This is your SolarWakeup for June 8th, 2023
Domestic Supply Chain Unknowns. Passing the IRA created intentions, rules, guidance and now interpretations. The intention is to make the products that are installed by American workers right here, with many new factories activating to participate in this market. The rules were published by congress and drafted by the agencies that oversee the execution of the law passed by the legislative branch. Now the guidance has come out, meant to create rules of the road so to speak, and enable deployment of billions of capital. However, the interpretations leave some guidance with additional questions that the industry is working through. Part of this is also on the buyers in the industry to choose to go along with a domestic content success, it can’t just be a decision to buy something cheaper made elsewhere. At some point, the market has to decide to make local manufacturing a given, not a choice.
Not Peanuts. Duke’s capital plan includes $65billion of investments in the next 5 years, 80% of which are labeled as low carbon. This isn’t a unique situation, the investments being made by munis, cooperatives, and investor-owned utilities are significant and growing to allow for the grid to become more stable and resilient within the energy transition.
Texas Storage Postcard (From The Future). Texas, with a robust, energy based power market, has been installing storage at quite the pace, especially in the distribution scale because of the quicker permitting process (take note!). As storage has been built in ERCOT, regulators have realized that batteries can do quite a few things that are valuable to maintain grid stability. This realization comes with new services and regulations that storage assets need to conform to, requiring new configurations, upgraded controls package and analytics capabilities. This will be a reality with Federal agencies as well, particularly on industrial controls and cybersecurity protocols. Happy to connect you with folks from our FlexGen team to get more insight on these rather complex and nuanced challenges that the market will maneuver through.
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This is your SolarWakeup for June 7th, 2023
SEIA Clout Expansion. Having spent the last few days in DC for the SEIA board meeting and administration briefings, I’m in awe of how far this industry has come. SEIA’s leadership under the stewardship of CEO Abby Hopper makes the calls and gets calls back from the agencies doing the hard work of implementing the IRA. On Monday, positive feedback was heard from Departments of Labor, Interior, Energy and Treasury on how and when the rules would come out. The ended with a grand finale with John Podesta, who’s running the IRA implementation for President Biden, speaking to the board for over an hour. This administration cares about the solar industry, what it takes to get it right and how to do more. In short, solar is doing more than we ever thought possible 15 years ago.
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This is your SolarWakeup for June 6th, 2023
Would You Rather? It’s still hard to understand what causes pushback to solar project developments. Farmland that’s used for solar means that the farming isn’t able to pay the same rent. People don’t want to see it? But they still want their lights to turn on. Ultimately it becomes an exercise of staying in the dialogue as long as possible because homeowners also don’t want a gas, coal or nuclear plane near their home either, they probably pick solar over all their options.
You Get A Battery (Plant). France gets it, someone in the EU needs to be building battery factory ecosystems and Macron seems to setting his Country up for success. The reality is that engine manufacturing is getting replaced by battery manufacturing and the best way to build a battery plant is to lean in and create a market beyond EVs. Manufacturing plants are all about the throughput, that is where “we make it up through volume” comes from, an EV plant that doubles as a storage product is also important.
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This is your SolarWakeup for June 5th, 2023
What’s In The Debt Deal? Headlines highlight environmental permitting for energy projects as being included in the debt ceiling deal. First, getting debt ceiling issue behind us creates an economic certainty that is a pre-requisite for anything that is to follow in terms of private capital investments. What the deal also brings to the forefront is the need to talk about permitting as something that hinders the type of private investments that our infrastructure needs and time kills deals (as well as returns). The deal does not actually deal with the issue of permitting and interconnection in the way that is really needed but more of a down payment for further discussions.
Almost $2 But Need $4. Trillion dollars per year, that is. The amount of capital that needs to be invested annually according to the IEA in order to meet the climate and energy needs that come with the energy transition. New generation, new resilience, new fuel delivery mechanisms, are all part of the global picture as we transition more and more energy usage from molecules to electrons. But at $1.7trillion this year, that’s not a bad market to serve of be investing out of.
You Snooze, You Lose. The UK has a good idea when it comes to clearing interconnection queues. When it’s your turn to step you, you better be ready to move or you’ll lose your turn. Innovators could be disadvantaged because selling or raising money for a project without interconnection is hard which means that large corporations with captive capital sources could benefit from a quick turn around. The intention to move through the queue faster is the right idea and that envelope should be pushed.
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This is your SolarWakeup for June 2nd, 2023
A Global View. 2023 is likely to be a banner solar and wind year globally, expected to add over 400GW of total capacity around the world. With Russia’s invasion of Ukraine taking a volatility mallet to the EU gas market, it was just yesterday that Ukraine saw defensive positives in the distributed nature of wind farms. In total that brings the installed capacity to 4,500GW globally for wind and solar. The as available nature is going to require some storage I presume…
Permit Expediting. Europe is tired of waiting for projects that they want, and investors are willing to invest in, to get built because the permits aren’t getting approved. A new directive is going to make it 2 years maximum to get a project approved and 1 year for a repower. With as much existing capacity that exists, I can see colocation of some batteries in the future as well, given the success we’ve seen in the UK market. There are 58GW in permitting stages awaiting approval, possibly igniting a new stage of growth in the EU markets.
Taking A Manufacturing Victory Lap. Treasury released additional guidance for the $10billion in manufacturing tax credits this week and trade groups can take a victory lap for bringing the US manufacturing sector back to life. Press releases barely get highlighted anymore but that’s exactly what this exciting market needed after years of advocacy to get the IRA done.
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This is your SolarWakeup for June 1st, 2023
DC Work Remains. Next week I’ll be in Washington DC at the Secure Renewables conference. Solar used to be the niche, I recall a legislative effort to get solar to 2% of the portfolio. It’s more than just niche now that hundreds of billions flow into the sector annually. With the addition of energy storage, the role that our generation plays with our grid security is enhanced and widely underreported. How to control, manage and monitor these assets has to be given due regard and I look forward to hearing from the experts next week while in town. You can find more about the conference here.
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This is your SolarWakeup for May 31st, 2023
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This is your SolarWakeup for May 30th, 2023
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This is your SolarWakeup for May 26th, 2023
Back From NOLA. Congrats to the team from ACP for a successful CleanPower event. 3 days in New Orleans definitely prepare the industry for the week we have to spend in Las Vegas later this year for RE+! The trend was obvious for 2023 and 2024 beyond the IRA, it’s all about asset performance and optimization. Getting projects to work as expected or better is where the focus is, nobody is interested in someone coming in and trying to cut corners to get deals done. Big thanks to the friends that I got to spend time with over the past few days, those that are learning about storage with me and particularly those that are trying to learn about storage software from me, I appreciate your patience!
A Crazy Thought. I’ll put a crazy prediction out there, adding storage to existing solar farms is going to be big new trend in development and offtakers should work with their PPA generators to add that addendum to the contract.
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This is your SolarWakeup for May 25th, 2023
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