This is your SolarWakeup for January 27th, 2020

The Solar Tech Boom. I met the CEO of Sofdesk, Lennie Moreno, several years ago and you knew right away that he’s not going to let customers slip away. Tucked away in a nondescript Montreal office building, Lennie replicated a tech loft that built a popular software which may be the biggest exit for tech in solar thus far. It likely isn’t the biggest by dollar amount but it’s the type of software that can be built without expensive hardware solutions added on and with an exit on record, it will give VCs a liquidity event to seek to replicate. Sofdesk’s sale also brings Kelcy Pegler Jr back into the news, as he stood as the company’s Executive Chairman and investor for the past few years. While the former NRG Home Solar CEO is usually flying under the radar, seeking to remain out of the spotlight, this is the second major exit for the solar pro. The first exit came in 2014 when NRG’s David Crane acquired Kelcy’s Roof Diagnostics Solar, one of the largest residential solar installers in the Country at the time. When asked to comment via email, Kelcy responded with “Stay Tuned”

All About The Customer. In solar, there are many customers and for manufacturers it means making multiple people happy. If you make anything, you need to know how much to make, where to send it and which SKUs will be needed. Enphase has had trouble with making sure it’s rising product demand is met by the needed supply but with a major acquisition, they are about to get a lot smarter without upsetting the ecosystem. Enphase has acquired Sofdesk, the company behind the popular solar design software you know as Solargraf. Why would Enphase buy a design software with hundreds of installer customers? It’s not only the data but also the technology that will enable a more seamless integration of Enphase in design, proposals, permitting docs and more. But it also tells the company when a proposal goes out, to what city/state, and which sized module is proposed alongside the inverter. Integrated at scale, Enphase will be in a position to fulfill demand more efficiently. Will it include an order now button for installers? Who knows, but it could be the type of margin expansion that Enphase management seeks to grow every day.

The Full Wall Street. Forget ESG at this point, Wall Street is all in on the energy transition and climatization of businesses. See below for actual examples responding to this. In his annual shareholder letter, Larry Fink from BlackRock, is going further than he has in the past. He and through him, BlackRock’s 7.8 trillion AUM, is calling for full corporate climate disclosures and the business purpose beyond profit. It is also asking for the corporate’s plan on how they would be compatible in a net-zero economy.

The Utility Transition. I have officially been in solar long enough to be lectured to by a nuclear engineer turned CEO that nuclear energy is the future of the energy transition and then have the same person make the point that renewables are the lifeblood of that business and the energy transition to the extent that they have the entire utility lobby endorsing a 100% clean energy future. NextEra happens to be my utility and also the utility that may bring the distinction between solar and the utility business model to the most fundamental point, who owns the asset. For 15 years, NextEra has never openly seemed anti-renewable, even behind closed doors the utility was doing pilots and negotiating paths to building more solar. The sticking point was always ownership, which I grant you is not a small one especially when you care about competition, consumers and overall intellectual honesty. While NextEra announced that they target 30GW of renewables to be added on their balance sheet in the next 3 years, it is the announcement from EEI’s Tom Kuhn, which I credit to NextEra’s influence, that is most impressing today. “We are joining the growing call for a 100% clean energy future.”

Energy Wednesday. Governor turned Secretary of Energy nominee, Jennifer Granholm is on the hill today for her nomination hearing. Expectations are that the White House is also rolling out more executive action on climate. Of note in the personnel world, Energy Storage Association’s CEO Kelly Speakes-Backman has been appointed as the Principal Deputy Assistant Energy Secretary at DOE’s EERE and Energy Innovation’s Sonia Aggarwal is joining the White House as a senior advisor for climate policy and innovation.

A Supply Chain Mess. Solar is growing everywhere and the US market continues to be underestimated. With our path to 1million solar homes installed in a few years, Australia at over 25% penetration, suppliers are having a hard time keeping up with demand. The SolarWakeup Buyer’s Group was meant to not only lower costs but also increase access by consolidating demand amongst its members. We’re doing that now, reducing lead times and saving money. Get in touch with us through our portal or hit reply to this email. 

Opinion

Best, Yann