This is your SolarWakeup for June 23rd, 2023
Resi Storage Proliferation. Companies are either doubling down or getting into building a home battery. Yesterday it was Lunar and today Panasonic, both making announcements on the topic. This week, batteries in VPP environments in Texas were able to sell energy into the wholesale market for over $5 per kWh, which seems like an anomaly but possible a sign of the energy market ahead.
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This is your SolarWakeup for June 22nd, 2023
The Promise Of Cleaner. And Cheaper. Every new data point shows that solar is increasingly the cheapest option in more geographies. We’ve moved past putting solar in deserts only and now can produce clean energy cheaper than all other forms. The next iteration also makes that clean and cheap energy much more dispatchable using energy storage. I still hold out hope that the financial drivers of existing solar farms will drive the enhancement of the offtake contracts by offering generators the amendment needed to make that solar plant dispatchable. So here’s the message to anyone in a CCA or utility that reads this newsletter, take a PPA off the shelf and call that asset owner and ask what the PPA price increase would be to add storage to that site. Just make the call and realize it’s insanely accessible, right now.
Access Is A Feature. Not a bug, and we’re talking about the lack of access to the grid. Given the above, i.e. cheap renewable energy, the massive queues in the interconnection pipeline do not have aligned interests across the board. We should be comfortable with having much greater capacity reserves and more time focuses renewables.
At The Summit? I'll be talking around 9am this morning on the future of energy storage and how it is growing both in deployment and manufacturing in the US. Come say hi!
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This is your SolarWakeup for June 21st, 2023
The Solar Summit. Busy travel week for me but will get you the commentary as possible. Make sure to catch up with me at the Solar & Storage Summit in San Francisco on Thursday morning if you are at the conference. We’ll be talking about the incredible impact that the IRA has had on new factory announcements and the expansion of available technologies in the marketplace.
<ERCOT’s Need. You’ve seen the ERCOT price maps undoubtedly which means that the market needs more infrastructure to be built. This is another reminder that the storage pipeline in Texas is ready to be built out in order to build the resilient grid that consumers deserve.
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This is your SolarWakeup for June 20th, 2023
The Grid We Have. It’s hot in Texas and across the Southeast but ERCOT is likely to break records over the next few days and nearly hit 80GW of demand yesterday with less than 10% capacity reserves. Resilience is earned through robust price signals within the market that enable investments to be made in order to ensure the lights turn on when you hit that switch. During Winter Storm Uri, demand hovered in the 60GW range. It came down to the reliability of the generation that remained available plus decreased access to energy for consumers. Back to today, 5GW of reserve isn’t going to make a reliable grid. Going forward we need more price signals from regulators in order to turn up the reserve as the demand grows and grow it will. I’ll make a bet that we see a 100GW demand within 5 years.
What Could Be Possible. The easiest thing for any grid operator would be to expand the price signals, i.e. markets, for technologies that exist in the 21st century. Let’s start with energy storage, these technologies can do much more than what the current markets ask an asset to do. For example, short term grid resilience dispatches to power plants are much better served by storage. Storage can also turn solar plants much more intelligent, imagine if offtakers allows solar PPA generators to add an amendment to make the solar generation dispatchable. The second powerful tool for grid reliability would be to create a real market for dispatching home demand and smart home devices. This will be more of a must have when cars become EVs in every driveway. If a real virtual power plant market were priced by operators, real flexibility would become available.
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This is your SolarWakeup for June 16th, 2023
What’s Your Security Plan? If you’re not listening to folks in DC and grid operators, I can assure you that the security of your solar and storage plants will need to be taken into account. That will include bringing your cybersecurity and data plans up to par, elevating your asset management standard and possibly bringing your industrial controls package into compliance. This is no small thing, solar can make our break a grid resiliency and as an operator/owner of those plants, you’ll be asked to ensure compliance.
Jobs To Build Homes For Jobs. It’s not just solar jobs that’s booming, but also the jobs to build the factories that will support solar supply chain.
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This is your SolarWakeup for June 15th, 2023
More Guidance Arrives. The big one is here, guidance on the ITC transferability and direct pay provisions including who is eligible for the direct pay. Amongst those eligible for the direct pay provision are governments, tax exempt entities (including many cooperative utilities), the TVA and Native American tribal governments. Transferability will open up the market for buyers (and brokers) that will start bidding on your tax equity to resell to their eligible investors. We’ll be interested to see how close credits get to 100% as demand increases for a somewhat limited supply.
Relatable Congress. When it comes to climate change Congress has been questioning scientists for decades, and I don’t mean when someone asked Senator Kerry about his political science degree. But more often than not, members of the House do not have much real life experience around climate change so it’s great when a member has learned experiences. We need more of that, hopefully a Wakeup reader will run and win!
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This is your SolarWakeup for June 14th, 2023
Relentless Attacks, But Why? The House majority is taking up a repeal of the ITC and PTC in Ways and Means. Solar is supported by both parties and solar manufacturing is opening factories all over America, including many red districts. Yet the leaders of the most powerful committee in the House is taking on the key tax benefit for the fastest growing energy source in the US.
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This is your SolarWakeup for June 13th, 2023
The Problem That Today’s Grid Presents. The grid can’t handle the energy transition is the biggest talking point that is fed to members of Congress charged with slowing down the energy transition that consumers want. What if every car became an EV, could the grid even handle that? Reality is that people that buy electric vehicles and industry shifting to electric or solar don’t think about the impact to the grid, the grid operators are held accountable for that. Regulators need to accept that and plan accordingly.
Why It’s A Problem And Setting. This is the manifestation of what I said above, coal is declining no matter what happens next. Grids are either going to send the pricing signals to make sure the private investments or they will be left in a painful position with increased costs to consumers. ERCOT is going to hit record demand next week and hopefully will be able to make it work with the infrastructure that’s already in place but it will need far more resilience in the future.
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This is your SolarWakeup for June 12th, 2023
The Domestic Credit Adder. Most of DC is working on figuring out who, how and when the domestic adder will be able to come to fruition. With some guidance creating new questions, it is now up to the tax lawyers to make opinions and get clarifications from regulators on how the market will benefit and how manufacturers must grow domestic factories in order to be compliant. The good news is everyone is on board with the idea of building domestic supply chains, bad news coming from the standpoint that not everyone is sure that their new factory will be enough to satisfy the requirements.
A Smoke Filled Eastern Corridor. Dealing with smoke filled air quality has been largely a California problem, many of us having suffered through terrible air during the Bay Area fires in 2018. It hasn’t been a real thing in New York and DC, which all of a sudden brought back the Bladerunner memes to the internet. Wildfires are a byproduct of climate change but for many Americans could still be too far a connection between their habits and thinking that changing them would help stave off natural disasters. What could I possibly do to help prevent this? Is the ultimate climate change problem, which is why solar, wind and storage are such a great climate change fighting tool. If the economy prospers, people get jobs and money can be made, fighting climate change is a nice side effect.
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This is your SolarWakeup for June 9th, 2023
Can’t Escape It. It was hard to escape the smoke this week, with over 60million Americans affected with poor air quality. Hard to think about how to tackle the wildfire problem but climate change can’t possibly be helping. We’re about to enter silly season where one political party wants to make this a wedge topic to separate us, but in the end we all breathe the same air and drink the same water.
Impact On Solar. Interestingly, this is a concern of the grid operators in California. What happens to the reliability of solar production when wild fires reduce solar radiance across the geography? The entire northeast felt this with the smoke cover lingering for several days bringing this scenario to a new grid.
The US Scale. If you look at the energy storage deployment across the world, you’ll realize that the scale in the US is exponentially bigger.
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Yann