This is your SolarWakeup for August 12th, 2020
It’s Kamala. The VP pick is out and as predicted here last week, Senator Harris is joining the Biden ticket. The legislative headline right now is her environmental justice bill with AOC that is right down the fairway of solar advocates and our industries broader mission to do good. This opens the Senate seat in California and an interesting pick (though many say unlikely) is Kevin de Leon, former Senate Pro Tem and 100% RPS advocate. The Biden Harris ticket definitely sends a message to our industry that they view environmental issues as top of the to do list and our work is to hold them to it. That being said, you need to be elected before you can govern, which includes raising money. On behalf of the SolarWakeup family, you can show your support to the campaign here. This isn’t an election to sit out.
Time Of Big Modules. SNEC took place in China and PV-Tech visited the show. The story coming from the show is the increase in scale of modules, some doubling the standard 60cell modules in use in the market today. 500w, 600w, and even 700watt modules were exhibited as well as the expansion to 78 cells.
Everywhere You Land. Every person in solar has looked at the giant roofs without solar when they land at major airports, naked roofs. These naked roofs are a major dilemma for solar pros because putting solar on them is much harder than you think. Energy consumption is generally lower than potential output, tenants have leases less than the life of the solar plant, energy rates are low and many are owned by SPV holdcos. The market development needed to target this market is to view these roofs as land where the plant does not typically serve the consumer below. So we can talk about the 145GW market potential but reality is more complicated than technical potential.
Free Solar For Everyone. The lead generation ads are largely annoying, my friends send me the latest government program guaranteeing free solar all the time. But reality and lead gen is getting closer together with the latest loan product from Mosaic that is no payment for 12 months, not much different from other consumer products. Here is something you wouldn’t see though, the loan is provided by Webbank (per press release) which is owned by Steel Partners, which also owns roofing/solar player OMG. There is no market impact of that relationship but I thought it was interesting that a industrial public holding company is in solar with two portfolio companies and most executives wouldn’t even realize it.
Duke Earning Call, Tweet. Goldman Sachs analyst asked Duke executives a solar question, hat tip to Ben Inskeep for catching this tweet.
Tweet Of The Day. From Dave Pomerantz, it involves utilities, CEOs, private jets and safety.
Buyer’s Group. Your competition is joining the SolarWakeup Buyer’s Group, ask them if you don’t believe me. The market is maturing and this is a big part.
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Yann
This is your SolarWakeup for August 11th, 2020
The Edge Of Scale. Selling solar to homeowners is an even playing field. Of course there are some advantages to those with more cash in the bank or purchasing volume but nonetheless a small company can compete with the biggest installer. In the world of virtual power plants, contracts with utilities, that changes. This was the quote from Sunrun CEO, Lynn Jurich, on the earnings call yesterday, “We have the contract with the utility for grid services which gives us a customer acquisition edge.” To their credit and that of utilities, it is still early in this newly created market. There is a future where utilities engage in virtual power plants with consumers without the installers. The highlight of the call came from Ed Fenster (Executive Chairman) on the discussion of tax equity. “We prefer a high corporate tax rate,” Ed said then explaining that tax liabilities increase and create more supply in tax equity markets. It also improves the value of depreciation by about ten cents per watt. At the end of the day, Sunrun posted a strong quarter, 78MW installed which is 24% lower than the same quarter in 2019. Given that the entire quarter was under the weight of a pandemic, I’d say it’s better than expected. The company did lowball estimates for the rest of the year, seemingly tempering investor expectations for future upside surprise in my opinion. Earnings Slides.
COVID’s Impact In Q2. We now have the public earnings reports from solar players for the COVID quarter, Q2 2020. None of the reports show the worst case we saw in the SolarWakeup surveys, down 50%+, instead the worst was about 25% down year over year. Europe is showing a stronger solar market and stronger COVID recovery which we saw in the SolarEdge earnings. None of the solar companies were willing to talk about backlog but we know that backlogs were growing through the quarter. Halfway through Q3, those that have made the pivot to the new way of doing things have figured it out versus those that are struggling. Q2 also gave coverage for one time costs, Sunrun had over $15million and Enphase had significant convertible note costs, but that’s not buried in the reports of a quarter we will all hope to forget.
At Home Microgrid. Generac quietly announced the microgrid in a box. A transfer switch and brain system that seamlessly integrates a generator, battery and solar production. In this design, the generator and battery can be smaller and therefore more cost effective. Generac has two inherent advantages to Enphase and SolarEdge, they have the generator market cornered and millions of existing customers that have a transfer switch installed.
East & West Coast Acquisition. Sunworks, the publicly traded solar company based in California, has been acquired by Vermont’s Peck Company. The combined companies represent about $88million in revenue according to company statements. Without too much detail, this was a share transfer and thus leaves the combined company as a publicly traded one.
Bill Walton Comes Back. SolarWakeup friend, NBA Hall of Fame, all time best NCAA player, solar expert and CALSSA’s annual dinner motivational speaker, Bill Walton, is back in solar. He is the recently engaged spokesperson for San Diego’s Stellar Solar. If you’ve never heard Bill talk about solar, you’re in for a treat. Here we go!!!
Out of Many, You Benefit. Every major industry has group purchasing cooperatives and now solar does as well. More importantly than a lower price point, SolarWakeup Buyer’s Group gives installers transparency and removes other costs from the price. Credit terms, warehousing, rebates and shipping are all packed into the price which removes the transparency you need to operate your business. This isn’t a replacement, it gives you an option to the norm. More info, price challenge and sign up on our website.
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Yann
This is your SolarWakeup for August 10th, 2020
WFH Reimbursement. With companies having their employees working from home, some going permanently remote, the load profile is shifting for the grid. It also begs the question of how companies will provide stipends to their employees. You could imagine a stipend for a separate bedroom, high speed internet or energy consumption. Which company will strike the first deal to put free solar on employees’ homes with the company picking up the monthly bill?
GM To Investors, Is Pepsi Okay? GM is contemplating the spin-off of its electric vehicle business. This would be very good for that division, able to focus and deliver better products but it would be a disaster for the old GM. The old company shareholders would be left knowing that their business has a decade left before most of its market share evaporates, with exception for a few niche market segments. There is no way that this happens and the CEO should have enough conviction to say so.
The New First Solar. Last week I wrote about the new SunPower, shedding its manufacturing to focus on sales and install of residential and C&I markets. First Solar is doing the same but looks to be focused on being a module manufacturer, centered on the implementation of the series 6 module. It already sold its O&M business and is now looking to sell its development arm. Interestingly it cites headwinds in tax equity, given that the company was a major opponent of the tax equity extension a few years ago. Development platform deals appear to be heating up, rumor has several other firms also being acquired.
Venturing Into Solar Investing. Investing in solar related startups is going to get better. As we get digital and the energy production gets smarter, teams of bright minds will be able to change the way things are done. This inevitably gets faster and better through pivots and iteration. Solar investing, into corporates, is very limited though there are now more folks that appreciate the space that have made good money doing that. I toyed with the idea of a Wakeup fund to seed companies a few years ago but neither the pipeline nor the investor base was there then. Not sure how this plays out but I’d love to see a solar angel fund circling the startup universe.
The Veep Week. We are likely going to hear Biden’s pick this week on his vice presidential nominee. The noise around energy being a counterpoint is getting louder so we will cover that angle when it comes up.
A Price Challenge. The SolarWakeup Buyer’s Group is presenting a price challenge. Take your favorite and most commonly used products and if they are on the price sheet for the buyer’s group, we’ll respond with your transparent cost for it. No frills, no negotiations, just the best price we could bring to the market using bigger volume. In the past week we’ve had outreach from every major manufacturer that appreciates the transparency and we look forward to adding more products to the portfolio. Of course you can always sign up and see for yourself.
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Yann
This is your SolarWakeup for August 7th, 2020
Storage Wars. Q Cells is acquiring Geli, the software that helps manage your storage assets. Geli has been around for many years and has been focused on the C&I market which Q Cells is seeing possible upsides in. The reality is that storage is the undervalued, under compensated and correctly hyped part of the solar market.
Situational ALertness. Trump reinstated a 10% tariff on certain Canadian aluminum. This can include US made aluminum that has to go to Canada for painting or manufacturing.
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Yann
This is your SolarWakeup for August 6th, 2020
The New SunPower. By all accounts from management, SunPower and Maxeon will be two separate companies this quarter. That means that the new SunPower will no longer have the burden of manufacturing and focus on being a large installation business. You can read all the details in their slides but a note on a data point that was spoken on the call, which is why you should always read the transcripts. In July, SunPower reached a new milestone of 1,000 appointments and exceeded that number every week since then. That means that demand for solar, at least from SunPower’s perspective, is stronger than ever.
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Yann
This is your SolarWakeup for August 5th, 2020
Midweek Recap. The SolarWakeup Buyer’s Group is launched and we doubled in size yesterday alone. You too can join the group and save. More info here as well as online portal for easy registration.
Uber For Solar. Palmetto closed their series b with $29 million in new venture money. I talked with their CEO and President just a few months ago (here). The software company enables more residential solar to be built and helps those that want to get into the industry.
Ideology Meets Reality. Biden wants 100% by 2035 and some are getting stuck on the definition of 100%. I want to hear how we get to 100% even if it means 80% and how it would happen politically. What rules have to be changed and what markets open up for this industry to create opportunities for jobs and growth?
PG&E Has No Shame. PG&E, freshly out of bankruptcy and still a convicted felon, is offering incentives for energy storage installations. Except that the program, SGIP, is legislative and CALSSA, solar advocates and partners were the driving force to get the bill passed in spite and not because of PG&E. They may administer some of the funds but today is a good day to remember your need to renew or increase your funding for CALSSA.
Seeing Green. Solar stocks are hot, no denying that. It’s also great to see that solar pros that took a bet on their companies by getting paid in shares, options and stock grants are seeing a real return for their hard work. We have genuine 8 figure value creation in this industry now. Enphase reported yesterday, positive results but down for the quarter as expected with a positive guide for Q3 as well as being sold out of their energy storage system for Q3. SunPower and Vivint Solar report today after the market closes.
Not So Green. BP cut its dividend in half, that won’t be good for the investors that trust on that quarterly payment.
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Yann
This is your SolarWakeup for August 4th, 2020
SolarWakeup 3.0. 2 years ago I joined the residential solar market and it changed my view on everything. Armed with a great product and a strategy to talk to every solar installer in the Country, the conversations began. Since leaving Quick Mount in May, it has been my absolute focus to eliminate as much margin stacking and inefficiency levied on the residential solar installer. From the factory to the customer’s rooftop, products can double in cost due to those inefficiency. Most importantly, installers do not have a clear view of what they are paying for. Rebates, transportation, logistics, credit terms, margins all make up some of that cost. Some installers pay 50% more for a product just because. Let me be very clear, this week you will hear exactly how tenacious and resilient solar installers are across the Country. We all play our part in putting solar on every rooftop in America and together we will make it a mature, transparent and efficient market.
The SolarWakeup Buyer’s Group. Not all installers buy 200MW of product per year, most don’t and shouldn’t. That doesn’t mean that they shouldn’t have the ability to buy product competitively without markups for things they don’t need, namely logistics and credit. The SolarWakeup Buyer’s Group is a group purchasing cooperative that will provide access to installers to some of the most commonly used products at pricing that matches the scale of a top 10 installer. By this time next year I expect the buyer’s group to be the largest single block of purchasing in residential solar. As the Buyer’s Group grows, installers will benefit from each other driving the price down and expanding the product portfolio. Group purchasing organizations are active in many other industries and my expectation is that we can work together to create a sustainable purchasing community in solar as well. You can join the group online or if you want to have a conversation, hit reply to this email.
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Yann
This is your SolarWakeup for August 3rd, 2020
Venture Ventures. GE Ventures is continuing to divest its portfolio, with the latest deal selling GE’s shares in 11 startups to 40 North Ventures. This story has two points of relevance for our industry. First, some of the companies are in clean energy including Enbala, Volta and Proterra. Second, 40 North Ventures is part of Standard Industries which owns GAF and GAF Energy. GAF Energy is the roof integrated solar product that spun out from GAF last year but has been internally built at GAF for a decade.
VP Portfolio. Every VP list coming from DC pundits has Senator Harris at the top of the list. Typically, from a strategic standpoint, a vice presidential nominee with legislative power would put forth new bills that bolster issues relevant to the campaign. Senator Harris is about to introduce environmental justice legislation. This isn’t the first time, 15 years ago as the San Francisco District Attorney, Harris pursued environmental crimes that disproportionately targeted poor communities. The bridge between climate change, income inequality and fossil fuel generators exists and Senator Harris, potentially as VP candidate, will be making that case nationally.
2 Out Of 50. Bribery charges in Ohio and Illinois largely hasn’t surprised most in solar advocacy, maybe the scale of it, but we’ve all seen how utilities maneuver the legislative limbo. The New York Times comes in with a well written documentation that makes the issue understandable by those outside of the industry. The NY Times asks for opposing views, which will be interesting to read if they come out. The real story that I hope get picked up is that this is happening in every State. Each instance may differ in degree but with the right investigative budget, the New York Times would find dozens of reportable cases. Even better, the New York Times should hire Energy and Policy Institute to do the investigation.
Arizona RPS Laughs. A regulatory body that seemed aligned to increase the RPS in Arizona ended up closing the proceedings rather abruptly when a difference of opinion of how to proceed became apparent. Twitter had some fun with this one but I’ll leave you with the coverage. Let’s see if the regulators have their staff coordinate and come back with good news.
It’s Kentucky. 50MW PPA signed in Kentucky, if Kentucky wants more of that in the future residents can call their senior senator and ask for the ITC to be included in the stimulus package.
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Yann
This is your SolarWakeup for July 31st, 2020
Weekend Vibes. Happy Friday and end of July. Here’s your rundown and fast feedback on today’s news in solar.
Support Energy News. EPA doesn’t like the coverage they are getting from E&E News and canceled their subscription. If you can, support E&E by subscribing. They used to have a fantastic TV studio that I’d love to host SolarWakeup TV in. In the meantime, solar should make a deal with coal plants across the Country, shut down the coal plant and replace it with solar plus storage and use the savings to clean up the site and help with job training of the displaced employees.
Virtual Power Plant Contracts. A month ago, if you listened to the SolarWakeup podcast, we had this story in my conversation with Nick Chaset from East Bay Community Energy. This is another virtual power plant using local resources. This type of project will become harder to do in the future based on the decision by the CPUC to take local resource adequacy responsibility off the hands of CCAs and giving it to PG&E and SCE.
Home Electrification. In a double newsday keeping my PR friends busy, Sunrun signed a JV with SK E&S, a Korean conglomerate. Each company will contribute $75million to a joint venture aimed at home electrification, which will be interesting to watch and understand what that means. SK E&S will also buy $75million worth of Sunrun shares at $36 per share.
Earnings Season. Sunnova beat and reaffirmed guidance for the year. Generac is predicting positive cash flow in clean energy in 2020. Next week we get Enphase and Solaredge. In case you missed it, listen to the Generac earnings call and you’ll get a look at how a CEO should handle an earnings call. It was a easy flowing conversation off the cuff without talking points and scripts. Solar companies should take note.
Utilities As Public Good. Utilities get monopoly status because they have a public responsibility, a responsibility to serve. This has been hijacked by shareholder desire for growth and dividends. First Energy is not out of the woods as 5 people get indicted by an Ohio grand jury including the Ohio Speaker of the House. It shows how far utilities are willing to go to get what they want from politicians and regulators. It seems beyond potential to rectify the situation but let’s hope it can be done.
CPV Project Goes Bust. A SolarReserve project has gone bust and a DOE loan guarantee will lose a little over $200million. Digging into PR talking points from 5 years ago, here is what the SolarReserve CEO had to say about the future of CPV at the time “We can’t power the planet with rooftop solar and the case for developing CSP when PV is cheaper.” I think rooftop solar won.
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Yann
This is your SolarWakeup for July 30th, 2020
No Column. Catch up on this week’s podcast about virtual batteries with the CEO of Extensible Energy. You can find it on your favorite platforms.
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Yann