This is your SolarWakeup for February 27th, 2017

A deadline for cleantech startups. Free Electrons is a new program that Danny Kennedy told us about on EnergyWakeup podcast last week. There is a deadline to apply on February 28^th for companies that work to disrupt the utility space. The program is a global endeavor with partners from the world’s largest utilities. These companies, as Danny Kennedy told us, understand the future lies in renewables and their business will be transformed. By getting ahead of the curve and working with these innovators, the utility executives know they are helping their shareholders.
Events you can’t miss. I can’t speak more highly of the two organizations I have been working with from my very first day in solar. Vote Solar and IREC were both there when I flew to Tallahassee in 2007 and together wrote the net metering policies that have created a solid baseline for our market here. The nuanced regulatory fights, grassroots activation, workforce education and public education costs money and does good for our industry we must support. Do this today please. BUY A TICKET to IREC’s Impact @35 and Vote Solar’s Equinox. Even if you don’t go, buy a ticket (preferable the most expensive one).
The Big F Deal. Couple of highlights from the big deal of the week. AES is buying sPower with AIMco, the Alberta pension fund. This is AIMco’s second endeavor into renewables after putting $500million with DE Shaw RE Fund. My first observation is that this is probably not the number one choice outcome for sPower. They likely preferred a private yieldco with the pension fund but it seems that the pension fund wanted a large sponsor to stay at the top of the ticket. AES is a decent partner, they have large exposure to the space already but they have also exited from large scale development platforms when they sold Silver Ridge to SunEdison. This also isn’t surprising, CohnReznick’s Conor McKenna teased this in our interview a few weeks ago that pension funds were looking hard.
The Pricing on sPower. Breaking down the pricing on this is hard because we only get top line numbers. 1.274GW for $853million in cash and assumption of $724million in project debt. Doing the numbers, assuming standard tax equity terms, you get to about $2/watt of project valuations. The pipeline could or could not be in these numbers but instead in an earnout to the current owner FirTree. At a high level it seems like a win for FirTree having deployed the capital, making some acquisitions and exiting the development platform. Maybe FirTree Principals will now go big into another segment of solar now.

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Yann

This is your SolarWakeup for February 24th, 2017

Covering Innovation. Danny Kennedy has been in solar for a long time and hes been fighting for the clean energy economy for decades. Now he is leading CALCEF and deploying capital and grants to the best and brightest trying to change the world and our industries. We spoke to Danny in our latest EnergyWakeup about his funds and how the capital can get into entrepreneur’s hands. Next week is the deadline for a great program called Free Electrons (freeelectrons.co) which is funded in partnership with the World’s largest utilities. If you are in the utility space, get your application in ASAP.
Pot meet kettle. The economist got this one wrong, very wrong. While highlighting the huge growth of the renewable energy space it pointed out that the marginal value of most solar and wind is zero. The next electron doesn’t cost anything to produce. So instead, the article says the market needs to subsidize solar and wind to keep it profitable. That’s crazy talk. What the market will move to is proper price signaling. A more transparent market will lead to more choice and lower cost for consumers in all segments of the market.

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Yann

EnergyWakeup – Danny Kennedy From CALCEF On Cleantech Startup Investing and Innovating Utilities

This episode is sponsored by Conductive Capital, a distributed generation platform with tax efficient capital. In this episode we speak to Danny Kennedy, managing director of CALCEF (calcef.org) and President of CalCharge. Danny has gone from activist to entrepreneur and now investor, fighting for a clean energy future for many decades. CALCEF is the fund that is deploying early stage dollars into clean energy startups in a time when working with early stage companies could not be more important. We talk about the most pressing issues in the space and what kind of companies they are looking to fund. In … Read More →

This is your SolarWakeup for February 23rd, 2017

Electrify everything! I’ve been saying it for years and I’ll say it again. Solar needs to let utilities fight with the oil lobby and step out of the way. Once electric cars tick up the demand, solar will be there to fill the need.
Who pitched it? I hate this story with a passion. It was pitched by someone with an agenda enough with data to make the New York Times run with it. Last year, the same reporter ran a bad story about net metering in California and now this. The anti-Elon Musk lobby is real and here you see it in action.
SunEdison C&I is revived. Mitsui has acquired the team from SunEdison. Glad to see that happen and looking forward to see how those things progress.

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Yann

This is your SolarWakeup for February 22nd, 2017

100% for the win. While the Federal government wants to regress, and fail at leading us all into the future, leave it to California’s legislators to take the reins. The legislature has filed a bill to bring the 50% RPS to 100%. It had failed in the past due to the oil lobby’s push against the increase of fuel efficiency standards but this time it looks very promising. Bryan and I spoke about this with Senator Wiener on EnergyWakeup.
Do it yourself. Across the globe there is a new trend that is changing the world in amazing ways. When the poorest among us are without energy, light or clean ways to cook, they are turning to solar energy. No longer having to wait for dirty coal plants or costly transmission, solar is bringing access to new opportunities.
Florida Inside Baseball. Spring training is just getting started but there is some great political inside baseball going on in Florida. The Governor and the Speaker of the House are engaging in a battle royale regarding corporate welfare. Specifically, this battle is about tourism marketing and economic development dollars. Keep in mind that this is republican infighting. So you can imagine the irony in watching FP&L rate basing 800MW of solar while keeping the market monopoly away from private sector competition. Nothing to see here! That’s why we keep the capitol in Tallahassee.

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Yann

This is your SolarWakeup for February 21st, 2017

Solar on every roof, 80% RPS. Two bills that push the goal post in a direction we are not used to right now. Normally we are playing defense on kill NEM bills or attacks on solar markets across the Country. In this episode of EnergyWakeup we interviewed Senator Wiener of CA and Assemblyman Brooks of NV. Wiener is the sponsor of the solar on every new roof in CA bill and Brooks is the sponsor of the RPS bill in NV that brings it to 80%. Moving goal posts!
Oh Pruitt. He is a bad dude indeed. I don’t know why some people wake up and don’t have an ounce of decency but Pruitt is one of them. Rulemaking to stop CPP will start as expected. Let’s look at the flipside. Pruitt is a poster child for the environmental lobby, he has a history of hating the environment and using him politically should be straightforward. If you think the next three guys in line would have been any better, then guess again. Unless you want Myron Ebell?
Is nuclear going the way of coal? Over time my enthusiasm for nuclear has decreased and in the past few years have become convinced that we just don’t need new plants anymore. Water issues, safety issues, and capital logistics. With battery pricing and a shift to distributed generation do we really need new nuclear? I’m not as sure that no new plants will be built as I am that no new coal plants will be built but I think we are really close to this. Solar + storage wins out in my opinion.

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Yann

EnergyWakeup – Episode 5 – EnergyWakeup With Senator Wiener Of CA And Assemblyman Brooks Of NV

These are the top 10 most read solar articles by your peers this week!

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Yann

This is your SolarWakeup for February 17th, 2017

I supportish Solar. This Governor’s letter about a carbon tax is utter nonsense. Yes, it makes everyone feel good and fluffy inside that maybe the Country is unifying around saving the polar bears and solar will be on every house. That’s not how politics works. The NRA spends barely any money compared to their industry’s profits, what they do is activate a million phone calls and swarm a legislator if they step out of line. Solar could have the same exact impact, our associations should have a phone and email list in the 10’s of millions that activate when called upon. Want to change the law? Make it political. How do you think solar won all of those net metering battles before we started losing?
Want to get the word out? You can sponsor this newsletter and the EnergyWakeup podcast starting Q2 of this year. If you are looking for a great way to reach the top audience in solar, this is it.
California is flat. You saw it here first several months ago. Residential data in California doesn’t look pretty, new interconnect apps are down and now installers have to transition to NEM 2.0. With more on the grid, you are going to see slowing growth rates which makes sense but doesn’t bode well for the public companies. Arizona, Nevada and Hawaii are basically closed as markets and they were leading the pack behind California. I’m not saying it’s doomsday but OneRoof, Verengo and NRG Home Solar are all out of the residential market. If I am selling into the residential supply chain, I would figure out my plan B quickly because cheap Chinese goods are coming for any margin that may still exist.
Time to buy? Last week I said it would make sense for First Solar and SunPower to join forces. Yes, Buffett says that two desperate companies don’t make a profitable bigger one but I think we can look behind the curtain here. First Solar has a strong balance sheet and remains quite competitive in the utility scale business. Governments and utilities are not going to stop their solar farm build out and Series 6 modules are pretty impressive albeit the write down the company has to take to skip Series 5. First Solar could be a buyer here, the SunPower technology has a strong footprint in the residential sector that is growing, cash and loan deals, with the independent contractor base they have built for the past decade. With a market cap under a billion, the technology is becoming intriguing as an acquisition target.

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Yann

This is your SolarWakeup for February 16th, 2017

Political Strategy. We discussed this on EnergyWakeup, that the solar policy teams and politicians that support solar don’t push the envelope hard enough. It doesn’t mean that you have to get that ideal outcome on day one, but it makes the forward progress seem like a negotiated settlement. It’s crucial that with the public support the industry gets, that we help politicians file bills that go above and beyond today’s standards.

Today’s Newsletter is sponsored by Conductive Capital, a distributed generation platform with tax efficient capital looking to acquire your projects.

Tax reform. I asked Conor McKenna from CohnReznick this exact question because tax reform can throw a solar model sideways for tax equity investors. This should impact ITC except reducing future demand for the credits. The main cause of discomfort is the cash value of the depreciation if the tax rates are reduced. Keep watching this space, Speaker Ryan says that tax reform is going to be taken up late spring and summer of this Congressional session.

The Path for Utilities. Who knew? It would take Kansas City Power & Light is putting in 1,000 EV charging stations across its service area. Kansas regulators declined the request to ratebase the $20million investment and Missouri has yet to rule but the utility appears to move forward regardless. This is a smart use of shareholder capital because they already have the credit and collection mechanism to charge users for the energy and growing sales will mean more ratebase investments for power plants or infrastructure once everyone drives an EV.

Sponsor the next newsletter. You can now sponsor the newsletter with in line text. Get in touch with the solar industry through the newsletter that everyone reads.

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Yann