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Customer Loans Receivable

3 Months Ended

Mar. 31, 2024

6. Customer Loans Receivable

In past years, the Company provided financing to qualified customers to purchase residential or commercial photovoltaic systems, as well as other products the Company offered in the U.S. Depending on the credit rating of customers, the interest rate generally ranges from 0.00% to 10.99% per annum with financing terms ranging from one to fifteen years. At March 31, 2024 and December 31, 2023, the percentage of the Company’s loan portfolio with a 0% interest rate is 5% and 14%, respectively.

The customer gives the Company a security interest in the photovoltaic systems and other products financed.

The following tables summarize the Company’s customer loan receivables by credit rating, determined at origination, for each vintage of the customer loan receivable portfolio at March 31, 2024:

	Year of Origination												March 31, 2024
	2024		2023		2022		2021		2020		Prior		Total		%
Prime — FICO score 680 and greater	$	-	$	-	$	-	$	-	$	141,710	$	5,164,659	$	5,306,369		86	%
Near-prime — FICO score 620 to 679		-		-		18,191		-		11,057		606,219		635,467		10	%
Sub-prime — FICO score less than 620		-		-		-		-		-		155,722		155,722		3	%
Business entity — FICO not available				-		-		48,396		22,932		-		71,328		1	%
Total Customer Loan Receivables, gross	$	-	$	-	$	18,191	$	48,396	$	175,699	$	5,926,600	$	6,168,886		100	%

The following tables summarize the Company’s customer loan receivables by credit rating, determined at origination, for each vintage of the customer loan receivable portfolio at December 31, 2023:

	Year of Origination												December 31, 2023
	2023		2022		2021		2020		2019		Prior		Total		%
Prime — FICO score 680 and greater	$	-	$	-	$	-	$	181,315	$	438,676	$	5,234,583	$	5,854,574		87	%
Near-prime — FICO score 620 to 679		-		19,117		-		18,107		42,175		622,398		701,797		10	%
Sub-prime — FICO score less than 620		-		-		-		-		72,489		84,992		157,481		2	%
Business entity — FICO not available				-		52,753		28,051		-		-		80,804		1	%
Total Customer Loan Receivables, gross	$	-	$	19,117	$	52,753	$	227,473	$	553,340	$	5,941,973	$	6,794,656		100	%

Customer loans receivable consist of the following as of March 31, 2024 and December 31, 2023:

	March 31, 2024			December 31, 2023
	(Unaudited)
Customer loans receivable, gross	$	6,168,886		$	6,794,656
Less: unamortized loan discounts		(572	)		(2,332	)
Allowance for loan losses		(328,308	)		(256,808	)
Customer loans receivable, net		5,840,006			6,535,516
Less: Current portion		1,395,744			2,212,574
Non-current portion	$	4,444,262		$	4,322,942

Principal maturities of the customer loans receivable at March 31, 2024 are summarized as follows:

For the year ending December 31,	Amount
2024 (remainder of)	$	1,395,744
2025		1,367,415
2026		1,203,664
2027		990,290
2028		665,563
Thereafter		546,210
Total customer loans receivable	$	6,168,886

The Company is exposed to credit risk on the customer loans receivable. Credit risk is the risk of loss arising from the failure of customers to meet the terms of their contracts with the Company or otherwise fail to perform as agreed.

The activity in the allowance for loan losses for customer loans receivable for the three months ended March 31, 2024 and 2023 is as follows:

	Three Months Ended March 31,
	2024		2023
	(Unaudited)
Balance – beginning of period	$	256,808	$	288,457
Provision for loan losses		61,298		106,862
Chargeoffs and adjustments		10,202		23,308
Balance – end of period	$	328,308	$	418,627

Total interest income on the customer loans receivable included in revenues was approximately $100,000 and $150,000 for the three months ended March 31, 2024 and 2023, respectively.