DRP) for gross proceeds of $1,070,273,744 (before dealer-manager fees of $4,357,386 and selling commissions of $14,241,904 for net proceeds of $1,051,674,454). As of December 31, 2020, we had received subscriptions for and issued 67,133,640 of our shares (including shares issued under the DRP) for gross proceeds of $617,098,806 (before dealer manager fees of $4,308,949 and selling commissions of $14,198,029 for net proceeds of $598,591,828).
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General Market Overview for Alternative Energy Projects
The U.S. electric consumer expects a virtually error-free, consistent supply of sufficient electricity at all times for all purposes. The U.S. power industry, which includes energy generation and transmission, is structured to ensure a sufficient, constant supply of energy to all end users to meet varying demand requirements on a minute-by-minute basis. Historically, the mix of electricity supply was dependent largely on fossil fuels such as coal and natural gas, as well as nuclear and hydroelectric power. However, this is changing rapidly due to the rise of renewable energy. According to the U.S. Energy Information Administration (the “EIA”), fossil fuels such as coal, petroleum and gas supplied about 67% of the U.S.’s requirements in 2014, highlighting a heavy reliance on nonrenewable resources for power. Since 2014 however, there has been a shift in the mix highlighted by a substantial rise in both natural gas, which has now overtaken coal as the primary source of electricity generation, and renewables, which comprised 17% of the generation mix in 2019. We believe that renewable energy is poised to gain even more market share over the decades to come, driven largely by several trends:

The decline of coal. The U.S. coal industry is declining in the face of lower-cost natural gas and renewable energy, and regulations designed to reduce greenhouse gas emissions and protect public health.

Falling price of renewables. The cost of renewable energy, particularly solar and wind, has fallen substantially over the past decade, making renewable energy the lowest-cost provider of new generation in many markets.

State mandates. State requirements to use more renewable energy sources have contributed to the historic growth of renewables, and are likely to drive further growth.

Federal support. Availability of government and other financial incentives for building new renewable capacity has supported the case for renewables when they were priced.

Environmental concerns. Reliance on fossil fuels has resulted in excessive production of harmful greenhouse gas emissions, which has been identified as one of the major causes of global climate change and numerous other environmental issues. This has led to growing support among the voting public for an energy transition based upon renewable energy.

The result of these and other factors is that renewable energy has gone from being a niche player in energy markets to being widely perceived as the present and future of energy generation in the United States. Validating the idea that a sea change is occurring in U.S. energy markets, the EIA reported that U.S. electricity generation from renewable energy exceeded coal for the first time in April 2019, and forecasts that coal generation will decline 13% in 2020. The EIA also projects natural gas generation will only grow 1.3% in 2020—the slowest rate since 2017—while non-hydropower renewable energy generation will grow 15% in 2020—the fastest rate in four years.

We anticipate that these trends will accelerate the growth of renewable energy, particularly solar and wind for power generation and batteries for storage. Bloomberg New Energy Finance’s New Energy Outlook for 2019 estimates that the global energy mix will move from “two-thirds fossil fuels in 2018 to two-thirds zero-carbon energy by 2050. For wind and solar that's '50 by 50' with these technologies supplying almost 50% of world electricity by 2050, ending the era of fossil fuel dominance in the power sector.”

The U.S. Renewable Energy Industry Has Been a High-Growth Market

The market for renewable energy has grown rapidly over the past decade. According to Renewable Energy Data Book, renewable electricity grew to nearly 205% of total installed capacity and more than 17% of total electric power generation in the United States in 2017. According to the same publication, renewable electricity accounted for 60% of all new electricity capacity installations in the United States in 2017.

The U.S. Renewable Energy Industry Is Expected to Be a High-Growth Market for Decades

We believe that demand for renewable energy will continue to grow as countries seek to reduce their dependence on outside sources of energy, and as the political and social climate continues to demand social responsibility on environmental matters. The EIA anticipates that generation from renewable energy sources will grow by 77% from 2010 to 2035 in its base case. This expected increase is supported by renewable fuel standards, state-level renewable electricity standards, and U.S. federal tax credits.

In addition, supported in part by federal tax credits in the early part of the projection period, U.S. federal renewable fuel standards and state RPS, non-hydropower renewable generating capacity is expected to grow at a faster rate than fossil fuel
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capacity, according to the Renewable Energy Data Book. According to this and other industry sources, including the EIA, total renewable energy capacity is expected to increase to 15% of U.S. electric power generation, primarily due to projected increases in the generation capacity of wind, solar and biomass energy.

Capital Shortage in the Market

According to Bloomberg New Energy Finance, spending on renewable energy capacity is expected to total $7 trillion from 2010 to 2030. Limited conventional fuel supplies, growing demand for energy, advances in technology, continuing climate change and improving price competitiveness between traditional and renewable energy sources are expected to drive the continued growth of renewable energy for years to come, Bloomberg New Energy Finance reports. Notwithstanding this growing demand, we believe that there is currently a shortage of capital available to satisfy the demands of the renewable energy sector in the United States and around the world, particularly with respect to newly developed small and mid-size projects and businesses. In addition, much of the capital that is available is focused on larger projects that have long-term offtaker contracts in place and does not allow project owners to take any “merchant” or investment risk with respect to RECs. We believe many project developers are not finding, or are encountering delays in accessing capital for their projects. As a result, we believe a significant opportunity exists for us to provide new forms of capital to meet this demand. With our permanent capital structure, we are ideally suited for investments in long-term assets like renewable energy, energy efficiency and other sustainability-related projects.
Current Competition in the Alternative Energy - Solar Marketplace
The solar financing market started as a cottage industry where developers would bring together high-net-worth investors to fund single solar and wind transactions. Though successful in jump starting the industry, true capital formation is a relatively new phenomenon and is not as well developed as in other asset classes. Currently in the alternative energy — solar marketplace, there are several sources of capital:
Developer/Owner Operators. The major competition we face in the market for the assets we target comes from privately backed developer/owner operators. The capital from these organizations has generally been sourced from a combination of family offices/private equity funds and hedge funds. These organizations are generally set up as developers, with investment return expectations in the 20-30% range.
However, to facilitate the most favorable exit for the sponsors, the developer/owner operators seek to accumulate a significant portfolio of operating assets to provide a base level of stable and predictable earnings for the enterprise. Through a combination of developer profits and leverage they can generate satisfactory ongoing returns, with the bulk of the upside being generated for the sponsors through the exit. Particularly in circumstances where equity markets experience a downturn, we are of the opinion this group of buyers will ultimately be capital constrained.
Single-Purpose Limited Partnerships. These entities are typically funded by high-net-worth individuals or family offices, and are generally focused on a small number of deals, as they have a limited amount of capital to invest.
Utilities. These are funded by institutional investors, including large life insurance companies, pension funds and infrastructure funds. This sector dominates investment in the larger projects (e.g., $100,000,000 or greater). We tend not to encounter this group in the markets we target because scale is always an important consideration for larger institutions.
In management’s view, the company has been competitive in bidding for solar assets against all these sources of capital and maintains a significant pipeline of deals which can be consummated as offering proceeds are raised.
Opportunities in Solar Power Today
We believe that the greatest opportunity exists within the Small Utility Scale, Commercial Solar and Community Solar segments of the market. In the Small Utility Scale market, the company can buy assets with similar commercial attributes to the Large Utility Scale projects — investment-grade offtaker, same equipment and warranties, same operations and maintenance service provider — but where returns are higher.
We have also noted a growing trend among U.S. corporations to work with developers and financiers to provide renewable power for their operations. Driven by a desire to save money, create certainty around long-term electricity prices and support green marketing initiatives, the Commercial and Industrial (C&I) segment is rapidly becoming one of the most exciting parts of the renewable energy project market. These deals tend to be smaller than Utility Scale solar, which fits well with our strategy of focusing on the lower middle market segment of the industry.
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A number of U.S. states have adopted programs that encourage the development of Community Solar Projects, where groups of companies, municipalities and individuals can buy renewable power from solar and wind plants that are located within the customers' utility zone. While there are certain complexities associated with such projects, we are closely monitoring the rapid growth of this segment.
In our view, there is a significant opportunity to aggregate portfolios of high-quality Small Utility Scale, Commercial Solar and Community Solar projects working with experienced developers looking for a reliable and sustainable source of capital to increase the certainty of their closing transactions. As a result, we have been focusing on building relationships with respected developers with a view toward acquiring pipelines of projects rather than one-off deals.
By working closely with developers to efficiently close their transactions, we are seeking to create a sustainable competitive advantage which will lead to recurring and consistent deal flow. Importantly, our strategy is differentiated from the developer/owner operators mentioned above, because we do not seek to compete with the developers. Rather, we work with developers so that they can focus their activities on development while we focus on the financing and long-term ownership of their developments. This alignment of interests is mutually beneficial and symbiotic.
Current Competition in the Alternative Energy — Wind Marketplace
For the U.S. wind industry, 2020 was its strongest year to date; the fourth quarter alone added more wind power than in the entirety of 2019. Capacity increased by 85% over the previous year, producing 16,913 MW in total. In particular, the fourth quarter brought 10,593 MW of that capacity, obliterating previous records and bringing total U.S. wind power capacity to 122,478 MW—enough energy to power 38 million homes, according to the American Clean Power Association’s Market Report Fourth Quarter 2020.
Thus, current market conditions remain favorable for additional wind development in 2021. Particularly for smaller middle market transactions involving assets similar to those in our current portfolio, we believe that we will continue to be competitive in bidding for wind assets. We also believe that we may see opportunities to purchase operating wind assets which have run through their tax credits.
Opportunities in Wind Today
We believe that the middle market segment presents the best opportunities for investment. This sector faces less competition for assets than the large utility scale sector, which tends to be fully banked. Furthermore, we believe that targeted investments in select wind opportunities provide us with increased diversification of cash flows stemming from the fact that wind assets tend to perform better in the winter months while solar tends to perform better in the summer months.
We believe that this countercyclical diversification is highly beneficial in managing our cash flows throughout the year. We also believe that we are well positioned to find investable assets in this sector, given our track record of purchasing four wind portfolios of this size range over the past two years. These purchases have enabled us to build relationships with respected developers who we may be able to work with in the near future.
General Market Overview for Battery Storage
In 2020, investment in the battery storage sector was up 136%, with $6.6 billion in 54 deals, according to Mercom Capital. This was driven by falling costs, particularly in certain battery chemistries such as lithium-ion. According to a recent analysis by Lazard in its “Levelized Cost of Storage Analysis (LCOS 6.0),” storage costs have declined across most use cases and technologies, particularly for shorter-duration applications. In addition, long-duration storage has begun to gain traction as a commercially viable solution to challenges created by intermittent energy resources such as solar or wind.
Due to its potential for rapid growth, as well as new state mandates rapidly falling costs for both short-term and long-term storage, battery storage represents a large and growing investment opportunity, we believe, for the foreseeable future.
Factors Impacting Our Operating Results
The results of our operations are affected by a number of factors, and will primarily depend on, among other things, the supply of renewable energy assets in the marketplace; the revenues we receive from renewable energy and energy efficiency projects and businesses; the market price of electricity; the availability of government incentives; local, regional and national economies; general market conditions; and the amount of our assets that are operating versus those that are non-operating because they are currently under construction. Additionally, our operations are impacted by interest rates and the cost of
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financing provided by other financial market participants. Many of the factors that affect our operating results are beyond our control.
Size of portfolio. The size of our portfolio of investments is a key revenue driver. Generally, as the size of our portfolio grows, the amount of income we receive will increase. In addition, our portfolio of investments may grow at an uneven pace, as opportunities to make investments in our target assets may be irregularly timed, and the timing and extent of GCM’s success in identifying such assets, and our success in acquiring such assets, cannot be predicted. Lastly, other than management fees, most of our expenses are of a fixed nature. Therefore, expenses as a percentage of net assets are reduced as the net assets of the company increase.
Pre-operational and non-earning assets. The increasing amount of pre-operational and non-earning assets (defined as deposits and other cash investments not currently generating a material investment return) in our portfolio is a significant factor in our revenue and net asset value. The amount of cash invested in these pre-operational and non-earning assets reduces investment income until (1) the asset reaches commercial operation date; or (2) otherwise begins generating an investment return and commences regular distributions to the company. We believe these assets, once operational or income generating, will provide returns consistent with the company’s investment strategy.
Credit risk. We encounter credit risk relating to: (1) counterparties to the electricity and environmental credit sales agreements (including PPAs) for our projects; (2) counterparties responsible for project construction and hedging arrangements; (3) companies in which we may invest; and (4) any potential debt financing we or our projects may obtain. We seek to mitigate credit risk by entering into contracts with high-quality counterparties. However, it is still possible that these counterparties may be unable to fulfill their contractual obligations to us.
If counterparties to the electricity sales agreements for our projects or the companies in which we invest are unable to make payments to us when due, or at all, our financial condition and results of operations could be materially adversely affected. While we seek to mitigate construction-related credit risk by entering into contracts with high-quality EPC companies with appropriate bonding and insurance capacity, if the EPCs to the construction agreements for our projects are unable to fulfill their contractual obligations to us, our financial condition and results of operation could be materially adversely affected. We seek to mitigate credit risk by deploying a comprehensive review and asset selection process, including worst-case analysis and careful ongoing monitoring of acquired assets, as well as mitigation of negative credit effects through back-up planning. Nevertheless, unanticipated credit losses may occur that could adversely impact our operating results.
Electricity prices. All our projects benefit from take-or-pay agreements, with terms structured to take 100% of the power output. On average, the contracts in our existing portfolio have approximately 17 years remaining prior to exposure to market prices. The credit standing of the contract counterparty is a particular focus in situations where the contracts have a price escalator. Escalating contracts create an incentive for the counterparty to not continue to perform if the contract pricing deviates materially from the market price. If the contract is with a public or investment-grade entity, we have generally been confident that the contract terms will be honored. The only exception might apply in situations where rising electricity prices could create pressure around a political change at the state or local level.
Due to the take-or-pay nature of the contracts, we believe that the company is largely insulated from the daily volatility of the electricity market prices. Nevertheless, we monitor these markets to stay abreast of developments in the industry as they occur. Over recent years, we have seen a lot of volatility in gas prices. However, that volatility has been slow to translate into movements in the electricity prices.
Electricity pricing is a function of a range of factors. The price of gas is just one component. Electricity prices also include: (1) a recovery of the cost of the generation plant; (2) the labor to operate it; (3) the cost to transport the fuel to the plant; (4) the cost to wheel the power to the customer; and (5) the cost to administer the utility. Thus, gas price volatility has less impact on the delivered price of electricity than one might expect.
The U.S. Energy Information Agency of the Department of Energy anticipates that electricity prices will rise annually by between 2.5% and 3.0% nationally for the next 20 years (on a nominal basis). Assuming the price at which we sell the power under our contracts is set at a discount to the current electricity price, and the escalator (to the extent there is one) is less than 2.5% per annum, we expect the contracted price will remain close to, if not below, the market price of the electricity throughout the entire term of the contract. 
Changes in market interest rates. To the extent that we use debt financing with unhedged floating interest rates, or in the case of any refinancing, general increases in interest rates over time may cause the interest expense associated with our borrowings to increase. This would decrease the value of our debt investments. Conversely, general decreases in interest rates
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over time may cause the interest expense associated with our borrowings to decrease and the value of our debt investments to increase.
Market conditions. We believe that demand for alternative forms of energy from traditional fossil-fuel energy will continue to grow as countries seek to reduce their dependence on outside sources of energy and as the political and social climate continues to demand social responsibility on environmental matters. Notwithstanding this growing demand, particularly with respect to small and mid-size projects and businesses that are newly developed, we believe that a significant shortage of capital currently exists in the market to satisfy the demands of the renewable energy sector in the United States and around the world.
Many of the traditional sources of equity capital for the renewable energy marketplace were attracted to renewable energy projects based on their ability to utilize ITCs and tax deductions. We believe that due to changes in their taxable income profiles that have made these tax incentives less valuable, these traditional sources of equity capital have withdrawn from the market. In addition, much of the capital that is available is focused on larger projects that have long-term offtake contracts in place and does not allow project owners to take any “merchant” or investment risk with respect to RECs. We believe many project developers are not finding, or are encountering delays in accessing, capital for their projects. As a result, we believe a significant opportunity exists for us to provide new forms of capital to meet this demand.
Regulatory matters. Regulatory and tax policy at the federal and state levels tends to be forward looking rather than retrospective. As a result, we do not see many regulatory or tax issues impacting any assets we already own or buy during the operation of a particular regulatory or tax regime.
Future changes, which could impact the returns on future transactions, will be factored into our buying decisions. In the past, we have seen government policy drive a lot of development activity. For example, when the government announces the phasing out of a tax incentive, developers race to get projects to a stage that ensures the project qualifies for the incentive. Policy-driven activity is generally short lived, but can skew the investment supply and demand dynamic.
From the federal perspective, changes in tax and regulatory policy could negatively affect prospective returns. Federal tax incentives are comprised of MACRS depreciation and the ITC. MACRS results in accelerated depreciation of renewable assets over a 5.5-year period. Given the wide application of MACRS to other asset classes, we believe it is less susceptible to change than the ITC. The ITC is a tax incentive that allows an investor to take up to 30% of the installed cost of a solar system as a federal tax credit. This rule was extended at the end of 2015, and again in December 2020, with the credit amounts incrementally lowered over the next few years, from 26% in 2021 to 22% in 2023; to 10% in 2024 and beyond. 
Other kinds of regulatory changes that could negatively impact returns include the introduction of some kind of value-added tax either at the federal or state level, changes to property tax regimes, or any kind of targeted tax on the income of renewable energy generation assets. None of these possible changes appear likely any time soon, but it is impossible to predict the future with any real certainty.
Generally, the policy changes that have occurred over the past decade at the U.S. Environmental Protection Agency and U.S. Department of Energy have been very positive for renewables: stronger emission regulations and other mandates improving the case for renewable energy assets. In addition, in 2018, the U.S. imposed tariffs on photovoltaic (“PV”) panels imported to the U.S., which could have an impact on overall U.S. demand.
The regulatory market for electric power is highly fragmented, with each state having significant influence over the functioning of its respective market. As the primary regulator for the utilities, states have implemented widely divergent policies. For example, some states allow utilities to be vertically integrated — producers of power as well as operators of the grid. Other states have separated those functions entirely.
We believe that this market diversity is a benefit for our program. States have been highly adept at advancing programs designed to benefit renewable energy, with or without federal government support. There are currently 30 states that have developed a renewable portfolio standard. As a result, we see state regulatory issues as a shifting mosaic of opportunities where some markets will present opportunities while others become less attractive on a prospective basis.
COVID-19 Impact
In March of 2020, the United States declared a National Emergency concerning the COVID-19 outbreak. This came after the World Health Organization (“WHO”) declared the virus a global pandemic on March 11, 2020.
Since the outbreak of COVID-19 in the United States, the company has generally been able to conduct its business despite the turmoil in markets and the shuttering of many businesses across the country. We have and will continue to assess the current and future business risks related to COVID-19 as new information becomes available, including any potential performance risk
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of our PPA and construction counterparties. As of the date of the filing, we are not aware of any material impact to our financial results.
Critical Accounting Policies and Use of Estimates
The following discussion addresses the accounting policies utilized based on our current operations. Our most critical accounting policies involve decisions and assessments that affect our reported assets and liabilities, as well as our reported revenues and expenses. We believe that all the decisions and assessments upon which our consolidated financial statements are based were reasonable as of the time made and were based upon information available to us at that time. Our critical accounting policies and accounting estimates may be expanded over time as we continue to implement our business and operating strategy. The material accounting policies and estimates that are most critical to an investor’s understanding of our financial results and condition, as well as those that require complex judgment decisions by our management, are discussed below.
Basis of Presentation
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties.
Although we are organized and intend to conduct our business in a manner so that we are not required to register as an investment company under the Investment Company Act, our consolidated financial statements are prepared using the specialized accounting principles of Accounting Standards Codification Topic 946, Financial Services — Investment Companies (“ASC Topic 946”). Overall, we believe that the use of investment company accounting makes our consolidated financial statements more useful to investors and other financial statement users, since it allows a more appropriate basis of comparison to other entities with similar investment objectives.
Basis of Consolidation
As provided under Regulation S-X and ASC Topic 946, the company will generally not consolidate its investment in a company other than a wholly owned investment company or controlled operating company whose business consists of providing services to the company. Accordingly, the company consolidates in its consolidated financial statements the accounts of certain wholly owned subsidiaries that meet the criteria. All significant intercompany balances and transactions have been eliminated in consolidation.
Investment Classification
We classify our investments by level of control. “Control Investments” are investments in companies in which we own 25% or more of the voting securities of such company, have greater than 50% representation on such company’s board of directors, or that are limited liability companies for which we are the managing member. “Affiliate Investments” are investments in companies in which we own 5% or more, and less than 25% of the voting securities of such company. “Non-Control/Non-Affiliate Investments” are investments that are neither Control Investments nor Affiliate Investments. Because our consolidated financial statements are prepared in accordance with ASC Topic 946, we do not consolidate companies in which we have Control Investments, nor do we apply the equity method of accounting to our Control Investments or Affiliate Investments.
Valuation of Investments
Our Advisor, in conjunction with an independent valuation firm when necessary, subject to the review and approval of the Board of Directors, is ultimately responsible for the determination, in good faith, of the fair value of investments. In that regard, the Advisor has established policies and procedures, which have been reviewed and approved by our Board of Directors, to estimate the fair value of our investments, which are detailed below. Any changes to these policies and procedures are required to be approved by our Board of Directors, including a majority of our independent directors.
Investments for which market quotations are readily available are valued at such market quotations.
For most of our investments, market quotations will not be available. With respect to investments for which market quotations are not readily available, our Board of Directors has approved a multi-step valuation process each fiscal quarter, as described below:
1.Each investment will be valued by GCM. As part of the valuation process, GCM will prepare the valuations and associated supporting materials for review and approval by the Board of Directors.
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2.Our Board of Directors has approved the selection of an independent valuation firm to assist with the review of the valuations prepared by GCM. At the direction of our Board of Directors, the independent valuation firm will review valuations prepared by GCM for the appropriate application of its valuation policies and the appropriateness of significant inputs used in the valuation models by performing certain limited procedures, which will include a review of GCM’s estimates of fair value for each investment, and providing an opinion that GCM’s estimate of fair value for each investment is reasonable. The independent valuation firm may also provide direct assistance to GCM in preparing fair value estimates if the Board of Directors approves such assistance. In the event that the independent valuation firm is directly involved in preparing the fair value estimate, our Board of Directors has the authority to hire a separate valuation firm to review that opinion of value.
3.The Audit Committee of our Board of Directors reviews and discusses the preliminary valuation prepared by GCM and the report of the independent valuation firm, if any.
4.Our Board of Directors reviews the valuations and approves the fair value of each investment in our portfolio in good faith by GCM.
Loan investments are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts (for example, interest and amortization payments) to a single present value amount (discounted) calculated based on an appropriate discount rate. The measurement is based on the net present value using current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in determining the fair value of our loans include as applicable: debt covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the project’s ability to make payments, its earnings and discounted cash flows, the markets in which the project does business, comparisons of financial ratios of peer business entities that are public, mergers and acquisitions comparables and the principal market and enterprise values, among other factors.
Equity investments are also valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts (for example net cash flows or earnings) to a single present value amount (discounted) calculated based on an appropriate discount rate. The measurement is based on the net present value using current market expectations about those future amounts.
In following these approaches, the types of factors that we may take into account in determining the fair value of our equity investments include, as applicable: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, the project’s earnings and discounted cash flows, the markets in which the project does business, comparisons of financial ratios of peer business entities that are public, mergers and acquisitions comparables, the principal market and enterprise values, among other factors.
OTC derivatives including swap contracts are valued daily using observable inputs, such as quotations provided by an independent pricing service, the counterparty and broker dealers, whenever available and considered reliable.
We have adopted Accounting Standards Codification Topic 820, Fair Value Measurement (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements.
ASC Topic 820 clarifies that the fair value price is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability; that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. ASC Topic 820 provides a consistent definition of fair value that focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. In addition, ASC Topic 820 provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established by ASC Topic 820 are defined as follows:
Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets.
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Level 2: Other significant observable inputs that are sourced either directly or indirectly from publications or pricing services, including dealer or broker markets, for identical or comparable assets or liabilities. Generally, these inputs should be widely accepted and public, non-proprietary and sourced from an independent third party.
Level 3: Inputs derived from a significant amount of unobservable market data and derived primarily through the use of internal valuation methodologies.
In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgement and considers factors specific to each investment.
Our Board of Directors has approved the selection of an independent valuation firm to review our Advisor’s valuation methodology and to work with our Advisor and officers to provide additional inputs for consideration by our Audit Committee and to work directly with our full Board of Directors, at the Board of Directors’ request, with respect to the fair value of investments. For example, our Board of Directors may determine to engage more than one independent valuation firm in circumstances in which specific expertise of a particular asset or asset class is needed in connection with the valuation of an investment. In addition, GCM will recommend to our Board of Directors that one quarter of our investments be valued by an independent valuation firm each quarter, on a rotating quarterly basis. Accordingly, each such investment would be reviewed by an independent valuation firm at least once per year.
Our Board of Directors will have the ability to review our Advisor’s valuation methodologies each quarter in connection with GCM’s presentation of its valuation recommendations to the Audit Committee. If during the period between quarterly board meetings, GCM determines that significant changes have occurred since the prior meeting of the Board of Directors at which it presented its recommendations on the valuation methodology, then GCM will also prepare and present recommendations to the Audit Committee of the Board of Directors of its proposed changes to the current valuation methodology. Any such changes to our valuation methodologies will require the approval of our Board of Directors, including a majority of our independent directors. We will disclose any change in our valuation methodologies, or any change in our investment criteria or strategies, that would constitute a fundamental change in a registration statement amendment prior to its implementation.
Foreign Currency Translation
The accounting records of the company are maintained in U.S. Dollars. The fair value of investments and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. Dollars using the exchange rate at the end of each reporting period. Amounts related to the purchases and sales of investments, investment income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions.
Net unrealized currency gains and losses arising from valuing foreign currency-denominated assets and liabilities at the current exchange rate are reflected as part of Net change in unrealized appreciation (depreciation) on translation of assets and liabilities denominated in foreign currencies in the Consolidated Statements of Operations.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.
Calculation of Net Asset Value
Net asset value by share class is calculated by subtracting total liabilities for each class from the total carrying amount of all assets for that class, which includes the fair value of investments. Net asset value per share is calculated by dividing net asset value for each class by the total number of outstanding common shares for that class on the reporting date. For purposes of calculating our net asset value, we expect to carry all liabilities at cost.
The determination of the fair value of our investments requires judgment, especially with respect to investments for which market quotations are not available. For most of our investments, market quotations will not be available. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material. Because the calculation of our net asset value is based, in part, on the fair value of our investments as determined by our Advisor, which is an affiliated entity of the company, our calculation of net
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asset value is to a degree subjective and could be adversely affected if the determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such investments. Furthermore, the fair value of our investments, as reviewed and approved by our Board of Directors, may be materially different from the valuation as determined by an independent valuation firm.
Revenue Recognition
To the extent the company expects to collect such amounts, interest income is recorded on an accrual basis. If there is reason to doubt an ability to collect such interest, interest receivable on loans and debt securities is not accrued for accounting purposes. Original issue discounts, market discounts or market premiums are accreted or amortized using the effective interest method as interest income. Prepayment premiums on loans and debt securities are recorded as interest income when received. Any application, origination or other fees earned by the company in arranging or issuing debt are amortized over the expected term of the loan.
Loans are placed on non-accrual status when principal and interest are 90 days or more past due, or when there is a reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are generally restored to accrual status when past due and principal and interest is paid and, in management’s judgment, is likely to remain current.
Dividend income is recorded when dividends are declared and when it is determined that collection is probable. The timing and amount of dividend income is determined on at least a quarterly basis. This process includes an analysis at the individual project company level based on cash available from operations and working capital needed for the project company operations. Dividend income from our privately held equity investments is recognized when approved. On a quarterly basis at a minimum, dividends received from the company’s project companies, which generally reflect net cash flow from operations, are declared, accrued and paid.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments
Without regard to unrealized appreciation or depreciation previously recognized, realized gains or losses will be measured as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset. Net change in unrealized appreciation or depreciation will reflect the change in investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Organization Costs
Organization costs are expensed on the company’s Consolidated Statements of Operations as incurred.
Offering Costs
Offering costs include all costs to be paid by the company in connection with the offering of its shares, including legal, accounting, printing, mailing and filing fees, charges of the company’s escrow holder, transfer agent fees, due diligence expense reimbursements to participating broker dealers included in detailed and itemized invoices, and costs in connection with administrative oversight of the offering and marketing process, preparing supplemental sales materials, holding educational conferences, attending retail seminars conducted by broker dealers, finder's and other fees paid to third parties and sales commissions paid to registered representatives of our managing broker dealer. When recognized by the company, offering costs will be recognized as a reduction of the proceeds from the offering.
Deferred Sales Commissions
The company defers certain costs, principally sales commissions and related compensation, which are paid to the dealer manager and may be reallowed to financial advisors and broker-dealers in the future in connection with the sale of shares sold with a reduced front-end load sales charge and a trail fee. The costs expected to be incurred at the time of the sale of the Class C shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) when the maximum amount of sales commission and related compensation is reached under regulatory regulations; 2) the date which approximates an expected liquidity event for the company; or 3) the expected holding period of the investment. The costs expected to be incurred at the time of the sale of the Class P-T and Class P-S shares are recorded as a liability on the date of sale and represents the aggregate amount due for such costs over the period beginning at the time of sale and ending on the earlier date of 1) the date which approximates an expected liquidity event for the company; or 2) the expected holding period of the investment. The estimated amount of the liability can be updated as management's assumption surrounding an expected liquidity event changes or if the maximum of sales-related
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commissions and costs under regulatory regulations is attained. As of March 31, 2021, and December 31, 2020, the company recorded a liability for deferred sales commissions in the amount of $4,094,869 and $131,875, respectively.
Financing Costs
Financing costs related to debt liabilities of the company, GREC or GREC HoldCo are presented on the Consolidated Statements of Assets and Liabilities as a direct deduction from the carrying amount of that debt liability. Financing costs are deferred and amortized using the straight-line method over the life of the debt liability.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the effects of Reference Rate Reform on Financial Reporting," which provides companies with optional financial reporting alternatives to reduce the cost and complexity associated with the accounting for contracts and hedging relationships affected by reference rate reform. The amendments in this update is effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. As of March 31, 2021, we have not elected to apply the optional amendments and are currently evaluating the impact of the ASU and the effect on our consolidated financial statements.
JOBS Act
We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act, enacted on April 5, 2012. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.
Under the JOBS Act, we will remain an “emerging growth company” until the earliest of:
the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;
the last day of the fiscal year following the fifth anniversary of the completion of our offering;
the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and
the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700,000,000 in outstanding common equity held by our non-affiliates as of the last day of our most recently completed second fiscal quarter; (ii) been a public company for at least 12 months; and (iii) filed at least one annual report with the SEC. The value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter.
The JOBS Act also provides that an “emerging growth company” can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. However, we are choosing to opt out of that extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Amendments to the Operating Agreement Related to Incentive Allocations
On August 25, 2020, certain amendments to the Operating Agreement to remove the provisions therein related to the Income Incentive Distribution and the Capital Gains Incentive Distribution, in each case allocable to the Special Unitholder under certain circumstances, and to replace them with provisions for a performance participation fee (the “Performance Participation Fee”) based on the periodic total return generated by the company, payable under certain circumstances by the company to the Special Unitholder, was approved by the company’s shareholders and was applied retroactively on April 1, 2020 and for all periods thereafter. The Liquidation Incentive Distribution provision in the Operating Agreement was correspondingly amended to reflect that the Liquidation Incentive Distribution will be calculated based on the difference
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between the company’s net proceeds from a liquidation or listing of our shares (in either case, as calculated in accordance with the Operating Agreement) and the company’s aggregate net asset value (NAV) immediately prior to the time of such liquidation or listing.
Portfolio and Investment Activity
As of March 31, 2021, the company invested in numerous solar, wind, biomass and energy efficiency projects included in 12 investment portfolios, as well as seven secured loans, as follows:
Commercial Solar
GEH Portfolio
This portfolio consists of operating solar power facilities totaling approximately 99.2 MW, located across Arizona, California, Colorado, Connecticut, Florida, Hawaii, Indiana, Massachusetts, Maryland, New York and New Jersey, North Carolina, Tennessee and Vermont. The systems sell power under PPA arrangements ranging from 15 to 25 years. Certain systems also sell RECs and SRECs to the local utilities. Certain of the facilities, representing 8.4 MW of the total for the portfolio, represents leased operating solar power facilities. During the remaining term of the lease, which is approximately 11 years, there is the potential for the company to purchase these assets directly upon the agreement and consent of the parties.
Other Commercial Solar
This portfolio consists of operating solar power facilities totaling approximately 125.5 MW, located in Canada and across California, Colorado, Nevada and North Carolina. These projects consist primarily of rooftop solar photovoltaic systems, community solar projects and solar PV systems. The systems primarily sell power to various commercial, municipal and utility offtakers under long-term PPAs.
Sego Lily Portfolio

This portfolio consists of operating and pre-operating solar power facilities totaling approximately 120.0 MW, located across California and Utah. Of the total, approximately 111.0 MW is associated with pre-operating solar power facilities which are expected to reach COD during 2021. For all facilities within this portfolio, power is either sold or will be sold through PPA contracts that range from 15 to 20 years
Trillium Portfolio
This portfolio consists of operating and pre-operating solar power facilities totaling approximately 198.5 MW, located across Arkansas, Colorado, Maryland, New Jersey, Vermont and Washington, D.C. Of the total, approximately 73.6 MW is associated with pre-operating solar power facilities which are expected to reach COD during 2021. For all facilities within this portfolio, power is either sold or will be sold through PPA contracts that range from 5 to 28 years.
Wind
Greenbacker Wind Holdings II Portfolio
This portfolio consists of operating and pre-operating wind power facilities totaling approximately 105.3 MW, located in Iowa, Maine, Massachusetts, and Montana. Of the total, approximately 15.3 MW is associated with pre-operating wind power facilities which are expected to reach COD during 2021. These systems primarily sell power to various municipal and utility offtakers under long-term PPAs. Certain systems also sell RECs to the local utilities. During the three months ended March 31, 2021, two assets comprising 20.3 MW of the total for the portfolio were transferred from the Greenbacker Wind Portfolio - Maine Portfolio and from the Other Wind Investments Portfolio.
Greenbacker Wind Portfolio - HoldCo Portfolio ("GB Wind HoldCo")
This portfolio consists of operating wind power facilities totaling approximately 131.3 MW, located in Idaho, Iowa, Minnesota and Vermont. The systems sell power under PPA arrangements ranging from 20 to 25 years. Certain systems also sell RECs to the local utilities.
Other Wind Investments
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This portfolio consists of operating wind power facilities totaling approximately 6.0 MW, located in California. The systems sell power to the local utility under a PPA arrangement with a 15 year term.
Biomass
EVCE Biomass Portfolio
This portfolio consists of an operating biomass facility approximating 12.0 MW, located in Colorado. The system sells power to the local utility under a PPA arrangement with a 20 year term.
Battery Storage
Pacifica Portfolio
This portfolio consists of operating and pre-operating battery storage facilities totaling approximately 14.3 MW, located in California. Of the total, approximately 9.8 MW is associated with pre-operating battery storage facilities which are expected to reach COD during 2021. For all facilities within this portfolio, power is either sold or will be sold to commercial offtakers for a 10-year term.
Pre-Operational Assets
Citrine Portfolio
This portfolio consists of pre-operating solar power facilities totaling approximately 285.9 MW, located in California, Massachusetts and New Jersey. The facilities are expected to COD over the period ending in 2023. The significant majority of the facilities have contracted PPAs to sell power to utilities, commercial and municipal offtakers once they reach COD.
Other Energy Efficient Portfolios
This portfolio consists of capital leases and secured loans, including loans to the related parties LED Funding LLC and Renew AEC One LLC (the “AEC Companies”).
Other Portfolios
This portfolio consists of acquisition costs related to energy projects being acquired in the United States. Additionally, the company has invested capital to acquire and safe harbor panels that will be used in the construction of various pipeline projects.
In addition, on October 9, 2020, GREC made a $5,000,000 limited partner (“LP”) commitment to Greenbacker Development Opportunities Fund I, LP (“GDEV”), which was increased to $6,075,000 in the fourth quarter of 2020. As of March 31, 2021, $5,614,619 of the commitment was funded—the fair value of this investment is $5,607,040. In April 2021, the commitment to GDEV increased to $7,500,000.

GDEV is an affiliate of GREC, as GDEV possesses the same Advisor as GREC. The agreement between GDEV and GREC was negotiated at an arm’s length and contains standard terms and conditions that would be included in a third-party limited partnership agreement. However as part of the agreement between GDEV and GREC, GREC was awarded a membership interest in Greenbacker Development Opportunities GP I, LLC (“GDEV GP”), which provides for a 10% allocation of the carried interest in GDEV GP.

Secured Loans
SE Solar Loan
In February 2019, the company entered into a short-term secured loan agreement with SunEnergy1, LLC. The loan bears an interest rate of 9% and matures on December 31, 2021.
Encore Loan
In October 2019, the company entered into a short-term secured loan agreement with Encore Equipment, LLC. The loan bears an interest rate of 10% and matures on September 30, 2021.
Hudson Loan
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In June 2019, the company entered into a short-term secured loan agreement with Hecate Energy New York Holdings LLC. The loan bears an interest rate of 8% and matures on November 30, 2021.
Hudson II Loan
In November 2019, the company entered into a short-term secured loan agreement with Hecate Energy New York Holdings LLC. The loan bears an interest rate of 8% and matures on November 30, 2021.
New Market Loan
In October 2019, the company entered into a short-term secured loan agreement with New Market Solar, LLC. The loan bears an interest rate of 9% and matures on December 31, 2021.
Shepherd's Run Loan
In January 2021, the company entered into a short-term secured loan agreement with Hecate Energy Columbia County 1 LLC. The loan bears an interest rate of 8% and matures on September 30, 2022.
TUUSSO Loan
In November 2019, the company entered into a short-term secured loan agreement with TUUSSO Energy, LLC. The loan bears an interest rate of 8% and matures on July 31, 2021.
Portfolio Disposals
There were no sales during the three months ended March 31, 2021.
The following portfolios had sales of assets during the year ended December 31, 2020:
Citrine Portfolio
The company entered into a transaction with Greenbacker Renewable Opportunity Zone Fund LLC (“GROZ”) to sell the Gliden Solar LLC investment, included in the Citrine Solar Portfolio, on December 22, 2020 for an initial sale price of $12,752,215. GROZ is an affiliate of GREC, as GROZ shares the same Advisor as GREC. Since GROZ is an affiliate of the company, the determination of the purchase price was based on the fair value of the investment as determined by an independent third-party appraiser. The purchase was approved by a majority of the company’s Board of Directors (including a majority of the independent directors) not otherwise interested in the transaction to be fair and reasonable to the company.

The transaction resulted in a realized gain of $1,608,644, all of which was recorded in the 12 months ending December 31, 2020. GROZ paid an initial amount of $7,993,972 at closing. The transaction resulted in a receivable recorded of $4,758,243 as of December 31, 2020, in Investment sales receivable on the Consolidated Statements of Assets and Liabilities.

Residential Portfolios

On March 5, 2020, the company closed a transaction to sell the entirety of its investments in the Greenbacker Residential Solar Portfolio and the Greenbacker Residential Solar Portfolio II (collectively, the “Residential Portfolios”). The Residential Portfolios comprised 3,668 individual residential sites, which were accumulated through a series of transactions from October 2016 to July 2017. The purchase price consideration for this transaction was $42,891,241, which resulted in a realized gain of $8,152,495, all of which was recorded in the 12 months ending December 31, 2020. The transaction resulted in a receivable of nil as of December 31, 2020.

GEH Portfolio

On January 10, 2020, the company closed a transaction to sell three assets, North Carolina I, North Carolina II, and South Robeson, all included in the GEH Portfolio. The portfolio consisted of systems that comprised 11.35 MW of commercial solar photovoltaic systems. The purchase price consideration for this transaction was $11,084,803, which resulted in a realized loss of $(1,574,616), all of which was recorded in the 12 months ending December 31, 2020. The transaction resulted in a receivable of nil as of December 31, 2020.
Investment Summary
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The following table presents the gross purchases of the gross funding of additional capital for new or existing investments for the three months ended March 31, 2021 and March 31, 2020:
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Battery Storage
Pacifica Portfolio$300,974 $— 
Biomass
Eagle Valley Biomass Portfolio600,000 60,533 
Commercial Solar
GEH Portfolio859,034 14,979,408 
Other Commercial Solar601,576 802,037 
Sego Lily Portfolio23,441,777 — 
Trillium Portfolio87,999,278 24,275,569 
Residential Solar
Greenbacker Residential Solar Portfolio— 13,000 
Greenbacker Residential Solar Portfolio II49,698 265,000 
Wind
Greenbacker Wind Holdings II9,823,100 747,000 
Greenbacker Wind Portfolio - HoldCo3,839,547 23,732,876 
Other Wind Investments40,000 555,415 
Pre-Operational Assets
Citrine Portfolio27,946,896 9,513,124 
Greenbacker Wind Portfolio - Maine— 2,680,216 
Other Investments
Other Portfolios4,155,406 5,070,061 
Secured Loans
Encore Loan9,918 — 
Hudson Loan1,345,394 464,149 
Hudson II Loan1,345,394 — 
SE Solar Loan— 4,000,000 
TUUSSO Loan1,132,850 1,141,672 
Shepherd's Run Loan6,322,590 — 
$169,813,432 $88,300,060 
During the three months ended March 31, 2021, we executed 22 acquisitions of renewable energy projects: 20 added to the Trillium Portfolio and two added to the Citrine Portfolio, and had no project disposals. As our access to capital has increased, the average size of our projects increased from 3.9 MW per project in 2020 to 4.3 MW per project the three months ended March 31, 2021.
The composition of the company’s investments as of March 31, 2021, at fair value, were as follows:
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Investments
at Cost
Investments
at Fair Value
Fair Value
Percentage
of Total
Portfolio
Battery Storage
Pacifica Portfolio$9,140,209 $9,140,209 0.8 %
Subtotal$9,140,209 $9,140,209 0.8 %
Biomass
Eagle Valley Biomass Portfolio$23,686,352 $23,686,352 2.1 %
Subtotal$23,686,352 $23,686,352 2.1 %
Commercial Solar:
GEH Portfolio$148,065,778 $157,551,976 14.3 %
Other Commercial Solar44,848,541 49,875,844 4.5 %
Sego Lily Portfolio49,933,176 72,818,599 6.6 %
Trillium Portfolio180,568,859 220,333,187 20.0 %
Subtotal$423,416,354 $500,579,606 45.4 %
Wind:
Greenbacker Wind Holdings II$54,935,583 $66,494,635 6.0 %
Greenbacker Wind Portfolio - HoldCo77,005,002 78,727,426 7.2 %
Other Wind Investments9,540,000 8,686,199 0.8 %
Subtotal$141,480,585 $153,908,260 14.0 %
Pre-Operational Assets:
Citrine Portfolio$29,794,816 $30,410,677 2.8 %
Subtotal$29,794,816 $30,410,677 2.8 %
Other Investments:
Other Portfolios$20,123,799 $19,750,743 1.8 %
Subtotal$20,123,799 $19,750,743 1.8 %
Energy Efficiency:
Other Energy Efficiency Portfolios$707,891 $701,336 0.1 %
Subtotal$707,891 $701,336 0.1 %
Secured Loans:
Encore Loan$9,307,725 $9,307,725 0.8 %
Hudson Loan7,366,796 7,366,796 0.7 %
Hudson II Loan5,269,267 5,269,267 0.5 %
New Market Loan5,007,350 5,007,350 0.5 %
Shepherd's Run Loan6,322,590 6,322,590 0.6 %
SE Solar Loan5,005,244 5,005,244 0.4 %
TUUSSO Loan7,895,946 7,895,946 0.7 %
Subtotal$46,174,918 $46,174,918 4.2 %
Investments in Money Market Funds:
Fidelity Government Portfolio - Class I$78,878,486 $78,878,486 7.2 %
First American Government Obligations Fund - Class Z78,878,486 78,878,486 7.2 %
Invesco Government & Agency Portfolio - Institutional Class— %
JP Morgan US Government Money Market Fund - Class L78,828,486 78,828,486 7.2 %
Wells Fargo Treasury Plus Money Market Fund - Institutional Class78,828,486 78,828,486 7.2 %
Subtotal$315,413,951 $315,413,951 28.8 %
Total$1,009,938,875 $1,099,766,052 100.0 %
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The composition of the company’s investments as of December 31, 2020, at fair value, were as follows:
Investments
at Cost
Investments at Fair ValueFair Value
Percentage
of Total
Portfolio
Battery Storage:
Pacifica Portfolio$8,839,235 $8,839,235 1.3 %
Subtotal$8,839,235 $8,839,235 1.3 %
Biomass:
Eagle Valley Biomass Portfolio$23,236,352 $23,236,352 3.5 %
Subtotal$23,236,352 $23,236,352 3.5 %
Commercial Solar:
GEH Portfolio$114,253,479 $124,637,707 18.9 %
Magnolia Sun Portfolio33,008,559 36,904,011 5.6 %
Other Commercial Solar44,410,568 47,500,424 7.2 %
Trillium Portfolio83,219,738 105,913,033 16.1 %
Subtotal$274,892,344 $314,955,175 47.8 %
Wind:
Greenbacker Wind Holdings II$33,834,320 $35,839,967 5.4 %
Greenbacker Wind Portfolio - HoldCo73,244,891 75,013,771 11.4 %
Other Wind Investments19,986,133 20,356,806 3.1 %
Subtotal$127,065,344 $131,210,544 19.9 %
Pre-Operational Assets:
Citrine Portfolio$23,523,051 $23,314,570 3.5 %
Greenbacker Wind Portfolio - Maine12,704,196 23,758,084 3.6 %
Sego Lily Portfolio29,178,404 62,135,652 9.4 %
Subtotal$65,405,651 $109,208,306 16.5 %
Other Investments:
Other Portfolios$23,669,446 $23,291,114 3.5 %
Subtotal$23,669,446 $23,291,114 3.5 %
Energy Efficiency:
Other Energy Efficiency Portfolios$738,348 $741,581 0.1 %
Subtotal$738,348 $741,581 0.1 %
Secured Loans
Encore Loan$10,606,725 $10,606,725 1.6 %
Hudson I Loan6,021,402 6,021,402 0.9 %
Hudson II Loan3,923,873 3,923,873 0.6 %
New Market Loan5,007,350 5,007,350 0.8 %
SE Solar Loan5,005,244 5,005,244 0.8 %
TUUSSO Loan6,763,096 6,763,096 1.0 %
Subtotal$37,327,690 $37,327,690 5.7 %
Investments in Money Market Funds:
Fidelity Government Portfolio - Class I$10,100,000 $10,100,000 1.5 %
First American Government Obligations Fund - Class Z1,072,720 1,072,720 0.2 %
Invesco Government & Agency Portfolio - Institutional Class— %
Subtotal$11,172,727 $11,172,727 1.7 %
Total$572,347,137 $659,982,724 100.0 %
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Results of Operations
A discussion of the results of operations for the three months ended March 31, 2021 and three months ended March 31, 2020 are as follows:
Revenues
As the majority of our assets consist of equity investments in entities established to own and operate our renewable energy projects, the majority of the revenue we generate is in the form of dividend income. Dividend income is not equivalent to the gross revenue produced at the project level, but is instead the amount of free cash that is distributed from the project entities to the company from time to time after paying for all project-level expenses, remitting principal payments not funded by the company, and complying with any specific project-level debt and tax equity covenants. Thus, the presentation of investment income in our financial statements differs from the traditional presentation shown in the financial statements or entities not prepared in accordance with ASC 946 and, most notably, is not equivalent to revenue as one might expect to see in financial statements not prepared in accordance with ASC 946.
The timing and amount of dividend income to be distributed to the company is determined on at least a quarterly basis by the company. This process includes an analysis at the individual project entity level of the cash available from operations and necessary working capital needed for the proper daily operations of the project. As a general rule, the dividend income from our equity investments is recognized as income only when it is received by the company, or expected to be received by the company immediately after each quarter end, whereas the undistributed income is retained within the project entities (i.e., included in working capital of the project company) and is added to the carrying value of those investments on the balance sheet. The other major component of our revenue is interest income earned on our debt investments, including loans to developers and loans made directly or indirectly to renewable energy projects. Dividend income for the three months ended March 31, 2021 and March 31, 2020 totaled $5,252,663 and $5,207,790, respectively, while interest income earned on our cash, cash equivalents, and secured loans (including the amortization of origination and other fees) amounted to $946,010 and $729,867, respectively.
The slight increase in dividend income from the three months ended March 31, 2021 to the three months ended March 31, 2020 was primarily attributable to the acquisition of operating assets and completion of construction assets during the latter part of 2020 offset by decreases in dividend income from certain wind portfolios related to a build-up of dividends distributed from the wind assets in the three months ended March 31, 2020.
The increase in the interest income for the three months ended March 30, 2021 versus the three months ended March 30, 2020 was primarily attributed to the increase in our interest-bearing loans to unaffiliated entities.
During 2021, our investments increased from $649 million as of December 31, 2020 to $784 million as of March 31, 2021, or a 66.6% increase. As of March 31, 2021, and December 31, 2020, we had approximately $222 million and $144 million in pre-operational and non-earning assets, which amounted to 15.1% and 13.4% of our gross investment amounts, respectively, and 21.9% and 26.0% of our net assets, respectively. We expect that the majority, but not all, of the assets that are currently pre-operational and non-earning to become revenue generating throughout the remainder of 2021 and into 2022, but we also expect to continue to make new investments in projects prior to the commencement of construction. As noted above, the strategy of investing in projects prior to the commencement of construction resulted in an increase in costs with no immediate increase in dividend income from those projects.
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BalanceMarch 31, 2021December 31, 2020December 31, 2019
Investments in controlled/affiliated and non-controlled/non-affiliated portfolios at fair value$784,352,101 $648,809,997 $475,175,871 
Investments in money market funds at fair value$315,413,951 $11,172,727 $4,984,621 
Total investments at fair value$1,099,766,052 $659,982,724 $480,160,492 
Notes payable balances of the company and its’ operating entities$444,364,480 $507,108,553 $261,850,711 
Cash, cash equivalents and restricted cash$8,947,086 $4,675,836 $4,081,470 
Less: Note payable balance of the company$(88,899,198)$(90,145,500)$(71,990,467)
Gross Investment Amount$1,464,178,420 $1,081,621,613 $674,102,206 
Additional Metrics
Pre-operational and non-earning assets$221,706,542 $144,404,286 $128,632,161 
Pre-operational and non-earning assets as a % of gross investment amount15.14 %13.4 %19.1 %
Pre-operational and Non-earning Assets as a % of net assets22.29 %26.0 %31.5 %
Expenses
For the three months ended March 31, 2021 and March 31, 2020, the company incurred $6,557,880 and $4,338,752 in operating expenses, respectively, including the management fees earned by the Advisor.
For the three months ended March 31, 2021 and March 31, 2020, the Advisor earned $4,075,503 and $2,399,753, respectively, in management fees, with the increase in management fees due to the increase in total assets. The consolidated financial statements reflect no performance participation fee for the three months ended March 31, 2021, and a $2,687,459 increase in incentive allocation for the three months ended March 31, 2020 based primarily upon net unrealized appreciation.
Lastly, for the three months ended March 31, 2021 and March 31, 2020, the company generated a tax (benefit) expense from operations in the amount of $(1,369,294) and $(3,231,864), respectively. The benefit recorded within net investment income (loss) is mainly derived from net operating losses incurred by the company.
For the three months ended March 31, 2021 and March 31, 2020, the net investment income (loss) was $1,010,087 and $4,805,340, respectively, or $0.01 and $0.10, respectively, per share.
Going forward, we expect our primary expenses to be the payment of asset management fees under our advisory agreement with the Advisor as well as performance participation fees to the Special Unitholder. We will also bear other expenses, which are expected to include, among other things:
the cost of calculating our net asset value, including the related fees and cost of retaining third-party valuation services;
the cost of effecting sales and repurchases of units;
fees payable to third parties relating to, or associated with our financial and legal affairs, making investments, and valuing investments, including fees and expenses associated with performing due diligence reviews of prospective investments and sub-advisors;
fees payable to our Advisor, including the Performance Participation Fee;
interest payable on debt incurred to finance our investments;
transfer agent and custodial fees;
federal and state registration fees;
costs of board meetings, unitholders’ reports and notices, and any proxy statements;
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directors’ and officers’ errors and omissions liability insurance and other types of insurance;
direct costs, including those relating to printing of unitholder reports and advertising or sales materials, mailing, telephone and staff;
fees and expenses associated with independent audits and outside legal costs, including compliance with the Sarbanes-Oxley Act of 2002 and applicable federal and state securities laws; and
all other expenses incurred by us or the Advisor or sub-advisors in connection with administering our investment portfolio, including expenses incurred by our Advisor in performing certain of its obligations under the advisory agreement.
Net Change in Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Translation and Deferred Tax Assets
Net realized and unrealized gains and losses from our investments and net realized and unrealized foreign currency gains and losses on translation of assets and liabilities denominated in foreign currencies are reported separately on the Consolidated Statements of Operations. We measure realized gains or losses as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
For the three months ended March 31, 2021, we recognized a $(72,149) realized loss related to net working capital adjustments on investments previously sold, a net change in unrealized appreciation of $5,730,739 was recorded of which $2,171,448 of unrealized appreciation related to the change in value of investments and $20,142 of unrealized appreciation related to the change in value based upon changes in foreign currency exchange rates and $3,739,027 of depreciation related to the change in value of swap contracts.
For the three months ended March 31, 2020, we recognized a $6,402,927 realized gain on the sale of investment related to the sale of Greenbacker Residential Solar Portfolio, Greenbacker Residential Solar Portfolio II, and assets included in the GEH Portfolio, a net change in unrealized appreciation of $5,730,739 was recorded of which $12,100,435 of unrealized appreciation related to the change in value of investments and $(52,248) of unrealized depreciation related to the change in value based upon changes in foreign currency exchange rates and $(6,317,448) of depreciation related to the change in value of swap contracts.
The (provision for) income taxes on realized and unrealized gain (loss) on investments, foreign currency translation and swap contracts was $(3,142,873) and $(6,307,218) for the three months ending March 31, 2021 and March 31, 2020, respectively. The provision is mainly derived from unrealized tax basis gains on the company’s investments offset by net operating losses incurred and investment tax credit carryforwards related to the company’s investments which, unlike for financial statement purposes under GAAP, are consolidated for tax purposes.
Changes in Net Assets from Operations
For the three months ended March 31, 2021 and March 31, 2020, we recorded a net increase in net assets resulting from operations of $3,725,682 and $10,631,788, respectively. The increase in net assets primarily relates to our net investment income earned during the period and unrealized appreciation related to the change in value of investments and swap contracts.
Dividend Coverage Ratio and Realized Gains
As further discussed below, towards the end of 2017, our investment advisor began to observe an increase in the opportunities to participate in projects that were largely similar to our operating assets in terms of the long-term risks, but which had the potential for additional returns if we could manage some additional risks in the early stages of the investment lifecycle. As a result, we determined that we should expand our investment capabilities to include four basic investment categories: operating assets, commercial operation date, notice to proceed, and special situations. Since then, in addition to acquiring operating assets, a substantial portion of our investment activity consists of acquiring pre-operational assets which we then fund through construction until such time as the assets are placed in service and start generating revenue. Depending on the circumstances, the construction process can take several months during which time we are not generating revenues from these investments, and are paying distributions on the capital raised to fund the investments. When determining the price to be paid for pre-operational assets, we perform a discounted cash flow analysis using conservative assumptions regarding the lifetime operating returns of the projects and incorporating the pre-operational period into our analysis. Through the construction period we continue to incur substantial operating expenses associated with owning and managing these investments, as well as pay
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distributions on the capital raised to fund the investments. Thus, from a near term financial perspective, the company’s financial statements and overall dividend coverage ratio is negatively impacted.
An analysis of the company’s dividend coverage ratio, including the impact of realized gains, is as follows:
Description3/31/202120202019201820172016
Net Investment Income (loss) before taxes$(359,207)$1,645,856 $4,213,800 $9,681,310 $7,459,040 $3,749,560 
Shareholder Distributions (total including DRP)$11,952,024 $31,038,522 $25,884,100 $17,738,130 $11,403,610 $6,717,870 
Dividend Coverage Ratio (net investment income/total distributions)(3.0)%5.3 %16.3 %54.6 %65.4 %55.8 %
Realized Gains (Loss)$(72,149)$7,830,550 $12,915,740 $— $694,000 $— 
Gross Dividend Coverage Ratio (Net Investment Income and Realized Gains/Total Shareholder Distributions)(3.6)%30.5 %66.2 %54.6 %71.5 %55.8 %
The company has built its business around investing in long-term income-producing assets in the renewable energy industry utilizing the cash flow associated with those assets to pay monthly distributions to our investors. When fully invested, we will measure success based upon generating a consolidated cash flow stream, which enables the company to pay all shareholder distributions through the operating returns of the company’s projects. As such, our long-term goal has always been to achieve a distribution coverage ratio of at least 1:1, and to grow that ratio meaningfully over time, so that we can increase long-term returns to investors either through distribution growth or by growing the net asset value of our shares through reinvestment on net investment income.
Investment Company Accounting Considerations
Since the company’s consolidated financial statements are prepared using the specialized accounting principles of ASC Topic 946, our investment Advisor produces an estimate of the fair market value of each of our investments quarterly. When valuing our investments under the income method, net operating earnings generated at the project level are included in our valuation models. While the valuation models take into account all revenue, Distribution Income recorded from each of our project companies may be more or less than that included in our valuation models each period due to various cash flow considerations. As an example, since many of our projects are held in tax partnership structures, or in related entities with bank-financed project-level debt, the company may be contractually limited in its ability to make dividend distributions from project companies to the company. Since project entities are not consolidated with the company under ASC Topic 946, in many cases not all net income from operations earned by a project company is distributed to the company. While this non-distributed income is included in the calculation of fair market value and unrealized gain/loss on investments, it is not included in Net Investment Income on the Statement of Operations, and therefore not included in our dividend coverage ratio.
Investing in Asset Classifications other than Operating Assets
We believe that the hallmark of a good investment strategy is the ability to take advantage of new opportunities and adjust to changing market conditions. Towards the end of 2017, our investment advisor began to observe an increase in the opportunities to participate in projects that were largely similar to our operating assets in terms of the long-term risks, but which promised additional returns if we could manage some additional risks in the early stages of the investment lifecycle. As a result, we determined that we should expand our investment capabilities to include four basic investment categories:
1.Operating Assets – As a continuation of our initial strategy, the company will continue to invest in solar, wind and other alternative energy assets that are already in commercial operation and generating investment returns through the sale of contracted electricity and environmental attributes.
2.Commercial Operation Date (“COD”) – The company will also purchase assets that have been constructed by developers but have not been placed in service. Functionally these assets are generally ready to generate electricity and have reached a milestone known as the COD. While we have determined that a modest investment premium could be obtained by investing at COD, most importantly the term of the contracted cash flows is maximized through this strategy.
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3.Notice to Proceed (“NTP”) – We further determined that we could invest in assets that had not yet been constructed but that had received substantially all of the permits necessary to begin construction, a milestone known as NTP. While potentially riskier than operating or COD projects due to the level of construction risk, we believe that the additional return associated with these projects more than compensates for the additional risk. Furthermore, when we invest in NTP assets we have the added benefit of having more control of equipment selection and implementation of construction best practices, which positively affects the long-term performance of our plants. With the continued growth of the renewable energy market, driven by increases in the level of Renewable Portfolio Standards in several states and the planned wind-down of federal tax incentives, we identified a significant number of NTP transactions coming to market and an opportunity to develop strong pipeline-type relationships with the developers of these projects. Besides increasing returns to investors, this has enabled management to substantially increase our access to a proprietary pipeline of sound projects.
4.Special Situations –We also determined there are market opportunities for selected projects driven by either technical or financial issues, either at the project or owner level, that can be relatively easily resolved by accessing the broad range of expertise we have in-house to deal with our day-to-day operations. Therefore, we determined that on a limited basis the company would seek investments that had these characteristics, since by resolving the issues we have the potential to generate above-market returns.
In order to execute on this strategy, management recognized the need to build a dedicated team of technical asset management professionals. Greenbacker Administration therefore began hiring a team of experienced engineers and construction managers, which enabled the company to expand our investment focus into these additional categories of investment. Having access to the technical expertise enabled the company to purchase operationally challenged solar and wind farms while having a sound financial understanding of the costs and time required to resolve the issues. Having an in-house team of technical asset management professionals increases our ability to extract revenue from aging solar assets through repowers and plant optimization. It also allows us to capitalize on the acquisition of “distressed” assets as the number of those assets exponentially increases over the coming years. Lastly, it enabled us to invest in earlier-stage projects where the projects were fully permitted but construction had not yet commenced. Having access to this level and breadth of expertise is a major competitive advantage for the company in the marketplace.
Strategic Considerations of Investing in NTP Projects
We believe that investing across the four investment categories discussed above provides the best opportunity for the company to generate superior investment returns over the medium term, diversify our portfolio, and create a proprietary pipeline of sound investment opportunities for future growth. The downside of this approach is that investing in pre-operational solar and wind projects that are underperforming has a negative impact on near-term cash flows and dividend coverage. To minimize the downside effects of the strategy, management has continued to explore more sophisticated financing tools to enable us to direct more of our investable capital into current income-generating investments going forward. As the size of our portfolio grows, our ability to access the more sophisticated financial products increases.
History of Distribution Coverage
2014 - 2018
During the period from April 2014, when we started raising capital, through the end of 2017, our investment strategy consisted wholly of purchasing operating renewable energy projects that were in service and generating income from the sale of electricity under long-term power purchase contracts. By investing exclusively in operating assets, the company was able to demonstrate steady improvement in distribution coverage through that period. This initial operational period also corresponded to a significant increase in assets under management, as well as the deployment of capital in income producing renewable energy operating assets. During 2018, the company began to expand its investment focus with the purchase of the Midway III project in September 2018. There were no assets under construction in 2017, whereas by December 31, 2018, the company’s investment portfolio included a total of $67 million of to-be-constructed assets. Given the substantial increase in non-income-generating assets, the distribution coverage ratio fell to 54.58% on average assets by December 31, 2018.
2019
By December 31, 2019, total capital deployed in pre-operational and non-earning assets reached approximately $129 million which amounted to 31.5% of net assets, or 19.1% of the gross investment amount. In addition, Greenbacker Administration costs increased approximately $3 million year over year due to the increase in specialist headcount to manage the construction and operational risks associated with these in investment initiatives. These increased costs directly reduced the operating cash flows from project-level entities that would otherwise have been available to distribute to the company as
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dividend income. When these projects commenced operations, any increase in the fair value of the project was recognized as an unrealized gain in the statement of operations, not as investment income. Thus, while costs incurred prior to operation reduce the dividend coverage ratio, any unrealized gains on the value of the project after reaching operations has no effect on the dividend coverage ratio.
2020
As of December 31, 2020, total capital deployed in pre-operational and non-earning assets reached approximately $144 million which amounts to 26.0% of net assets, or 13.4% of the gross investment amount. In addition, Greenbacker Administration costs continued to increase due to the increase in specialist headcount to manage the construction and operational risks associated with these investment initiatives. These increased costs directly reduced the operating cash flows from project-level entities that would otherwise have been available to distribute to the company as dividend income. Consistent with 2019, as these projects commenced operations, any increase in the fair value of the project was recognized as an unrealized gain in the statement of operations, not as investment income. Thus, while costs incurred prior to operation reduce the dividend coverage ratio, any unrealized gains on the value of the project after reaching operations has no effect on the dividend coverage ratio.
2021
As of March 31, 2021, total capital deployed in pre-operational and non-earning assets reached approximately $222 million which amounts to 22.3% of net assets, or 15.1% of the gross investment amount. Additionally, as a result of the significant capital raised during the three months ending March 31, 2021, the Company has $315 million in investments in money market funds as of March 31, 2021 amounting to an additional 31.6% of our net assets, or 21.5% of our gross investment amounts. Consistent with historical trends, as these projects commenced operations, any increase in the fair value of the project was recognized as an unrealized gain in the statement of operations, not as investment income. Thus, while costs incurred prior to operation reduce the dividend coverage ratio, any unrealized gains on the value of the project after reaching operations has no effect on the dividend coverage ratio. While pre-operational assets continues to increase, from a near term financial perspective, the company’s financial statements and overall dividend coverage ratio is negatively impacted.
Demonstrating Value Creation Through Selected Asset Sales
During 2019 and continuing into 2020, we determined that the company would engage in a process of selling selected projects that it considered to be non-core investments, or for which there were compelling opportunities to sell at prices in excess of original cost.
In the three months ended March 31, 2021, the company did not have any sales.
During the year ended December 31, 2020, the company sold two operating portfolios and a portion of another operating portfolio. A discussion of the acquisition and sale process for the operating portfolios sold in 2020 are as follows:
Residential Solar Portfolios
Greenbacker Residential Solar Portfolio
Origination Process. In the second quarter of 2016, the company purchased 1,610 operating residential photovoltaic solar systems from One Roof Energy (“ORE”) located in California, Connecticut, Massachusetts, New Jersey and New York. While Greenbacker had focused exclusively upon purchasing commercial and utility solar projects since commencement of operations, the deal team identified an opportunity to purchase these assets from ORE at a price that was extremely attractive, especially given the high credit quality of the homeowners (Average FICO Score of 740). The company was able to purchase an additional 1,015 residential solar systems early in early 2017 as ORE experienced financial problems that forced it to cease operations. These portfolios provided an attractive cash flow from operations as well as higher than average cash yield
Greenbacker Residential Solar II Portfolio
Origination Process. Having successfully purchased and managed a portfolio of residential solar assets, earlier in the year, the company sought to increase its scale and take advantage of dislocations in the residential solar market, so it agreed to purchase an additional 1,250 operating residential photovoltaic solar systems located in California, Arizona, New York, New Jersey, Massachusetts, Maryland, Nevada and Connecticut from Terraform, a residential solar developer whose parent company, SunEdison, had gone into bankruptcy. While the transaction was very complex, we were highly attracted to this portfolio due to the high credit quality of the residential homeowners, and felt that the
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price we paid for the portfolio was well below the market prices we had observed in other residential solar portfolio sales and securitizations. Lastly, there was estimated to be considerable upside in this portfolio if we could complete construction of some of the to-be-built residential solar projects. Through active management we were able to complete construction and operate a number of additional projects that were purchased alongside the operating projects, and were also able to improve the overall management of the portfolio.
Sale Process:
In the third quarter of 2019, the company decided to explore the potential exit of the entirety of its residential solar business to take advantage of market yield compression and our estimation that the market had reached the late stage of a bull market cycle. Management’s view was that maintaining exposure to consumer credit in the form of residential rooftop power contracts was increasingly imprudent. The company began a process in the final quarter of 2019 with a dedicated buyer and was able to complete the sale of the portfolio in the first quarter of 2020.
Commercial Solar Portfolios
GEH Portfolio
Origination Process. In February 2015, the company purchased a portfolio of 13 commercial solar systems located in various states across the US from MP2 Capital and Blu Leaf Ventures, which we subsequently described as the “East to West Assets” included in the GEH Portfolio. These assets consisted of two 2.0 MWac commercial solar systems located in North Carolina. Then in December 2015 the company purchased a portfolio of two commercial solar systems from Heelstone Energy, LLC, including one 5.0 MWac system located in North Carolina, which was also added to the GEH Portfolio. All three projects were placed in service from 2011 to 2013, and sold 100% of the power produced to Duke Energy, an investment grade offtaker, through 15-20-year PPAs. The projects were accumulated as part of the process of adding affordable operating solar projects with solid offtakers to our portfolio in the very early phases of our investment activity.
Sale Process. In mid-2019, we began discussions with USF Holdings Corp. to sell 100% of our interest in the Raleigh Portfolio, which consisted of five projects in North Carolina, together with three of the projects in the GEH Portfolio located in North Carolina, all of which were selling power to Duke Energy. The transaction was structured with two separate closings, the first of which occurred in December 2019 in respect of the Raleigh Portfolio and the second in January 2020 in respect of the three projects from the GEH Portfolio. As these projects were nearing the 10-year mark of their remaining PPA terms, the company was looking to sell the Raleigh Portfolio and three projects from the GEH Portfolio to reinvest the proceeds into projects with longer-term contacted cash flows. The second close of the transaction, which included the three projects from the GEH Portfolio, occurred in January 2020.
PortfolioCost Basis of
Investment
Sale
Proceeds
Realized
Gain
(Loss)
Realized
Gain
(Loss)/Cost
Greenbacker Residential Solar Portfolios*$34,788,444$42,891,241$8,102,797 23.3 %
GEH Portfolio$12,659,419$11,084,803$(1,574,616)(12.4)%
*Updated for final proceeds after net working capital true up calculations.
Electricity Production by Our Investments
Between 2018 through the end of 2020, we observed a 187% year-over-year growth in annual total MWh production output across all renewable energy projects in our investment portfolio, resulting in a corresponding growth of revenues earned by our investments. This growth was due in large part to the increase in the capital we deployed in commercial solar and wind projects while increasing the diversification of our portfolio geographically, technologically and across various investment-grade offtakers. Also contributing to year-over-year growth was the purchase of our first biomass power plant asset in 2019, where we took advantage of a “special situation” investment opportunity and further increased the technology diversification within our portfolio.
Our strategy of purchasing smaller sub-utility-scale projects where there is less competition from large capital providers continues to enable us to build a highly diversified portfolio. While buying and operating smaller projects creates a lot of challenges versus buying large single projects, we see significant benefits in terms of the investment return potential, the ability to buy pipelines of deals from developers, and the overall scalability of the asset class, where solar and wind projects can be purchased to match capital inflows.
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The most significant growth by segment over the last three years was in wind, with a 247% increase in annual MWh production from 2018 through 2020. This increase is largely due to our 42.5 MW operating wind farm in Iowa and our 30.8 MW operating wind farm in Minnesota, both of which are included in Greenbacker Wind Portfolio - Holdco and were acquired in late 2019. Commercial solar achieved an increase of 106% in annual MWh production over the last three years. Also, at the end of 2020, we had 49 commercial solar assets under construction, and one wind asset under construction, which are expected to increase in value as a result of the growth in production and revenues of our portfolio in 2021 and beyond.
For the three months ended March 31, 2021 and March 31, 2020, the total megawatt hours produced across all renewable energy projects in our investment portfolio were 324,470 MWh and 231,239 MWh respectively. We observed growth of 40% from the first quarter of 2020 to the first quarter of 2021. The most significant growth by segment for the first three months of 2021 as compared to the first three months of 2020 was in commercial solar. This increase of 137% YoY was largely due to the Turquoise Solar project included in the Other Commercial Solar Portfolio which comprises 61.2 MW in Nevada and 124.9 MW of operating assets that turned on throughout 2020 and into 2021 within the Trillium Portfolio.
MWh by SegmentThree months ended March 31,
2021
Three months ended March 31,
2020
Twelve months ended December 31,
2020
Twelve months ended December 31,
2019
Commercial Solar112,373 47,320 287,867 245,015 
Residential Solar— 3,961 4,058 32,934 
Wind188,717 155,894 606,725 271,118 
Biomass23,380 24,064 92,241 67,892 
Total324,470 231,239 990,891 616,959 
cik0001563922-20210331_g1.jpg
Net Asset Value and Monthly Share Value Determinations in Connection with Our Offerings
Since commencing operations on April 25, 2014, the company has sold shares on a continuous basis at offering prices that were based upon NAV (through September 30, 2020) and a Monthly Share Value, effective October 1, 2020.
As described above, we determine our NAV for presentation in our financial statements. In addition, we have adopted a model, as explained below, that adjusts the value of our assets and liabilities from GAAP-based fair value to a Monthly Share Value (“Monthly Share Value”) for the purpose of establishing a purchase and repurchase price for our shares.

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We calculate our Monthly Share Value per share in accordance with the valuation guidelines that have been approved by our Board of Directors. As a general rule we will continue to monitor the valuation of the company’s entire investment portfolio on a daily basis and make adjustments to the offering price as necessary as soon as is practical thereafter to reflect any changes in market conditions that materially impact the value of our net assets. On the last business day of every month following the valuation date, the GCM Investment Committee will meet to consider the appropriateness of the Monthly Share Value. As part of that consideration, it will consider the current market values of our liquid and illiquid investment portfolios. The GCM Investment Committee will then set new offering prices based upon the Monthly Share Value, taking into account any movements in the valuation of our liquid portfolio and any material changes in the valuation of our illiquid portfolio due to changed market conditions. The new offering prices will be announced following that determination and take effect on the first business day of the following month.

Monthly Share Value is the basis for (1) determining the offering price for each class of our shares and the price per share that is paid to shareholder participants in our share repurchase program; and (2) the value of an investment in our shares, as shown on each shareholder’s periodic customer account statement. The Monthly Share Value for each class of shares will be evaluated alongside the net proceeds per share to us from this offering to ensure that the net offering price per share is not above or below our Monthly Share Value per share. While we believe our Monthly Share Value calculation methodologies are consistent with standard industry practices, there is no rule or regulation that requires we calculate Monthly Share Value in a certain way. Monthly Share Value should not be considered equivalent to members’ equity or any other GAAP measure.

Our Monthly Share Value per share does not represent the amount of our assets less our liabilities in accordance with GAAP. We do not represent, warrant or guarantee that:

a shareholder would be able to realize the Monthly Share Value per share for the class of shares a shareholder owns if the shareholder attempts to sell its shares;

a shareholder would ultimately realize distributions per share equal to the Monthly Share Value per share for the class of shares it owns upon liquidation of our assets and settlement of our liabilities or upon a sale of our company;

shares of our limited liability company interests would trade at their Monthly Share Value per share on a national securities exchange;

a third-party would offer the Monthly Share Value per share for each class of shares in an arm’s-length transaction to purchase all or substantially all of our shares; or

the Monthly Share Value per share would equate to a market price of an open-ended renewable energy fund.

The following details the adjustments to reconcile members’ equity under GAAP to our Monthly Share Value:

The accrued shareholder servicing fee represents the accrual for the full cost of the shareholder servicing fee for Class P-S and Class P-T shares. Under GAAP, we accrued the full cost of the shareholder servicing fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum shareholder servicing fee) as an offering cost at the time we sold the Class P-S and Class P-T shares. For purposes of our Monthly Share Value, we recognize the shareholder servicing fee as a reduction of Monthly Share Value on a monthly basis as such fee is paid.

The Advisor will advance certain organizational and offering expenses on our behalf through December 31, 2022. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For Monthly Share Value, such costs will be recognized as a reduction to Monthly Share Value as they are charged to equity ratably over 60 months.
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The company's shares had been offered at the following prices, based on the then current net asset value determination through the period ending September 2020. Commencing as of October 1, 2020, the offering prices are determined monthly, as opposed to quarterly, and are based upon the Monthly Share Value determination.
PeriodClass
FromToACIP-AP-IP-SP-TP-D
25-Apr-144-Nov-15$10.00 $9.58 $9.19 N/AN/AN/AN/AN/A
5-Nov-154-Feb-16$10.02 $9.60 $9.21 N/AN/AN/AN/AN/A
5-Feb-165-May-16$10.05 $9.62 $9.23 N/AN/AN/AN/AN/A
6-May-163-Aug-16$10.07 $9.64 $9.25 $9.59 $8.81 N/AN/AN/A
4-Aug-166-Nov-16$10.23 $9.79 $9.39 $9.79 $8.95 N/AN/AN/A
7-Nov-167-Feb-17$10.28 $9.58 $9.45 $9.78 $8.83 N/AN/AN/A
8-Feb-174-May-17$10.22 $9.53 $9.39 $9.70 $8.76 N/AN/AN/A
5-May-1717-May-17$10.17 $9.48 $9.34 $9.70 $8.69 N/AN/AN/A
18-May-173-Aug-17$9.74 $9.07 $8.94 $9.70 $8.69 N/AN/AN/A
4-Aug-172-Nov-17$9.72 $9.08 $8.93 N/A$8.73 N/AN/AN/A
3-Nov-175-Feb-18$9.74 $9.09 $8.94 N/A$8.75 N/AN/AN/A
6-Feb-186-May-18$9.78 $9.09 $8.98 $9.65 *$8.81 N/AN/AN/A
7-May-182-Aug-18$9.80 $9.12 $9.01 $9.68 $8.84 N/AN/AN/A
3-Aug-1831-Oct-18$9.83 $9.17 $9.03 $9.69 $8.90 N/AN/AN/A
1-Nov-186-Feb-19$9.79 $9.15 $8.99 $9.68 $8.89 N/AN/AN/A
7-Feb-196-May-19$9.63 $9.01 $8.84 $9.50 **$8.76 N/AN/AN/A
7-May-191-Aug-19N/AN/AN/AN/A$8.76 N/AN/AN/A
2-Aug-198-Nov-19N/AN/AN/AN/A$8.77 N/AN/AN/A
9-Nov-1919-Mar-20N/AN/AN/AN/A$8.93 N/AN/AN/A
20-Mar-2018-May-20N/AN/AN/AN/A$8.90 N/AN/AN/A
19-May-2020-Aug-20N/AN/AN/AN/A$8.95 N/AN/AN/A
21-Aug-201-Nov-20N/AN/AN/AN/A$9.02 N/AN/AN/A
2-Nov-2031-Jan-21N/AN/AN/A$9.42 $9.02 $9.02 $9.02 $9.02 
1-Feb-2126-Feb-21N/AN/AN/A$9.38 $8.96 $9.00 $9.00 $9.00 
1-Mar-2131-Mar-21N/AN/AN/A$9.44 $9.02 $9.00 $9.00 $9.00 
1-Apr-2130-Apr-21N/AN/AN/A$9.39 $8.92 $8.99 $9.50 $9.20 
3-May-21-N/AN/AN/A$9.39 $8.92 $8.99 $9.50 $9.20 
*     Effective April 16, 2018
**    Ceased February 8, 2019 and recommenced as of November 2, 2020
Liquidity and Capital Resources
As of March 31, 2021, and December 31, 2020, the company had $8,947,086 and $4,675,836 in cash and restricted cash, respectively. Our current cash balance is generally reflective of the cash necessary to fund normal operations. In 2021, we anticipate continuing to (1) increase our draw on current financing facilities; (2) enter into new financing arrangements and (3) raise additional equity through our current private placement. We use our cash and additional liquidity facilities to fund the acquisition, construction and operation of renewable energy and energy efficiency and sustainable development projects, make investments in renewable energy businesses, repay principal and interest on our borrowings, make distributions to our members and fund our operations. Our primary sources of cash generally consist of:
the net proceeds from the current offering;
dividends, fees, and interest earned from our portfolio of investments, as a result of, among other things, cash flows from a project’s power sales;
proceeds from sales of assets and capital repayments from investments;
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financing fees, retainers and structuring fees;
tax equity capital contributions in partnerships where the company is the managing member; and
borrowing capacity under current and future financing sources.
Operating entities of the company, which are accounted for as investments using fair value in the company’s consolidated financial statements under ASC 820, had approximately $355,465,282 and $416,963,053 in outstanding notes payable collateralized by certain solar assets and membership interests in limited liability companies included in the Eagle Valley Biomass, GB Wind HoldCo, GEH, Greenbacker Wind Holdings II, Other Commercial Solar and Trillium Portfolios as of March 31, 2021 and December 31, 2020, respectively.
Since the company maintains operating control over all entities with project-level debt outstanding, we have included the total amount of the debt outstanding in the below table, summarizing notes payable associated with the company’s operating subsidiaries as well as GREC and the company.
On January 5, 2018, the company, through GREC HoldCo, entered into a Credit Agreement by and among the company, the company’s wholly owned subsidiary, GREC, the lenders party thereto and Fifth Third Bank, as administrative agent, as sole lead arranger, sole lead bookrunner, and as swap counterparty. The credit facility (the “Credit Facility”) consisted of a loan of up to the lesser of $60,000,000 or a borrowing base amount based on various solar projects that act as collateral for the credit facility, of which approximately $25.7 million was drawn down at closing. The Credit Facility allowed for additional drawdowns through December 31, 2018, and converted to a term loan with a maturity on January 5, 2024.
On June 20, 2019, the company, through GREC HoldCo, entered into an Amended and Restated Credit Agreement with the lenders party thereto and Fifth Third Bank, as administrative agent, sole lead arranger, sole lead bookrunner and swap counterparty. The new credit facility (the “New Credit Facility”) consists of a loan of up to the lesser of $110,000,000 or a borrowing base amount based on various solar projects that act as collateral for the credit facility, of which approximately $58.3 million was drawn down at closing. In November 2020, the company, through GREC HoldCo, entered into the Second Amended and Restated Credit Agreement, which amends the New Credit Facility to make available a non-revolving line of credit facility that will convert into a term loan facility and a letter of credit facility. The commitments of the lenders aggregate to $97,822,841 between existing term loans, future committed loans and letters of credit, of which approximately $90.7 million was drawn down at closing. The New Credit Facility allows for additional drawdowns through November 25, 2021, at which point the outstanding loans shall convert to an additional term loan that mature on June 20, 2025.
The company will use the net proceeds of borrowings under the New Credit Facility for investment in additional alternative energy power generation assets that are anticipated to become projects and for other general corporate purposes. Loans made under the New Credit Facility bear interest at 1.75% in excess of the three-month LIBOR. Prior to the New Credit Facility converting to a term loan, quarterly commitment fees on the average daily unused portion of the Credit Facility were payable at a rate per annum of 0.50%.
Borrowings under the New Credit Facility are back-leveraged and secured by all of the assets of GREC HoldCo and the equity interests of each direct and indirect subsidiary of the company. The company, GREC and each direct and indirect subsidiary of the company are guarantors of the company’s obligations under the New Credit Facility. GREC has pledged all of the equity interests of GREC HoldCo as collateral for the New Credit Facility.
Regarding the Credit Facility, the company has entered into six separate interest rate swap agreements. The first swap, effective July 29, 2016, has an initial notional amount of $4,300,000 to swap the floating-rate interest payments on the original facility 1 term loan for a corresponding fixed payment. The fixed swap rate is 1.11%. The second swap, with a trade date of June 15, 2017 and an effective date of June 18, 2018 and an initial notional amount of $20,900,650, was used to swap the floating-rate interest payments on an additional principal amount of the Credit Facility, for a corresponding fixed payment. The fixed swap rate is 2.26%. The third swap, with a trade date of January 11, 2018 and an effective date of December 31, 2018 and an initial notional amount of $29,624,945 was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.65%. The fourth swap, with a trade date of February 7, 2018 and an effective date of December 31, 2018 and an initial notional amount of $4,180,063, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.97%. The fifth swap, with a trade date of January 2, 2019 and an effective date of September 30, 2019 and an initial notional amount of $38,203,507, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.69%.  The sixth swap, with a trade date of February 19, 2021, an effective date of February 26, 2021 and an initial notional amount of
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$7,068,965, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 1.64%.
If an event of default shall occur and be continuing under the New Credit Facility, the commitments under the New Credit Facility may be terminated and the principal amount outstanding under the New Credit Facility, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable. 
On December 6, 2019 the company entered into a $15,000,000 revolving letter of credit facility agreement (“LC Facility”) with Fifth Third Bank. On January 30, 2020 the amount of $5.6 million was drawn down. On March 18, 2020 a repayment of $1.9 million was made, reducing the outstanding balance of the facility. On June 9, 2020 a repayment of the remaining outstanding balance occurred. In October 2020, the LC Facility agreement was amended to increase the aggregate principal amount to $22,500,000. On April 1, 2021, the LC Facility agreement was amended to maintain cash collateral in an amount equal to 100% of the outstanding obligation. The LC Facility matures on June 6, 2021, at which time any outstanding letters of credit will be due.
The weighted average interest rate on all notes payable outstanding at the company’s operating entities was 3.36% as of March 31, 2021.
The following table summarizes the notes payable balances of the company and its investment entities as of March 31, 2021:
Interest Rates
RangeWeighted
Average
Maturity DatesMarch 31, 2021
Fixed rate notes payable1.905%–9.088%1.92 %8/30/2021-09/29/2049$35,303,073 
Floating rate notes payable2.825%–4.250%3.48 %06/30/2022-12/29/2044409,061,407 
$444,364,480 
The principal payments due on the notes payable for the company and its investment entities for each of the next five years ending December 31, and thereafter, including amounts expected to be drawn down on existing commitments, are as follows:
Year ending December 31:Principal
Payments
202117,042,576 
202228,441,913 
202322,219,541 
202422,316,463 
202587,497,917 
Thereafter266,846,070 
$444,364,480 
In the future, we expect that our ongoing sources of financing will be through corporate-level credit facilities or other secured and unsecured borrowings. In addition, we expect to use other financing methods at the project level as necessary, including joint venture structures, construction loans, property mortgages, letters of credit, sale and leaseback transactions, other lease transactions and other arrangements, any of which may be unsecured or may be secured by mortgages or other interests in our assets.  Other sources of capital may include tax equity financings, whereby an investor receives an allocation of tax benefits as well as cash distribution and governmental grants.
Tax equity investors are passive investors, usually large tax-paying financial entities such as banks, insurance companies and utility affiliates that use these investments to reduce future tax liabilities. Depending on the arrangement, until the tax equity investors achieve their agreed-upon rate of return, they may be entitled to substantially all of the applicable project’s operating cash flow, as well as substantially all of the project’s ITCs, accelerated depreciation and taxable income or loss. Typically, tax equity financing transactions are structured so that the tax equity investors reach their target return between five and ten years after the applicable project achieves commercial operation.
As a result, a tax equity financing may substantially reduce the cash distributions from the applicable project available for debt service, and the period during which the tax equity investors receive most of the cash distributions may last longer than expected if the portfolio company’s energy projects perform below our expectations. While the terms of a tax equity financing
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may cause cash to be diverted away from the company to the tax equity investor for certain periods specified in the financing arrangement (often five to ten years, measured from commencement of the tax equity financing), then we expect to couple investments where cash is so restrained with other cash-flowing investments so as to provide cash for distributions to investors. To maintain a mix of cash flowing and non-cash flowing investments, our investment strategy will involve a combination of several types of investments.
Hedging Activities
In regard to the New Credit Facility, the company has entered into six separate interest rate swap agreements. The first swap, effective July 29, 2016, has an initial notional amount of $4,300,000 to swap the floating-rate interest payments on the original facility 1 term loan for a corresponding fixed payment. The fixed swap rate is 1.11%. The second swap, with a trade date of June 15, 2017 and an effective date of June 18, 2018 and an initial notional amount of $20,900,650, was used to swap the floating-rate interest payments on an additional principal amount of the Credit Facility, for a corresponding fixed payment. The fixed swap rate is 2.26%. The third swap, with a trade date of January 11, 2018 and an effective date of December 31, 2018 and an initial notional amount of $29,624,945, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.65%.
The fourth swap, with a trade date of February 7, 2018 and an effective date of December 31, 2018 and an initial notional amount of $4,180,063 was used to swap the floating rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.97%. The fifth swap, with a trade date of January 2, 2019 and an effective date of September 30, 2019 and an initial notional amount of $38,203,507, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 2.69%. The sixth swap, with a trade date of February 19, 2021, an effective date of February 26, 2021 and an initial notional amount of $7,068,965, was used to swap the floating-rate interest payments on the remaining unhedged portion of the Credit Facility, as well as the estimated additional drawdowns, for a corresponding fixed payment. The fixed swap rate is 1.64%.
In regard to our investment in the Canadian Northern Lights assets included in the Other Commercial Solar Portfolio, with 79 solar assets located in and around Toronto, Ontario, Canada, we have foreign currency risk related to our revenue and operating expenses, which are denominated in Canadian Dollars as opposed to U.S. Dollars. While we are currently of the opinion that the currency fluctuation between the Canadian and U.S. Dollar will not have a material impact on our operating results, we may in the future hedge this risk through the use of currency swap transactions or other financial instruments if the impact on our results of operations becomes material.
Contractual Obligations
While the company does not include a contractual obligations table herein, as all obligations of the company are short term, we have included the following information related to commitments of the company to further assist investors in understanding our outstanding commitments.
Advisory Agreement
GCM, a private firm that is registered as an investment Adviser under the Advisers Act serves as our Advisor. Under the direction of our Board of Directors, GCM manages our day-to-day operations and provides advisory and management services to us. The advisory agreement was previously approved by our Board of Directors and became effective on April 25, 2014. Unless earlier terminated, the advisory agreement will remain in effect for successive one-year periods if approved annually by a majority of our independent directors. The advisory agreement was most recently re-approved in February 2021, for the one-year period commencing April 25, 2021.
Pursuant to the advisory agreement, GCM is authorized to retain one or more sub-advisors with expertise in our target assets to assist GCM in fulfilling its responsibilities under the advisory agreement. However, GCM will be required to monitor any sub-advisor to ensure that material information discussed by management of any sub-advisor is communicated to our Board of Directors, as appropriate. If GCM retains any sub-advisor, our Advisor will pay such sub-advisor a portion of the fees that it receives from us. We will not pay any additional fees to a sub-advisor. While our Advisor will oversee the performance of any sub-advisor, our Advisor will remain primarily liable to us to perform all of its duties under the advisory agreement, including those delegated to any sub-advisor. As of March 31, 2021, no sub-advisors have been retained by GCM.
We pay GCM a base management fee for advisory and management services. The base management fee is calculated at a monthly rate of 0.167% (2.00% annually) of our gross assets up to $800,000,000 (including amounts borrowed). The base
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management fee monthly rate is 0.14583% (1.75% annually) for gross assets from $800,000,001 to $1,500,000,000 and 0.125% (1.50% annually) for gross assets greater than $1,500,000,000. The Special Unitholder, an entity affiliated with our Advisor, will hold the special unit in our company entitling it to a performance participation fee, as well as a liquidation performance participation fee, payable upon a listing or a liquidation.
Administration Agreement
Greenbacker Administration serves as our Administrator. Since commencement of operations, Greenbacker Administration delegated certain of its accounting-related administrative functions to U.S. Bancorp Fund Services, LLC (doing business as “U.S. Bank Global Fund Services”). Greenbacker Administration may enter into similar arrangements with other third-party administrators, including with respect to fund accounting and administrative services. Greenbacker Administration performs certain asset management, construction management, compliance and oversight services, as well as asset accounting and administrative services, for many of the company’s investments. The fee for these services is billed at cost to the company’s individual investments.
Pledge of Collateral and Unsecured Guarantee of Loans to Subsidiaries
Borrowings under the GREC EH Credit Facilities are secured by the assets, cash, agreements and equity interests in GREC HoldCo and its subsidiaries. The LLC and GREC are guarantors of GREC HoldCo’s obligations under the GREC EH Credit Facilities. Pursuant to various loan agreements between the operating entities of the company and various lenders, the operating entities have pledged all operating assets as well as the membership interests in various operating subsidiaries as collateral for the term loans, with maturity dates ranging from January 2021 through September 2049. The amount of the unsecured guaranty on the outstanding principal of the GREC EH Credit Facility is approximately $89 million as of March 31, 2021.
Investment in To-Be-Constructed Assets
Pursuant to various engineering, procurement and construction contracts to which twenty-six entities of the company are individually a party, the entities, and indirectly the company, has committed an outstanding balance of approximately $257.6 million to complete construction of the facilities. Based upon current construction schedules, the expectation is that these commitments will be fulfilled in 2021 into 2022. In addition, pursuant to various membership interest purchase agreements to which the company's operating entities are individually a party, the operating entities, and indirectly the company through the pledge of parent company guarantees, have committed an outstanding balance of approximately $315.2 million as of March 31, 2021 to complete the closing pursuant to the membership interest purchase agreements. The company plans to use debt and tax equity financing as well as additional capital raised to fund such commitments.
Renewable Energy Credit
For certain solar power systems in the GEH, Other Commercial Solar, Greenbacker Wind Holdings II and Trillium Portfolios (the “Portfolios”), the company has received incentives in the form of RECs. In certain cases, the Portfolios have entered into fixed-price, fixed volume forward sale transactions to monetize these RECs for specific entities. If we are unable to satisfy the transaction requirements due to lack of production, we may have to purchase RECs on the spot market and/or pay specified replacement cost damages. Based upon current production projections, we do not expect a requirement to purchase RECs to fulfill our current REC sales contracts. If RECs earned by the Portfolios are not sold on a forward basis, they are sold in the spot market, with revenue recorded in the accounts of the underlying investment when received.
Recording of a sale of RECs under GAAP is accounted for under Accounting Standards Codification Topic 606, Revenue Recognition. There are no differences in the process and related revenue recognition between REC sales to utilities and non-utility customers. Revenue is recorded in our wholly owned, single-member LLCs when all revenue recognition criteria are met, including that there is persuasive evidence that an arrangement exists (typically through a contract), services are rendered through the production of electricity, pricing is fixed and determinable under the contract and collectability is reasonably assured. The accounting policy adopted by our wholly owned, single-member LLC related to RECs is that the revenue recognition criteria are met when the energy is produced, and a REC is created and transferred to a third party.
If any of our REC counterparties fail to satisfy their contractual obligations, our costs may increase under replacement agreements that may be required. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our advisory agreement. For the majority of the forward REC contracts currently effective as of March 31, 2021, GREC and/or the company has provided an unsecured guaranty related to the delivery obligations under these contracts. The amount of the unsecured guaranty on REC contracts is nil as of March 31, 2021.
Pledge of Parent Company Guarantees
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Pursuant to various contracts in which the company has provided a parent company guarantee, excluding those discussed above, the operating entities, and indirectly the company, has committed $111.6 million in unsecured guarantees, in the event of a default at the underlying entity as of March 31, 2021.
We currently have no off-balance-sheet arrangements, including any risk management of commodity pricing or other hedging practices.
Distributions
Subject to the Board of Directors’ review and approval and applicable legal restrictions, we intend to authorize and declare distributions on a quarterly basis and pay distributions on a monthly basis. We will calculate each member’s specific distribution amount for the period using record and declaration dates, and each member’s distributions will begin to accrue on the date we accept each member’s subscription for shares. From time to time, we may also pay interim special distributions in the form of cash or shares, with the approval of our Board of Directors.
Distributions will be made on all classes of our shares at the same time. The cash distributions with respect to the Class C, P-S and P-T shares are lower than the cash distributions with respect to Class A, I, P-A, P-I and P-D shares because of the distribution fee relating to Class C, P-S and P-T shares, which will be allocated as a Class-specific charge. Amounts distributed to each class will be allocated among the holders of our shares in such class in proportion to their shares.
Cash distributions paid during the periods presented were funded from the following sources noted below:
For the three months ended March 31,
2021
For the three months ended March 31,
2020
Cash from operations$— $1,598,905 
Offering proceeds8,066,157 5,511,620 
Total Cash Distributions$8,066,157 $7,110,525 
The company expects to continue to fund distributions from a combination of cash from operations as well as offering proceeds. Due to the company’s change in investment portfolio composition to include a greater percentage of pre-operational assets, a significant amount of distributions will continue to be funded from offering proceeds. We expect distributions to continue at the current level and we do not currently anticipate significant changes in the level of distributions in future periods.
Inflation
We do not anticipate that inflation will have a significant effect on our results of operations. However, in the event of a significant increase in inflation, interest rates could rise, and our projects and investments may be materially adversely affected.
Seasonality
Certain types of renewable power generation may exhibit seasonal behavior. For example, wind power generation is generally stronger in winter than in summer as wind speed tends to be higher when the weather is colder. In contrast, solar power generation is typically stronger in the summer than in the winter. This is primarily due to the brighter sunshine, longer days and shorter nights of the summer months, which generally result in the highest power output of the year for solar power. Because these seasonal variations are relatively predictable for these types of assets, we factor in the effects of seasonality when analyzing a potential investment in these target assets. Therefore, the impact that seasonality may have on our business, including the cash flows from our investments in our target assets, will depend on the diversity of our investments in renewable energy, energy efficiency and other sustainability-related projects in our overall portfolio at such time as we have fully invested the proceeds from this offering. However, in the early stages of our operations, or to the extent our initial investments are concentrated in either solar or wind power, we expect our business to be seasonal based on the type of investment, as discussed above.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The following qualitative disclosures regarding our market risk exposures — except for (i) those disclosures that are statements of historical fact; and (ii) the descriptions of how we, along with our Advisor, manage our primary market risk exposures — constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Our primary market risk exposures as well as the strategies used and to be used by the Advisor managing such exposures are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of our risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation and many other factors could result in material losses as well as in material changes to our risk exposures and risk management strategies. There can be no assurance that our current market exposure and/or risk management strategies will not change materially or that any such strategies will be effective in either the short or long term. Investors must be prepared to lose all or substantially all their investment in the shares.
We anticipate that our primary market risks will be related to commodity prices, the credit quality of our counterparties and project companies and market interest rates. We will seek to manage these risks while, at the same time, seeking to provide an opportunity for members to realize attractive returns through ownership of our shares.
Commodity price risk
Investments in renewable energy and energy efficiency projects and businesses expose us to volatility in the market prices of electricity. To stabilize our revenue, we generally expect our projects will have PPAs with local utilities and offtakers that ensure that all or most of electricity generated by each project will be purchased at the contracted price. In the event any electricity is not purchased by the offtaker or the energy produced exceeds the offtaker’s capacity, we generally will sell that excess energy to the local utility or another suitable counterparty, which would ensure revenue is generated for all electricity produced. We may be exposed to the risk that the offtaker will fail to perform under the PPA, with the result that we will have to sell our electricity at the market price, which could be disadvantageous.
In regard to the market price of oil, our investments are little affected by the volatility in this market, as most oil consumed in the U.S. today is used for transportation infrastructure and not for the generation of electricity.
Credit risk
Through our investments in our target assets, we expect to be indirectly exposed to credit risk relating to counterparties to the electricity sales agreements (including PPAs) for our projects as well as the businesses in which we invest. If counterparties to the electricity sales agreements for our projects or the businesses in which we invest are unable to make payments to us when due, or at all, our financial condition and results of operations could be materially adversely affected. GCM will seek to mitigate this risk by deploying a comprehensive review and asset selection process and careful ongoing monitoring of acquired assets. In addition, we expect our projects will seek contracts with high-credit-quality counterparties. Nevertheless, unanticipated credit losses could occur, which could adversely impact our operating results. 
Changes in market interest rates
With respect to our proposed business operations, general increases in interest rates over time may cause the interest expense associated with our borrowings to increase, and the value of our debt investments to decline. Conversely, general decreases in interest rates over time may cause the interest expense associated with our borrowings to decrease, and the value of our debt investments to increase.
Changes in government incentives
Retrospective changes in the levels of government incentives may have a negative impact on current investments. Prospective changes in the levels of government incentives, including renewable energy credits and investment tax credits, may impact the relative attractiveness of future investments in various renewable energy projects, which could make it difficult for GCM to find suitable investments in the sector.
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Item 4. Controls and Procedures
Disclosure Controls
In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q, and determined that the disclosure controls and procedures are effective. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act are recorded, processed and summarized and reported within the time period specified in the applicable rules and forms.
Change in Internal Control Over Financial Reporting
No change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the period ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Any control system, no matter how well designed and operated, can only provide reasonable (but not absolute) assurance that its objectives will be met. Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None of us, GCM, or the Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against GCM or the Administrator.
Item 1A. Risk Factors
There have been no material changes from the risk factors disclosed under the heading “Risk Factors” in the LLC’s annual report on Form 10-K for the year ended December 31, 2020.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2021, the company sold 83,621 Class P-A shares, 17,027,155 Class P-I shares, 111,048 Class P-D shares, 15,741 Class P-T shares and 33,396,467 Class P-S shares under a private placement memorandum. During the year ended December 31, 2020, the company sold 37,155 Class P-A shares and 16,112,855 Class P-I shares under a private placement memorandum.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other information
Not applicable.
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Item 6. Exhibits
Exhibit
Number
Description of Document
3.1*
3.2*
10.1**
10.2*
10.3*
10.4*
10.5*
10.6*
24.1*Power of Attorney (included on the signature page hereto)
31.1**
31.2**
32.1**
32.2**
101The following materials from Greenbacker Renewable Energy Company LLC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 14, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Assets and Liabilities, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Changes in Net Assets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Schedules of Investments and (vi) Notes to the Consolidated Financial Statements
*Filed previously.
**    Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 14, 2021By /s/ Charles Wheeler
Charles Wheeler
Chief Executive Officer and Director
(Principal Executive Officer)
Greenbacker Renewable Energy Company LLC
Date: May 14, 2021By/s/ Richard C. Butt
Richard C. Butt
Chief Financial Officer and
Principal Accounting Officer
(Principal Financial and Accounting Officer)
Greenbacker Renewable Energy Company LLC
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