This is your SolarWakeup for February 9th, 2020

What Is A SPAC? When a company goes public via a SPAC, which is a vehicle that has already gone through an IPO with the intention of acquiring a private company, it does so with the basic intention to raise additional capital. It is not (in most cases) an exit event, it is meant to provide hundreds of millions of dollars to a private company through the acquisition and a PIPE (private investment in public equity). A lot of folks talk about valuations, market caps and stock prices but SPACs are a vision into the future. While public companies are typically thought of as short term, SPACs are meant to make monster companies over the next few years with the fuel of money today. Some will fail, even $200million can’t make unicorns, but others will take the fuel and do big things and that’s the investment thesis.

The GREEN Act, ITC Edition. The House Ways and Means committee has a GREEN act filed with includes a 5 year extension of the ITC at 30%, direct pay at 85% and includes storage. There is also a version of a credit upside if certain labor requirements are followed. This is early and legislation needs a vehicle and momentum but now you have the outline of what the new Congress is thinking about

Midwest Solar Goes Bigger. 195MW in Indiana. Do you need more proof that solar is going to be everywhere?

Ratebase Performance. In many ways Hawaii is looking at utility profits in the way that they should have been since the start, paying for performance instead of simple ratebase spending. Over the past 50 years regulated monopolies have simply become expensive banks that get paid for how much money they deploy and passing along operating costs. The problem with that is some utilities are better than others and the good ones should be rewarded.

Enphase Shops Again. Last week Enphase acquired a software startup that supplies layout and proposal tools to hundreds of installers but today the company announced that it has acquired an India based proposal and design company. It may seem like an overlap but it’s actually that complement to the tech tool. It’s becoming clearer now that Enphase is focused on supporting installers, sales people and homeowners from understanding how much solar fits, how much solar is needed and the financial value proposition to getting the project into permitting. Some companies provide leads to installers, Enphase may be trying to provide contracted projects with permits to contractors. I don’t think installers will mind paying double for inverters if they get a fully permitted project. The question is, how will they fill the remaining parts of the process?

Opinion

Best, Yann