This is your SolarWakeup for July 14th, 2020
Happy Birthday. Today is my oldest child's 10th birthday. That seems insane to me but in the hopes he one day comes back and reads every newsletter, happy birthday E! Not to worry, we'll be at 100% clean energy by the time you graduate college.
Talking To Congress. This week 650 companies in the solar industry made their voice heard in Congress. This is a bipartisan call for action on policies like refund ability of the ITC, inclusion of storage and more. Over the past 3 months the solar industry has shown its resilience, not only in bouncing back with jobs and market but also with public company performance. Public solar companies have done better than other companies. The industry is also there to pull the rest of the economy up with it as we expand.
A Big Announcement. Reporting from Bloomberg has it that Joe Biden will announce his plan to build back the economy later today which will include a call for 100% clean energy by 2035. That’s 14 years away and quite the initiative, one I support for financial, moral and environmental reasons. The saying goes, if we’re right about climate change we will have done something about it but if we’re wrong about climate change we will have created jobs and economic growth. There is no downside to actually implementing this and a clear distinction of the political race we’re in.
A Decade Of Action. I want you to think about what it means to get to 100% and the steps you have to undertake in order for us to achieve that. It won’t be easy but it is readily achievable. It sure that we will need more of everything but like all things that solar undertakes we have to also figure out how to do it better. That’s why tonight the latest SolarWakeup podcast talks about sustainability inside solar companies. I talk with TJ Kanczuzewski from Inovateus. They recently published their sustainability report and talk about zero waste construction for their EPC projects. We need more solar but unlike the oil and gas wells that are left behind creating environmental disasters, solar will do better.
Industrial Electrification. What would a truck look like that has a battery in the bed of it that goes to a construction site and charges electric caterpillar machinery? Seriously, I have no idea of the scale of the truck it takes to achieve that. Today, trucks carrying diesel go to the sites but if we electrify machinery that truck gets replaced by something else. Maybe utilities will have mobile stations that get connected to temporary power instead but for the electrical engineer readers, I’m interested to learn.
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Yann
This is your SolarWakeup for July 13th, 2020
EVs In Focus. Rivian has raised another $2.5billion. What is now becoming clear to me is that the existing OEMs are not able to get real on EVs. They have the teams, money and facilities but can’t get around to making EVs that actually do what they are supposed to, cannibalize their existing market. Tesla will be joined by Rivian and then another but until salespeople, dealers and designers see the benefits of change, they will resist it.
Effective Load Capacity. Twitter has the best headlines buried in it and I hope that reporters will take this one on. California utilities have studied the effective load carrying capacity (ELCC) of various forms of renewables, names solar, solar with 4 hours of storage, wind and wind with 4 hours. You’ll have to read the filing to get the full definition of ELCC but it is as it seems, how effective at providing electricity is each source when the grid needs it. Here’s the headline, tracking PV is 6.9% when judged as an as-available resource. Add 4 hours of storage to it and it jumps to 99.8%. This remains true even in 2030 when the ELCC for solar hybrid is still 93.2%. Let’s reevaluate the race to the bottom on energy cost and get projects built that monetize the value of the assets.
500 Million Solar Panels. Part of the Biden-Sanders plan brings back an idea from Clinton in 2016, 500 million solar panels. In my podcast from a few weeks ago with John Farrell, we talked about his plan for 30 million solar roofs and it’s similar to a memo I wrote a year ago pushing for no more naked roofs, i.e. solar on every rooftop. Biden’s plan is clear, we’re going to do more solar. Industry folks will push for a different metric but people understand solar panels more than they understand watts or kWhs. If you could write the plan for the Biden campaign, what are the bullet points?
Are Modules Fungible? Rinse and reuse as they say. The SolarWorld factory in Oregon was acquired by SunPower and now the factory in Germany is taken over by Meyer Burger. Meyer was historically a provider of factory solutions to OEMs looking to manufacture. Now they feel that their solution is fine branded under their own flag. So I ask you to think about this, what is the value of the label on the module? I’m not talking about quality or materials used, but the label itself. Residential solar modules range from modules in the 30s per watt to over $1. Brand names and names only solar pros know, silver on white and black on black. Is this fungible or drive a homeowner to make a decision one way or another.
Mobile But Stationary. Here is the corrected link for the podcast with Orison CEO, Eric Clifton. Orison is the storage company that makes storage for your home but plugs into your outlet. Podcast link for Apple and Spotify
Trivia Answer. Last week I asked who the largest pure play installer was now that Sunrun is acquiring Vivint Solar. Of course SunPower and Tesla follow Sunrun but they aren’t only installers. The answer is Trinity Solar out of New Jersey.
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Yann
This is your SolarWakeup for July 10th, 2020
Talking Orison’s Battery. In this week’s podcast I talk with Orison’s CEO. Orison is the startup that recently raised $8.5million for their energy storage hardware product. If you read the comments about the original coverage you’ll see that there is some pushback about the product from inside solar and I ask him some of those questions. Please rate and subscribe to the podcast.
Two Energy Policy Options. The Biden campaign, in collaboration with the Sanders advisors, released a strong and ambitious plan to fight climate change. More renewables, R&D, job training amongst other initiatives. In November there are two options on the ballot and when it comes to energy only one of them has a real plan. There are some great events coming up that I’ll be sharing with you and in the meantime hope you start putting your money behind the policy that increases the market for your work.
Revisiting Equity In The Workplace. BlueWave Solar released their actions and plan to practice anti-racism in the workplace. The plan is simple and to the point and I appreciate their willingness to be open and share it with the industry.
Readers Helping Out. A personal thank you to Panasonic’s Jack O’Donohue for a kind message on LinkedIn about SolarWakeup. It gave SolarWakeup a new network to welcome to the readership. Thanks Jack!
Share Data, Not Germs. Thanks to the great team at UtilityAPI for sending one of these really cool masks. What are your branded masks looking like?
Nonprofits Want Solar Too. My friends at CollectiveSun can help you sell more solar to nonprofits. By working with CollectiveSun your nonprofit prospects get easy $0 down financing and a 12% or more tax-like credit for their systems. Now, more than ever, solar can help nonprofits save on their critical operating expenses. If you are a solar installer or developer, this is a great solution for you to sell more solar and ignite more deals with nonprofits. Click here to learn more about working with CollectiveSun.
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Yann
This is your SolarWakeup for July 9th, 2020
A Feel Good Story. The CEO of a Los Angeles based installer has the story that we want to hear in solar. Kenneth Wells didn’t have it easy growing up and after 6 years in the criminal system found himself entering the solar workforce through a program at Grid Alternatives. That training led to more solar jobs before ending up at Sunrun as a construction manager. Today he’s his own boss running O&M Solar Services. There isn’t enough funding for solar groups like Grid Alternatives and training centers, and stories like Kenneth’s help tell the solar success story.
Solar Is Misunderstood. The headline pulled me in, I wanted to read more analysis on what folks thought about Sunrun’s acquisition of Vivint Solar. Reading the article, I was shocked by the confusion. In short, the author says that Sunrun bought Vivint Solar because more homeowners are buying solar instead of leasing it and Sunrun wanted to more share of the “shrinking slice of the pie.” Cash, loans and leases are democratized. Most installers have access to all three financial products today and this deal isn’t about leases.
PacifiCorp Responds To Solar. Two days in a row for the Northwest utility on SolarWakeup. The 58th largest utility in America filed their IRP and is readying an RFP for 1.8GW of solar and 595MW of energy storage to be installed in the next 3 years. Not too shabby.
Capital Dynamics Wants It All. When MISO releases their recent interconnection data, we will likely see record applications that may reach over 2GW in applications, maybe much more. Capital Dynamics, the asset manager with a record of execution, is now partnering with Tenaska on a portfolio of 24 projects coming online by 2023. The total capacity is estimated to be 4.8GW.
Nonprofits Want Solar Too. My friends at CollectiveSun can help you sell more solar to nonprofits. By working with CollectiveSun your nonprofit prospects get easy $0 down financing and a 12% or more tax-like credit for their systems. Now, more than ever, solar can help nonprofits save on their critical operating expenses. If you are a solar installer or developer, this is a great solution for you to sell more solar and ignite more deals with nonprofits. Click here to learn more about working with CollectiveSun.
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Yann
This is your SolarWakeup for July 8th, 2020
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59th Largest IOU. The combination of Sunrun and Vivint Solar, from hereon out called Sunrun will have over 500,000 residential customers. According to EIA, that makes Sunrun the 59th largest investor owned ‘utility’ nestled between Duke Energy South Carolina and Pacificorp. For reference, it is 1/7th the size of PG&E and 1/9th Florida Power & Light which sits at 4.3million customers. At the point of IPO, Sunrun had 80,000 customers and adds about 40,000 customers per year. In comparison, many of you residential solar installers are considering yourself huge when you reach 1,000 installs per year, something less than 50 companies in the US can say.
Installer Trivia. Sunrun will be the largest by far followed by other public companies, Tesla and SunPower. Can you name the next largest installer measured by number of permits pulled?
Management Talking Points. The companies hosted a conference call yesterday morning led by Lynn Jurich (CEO), Ed Fenster (Executive Chairman) and Tom vonReichbauer (recently new CFO of Sunrun) joined by CEO of Vivint Solar, David Bywater. The call started with highlights of the synergies and complementary nature of combining the companies. Sunrun is adding direct to home sales engine and the combination will save $90million in overhead. Wall Street analysts are focused on the $90million in cost synergies which was frustrating for me on the call because it misses the larger point. The combination is 500,000 customers and while the company isn’t focused on the ability to add storage to those customers, it remains an asset. Behind the scenes analysts tend to view the deal in a positive light. The optimism comes in the form of short-term, refinancing the debt of the entire portfolio, and longer term partnering with low cost of capital, pension fund type, investors to create a competitive edge. The real value and reason for scale is that the residual income that the general partner (Sunrun) can create from these portfolios could be enough to fund the overhead of the platform. That would bring Sunrun into the public company glory land of positive earnings per share. More to come on this, particularly from financial analysts.
The Nodal Impact. Most regulatory risk will talk about antitrust approvals, I don’t worry about that especially since Sunrun and every solar installer compete against electric utilities which are you know, monopolies. Also not a risk, but interesting to talk about is what happens when Sunrun and solar companies in general control energy storage all over the residential grid. Imagine Sunrun with 500k storage units across the Country, will utilities ask regulators to oversee that control? Nationally it’s diverse enough but think about it at a nodal level.
IPO To Quasi-Merger. In 2014, Vivint Solar went public with my writeup on the S-1 and in June of 2015, Sunrun filed its S-1. A month later, Sunedison entered into terms with Vivint Solar to acquire the company for $2.2Billion. It has taken exactly 5 years from that moment for the Utah based company to enter into a new agreement. This all-stock acquisition feels a bit more like a merger to me but now you have the fruits of over a decade of labor. Someone could and should write a book about Sunrun from the early days of resi solar, lots of fun stories involving startups, SolarCity, race cars, rocket ships and of course American Idol. This feels like a summit of sorts, but we know that much more work is to be done by the industry.
Pipelines And Politics. A lot of talk about pipelines this week and how the potential Biden presidency impacts the development of those. That logic is flawed. Pipelines are financial investments that span decades, you need a consistency of policy not a momentary positive followed by a negative. Even if the next decade only feature republican presidents, would pipelines continue to be built? The trend on this is the direction away from the fossil fuels in oil and gas pipelines and towards transmission, especially HVDC. The trend line is more important than the election.
Nonprofits Want Solar Too. My friends at CollectiveSun can help you sell more solar to nonprofits. By working with CollectiveSun your nonprofit prospects get easy $0 down financing and a 12% or more tax-like credit for their systems. Now, more than ever, solar can help nonprofits save on their critical operating expenses. If you are a solar installer or developer, this is a great solution for you to sell more solar and ignite more deals with nonprofits. Click here to learn more about working with CollectiveSun.
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Yann
This is your SolarWakeup for July 7th, 2020
Sunrun And Vivint Solar. The big news of the day, the week and the year is that Sunrun has agreed to acquire Vivint Solar. We’re going to talk a lot going forward about what this $3.2Billion transaction means for the industry. In the meantime, before I get the chance to listen to a call hosted by the companies in 90 minutes, we know that it is an all stock transaction where Vivint Solar shareholders get 0.55 shares of Sunrun. This means that Sunrun shareholders will control 64% of the combined company. All of this has been signed off by the board of directors and is expected to close late this year. Closing will require regulatory and shareholder approvals to get this done.
First Thoughts. This long rumored transaction brings together the two largest residential solar installers. In a year where COVID is hammering markets, residential solar is saying we’re growing, we’re profitable and we’re no longer waiting to get deals done. There are going to be questions by regulators, should the top 2 installers be allowed to merge? Vivint Solar shareholders are controlled by the Blackstone Group but Sunrun shareholders will have to understand the value of the acquisition. It is notable that they are acquiring the VSLR at only 10% premium to yesterday’s close and it’s an all-stock deal. The bet is that scale is a winning variable to the upcoming decade and that having 500,000 customers (many of whom don’t have storage yet) is a value that isn’t being monetized today. I hope all of the service and product suppliers to both companies have a fruitful day of meetings figuring out what this means to their business.
SCOTUS Pipelines. If the Atlantic Coast Pipeline wasn’t enough for oil and gas news, a judge stopped fast track progress for the Dakota Access pipeline and shortly thereafter the Supreme Court affirmed that decision in a roundabout way. Fast-tracking for projects can proceed except for the Keystone XL application requested by the Trump administration.
Stationary vs Mobile. The batteries are the ballgame in this decade. You can look at the key talking points in the Sunrun press release, listen to their messaging, or read the news from car companies. Whether the batteries are stationary or mobile, the only difference is who gets to sell them to homeowners. Keep your eye on the pilots for V2G, vehicle to grid, programs and how they interface with homes and codes.
Nonprofits Want Solar Too. My friends at CollectiveSun can help you sell more solar to nonprofits. By working with CollectiveSun your nonprofit prospects get easy $0 down financing and a 12% or more tax-like credit for their systems. Now, more than ever, solar can help nonprofits save on their critical operating expenses. If you are a solar installer or developer, this is a great solution for you to sell more solar and ignite more deals with nonprofits. Click here to learn more about working with CollectiveSun.
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Yann
This is your SolarWakeup for July 6th, 2020
Buffett Goes Shopping. Berkshire Hathaway is buying the Dominion Energy for $4Billion plus about $6Billion in debt. This is the first deal that Buffett has done since the start of the pandemic and now gets Berkshire control of 18% of the interstate movement of natural gas. That’s something that should be considered. Keep in mind that Berkshire is heavy in the railroads which make a lot of money with coal transportation and natural gas are part of the fuel that is hindering coal’s future success.
Dominion’s View Forward. The obvious question is why Dominion would give up its natural gas assets. After a legal decision regarding the Atlantic Coast Pipeline, Dominion and Duke called the pipeline development off. With electrification and EVs on the horizon, corporate announcements on renewables rising, Dominion saw this as a graceful exit for their shareholders.
Is This A Larger Shift? The headlines will read, “utilities skip the natural gas bridge and go from coal to renewables instead.” I do believe that we are close to utilities saying that natural gas peakers are no longer competitive or the best thing for ratepayers. Most of the coal to gas power plant replacements have already occurred, the majority of ratebase has already funded the construction and we can rotate into solar plus storage mass adoption. I’m all for that last bit but wouldn’t mind regulators doing the math for ratepayers on whether the assets should be built on the utility balance sheet or by 3rd parties with a PPA.
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Yann
This is your SolarWakeup for July 3rd, 2020
Time To Reload. Hannon Armstrong acquired 49% of the 2.3GW Engie portfolio consisting of wind and solar assets. This type of transaction allows both parties to benefit. Hannon, as a public company, is looking to deploy capital into assets that are yielding consistent returns. Engie also gets to retain control and return capital to the teams for future deployment. Hannon is the REIT that will put solar assets on the map for dividend focused investors.
Truth Starts Coming. NERA, the probably front group trying to federalize rate regulations, is trying to argue it’s way back into a case to be heard by FERC. With near unanimous dissent on the original filing, we now have at least some information on membership including an individual tied to a firm that has several IOU clients. There are 15 members of the group, ten of which pay $20,000 per year. Think about that, what group are you part of that has 75% of its members paying $20,000.
Utility Virtual Power Plants. Portland’s utility is getting into the virtual power plant market that is going to drive more headlines over the next few years. This pilot allows for over 500 homeowners that either have a battery or would like to buy one to benefit financially from interacting with the utility. Not for nothing, Portland’s utility was also the partner on my first large rooftop projects some 12 years ago.
Happy 4th of July. Stay safe, stay home and think of the things that make America great. We’re lucky to be here and working in the industry doing really great things.
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Yann
This is your SolarWakeup for July 2nd, 2020
More To Come. Come back tomorrow for more analysis of the solar news. Make sure to listen to my interview with Nick Chaset of the EBCE CCA as we talk about the Virtual Power Plant. Next week, we talk with Orison CEO, Eric Clifton about their upcoming launch and recent capital raise.
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Yann
This is your SolarWakeup for July 1st, 2020
Reminder, Take ITC Action. SEIA is asking companies to sign-on to our letter urging Congress to support pro-solar policies.
The Dems Release Climate Playbook. 2 years ago the House named a select committee on climate change and the committee went to work without much fanfare. Now a 500 page report is being praised, you’ll have to read the report or reporting on the report to learn more about it.
But, If You Care. Whether you care about the ITC, tax code, land management, transmission lines, FERC rules, trade policies or DOE priorities that impact solar, only one candidate will care about solar come November. Time to put your money where your money comes from and support Clean Energy For Biden. If you want the ITC extended at existing rates donate $26 or if you want it to go back to 30% then donate $30. If you want solar to have a real impact in the White House, give the max $2,800. You can do all of that here, which gives credit to the SolarWakeup community and therefore pools our influence.
Early Retirement. Just like recent legislation allows for early withdrawal of certain retirement savings, it is time we allow and pursue early retirement of coal plants across the Country. None of them are financially, environmentally or socially viable. If you look at hourly output at any of the major service sectors you will see an energy portfolio that still needs a lot of work.
Florida Solar Growth. Florida released their annual solar interconnections this week. With more than 21k new systems and over 200MW of new addition, solar in Florida is real. The Sunshine State finally lives up to its name. Read the reports here.
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Yann