This is your SolarWakeup for February 13th, 2023
It Hasn’t Happened Yet. Looking at the top story tells the story. California is well ahead in the EV transition compared to other states but the drive to electric is happening everywhere. I see cars plugged in that I didn’t even know made an electric version, we’ve come a long way from the EV1. Electric cars just look like cars these days. How, when, where and how much they charge is the grid problem plaguing operators and part of the essence of why so much storage is required for flexibility across the grid.
The New Tracking Frontier. Last week Nextracker held their IPO which went as planned, underpriced with a solid pop on day one. The real story is the market expansion that tracking innovator Nevados is bringing to the industry. Eliminating the need for a flat square piece of land in order to get tracking production, the company is opening up markets across the Country with a mega order announcement.
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This is your SolarWakeup for February 10th, 2023
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This is your SolarWakeup for February 9th, 2023
Trading NXT. Yesterday, Nextracker priced an enlarged IPO at $24 per share. At some point early this morning, you can see the legacy single axis tracker start trading on the public markets. Compared to the peers, Nextracker is going public at a lower valuation multiple but it is by all accounts a major event for cleantech as the first IPO in a bit.
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This is your SolarWakeup for February 8th, 2023
The Oil Major Headline (Miss). So many of you emailed me about the headlines on commentary coming from oil majors amidst record earnings. Here’s my answer and it may come across as short, but the headlines are missing the point. Oil majors are used to having a monopoly based on the land rights they have because their profits are coming from below the ground, furthering access opportunity because it takes billions in cash to get started. Whereas solar energy is equal from one piece of land to the next. (even balloons run on solar energy these days) Oil majors also know that the energy transition isn’t about fossil to renewable energy generation, it’s about the shift from molecules to electrons in consumption of energy. They will invest tens of billions in the delivery, transportation, trading and servicing of the electrification sector while there are ten dollars available for every dollar needed to build a solar and wind project.
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This is your SolarWakeup for February 7th, 2023
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This is your SolarWakeup for February 6th, 2023
Your Car As Backup. Consider me both, unsurprised and pessimistic, to the idea that cars are stationary power loads for your home and grid. Given the decades of work it has taken to connect rooftop solar to the grid, imagine the car based battery to become a connected load to the grid. So assume that bidirectional aspect of EV charging is to be a backup for your home, is that really the best way for you to use the cycles available in your car? How will auto OEMs change the terms of the warranty since mileage isn’t the totality of the use case of the car? Don’t get me wrong, I understand why it should be more common for your EV to be a grid DER, but what is the price signal to make a market out of it? Wait and see.
Big Batteries, Big Tenders. On the other side of the spectrum is the large scale energy storage market, also (in some markets) looking to find price signals for grid operators that are yet to discover the use case that energy storage can most valuably fill in the grid operations (we’re looking at you PJM). That hasn’t slowed the 100’s of GWh of tenders to hit the market around the world and the tens of billions of capital committed to this market. No more esoteric, capital formation got here rather quickly. Now folks are looking for that deal flow, platforms that know how to do batteries are getting some nice acquisition flow. Obviously, I’m a bit of an insider to this market so I can say that hardly a day goes by that capital isn’t calling to see what potential deal flow is out there for investment.
The Sunrun VPP Market. Sunrun picking Lunar Energy is not a headline you would typically see on this newsletter but this has so much inside baseball that I feel I need to point some of the obvious ones out to you. Lunar, by the description in the website, helps companies like Sunrun manage their virtual power plant contracts. It was hardly a secret that Autogrid (acquired by Schneider in 2022) was the platform that used to do this for Sunrun. Lunar came out of stealth last year and the interesting part is that Sunrun was a major investor in that venture funding, with Sunrun’s co-founder and Co-Chair (ex-CEO), Lynn Jurish, joining Lunar as the Chair. For extra inside deal, most of the founding team of Lunar comes from Tesla Energy.
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This is your SolarWakeup for February 3rd, 2023
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This is your SolarWakeup for February 2nd, 2023
Who’s NEXT? It looks promising that Nextracker’s IPO will come out and look pretty good. Pricing in the range of $20-$23 per share implies a relative discount to the tracker peers already in the public markets. The $500million IPO looks to provide the secondary (liquidity) to Flex, it’s current owner. The TPG Rise fund which invested last year, does not appear to be selling their shares according to analyst reports. As a profitable company, leading in it’s segment, Nextracker looks to unlock the public markets in what has been a dry (read closed) IPO market. This could be exactly what the clean tech markets needs to signal that the IRA is ready to unlock the trillions of project capital and that the companies supporting that investment are ready to be worth billions.
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This is your SolarWakeup for February 1, 2023
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This is your SolarWakeup for January 31st, 2023
The Coming EV Rush. This has the potential to upend the grid transition even faster than previously predicted. There are dozens of brand name models on the market now and a bit of a price war is breaking out. That will only make EV consumers more likely to make a jump over to instant torque. Many of the other barriers to entry have started to be eliminated: charging, range, societal norm and of course operating cost. The EV adoption in the US lags the EU by 3x or more, and this price decrease could become an accelerant. Once this happens, which isn’t a question of if, but when, what will the grid need in terms of build out of new generation and flexibility. We’ll see new rate schedules, pricing signals, infrastructure investments and more. Like I’ve said in the past, the energy transition isn’t about how energy is made but how it’s used.
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