10-K/A: HASI Amends 10-K to Include Key Subsidiary Financials

HA Sustainable Infrastructure Capital, Inc. filed an amendment to its 2025 Annual Report to include separate financial statements for significant unconsolidated subsidiaries, Palmetto HASI Holdings LLC and Daggett Renewable Holdco LLC, as required by SEC regulations.

Summary

• HA Sustainable Infrastructure Capital, Inc. (HASI) filed an Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, originally filed on February 13, 2026.
• The amendment's sole purpose is to comply with Regulation S-X, Rule 3-09, which requires separate financial statements for individually significant unconsolidated subsidiaries and investees accounted for by the equity method.
• The filing includes consolidated financial statements for Palmetto HASI Holdings LLC and its subsidiaries for the years ended December 31, 2025 and 2024.
• Palmetto HASI Holdings LLC reported total revenues of $88.6 million in 2025, a significant increase from $15.4 million in 2024, driven by growth in PPA and lease revenues.
• Palmetto HASI Holdings LLC recorded a net loss of $58.8 million in 2025, compared to a net income of $1.0 million in 2024, primarily due to increased interest expense and unrealized losses on derivative instruments.
• The filing also includes consolidated financial statements for Daggett Renewable Holdco LLC and its subsidiaries for the years ended December 31, 2025, 2024, and 2023.
• Daggett Renewable Holdco LLC reported total operating revenues of $67.3 million in 2025, a slight increase from $65.0 million in 2024.
• Daggett Renewable Holdco LLC reported a net loss of $23.5 million in 2025, an increase from a net loss of $2.1 million in 2024, mainly due to higher interest expense.
• The amendment includes updated certifications from HASI's Chief Executive Officer and Chief Financial Officer.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, primarily due to the significant growth in assets and revenues reported by the Palmetto HASI Holdings LLC subsidiary, indicating strong investment and expansion in the residential solar sector. However, the increased net losses for both subsidiaries temper the overall sentiment, suggesting potential profitability challenges or high initial investment costs.

Positives

• Palmetto HASI Holdings LLC demonstrated substantial revenue growth, with total revenues increasing from $15.4 million in 2024 to $88.6 million in 2025.
• Palmetto HASI Holdings LLC's cash provided by operating activities significantly increased to $28.7 million in 2025 from $4.8 million in 2024.
• Palmetto HASI Holdings LLC's total assets grew substantially from $1.37 billion in 2024 to $4.19 billion in 2025, indicating significant project acquisitions and investments.
• Daggett Renewable Holdco LLC saw a reduction in BESS availability penalties and other charges from $2.0 million in 2024 to $0.6 million in 2025.
• Daggett Renewable Holdco LLC's curtailment revenue increased from $0.14 million in 2024 to $0.51 million in 2025.

Negatives

• Palmetto HASI Holdings LLC reported a net loss of $58.8 million in 2025, a significant decline from a net income of $1.0 million in 2024, despite strong revenue growth.
• Palmetto HASI Holdings LLC's net income attributable to members decreased from $149.1 million in 2024 to $84.3 million in 2025, largely due to the entity's overall net loss and noncontrolling interest allocations.
• Palmetto HASI Holdings LLC's total liabilities increased significantly from $393.5 million in 2024 to $1.34 billion in 2025, reflecting increased borrowings for project acquisitions.
• Daggett Renewable Holdco LLC's net loss increased from $2.1 million in 2024 to $23.5 million in 2025, primarily due to higher interest expense.
• Daggett Renewable Holdco LLC's total assets slightly decreased from $1.10 billion in 2024 to $1.03 billion in 2025.

Risks

• Palmetto HASI Holdings LLC is subject to credit risk related to its commercial and residential customers.
• Palmetto HASI Holdings LLC relies on the continued performance and reliability of its systems, infrastructure, and third-party service providers.
• Palmetto HASI Holdings LLC faces risks from changes in federal, state, and local laws and regulations.
• Palmetto HASI Holdings LLC's energy production can be impacted by weather conditions and other environmental factors.
• Palmetto HASI Holdings LLC is exposed to financial market conditions and access to capital.
• Daggett Renewable Holdco LLC faces risks associated with the performance of its facilities below expected levels of efficiency, output, and storage capacity.
• Daggett Renewable Holdco LLC is exposed to shutdowns due to equipment breakdown or failure, potentially exacerbated by the inability to obtain replacement parts.
• Daggett Renewable Holdco LLC's operations are vulnerable to catastrophic events such as extreme weather, fires, earthquakes, floods, explosions, pandemics, supply chain disruptions, or hostile cyber intrusions.
• Daggett Renewable Holdco LLC is exposed to credit losses in the event of noncompliance by counterparties to its derivative financial instruments.

Future Outlook

Palmetto HASI Holdings LLC anticipates continued growth in its residential solar and battery projects, as evidenced by significant project acquisitions and new debt facilities. Daggett Renewable Holdco LLC has contracted with Southern California Edison Company to sell resource adequacy of 17 MW (Daggett Solar Power 3) and 52 MW (Daggett Solar Power 2) at various fixed prices per contract year, beginning January 1, 2026 through December 31, 2028. Palmetto HASI Holdings LLC also issued an ABS 2026-1 Facility for $430 million in February 2026, indicating ongoing financing for future projects.

Management Comments

• Jeffrey A. Lipson, Chief Executive Officer and President, certified that the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading, and that the financial statements fairly present the financial condition, results of operations, and cash flows.
• Charles W. Melko, Chief Financial Officer, Treasurer and Executive Vice President, provided similar certifications regarding the accuracy and fair presentation of the financial information in the report.

Industry Context

StockSavvy.ai notes that the inclusion of detailed financials for unconsolidated solar and battery storage subsidiaries highlights the growing complexity and capital intensity of the renewable energy sector. The significant asset growth and project acquisitions by Palmetto HASI Holdings LLC reflect robust investment in residential solar, while Daggett Renewable Holdco LLC's operations in utility-scale solar and BESS facilities underscore the ongoing expansion of grid-scale renewable infrastructure. The reliance on diverse financing mechanisms, including credit facilities and asset-backed notes, is typical for funding large-scale renewable projects, indicating a healthy, albeit debt-reliant, growth environment in the sustainable infrastructure market.

Comparison to Industry Standards

• Palmetto HASI Holdings LLC's substantial revenue growth (from $15.4M to $88.6M) in 2025 is indicative of a rapidly expanding residential solar market, potentially outpacing some smaller, regional installers but aligning with aggressive growth strategies seen in larger players like Sunrun or SunPower in their early expansion phases.
• Daggett Renewable Holdco LLC's 300-MW solar PV and 149-MW BESS facility (Daggett Solar Power 3) and 182-MW solar PV and 131-MW BESS facility (Daggett Solar Power 2) are significant utility-scale assets. These capacities are comparable to projects developed by major renewable energy developers such as NextEra Energy Resources or Clearway Energy Group (itself a related party), which frequently deploy multi-hundred-megawatt solar and battery storage projects to serve large off-takers like Southern California Edison and Pacific Gas and Electric Company.
• The fixed-price PPAs and long-term resource adequacy agreements for Daggett Renewable Holdco LLC's facilities are standard industry practice for securing stable revenue streams, similar to contracts seen in projects like the Edwards Sanborn Solar + Storage project (Terra-Gen) or the Gemini Solar Project (Quinbrook Infrastructure Partners), which also serve California utilities with combined solar and storage capacity.

Corporate Governance

Legal Proceedings

• Both Palmetto HASI Holdings LLC and Daggett Renewable Holdco LLC are subject to various claims and litigation in the ordinary course of business, with management expecting no material adverse effect on financial position or results of operations.

Related Party Transactions

• Palmetto HASI Holdings LLC conducts operations through a joint venture agreement with HASI Sabal, LLC and Palmetto Solar, LLC, with Palmetto Solar, LLC being a 50% joint venture partner and performance guarantor for ABS facilities.
• Palmetto HASI Holdings LLC's wholly-owned subsidiaries acquired solar energy systems from Palmetto Solar LLC under a Development Asset Purchase Agreement.
• Palmetto HASI Holdings LLC's tax equity entities have Asset Management Agreements, Administrative Services Agreements, and Maintenance Services Agreements with Palmetto Solar LLC.
• Daggett Renewable Holdco LLC is a partnership between Daggett Solar Investment LLC (a subsidiary of Clearway Energy Operating LLC), HA Lighthouse LLC (HASI), and Clearway Renew LLC (a subsidiary of Clearway Energy Group LLC).
• Daggett Renewable Holdco LLC has a Management Services Agreement for asset management and administration services with Clearway Asset Services LLC, a subsidiary of Clearway Energy Group.
• Daggett Solar Power 3 (a subsidiary of Daggett Renewable Holdco LLC) had a Construction Management Agreement with Renewables Construction LLC, a subsidiary of Clearway Renew.
• Daggett Solar Power 3 and Daggett Solar Power 2 (subsidiaries of Daggett Renewable Holdco LLC) have Operation and Maintenance Agreements with Clearway Renewable Operation & Maintenance LLC (RENOM), a subsidiary of Clearway Energy Group.
• RENOM agreed to forgive performance bonus payments totaling $185 thousand for Daggett Solar Power 3 and Daggett Solar Power 2 in 2025.
• RENOM agreed to reimburse Daggett Solar Power 3 and Daggett Solar Power 2 a total of $1.3 million for auxiliary equipment in November 2025.
• Daggett TE Holdco and Daggett Solar Power 3 are parties to a Project Administration Agreement with Clearway Asset Services LLC.
• Daggett Renewable Holdco LLC has solar facility ground lease agreements with Daggett Land Holdings LLC and Daggett Land Holdings 2 LLC, both subsidiaries of Clearway Renew.

Stakeholder Impact

• Shareholders of HA Sustainable Infrastructure Capital, Inc. gain increased transparency into the financial performance of significant unconsolidated subsidiaries, which could influence their valuation of the parent company's equity method investments.
• Creditors and investors in the subsidiaries' debt facilities (e.g., ABS notes, credit facilities) receive updated financial data, which is crucial for assessing creditworthiness and investment risk.
• Customers of Palmetto HASI Holdings LLC's residential solar systems are subject to the terms of PPA and lease agreements, with performance guarantees in place.
• Off-takers of Daggett Renewable Holdco LLC's utility-scale solar and BESS facilities (e.g., Marin Clean Energy, Clean Power Alliance, Southern California Edison) are impacted by the operational performance and contractual agreements of these projects.

Next Steps

• Palmetto HASI Holdings LLC will continue to manage its Credit Facility, ABS 2025-1, ABS 2025-2, and the recently issued ABS 2026-1 Facility.
• Daggett Renewable Holdco LLC will commence selling resource adequacy to Southern California Edison Company from January 1, 2026, through December 31, 2028.
• Daggett Renewable Holdco LLC expects to install auxiliary equipment during the first half of 2026 to address unexpected increases in operating costs.

Key Dates

Keywords

HA Sustainable Infrastructure Capital, HASI, SEC Filing, 10-K/A, Amendment, Financial Statements, Unconsolidated Subsidiaries, Palmetto HASI Holdings, Daggett Renewable Holdco, Solar Energy, Battery Storage, Renewable Energy, Power Purchase Agreements, Lease Agreements, Tax Equity, Debt Financing, Regulation S-X, Rule 3-09