This is your SolarWakeup for October 6th, 2022

IRA Is Bigger Than First Thoughts. Yesterday’s rundown had a report from the World Economic Forum that showed that just this year, renewable energy saved Europeans $29billion in energy costs. This stems from the fact that assets without fuel costs have to only persist in a capex environment with opex largely fixed for the life. Batteries add to those savings because they provide the resiliency without fuel volatility like a peaker plant would. With savings like this, product is in high demand, from solar panels, inverters, transformers and batteries. Projects to be built in 2024 and 2025 have to contract now to get done on time.

Demand Soars, So Does Fly By Night. You’re seeing it already, the get rich quick schemes around the IRA opportunity. With trillions of dollars ready to deploy, getting the money invested is much harder than investment committees think. That also creates a rush towards poor quality and short term thinking, i.e. spend less on capex and hope for the best. In some ways, tax equity provides a level of bankability requirement and that should create a focus on track record, uptime, and financial stability. Cheaper isn’t better, especially as solar plus storage starts getting into power markets and resource adequacy contracts, the higher upside is match with downside if you can’t perform.

IRA Rules Implementation. The government is looking to get the rules set, if you have input, now is the time to get involved.

What To Watch For. OPEC cuts production and draws White House response. Puerto Rico grid isn’t getting any better with new manager and committees. Babcock Ranch in Florida is still not a solar community, it just has a solar farm located nearby. (Newsflash, solar hardware is engineered to withstand 170mph winds and showed that engineers did their jobs)

Opinion

Best, Yann