Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 1
Chunk 1
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 declines.
This method of operation is designed to bring more of the value created during the development cycle directly to Alternus, thereby reducing
equity requirements to build out a larger portfolio, as the margins captured can be reinvested in future growth. In addition, it provides
greater certainty of future revenue streams as the projects owned today reach planned operation dates in the future.

1

We generate our new project pipeline by working
closely with a cultivated network of local and international project development and strategic partners, that provide a continuous pipeline
of new projects for acquisition and construction and operation.

We believe that a core benefit of being a long-term
owner of these projects are the long-term recurring revenues and income, under long-term Power Purchase Agreements (“PPA”s)
or via service contracts to clients created from the stable and predictable income streams as the cumulative operational portfolio grows.
Every time we add a new project into the portfolio; we get a potential lift in long-term incomes that accumulates each time creating long-term
sustainable value for shareholders from the recurring revenue streams.

Notwithstanding this core focus, Alternus retains
the option to sell certain assets at a profit that would be immediately accretive to both income and cash and therefore reduce the need
to issue additional equity to public markets to support the business. This is particularly evident in the Microgrids segment where projects
that do not meet our long-term economic criteria, or where the client prefers to own the facilities directly, are sold as ‘turnkey’
for the full capital costs plus a margin.

Revenue Model:

Alternus generates revenues from two areas (1)
sale of clean energy, under long-term offtake agreements, to national power grids (Utility Scale Solar and Storage) or to corporate clients
(Microgrids) and (2) sale of turnkey solutions to clients for the full amount of capital expenditure plus a margin.

Sale of Clean Energy – Utility Scale
and Storage

The clean energy generated from a Utility Scale
renewable energy project is delivered directly to national utility power grids. Revenues are booked by multiplying the energy produced,
measured in megawatt hours (MWh), by the energy rate attributable to the hours during the reporting period. The rates received from either
local government or investment grade commercial customers are contracted under long-term contracts and/or from local energy markets at
the market rates prevailing as the energy is delivered. At any one time, Alternus aims to have approximately 70% of the energy rates contracted