This is your SolarWakeup for December 21st, 2020
The ITC Extension. It wasn’t entirely expected to happen at this point in time but the ITC is likely to be extended for 2 years in a vote later today. The cliff from 26% to 22% will wait until the end of 2022 and 22% will stay through 2023. This will give large scale developers flexibility with placed in service procedures and safe harbor for all tax equity based structures. It also gives the industry another 2 years to get its act together and fight for a longer extension or even the ability to make the ITC permanent. Permanent may seem impossible but alcohol excise breaks were made permanent in today’s extender package. As of this moment, the actual bill language hasn’t been filed yet. We’ll update you when we see it.
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Yann
This is your SolarWakeup for December 18th, 2020
A Message On Policy. If you happened to participate in yesterday’s Roth call you heard me say this live. Companies in solar need to step up and so should everyone reading this. Over the past 15 years years we have transitioned solar from an industry that needs support to prove a point to being the fastest growing energy source with margins throughout the ecosystem. I read almost every form 4, and I don’t mean to pick on executives at public companies, but we are doing much better than ever before. The problem is most companies and executives view policy as charity, not a regulatory necessity or business development. Companies and executives alike should be setting aside 1% of their revenue to invest in policy efforts. That means if your revenues are $200million, you should be spending $2million on policy through staffing, lobbying, trade groups and political contributions. Let’s say that last year the revenues in US solar was $30billion, imagine how powerful solar would be if we spent $300million industry wide on policy efforts and therefore what would you say your salary, equity and net worth growth would be next year. Do you think we would be fighting for a 1 or 2 year ITC extension? Would SEIA and CALSSA have to struggle to find revenues because COVID killed in person events that raise a majority of the small budgets that operate our trade representatives? 1% is the number. I hope that every CEO and executive team at least spend time in a meeting talking about what this would look like on their P&L and what regulations would make that investment worth it and what policies could die if they don’t do it. Here’s my contribution to you, if you’re open to doing this and don’t know how to deploy that money, I will give you unbiased advice on how I would deploy if I were in your shoes.
And The Freeloaders. There is a list of companies in my mind and other policy pros. These companies are growing, profitable and lack participation at any level. You’d be shocked if I named names, which I won’t, of companies that aren’t members at state SEIA chapters or any trade group at all. They also tend to ignore the phone call that asks for their participation in fundraising drives and they definitely don’t have policy staff. If the solar industry has increased your net worth to over $10million, do me a favor and look at your policy spend. SEIA’s budget shouldn’t be $20million (in a normal year) and CALSSA shouldn’t be $2million, they should be 5x that number and would be if everyone participated.
Biden’s Climate Team. Biden has named names, Congresswoman Haaland to Interior, Michael Regan to EPA and Brenda Mallory to CEQ being added to the Granholm, McCarthy and Kerry announcements that came before. These are great names and will have the ability to do good things for the planet and solar. The next level of staffing will be great to see, I assume we will see names from inside our industry fairly soon.
No Spending/COVID Deal Yet. Negotiators continue to hash out the details of the covid stimulus. It is now expected that members of Congress will vote on a deal over the weekend but no word on if extenders get included and whether solar is included if they do.
30 Years Of Solar. In this episode of SolarWakeup (or find it on spotify or Apple), the podcast, I speak with Dan Shugar. Dan is the CEO of Nextracker, one of the largest tracker company in the world, currently owned by Flex. Dan has been thinking about solar for over 30 years and our conversation weaved through many of the periods that led us to where we are today, a mainstream energy generator creating generation wealth opportunities. Conversations like this are difficult to maneuver for me because after 15 years in solar I have a lot of the background that some listeners may not know or recollect but I think this may be a great welcome to solar listen for everyone in the industry. You also get a first attempt at the 10 minute episode of SolarWakeup recap at the top, fast forward to minute 10 to get to the interview. I’d certainly appreciate it if you forward the episode along to friends and colleagues.
Solar For Clubs. My friends at Sustainable Capital Finance (SCF) have seen an uptick in interest for solar PPAs from schools, country clubs, and golf courses, as these off-takers have been impacted differently than other C&I energy consumers during the COVID-19 crisis. Golf & Country Clubs have seen increased revenue from golf and other outdoor activities, while schools would install solar while students aren’t on school grounds. In both scenarios, savings from a solar PPA are extremely attractive. Click here to learn more about how their subscription-free, proprietary software, the SCF suite, can help to speed up your PPA pricing and transaction process.
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Yann
This is your SolarWakeup for December 17th, 2020
What It Means. Today at 11am eastern, join me and Phil Shen as well as our fellow industry insiders for a market update call, particularly focused on residential. You can read Phil’s market analysis on the possible ITC extension here as well as read his weekly market insights by contacting him. Registration for the webinar is here and anyone that’s been listening to the series (this is webinar #10) has definitely been given the most accurate analysis and forecast in the market.
An Early Christmas Gift. When it comes to policy, anything that is not discarded is very much possible. Such is the case, at this moment, that the ITC could be part of the omnibus spending bill. Attached to the omnibus will be a covid stimulus and possibly a tax extenders package where the ITC extension could be included. Congress is on the clock, the government runs our of funds at the end of the day Friday though OMB would consider the timing negligible if it appears a bill is imminent and things could flow into the weekend. Regardless that would require a spending agreement between the four corners and the White House before members vote on the agreed bill since a second go around wouldn’t be allowed by the calendar of events. I don’t anticipate Congress wanting to go home for Christmas without stimulus and a government shutdown so something is going to get done this week, whether tax extenders are included could be known any moment (most likely 5 minutes after you receive this email).
Mayor Pete’s Infra Week. The Department of Transportation is not one steeped in glamour but it offers Mayor Pete, one year my senior, a platform for the future. Over the next four years we will undoubtedly get an infrastructure week and with Granholm at DOE as well as unstoppable market forces see major shift on how we move as Americans. Infrastructure is the government spending bill that is hard for any members of Congress to deny and Pete will have the chance to visit many airports, train stations, and factories around America to spread his message. I’ll tell you another secret how this overlaps with our industry. Highways and railroads have the best easements in America, imagine high voltage DC transmission alongside roads and railroads to move renewable energy around the Country. This may seem far fetched but alas it has been worked on for a decade and needs action to get executed.
30 Years Of Solar. In this episode of SolarWakeup (or find it on spotify or Apple), the podcast, I speak with Dan Shugar. Dan is the CEO of Nextracker, one of the largest tracker company in the world, currently owned by Flex. Dan has been thinking about solar for over 30 years and our conversation weaved through many of the periods that led us to where we are today, a mainstream energy generator creating generation wealth opportunities. Conversations like this are difficult to maneuver for me because after 15 years in solar I have a lot of the background that some listeners may not know or recollect but I think this may be a great welcome to solar listen for everyone in the industry. You also get a first attempt at the 10 minute episode of SolarWakeup recap at the top, fast forward to minute 10 to get to the interview. I’d certainly appreciate it if you forward the episode along to friends and colleagues.
Solar For Clubs. My friends at Sustainable Capital Finance (SCF) have seen an uptick in interest for solar PPAs from schools, country clubs, and golf courses, as these off-takers have been impacted differently than other C&I energy consumers during the COVID-19 crisis. Golf & Country Clubs have seen increased revenue from golf and other outdoor activities, while schools would install solar while students aren’t on school grounds. In both scenarios, savings from a solar PPA are extremely attractive. Click here to learn more about how their subscription-free, proprietary software, the SCF suite, can help to speed up your PPA pricing and transaction process.
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Opinions:
Have a great day!
Yann
This is your SolarWakeup for December 16th, 2020
Taking A Victory Lap. 2020 numbers for Q3 are out from SEIA in their Solar Market Insight. Spoiler, they are really good and I get to take a victory lap alongside this network we’ve created. When the pandemic struck in February, I spent hours talking to you, conducting surveys and trying to put results over sentiment. This led to a SolarWakeup prediction in May where I said that residential solar would not decline by 20%+ but instead grow in 2020. Most were skeptical about that forecast but here we are, prediction is true thanks to you.
The Market Speaks. 2020 has been a year for all of us and somehow in the middle of it the solar industry is going to grow like crazy, including in a residential segment that was originally expected to shed 1GW from 2019 levels. With 69GW of utility scale solar already contracted, we’re entering the SEIA dubbed solar decade. This means that solar, as an industry, is ready to let Joe Biden put sunshine on our panels (we need a wind in our sails analogy) and supercharge what’s ahead. The energy and transportation transition needs solar to work hard to do it all. Jobs and opportunity lie ahead, you should all take a moment and thank each other for the work you’ve done to get us here.
Hear More. Tomorrow at 11am eastern, join me and Phil Shen as well as our fellow industry insiders for a market update call, particularly focused on residential. You can read Phil’s market analysis on the possible ITC extension here as well as read his weekly market insights by contacting him. Registration for the webinar is here and anyone that’s been listening to the series (this is webinar #10) has definitely been given the most accurate analysis and forecast in the market.
An ITC Inside Straight? Late yesterday evening, at the time of this writing, there seems to be a narrow window for a 1-year extension of the ITC. This extension would be included within a broader extenders bill inside the omnibus spending bill. The omnibus will also get a ~$700b covid stimulus attached to it, making it too big to fail at final vote. Whether solar gets included during the legislative drafting and negotiation is likely to occur overnight and maybe announced by the time you read this.
The DOE Secretary. Now officially the President-elect, Joe Biden is naming Governor Granholm as the next Secretary of Energy. SolarWakeup proposed the Governor for the position 4 years ago (see here). Granholm was Governor of Michigan from 2003 to 2011, close to the domestic auto sector and big supporter of solar. She was a big fan of Uni-Solar and courted companies like Suniva to open plants in Michigan. She personally bragged about the manufacturing plants to me in 2010, I will vouch for her enthusiasm for the solar sector. She joins the administration from her current post at UC Berkeley moving to DC from Oakland, where many of you are reading this newsletter from. A company she sits on the board of, ChargePoint, recently announced that it was going public via SPAC. They can definitely contact me to fill that board seat.
30 Years Of Solar. In this episode of SolarWakeup (or find it on spotify or Apple), the podcast, I speak with Dan Shugar. Dan is the CEO of Nextracker, one of the largest tracker company in the world, currently owned by Flex. Dan has been thinking about solar for over 30 years and our conversation weaved through many of the periods that led us to where we are today, a mainstream energy generator creating generation wealth opportunities. Conversations like this are difficult to maneuver for me because after 15 years in solar I have a lot of the background that some listeners may not know or recollect but I think this may be a great welcome to solar listen for everyone in the industry. You also get a first attempt at the 10 minute episode of SolarWakeup recap at the top, fast forward to minute 10 to get to the interview. I’d certainly appreciate it if you forward the episode along to friends and colleagues.
Solar For Clubs. My friends at Sustainable Capital Finance (SCF) have seen an uptick in interest for solar PPAs from schools, country clubs, and golf courses, as these off-takers have been impacted differently than other C&I energy consumers during the COVID-19 crisis. Golf & Country Clubs have seen increased revenue from golf and other outdoor activities, while schools would install solar while students aren’t on school grounds. In both scenarios, savings from a solar PPA are extremely attractive. Click here to learn more about how their subscription-free, proprietary software, the SCF suite, can help to speed up your PPA pricing and transaction process.
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Opinions:
Have a great day!
Yann
This is your SolarWakeup for December 15th, 2020
How Fast Will EVs Grow? Mercedes announced that it is adding 8 EVs to the lineup including an Alabama built large SUV by 2022. By the time your next lease ends, this could be a reality and most likely this will be one of many. While it is still surprising to me that Ford isn’t fast tracking an electric F-150 and Explorer we are embarking in something that will seem incredibly obvious a few years from now. The electric consumer vehicle is going from 0-60 in the next replacement cycle, it won’t just be Tesla and Rivian but every brand you love today. Part of the reason for this is also what creates the growth in residential solar. A consumer goes from uneducated to skeptical with some particular characteristic, i.e. range anxiety or solar is too expensify. Then, all of a sudden, a neighbor puts solar on their roof and buys a Tesla and skepticism is potentially eliminated. That network effect becomes a flywheel effect when more than one neighbor changes their behavior.
Executing The Clean Power Plan. Gina McCarthy was the principal architect of the Clean Power Plan as the EPA administrator. She was highly effective, part of the reason it took the Senate 136 days to confirm her nomination. Biden is eyeing her as the Domestic Climate Coordinator and if you’re wondering how the dumbest, newly elected members of Congress feel about it, read the tweet. (Clicking the tweet will reveal a part of the internet you may regret visiting, do so at your own risk)
Will All Transport Electrify? California has 2035 as the goal line for the end of sales for new internal combustion vehicles but a group of European truck manufacturers are setting another bar. The group includes Daimler, Scania, Volvo and Ford are pledging to end ICE for trucks in favor of other sources like battery and hydrogen by 2040. American trucking is one of the largest job creators in the Country and how this industry evolves with fuels and self driving technology will shape the future in a big way.
Adjusting Power Generation. Economic growth used to mean that power needs and electricity consumption increased, heat maps would tell you which areas of the country are growing their economy. Energy efficiency has largely muted that correlation but when transportation electrifies, we will need to plan for a significant increase in energy need and the appropriate increase in generation. You cannot legislate this shift in consumption behavior by moving towards EVs without also including in the same policy guidance and requirements for ensuring the grid is ready for it.
Using Rooftops Better. Rooftops remain the most valuable and underutilized real estate in the Country. This will require regulators to create a long term rate schedule for C&I rooftops because capacity potential will often be larger than the consumption in the building. Leases for large buildings will always be less than the 20/25 years that it takes to get a solar deal done. Those two variables require the downside scenario of a PPA agreement to provide enough cash flow for the solar project.
Hot Jobs. Starting this week you will see the return of the jobs listings on our daily newsletter. This popular feature which was too difficult for us to maintain in house will now be a partnership with our friends at EnergeiaWorks. I invite you to check out their jobs listings which will be updated weekly and support SolarWakeup partners. At any point, if you’d like a personal introduction, please let me know.
Solar For Clubs. My friends at Sustainable Capital Finance (SCF) have seen an uptick in interest for solar PPAs from schools, country clubs, and golf courses, as these off-takers have been impacted differently than other C&I energy consumers during the COVID-19 crisis. Golf & Country Clubs have seen increased revenue from golf and other outdoor activities, while schools would install solar while students aren’t on school grounds. In both scenarios, savings from a solar PPA are extremely attractive. Click here to learn more about how their subscription-free, proprietary software, the SCF suite, can help to speed up your PPA pricing and transaction process.
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Opinions:
Have a great day!
Yann
This is your SolarWakeup for December 14th, 2020
Spending Bill Pushed. Late Friday, Trump signed a one week continuing resolution that lets the government stay open. This came as Senators on both sides threatened to put holds on the measure in order to get stimulus paid to Americans and deal with the defense spending bill which Trump had threatened to veto. This is all relevant to solar because the omnibus bill still stays in limbo and tax extenders may fall to the wayside or sneak in if folks are focused on getting big items passed.
The Vaccine Ships. If you’re enthralled with logistics processes like me, you’ll find this deep dive into how FedEx and UPS will be getting the vaccine to your local areas. With 20million Pfizer doses expected to reach patients by year end, the logistics challenge includes ramping up the manufacturing of dry ice.
VPPs Take Different Shapes, Big Dollars. Last week there were two headlines with similar yet different takeaways. OhmConnect, which reduces existing consumers loads on demand, raised $80million for a demand shaped virtual power plant in California. A new player, Swell Energy, announced Friday that it raised $450million for a 14,000 home virtual power plant in California from Ares and Aligned Climate Capital. There are three ways that this project could yield monetization above the energy production: Swell could enter into a contract with a utility similar to Sunrun and the Bay Area CCAs, CAISO and other CA agencies could provide pricing signals in the market for distributed resources, or FERC order 2222 gets implemented which paves the path for DER revenue streams. Regardless, offsetting grid electricity will become only a part of the future financial value of distributed solar.
Mid-Atlantic Power Market. Several mid-atlantic utilities are proposing an energy exchange with state regulators and plan on bringing it to FERC in the future. While not a power market per se, it shows that utilities see the need for access to generation to reach beyond arbitrary service territories on a map.
EU Sees Carbon Decline Upside. No doubt that 2020 has reimagined energy consumption and carbon pollution, dropping emissions by 7% in some regions. The Paris agreement is 5 years old now and EU is increasing their speed of delivery of even greater reductions. Some of this is made possible by the change in societal behavior but it’s also because of the trends in solar and wind generation costs, battery pricing and capabilities and global belief that EVs are the exclusive future. Reporting out of China shows that there could be a reduction or elimination of coal project financing/development globally and a ramp up of shutdowns within their own borders.
Faster Permitting. This is your weekly reminder that the lowest cost, fastest path to putting solar on every roof in America is to make solar permitting online and instant. Hawaii is showing us the way alongside the great efforts of SolarAPP.
Hot Jobs. Starting today you will see the return of the jobs listings on our daily newsletter. This popular feature which was too difficult for us to maintain in house will now be a partnership with our friends at EnergeiaWorks. I invite you to check out their jobs listings which will be updated weekly and support SolarWakeup partners. At any point, if you’d like a personal introduction, please let me know.
Solar For Clubs. My friends at Sustainable Capital Finance (SCF) have seen an uptick in interest for solar PPAs from schools, country clubs, and golf courses, as these off-takers have been impacted differently than other C&I energy consumers during the COVID-19 crisis. Golf & Country Clubs have seen increased revenue from golf and other outdoor activities, while schools would install solar while students aren’t on school grounds. In both scenarios, savings from a solar PPA are extremely attractive.Click here to learn more about how their subscription-free, proprietary software, the SCF suite, can help to speed up your PPA pricing and transaction process.
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for December 11th, 2020
Have A Great Weekend. Q4 is wrapping up and I think we’re all a little bit burnt out on 2020. More opinions and insights next week but make sure you catch my conversation with NexTracker’s CEO, Dan Shugar, this week on all your favorite podcast streams. Just search for SolarWakeup with Yann and you can subscribe, listen and share. It was an hour long conversation that easily could have gone six or seven.
Supply Chains Choke Up. If you are a buyer of products, now is the time to expand your time horizons to ensure continuity of supply. Manufacturers and research companies are underestimating the size of the market over the next two quarters and likely most of 2021. That means that there will be a limited amount of product to go around and if you’re not allocated, you may get hung out to dry. SolarWakeup Buyer’s Group is here to help, ensuring allocations for our members now.
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Yann
This is your SolarWakeup for December 10th, 2020
A Senate Energy Bill? Could it be possible? Will the Senate be able to pass a bipartisan energy bill in the new session? That’s the headline in the news today and remains an effort being led by Manchin/Murkowski, the most centrist of the Senators. Wait and see, but unlikely.
ESG Pension Funds. When pension funds or endowments divest, I tend to shrug my shoulders. Not because it’s not a big deal but because it is bound to happen anyway. If investing is determining the value of companies in the future, investing in fossil fuel companies is not a good idea over the next 30 years.
Development Platforms Get $. BayWa may be the distributor you know in the US but globally they are a massive renewable energy development firm as well. EIP, the investment firm, is taking a 49% stake in the company for over $600million. The investing thesis will tell you that this investment will be worth well more than a few years from now.
Talk About Dealflow. The untold piece of ESG investment is that currently there is more money than deal flow. This is momentary but the sellers, startups, and companies raising the money are likely to be in a position of power but also in a position to ensure that ESG capital doesn’t have excuses not to grow.
Supply Chains Choke Up. If you are a buyer of products, now is the time to expand your time horizons to ensure continuity of supply. Manufacturers and research companies are underestimating the size of the market over the next two quarters and likely most of 2021. That means that there will be a limited amount of product to go around and if you’re not allocated, you may get hung out to dry. SolarWakeup Buyer’s Group is here to help, ensuring allocations for our members now.
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Yann
This is your SolarWakeup for December 9th, 2020
Quick Hits. Congress is likely to pass a 1-week continuing resolution to push the spending bill to December 18th but Democrats may be trying to add a covid stimulus to the CR. Still no word about tax extenders.
Climate Coverage. David Roberts formerly of Vox and Grist has left Vox to start a climate and politics newsletter. Climate reporting is important, I don’t consider myself a reporter in the traditional sense because I comment from the inside. What David does well goes deep into complex issues and attempts to make them mainstream. If you like what he does, subscribe to his newsletter at volts.wtf. If you want his old job, Vox is hiring a climate writer.
UK Takes Steps. UK regulators are taking steps to make the grid catch up to the energy transition. National Grid, the utility in the UK, is also active in the US. The little known fact is that National Grid supported the original Sunrun capacity participation in the ISO-NE auction. Without National Grid, Sunrun wouldn’t have been this early to the grid services market. Maybe copying some of the UK steps is what the US should be looking to do.
Supply Chains Choke Up. If you are a buyer of products, now is the time to expand your time horizons to ensure continuity of supply. Manufacturers and research companies are underestimating the size of the market over the next two quarters and likely most of 2021. That means that there will be a limited amount of product to go around and if you’re not allocated, you may get hung out to dry. SolarWakeup Buyer’s Group is here to help, ensuring allocations for our members now.
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Yann
This is your SolarWakeup for December 8th, 2020
Transparent Power Plant. OhmConnect has raised $100mm of which $80mm is going towards a virtual power plant. The capital is coming from the Alphabet backed Sidewalk Infrastructure fund. OhmConnect is known for its demand response platform, typically working off utility signals. Those signals cause Ohm to reduce participating homeowners’ demand by shutting off their AC/refrigerators/other loads with smart appliance connectors. How much opportunity is in this market? Shaping demand is one of the cornerstones of CAISO’s look into the future and how California can get to pure renewables because shaping supply isn’t always the most effective way of managing the grid. It’s easy to see how Ohm could deploy $10bb plus in the next few years to operate smart homes.
100% Is Feasible. Yesterday I wrote about Mary Nichols potential nomination to lead the EPA and today a draft report from the CPUC, CEC and CARB is released showing the technical feasibility of reaching 100% renewables by 2045. CARB is led by Mary Nichols who talked at the release about the transformation ahead for Californians. With reliability and grid resilience as the core concern, look above to Ohm’s platform and distributed solar with storage to be the central stabilizing tendon in the infrastructure.
The Climate Diplomats. Biden will enter his term having to play catchup on climate policy. While he will re-enter the Paris agreements, many of our global counterparts are already working towards or attempting to exceed the targets. Biden will also have a Senate and States that fight every step of his agenda to improve the quality of air and cleanliness of water across the Country.
Michigan Has Insights. Consumers Energy has a rate case that is the parting policy from their former CEO who has now moved to run California’s PG&E. Consumers had attempted to squash solar and is now pushing for more revenue in a rate case. How much of this DNA is transported to the San Francisco based utility is to be determined.
Supply Chains Choke Up. If you are a buyer of products, now is the time to expand your time horizons to ensure continuity of supply. Manufacturers and research companies are underestimating the size of the market over the next two quarters and likely most of 2021. That means that there will be a limited amount of product to go around and if you’re not allocated, you may get hung out to dry. SolarWakeup Buyer’s Group is here to help, ensuring allocations for our members now.
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Opinions:
Have a great day!
Yann