This is your SolarWakeup for February 4th, 2020
Green Cabinet Advances. Mayor Pete becomes Secretary Pete and Governor Granholm is on her way to the same. President Biden is getting the cabinet he desired with the executive orders to centralize the effort to fight climate change throughout government. EPA nominee Regan was on the hill yesterday.
Stranded Assets Get Audited. NextEra kicked off the energy earnings season with the first quarterly losses in a decade due to a billion-dollar right down of a natural gas pipeline project. A new report now forecasts over $1 Trillion in losses from these types of delayed and stranded assets. The pain will only get worse if we expect delaying the transition will somehow avoid the pain that is almost guaranteed by poor investments. Part of overcoming the negative financial impact will be creating investment opportunities on the positive side of the ledger.
SEC ESG Advisor. NYU’s Satyam Khanna is joining the SEC as an advisor on ESG and climate issues. With financial firms already understanding that ESG is central to their investment thesis (see stranded assets) it helps to have regulators understand the issue from a regulatory standpoint. Not only to keep clarity on what is ESG but also to ensure that regulations don’t get in the way of this decade’s wealth creation opportunity.
We Ride Together. Late notice but join us this morning at 8 am for a 30-minute ride on Peloton with Ally Love. There are over 60 members in the #ride4solar team and growing. When we can’t network in person, we shall do it virtually on a bike!
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Yann
This is your SolarWakeup for February 3rd, 2020
Utility Ownership Fallacy. Utility ownership of behind the meter or community level assets reveals the flaw that is the 21st century business model. When it comes to building the most competitive and dynamic energy grid, it requires consumers to be at the center of the services that are provided. Not in a way that is secured by minimum bills or required contracts but by a provider showing the value proposition and actually delivering what was promised. Years from now there will be books written about how PG&E has been able to survive this long as an IOU through two bankruptcies, multiple criminal convictions and an ongoing search for executives. At the center of that story will be the regulatory capture in Sacramento.
Better Jobs. Part of the solar industry’s goal for the next decade is geographically dispersing the job opportunities. Of course the installations are spread around the Country but what about the office jobs? I’d be interested to see trade groups working with local economic development councils to find siting opportunities for solar companies in places that aren’t usually considered or are hard to find.
Plan For Big Solar. Every week passes and the realization comes that for the foreseeable future the limits to the growth in solar will be labor and materials. The pipeline appears endless, consumer demand growing in depth and geography and capital loves solar more each day. Trying to buy materials for a project in the next two quarters however, is far more complicated and unpredictable than ever before and it may get worse before it gets better. Next week, Enphase will report earnings and you may hear that they are sold out and raising margins simply due to fundamental economics of supply and demand.
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Yann
This is your SolarWakeup for February 2nd, 2020
Finishing The Stimulus. DC is back to some standard back and forth. Dems offered a $1.9trillion stimulus and a gan of 10 Senators from the GOP countered with $600billion. If old DC is back, we’ll get a $1.2Trillion stimulus by next week. It does help that the very conservative GOP governor from West Virginia is calling for peak stimulus. One way to know that things are back to some norms, those ten GOP senators met with Biden yesterday and nobody called anyone any names, you probably didn’t even hear about it.
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Yann
This is your SolarWakeup for February 1st, 2020
Opinion
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Yann
This is your SolarWakeup for January 29th, 2020
Have A Good Weekend. Plenty of news headlines to go back and catch up on from this week. Have a great weekend!
Don’t Miss. I visited with the team from GRNE Solar to talk about soft costs in solar. Catch the podcast here.
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Yann
This is your SolarWakeup for January 28th, 2020
Shoals IPO Boom. It was a 24-year overnight success story for the man you all know, Dean Solon the founder and former CEO of Shoals. Shoals do simple things well and in the past few weeks introduced me to the category of eBOS. I said that it would be a boost to the industry if Shoals IPO went so well that the company would be valued at $2billion, but it closed at over $5billion in market cap on its first day of trading. While Oaktree sold around a 70million shares for a major gain for its investment, Dean Solon appears to be in it for the long run, still holding over a 65million shares of the company started and still operating in Tennessee. Trading under the ticker SHLS, count this as the entry ticket that says to every founder, executive, and operator in the solar industry that the billion-dollar exit and valuation can be in your future as well. Congratulations to the entire team.
Side Note. Shoals has a market cap of $5.2billion as of yesterday close of the market and FLEX has a market cap of $8.7billion. FLEX just happens to also own Nextracker, the largest supplier of tracking in the world.
Biden Climate Orders. There was a waterfall of climate-related activity from the White House yesterday as expected. The executive order for tackling the climate crisis ties in all aspects of the federal government. It also establishes the Office of Climate Justice at the Department of Justice, one of the most consequential paths for achieving the overarching goal of decarbonizing the electric grid by 2035 as called for by the executive order.
Envoy John Kerry Speaks. The foreign policy on climate change was a central part of John Kerry’s tenure as Secretary of State and now he’s taking the issue on full-time. What Biden is creating is a domestic/offshore 1-2 punch on climate policy with two executives that know the issue better than most.
Gina McCarthy Sets Tone. Gina McCarthy unveiled the administration’s tone on climate yesterday and through the accent, the policy tailwinds were loud and clear. It will now be up to the industry to coordinate, plan and lobby the administration in order to set the rules that actually implement the goals ahead. The plethora of goals is too long to handle, releasing more climate positive news in a day than the federal government has done since declaring independence.
Granholm Doubles Down. In her hearing on the hill, Jennifer Granholm explained to the Senators that a climate positive future is exactly what the economy and the Country needs right now. Jobs, from construction, manufacturing to finance and legal, are the lifeblood of the renewable energy markets. If the solar industry is set to sell a million solar homes, we will need to labor and management staff to install it. Granholm looks to join Pete Buttegieg in a quick confirmation in the Senate.
Deal Thursday. Joining the Shoals gangbusters day is EnterSolar and Loanpal. EnterSolar solidified its relationship with EDF by selling its remaining ownership to the company while Loanpal, which is just about 3 years old, raised a new $800million.
A Supply Chain Mess. Solar is growing everywhere and the US market continues to be underestimated. With our path to 1million solar homes installed in a few years, Australia at over 25% penetration, suppliers are having a hard time keeping up with demand. The SolarWakeup Buyer’s Group was meant to not only lower costs but also increase access by consolidating demand amongst its members. We’re doing that now, reducing lead times and saving money. Get in touch with us through our portal or hit reply to this email.
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Yann
This is your SolarWakeup for January 27th, 2020
The Solar Tech Boom. I met the CEO of Sofdesk, Lennie Moreno, several years ago and you knew right away that he’s not going to let customers slip away. Tucked away in a nondescript Montreal office building, Lennie replicated a tech loft that built a popular software which may be the biggest exit for tech in solar thus far. It likely isn’t the biggest by dollar amount but it’s the type of software that can be built without expensive hardware solutions added on and with an exit on record, it will give VCs a liquidity event to seek to replicate. Sofdesk’s sale also brings Kelcy Pegler Jr back into the news, as he stood as the company’s Executive Chairman and investor for the past few years. While the former NRG Home Solar CEO is usually flying under the radar, seeking to remain out of the spotlight, this is the second major exit for the solar pro. The first exit came in 2014 when NRG’s David Crane acquired Kelcy’s Roof Diagnostics Solar, one of the largest residential solar installers in the Country at the time. When asked to comment via email, Kelcy responded with “Stay Tuned”
All About The Customer. In solar, there are many customers and for manufacturers it means making multiple people happy. If you make anything, you need to know how much to make, where to send it and which SKUs will be needed. Enphase has had trouble with making sure it’s rising product demand is met by the needed supply but with a major acquisition, they are about to get a lot smarter without upsetting the ecosystem. Enphase has acquired Sofdesk, the company behind the popular solar design software you know as Solargraf. Why would Enphase buy a design software with hundreds of installer customers? It’s not only the data but also the technology that will enable a more seamless integration of Enphase in design, proposals, permitting docs and more. But it also tells the company when a proposal goes out, to what city/state, and which sized module is proposed alongside the inverter. Integrated at scale, Enphase will be in a position to fulfill demand more efficiently. Will it include an order now button for installers? Who knows, but it could be the type of margin expansion that Enphase management seeks to grow every day.
The Full Wall Street. Forget ESG at this point, Wall Street is all in on the energy transition and climatization of businesses. See below for actual examples responding to this. In his annual shareholder letter, Larry Fink from BlackRock, is going further than he has in the past. He and through him, BlackRock’s 7.8 trillion AUM, is calling for full corporate climate disclosures and the business purpose beyond profit. It is also asking for the corporate’s plan on how they would be compatible in a net-zero economy.
The Utility Transition. I have officially been in solar long enough to be lectured to by a nuclear engineer turned CEO that nuclear energy is the future of the energy transition and then have the same person make the point that renewables are the lifeblood of that business and the energy transition to the extent that they have the entire utility lobby endorsing a 100% clean energy future. NextEra happens to be my utility and also the utility that may bring the distinction between solar and the utility business model to the most fundamental point, who owns the asset. For 15 years, NextEra has never openly seemed anti-renewable, even behind closed doors the utility was doing pilots and negotiating paths to building more solar. The sticking point was always ownership, which I grant you is not a small one especially when you care about competition, consumers and overall intellectual honesty. While NextEra announced that they target 30GW of renewables to be added on their balance sheet in the next 3 years, it is the announcement from EEI’s Tom Kuhn, which I credit to NextEra’s influence, that is most impressing today. “We are joining the growing call for a 100% clean energy future.”
Energy Wednesday. Governor turned Secretary of Energy nominee, Jennifer Granholm is on the hill today for her nomination hearing. Expectations are that the White House is also rolling out more executive action on climate. Of note in the personnel world, Energy Storage Association’s CEO Kelly Speakes-Backman has been appointed as the Principal Deputy Assistant Energy Secretary at DOE’s EERE and Energy Innovation’s Sonia Aggarwal is joining the White House as a senior advisor for climate policy and innovation.
A Supply Chain Mess. Solar is growing everywhere and the US market continues to be underestimated. With our path to 1million solar homes installed in a few years, Australia at over 25% penetration, suppliers are having a hard time keeping up with demand. The SolarWakeup Buyer’s Group was meant to not only lower costs but also increase access by consolidating demand amongst its members. We’re doing that now, reducing lead times and saving money. Get in touch with us through our portal or hit reply to this email.
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Yann
This is your SolarWakeup for January 26th, 2020
It’s Deal Week. Lots of transactions yesterday and I think we are just getting started.
Shoals. The IPO is well oversubscribed and they have upsized their offering from 50 to 70million shares and increased their price range. It’s now expected that SHLS will raise/sell over $1.4billion in shares. Not bad for a $150million revenue company.
Sunlight Financial. If you’ve dialed into Phil Shen’s market updates that I participate in, you’ve seen Sunlight’s CEO on those calls. Unable to attend the past 2 times, you now know why. Sunlight is acquired by an Apollo backed SPAC and will be going public as well.
First Solar. What once saved the company is now being sold. First Solar is selling its development business to Leeward and will be focusing solely on manufacturing.
A Supply Chain Mess. Solar is growing everywhere and the US market continues to be underestimated. With our path to 1million solar homes installed in a few years, Australia at over 25% penetration, suppliers are having a hard time keeping up with demand. The SolarWakeup Buyer’s Group was meant to not only lower costs but also increase access by consolidating demand amongst its members. We’re doing that now, reducing lead times and saving money. Get in touch with us through our portal or hit reply to this email.
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Yann
This is your SolarWakeup for January 25th, 2020
A Fed Response. Looking at the policy landscape, especially on solar and renewables, I wonder how close folks have looked at what ESG first monetary policy would look like. Solar on a roof can be a $1,200 per year stimulus for those living in the house or similar benefits for community solar customers. All we’d have to figure out how to lower the cost of money to the point that the capex of the investment is offset by the cost of staying with the status quo.
Infrastructure Week. Joe Manchin, with a bright spotlight on him at the 50th Senator, is calling for a $4 trillion infrastructure bill. He’s not ready to jump into renewables head first but he also knows that infrastructure spending won’t be building new coal plants, he just can’t say it out loud.
Fixing RTOs. There is no doubt that the last four years of attempted Federal takeover of state and regional energy policy has caused problem. Starting with the MOPR, RTOs and ISOs have to come back to the starting block and then implement state by state energy standards and goals. Moreover, they are looking at an energy demand that has been turned on its head and now is very residential. And then you add the electrification of transportation as well as the money losing power plants that are closing and you realize that the energy markets have to figure out how to price signal to developers the value of DERs and other distribution level grid investments. This is an important time to be a regulator.
Solar For All. With everything that we are talking about, in the market and in policy rooms, we have to ensure that the access to solar and solar generated electricity isn’t just for those that own a single family residence with southern exposure. Renters, low income families, and others without access to onsite solar must have reasonable alternatives with similar benefits. Low income families spend a giant percentage of their income on utilities and it would be a bad signal by our industry and supporters to forget that.
A Supply Chain Mess. Solar is growing everywhere and the US market continues to be underestimated. With our path to 1million solar homes installed in a few years, Australia at over 25% penetration, suppliers are having a hard time keeping up with demand. The SolarWakeup Buyer’s Group was meant to not only lower costs but also increase access by consolidating demand amongst its members. We’re doing that now, reducing lead times and saving money. Get in touch with us through our portal or hit reply to this email.
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Yann
This is your SolarWakeup for January 22nd, 2020
Star Spangled Weekend. Yes, The Dead’s Bob Weir played at the Clean Energy for America Ball on Wednesday night but it was solar’s own, Dan Shugar, that played the intro Anthem. It was like having the Battle of the Bands back for a moment.
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Yann