This is your SolarWakeup for March 20th, 2020
Survey Results, Installers. Installers are reporting that closed sales are down 25.1% from their weekly average in Q1, still operating at 74.9% close rates.
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Yann
This is your SolarWakeup for March 19th, 2020
The Permit Problem. According to the SolarWakeup tracking survey, 44% of installers are seeing building department close or delay inspections due to COVID-19. It is understandable that the situation is happening and at the same time an opportune time to talk about how solar should be permitted. Solar permits should be automated and instant, we already have the software tools at our disposal that create the drawings installers need to follow in order to build code compliant solar. If the software were vetted by a building department or state regulator, as long as the installer followed the plans, they should be able to build the system right away. Inspectors could choose to video conference the inspection with the installer or spot check the system at a later date, if the installer fails to do it correctly they would be thrown off the instant permit system and risk losing their license. If there was ever a time to create a digital bridge between solar installers and AHJs, the time is now.
Solar Is An Essential Business. There is a reason that solar installers need to be able to keep working. While sales will transition to remote, phone and video calls, installations are safe to proceed without contamination risk. Imagine if this crisis was happening in a few months when the risks of wildfires start back up? Just yesterday there was a major earthquake in Salt Lake City. Solar installers across the Country are adding solar and storage that make homeowners self-reliant and eliminate the risk of power shutoffs for at risk population. It is crucial that solar continues to install safely while maintaining social distancing. In the Bay Area, most of the counties have put a shelter in place order in force that excludes essential businesses. For me, it is very clear that solar is and should continue to be able to work in order to allow the preparation for wildfire season to continue.
The Problem With The Data. Most of us are feeling a level of uneasiness that we have never felt before, I feel it too. With three kids at home, and the prospects of no school for the next 5 months, I don’t know what happens from here. Here is my biggest problem with all of this, we need bigger data. In this vast country of 300 million people we have 60,000 people tested and 8,700 positives. That’s a terrible data set to make decisions on, for our country, society and industry we need to make the right decision based on the right data. If it means we have to shut everything down for 30 days, so be it but let’s stop messing around without knowing the facts.
Thank You. The first SolarWakeup tracking survey was a success. The results will be published tomorrow and every Friday from here on out. On Sunday each week, you will receive a link to the next survey and I hope more of you decide to participate going forward. Knowing what is happening in the market will get us to a point where we can speak with data to politicians on how they can help us through this troubled time. More to come.
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Yann
This is your SolarWakeup for March 18th, 2020
One Last Chance. Here is the link to this week’s tracker. This survey gives us the baseline, thank you for everyone that already filled it out. At noon today, the survey will close. Responders will get a preview via email tomorrow.
2019 Year In Review. Hard to think about 2019, but it was a record year for distributed generation across the County. Solar grew 23% from 2018 even in the face of tariffs. Residential solar had an impressive 2.8GW and would have absolutely crushed the 3GW in 2020 and may still do so. Community solar, waiting for its major growth year still achieved 500MW in 2019. There is a note in today’s rundown that talks about retail buyers being a key demo in solar, this is what will grow the community solar segment as well. Remember that non-residential includes C&I as well as community solar.
SEIA Comments On Corona. The forecast in the 2019 year in review makes a disclaimer that it does not include any impact by corona. In a separate statement, SEIA said that the 47% growth forecasted will be ratcheted in the coming months as we know the impact. Abby Hopper says it will be a “pretty significant crisis in the solar industry in addition to a significant crisis in the overall economy.”
Is Solar Contrarian? GTM found a gem in the Q4 Sunrun earnings call. On the call CEO Lynn Jurich said that solar may work better in an economic downturn and I agree with her rationale. Assuming the cost of capital, underwriting and liquidity remain in the market and competitive, solar will be able to continue. The only counterpoint, which was hard to predict, is that solar companies that overly rely on selling face to face will have difficulties and need to adjust to the short term changes.
Utility Shutoffs. Almost unanimously, utilities will suspend cutting offer power for non-payment during corona.
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Yann
This is your SolarWakeup for March 17th, 2020
Testing The Impact. The only way we can understand the depth and duration of the coronavirus impact on the solar market is to track the four markers: deals signed, loans closed, permits approved and projects installed. Through the SolarWakeup survey tracker and partnerships with key analytics firms, we will guide you through this. While I can deliver the data, I can’t make it up and your participation is key. We need the collective us to share information so that the data becomes most useful. The goal is to deliver weekly analytics in a way that helps you adjust your metrics. For example, when you have the first good week after the lull, is it just you or the entire market? If you see others are also doing better, you will feel more inclined to get back at it at full strength. That’s the goal, isolate quickly and then get back after it. Here is the link to this week’s tracker
Cities Shelter In Place. You may have heard that cities in and around San Francisco have a public health order to shelter in place. The headline is underpinned by details that are important to the solar industry. Let me preface with, if you can do your job from home, please do so for as long as you can. There is an exclusion for two purposes, essential businesses and minimum business operations for which necessary employees can continue working while maintaining safe distances to stop the spread. For Bay Area solar installers with a backlog of solar plus storage systems, it is up to you to determine the importance you play in advance of the wildfire season. My point is that solar will not stop because the Bay Area is working from home, our work is essential to the future of this Country because while corona may be the now problem, climate change remains as important as ever.
Bullish On Solar. Before the market opens today, there looks to be a nice bounce after yesterday’s massive drop. Losing over 12% and reaching the all-time high on the VIX yesterday, I see positive signs on the horizon after we get through some difficult times. The solar names have been beaten down, some of them trading at 50% of the price of a few weeks ago. Here’s the question you want to ask yourself; 5 years from now, will there be more solar installed on homes, buildings and farmland or less? If you agree with me, get ready to get invested because I’m bullish on solar.
Bailouts Are Coming. The airline trade association is asking for $25billion in grants and $25billion in zero interest loans while the casinos are also in DC ringing the bell. Their direct line to the White House prompted a Trump tweet, “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!” I’ve got some asks to attach to the bill.
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Yann
This is your SolarWakeup for March 16th, 2020
Social Distancing. Before we get into the headlines and solar market, let’s take a step back to recognize the gravity of the current situation. Now that it has reached the pandemic levels and changed everything about our everyday lives, we realize that what we do in normal times relies on a level of stability that currently does not exist. In the hopes of getting back to normal as fast as possible do your part and stay away from others as much as possible, there are plenty of infographics that show you what happens when people isolate and stop the spread of the virus. Not only will things get back to normal you will likely help save some lives at the same time. If you need some additional pressure of what happens when the ‘flu’ spreads across the globe, read this 1997 piece by Malcom Gladwell about the Spanish Flu.
Let’s Track The Delays. Like everything in the economy right now, there is going to be a pause to growth as people stay home to isolate and stop the spread of COVID-19. With the longer cycles of utility scale and C&I to be less affected by the short term, SolarWakeup is going to track any slowdown that may occur. This survey is meant for residential solar installers given that is where 60% of the solar jobs sit and there are weekly/daily sales, loan closings and installations. This will give us a tracking view of the market and provide the feedback we need to make our business decisions. Please take 5 minutes and fill out this survey if you are a residential installer, if you are not an installer please send it to a few that you know. This is the network effect of data that helps us all. Here is the link.
The Positive Outlook. While the CDC has asked for society to stop gathering in groups greater than 50 for the next 8 weeks, I look at the positive. 8 weeks is achievable and we should look at this in a positive way. The CDC could have said longer and there may be a few weeks coming up where we’re asked to stay home altogether. The solar market was going to grow by over 25% this year, which means that ever losing 8 weeks would mean we can rebound and catch up. With the fed rate dropping to zero, we may see better rates for solar loans across all market segments creating opportunity to scale everywhere. I’m optimistic that we will do the right thing as a society and come out ready to do big things.
Let Solar Help. Many of you may be going through business hurdles through this pandemic. I can’t promise that we can help everyone but let me speak on behalf of the industry that if there are issues or questions that are hurting your business, please let me know and I’ll do my best to advise or put you in contact with someone that could be helpful. My email is yann@solarwakeup.com.
The Survey. Don’t forget to participate in the survey and please share this tweet to get it out as much as possible.
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Yann
This is your SolarWakeup for March 13th, 2020
Pre-Corona Survey. Here are the highlights of the market survey released this week, answers coming between March 10th-11th. Respondents ranged from installers (35%), manufacturers (15%) and developers (25%). You covered every market in the Country with half of you doing business in California but MA (45%), NJ (38%), CT (31%), FL (27%) and AZ (27%) were also represented.
Q1 Improvement. While 25% of you saw no improvement in Q1 over last year, 55% of respondents were up in the first quarter over last year.
The Corona First Take. This is where timing of the survey is important. All of the responses came before March Madness, NBA, NHL, MLS and little league games were canceled due to the pandemic. 62% of the answers said that coronavirus had no impact on your Q1 sales and 48% said that you are not adjusting the Q2 forecast. My assumption is that a survey next week would have different numbers. 39% of you are adjusting the forecast by 0-20% downward.
What You’re Doing. Many of you shared with your actions in anticipation of which the most two most common were: no travel and work from home. Some also highlighted that society will now learn to wash hands once again. I’m interested to learn what companies are doing across the industry to manage their business through the crisis and if there are any changes to the economic business model of the sector. Please take your time to send your ideas and concerns to yann@solarwakeup.com, together we will manage through this.
Looking Ahead. There are going to be more questions than answers over the next week while the world settles into the reality that the virus is spreading everywhere. Without being hysteric, the way to solve the spread or flatten the curve is to isolate for as long as possible. Expect companies to have as many people as possible working from home while doing their best to keep moving business forward. I will circulate another survey next week and check the pulse of the industry. Typically I look to have podcast interviews that have some longevity to them but I will likely do a few interviews on this topic in the coming weeks to give you critical information for your business.
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Yann
This is your SolarWakeup for March 12th, 2020
Market Survey Pre-Read. As we get through the many responses here are some early data points. 90% of you are somewhat or very concerned about coronavirus and more than 50% of you are adjusting your Q2 forecast downward. The survey appears to have come too early to find measurable change in consumer behavior or changes to pricing in systems, modules or other hardware. More data from the survey coming tomorrow including what steps respondents are taking to keep their business operational.
DC Quick Read. The bill of bi-partisan bills in the Senate was soaked in mediocrity that it failed to get the 60 votes it needed to get out of filibuster. We now wait to see what happens with the bailout, stimulus legislation that is circulating between the White House and Congress. The White House is floating headlines for oil and gas stimulus to see where the public gets excited including a payroll tax cut that moved the markets up on Tuesday while the House is floating a paid sick leave bill before their weeklong recess coming up. Apparently we don’t know what we don’t know so let’s wait and see.
A Trade Letter. Yesterday 140 companies signed on to another letter to the White House asking for tariff related relief, read the letter in the link in the 3rd story today.
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Yann
This is your SolarWakeup for March 11th, 2020
Don’t Forget The Survey. One more day to get your survey response in, it takes 3 minutes and helps the entire industry. Here is the link
Solar Power Power. DC is going to pass a stimulus bill in the coming weeks to deal with the economic effects of corona and the oil price wars. Focusing on the second one, oil producers across the US will either stop production or lose money with the low oil price that’s now in the market. The White House is floating and the Senate will try to push into the stimulus bill a bailout or tax credit for oil companies. This is going to be the moment of truth for solar advocates in DC, does solar have any political influence that translates into results? The analysis of that question will be black and white, either the ITC returns and gets extended or solar is left out of the bill. There will be a bill and the answer will be yes or no when it comes to solar.
The Network Effect. The dealer network is a new battleground in residential solar. Module OEMs and financing companies are battling for the primary value creator for solar installers across the Country. At the same time, those that should have a bigger dealer network are underestimating the value that they can provide and in return receive from the dealers.
The Battle Is On. The original dealer network came from SunPower, so powerful that the company’s partners rebranded to SunPower by. Loan companies followed suit, Mosaic taking the lead and Sunnova quickly joining the network creation which made sense given the financial relationship that exists between the installer, homeowner and loan provider. Module OEMs have a network of platinum or elite installers but the relationship is a bit looser at this point, but don’t sleep on this.
Control Of Sales Levers. Yesterday after market close, Vivint Solar released their fourth quarter earnings and held their conference call. The quote of the call was “we like the control of sales” referring to the company’s direct to consumer sales force that allows the company to decide where and how to sell solar. While Vivint believes that they can grow faster, they don’t want to grow for growth’s sake and keep their focus on markets where they can make money and grow faster than the rest of the market calling out MA, NJ and CA. How do you control your sales levers?
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Yann
This is your SolarWakeup for March 10th, 2020
The Market Survey (Click Here). This is your opportunity to participate in a community survey about the current state of solar. While many of us came into Q1 with great anticipation for a record 2020, there have been a few curveballs thrown at us including a global public health crisis that will likely impact us personally in many ways. At the same time we are left with many questions and few answers on what to do. My hope is that we share our individual viewpoints and try to find the best way to move forward. Please share openly so that your industry colleagues can learn and collaborate. Your answers are confidential. Results of the survey will be shared as early as Friday if enough people respond right away, time is of the essence so please take 5 minutes now.
Climate Change Blinders. One of the feelings I’ve been having about coronavirus is that I just want to fast forward and come out with the best possible outcome on the other end. In some ways it reminds me of hurricane preparation, should you put up shutters, buy food and water for two weeks, get a generator, evacuate; and when you are finished with the preparations the hurricane turns and goes another way. With corona it has a similar feeling because what type of preparation should you do, especially when you don’t understand why there is no rice left on the grocery store shelves. Climate change has the opposite problem, we know what to do and what the catastrophic results of inaction could be but we don’t have the ability to grasp the scale of our needed action. The political and personal willpower doesn’t exist today because we assume that the catastrophe is beyond our time span of discretion.
Innovation Among Us. Much like the solar roads project, I like when companies push the envelope into a contrarian perspective. GAF Energy has a thesis that solar will be installed in a BIPV method at the same time as the new roof so that the roofer sells both systems at the same time at a much smaller acquisition cost than solar has today. As an executive in the racking industry, this obviously pushes my thinking in a way that is uncomfortable today. That being said, this is clearly a 20 year transition from one to the other that will get us all to innovate together.
The ISO-NE Queue. 95% of the 21GW in the ISO-NE queue are wind, solar and battery projects. From a grid operation standpoint, it would be crucial to move projects to NTP even if that means putting an operating date out into the future. Developers need time and resources to start construction and ISO-NE needs to get itself acquainted with the process. From my standpoint I would love to see a process that lets developers future bid NTP dates, how great would it be to see a solar plus 8 hours of storage offer (with collateral) for a 2026 placed in service date?
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Yann
This is your SolarWakeup for March 9th, 2020
Covering Corona. I am as much in the dark about what is to come or what to do in our business when it comes to dealing with the coronavirus. There is a humanitarian aspect to the spread of the virus that is best covered by others. My hope is that I can bring together the wisdom of the crowd. This week, I will circulate a survey and ask you to participate so that we can learn from each other about what we are doing as an industry. I hope to learn from you about what you’re seeing in consumer behavior and how you are preparing. More to come.
Oil Wars. The headlines are busy this weekend, stock market futures have triggered a stop to stop a free fall ahead of the open and oil is trading down almost 40% from Friday morning’s price. While global uncertainty is driving people into their corners, OPEC and Russia have a disagreement that caused the Saudis to increase production and lower global pricing. Maybe it’s time to charge our cars with solar instead.
The Good News. Virginia is joining the yearlong stampede to 100% policies enacted by States around the Country. Some estimates have the impact at an increase of more than 50GW of solar nationally. That means that the policies pushed by groups at the State level, led by local installers and pushed by homeowners that went solar are now helping the entire solar industry. I’ll restate this, grassroots solar supporters have pushed more solar in the US in the past year than ever before. This isn’t a statement about us versus them or me versus you. It’s a statement meant to create clarity for those that investment into DG or grassroots is a waste. Reality is that $1 into either of those segments creates 100X the impact than another report into the tariff impact.
Looking Ahead. This week we will get the earnings report from Vivint Solar that gives us the comparison between them, Sunrun and Sunnova and a great look into the residential solar market. Not a great week to have an earnings update but the data is from Q4 which will put a bow on the great 2019. I’m looking to hear whether Vivint Solar says anything about a dealer network, more thoughts on this topic soon.
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Yann