This is your SolarWakeup for May 3rd, 2021

Capital Deep Dive. There are some important things to note in this deep dive by BNEF about the global capital to project pipeline. The energy transition, centered around the goals pledged to by economies around the world, is going to take north of $50 trillion (with a t) and even then will allow for the allocation of $2-3trillion per year. Their estimates have it at $2.1trillion this year alone. There are three items that I want to highlight and get you to think about. A few years ago, the CEO of an oil major said even if he wanted to invest $10billion into renewables, he wouldn’t find that scale in the market. That has changed and create the inverse problem. Large investors like majors and pension funds are going direct to the pipelines and not looking to trade those assets once they’re in the portfolio. The lack of trading is noted by BNEF and makes the value of platforms higher than ever before (and I note that the value of the platforms used to be less than zero just 5 years ago). Lastly, let’s realize the scale of the capital appetite and what it will take to credibly deploy it for long life assets. That means that not only do the investment platforms need to do the work well, the companies that are hired to build, procure, integrate and maintain those projects are vital to the ecosystem.

And Now You Know. The entire previous paragraph is why companies like FTC Solar are going public, Enphase, Shoals and Array are valued at 100x earnings with Nextracker and Loanpal filing their IPO docs.

ICYMI. I spoke about our role in helping develop the energy storage pipelines across the energy sector in this coverage. 

 Opinion

Best, Yann