HA Sustainable Infrastructure Capital, Inc. (HASI) Q1 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

in 2027 and beyond. It is reasonable to assume that by that time our developer clients will have adapted to any remaining tariffs by both on showing more of their procurement and passing on any increased costs. In fact, most of the public developers and sponsors who have already reported their first quarter results have confirmed strong confidence in their long-term pipelines just in the last few weeks. We also have a portion of our business that involves capital recycling on existing projects, which is an investment profile unimpacted by tariffs. In summary, we expect very limited impact from any increased tariffs on our business, particularly in the guidance period. Turning to page five, another issue worth discussing is the expected impact of a recession on our business. GDP contracted in the first quarter of 2025 and many economic forecasts have increased the likelihood of a 2025 recession above 50%. However, as depicted on the slide, U.S. electric generation capacity continues to expand, even during economic downturns, in recent years substantially driven by wind and solar. If a recession occurs in 2025, we would expect investments in clean energy generation to be only marginally impacted and we would not expect any resulting material impact on our financial results. Also, as stated a few moments ago related to tariffs, the vast majority of our pipeline includes projects under construction, which are unlikely to be impacted by a recession. In summary, we have a non-cyclical business model in which growth and profitability are typically not directly tied to macroeconomic cycles. In addition related to both the tariff issue and the potential slowdown, the forecasted demand for energy is expected to drive clean energy development in all policy and macroeconomic sce...