Greetings and welcome to the SolarCity First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Aaron Chew, Vice President of Investor Relations for SolarCity. Thank you, Mr. Chew, you may begin.

Thank you and good afternoon to all those joining us today for SolarCity's first quarter and 2015 earnings conference call. Leading the presentation today will be a discussion from our Chief Executive Officer, Lyndon Rive and our Chief Operating Officer, Tanguy Serra and our Chief Technology Officer, Peter Rive, as well as our Chief Financial Officer, Brad Buss, after which point and time we will open up the call for question. As a reminder today discussion will contain forward-looking statements that involve our views as of today, based on information is currently available to us, forward-looking statements should not be consider to guarantee, a future performance of results, and reflect information that may change over time. Please refer to SolarCity's quarterly shareholder letter issued today and the slides accompanying this presentation as well as our periodic reports filed with the Securities and Exchange Commission for a discussion of forward-looking statements and the factors and risks that could cause our actual results to differ from our forward-looking statements. We do not undertake any obligation to publicly update or revise any forward-looking statements. In addition, during the course of this call we will use a number of specially defined terms relating to our business metrics and financial results including non-GAAP financial metrics. We refer to the definitions and the required reconciliation between GAAP and non-GAAP financial metrics included in the shareholder letter issued today and the slides accompanying this presentation which are available on our Investor Relations website at investors.solarcity.com. And with that behind us I would like to introduce SolarCity's Chief Executive Officer, Mr. Lyndon Rive.

Thank you, Aaron. I am excited about today’s earnings call. As we’re going to provide additional information on the economic value we create every quarter. SolarCity is essentially two companies in one, with the development company and the power company. The development company is responsible for acquiring customers and getting solar systems installed. The power company provides the financing and in collect 30-years of recurring revenues through studying the energy. As we look at the development company for this quarter we book 237 megawatts which is a new record for the company. We also installed the 153 megawatt. Our residential business grew 108% year-over-year with a total of 139 megawatt. A total cost was 295 with a 9% decline year-over-year. Now we look at the power company we produced over 110 an hour of energy over the last 12 months. Our contracted customer payments increased by 1.2 billion this quarter and we now have 6.1 billion our contracted customer payment. We also have over 217,000 customers. For the quarter, we traded a $147 million of economic value. Brad will discuss this in more detail on later slides. Let’s take a closer look at our customer growth. As mentioned in previous earnings call, we have a goal of 1 million customers by mid 2018 in our 20% of the way of achieving this goal. To achieve this goal we need to grow at 60% year-on-year. Historically, we’ve grown at 95% which makes you feel confident in achieving the 1 million customer goal. As I just mentioned, a nominal contracts increased by $1.2 billion in the quarter this is a 144% increase year-on-year. We now have 6.1 billion nominal contracts. I am now going to hand it over to Tanguy Serra, our COO.

Thanks, Lyndon. Our residential business continues to more than double with installed - Q1 installs growing from 67 megawatts to 139 megawatts year-over-year. This is a combination of our existing states continue to grow, and the opening of new states like Nevada, New Hampshire and New Mexico. We are at 75 permanent warehouses in 16 states and have on opening one approximately every 15 days in 2015 identifying and expanding our geographic coverage. Through this growth, we have additional dedicated regional source through the academy that allow it to recruit on-board and train installers. Our commercial installers are flat year-on-year. However commercial is a very existing market with very strong booking and we expect to see significant growth in installs in that segment in 3Q and 4Q this year from jobs currently in the process. We have started to do commercial work with our crews and are seeing outstanding increase in productivity. As an example we installed a 157 kilowatt large commercial flat roof in three days versus an industry standard of over 20 days using our Zep mounting hardware. Our instillation costs have stayed flat in Q1 2015 versus Q4 2014 is a remarkable achievement given the winter month in East Coast in the harshness of installing through snow. I would note that our safety and quality continue to lead the industry and our sophisticated compensation structures are yielding solid results. Final prices in Q1 2015 were in the 70s which gives us significant comfort achieving our 1.90 cost target by 2017. Sales cost [indiscernible], but we expect that number to start trending down as our mix of bookings use towards lower cost channels in the coming quarters. Overhead is on a per watt basis and lower seasonal volumes in Q1, but the overall trend of scaling fixed cost remains unchanged. With that let me pass it over to Pete Rive, CTO and Co-founder of SolarCity.

Hi, everybody, we’ve exceeded 1 terawatt hour of energy production for the past 12 months and as we enter the spring and summer we are breaking records. Over the past couple of months we broken through the four, and five and six gigawatt hour a day a month. We are expecting to see summer trends continue in the future and at the scale were aspiring to we have to ensure the energy delivery is not intermittent and it is also available at night. So that’s a pretty good segway into our recent factory releases. As many of you know we announced new versions of our solar battery systems in all of our business units, commercial and government, microgrid and residential. We are seeing great growth and strong demand in commercial and microgrid offerings and the new test of batteries are helping to wide in the addressable markets so where we can offer those systems. On the residential side, our fully installed solar battery system costs are about one-third of what they were a year ago. We expect cost to decline further at manufacturing sales and over the next five to 10 years these costs reductions will make a feasible to deploy the battery by default with all of our solar power systems. A solar battery backup system will sell for $5,000 as an add-on to a leases and PPAs which is comparables to other backup generator options. It’s important to know that the test subtracts of 3500 dozens include the inventor, permitting, installation management software and electrical equipments to wire the circuits they need to be backed up. One other things are included in our turnkey service in our solar battery systems. Interestingly the residential backup generator market is actually larger than solar with over 3.5% of residential customers having…

Thanks Pete. Overall, I was very pleased with our Q1 results and I will cover some of the financial highlights that we’ve detailed on our earnings deck which is posted on the website. Slide 10 of that deck we had another record quarter on the financing front and we are in great shape for the rest of 2015. With respect to tax equity we created four new funds and we continue to see strong and growing interest from our current investors as well as new financial as well as corporate investors. Our undeployed tax equity capacity stood at 624 megawatt up from 592 megawatt as of our last call and the team is hard at work nailing down commitments well into 2016 already. Outside of tax equity it’s been very busy as you’ve seen from a bunch of press releases lately. In may we will begin our first drawdown on our revolving MyPower credit facility as you saw today we just closed on new $500 million aggregation debt facility. That’s at a rate of about 3% and again with the best cash advance rate that we have seen so far. Not only is this our largest ag facility to date it’s the first with three major bank partners it’s a revolving facility and most importantly we will be able to drawdown at installation which is approximately 90 days faster than our old facilities and is a huge benefit as we continue to lower our working capital cycle time going forward. With respect to ABS we are very close to a new facility. So there’s not a lot that I can publicly say expect that we anticipate all of our tax equity partnerships structures will be soon investment grade rated and will be continuing to work with all of the agencies…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Patrick Jobin with Credit Suisse. Please proceed with your question.

Congrats on the quarter and then certainly thanks for the new metrics, very helpful to get the unlevered IRR and the equity value here. So first, how should we think about the evolution of those numbers 11% from unlevered IRR given the geographic and segment mix into Q2 perhaps and then a few follow-ups? Thanks.

Yes, Patrick I think we are not looking to start forecasting data at this point in time even I think you hit it bang on the head I think you’ll see a little mix at all knock the numbers around, but our models how we are approaching this business on a portfolio basis are pretty tight, we shouldn’t see a ton of our ability, but mix is always going to impact that.

Okay, and then just a few follow-ups here, how should we think about the hurdle rate for entering new markets and if you have any targets for new market entry for the year that would be helpful. And then just lastly on Arizona, have the regulatory developments that’s our PAPS, TP have they altered any of your growth projections for the year or you seeing strength in other markets to offset a few of those markets? Thanks guys.

Jobin, this is Lyndon and so in terms of new markets whenever we look at new markets, we look at the economic value that it creates and it’s important that day one, if you add all the financing that day one is region itself is cash positive and then we look at the returns. The IRR if its day one positive then essentially its infinitive IRR. If its commercial – it’s probably be in the 20% range for the IRRs. And the second part of the question was SRP and things happening in Arizona. So we will not continue to grow in Arizona so that we’ve asked some of our employees to move other states. This will help us in the other states, but it is unfortunate for the status we prefer to grow in the states and we are – as the topic where it was assuming SRP right now for them since we using the monopoly strength to kill the market and we will see where that ends up and once that is resolved we will move back into the market and continue to scale in Arizona. And that for now we allocating that volume to other region.

And just a quick follow Patrick its - the 20% he is referring to the levered IRR.

Got it thanks guys.

Thank you. Our next question comes from the line of Brian Lee with Goldman Sachs. Please proceed with your question.

Hey guys thanks for taking the questions. We will let go Patrick’s sentiment on the kudos for the new disclosure. So on the Q1 deployments being a $1.7 per watt here Brad how should we expect that number to trend in 2015 and even into 2016 given pricing mix cost assumptions, I know there is a lot of moving parts there and then also what do you as a potential for the debt cost assumptions I think you are using 4.5% right now and are you assuming all that debt – new debt is fully amortizing and then have a follow up.

That’s a lot of questions. So again I don’t think we are in position do any forecasting and I think even if we were probably not in area we are going to go down into forecasting the next quarters I think like I said earlier right we thought various specific targets like Lyndon mentioned on the day one cash we have return targets we want to run it out of portfolio level.

Yes, one that I’d add to that is you can kind of pick some of that of the retained value, so the incremental retain value is increasing then naturally the IRR should be increasing as well and it can stay flat or going down then it will have that same effect it will just roll down. So that is our indication for you see how we’re looking the future, but we don’t want to forecasted.

On the debt one on the 4.5 I mean I think that’s obviously very conservative, we are doing better than that and I would expect we continue to do better than that, obviously subject to where rate may end up going. Every six months I only see our credit spread shrinking as we continue to perform as the paper continues to perform. So I am very happy where things are going from that perspective and then obviously on a cost spend of it. It is really is the cost of capital and the cost that’s really driving our success and where I think we will continue outdistance cost efficient.

The two most sensitive numbers and the economic value creations is what the PPA rates competition.

Yes, I mean the two most sensitive numbers and the economic value creation is what the PPA rates $0.13 a kilowatt hour test going up or downs and its mix of course have to get down and it will have a impact and then up cost assuming financing phase.

Okay, great that’s helpful. Follow-up with just on volumes, I think you guys if you could help us on your instillation operational capacity and how its grown since Q4 I think you had mentioned targeting 1 gigawatt for resi by year end. So wondering how close you are in relation to that target and especially since you installed almost a 180 megawatts which is the target for Q2 here, but you had seasonal impacts in Q4. So you’d have thought maybe you could be significantly higher here versus the guidance that you provided so any thoughts there would be helpful? Thanks.

Let me just clarify one thing before Tanguy answers, it’s not a gigawatt residential they forecasted 922 gigawatt residential and commercial.

Great, let me make some comments. So I think not changing the range, there are still threshold very much in that range for the full year installs, is commercial and residential, and commercial seems attracting nicely. As I said I think we will see revenue growth in Q3, Q4 based on where the job done and published right now, we feel very good about that. On residential we have capacity today where we do a little more than we currently doing and the key in residential is we don’t want to scale too far ahead when the – is actually coming through, because if you do that you are adding costs ahead of the curve, which you don’t want to do, but what we done is we have really sophisticated forecasting models that allow us to look at based on our patterns when installs were hit by geographic area and that allows us to drive reasonably sophisticated hiring plants that we got hiring, recruiters hiring and social attorney for training which allows chaining on board installers to be ready to install one inflows actually are required. So that’s piece of the probably actually increases as well and we are very confident being able to run multiple multi megawatt on a month-to-month without any particular issues. As a point of reference I would say that the its sometime in 2014 those are the couple of months where we grew by more than 5 megawatts month-on-month in 2014 and we are much smaller than we are now by growing north of 5 megawatts month-on-month is something growing past and I think we can do again.

One additional point Brian, I think we can try to gage capacity, you are looking at – we are commenting against the 4Q run rate and its worth noting that 4Q is always is your biggest commercial quarter. So it relies much stronger growth in the revenue front.

Okay.

Okay, in Q1.

Thanks guys.

Thank you. Our next question comes from the line of Philip Shen with ROTH Capital Partners. Please proceed with your question.

Hey guys I’m bouncing between calls here, so apologize if this question was already addressed. I know you are focused on megawatt installed now instead of deployed, but your 2015 guidance remains on a deployed metrics. Can you share what megawatts deployed were in Q1?

143 and just for future reference you’ll always get that number in your EDC Slide which is based on deployment not install. So we get 143 total with about five cash, so 138 energy system.

It’s in the tables on the press release.

Okay, thanks. With the introduction of the cash flow available for distribution metrics it may back the question when do you expect you maybe able to make a distribution with visible cash flows that you have in the limited requirements on equity investments given the robust finance machine you’re developing and what is related to view on. It’s actually Sunday paying a dividend?

I have a dream, no I think I mean again think about is the growth rate that we are on every dollar that we are going to generate, we are going to solid right back into the business and that’s going to go on for the foreseeable future from my perspective and would be the best use of that capital at this time.

Fair enough, Thanks Brad I’ll jump back in queue.

Thank you. Our next question comes from the line of Krish Sankar with Bank of America Merrill Lynch. Please proceed with your question.

Yes, hi thanks for taking my question I had a couple of them first one on California, now that they’re going to be collapsing the tiers and when the new tiers are finalized. Some of the earliest California leasing PPA customers might find their contracts underwater based on the per kilowatt rate design and that plus escalators do have any concerns on those.

I mean I look at that most of ones were in the….

Let me tackle that Krish. Most of our California pricing is in the 17%, 18% set range historically. So it’s not like we’re pricing 10%, 15% off a rate. So if a guy that’s heavily to report user is it $0.30 he is not being price at 28%. So our standard pricing historically seems to protect us, it’s based on the proposed rate so far.

And this is not the first time this has happened and second time in the last I think probably three years. And they use to have a tier 4 and 5 they still do have a tier 4 but it’s same as today. And [indiscernible] that down and we saw no effect in our customer base.

Got it, that’s very helpful and then as a follow up given some of the challenging policy environment that you encountered in Arizona and some where in the out of the U.S. and looking at overseas the markets for solar storage and micro bits does it foreseen or have you been thinking about expanding the leasing PPA model overseas or internationally sooner rather than later kind of your thoughts on that would be appreciated.

Yes, I mean we actually extremely bullish and for the U.S. market you look at the policy changes at new office implementing policy changes that California is going to looking at implementing and we actually believe in a future and see in future, where the grid is a two-way grid where consumer is actually providing services to the utility. So we are optimistic about the U.S. Now Arizona is little different and it is a challenging state for us and we are all in kind of states where the utilities - deduction of dollar and do whatever they can to prevent competition and give consumer choice and in those days we will have to fight the fights. And but in our primary states we are very optimistic about our growth. That said we do at international markets and I’ve said the statement a few time, our international expense is about, we have been thinking of expanding internationally in the next year. The last eight years. And so we probably expanding this in the next year or two.

Great. I mean it’s obviously very attractive and I think we have an incredible model that we are going to be able to duplicate, but we are going to do when we are ready.

Yes, I mean with the growth rate we are experiencing right now and the size of the markets that we are in, its no urgency to expand internationally and that’s separate from the market – where we see opportunities.

So just to be clear we are offering micro grid internationally and are seeing demand, healthy demands about U.S. for micro grid.

Got it. Thank you guys.

Thank you. Our next question comes from the line of Vishal Shah with Deutsche Bank. Please proceed with your question.

Hi, thanks for taking my question, you guys talked about this $500 million – system, batter system for stationary storage are in backup generators, when you think you can offer that system, residential customer in U.S., what price points you need to see to be able attract some of the customers for base load storage?

I am not sure I understand the question. Is the question when will the backup system available.

My question is what price point do you need to see in order to a broader adoption of storage in the U.S. residential market?

He is asking our first generation is a backup what price point or cost point we need to maybe more likely release at – on the backup.

I mean that there is like the market structures have to evolve as well and examples of market structures are aggregated residential demand response and significantly differentiated some of these pricing. I think the economic are kind of there now, if the right kind of market structure can be developed. At this point I don’t want to put a kind of cost target out there for what the combined battery and solar systems have to be in order to be able to pay for – to get paid for based on some sort of tariff that we can’t even speculate on just yet. So it’s a tough question to answer, because I will just reinforce we continue to spend it, I think that like in the next five to ten years we will be installing battery with solar power, but my thinking is kind of routed in the fundamental kind of engineering challenges and opportunities and just having faith [indiscernible] structures.

Yes, to us it’s really keeping the policy changes around this in fact the policy benefit to utilities as well. Peter actually wrote a blog that I recommend you to ready, today most of the utilities if they would have subscribed for the services that our customers can provide. It will just be a past though cost, note make no money on that and so they are motivated to deploy their own infrastructure because that’s the only way they make money. So change in policy to allow them to use other people of infrastructure and then still make money of other peoples infrastructure is what needs to happen.

It doesn’t you don’t need to call it I think kind of a base load with solar battery, so the value in addressing which is where the most expectable.

And in the interim I mean neutral demand for the backup generation that we just announce has been off the charges and way beyond our expectations.

It’s helpful. And just one other question on the full year guidance for 2015, what percentage of your shipments will be for instance MyPower I know you guys are provided some number in the past I was just wondering if you can update that number?

It’s tough to forecast I don’t want to give a forecast what you think it is and I can give you an expectation what we currently have this last quarter, what was the percentage of – my part of last quarter.

Yes, I mean so one thing to keep in mind is our backlog and how it trickles through, so it’s a lot higher portion of our bookings right now that it is installed I mean looking at the data, but I don’t our expectation overall hasn’t changed in terms of the overall run rate.

I think roughly high-teens, low-20s.

And Vishal it was about 15% of deployments not inflations in 1Q.

Okay, great thank you.

Thank you. Our next question comes from the line of Tyler Frank with Robert W. Baird. Please proceed with your question.

Hi guys, thanks for taking the question and I apologize if it’s already been asked also bouncing around, so its looks like a large portion of the dollars coming from cash flows and from the renewals years you are trying to 30 can you breakdown 107 on the additional 20-year contract versus the renewal?

I mean its not a number where we are looking to split up right now, but I mean I would say roughly two third to third just kind of in that ballpark areas about who want to go.

Two-third coming from that 20 to 30?

Well, don’t think 20 to 30 contracted versus MyPower is a 30 year contract.there is no renewal assumption with MyPower. So roughly two third contractors renwal.

Okay great and then in terms of different markets and potential adjustments to net metering. [indiscernible] for all the current net metering programs there is change that more of a state-by-sate basis.

Everything grant for Lyndon has been installed, bt it is the safer side things side so far -..

Okay great thanks guyds.

Thank you our next question comes from the line of Edwin Mok with Needham Company. Please proceed with your question. Q –Edwin Mok: Hey thanks for taking my question. So one just on booking quite a bit about deployment but you guys mentioned about conversion is most of the incremental booking from commercial in this quarter.

We had a good commercial booking but its not much the majority store residential.

I still maybe also differently all of the 920 to 1000 megawatt this should deployment. You guys mentioned second half we expect bigger ramp in commercial. Think of us rough idea even in just range of the commercial versus –

So historically we’ve said was being about in 820 and suspected probably you closer to low-teen – mid-to-low teen.

And so Edwin the resi portion the mix and bookings was higher in Q1 there was in Q that you asking.

Okay great thanks so much [indiscernible] helpful thanks. And then on cotton have retail retention why that you that metrics I wondering I was reading thatkind of details there because you guys including the cost needed to deploy the back hawk is such as calculated power p to hold how was done that doest not can be useful deli am just trying = help with were is that pretty [indiscernible].

Yes, our estimate in small we are application one Q1 in stock ups, two the mega watts and backlog and backing of the expect investment from our technically partners. And we are assuming look largely encourage develop that backlog in working capital that would be whatever…

I see, okay, that’s helpful. Okay, last question on MyPower, since you guys launched a product right have you seen more competition comes on the loan side or market, how do you think that product has been received in the marketplace and have you seen competitors offerings to more type of column product to compete with you guys?

Yes, we do think we are going to – like the strategy it never being to lead with financial innovation and the strategy is to – financial innovation gets commoditized in every at some points for this asset class should have access to the same cost of capital. And so our focus is differentiating in cost, quality and product set and that said we aren’t seeing much competition yet in the MyPower sector and a product similar designed to MyPower there are some loan products out there, but not designed the same way as MyPower.

Okay, that’s all I have thank you.

Thank you. Our next question comes from the line of [indiscernible]. Please proceed with your questions.

Good afternoon, it’s Julian over here.

Hey, Julian.

So going back to the wider question here what – in terms of yield curve. Can you discuss how you think about your own evaluation and evolution of the business model? And then also perhaps just in that same – how you think about your own – growth metrics. I know we are still in early days here, but how that might compare versus peers out there in the publicly traded world.

All above cost of capital, so for us like we said many times over we are driving our unit costs down and we want to drive the cost of capital down. So we are agnostic to any of the products that are out there than get us there, we look at everything, we evaluate everything, so I like everything anything that can me a lower cost and more variability and more cash upfront is good. Again on the cat fee end of it I think it would be great to put the metric so and then we talk about forecasting, but I think its pretty simple to see what’s our growth that we have the growth and retain value everything kind of came and then comes inline. So I mean our growth profile is going to be pretty gone big I think compared to most companies that are out there and the cat fee.

In the variability soon would be that much like we are talking $0.01 to $0.02 a kilowatt hour and that it should be maximum ability within the PPA rates.

When you say variability in the PPA rates that prospective PPA rates in what you are signing?

Yes, because we haven’t change pricing for sometime now and so any new quarter the variability is just the differences in install megawatts in the ratio that install megawatts but state that doesn’t move that much your 13 megawatts to 12.5, but it has a very small impact and everything is really fixed to none in our wholesales model. If you compare to our peers when you are dealing with large scale program you have to price every deals separately and then you could have a fairly large swing without a pricing not expect so it’s not a time.

Great, and then taking the other side of the equation on California and the change in turn could you talk about the opportunity to capture some of the lower tiers now one and two kind of under the prospect of rate changes we are talking about there and what kind of PPA rates are margin opportunity those might be as well?

Yes, California is still in process of changing all its policies and rates, they have flatten the tiers does bring the market and it does make solar available to those customers in the lower tiers. There are also some challenges with the proposals that the PC has with the utilities that we still need to work out and the biggest challenge there is fixed fees we preferred minimum and then the speed at what the flattening was to occur and we think it needs to be little slower, but work through those PC and the California utilities.

But at the end of the day do you see an accelerating residential opportunity in California given the rates flattening?

It absolutely will open up additional markets for those customers with low utility books.

Great, thank you.

Thank you. Our next question comes from the line of [indiscernible]. Please proceed with your question.

Yes, good afternoon and thank you. As you look at customer acquisition cost running the $2,000 to $3,000 range per customer I mean you had new start ups indicating acquisition cost well below that as much as below $1000 per customer with $600 per customer how aggressively are you pursuing innovation in the area and how would you characterize the cadence of cost reduction specifically [indiscernible]?

Yes, Silevo acquisition metrics it look so much better can half of this - and the we never look that competitors who have actual cost of the 1000 buck it marketing acquisition cost its not the fully loaded acquisition cost and so you have to compare apples to apples and have been said we do have channel with the fully loaded acquisition cost is in the range and in our federal as an example as a load acquisition cost it just been referral. But when you doubling every single year you can’t growth at that paid on referral. So some other companies who only have at 30% growth you can do that on referrals. So we will – with that being said we will look at we continue to innovation and reducing our acquisition cost it has creep up in Q4 and Q1 based on the large investment should made in the sales team up and running and investing to the future and invested a head of deal the seasonality of Q4 specifically selling days and in put some of the winter on the east coast, the biggest cost increased primarily the investment we are making in to future. And so now you could sales people up and running get some producing bookings and that case to sales person full ramped and producing that. Yes we will expanded additional partnerships we will look at expanding our online presences we improving our web marketing as well through just the cost of acquisition.

Good thank you that color. Second question just on the vary system may be like just question how you anticipate handling 220 pound battery and then broader question about the integration of the storage and solar system and how you would integrated both optimize performance of the combined. Thank you.

So it’s a very good question very good inside on the terms we actually like we are so we did in 350 and we work that test engineers the basically integrate lets handle and have approved that few people kind – we actually put long and haul that how to get to people and what was your second question.

We just more broadly on optimization of the integrated system as you combined storage.

Yes, I mean there is one of the things we are like as you release in the product you already thing of like dozen of things that you can modified to the integrated systems make even better cheap of the next year or so there is lot of opportunity and we are in a position right now we kind of spoke about it. But there is a lot of stuff that we are still doing – to lower the cost, like year-on-year lowering it by two-thirds we are pretty happy with kind of it will be the function proven this year and next year, but the loss that we are doing that’s going to…

Great, while we look forward to seeing it. Nice jump in the quarter.

Thank you.

Thank you. Our next question comes from the line of [indiscernible] with Raymond James. Please proceed with your question.

Thanks for taking the question guys, can I ask about headcount given the way OpEx is trending up you are obviously adding a lot of sales and elsewhere are you worried at all that in 18 months as the ITC winds down you may have to do some pretty severe cutbacks in headcount?

So we have a fully loaded cost target $2.50 and end of 2016, we still feel confident in achieving and remember the increase in headcount dollars per watt has big impact on the lower instilled megawatts for this quarter. And OpEx – traditional OpEx are overhead the way I look at it. And we are not adding much there most of the headcount is in core revenue generation sales and install it.

Yes, I mean in - just to give it in perspective in Q1 we added 1,300 people and 92% of them are sales – and Lyndon talked about. And I think the bigger point though which we will talk more in the future is growth where we are going with our cost target as well as our efficiencies, the technology gains and even in a post dropdown ITC assuming that happens we are still going to have in very viable business, probably one of the few that will be that strong and I think you will see us continue to grow potentially even faster with that headwind out there. And I think quite honestly a line of the competition we are going to take a few bullets in the head because our cost structures and now were near that, so we obviously will monitor it very carefully, but we think we are going to follow right through and continue to grow.

I appreciate the color can I also just ask about the financing side. I guess the slide 10, you said at points in the past that you want to do an asset-backed financing every quarter, but now it’s been more than six months since the last one what explains that?

Like I was saying our other structure we have one last structure which is the one that in the process right now like any new structure that takes a little longer it probably took longer than we expected and we hope to have that done pretty soon and then we’ll also broaden and start using a couple of agencies so we don’t get backed up internally there. So that was to my earlier point I think will be true all the complexities of the partnerships and then we’d be able to go on a much more frequent basis. Trust me, we love to began that.

All right. I appreciate it.

Thank you. Our next question comes from the line of [Michael Lucente] with Avondale Partners. Please proceed with your question.

Hi guys thanks for taking my call. Primarily interested in the timing of cash rich recognition I think which you can do to speedup cash flow back to city whether its through tax equity and stretching out their involvement or with the financing, but basically the portfolio that [indescribable] and getting to the hands of shareholders as quickly as possible? Thanks.

I mean I think the ag facility is a great example right we are looking at number of people that canceled from so kind of permission to operate is very, very minuet so the ability to move that up I think is a great testament to our model and like I said that will take us 90 days right there. On the tax equity it really revolves around the ability to trounce quicker with our partners get them through the data quicker. So believe me I mean just like we do with cost we look at everything, we are looking at every lag in the financing cycle time as I refer to because I look at financing as a factory right, the operational part of the factory is just continuing in the long and we want to make sure we are doing that with capital. So anyway we squeeze the day or two out, we plan on doing that and then also the other focus is on getting more of the cash advance upfront and part of that negotiation and part of that is the quality of the assets and the paper as we continue to grow.

And we have done a lot of the laid work getting the all the structures approved we then accelerate the amount of securitizations we do and as Brad mentioned we can’t really do one trounce right now per month per investors if you can get that to two that will help a lot.

And I will be doing more on the front end kind of like as you would call it probably like a construction facility concept, we are doing some interesting stuff there and looking at longer term bonds. We look at everything, look at everything.

Thanks guys. End of Q&A

Thank you. Unfortunately we have exceeded a lot of time for questions. This does concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.