This is your SolarWakeup for June 30th, 2020
Get Into ITC Game. Last week, the House Ways and Means Committee introduced the GREEN Act as a part of the $1.5 trillion House infrastructure package. The bill, which is expected to pass this week in the House, would push out deadlines for the Solar Investment Tax Credit and provide a direct payment option in lieu of the ITC. And now it’s time for you to take action. A strong grassroots push now can make a difference in solar’s ability to get pro-solar provisions added to bipartisan COVID-19 recovery legislation. Many of you operate in districts and
Les Nelson Memorial. Please join NABCEP and CALSSA for a virtual memorial celebrating Les Nelson. As you know, Les played a pivotal role in the solar industry, volunteering his time and providing valuable guidance on many industry boards. On July 1st, please take a moment to remember him. Details are here.
Value Of Net Metering. It’s been sometime since we had a big and public fight on net metering. Over the years we’ve had value of solar studies and this one from Michigan shows once again that ratepayers benefit from their neighbors putting solar on their roof. The reality is that net metering is a benefit to all consumers and the solar industry is perfectly fine with the simplicity of one to one credit on the production. On the other hand, simplicity has always been the attribute that opponents of solar hate the most since it doesn’t confuse consumers. This may be a year that ‘net metering is a subsidy’ debate comes back, stay tuned. Careful to all my utility readers though, messing with net metering will only serve to expand and increase the adoption of storage, accelerating the loss of consumers to the rate base.
The Corporate Market. Yesterday there was a story about a 500MW buyer in Europe looking for assets and today Bank of America does a deal with NRG. Neither of these two things really gets me excited. What really needs to happen is 200 1MW customers getting together to do a deal. There should be so many off takers in the market that no developer has to ask “how will I get an offtaker for this project?”. Even better would be that the competition over projects drives the value of energy generation up in price instead of this never ending race to the bottom because the project must have someone on the other end of it.
A Favor. You know this year is hard on groups working on your behalf. CALSSA is trying to offset losses to revenue and we’re falling behind in the silent auction. Please help us raise another $10,000 by placing a bid right now. This is money well spent at your business. Furthermore, if you’re not a member, please join. If you are a member, please contact Carter at CALSSA to join the President’s circle. All of these business expenses are offset by your reduced travel and trade show budgets and our work at the Capitol hasn’t reduced.
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Yann
This is your SolarWakeup for June 29th, 2020
Clean Energy For Biden. You can now support Joe Biden’s campaign on behalf of the SolarWakeup community. I was involved in Cleantech For Obama and this marks another moment when the solar industry can get behind the former Vice President. Join me by donating here.
Grid Electrification. Much news was made this weekend when PG&E came out in support of electrifying new construction in California. This may be news in the literal sense but it’s not for climate reasons. Electrification is a monetization strategy for a bankrupt monopoly. The gas pipelines have been a giant liability for the utility and there is little additional rate base in that market. Electrifying, especially in dense geographies means more infrastructure that needs to be upgraded.
Actions Will Prove My Comment. If you listen to my interview with Nick Chaset, CEO of East Bay Community Energy, you will hear about the complicated relationship between the CCAs and the IOUs. Especially as it comes to the important local resource adequacy procurement, CCAs have lost their control on what projects get greenlit. With the new central procurement process, local storage, demand response and microgrids can’t get paid for local RA unless PG&E and SCE say yes. While you’re there, please rate and review the podcast. You can do this even if you don’t listen to it, as a favor to me.
Utilities And SPI. Not to belabor the point but since SPI is happening this year and is going to be down in revenue quite a bit, I will remind you that half of the profits from the show go to SEIA and the other half go to SEPA. SEPA, which doesn’t have the word solar in it, has launched SEPA TV. So if you want to know what SEPA stands for at this moment in time, you’ll get to hear executives from APS, NYPA, Xcel, Edison International, PSEG and PNM.
Debt Gets Fracked. Chesapeake Energy has filed for bankruptcy protection, to restructure $7billion in debt. By no means does this mean they’re going out of business, they just want to pay their bond holders less for the debt continuing the trend of losing money for shale investors.
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Yann
This is your SolarWakeup for June 26th, 2020
Friday Funday. Another great week as we wrap up Q2, cross it off your calendar and go into Q3 without anymore excuses. Drop ‘in these times’ ‘because of corona’ from your vocabulary and do your work. Everyone is in a similar situation, just get it done. No more column today, have a great weekend.
Virtual Power Podcast. Check out the latest episode of SolarWakeup Podcast as I interview East Bay Community Energy’s CEO Nick Chaset. We talk about CCAs, CPUC’s ruling and the future of virtual power plants.
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Yann
This is your SolarWakeup for June 25th, 2020
Shale Revolution Was A Loser. The shale gas revolution was supposed to be something special, lots of money being made and littered around. According to a Deloitte report the reality is the total opposite and the numbers are staggering. Over the past 15 years, the US shale industry has returned $300billion in negative cash flow and impaired $450billion in invested capital.
Climate Change Polls Improve. In the latest Pew research on climate change, results continue to show that our industry and the broader clean energy space has excellent bipartisan support. That support is greater than 80% on most issues when you remove conservative republicans from the analysis. Invest more in ‘alternative energy’ is 81%-97% and the big winner is planting a trillion trees which polled at over 87% for all political groups. At the end of the day the polling is much better on the solution than the issue.
Young People Know. The GOP has an internal generational problem on the issue of climate change and renewable energy. Boomers support renewable energy at 55% versus the millennials at 79%. You may be surprised to know that there are republicans working in solar and they tend to be my age or younger. That’s the upside of solar, it’s fundamentally a bipartisan issue. You can support it for a variety of reasons that align with your ideology.
Revenue Stacking Goes Distributed. It was a recent switch that went off in my mind but virtual power plants are a huge new segment for our market. Batteries will not just be there for homeowners that are looking to shift energy consumption or to have backup power. Owners of storage will be able to monetize by partnering with load service entities just like East Bay Clean Energy did for their pilot program. Keep your eyes on this space, I’m intrigued.
SEBANE Annual Awards. Join SEBANE for our Third Annual Summer Solstice Celebration and Awards Event, being held virtually today. The Summer Solstice and Awards Celebration will feature remarks from SEBANE President Mark Sylvia, public officials, and industry stakeholders, will include a virtual happy hour.
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Yann
This is your SolarWakeup for June 24th, 2020
PAC12, Bill Walton and SolarWakeup. Today at 4pm PST/7PM EST, I will be talking solar with Bill Walton. This Zoom event will talk about how PAC-12 schools can be more renewable and sustainable. Registration Link
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Yann
This is your SolarWakeup for June 23rd, 2020
VC In Solar. We need some exits to really feed the excitement. With a recent wave of new climate tech venture capital funds being announced, some that have been investing for 2 years, I am looking forward to hearing about the exits and hopefully the next IPO. There’s been early investing in the software space and plenty of private equity action in the hardware and project side of the business. My expectation is that this really takes off but with a focus on margin, revenue and exits.
Margins For Stars. When you’re a contractor, service provider or other retail business then you make plenty of decisions based on the online reviews that will follow your decision. The biggest problem in residential solar has been bad equipment and the underpayment (or nonpayment) of labor related costs for a warranty claim. When an inverter goes down, the installers goes to the job to determine the cause of the issue. That truck roll is not paid for but required by the contractor. Then the inverter(s) get a return authorization from the manufacturer and gets replaced. Most of that time and cost of the replacement (material aside) gets covered by the installer. My point is that lower failure rates are worth far more than the original cost of the inverter.
TVA As The Leader. The TVA was a missed opportunity for our industry during the Obama years. First, it could have created a network of solar professionals, advocates and experts that have real utility work experience. Keep in mind that the TVA CEO came to California to take over PG&E as their CEO. The other part would have been the board of directors that guide the utility into the 21st century. If and when Joe Biden wins, this is where I am going to focus and I will be vocal about my desire to see some of you nominated to the board at TVA. This is a public entity and it should be shaped to our goals. Stay tuned for how you can get involved with Clean Energy For Biden.
Support CALSSA. Trade associations have lost quite a few revenue opportunities and CALSSA needs your help. You can support the team that supports your business by bidding on a silent auction with some good items. Please do what you can! Here is the link for the silent auction.
Bill Walton And Friends. In a fun event on this Wednesday, join me and basketball and broadcasting sensation Bill Walton at the virtual PAC-12 Sustainability Conference. This is a free event and if you’ve never seen Bill talk about solar, it’s a huge treat. Pass along the registration link to anyone that may want to join you. Don’t you think that every PAC-12 school should be 100% solar?
Clean Energy For Biden Event Alert. Today. Please Join Dr. Jill Biden along with Governor Kate Brown, Attorney General Ellen Rosenblum, and Labor Commissioner Val Hoyle for a virtual conversation! Sign Up Here!
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Yann
This is your SolarWakeup for June 22nd, 2020
SolarWakeup 3.0. For those of you that have been following SolarWakeup for sometime know that my work tends to come in cycles given the turnaround/growth work that I focus on. In between, I focus on two things. First is the next big leap for SolarWakeup and the second is consulting which leads me to create the thesis for my next full time work. Last time, SolarWakeup 2.0 was the expansion of the daily coverage to more than 1 paragraph which recapped the main stories with an addition of my take on the story. SolarWakeup 3.0 will do even more for the solar market and will launch next week. Thanks to many of you for supporting and reading all these years.
Texas And Florida. News broke late last week including some Twitter aviation sleuths showing that Elon Musk and Tesla board members were eyeing a site outside of Austin for the next factory. This factory would be used for the Cybertruck and east coast deliveries of the Model Y. The company has secured a 2,100 acre site for the plant and would continue a trend to move from California to the Austin region, East Bay folks will tell you that it’s the most commonly discussed destination. The other is Miami, many VCs have setup shop in Miami for the beaches, weather and no state income tax. Florida makes an awful logistics center for cars though.
Monopoly Treatment. Already a convicted felon for a gas explosion, PG&E was found guilty of manslaughter many times over last week. This was while the company was on probation for the previous felony and in bankruptcy. To recap, the credit profile has a recent BK and two felonies. If that was a solar off taker or homeowner, you wouldn’t be able to approve them for a $20k loan let alone the responsibility of serving millions of Californians. Capitalism doesn’t work if there is no repercussion for bad behavior, how the company expands on the monopoly or keeps it is hard to understand.
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Yann
This is your SolarWakeup for June 19th, 2020
Friday Rundown. What a week! It started off with a ridiculous 45 hour drive for me and a never ending jet lag but here we are another week down. We now have 10 days left in the worst, strangest and seemingly longest quarter in my time in solar. Here we go
From Alabama’s Reporting. As the regulators approve a gas plant but not solar, reporters write. “The original expansion proposal included five 80-megawatt solar projects paired with battery storage banks that could be used after dark when the panels would not normally provide power. There are limitations, however. The batteries for the project would last about two hours before needing to be recharged by the sun. That might not be long enough during a cold winter morning if the sun wasn’t shining.”
EPA Forgot Its Second Letter. Toxic water? Don’t worry about it.
Equality, Diversity, Solar’s Work Begins. What are the actions and changes you’ve embarked on to make your business more diverse?
Repowering and Developing Big Solar. It’s been a few years since I focused on large scale development and I’ve lost touch with who is doing what. As wind gets into the repowering of existing farms, there will be the same work in solar. We are also seeing early stage development getting much larger in scale and reaching new geographies. This work is no longer limited to large companies, individual developers are reaching key interconnection milestones as well. Not too many teams have the financial wherewithal to fund development and construction but I expect to see more of you raising your hands for these 100MW opportunities.
Bill Walton And Friends. In a fun event on June 24th, join me, Bill Walton and his friends at the virtual PAC-12 Sustainability Conference. This is a free event and if you’ve never seen Bill talk about solar, it’s a huge treat. Pass along the registration link to anyone that may want to join you.
Presented by Adani Green Energy. Adani is a fully integrated renewables company, from solar cell and module manufacturing to ownership and operation. The company has a top global operating and contracted pipeline of over 14 GW. Adani is the recipient of the largest solar award ever of 8 GW, which includes a single site project of 2 GW - tied for the world's largest. No one knows mega-scale projects like Adani.
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Yann
This is your SolarWakeup for June 18th, 2020
The DG Power Plants. This week I interviewed the CEO of East Bay Community Energy, Nick Chaset, to talk about local resource adequacy and distributed virtual power plants. In the news yesterday was a duo of residential aggregated solar plus storage systems that make up a virtual power plant, both with Sunrun. The first with SCE in California and the other on the east coast. These projects are a three party arrangement between the installer/investor (Sunrun), the site host (homeowner) and the utility. In most cases, the management of the system is aligned between what is best for the homeowner and what the utility needs, though a divergence of benefits in that relationship would be interesting to play out. For the homeowner it is a version of revenue stacking, an additional benefit for installing a more expensive system. For the installer, it’s more revenue upfront, an ongoing management relationship and a complexity that will drive stickiness. For utilities, it’s demand response and lower infrastructure costs for the overall system. I like this space and can’t wait to see others play in it.
$16 Trillion. Goldman Sachs has a new report about the value of the renewables space and it does not disappoint. They are talking about an economic investment opportunity of $16 Trillion dollars between now and 2030. The firm annualizes the opportunity at $1 - $2 Trillion per year and job creation of up to 20 million over the next decade.
Cleantech Shark Tank. Let’s say it with great enthusiasm. Cleantech VC is cool again. I can only name two VCs that have been doing it since before I got into solar 15 years ago but I welcome all of the new participants. The convergence of folks that have done VC at the top of their game that now merge their work with climate based investing is incredibly exciting to me. So here’s how I want you to think about it, if you are a startup or know a startup, send them my way. I want to highlight and interview them so that the word spreads that our solar community has the next unicorn in it. Just look at the first two paragraphs and tell me that this isn’t possible!
Big Impact From Big EV Fleets. Lyft is promising 100% of their cars will be EVs by the end of the decade and a report comes out about California’s clean truck rule which will save billions. I promise you, if Joe Biden wins the election then I hope he appoints Mary Nichols as Secretary of Transportation.
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Yann
This is your SolarWakeup for June 17th, 2020
2020 Solar Market. The past 10 weeks has put me on an emotional roller coaster as it pertains to the solar market. It was March 17th when shelter in place was announced in California and I texted an installer, next week you will have zero sales, what are you going to do? That was when I posted the first survey to see how many weeks solar would be at zero sales. Thankfully we never got to zero and now some installers are back above the sales numbers from early March. Non-residential installers also showed that this would be a blip and the survey for May will show the start of a split in solar. Those that are rebounding and those that couldn’t handle it. I’ll be covering the May results on a call tomorrow at 10am EST. RSVP for that call here free of charge.
May Survey. Did you fill out your response for May? Today is the last day. You can see the full results of previous surveys here
Not All Rebounds Are Same. PetersenDean has filed for bankruptcy protection according to PV-Magazine reporting and is only quoting roofing projects right now. It appears that the company will blame COVID for the woes but I expect more about this story to come out. There are many installers in far less profitable markets that are rebounding nicely and adapting to the virtual environment.
Get The Scale. First it was the cost of solar, then it was a lack of scale. Now pension funds not only see the returns they want, they also see the massive scale that makes deploying real dollars feasible including with great currency diversification for truly big funds. Danish fund, CIP, is targeting $15billion in investments.
What To Make Of BP? The company is writing down the value of some assets by a total of over $17billion dollars and is increasing the carbon cost for its investment planning to $100 per ton in 2030. That means that fossil projects will have to overcome significant additionality for projects that are not that far away in the world of a BP. The inverse is also true, renewable energy projects will become significantly better investments with such a carbon price included and you could see the company leveraging its development, land rights and offshore infrastructure for such projects.
Solar Plus Storage. Not for nothing but Vectren, the utility company HQed in Indiana is including 1GW of solar and storage in their IRP. I’m sure that Mike Pence will be lauding their foresight any minute now.
Presented by Adani Green Energy. Adani is a fully integrated renewables company, from solar cell and module manufacturing to ownership and operation. The company has a top global operating and contracted pipeline of over 14 GW. Adani is the recipient of the largest solar award ever of 8 GW, which includes a single site project of 2 GW - tied for the world's largest. No one knows mega-scale projects like Adani.
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Yann