This is your SolarWakeup for March 10th, 2020
All Eyes On DC. With the American Rescue Plan headed to Biden’s desk today all eyes move towards the climate and infrastructure bill. It was Senator Manchin that said it could be as high as $4trillion investment and it launches Mayor/Secretary Pete into the spotlight. In bipartisan formats, energy storage standalone ITC is center stage alongside the rest of the ITC expansion/extension. This major bill would be a decade of infrastructure improvement for grids, roads, bridges and more but likely the most meaningful expansion of climate policy in the history of the Country.
Manchin’s Role And Rule. The West Virginia Senator has been saying that he will not take the bill up in reconciliation and exclude Republicans from the start. Lindsay Graham is posturing some talk about adding the GOP to the climate discussion, which quite frankly would be a welcome addition from my perspective. Manchin holds the key as the 50th vote and could be pressuring the GOP to get involved or risk being left out as they did in the latest COVID stimulus. The reality is that all infrastructure is local and when it comes to our market, it would mean hundreds of thousands of well paying jobs for many years across America.
Standard Standards. NREL Is out with a new permitting database assessing the state of permitting, in progress and inspection across 20,000 jurisdictions. Ahead of the launch of SolarAPP, NREL is showing that even though there are national standards for solar construction, there are no standards carried across the Country. NREL is currently processing and selecting the administrator for the SolarAPP platform which should help carry the program into the next phase of launch.
New Energy Demand. Markets continue to understate the role and impact that EVs will have on the grid. When we need power, how much we need and where it’s needed.
A Product Showcase. In two weeks, join CALSSA and the dozens of manufacturers in a product showcase. This is a free event if you register in advance, you can do that here. Absent in person events and a desire to stay in front of a computer all day, CALSSA brings you the best way to learn about the latest and greatest.
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Yann
This is your SolarWakeup for March 9th, 2020
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Yann
This is your SolarWakeup for March 8th, 2020
In Case You Missed It. I joined FlexGen, the second largest integrator in the US, last week. Read here. I want to give you a behind the scenes of why I joined FlexGen at what I see as a crucial moment in our market and the energy transition.
The Macros. Renewables are going to continue taking addition share of the generation portfolio. Politics will drive that continuation to some degree but cost and emissions are the leading factors. Consumers are leading the charge by adding solar at record levels, remember my 1million solar homes forecast a few years from now. The climate related impacts with hurricanes on the east coast, fires in the west and heat/freeze temps causing new grid peaks. Lastly, with solar costs down 90% since I joined the industry in 2006, battery costs are also coming down. The ability for solar and storage to be market makers not market takers is a fundamental reason for me making this leap.
Grid Needs. Natural disasters caused the grid to shutoff but the heat waves and winter freezes really put the pressure on the grid. This behind the scenes in ERCOT shows just how close to long term disaster the grid came. A grid only works when generation and demand are close to matching up and when either side of the chain falls down, there is a slack in the line that can cause major issue. This slack is optimized in the ancillary services portion of the power market and result in what you would imagine the details of grid services is. So whether it was front of the meter batteries or a virtual power plant, batteries play a major role in this dispatch capability.
A ClimateTech Play. ClimateTech is the nexus where hardware meets software to enable the energy transition happening today. For the past 10 years, FlexGen has been building the most advanced software platform that spans from electron controls to trading integration in the energy management system. The energy storage systems are true systems, power electronics, controls and battery racks brought together by hardware vendors with billions of R&D in play to make technological leaps. For us, as integrators, we will always bring the most bankable technology to our partner EPCs, IPPs and other asset owners. That’s the advantage of being hardware neutral in clean tech, something I’ve believed in since making that mistake in the 08/09 years.
Maturing Market. Like solar, energy storage is finding its comfort with all of the market participants. Who does what and how does it work are going to be solved. As a technology partner to the market, Kelcy said it best. “We didn’t just wake up and say, ‘Let’s make this software capability because we think it could create a lot of value," he added. "Our software platform has been built over a decade with all the learnings and scars and bruising that occurs in being on the front edge of innovation."
Learning Together. Over the coming weeks, months and years, I hope to bring you along my learning curve. You’ve come to know me as wanting to be in every room and every conversation and I want to learn from you and explain what market discoveries I’m making as we work this in parallel. I know that we will make 100% clean energy grids a reality and that means we all have to do a lot more of what we are doing, so let’s go forth and execute together. In the meantime, I’ll be here every morning and you can hit reply anytime to say hello or ask a question.
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Yann
This is your SolarWakeup for March 5th, 2020
Personal Update. For the third time since the start of this newsletter, I have a new day job. This time I am excited to be joining the rockstar team at FlexGen as CFO. You’ve heard me talk about FlexGen in the past because over the last decade FlexGen has been at the leading edge of integrating batteries. From the military battlefields to the oil wells and now the grid, FlexGen has earned the right to be the second largest integrator in the Country and the future is as bright as ever. If you want to read more about this, please check out the great reporting from Julian Spector at GTM. I will remain based in South Florida with our company based in Durham. This platform has never been my personal lead gen site but as many of you start thinking about how, where and what around energy storage, please reach out and I’d be happy to connect you with the team. I’ll do some more FlexGen background on Monday so you know where we play in the ecosystem. In my career I’ve been fortunate to work with great people that have become friends, all of the smartest things written here come from them. FlexGen follows a trend that has allowed me to enjoy my work as I join Kelcy Pegler in this venture who joins the company as CEO, you may remember him from his greatest hits at Sofdesk (acquired by Enphase) and Roof Diagnostics Solar (acquired by David Crane’s NRG). Fun trivia for you, it was none other than solar’s number 1 supporter, Bill Walton, that introduced me to Kelcy.
Why Storage, Why Now. For 10 years energy storage was a solution without a market, with niche and pilot opportunities driving any addressable market. As outlined by the record breaking year and hockey puck quarter, storage is now an integral part of the energy transition. None of this is a futuristic notion anymore and energy storage companies are prepped for hyper growth. Storage is also the ultimate climate tech story, where hardware and software meet to create an intelligent and resilient grid. There is a lot of maturity left to find in the market, especially around scope of work to drive down the price and eliminate multiple layers of margin. This maturation reminds me of solar and makes me feel like I have an edge given the experiences I had going EPC, EpC and Epcm scopes as module and hardware scopes continued to fluctuate during solar’s growth. Energy storage also changes the game for solar as a price maker not a price taker in the power markets which enhance every aspect of the market, particularly as storage costs continue to decrease faster than any estimates in the market. In a world where I look to hit a hole in one on every hole, this market opportunity feels like the best way to do just that.
It Continues. Yes, SolarWakeup will continue and I will never stop caring about all segments of the solar market. You will be able to email me back any morning I write something you disagree with or want to ask me questions. This platform will remain a central part of who I am as a professional in the space. Thank you all for the words of support and congratulations, I remain in awe of how many of you take the time to reach out and read this little newsletter that started with 40 readers.
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Yann
This is your SolarWakeup for March 4th, 2020
More Tomorrow. Meanwhile this.
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Yann
This is your SolarWakeup for March 3rd, 2020
Solar Market Webinar. At 10am eastern you can join me and Phil Shen from Roth Capital to talk about the solar market. This is also a great opportunity to subscribe to Phil’s mailing list, with his great coverage of the public companies in the industry.
DC Is Buzzing. Senator Manchin is throwing the doors open on the infrastructure debate, in concert with the White House perhaps? Meanwhile the White House climate team is both real and working.
Product Showcase, Virtual Edition. This is a free virtual product showcase for solar installers across the Country hosted by CALSSA. This two day event is the best thing since standing in a room with 10,000 of your solar friends. Check that out here.
Startup Jobs In Solar. Nevados is a tracker startup that is looking for a Supply Chain Manager and their CEO is doing great work. This company is going to do big things in a huge market. Check out the listing or let me know for an intro.
More news coming shortly, will recap that tomorrow.
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Yann
This is your SolarWakeup for March 2nd, 2020
Granholm Talks Grid. “Clearly the grid, its reliability and its capacity are a huge focus.” That’s the Secretary of Energy talking to the Washington Post about the things that need to happen to adapt to the new normal of stresses on the grid by climate as well as the transition to renewables currently happening. The secretary also teases the inclusion of smart grid and infrastructure investments in an upcoming bill being prepared by the White House.
Carbon Pricing Meets Oil. The American Petroleum Institute is preparing to endorse a carbon pricing policy. As the trade group for oil and gas industries, the move is likely to create a dialogue but unlikely to yield actual legislation. Count me in as skeptical.
Holding The Power Bag. One of the oldest electric cooperatives serving dozens of local distributors and 1.5million of consumers received a rather large bill from ERCOT. Instead of passing that bill along, Brazos decided to file for bankruptcy instead. Assuming the reporting is directionally correct, Brazos expects to have debts in the $5-$8billion range which it will seek to restructure. This means that ERCOT could have a financial shortfall given that they are in between a buyer and seller, assuming that they have or intend to pay the seller. All eyes on Texas legislators to see how they handle this.
A Book On Jobs. A solar executive and development professional, Eric Pasi, has written a book on one of the most important topics in the industry, jobs. Not on how we create or grow them but a guide to success in this incredible wealth opportunity that is the green recovery. Check it out at https://www.cleanwavebook.com/
Solar Market Webinar. On Wednesday at 10am you can join me and Phil Shen from Roth Capital to talk about the solar market. This is also a great opportunity to subscribe to Phil’s mailing list, with his great coverage of the public companies in the industry.
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Yann
This is your SolarWakeup for March 1st, 2020
Texas Reform Needed? When it comes to ERCOT, it’s been an educational time for many of us. In less than a year’s time, ERCOT experienced huge price spikes from a heating event, outages from a hurricane and now the freezing of an unprotected infrastructure system. It also highlights that the stress tests for the Country’s grid are not tested for today’s needs and variables. Since the start of the pandemic, we’ve shifted our consumption farther to the grid edge, added electric vehicles and adopted electrification. ERCOT, specifically, is going to figure out if the market worked as designed or if it needs to adapt given a more drastic edge case. I can’t help but think that when it comes to our energy system, we are embarking on a road trip with our tank on empty, hoping that the gauge is broken.
Yellow Electrification. This has been an obvious announcement a long time coming. My son rides on a traditional blue bird yellow school bus and I hate that it’s not electric. Predictable routes with no range anxiety, central congregation spot, low speeds and lots of stops, all of which are perfect for an electrified school bus fleet. Like in solar, EV school bus fleets are the best counterparties for 3rd party ownership of those fleets because the capital can be cheap and not encumber the school district. We may not be there on costs quite yet, but this is happening in a big way.
Keeping The Lights On. One of the pictures I got last week, regarding homes in Texas staying on with solar, came from Sunrun. Their CFO was on Bloomberg talking about the ability for DERs to keep the lights on and how the demand in Texas is currently through the roof (or on the roof) for solar plus storage. Sunrun and every other solar company in Texas are hiring thousands of workers to keep up with demand because at a certain point, consumers realize that peace of mind and saving money are actually in alignment. High rises in cities sway with the wind, to absorb the force pushed on itself. In areas affected by earthquakes, high rises can have dampers (spring like devices) installed to absorb the higher forces. When it comes to the grid and its resiliency, DERs and storage will create that balance.
Small Area, Big Market. DC may not be big or a State but when it comes to being a market, it’s a big one for one local solar installer. New Columbia Solar has been leading the charge there and they keep adding capital to their firepower. A great outcome for a great team.
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Yann
This is your SolarWakeup for February 26th, 2020
Congratulations. To the next Secretary of Energy, Jennifer Granholm. I met her when she was Governor of Michigan and a strong supporter of solar then, she remained an ardent advocate for the clean energy market afterwards. Her expertise and executive leadership will be great for the amazing team at DOE.
Paint The Box. The opposition for a clean energy standard will say something about picking winners and losers. In reality, and more and more so publicly, utilities and investors want the Government to state the obvious which is that the energy transition is happening today. By having a ‘mandated’ goal, they have the coverage against the short term traders about doing the work they know will be done anyways.
Sunshine. Is the best disinfectant. Companies with climate risk should state as such, whether they need to do anything about it is up to them and their shareholders. I’ve lived in Florida for over 20 years with a hiatus in Northern California and Maryland. Most of you have lost your power more hours/days in the past 10 years than I have. That’s my way of saying that infrastructure and climate events that threaten that intelligent and reliable grid is no longer an isolated risk.
Have A Great Weekend! Big news next week.
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Yann
This is your SolarWakeup for February 25th, 2020
Right Job Right Location. Part of our job is to make sure that the energy transition doesn’t change the location of the jobs that people have today. As someone that has moved for work, as many of you have, it isn’t easy to leave behind friends, family and comfort for a new beginning. For many in coal, gas and power sectors they are working jobs that may have been jobs in their families for generations, think coal miners. We’re getting data that show that job opportunities match where the energy transition is impacting the most workers and it’s up to many of you reading this to grow your businesses in those locations and not put them where you are comfortable. Hiring talent is surely one of the toughest challenges you will face in the coming years so go to the talent.
Speeding The Replacements. The fiscal climate dilemma will surely be centerstage this decade. The dilemma is to determine what to do with existing assets that have not reached their end of life while also acknowledging that they are not the best solution anymore especially with societal costs being included in today’s analysis. Yes, it was the wrong decision to build in the first place but now they are installed, capitalized and millions of retirement accounts, pension funds, and investments are taking the assumption of a full life for granted. Should we replace many of those plants? Yes, the climate and grid need it to happen but that doesn’t happen in a vacuum either.
Climate, Jobs And Wealth Creation. We are the center of the greatest wealth creation opportunity in a generation, that is a certainty. Because of that and how the grid is changing, it is also where the largest growth of jobs will happen. As I said in a recent interview, tell me the job you want and I’ll show you the job opportunity in our industry. While this is the SolarWakeup and I remember at every CALSSA board meeting that we have become the big S, solar plus storage industry. The best part is that we are creating jobs, careers, and wealth while ensuring that our kids inherit a cleaner planet.
The First Step. In the coming months and years, we are going to have tough conversations, some of which I outline above. We’ve been having net metering battles since the day I joined the industry 15 years ago and even in California, the biggest market in the Country where solar is literally keeping the lights on during peak shutoff events, the fight continues. The grid is transitioning, changing for the better. We can either work together to make it work better for everyone or we can fight the battles where one side shuts their eyes and points that clean energy is bad, bad, bad. Look at SEIA’s statement about Texas last week, no finger-pointing just simply saying we can solve this problem, shutoffs, and rampant costs, by including the lowest costs and more resilient technologies. It is a long past time for anti-renewables forces to stop saying that consumer choice and self-reliance by investing in their own energy source is bad for the grid and if they aren’t going to stop, then it’s time for regulators to stop hearing it because consumers are tired of it.
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Yann