This is your SolarWakeup for February 13th, 2020
More Tomorrow For Friday Rundown. Lots in corporate news today, need to reflect on what if anything this means.
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Yann
This is your SolarWakeup for February 12th, 2020
Growth Without Pollution. With positive GDP growth across the world last year it is a departure from the norm that global emissions were flat. Still, with 33.3 gigatonnes of CO2 output, there is more work to do but when the economy grows it has always been the case that emissions do as well. This means that business health is diverging from climate sickness and that’s a step into the right direction.
The Kitchen Sink SolarCo. Real Good Solar has tried it all in the nearly 50 years that it has been around. Going public more than 10 years proved to change the path for the company from which it had difficulty recovering from and ultimately led it to the end last month when it closed the doors and filed for bankruptcy. Over the past decade the RGS got into solar shingles/tiles and even hoped to be a reverse merger vehicle for utility scale solar companies hoping to get public quickly. The OG solar guard will remember RGS as something much bigger and important than those that only encountered the most recent iteration but future solar pros will have to read the history books to learn the name.
4X But More To Come. New estimates show a step growth in residential energy storage in California this year up to 50,000 units to be installed. Let’s be real, that’s nothing compared to where we are going. First, the attachment rate is going to continue to climb but more importantly the retrofit market for adding storage to existing solar is going to be huge. Look to see what percentage of storage goes to existing solar.
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Yann
This is your SolarWakeup for February 11th, 2020
Sentiment Scares CEOs. There is a reason that economists measure consumer sentiment. The feeling of optimism or pessimism affects everything from market share and price, or in this case value. Pure analysts would say that oil companies are undervalued, Exxon trades at 18x but Enphase trades at 109x. While stock price is a rather bad indicator of value, it does create a real-time metric of where someone is willing to buy and someone is willing to sell. When it comes to oil and gas companies, the sentiment is bad. When folks like Jim Cramer comes out and says they are bad investments, it doesn’t help create comfort. Warren Buffet says that if you’re not comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes. So while Blackrock raised their ownership levels in several solar companies in the past few weeks, you have to ask yourself what’s ahead for the oil majors.
Safe And Predictable Solar. Fitch found that 86% of solar project performed to their P50 forecast. At the end of the day the modularity and simplicity of solar matched with the predictability of the sunrise to sunset timing makes solar an incredibly secure asset. As investors are trying to drive down the price of solar equity investments which are largely still double that of mortgages, developers are trying other ways to squeeze more out of the solar panel. I expect Solaredge to announce some initial traction with utility scale projects during their earnings call in a few weeks. This comes as some projects appear to be using optimizers on the solar farms when they’ve traditionally been used on residential installations. Of course, solar output can also be insured against through innovative financial products like the solar revenue put by kWh Analytics.
Definition Of Insanity. Is doing the same thing over and over again. The USITC published its review of the 201 tariffs which found increases of cell imports in light of the tariffs placed on them while module assembly in the US increased over the past few years. Tariffs are obviously the most self-imposed headwind to solar in the US and the job creation that would come with removing all 5 levels of tariffs impacting our industry. That being said, it’s time to take a different political approach with this White House. Trump doesn’t want to work together, he wants credit and praise. So let’s do that, let’s credit him with the module assembly factories in Georgia, Alabama and Florida thanks to his 201 tariff and then praise him for reviewing the anti-dumping tariffs that are hurting further growth of jobs. I don’t know if it would work, but when in Rome…
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Yann
This is your SolarWakeup for February 10th, 2020
Board Room Showdown. The CEO of Engie, Isabelle Kocher, was unceremoniously pushed out in a board meeting last week. Engie is the French utility that is 23% owned by the Government and has been pushing the 3 D’s, decarbonization, digitalization, and decentralization. The stock has been underperforming in recent times as the company has exited fossil generation in the US and elsewhere.
Why It Matters. Kocher is the only female CEO in the CAC 40, the largest companies in France. More importantly, it’s hard to imagine that the government wasn’t aware of the board room move in advance. Insiders are saying that the CEO was not doing enough to maximize the value of the power generation assets and too slow to move into renewables. Herein lies the problem, CEOs can’t be seen to look too far into the future, embracing the next era of clean economy for utility CEOs practically means that they are ready to leave their post. Much like David Crane during his time at NRG, Kocher was driving Engie into the future and it looks like half a decade of time passing and a Paris climate accord couldn’t give her the cover she needed to see the strategy unfold.
What Happens Next. I look forward to hearing what President Macron has to say about l’affaire Engie. If a quasi-governmental corporation with a global mission of the 3 D’s can’t give the CEO room to operate, no other CEO will take action. If Larry Fink’s BlackRock letter was meant to push executives and board directors into a clean economy, the move by Engie’s board is a big rebuttal. There are going to be a lot of powerpoint decks shown to board rooms putting the decision on the directors to point the ship in a direction of either status quo versus making a move towards fossil free. What does Kocher do next? Maybe there’s a private equity fund to look into the future backing Kocher/Crane for activism inside utility board rooms. Too bad I didn’t attend L’Ecole Polytechnique in Paris so I could put my hat in the ring at Engie.
The Takeover. Another week has passed in the PG&E negotiations that are happening behind the scenes. The debtors, courts, PG&E and State of California are talking about how the utility emerges from bankruptcy if at all. From a purely financial standpoint, the utility could emerge but the company knows it needs buy in from the State on the plan. Talk about a brilliant opportunity for the State to counter the failure by the Engie board and say, we want the utility of the future and we want the shareholders to put an executive in charge that lost their job trying to create one at the wrong place at the wrong time. It’s time to name some names and outline the plan, get the consumers to buy into a vision because when it comes to Government run utilities, PG&E already has the CEO of TVA at the helm and that won’t get us anywhere.
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Yann
This is your SolarWakeup for February 7th, 2020
Carbon Free Markets. SEIA backs calls to add carbon pricing to the NY wholesale power market. Would like to see a model that shows what that means for solar.
The Corona Impact. I need your input. Tell me how coronavirus supply chain is affecting you, are you being told of delays in supply? Are you stocking modules or inverters?
Payback, Monument Style. Next time a democrat is in the White House, I expect political payback to come in the form of solar farming the biggest lake in a Senator’s State.
MLPE Domination. Clear to me that two things are happening in distributed solar. Bankability matters and investors care about more than the module. Solaredge and Enphase are in a horse race but also have created a duopoly.
Annual Letters. More solar companies should write an annual letter with real thoughts, market opinions and predictions.
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Yann
This is your SolarWakeup for February 6th, 2020
Big Rooftop In Northeast. Big numbers for rooftop solar in the northeast per the EIA. These are policy driven initiatives and we need to do more of it across the Country. Residential solar is doing well but needs uniform permitting that is instant to come to life while commercial solar needs fundamental changes to the market and policy drivers.
Blame The Policy. Much to your surprise, the number of coal jobs in America is much smaller than you would expect. According to the bureau of labor statistics, coal jobs are now under 53,000 nationally. When someone tells me that solar can’t make up the coal jobs, I argue that the legislators in coal states are to blame. Not only are they trying to save the market, they are also trying to stop solar. Solar jobs won’t grow if politicians don’t want to let the market work.
Easier Acquisitions. Solar installers now get to go to a single loan source for roofing and solar (and probably storage). Not only is Sunnova doing this interesting work, they are also one of the only loan providers that do thorough vetting for all parts of the install by including racking in their approved vendor list. Congrats to their team for innovating and putting their logo up on their building in downtown Houston.
20 To Go. That’s how many coal plants are left in the West. Don’t blink, you will miss their closure.
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Yann
This is your SolarWakeup for February 5th, 2020
More Tomorrow. Trade show time means less time to write. Send me your news stories
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Yann
This is your SolarWakeup for February 4th, 2020
Virginia Is For (Solar) Lovers. Advocates have been pushing solar policy and negotiating tactically in Virginia for years. Their patience, steadfastness and political shifts at the capital is making Virginia a market to watch. We’ve seen major corporate purchases for big tech and university systems which made we think of a market that hasn’t taken off yet. Why can’t corporate purchasing and DG come together? The C&I warehouses seem like a great place to produce energy for off site users.
December Numbers. Look at those German solar installation numbers. Especially the 195MW installed under 750kW on rooftops across the Country.
Dynamite CapDyn. I’ve known the team at Capital Dynamics for a few years and their ability to execute and transact continues to impress. Far from their usual acquisition methodology, Capital Dynamics signed a 100MW PPA in Indiana.
A Bridge Too Far. Natural gas is often referred to as the bridge fuel and plenty of generating capacity is betting shareholder dollars on that fact. Much of the gas is so useless, especially on the oil fields that it simply gets burnt, aka flared. I guess that in some way that’s as wasteful as the daily solar spill that hits the earth without a solar panel in the way (but much dirtier).
Public PG&E? California’s Senator Wiener, a bold leader that isn’t afraid to tackle the toughest topics and has been a big solar leader, is calling for PG&E to be taken over by the State. He wants the management to be employed by the State with the 24,000 workers to be hired by the company in a way that doesn’t affect their compensation and pension. The labor component has been one of the trickier pieces of the State’s thoughts on this topic, rightfully so.
Presented By EcoFasten. EcoFasten, a solar mounting hardware company and part of Esdec U.S., is making its rail-based, click-in-place ClickFit Rooftop Solar System available to all installers in the United States. “Time is money in solar installation. That’s why we’re extremely excited to bring the fastest-installing solar racking system to the U.S. solar market.” For more information visit EcoFasten.com/clickfit
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Yann
This is your SolarWakeup for February 3rd, 2020
The Fossil Fuel Booyah. If you’ve watched CNBC over the past decade, you’re probably used to Joe Kernan’s never ending climate change denial. The enthusiastic Jim Cramer is less focused on the soft issues but calls it how he sees it. That’s why his comments on Friday caught be by surprise. He’s not calling for fossil fuels to go away, his follow up tweets say as much but he does say that investors should get out now. Which makes this the proverbial canary in the coal mine. If fossil companies lose shareholders they lose stock value, losing the value makes it harder to run the company with the capital flexibility it has today. That being said, there is still plenty of cash in the coffers so this isn’t a tomorrow thing..
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The Corona Impact. With the coronavirus impacting larger areas of China and some cases spreading around the world, the supply chain teams in solar are starting to look into the impacts that this could create to the booming solar industry in the US. The Chinese new year has been extended in some areas of China which means some delays could occur if the virus continues to spread..
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Scale To Drive Retail. Now that early adopters have shown that EVs are viable, additional scale will drive the price down for EVs to be the first, second and third choice. It took 20 years from plasma TVs to go from $10k for a 42” to $1500 for a 75” LCD and now we will see corporate fleets 10x the annual volume of electric vehicles and make scale drive down the cost for the rest of the market. Consumers will not only like the price but they will find any anxiety comforted if they see their UPS, Amazon and USPS vehicles running on batteries as well. (solar powered electricity)
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Yann
This is your SolarWakeup for January 31st, 2020
Have a great weekend! See you next week in San Diego’s Intersolar. Shoot me a note if you will be there, if there are enough folks we will do a SolarWakeup happy hour.
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Yann