This is your SolarWakeup for February 19th, 2020
ERCOT Known Knowns. Here are some things that you may not have known before this week that are important about the Texas grid. First, ERCOT doesn’t cover all of Texas, it leaves out the El Paso and Northern rectangle. You’ll find it interesting that neither of those sections were really impacted by outages. Why? That’s a great question and leads to the next thing you’d want to know which is that ERCOT is essentially an islanded grid. This means that Texas operates it’s electricity ‘market’ with true isolationism. They do this to avoid FERC oversight, I’m told, because in Texas they like things cheap. Cheap you ask? Yes, almost none of the infrastructure is build to withstand winter events and this year is not the first time it has happened. David Crane reminds us that on two previous occasions, NRG assets lost tens of millions of potential revenue because their power plants were not able to operate during winter events. So when wind developers ordered wind turbines, they did not spring for the heating elements for ice conditions which bodes well because neither did any of the thermal power plants.
The Solution? Sunrun and Freedom Solar send in their first images of how you can mitigate infrastructure problems in grid and gas. I am on the hunt for more pictures of a house with lights on because you installed solar with batteries next to neighbors without it. We can fight lies with facts, the visual kind. Send them my way please.
Texas Gas Embargo. Texas implemented a gas export ban, focusing on exporting only their Senators to Mexico instead. This impacted power markets nationally including California where electricity prices reached over $1,000/MWh but only during non-solar times. This price volatility is going to cause major hiccups throughout the Country and hopefully result in some changes to how markets react.
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Yann
This is your SolarWakeup for February 18th, 2020
Solar Plus Storage Pictures. I am on the hunt for pictures of a house with lights on because you installed solar with batteries next to neighbors without it. We can fight lies with facts, the visual kind. Send them my way please.
Save California Net Metering. Sign this petition if you want to see the largest solar market continue thriving.
A Podcast To Listen To. I was pleased to join Freeing Energy’s Bill Nussey to talk about soft cost reduction by making solar permits instant and digital. You can listen to the discussion here.
C&I PPA Webinar. My C&I solar friends at Sustainable Capital Finance (SCF) are hosting an exciting free webinar for EPCs and Installers on Feb 24th, demonstrating how their software users were able to improve PPA project conversions by 25% or more. Learn best practices in executing C&I solar & storage PPAs, helpful strategies for a remote sales process, industry insights, and more. You can sign up here or contact the SCF team at info@scf.com for more information.
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Yann
This is your SolarWakeup for February 17th, 2020
Texas Power Struggle. With cold weather continuing to increase demand and reduce supply in the ERCOT energy markets, Texans are left struggling with power outages and rolling blackouts. This has been going on for several days now, in some ways similar to Hurricane Harvey that parked itself over the Houston area and never seemed to want to move on. Everyone is talking about this and the blame game. Not all of it, or really any of it, based on the truth, facts or data. Twitter accounts from Senator Cornyn, Congressman Crenshaw were amongst the highlights blaming Congresswoman Ocasio-Cortez for the Texan power issues.
The PR Game. When it comes to the press game, count on natural gas communications executives to bring their A-game and in this case they did indeed. Even before the crisis, before I realized what was happening, the PR game was in full effect. On Monday, New York Times ran a headline blaming frozen wind turbines for the energy generation shortage. They did this because the natural gas industry knew that their power plants were going to fail in a massive and systemic fashion. Gas was being prioritized for heating consumption and wells were frozen, the irony of the day. That didn’t stop the WSJ editorial board to go all in on blaming renewables for the troubles.
All Others, Bring Data. Grid operations data show the better story. Jesse Jenkins, highlighted by Twitter’s corporate account, broke down how each generation source was executing against the plan. Wind was not relied on going into the crisis, only 6GW was planned for which created a shortfall of 4.4GW when only 1.6GW was able to get online. On the other hand, only about half of the Texas natural gas fleet was able to operate with over 25GW of capacity failing to operate. For the breakdown on the tweet thread, here’s Jesse’s twitter explanation.
Extreme Pressures. The reality is that engineering and operations is hard when you account for major anomalies. A multi day, deep freeze is almost all of Texas isn’t part of the design process. California doesn’t design for hurricanes and Florida doesn’t look at earthquake risk. The new climate has deeper pressure points that occur more often and we, as consumers, can either plan for the worst or be satisfied to hope for the best. What we need is more flexibility and ability to be resilient, and while wind and solar are comfortable in the variable nature of the energy production, we must also be truthful that natural gas can also be variable if fuel is not available because for Texans, the sun didn’t shine on their natural gas fleet.
Save California Net Metering. Sign this petition if you want to see the largest solar market continue thriving.
Hawaii RPS Signal. The RPS in Hawaii is going well and one of my favorite Senators, Brian Schatz, noticed.
Don’t Hallucinate. Strategy without execution is hallucination and corporate ESG goals without policy focus to back it up are just that. GreenBiz’s Heather Clancy highlights this in her column.
A Podcast To Listen To. I was pleased to join Freeing Energy’s Bill Nussey to talk about soft cost reduction by making solar permits instant and digital. You can listen to the discussion here.
C&I PPA Webinar. My C&I solar friends at Sustainable Capital Finance (SCF) are hosting an exciting free webinar for EPCs and Installers on Feb 24th, demonstrating how their software users were able to improve PPA project conversions by 25% or more. Learn best practices in executing C&I solar & storage PPAs, helpful strategies for a remote sales process, industry insights, and more. You can sign up here or contact the SCF team at info@scf.com for more information.
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Yann
This is your SolarWakeup for February 16th, 2020
It’s Cold Out There. Unless you were within a few miles of me in South Florida, you were wearing a sweater this weekend. I won’t rub it in but we had a cozy 85 degrees for the long weekend. Cold weather, especially where it is normally not expected, causes major pain in grid operations. You saw that Texas, with power plants coming off line and wind turbines needing to be deiced to continue turning, reached its peak power price of $9,000/MWh. Demand not only exceeded forecasts many times over but also happened simultaneously across major metro areas. Grid geeks debated the pros and cons of capacity markets, like PJM versus ERCOT, and I spent a lot of time thinking about the arbitrage opportunity between peaks for energy storage asset owners that were not contracted ahead of time.
A Central Grid, Decentralized. Two former state regulators including Sunrun’s VP of Policy, Anne Hoskins, write that it is shortsighted for regulators and grid planners to not proceed with major enhancements to the way distributed energy resources are dispatched and monetized. Look at the situation in Texas, if DERs had been included in the analysis and grid operations, the peak demand could have been shaved to some degree even though Texas is just getting started. California on the other hand, with over 1 million solar roofs plus a plan to get to a million solar with storage roofs can dramatically impact grid peaks. The dispatch ability for planners doesn’t come without a cost, it competes with other peaking or near peaking capacity but isn’t looked at by regulators as a solid asset just yet. California regulators are letting monopolies double down on peaking generation capacity contracts and more fossil fuel generators as a way to manage peak. But the CAISO CEO said it best once, we cannot simply manage peaks, we must also shape demand.
Gates Writes Book. Bill Gates has a new book about the energy transition, “How to avoid a climate disaster?” The CEO of Rocky Mountain Institute reviews the book and politico publishes an interview with Gates.
C&I PPA Webinar. My C&I solar friends at Sustainable Capital Finance (SCF) are hosting an exciting free webinar for EPCs and Installers on Feb 24th, demonstrating how their software users were able to improve PPA project conversions by 25% or more. Learn best practices in executing C&I solar & storage PPAs, helpful strategies for a remote sales process, industry insights, and more. You can sign up here or contact the SCF team at info@scf.com for more information.
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Yann
This is your SolarWakeup for February 12th, 2020
The News Business. Former GTM Editor in Chief, Eric Wesoff, reports that Wood Mackenzie is shutting down greentechmedia.com and the GTM squared subscription portal. WoodMac acquired GTM for $40million in 2016 which also included the strong research and event business units which are going to continue. The decision to shutter the site has caused many to recount how GTM shaped the news in solar over the past decade plus but I am more concerned about what this means to the industry from a news coverage standpoint. We need strong and amplified coverage of the industry, not just for outsiders but for each and everyone of you to keep track on who’s doing what and what comes next. There are a few sites still operating and they need to be supported but we need to find ways to expand coverage and reporting in a sustainable and profitable way. SolarWakeup exists because I have a day job, I have published over 2,700 newsletters over the past 8 years and most of that time I had a job that paid my bills so I know how hard it is to actually do the news for a living. I’m rooting for the remaining journalists at GTM and I’m open to ideas that help and support them or the expansion of journalists in the space. GTM has been a staple for all of us in getting the story out, I’ll be sad to see it go away.
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Yann
This is your SolarWakeup for February 11th, 2020
A 2010 Build. In 2010, CPS built a new coal plant and now they want customers to decide whether that plant should be shut down. I assume that during the public hearings pre-construction, someone said that coal wasn’t a good idea and the 30 year life expectancy is a fallacy. Now CPS wants to CYA by their customers.
Instant Permitting. Santa Barbara understands that when you want more solar on roofs, you cut the proverbial red tape. On demand permitting is now coming to a building department near you. You recall, as we’ve stated many times before on SolarWakeup, that permitting cost reductions are the best way to lower the cost of solar for homeowners. Listen to OpenSolar’s Andrew Birch talk about it on the Freeing Energy podcast.
Unlimited Money, Limited Pipeline. Macquarie adds another $2billion in announced capital for renewable energy infrastructure investment. The key is more around the types of projects that infra groups are willing to fund and how they gain their pipelines. Every good project gets funded, at least that was possible in a world where we didn’t have to do deals via zoom. On the other hand Macquarie has a history in doing deals that others won’t, like a storage aggregation in Walmarts 5 years ago early.
Margin Focused, Always. Enphase released Q4 earnings on Tuesday and they beat on revenue and margin. While the company is growing their services to installers through acquisition they are also investing in major R&D on their product roadmap. Both of those, if executed, will likely grow the margin for the company even better than the 40% they are at now.
Demand Grows, Then Grows Again. What happens when every home has an EV in the driveway or two? And every bus on the road goes electric as well? Fleet conversion is also going to happen much faster than anyone expects. All of that extra demand, at the end of the distribution lines, is going be a major added variable for grid operators.
Find A Vehicle. Congress needs a vehicle to pass items in their environmental agenda, like the ITC expansion and extension or environmental justice laws. COVID or infrastructure vehicles are pending this year and could be tagged as a possible vehicle.
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Yann
This is your SolarWakeup for February 10th, 2020
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Yann
This is your SolarWakeup for February 9th, 2020
What Is A SPAC? When a company goes public via a SPAC, which is a vehicle that has already gone through an IPO with the intention of acquiring a private company, it does so with the basic intention to raise additional capital. It is not (in most cases) an exit event, it is meant to provide hundreds of millions of dollars to a private company through the acquisition and a PIPE (private investment in public equity). A lot of folks talk about valuations, market caps and stock prices but SPACs are a vision into the future. While public companies are typically thought of as short term, SPACs are meant to make monster companies over the next few years with the fuel of money today. Some will fail, even $200million can’t make unicorns, but others will take the fuel and do big things and that’s the investment thesis.
The GREEN Act, ITC Edition. The House Ways and Means committee has a GREEN act filed with includes a 5 year extension of the ITC at 30%, direct pay at 85% and includes storage. There is also a version of a credit upside if certain labor requirements are followed. This is early and legislation needs a vehicle and momentum but now you have the outline of what the new Congress is thinking about
Midwest Solar Goes Bigger. 195MW in Indiana. Do you need more proof that solar is going to be everywhere?
Ratebase Performance. In many ways Hawaii is looking at utility profits in the way that they should have been since the start, paying for performance instead of simple ratebase spending. Over the past 50 years regulated monopolies have simply become expensive banks that get paid for how much money they deploy and passing along operating costs. The problem with that is some utilities are better than others and the good ones should be rewarded.
Enphase Shops Again. Last week Enphase acquired a software startup that supplies layout and proposal tools to hundreds of installers but today the company announced that it has acquired an India based proposal and design company. It may seem like an overlap but it’s actually that complement to the tech tool. It’s becoming clearer now that Enphase is focused on supporting installers, sales people and homeowners from understanding how much solar fits, how much solar is needed and the financial value proposition to getting the project into permitting. Some companies provide leads to installers, Enphase may be trying to provide contracted projects with permits to contractors. I don’t think installers will mind paying double for inverters if they get a fully permitted project. The question is, how will they fill the remaining parts of the process?
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Yann
This is your SolarWakeup for February 8th, 2020
The SPAC Transparency. Each day this week we’ll cover one part of the SPAC market. Tomorrow we’ll talk more about the basics as I understand them but today, let’s talk about transparency. When a SPAC merger is announced, i.e. a public acquisition corp says it’s acquiring an operating private company, an investor presentation is released. These presentations are gold for understanding where the business comes from, how it is performing financially and where it is going. These decks are almost always well prepared and give you a great outline of how to tell the story of your company, the competition and how you will win. I’ve seen quite a few but if there is one that impressed you, send me the link.
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Yann
This is your SolarWakeup for February 5th, 2020
Market Share Update. On yesterday’s Roth Capital market call, Ohm Analytics reported market share for residential inverter companies Enphase and Solaredge based on actual permit data. In this data set, Ohm showed that Enphase has increased its share in the resi market by 50% year over year to 48% of the overall market, taking a majority of that increase directly from Solaredge. Roth believes that Enphase earnings next Tuesday may show the financial execution of that business success.
Clean Energy for Biden. The incoming Secretary of Energy, Jennifer Granholm, highlighted the influence of the group on a LinkedIn post yesterday. Gone are the days when our industry isn’t in the room where it happens.
No Way Norway. Will Ferrell stars in this GM ad that will run during the Super Bowl announcing GM’s plan to have 30 EV models by 2025. As a marketer, I am in awe how far behind auto OEMs are in their consumer purchasing understanding. I’ve driven EVs since 2012 and not once did I think about the type of battery in the car. GM, call me.
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Yann