This is your SolarWakeup for April 12th, 2021

The Venture Effect. The term ClimateTech is the vertical made in Silicon Valley. Adding tech to a vertical, fintech, agtech, climatetech to name a few, indicate the ability to invest into companies with the objective of creating a 10x return on that invested capital. It used to be hard to imagine this, I first heard the 10x objective circa 2008 and thought that it was crazy. The reason it’s hard to create is the market has to be big enough for an idea to reach a tall objective, but the TAM (total addressable market) for our industries has crossed the threshold of everyone realizing it’s a big market. Can venture save the planet? Yes, if infrastructure capital deployment stands alongside, which it is.

Fall Short On What. After a miss on market forecasts in 2020, I am fearful that we are misunderstanding the market for renewables globally over the next decade. We are entering an era where renewables, depending on the resource/geography alignment, is cheaper than anything else available. Solar also has the advantage of being liked and preferred by everyone regardless of political belief. So take all forecasts with a grain of salt, especially any year over year declines, they will prove to be wrong.

Rolling Up Resi. Sunworks has acquired Solcius, a large residential solar installer. This follows the companies pivot towards residential from the ag sector it had been targeting previously. Last year, Sunworks had agreed to be acquired by The Peck Company but that merger failed due to a lack of vote participation by shareholders. The bigger story is the acquisition of a residential installer which had been complicated to value previously due to a lack of transactions. Expect the consolidation of installers to gain some traction as close rates continue to accelerate and geographic opportunity for solar grows.

Solar To WV. The state legislature is working to approve the solar lease for West Virginians. Enabling solar access to homeowners is a key step to gaining more positive views of the sector for those that have been largely impacted by oil, gas and coal market declines.

Talking Market. Tomorrow at 11am eastern, join me and the Phil Shen from Roth Capital as we continue our monthly conversation about the market. It’s been an entire year since the pandemic sparked the market survey index that told us that 2020 wasn’t going to be as bad as predicted. One year later, much has changed including my role in the market. Register here and make sure you subscribe to Phil’s newsletter as well.

 Opinion

Best, Yann