This is your SolarWakeup for October 16th, 2020

The $ARRY IPO. It was a big day for solar, New Mexico and the venture founded by Ron Corio in 1989. Array Technologies went public yesterday at $22 per share, pricing $1 above the $19-$21 range. Underwriters also upsized to the maximum levels. At the close of the after-hours market, $ARRY was trading just north of $38, an amazing 73% IPO day pop. Some of you got in at the first print of around $30, still a nice return. This also means that Ron is the first known solar billionaire, he sold 23 million shares at the IPO and still holds ~21.7 million shares. #solarwealth is the word of the decade because not only are we leading the energy transition, this is the single largest wealth creation opportunity of our collective lifetimes. Congrats to Array, the team and Ron for sticking to the vision.

What It Means For Sector. Array is a pure play solar company that makes the underlying structure needed to get the most out of solar modules. It manufacturers principally in the US and the majority of its revenue comes from the US market. There are dozens of solar trackers in the market but what sets Array apart along with Nextracker is the team and execution. I spent two years in racking on the resi side and this is exactly the type of exit that could have been possible if the focus weren’t on near term, consultant driven margin. Here’s what happens next, two predictions. I think Nextracker is going to have to look at spinning out from Flex and being a standalone. As the market share leader, Nextracker drives a global business into the public markets. Oaktree, the majority shareholder of Array, also owns Shoals Technologies. I wouldn’t doubt that Shoals is far behind on their S-1 filing and don’t be shocked when you see the margins of the widget manufacturer. Every asset manager and investment bank is meeting this week looking to get smart and get into solar, and that’s great for all of us.

Solar Vs Climate Policy. Biden talks a lot about climate change and even renewable energy. He has a multi-trillion dollar plan to combat climate change (the issue) and knows how he wants to solve it (the plan) but what does that mean for the actual execution. How does solar and storage fit into climate policy from a legislative perspective? Last night, Biden took a question about fracking and he did something that should be positive news for all in clean tech. He pivoted from fracking to solar panels on rooftops and batteries in the basement (his words) while highlighting the entire program as a jobs plan. We’ve come a long way. That being said, I still don’t have a clear vision for how his administration plans on getting us there though I hope that folks I know and perhaps read this newsletter will be doing so from 1600 Pennsylvania Ave. Here’s the clip on the issue from last night’s town hall. 

Storage and Grid Wars. Fluence (a Siemens and AES venture) has acquired AMS. This follows Generac’s acquisition of Enbala, LS Power’s acquisition of CPower and evGo, Engie’s acquisition of Green Charge, Enel’s acquisition of Demand Energy and Enernoc, Wartsila’s acquisition of Greensmith and I’m sure some that I’m missing. That leaves Stem as one of the remaining grid/storage companies, but having raised $371million, the price of entry will be hefty. Your thoughts and missing acquisitions are welcome.

State Capital Battles. The BP CEO talked a bit about climate advocacy in State capitols, which is my signal to remind you of the biggest head to head contests about to meet state legislators. With oil in transportation at record low levels and the electrification of buildings and transportation, oil companies and utilities are meeting head to head for the first time. They’ve mostly managed to ignore each other’s issues for a century but that’s changing. Look out for major battles and unlike utilities, I see some alignment of interests between our industry and oil that could benefit us.

Philly Gets Permits. Faster and cheaper permits in Philadelphia? They get it, let’s help them get to instant permits.

Thank You! Yesterday, CALSSA members stood up and raised $195 thousand dollars to keep the policy wheels moving. After a motivational, NBA Championship caliber speech from Hall of Famer Bill Walton, members dug into their pockets. We are $5k away from our goal of $200k and I’m hoping that you can help make up the gap. You can make a donation today!

Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page. 

Opinion

Best, Yann