This is your SolarWakeup for September 30th, 2020
First In 12. Much to my surprise and many others, Chris Wallace went off script last night (there wasn’t much of a script at this point anyways) and asked a climate change question to Trump and Biden. This was the first climate change question in 12 years according to Grist reporting in a presidential debate. I won’t cover the answers, it ranged from raking the forest to weatherizing buildings and regulating methane. Biden did call out the SunShot success in lowering the cost of solar to record levels, a nice mention of our industry.
The Role of Labor. We don’t talk about this often, our industry is different, but it should also be part of the discussion. Many of the utility and oil infrastructure jobs are part of major labor unions. Labor has been one of the major political forces fighting solar policies in State capitols. The crush on oil, COVID aside, has very little to do with our industry that would fall more on the EV infrastructure and utility sector. The utility sector tends to take a very strong position fighting against labor unions. Solar on the other hand is largely silent but we shouldn’t be. I believe that I would be directionally correct in saying that 50% of solar capacity is installed in partnership with labor unions including large scale solar in California, many public projects across the country as well as DG projects in states like NJ, MA, NY and IL. I would love to hear your view on this, including data that may support or refute my thoughts.
No Congressional Acts Likely. Senator Whitehouse is holding out hope for the Senate to take up climate legislation. As much as I would love for the Senator to be right, he may have thought this to be true before last night’s debate.
EPA, SCOTUS, and What If. In the week’s leading up to and after the selection of Kamala Harris as the VP, we wrote about how she could lead the fight against climate change by taking on polluters with laws like the clean air and water acts. In reality, these laws are on more nuanced standing after the passing of Justice Ginsberg who wrote the opinion giving the EPA the power to regulate emissions. The case for regulatory overreach was often argued by Justice Scalia including as recently in 2015 in Michigan v EPA where Scalia wrote the opinion for the 5-4 majority. If you recall, I quoted Justice Ginsburg’s 6-2 majority opinion from the EPA v EME Homer City in 2014 which gave the EPA more ability to regulate emissions across the Country. With the balance of the court changing, based on Judge Coney Barrett’s comments that Scalia’s views are her views, you can imagine some ability for a Biden/Harris administration having more difficulty executing on the pollution enforcement strategy I outlined just a few weeks ago.
Solar Market Update Call. The solar market can be considered complex and fast moving but if you join this monthly market call you can make sense of it. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for September 29th, 2020
Canary In the Cali Mine. If at times this page has felt California heavy to you, I agree. But in reality that is where almost 50% of solar is being installed and where the future of solar rules nationally get tested. More recently, California has experienced the impacts of climate change, grid resiliency and aggressive policy that will be the showcase for everyone else. It makes sense to take inventory of some of what is currently happening and expected to be implemented in the future.
Climate Change Impact. Coming off a tandem of major heat waves and experiencing one of the fiercest wildfire seasons, California is no longer waiting to see how climate change will impact its population and environment. It is testing the resiliency of the infrastructure including a power grid operated with central planning, purchasing and generation. Climate change will look different in some ways across the Country but power lines will be the weakest link whether we are talking derecho in Iowa, snowstorms in the Northeast or hurricanes in the Southeast. Tomorrow we will take a look back to our Kamala Harris prediction regarding climate policies if she wins the Vice Presidency.
All Electric Transportation. Not only does California have a 100% RPS goal in the not too distant future but now has an executive order signed by Governor Newsom last week that most cars sold will have to be electric by 2035. The governor discusses this with Kara Swisher on her new podcast Sway where I will soon be a guest (I wish, but call me Kara!). In reality, Newsom is making a headline of what many already predict to be true. Electric cars will be the norm within a decade. As an aside, there seems to be tension between Newsom and Tesla given the many opportunities that Kara gave the governor to talk about the auto OEM partners he talked with. It is important for the goal to exist, even as an executive order, so to make the rest of the energy ecosystem think about what needs to happen if oil loses the market share to electricity within 10 years (not a long time in energy world).
Future Of Distributed Assets. Some of us think about the policy that drives the solar market on a full-time basis, many of the readers of this newsletter do it 24/7 and as a director on the board of CALSSA I can attest that the CALSSA team does it better than anyone else. Our industry, namely solar and storage, is at the center of the climate change and electric vehicle venn diagram. The ability to manage through heat waves and matters affecting grid resilience requires the robust use of demand response, much of it distributed (see the point about the weakness of transmission above). It also includes the future of vehicle to grid (V2G) technology where cars are a form of nonstationary power as well as eliminating charging as a function of demand response. With some 80 million single family homes in America, the future of the grid will be in a good place if homeowners are made part of the grid not just a user, resiliency will depend on that.
It Takes Regulators. More than anything, Newsom needs to name a distributed solar expert to the CPUC and other governors should follow. Over the next few years, there is little that we can do that is more important than becoming part of the system that regulates us and the incumbent market participants. This isn’t just to drive positive policy but it is also meant to create comfort. Here’s a recent example. Local resource adequacy (local RA) is implemented through projects like a portfolio of solar with storage projects that are in homes, multifamily and businesses where a system operator can dispatch those assets during certain events. CCAs have been leaders in piloting and adopting these virtual power plants with great success. When local RA procurement came to the CPUC, the CPUC didn’t trust the procurement to the local aggregators but gave that power to two investor owned monopoly utilities showing that there is a lack of trust and comfort with newer participants. Policies like that have to adapt to the new normal, a norm that is smaller in scale and more distributed than ever. Resilience in many ways means duplication, a plethora of what if scenarios, and needs to take some new realities into account.
Oil Company Takeover. In over 100 years, oil companies and electric utilities never competed. If anything utilities used to be a major client of the oil companies but when it came to transportation it was smooth sailing for major corporates. If transportation goes electric, that stirs major competition that will meet in the hall of every Capitol across the country unless oil companies are also in the electric business. The advantage they have is that they are fundamentally traders whereas utilities are not always very good at it, unlike their IPP cousins. Just last month Portland Gas & Electric took a >$100million loss on a bad trade. The change from oil to electric could yield major volatility and trading benefits to these companies. When you read about oil companies adding a renewables arm, that means they are adding an electricity division and getting into the game. Note to the reporters covering this, all the oil companies are already in electricity but only seek headlines when they need more deal flow.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for September 25th, 2020
It’s Friday. Have a great weekend! On Monday we will cover what it takes to get to 100% clean energy by 2030 with no ICE cars by 2035 and when it has to start.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 24th, 2020
California’s Car Forecast. Newsom is picking fights by banning combustion engine cars by 2035. This is a good goal and likely a reality anyways. Tomorrow, Newsom has the ability to enable the path for the clean energy economy to be ready for those electric cars to be fueled accordingly.
GE’s Coal Regret. GE is ending its time in the coal business. One must ask what the point of the Alstom acquisition to the tune of more than $12billion was.
More Solaredge Money. The inverter (and more) manufacturer is raising $500 million in the form of debt. The company has made mention of desired increases to R&D spending.
China’s Energy Transition. China is increasing its renewable energy targets and more specifically shifting peak emission targets to before 2030. This comes from a speech to the UN General Assembly by Xi Jinping.
NBA’s Energy Politics. If you watched last night’s Miami Heat victory of the Celtics, Go Heat!, you saw an NRG logo. On Miami’s ‘home court’ in the Florida bubble, it was great to see a retail energy choice provider’s logo. Executives from NextEra watching the game were probably annoyed given their opposition for NRG to ever provide consumers any choice in the state.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
MDV-SEIA’s Solar Focus Conference. With events going virtual, it’s important for companies to support their state chapters and allows for out of state companies to participate in the virtual events. Register for MDV-SEIA’s conference.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 23rd, 2020
Deal Day, IPO Coming. Array Technologies filed for their IPO yesterday, looking to raise an easy $100million. With over $1billion in sales and EBITDA somewhere in the 15% range, Array is going to have no problem raising the capital. The question is how big will the valuation be. Couple of interesting points. First, they should have done a direct listing. The market will value them much higher than the IPO will yield for shareholders in my opinion. Second, I’m surprised a SPAC didn’t make a big bid for this real business. Last, don’t be surprised if there is a last minute acquisition of the business instead of the IPO.
Battery Day Highlight. Tesla hosted its battery day yesterday. Here’s the three things you’re going to want to know. Tesla will seek to eliminate cobalt from its chemistry. The company will seek to make cathodes in-house and in the United States, Tesla continues to be a major creator of manufacturing jobs in the US. Doing so will aim to lower battery costs by 50% allowing for a $25,000 car to be sold. We will cover the impacts of a mass market electric vehicle another day.
The Case For Power Markets. In my latest podcast we talk about the pros and cons of monopolies versus power markets. One key difference between the two is how much gas is built one way or another, because the free markets basically eliminate any new natural gas plants from being built. This makes one wonder why IOUs feel the need to continue doing so when it’s not the best path forward.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
MDV-SEIA’s Solar Focus Conference. With events going virtual, it’s important for companies to support their state chapters and allows for out of state companies to participate in the virtual events. Register for MDV-SEIA’s conference.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 22nd, 2020
The Power Of Markets. There’s a new report from Deloitte that talks about the cost, feasibility and timing of the utility decarbonization goals. I don’t want to judge the conflicts of the report but it’s important to note that Deloitte makes a significant market working with utilities. Deloitte measure the feasibility as doable with significant cost and need for innovation for success. The counterpoint isn’t that it’s not feasible, it’s that the market needs to change and be competitive.
The New Pod. In anticipation of the report, SolarWakeup’s latest podcast looks at the energy market in the Southeast US and what it would look like if it was competitive. I talk with Mike O’Boyle from Energy Innovation who wrote the study. Without spoiling the report, consumers would save billions of dollars and get cleaner electricity while the States would create jobs.
RBG Environmental Opinions. Environmental laws have not had the airtime nor headlines at the Supreme Court until recently. Politico does a nice job of describing RBG’s role in the opinions, especially around the EPA’s jurisdiction over bodies of water and pollution. When the EPA runs into jurisdictional battles with States that aren’t interested in following federal rules, you can thank Ginsburg for the opinion that gave EPA jurisdiction writing, “When Congress elected to make EPA's input a prerequisite to state action under the act, it did so expressly."
It’s Battery Day. Tesla is holding its annual shareholder meeting and battery day. Watch for big headlines about battery production and the price roadmap ahead.
Corporate (Virtual) PPAs. We’ve seen several gigawatts of solar transacted between solar farm and corporate off taker. Some call them virtual, corporate or remote arrangements. What we need is for those transactions to be open-sourced, so if you are a counsel, financier, developer, owner or customer in one of those transactions it would be great for the market for that to be explained to the market and made less esoteric.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 21st, 2020
Florida Looks Ahead. It’s well known that Florida’s net metering policy (which is more than 10 years old) is one of the fairest and straightforward policies in the Country. With the highest energy consumption per capita (residential) in the Country, distributed generation through solar and solar thermal is part of our DNA. The PSC held a workshop to discuss this and got tens of thousands of contacts from consumers asking for things to remain as is. Those that talk cost shift fail to identify many variables of why their statement is incorrect and intellectually dishonest. Florida will continue growing their solar market.
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Yann
This is your SolarWakeup for September 18th, 2020
Happy Weekend. Let me give an end of the week shoutout to the parents and teachers in the SolarWakeup family. Virtual learning has turned me into tech support and hall monitor while the snack pantry has no way of supporting a ten year old sitting through a 7 hour zoom call. Have a great weekend and for those that celebrate, Happy Rosh Hashanah!
Delays Not Reductions. This is the part that everyone is getting wrong about their analysis of the solar market as it pertains to Covid. Forecasters are tracking the end of the funnel, not the entire ecosystem. Two things happened during Covid that you won’t find in lower install volume. New sales never stopped and in many cases didn’t slow down but picked up steam. More people were home learning about solar and signing contracts. This caused the installers to grow their biggest backlogs they’ve ever had since installations had slowed down. That is why every month since June, installers, lenders and suppliers have had their best months ever, every single month.
Newsom Has The Opportunity. Newsom always says the right things when it comes to climate change and typically when he talks about solar as well. Here are several things that are in his court right now that cost nothing, help provide solutions for climate change, resiliency and the energy crisis and positive economic growth. First, Newsom can call for a statewide adoption of instant permitting for residential solar by implementing the SolarAPP. Second, he can show leadership by calling on the CPUC and SMUD to strengthen net metering, not try to destroy the policy. Third, direct the CPUC to return local resource adequacy purchasing back to the local utilities and CCAs. Fourth, work with the CPUC, CAISO and market participants to create a more granular and accessible demand response market; not just during energy crisis but at all times which will create a vibrant and resilient microgrid market. Lastly, stand with CALSSA on the Capitol steps and call on all Californians to support the 1 million solar batteries initiative. Call us, we’re available!
FERC Wants DERs. There is a realization happening in the market that distributed resources are a valuable asset to grid resiliency. The South Carolina settlement is wrapped in value placed on the assets. Yesterday, FERC passed order 2222 which tells power market operators to create rules that allow distributed resources to participate in the market. We’ll bring you more detail on this in the coming weeks.
Catch Me. If you didn’t get the chance, I was a guest on the Solar Spotlight podcast.
A New Mark. The SolarWakeup Buyer’s Group now has members doing over 200MW in aggregate. This means more vendors wanting to do more with those members and that means savings for you. If you’re curious, check out the price discovery page.
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Yann
This is your SolarWakeup for September 17th, 2020
BP Solar Comeback. 20 years ago, BP was the talk of the solar town. Just outside of DC, BP made solar modules because solar was the future. Then came Chevron with tax equity but that too passed. When you look at issues facing oil today, part of it is Covid and hundreds of parked airplanes but the other one is that oil is competing with electricity and losing. BP is in the business of powering your method of transportation, that’s why Vitol is out with an announcement expanding their power trading as well. Electricity is the new oil and that’s where the majors are going. Not too long ago, BP said that they couldn’t invest enough capital in renewables. 5 years from now they will have invested tens of billions and more; with less risk and better returns than they get today. Anyone doubting their return expectations go check out their corporate bond costs and ask your friend at NextEra if they expect 8-10% returns as well. Here’s a prediction, in my lifetime the CEO of BP will come from the renewables division and it will be the core revenue generator.
The Greater Responsibility. Peter Parker was told that with great power comes great responsibility. If you haven’t noticed, solar is being asked to do a lot more than install a few panels. Our industry will lead on creating jobs where other industries have left them behind. Remember the Gaval family in Mahanoy City, Pennsylvania living in a home worth less than $115,000? I haven’t stopped thinking about them and how the parents and two sons would surely be an asset to the solar industry and they could each live in their own house. We hold ourselves to a higher standard than just making money. Helping others, making solar inclusive and diverse while creating more jobs than any other sector is part of our DNA. With that internal bar set so high, outsiders will judge us and expect solar to fix it.
EV Charging PubCo. Chargepoint is going public via a reverse merger with a SPAC. This is a great step in the direction to bring charging to retail investors. For me, retail investors create comfort and credibility for the underlying company they are working with. An investor may look at it from a company standpoint and then realize they have 50 chargers in their County and they should get an electric vehicle. It normalizes the concept.
Farewell Spent Rods. I had some long form opinion about the state of nuclear but as much as some utility regulators hold out hope that nuclear is the future, it is merely the past. We will not see another nuclear power plant built in the US and likely other western Countries as well. There are many reasons for this but the biggest one is the lack of capability to actually build one.
SC Rooftop Solar. Vote Solar is calling the agreement with regulators and Duke Energy “the most forward thinking rooftop solar program in the US.” The NEM successor creates a system blended with demand response, storage and other variables in what some would call the biggest step towards performance based compensation. Without modeling out how this actually tracks to homeowners, I have two thoughts on this. First, a deal is a win and certainty beats uncertainty any day. Second, wouldn’t it be fantastic if the monopolies also had performance based compensation and allowed a robust power market in their territory?
Catch Me. If you didn’t get the chance, I was a guest on the Solar Spotlight podcast.
A New Mark. The SolarWakeup Buyer’s Group now has members doing over 200MW in aggregate. This means more vendors wanting to do more with those members and that means savings for you. If you’re curious, check out the price discovery page.
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Yann
This is your SolarWakeup for September 16th, 2020
No Column Today. Your solar news will return tomorrow including a new SolarWakeup podcast about the concept of a competitive power market in the Southeast United States. If you prefer to hear my podcast from the other side of the table, I joined the Solar Spotlight from Greenlancer podcast to talk about solar.
Thoughts. Take a moment to see how you can help our friends in the Gulf Coast. Hurricane Sally is going to be incredibly wet, when it passed my house last weekend we got 10 inches of rain and now is forecasted to do 30 inches in Louisiana. It’s wet and slow, one of the worst combinations for hurricanes.
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Yann