Company Overview and How They Make Money

Hi all, this is my first post, I’ve tried to keep it easy to read. I’ll be very happy to hear any feedback you may have.

What is Enlight?: Enlight is a global renewable energy platform which develops, finances, constructs, owns and operates utility-scale renewable energy projects. Enlight generally retains ownership of its assets and earns recurring revenue from selling electricity over decades.

Why I chose to research Enlight?: Unless we figure out how to commercialize nuclear fusion in the near future, I believe, renewables and especially solar will be on the rise. This is due to a mix of falling hardware costs, rising electricity costs and green government/company initiatives.

It also happens to be a field I’m passionate about and somewhat knowledgeable in. And we all pay electricity bills, directly and indirectly.

How do they make money?: Enlight has three core business areas:

·        Solar power generation

·        Wind power generation

·        Energy storage (battery systems)

They primarily generate revenue from the sale of electricity produced by its operating renewable energy assets (solar and wind farms), pursuant to long-term PPAs (Power Purchasing Agreements).

Revenue is highly predictable because:

·        Electricity is sold under long-term PPAs, often lasting 10 to 30 years.

·        Many projects receive regulated or contracted pricing rather than relying solely on volatile wholesale electricity markets.

Battery Energy Storage Systems (BESS) allow them to increase revenue by providing grid balancing services as well as storing electricity during curtailment periods or when prices are low, and then selling electricity when prices are high.

Their renewable projects require very high upfront capital investment, relatively low maintenance and operating costs and have long asset lives (~25-35 years). Once assets are operational they can generate stable and predictable cash flow for decades at minimal cost.