Company: ALCE
Filing Date: 2025-06-30
Form Type: 10-Q
Source: 0001213900-25-059349
Chunk: 248

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-30
Form: 10-Q
Item: Part I, Item 2
Chunk 248
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The Company revenue is a function of the volume
of electricity generated and sold by Company renewable energy facilities. The volume of electricity generated and sold by the Company’s
renewable energy facilities during a particular period is impacted by the number of facilities that have achieved commercial operations,
as well as both scheduled and unexpected repair and maintenance required to keep its facilities operational.

The costs the Company incurs to operate, maintain,
and manage renewable energy facilities also affect the results of operations. Equipment performance represents the primary factor affecting
the Company’s operating results because equipment downtime impacts the volume of the electricity that the Company can generate from
its renewable energy facilities. The volume of electricity generated and sold by the Company’s facilities will also be negatively
impacted if any facilities experience higher than normal downtime as a result of equipment failures, electrical grid disruption or curtailment,
weather disruptions, or other events beyond the Company’s control.

Seasonality and Resource Variability

The amount of electricity produced and revenues
generated by the Company’s solar generation facilities is dependent in part on the amount of sunlight, or irradiation, where the
assets are located. As shorter daylight hours in winter months result in less irradiation, the electricity generated by these facilities
will vary depending on the season. Irradiation can also be variable at a particular location from period to period due to weather or other
meteorological patterns, which can affect operating results. As most of the Company’s solar power plants are in the Northern Hemisphere,
the Company expects its current solar portfolio’s power generation to be at its lowest during the first and fourth quarters of each
year. Therefore, the Company expects first and fourth quarter solar revenue to be lower than in other quarters. As a result, on average,
each solar park generates approximately 15% of its annual revenues in Q1 every year, 35% in each of Q2 and Q3, and the remaining 15% in
Q4. The Company’s costs are relatively flat over the year, and so the Company will always report lower profits in Q1 and Q4 as compared
to the middle of the year.

Interest Rates on Company Debt

Interest rates on the Company’s senior debt
are mostly variable for the full term of finance at interest rates ranging from 6% to 30%.

In addition to the project specific senior debt,
the Company uses a small number of promissory notes in order to reduce, and in some cases eliminate, the requirement for the Company to
provide equity in the acquisition of the projects.