Trade Talks. You recall the name Robert Lighthizer, the US Trade Representative, from the 201 solar tariff discussions. Solar advocates met and advocated on our behalf in front of him and his staff. He has made a play to be the lead negotiator on the China trade talks that were started on December 9th when Trump and Xi came to a 90 truce. (Here is a great deep dive on Lighthizer). In the meantime, one of the biggest issues facing the solar industry is the potential escalation of the trade war instead of a deal. Solar is a global market place and the US is not in a position to keep our growth on the same track without the global supply chains even beyond China. Look for Lighthizer to give more updates on this topic, we are all watching closely.
EV Growth, What It Means. 2018 was a banner year for electric vehicle adoption in the US. It reached 361,000 up from 200,000 in 2017. The key here is that the number of available EV’s in the market is still minuscule, Tesla offers just 3 models and most Detroit OEMs have one or two at most. Consumers love the electric experience and the curve of adoption will skyrocket from here and we will reach over a 1 million new EVs on the road by 2021. All of this adoption will change the way the grid moves electricity and how much electricity is needed. Stay tuned…
PG&E Rating. A day after the Newsom inauguration, S&P cut the credit rating for PG&E to B from BBB- which means the corporations debt is now junk. In response, several executives retired and left their posts. This isn’t the end of the story but instead is the start. The market is saying that they are unsure of what the legislature will do given that PG&E is going to need policy action in order to potentially stave off bankruptcy or other restructuring.
Utility Risks For Solar. When utilities change their credit rating that affects anyone that sells to that utility because their receivables insurance could be lost or the receivables line of credit adjusts the available capital. For solar, changes in the IOU credit means more expensive debt, if it is available at all. At a B rating, solar projects under PPA with PG&E for example will have a hard time to refinance or find debt. This means that projects could be sidelined or the price per kWh will have to increase. A worse credit rating means more expensive solar for consumers.
Colorado Coal Costs. $2.5billion in savings if Colorado shutters its coal plants while increasing solar and wind from its current levels. That’s a solar spill that pays for its own cleanup!
- CNBC: Analysts see ‘several signs of modest progress’ in latest US-China trade talks
- Greentech Media: US Electric Vehicle Sales Increased by 81% in 2018
- Reuters: PG&E falls further after S&P cuts credit rating to junk
- Los Angeles Times: What would happen if PG&E sold its gas business or filed for bankruptcy?
- Vox: Colorado could save $2.5 billion by rapidly shutting down its coal power plants
- Utility Dive: 2019 Storage Outlook – Utility procurement will drive deployments, analysts say
Opinion
Have a great day!
Yann