This is your SolarWakeup for April 3rd, 2020
The Survey Results. The pandemic is starting to hit the solar industry, big increases in furloughs and terminations as well as delayed payables in the overall ecosystem. Thanks again for participating in the survey and passing the newsletter on to your colleagues. If anyone has success getting approved for the SBA paycheck protection program, please let me know.
New Sales Down. For the 3rd week in a row, new sales last week dropped 50% when compared to the average sales volume from Q1 pre-COVID. This is a further reduction from the 33% drop we saw in last week’s survey.
Building Departments Adjusting. While over 75% of you said that building departments had closed or delayed inspections, 42% are now seeing no-touch permitting and FaceTime inspections. Please share this data with your local trade group as they aggregate this information.
Adjusting Expenses. Some (43%) have had to lay off or furlough employees and more (36%) are seeing potential for more in April or May. This could be stemmed with the SBA payroll protection loan that is supposed to launch today (but likely isn’t)
Your Question. I asked what question you wanted to see in next week’s survey and over 50% of you asked about the ITC extension. In my conversation with you, it is clear that you want to see it in the next stimulus bill and want to know what strategy is being used to push this. You and I can do our part by contacting our member of Congress. If an actual call to action crosses my desk, I assure you that I will pass it on. I was saddened to see the ITC left out of package 3 and it worries me to see the administration trying to bail out the oil industry without further legislation but I shall keep my optimism alive.
Have a great weekend! Stay healthy!
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Yann
This is your SolarWakeup for April 2nd, 2020
Call Me Commish. Yesterday was the best April fools joke of my life. No, I will not be a PSC commissioner and yes I will continue to do this newsletter, you are stuck with me! I woke up in a panic, I live in California which means that a lot of you get this newsletter at 4am my time. Your texts and hundreds of emails made me realize that for some reason you thought I would be nominated by the Governor AND be able to get confirmed. I would actually love to be a PSC commissioner at some point but that time is not now. The panic came from the realization that maybe I overstepped the time we are living in and taking advantage of days blending together, but I got to see what an exit would look like and thank you! So next year, know that an April fools is coming again but this will be hard to top.
If You Need. If you used my announcement and by chance forwarded it to your boss or colleagues without fact checking, I’m sorry. If you want me to call your boss and explain just let me know! If you wrote analysis on the opportunity of solar because I’m on the PSC, please let me read it. I want to see how far in the pocket of solar you all think I am!
Back To Business. Things are really bad in the oil markets especially in Texas. Tens of thousands of oil jobs are at risk of being lost by the double black swan events coming together in corona and the Saudi/Russia collision. WTI traded below $20/barrel yesterday and global consumption is down bigly. With oil CEOs coming to the White House I would expect the White House to go big on a bailout. Look at CNBC’s Jim Cramer calling this a major economic risk.
What This Means For Solar. Trump tweeted about the impending infrastructure week and the current low interest rates. He’s also right that infrastructure spending would be vital to keep business flowing across the Country. Chamath Palihapatiya was on Kara Swisher’s Recode Decode and said it best, “right now, everyone gets everything they want.” From a political standpoint, I think oil execs should hug solar to stop the positioning that the Senate GOP is taking that package 4 isn’t required and ‘green’ topics shouldn’t be included. Oil doesn’t care if solar gets something or everything, they are in dire need of help and don’t care about the quo to their quid.
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Yann
This is your SolarWakeup for April 1st, 2020
Market Data. Yesterday I joined Roth capital to talk about the survey results, which you can see for yourself by going here after you participate. I am glad to see that this platform has been helpful to others in making business decisions, moving forward with their business plans and getting through the pandemic. We will do this again in a few weeks, with the intention to track the depth and duration of the slowdown as governments continue to work through their local plans. Please pass the survey along your network and it is important to participate each week, I promise we will stop doing this when we are back to normal. Link
SolarAPP Is Rolling. I caught up with Birchy from OpenSolar (ex Sungevity CEO), who’s been championing SolarAPP for the past 2 years, as the solution to reduce solar costs in the US. Following up from my editorial on Friday that we need SolarAPP faster given that many solar jobs are on hold or stalled, Birchy shared some positive news. Work started last week to accelerate the deployment of SolarAPP as a response to COVID driven restrictions in permit approvals. The SolarAPP consortium is going to expand the pilot to many more communities than planned, to provide a solution for AHJs to approve solar system permits without office based processing. If systems are installed by accredited installers using certified systems and installing to code, they would be eligible for automated permitting, subject to spot-checking and quality assurance by the AHJ. In the near-term emails and video call efforts are still necessary to keep projects moving, but the automated permitting tool will be released in beta as a solution for AHJs to grant permits of solar systems in the next few months - and this will be the new nationwide 'best-practice’ process created by NREL in consultation with the code and safety organizations representing key stakeholders. NREL has just launched the new solarAPP web page and I encourage you to sign up to stay in touch for this key initiative. You can stay informed about progress of this project, and register for an up-coming webinar that will discuss how communities can get involved in testing. Solar installers should encourage their AHJs to attend the webinar as well. This could be a real solution that can address a critical COVID response needed over the coming months, but also be a path to solving the bigger cost reductions achieved in all other international markets where residential solar installs at under $1.50/W largely due to non-existent soft costs.
No-Touch In The Meantime. I am excited and wish that SolarAPP would happen overnight but in the meantime let us help our State associations with information and outreach to AHJs. If you are in California, you can check out the CALSSA AHJ database on their current status, update it if you find different information and educate your teams on this. Then you should participate in and ask your building department contacts to join in a webinar on how building departments can enable no-touch permitting and remote inspections.
Tracking Current Permits. It is also time to see this week’s update on permit issuance for solar from across the Country. While the SolarWakeup survey tracks sentiment, sales and business strategy, our friends at Ohm Analytics are doing amazing work (temporarily for free) on showing you permits in major metros. Here’s my takeaway, building departments are either dipping to zero or close to it but then bouncing back, which tells me that they are creating a new process for processing the backlog. I’ll be watching to see what stays at zero and how close to the former average it bounces back to.
Payroll Protection. In case you were looking for it, SBA released the draft application for the payroll protection program.
Last Word. And now some bittersweet news. Next week will be the last week for the SolarWakeup daily newsletter, at least in this format. After 8 years, I have finally been tapped for a work assignment that doesn’t allow me to continue on. It is with great pleasure that I want to tell you that I’ve been nominated to join the Florida Public Service Commission (PSC) as its newest commissioner. More on this soon and I hope you will join me in thanking the community we’ve built together over almost 3,000 newsletters.
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Yann
This is your SolarWakeup for March 31st, 2020
Tracking Survey. This morning I am joining Roth Capital on a conference call with investors to discuss the results of the past two week’s tracking survey. If you’re interested in the results from this week, fill out your responses today. This takes 60 seconds and provides feedback about the market and legislators looking to see what to focus on. Link.
Trouble In Texas. Oil companies are having issues keeping their businesses afloat. This comes due to a double dilemma of Coronavirus and OPEC’s price slashing. Oil prices are down dramatically and oil companies want a bailout in the form of a major purchase by the federal government and likely more.
Setting The Stage. The problem with the bailout, a $3billion purchase adding to the strategic petroleum reserve, is that Congress needs to approve it and didn’t include it in the last stimulus bill. Much like the 2016 ITC extension which was traded for the oil embargo lifting, democrats in Congress are calling for solar to also get support alongside oil.
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Yann
This is your SolarWakeup for March 30th, 2020
Discussing The Market. Join me tomorrow in a discussion with Roth Capital’s Philip Shen about the SolarWakeup Tracking Survey results. If you’re interested in joining and reading Phil’s excellent coverage of the solar universe and public solar companies, email him at pshen@roth.com.
Adjusting The Forecast. WoodMac released an adjustment to the 2020 forecast for distributed solar. Their belief is that the 2020 forecast needs to be adjusted down by 31%, likely putting 2020 down from 2019. The public analysis doesn’t differentiate between residential and commercial but my view is that this is conservative and assumes a total shutdown for 4 months. The data we are seeing in our surveys and conversations with the market is one of resilience. Yes, 2020 won’t be 25% growth from last year but solar installers are finding ways to continue selling and using self-reliance as a purchasing motivation. We’ll get more into remote sales over the next few surveys and how you are adjusting the forecast.
Building Department Insight. Last week’s tracking survey showed a potential problem in the market with building departments closing. On the other hand, there has been a lot of talk about FaceTime inspections and email permitting so let’s see what the rest of you are seeing. So in this week’s tracking survey, we ask a few questions on the topic as well as updating the week to week changes. Respondents to the survey get the full data summary in advance of the rest of SolarWakeup subscribers. Click here to participate.
The States and Cities. Here is some reality to everyone in every industry. Cities and States are fighting the pandemic which is costing them money in addition to focus. Unlike the federal government, these bureaucracies can’t print their own currency and don’t operate at a deficit. In fact, they will have to raise debt or tap into emergency pools. This means that solar and renewable goals will take a backseat to the current emergency. My hope is that in package 4 stimulus, Congress includes aid to the local level in some form (treasury debt perhaps).
Preview Of Climate Change. Not to be alarmist but you’ve seen the climate change headline about mass migration or release of gases from the permafrost. Yes, this reads like a Dan Brown novel but there are some scary thoughts of what a global climate change event looks like. Our work is as important as ever, keep up the optimism and energy!
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Yann
This is your SolarWakeup for March 27th, 2020
Sales Continue To Slow. As expected, this week’s SolarWakeup tracking survey shows that sales have dropped compared to pre-corona levels. Installers say that sales are down 33.5%, a deterioration from the 25% reduction our survey showed last week. Anecdotally, a few installers are seeing an opportunity in the market due to their online or telephone based sales process. Installers that relied less on the face to face sales tactics are seeing minor increases in sales volumes.
Installers Prep To Tough It Out. Door to door sales have stopped across the board, with no installer reporting business as usual. With the backlog of projects keeping some installation crews operational, 62% of the installers have already or plan to terminate employees. Next week, we will test this given the loan forgiveness passed by the Senate this if employees are retained.
Another Barrier Arises. While most companies across the country (and many of the respondents) have transitioned to the Zoom economy (including my children and their teachers) building departments were not prepared for not being able to process digital permit sets or inspections. 24.1% of the installers are seeing delayed inspections and 44.8% report that some or all of their building departments are closed. Even if installers are able to sell projects right now, unless building departments move online (touches permitting) projects will wait for things to normalize.
Trade Group Support. Thanks to memos by groups like CALSSA, joining today would mean a lot, installers are considering themselves essential or critical in order to continue installations. 68.9% of them are doing so with over 50% officially labeling themselves as essential.
Survey Results. This week’s survey included responses from 74 companies whose primary markets spanned 20 states. Included in these companies were 29 residential solar installers. Responses spanned from March 23rd to March 26th.
Market Chatter. In discussions this week, companies are saying that they have had record attendance on webinars and software companies are able to guide installers, developers and companies through the digitization of their processes. There are bright spots in the market as the underlying reasons for solar’s success continue to exist.
Next Week. Look out for next week’s survey which opens on Sunday afternoon, as you can see the data is helpful to your business and respondents got many more data points than this short summary.
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Yann
This is your SolarWakeup for March 26th, 2020
Building Departments. Over 60% of this week’s survey respondents say that building departments are either closed or delaying inspections. There are also talks about departments not taking new applications because they aren’t taking hard copies. Just as there is a time to start selling remotely this is also the time to do digital permitting. Instant permits will allow solar to recover from this standstill while also give building departments the process to overcome the current situation. SolarAPP was already in the works in an orderly fashion, I hope that the process and pilot cities is drastically sped up and expanded in light of the current times.
$2.2 Trillion Dollars Unlevered. Honestly, I don’t want to talk about it. In the biggest economic stimulus and bailout by a factor of many, solar didn’t get what it tried to squeeze in. The political gamesmanship was interesting between Schumer and McConnell. Schumer’s leverage was the money needed for the strategic petroleum reserve purchase and pushed for the tax credit extension but it was McConnell’s elevation of the solar ITC that got even solar professionals to think industry went too far at the wrong time. The bailout left the ITC, 1603, storage, safe harbor out with the hopes getting pushed to the next bill, stimulus package #4. This time it wasn’t enough, hard to believe with the trillion dollar price tag.
But Wait. Couple of things to watch, there’s some talk that treasury could be asked to reinstate the 1603 program without new legislation, lawyers were quick to through cold water on that idea however. Late yesterday, Trump signaled that he would find the money for the oil purchase for the SPR by reassigning funds from the Department of Energy. This removes the biggest leverage point in stimulus #4 if Trump is successful.
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Yann
This is your SolarWakeup for March 25th, 2020
Last Day. This week’s survey ends at noon today, head there now and you receive full results tomorrow in a special email. Link
Sell From Home. My FaceTiming comments from yesterday reconnected me with my good friends at SolarGraf. They have some experience and best practices on how solar installers can sell remotely from start to finish. The company is sharing some of those in a blog post and hosting a webinar today as well. Head to the blog if you want to get some of their tips. I’ll share others when I get them. Link
A Deal In The Senate. Forget billions, we’ve graduated to trillions. Early this morning, a handful of Senate negotiators came to terms on the $2trillion stimulus package (#3). At this point the only language that we know of is around small business loans and industry grants/loans plus unemployment benefits. At the time of this writing, there is no word whether the ITC is in this bill. Insiders are hedging success for this bill and more optimistic about ITC being in package #4. What, for how long, with what conditions will all be known when words actually meet paper. No point in being first here, this all takes time. Look to the Senate to vote today and see if the House has to travel back to DC (they’re on recess) if someone objects to unanimous consent.
My Optimistic View. From a market standpoint, solar companies were way too oversold and I got myself back into the market over the past few days. It could go down further but these valuations are more than fair. My position is that years from now the market will be exponentially bigger, better and more mature than today. I’ve been in solar for over 15 years and I feel better even today than ever before in this market. Things are tough but they are tough for everyone, when we come out on the other side of this societal wide crisis, homeowners will want solar on their roofs and farmland. They will want cleaner and cheaper electricity, the fundamentals will not have changed. My future is in this market, no matter what.
Welcome To SolarWakeup. The past few weeks have brought a large number of new subscribers, welcome to the SolarWakeup family. You can reach out to me anytime at yann@solarwakeup.com or contact me on LinkedIn. Like most readers, I work every day in the solar market (selling innovative racking to solar installers) but this platform is a community to works together for the betterment of the solar industry.
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Yann
This is your SolarWakeup for March 24th, 2020
Be Heard. Participate in this crucial survey, this week’s data is showing a large disparity between what is going and where. Maximize the data by joining in.
Trackable Market Data. When coronavirus first hit the US I knew that I wanted to track sentiment and sales on a weekly basis. From sales to install we also have permit data which is usually not tracked in real-time. The best data source for this in the US is my friend Chris from Ohm Analytics. Ohm Analytics has leveraged its data sources and capabilities to track solar activity on a weekly basis. Ohm is providing access to this feature for the time being to help the industry navigate the next several months. Ohm's Weekly Solar Activity Tracker will monitor solar permit and other available records in a sampling of the largest cities and counties in major solar states. This is a major data tracker that Ohm is making available for free for now and should drive you to subscribe to their fuller data set or sign up as a contractor. Thank you to Ohm for making this happen and letting SolarWakeup show it to the market.
A Bill Today? Late last night, negotiators appeared to get closer to a deal in package 3. This package is nearing $2TRILLION dollars and whether the solar ITC is part of it is up to a handful of people. In case you are wondering if it’s part of the discussion, just ask McConnell. He had some choice words about solar.
Are You Facetiming? I want to talk to solar installers still selling but without meeting their customers face to face. Do you have a unique approach or concept? I want to hear about it.
The Essential Industries. In California, many of you asked me about the various orders from County and State officials and where solar installers fit in. The state rules around essential and federal definitions of critical sectors leave room for interpretation, which is why we have strong trade groups like CALSSA to provide guidance. In their well crafted memo, they lay out clear language for you to use for your business. Keep in mind, stay safe and use your judgement, this isn’t a free pass to act like all is normal. While you’re here, representing solar industry isn’t free. If you benefit from California solar and storage policies, join CALSSA and let them know I sent you!
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Yann
This is your SolarWakeup for March 23rd, 2020
Tracking Corona’s Impact. Here is this week’s tracking survey for you to fill out. This is for everyone in the solar industry and it takes 2 minutes. If you fill it out, you get the full set of results. Please take the time and share it with your colleagues as well.
ITC In Play. Over the weekend I sent a special alert and you responded. No link in SolarWakeup history got clicked on more and you forwarded almost 10,000 times to friends and colleagues. Your involvement could mean the difference for solar as Congress addresses a stalemate at the Capitol. The Politico story will be stale by the time you see it but stay tuned to see if solar gets included in the 3rd stimulus bill coming out, likely today. Topping over $1.5Trillion, hard to fathom solar being left out.
Managing Your Business. The CEO of Soligent posted a well crafted powerpoint on things to consider as you run your business. I think Jon makes some important points and it’s worth your time to review his recommendations. At this moment, it’s crucial we all absorb as much information and advice as we can. These are uncharted waters for all of us.
Looking At The EV Future. A bright moment coming out of the shutdown is we get to see what the future looks like. Around the world, pollution is down and dolphins are swimming in the clear waters of Venice. In Los Angeles, there is a clear reduction in pollution in the air, likely caused by the lack of cars. Hence our need to convert to EVs as soon as possible, no cars and EVs are basically the same when it comes to pollution especially when combined with a 100% RPS.
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Moment Of Levity
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Yann