This is your SolarWakeup for August 13th, 2021
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Yann
This is your SolarWakeup for August 12th, 2021
A Budget Resolution. The Senate passed their budget framework which sets up the reconciliation path and the House is expected to do their framework week of August 23rd. This sets up for the committees to put their language together in time for Biden’s September 15th deadline. This $3.5trillion spending bill has some goodies in it, we’re talking some real money in this one!
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Yann
This is your SolarWakeup for August 11th, 2021
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This is your SolarWakeup for August 10th, 2021
IPCC Sounds Climate Alarm. It’s getting hot out there and scientists are saying it’s all coming earlier than previously expected. When my favorite sports podcast starts talking about climate change and rising oceans sinking Miami, you know that climate concerns are getting mainstream. Unfortunately, there is no correlation to the political reality of anyone really giving enough thought to how to actually avoid this outcome. Read the details because I can’t do the scientists justice in how to accurately portray the red alarm.
Budget Bill Timeline. Schumer released the plan for the budget bill and the plan for getting it to the Senate with a goal timeframe of September 15th. This is the target for committees doing their legislative work but largely ignores the House and how they will package the bipartisan infrastructure bill with the budget bill. Will Pelosi sit on the bipartisan bill for 6 weeks or more?
Stranded Not Stranded. Stranded assets is how the market defines coal and gas power plants that are losing their value beyond the current contracts when cost of production exceeds value of generation. I see energy storage being the savior to stranded assets or at least the perceived value of those sites. Land plus interconnection are the two ingredients most crucial to a storage asset, particularly in competitive power markets. Look for those asset owners to make a big run and install storage assets on those sites and unstrand those investments.
Helioscope Acquired. Congrats to Paul and Paul at Folsom Labs. From the empty office in the Genability office to the pioneers of digital layouts, you made your mark on the solar industry for a long time. Getting acquired by Aurora makes sense and I look forward to seeing how you build the next generation with even more resources.
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Yann
This is your SolarWakeup for August 9th, 2021
Infra 1 To Pass Senate. Late last night the Senate ended the threat of filibuster on the bipartisan infrastructure bill with 18 GOP members joining the democrats. This puts the bill to pass the Senate sometime today or as late as Wednesday depending on procedural moves to delay. As we head into the recess, look for the House to decide how to get their votes in order as it appears that it could be really close to not being able to pass without a move on the budget reconciliation bill which would be the vehicle for the ITC extension. Democrats in the House aren’t particularly fond of this infrastructure bill and may hold it hostage for ensuring that the Senate passes the reconciliation bill.
The EV Gas Station Business. It’s already happening, when I don’t charge at home, I use a supercharger that is collocated with a WaWa gas station. Last night I added over 200 miles for around $6 in less than 20 minutes. EV infrastructure spending was largely removed from the infrastructure bill and it begs the question why this is needed anyways. Tesla, Chargepoint, EVgo and others have already proven that you can grow a network infrastructure with charging and the delta between fuel mile and electric mile is wide enough to charge a nice premium and run a business. Speed is the argument, I think, to get more stations up and running and get more people into EVs earlier but that’s what the other OEMs should be doing. Obviously EVgo just went public, but why hasn’t GM bought that business yet? Ford already did a deal with Sunrun for a car powered home backup system, why wouldn’t they own that business and expand into EV stations?
Hydrogen As A Solar Market. Green hydrogen is starting to look like the best path to greening dense energy consumption and I think it’s one of the best opportunities to speed up the growth of renewables by expanding the offtaker need and market. Would be great to see some numbers on this.
Solar (Freakin) Roadways. Secretary Pete thought he was hyping a fun thing in Georgia, their solar roadway pilot. Have you given him some love for showing off solar on his Instagram?
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This is your SolarWakeup for August 6th, 2021
From Day 1. For the better part of my career in solar, Lynn Jurich has been the CEO of Sunrun. If you go back to the 2008 era of solar, residential wasn’t really the thing that was expected to be the big thing, especially if you were based outside of California like I was. Think of all the companies in resi that came and went since then but Sunrun and Lynn stayed the course even while they were being counted out and placed in second. Here are some things I think folks should know about Sunrun and Lynn that impact the industry and where it is today. Sunrun held a central conviction that being aggressive on defending and advancing solar policy was a vital interest to the business. That meant investing millions of dollars every year to fight policy battles in Kansas, Wisconsin and other places that weren’t core to their market. It meant playing a founding role in TASC alongside others and always letting team members build partnerships with state associations and having them be the first to raise their hands when donation requests came in. Not only at the State level but I also give Sunrun big recognition for playing a leading role in the ITC extension in 2015 but that’s a story for another year. All of that to say that it’ll be a different when Lynn leaves her post as CEO at the end of the month. Of course, it is great to see Mary Powell join Sunrun as CEO coming in from her board director role that she’s held for 3 years and of course as former CEO of Green Mountain Power.
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This is your SolarWakeup for August 5th, 2021
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This is your SolarWakeup for August 4th, 2021
Enough Infra Talk. It seems like the one topic that should be bipartisan is getting stuck in the hamster wheel. The problem with big bills that have little price tags is that nobody really gets what they want and they become hard to fight for. Interestingly, it’s the politics of the two infrastructure bills that will either pass both or perhaps tank both. Even the manufacturing tax credit got left out of the bipartisan bill. Schumer’s threat to cancel the August recess seems to have folks’ attention however, we’ve got an Obama birthday party to attend!
Local Manufacturing. One of the best operating roles I had in my career was running a company with domestic manufacturing. Not only did I have the exposure to US manufacturing in clean tech but it was also domestic manufacturing in California. Domestic manufacturing has massive benefits for businesses except for the labor cost. That’s why the best way to drive up US manufacturing is to turn the payroll expense from a deduction to either a credit or multiply the deduction by 3x or 4x. If you want more of something in America, incentivize it with the tax code, that’s why we have one-year depreciation on private jets!
Let’s Be Optimistic. Over the past 20 years the amount of capital that has come into renewables has skyrocketed but the chart that shows the total dollars only tells a tiny story. Pre-2010, so much of the money was going into projects in a few Countries at ridiculously high unit prices and stunning venture capital investments into thin films or other breakthrough tech. The reality is that the $150bb plus that were deployed last year represent over a trillion in unit adjusted deployment compared to a decade ago. Here’s the kicker, there is no limit to how much money would invest in this sector, available capital is endless. It’s the pipeline of available projects that is capped by incumbents slowing development and more importantly the limit to how many development platforms that can reliably deploy that limitless capital. Finding and making the project investable is the gating item to deploy money, having the money is the commodity. Time to pay up fund managers!
Flexible Transmission Assets. Transmission upgrades are now more than wires and substations. One of the uses in the first infrastructure bill is to make the grid more ready for renewables and that includes transmission and distribution level energy storage. Adding the flexible power to the substation should significantly raise the amount of variable generation that a substation can manage. How to drive that investment or send a price signal for that investment is the key question I have now.
SPI Ready. Louisiana, site of SPI in 7 weeks, has one of the lowest vaccination rates in the Country and has now reinstitute their mask mandate. We’re back to the what if questions about SPI from where we were last year but it still seems like everyone is ready to get rolling in NOLA.
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Yann
This is your SolarWakeup for August 3rd, 2021
RFP Support. As more and more development opportunities and RFPs include energy storage, it’s important to understand the systems that drive the investment model in front of you. While FlexGen leads the Country in integrating energy storage projects and building the leading software platforms that operate them, FlexGen also provides engineering services for the pre-development work that determines if a project should be built in the first place. As you support RFP responses, let FlexGen support you. Hit reply and I’ll connect you to the team.
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This is your SolarWakeup for August 2nd, 2021
Talking Infrastructure. Mayor Pete (now Secretary) goes on Preet Bharara’s podcast to talk about infrastructure. There is no real news here but listen to how Pete answers the questions, pivots to how this is infrastructure and layers in climate/energy almost every time. Which other cabinet secretary does Pete work with the most? You’ll nEVer guess!
Guess Who Is Back! Comical at this point and apologies for those of you new to the industry. Suniva has filed to extend the 201 tariffs alongside Auxin Solar. Suniva hasn’t been producing solar panels since before the Trump era but here they are once again.
A Post For Staffers. This is your quarterly reminders about subisidies for oil and gas and solar being unequal. Solar tax equity investors must satisfy passive/active loss rules from which most oil and gas investors are exempt. This inequity should be solved by also exempting solar and storage tax equity investors.
Delays Means Profits. When a utility project is delayed and goes over budget, the utility shareholders make more money and consumers are stuck with the costs. That sort of alignment of interest is going to provide the best execution in the field.
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Yann