Happy SGIP Day. For many contractors across California today is an exciting day. The first window for SGIP funding is opening today, assumed to be fully allocated within minutes. Legislators in California have gone big in funding the incentive and they have thought it about it logically, similar to the CSI, SGIP will step down quickly. You would assume that the quickly dropping battery costs will keep up with the drops in incentive. Here is my question to California contractors. How did you choose your partner? Once you chose the battery architecture, i.e. Lithium Ion, how did you pick the rest of the system. The software? The power electronics? The manufacturers? This is going to be a big market and I am contemplating a road trip through California to learn how storage is affecting your business. More on the road trip soon.
Was it up to Suniva? Suniva first got into trouble financially in 2015, when module pricing was much higher. That is when Shunfeng came in and acquired 63% of the company. More recently, as money was running out once again, Suniva had hired their former CFO, Jim Modak, as a consultant to raise more money. Modak had been the CFO for 8 years but left the company in March of 2016, staying on for 6 months as a consultant. Modak is now the CFO of SQN Capital Management. This is where it gets interesting. Shunfeng and Wanxiang were not willing to put in more capital into Suniva, forcing the company towards a Chapter 7 filing. One lender was willing to provide post-bankruptcy capital, SQN Capital, under certain conditions. The first condition was to file the 201 petition for a tariff. If Suniva wanted tariffs, they could have filed it a year ago, this seems to have been a requirement of SQN. I don’t know how much SQN is providing but it’s a financial play betting that Suniva assets are worth more if a minimum price is put into place.
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The pension funds. Pension funds are playing in solar. They’ve long circled the wagons, waiting to see if scale is there to make an initial investment with enough room to follow on year after year. The consolidation of assets is also creating new market opportunities because unlike utilities, pension funds will likely outsource asset management, O&M and other functions. This also creates a nice value to investment bankers that specialize in the field like MVP Capital. Pension funds are lean operations and solar is likely to create outsized returns compared to asset classes like real estate.
Make sure you listen to the latest episodes of EnergyWakeup. Hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based energy bill analytics and proposal tool. I also speak with Tony Clifford from Standard Solar about being acquired by Gaz Metro and his work at SEIA.
- Utility Dive: California SGIP re-opens Monday with greater funding for energy storage
- PV-Tech: Yingli Green delays filing annual report on liquidity issues
- Reuters: Global pension funds warm to India’s solar power ambitions
- Guardian: Powerhouse – the startup making solar the most accessible energy in the world
- PV-Magazine: Out of Sungevity’s ashes, Solar Spectrum will rise using its assets and employees
- Greentech Media: Tesla Halts SolarCity’s Door-to-Door Residential PV Sales to Focus on Retail and Online
- GreenBiz: Hope for the metropolitan solution to climate change
- Business Insider: Tesla just delayed the roll-out of its solar roof
Opinion
Have a great day!
Yann