This is your SolarWakeup for December 1st, 2020
Big Solar Tech Money. Aurora, the design software company, added $50million in new capital from in their series B after raising $20million in their series A from 2018. From my memory, this could be the biggest software capital raise in our sector. Will be exciting to see what this runway does for the company.
We’re Adding Decimals. The scale of our industry is getting to a point where some of us have to recalibrate our minds. Take for example, the size of the securitizations in residential solar finance or the contracts for tracker supply in the utility scale sector. It seems that rather quickly, everything moved over one decimal and it feels like things are just getting warmed up.
What Grid Is Needed? Aside from the transition from gas to electric vehicles electricity consumption is going to stay largely flat or drop going forward. There have been hundreds of gigawatts of new gas plants with little talk about new grid infrastructure, why does renewable addition all of a sudden needs hundreds of billions in new investments? I have no problem in planning for a new 21st century grid, but that shouldn’t be a cost burden placed on solar and renewables. There is plenty of capacity coming offline that leaves room for new resources.
Biden’s Climate Advisor Pick. Brian Deese is joining the National Economic Council as Biden’s pick and is seen to be the inside man for climate. Deese is getting some negative feedback from the left because he works at Blackrock. The purity test is not for me, I’ve seen lots of solar enabled thanks to capital provided by firms like Blackrock and solar pros going to work at these firms. They, as Deese did, are creating internal pressure to expand ESG capital commitments and increased focus. Note that he comes with a quasi endorsement from Bill McKibben, who happened to perform Deese’s marriage ceremony.
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 November 30th, 2020
Closing 2020. I still have the Thanksgiving coast this afternoon and I hope you enjoyed your long weekend in your best way possible. Yes it was different but maybe it brought you back to some level of comfort. We’re four weeks out from closing the book on 2020 and I start thinking about lists and the big stories of the year, what a year to think back on for solar. It’s also a time to do the 2021 forecast: who, what, when, where and why. Start pondering and we’ll exchange notes. If anyone has great gift ideas for a 10, 9 and 4 year old that incorporates solar, I’d love to hear them.
One Big Thing. With 236GW worth of coal capacity still online, many of which have a retirement date let’s look at the two attributes that are still valuable beyond the retirement but are not valued by anyone in the grid operations. Until the moment we start valuing, with real dollars, these two things, we will have a hard time actually closing these power plants that are polluting communities around the Country. First, the interconnection is incredibly valuable. If the land allows, connecting a new power generation to that interconnection point is the cleanest and cheapest way to operation. If the land is not there, like a downtown peaker plant for example, it’s a great energy storage connection point. Second, unused grid capacity. If a coal plant goes out of service the same capacity should be allowed to reconnect with a fast track interconnection. The way it works today is solar or other generation that applies to connect to a certain point of interconnection that has a coal plant on it, even if the coal plant is scheduled to close, grid operations do not remove that existing capacity. That results in large interconnection fees and new power lines required for the new generation even though they are filling a gap. If we just offset coal plants in the next 5 years, solar would grow at rates never seen before.
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 November 24th, 2020
What We Know. The GSA has authorized the funds for the Biden transition team to receive the funds and access to start the transition. It also appears that Trump authorized this move in the closest we’ve come to a conclusion to the election. States have begun certifying their elections including PA, MI and GA while California does so on the 11th of December, 3 days before the electoral college meets on the 14th. Remember, the Government runs out of money on the 11th of December unless Congress passes a budget or continuing resolution (CR) which would require Trump’s signature unless a veto override takes place.
Climate Change Is National Security. John Kerry is returning to the White House as special presidential envoy for climate. This is a new cabinet level role for the former Senator and Secretary of State and will sit as a full member of the national security council. Kerry capped his time at State with the Paris agreement and founded the global organization, world war zero. This elevates climate to a security role and opens the dialogue that foreign policy has to take the issue into account. Some are unhappy with the status quo message of Kerry taking the lead but you have to assume he hits the ground running with decades of relationships with foreign political and corporate leaders.
Look For A Domestic Equal. It is expected that another climate leader will be added to the White House to coordinate across the agencies on the domestic front. If you step back, you understand that ever cabinet secretary has a portfolio of policies that impact climate change and some coordination needs to take place. We still have no nomination for energy, transportation, interior or EPA. Expect that to give us more color going forward.
Subsidies? You’re Joking. It is laughable to say we are going to subsidize climate change away, at best we are going to let climate change solutions play on an equal playing field. Not even the subsidies that solar and wind get are on par with what oil and gas get and have been getting for decades, long after reaching maturity and never paying their share for the damage they’ve caused the planet. Utilities still receive guaranteed rate base for natural gas plants that are subsidized from the shale to the pipeline and the stack, leaving consumers and neighbors to pay for the damage. Renewables need no subsidies, as long as no other fuels and incumbents get them either and societal costs are factored in.
What Does GM Know? GM seems to think that Biden is thinking big about electric transportation, doing a big leap in acknowledging the future is all electric. In that press release, GM also dropped its support for Trumps fight against California and the state’s ability to regulate auto emissions separately. This could be as simple as shifting with the wind but could also mean that Biden is about to double down on California’s 2035 goal of no more internal combustion sales. The leader in California on the trend to electrify transportation both consumer, fleet and mass transit has been Mary Nichols, the chair of the California Air Resources Board. She was an assistant administrator at the EPA for President Clinton and would look great in the administrator’s office for President Biden. Maybe GM knows more than they let on?
Happy Thanksgiving! SolarWakeup is off for the rest of the week, returning on the 30th. You can stay in touch with us on LinkedIn or follow me on Twitter @yannbrandt. Of course, you can always hit reply to the morning email and let me know your thoughts. I’d be extra thankful if you forward this email and ask someone to subscribe to the newsletter.
When Will It Build? Here’s the question I have been pondering for a few weeks. If someone signs a contract to put solar on your house, when do you tell them it will be installed? How sure are you that enough product will be available when install time comes? We are entering the most complex 2 quarters residential solar has ever seen, backlogs are at an all-time high and supply chains are very tight. The Buyer’s Group is working through this and would love to talk with you about it. Reach out on the price discovery page.
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Yann
This is your SolarWakeup for November 23rd, 2020
Biden Gets Involved. The President-elect is getting involved in the debate for the next round of stimulus. He has set the marker alongside the House’s $2trillion which is more than the Senate and Trump have offered. This remains a long shot for solar to get any policies into it even though a national permitting standard would be ideal to get folks back to work. Watch the spending bill instead as talks heat up once Congress comes back on the 30th.
Aligning Climate With Business Lobby. All roads are leading towards a bigger tent for solar lobbying. Corporates want more renewables and they want the best deal possible. Corporations want solar electricity from solar farms, solar on their rooftops and let their employees working remotely do have that same luxury. So what does it look like when the Chamber of Commerce and SEIA lobby for the same policy? Or when oil companies fight for electricity deregulation?
Power Of Incumbency. The EPA Chief, who is less than 60 days from the end of his tenure, has a couple of international trips planned before leaving his office. They say that power corrupts and whether you’re the administrator of the EPA or the chair of the PUC, there are billions of dollars at play every single day all over this Country. This is more true in energy than anything else given that the monopolies that have served as the market incumbents for decades.
When Will It Build? Here’s the question I have been pondering for a few weeks. If someone signs a contract to put solar on your house, when do you tell them it will be installed? How sure are you that enough product will be available when install time comes? We are entering the most complex 2 quarters residential solar has ever seen, backlogs are at an all-time high and supply chains are very tight. The Buyer’s Group is working through this and would love to talk with you about it. Reach out on the price discovery page.
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Yann
This is your SolarWakeup for November 20th, 2020
Let’s Get Into The Weekend. Trump finally gets the green light to remove the 201 exemption for bifacial modules. This comes after a long line of litigation that delayed this. Biden would be well situated to give the market some certainty and announce a review of the 201 with the intention to eliminate the tariff with an announcement to help the solar industry create more domestic manufacturing.
A Word From A Policy Pro. A great friend to many solar pros, Tony Clifford, gives you 5 things to watch in the new Biden era.
PG&E Gets New CEO. The CEO of Michigan’s Consumers Energy is moving to the Golden State. Not to take advantage of the lower San Francisco rents but to become the next CEO of PG&E. Consumers was recently trying to eliminate net metering by cutting the value of solar in half while increasing residential rates by double digits. I hope Ms. Poppe will take the time to understand the benefits of solar and storage in the California grid.
841 Times 2222. FERC has shown its intentions with FERC orders 841 and 2222 which allow storage and other distributed resources to become market participants with both front and behind the meter installations. States are responsible with filing their plans on how this would work in their markets but interconnection rules will have to keep up at the same time. State policy advocates will have to work this in parallel.
Another VPP Headline. Sunrun is running away with virtual power plant offerings to utilities. We are still in very early stages of this market which will become one where all homeowners will be able to participate through aggregators. Owning the individual assets is an easy early adopter strategy but not one for the long run.
Not Just Cars. This week brought headlines on the policy movements in the transportation transition to electric vehicles. The broader point is that fleets, including vans, trucks and buses, are transitioning at a faster pace than consumer cars. One to watch.
Spotlight On Community Clinic. This 412 kW-DC solar carport installation at Vista Community Clinic (VCC) will provide long term renewable energy for the sustainability-driven healthcare facility. M Bar C Construction, CollectiveSun, and VCC leadership joined together in bringing this system from funding to design to installation. Solar energy produced from the installation will free up facility resources allowing VCC to continue to serve their patients and the surrounding community while setting a powerful example of their commitment to renewable energy.
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Yann
This is your SolarWakeup for November 19th, 2020
Climate Administration. This seems to be the insider track on how Biden will elevate the issue of climate change. Let’s see the execution and then ask if personnel is policy.
Money Coming In. Another SPAC, this time from legendary investor TJ Rodgers, plus some great venture investments. More to come I’m sure.
Partial Or Total. The electric vehicle policy path tends to be centered around whether EV is part of a portfolio or if there is a push to make it the only option for cars. I’d caution folks to put any auto/EV announcement as a versus Tesla framing, there are millions of cars sold every year and the market will not be winner take all.
A Map For Utilities. We have reached the point where energy transition equals the best financial case for consumers. Doing nothing, including staying in stranded fossil assets, will cost consumers more money and that’s the cost shift argument to watch.
Spotlight On Community Clinic. This 412 kW-DC solar carport installation at Vista Community Clinic (VCC) will provide long term renewable energy for the sustainability-driven healthcare facility. M Bar C Construction, CollectiveSun, and VCC leadership joined together in bringing this system from funding to design to installation. Solar energy produced from the installation will free up facility resources allowing VCC to continue to serve their patients and the surrounding community while setting a powerful example of their commitment to renewable energy.
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Yann
This is your SolarWakeup for November 18th, 2020
All Eyes On Omnibus. Senator Shelby gives you today’s update on what is going on in Congress. Like every year, legislators are juggling several issues with the addition of COVID this year. In 2020, the Government runs out of money on December 11th if Congress doesn’t agree on a spending bill or a continuing resolution. Senator Shelby says that staff is working on the actual spending bill but acknowledges that the White House isn’t involved in that. The omnibus would be the likely bill to carry tax extenders including possible the ITC. I am expecting Congress to punt on the spending bill, here’s why. On December 11th, California certifies its vote and will officially put Biden over 270 electoral votes and December 14th the electoral college will vote in DC to certify the election. Twitter may go crazy during that 3 day period and I don’t see Trump signing anything, including a trillion dollar budget at this point.
Getting Back To Even. Before Biden can start on the plan to decarbonize electricity generation his administration will have to undo 100s of environmental deregulations before being able to save more carbon going forward. On the positive, it seems that people have been keeping track on what that Trump team has done and prepared the counterpunch.
ZETA 94.9. This was the classic rock station when I was growing up and today ZETA is the Zero Emission Transportation Association (zeta2030.org). 28 big companies are the founding members including the EV manufacturers as well as utilities like SCE, ConEdison, PG&E and Southern. Missing is NextEra, Ford, General Motors and any of the oil majors. If anyone knows their membership dues structure, let me know.
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Yann
This is your SolarWakeup for November 17th, 2020
Big Rundown, Highlights. The news are deep today, so let’s do some quick summaries of what you need to know today. Starting off, not solar related but you’re running a business in the strangest times ever. There are now two vaccines likely to start circulating in the near future. How do you plan on managing your business through the current spike of the virus and do you expect to ask your employees to get the vaccine, if so in what situation? What would you do if your employer asks you to get vaccinated? This isn’t a political statement, I’m going to ask you to give me feedback so that others may learn from your responses.
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Yann
This is your SolarWakeup for November 16th, 2020
The Leadership Outlook. SunPower’s CEO, Tom Werner, may have the most direct, yet politically correct statement about the Biden victory. When asked about the fact that Biden isn’t a climate denier Werner said,” It helps a lot.” He goes on to add that a stable regulatory environment would be a great benefit to the solar market. This is in line with what I got from my conversation with Abby Hopper, the CEO of SEIA. That is why everyone is working hard on the ITC extension now, businesses have to plan in a way that takes the peak and cliff away from the strategy side.
Buy What You’re Selling. If you were on our resi market call last week you heard me say that solar companies need to start believing in their own growth. The solar market is in one of the tightest supply markets I’ve seen since 2007 mostly because manufacturers were nervous about the COVID effect on market demand and forecasts were cut to 2GW when in reality we will pass 3GW and have Q1 and Q2 reach all-time highs. No matter the size of your solar company, you should be thinking about ordering now for Q1 and Q2 deliveries. Manufacturers should be running their businesses as if the ITC has already been extended, time to buy into our own market.
The Maps In The Oval. Joe Biden is going to look at the energy transition from a big picture perspective, like the smart grid map that he talks about. The map that Madam Vice President Harris will look at is what Axios is reporting on today, local pollution at the neighborhood level. The Environment Defense Fund has been doing methane measurements across the Country that do similar data visualization. The local pollution maps are going to drive the legal strategy for showing that polluters harm minority and low-income communities to a much higher degree than others. For the handful of coal plants that are still without retirement dates and weaker plants sitting in neighborhoods, watch for those to be replaced by energy storage before the end of the first term.
Solar Steel. Nucor, the steel manufacturer, has signed a 250MW PPA with EDF Renewables in Texas. This should be the steel going into all the trackers and C&I racking equipment, good old American made steel with American sunshine. In Texas. Are we mainstream yet?
Will The MOPR Go SWOPR? The MOPR was an attempt by the Trump team to upend local energy markets to prop up coal and gas plants against solar and wind projects. There was hope for a national 100% RPS but that is unlikely in a GOP Senate or even a 51-49 Dem senate. Perhaps the opposite of a MOPR, executive action towards solar and wind is possible if some adjustments to FERC are made. It still would find opposition from State and regional energy markets but likely align with their goals more than that MOPR ever did.
Spotlight On Community Clinic. This 412 kW-DC solar carport installation at Vista Community Clinic (VCC) will provide long term renewable energy for the sustainability-driven healthcare facility. M Bar C Construction, CollectiveSun, and VCC leadership joined together in bringing this system from funding to design to installation. Solar energy produced from the installation will free up facility resources allowing VCC to continue to serve their patients and the surrounding community while setting a powerful example of their commitment to renewable energy.
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Yann
This is your SolarWakeup for November 13th, 2020
Market Analysis Conference Call. In a few hours you can join me and other solar pros as we talk about the the current state of the solar market. We’ll talk about the election, ITC, supply chain shortages and more. Call is open to anyone for free, you can register here.
The Top 3 Policies. I asked Abby Hopper what the top three policy issues were in the next Congress and White House. First was the ITC, getting it extended and hopefully back to 30% with the addition of energy storage. Second was trade, fixing it and improving it to make domestic manufacturing thrive. Third came in two parts but with the same intention of putting more solar under the sun. 3a is the lack of efficiency in the interconnection process for solar farms, we’ve talked about how bad the interconnection queues are right now. 3b is permitting for residential solar, with the goal of making it digital, standardized and instant. Listen to the whole conversation here.
Trillion Dollar Voice. This is a big deal, BlackRock’s Larry Fink is publicly backing mandatory climate reporting by corporations. This is a risk issue, companies that have thousands of employees in a single location for example could be at risk if a natural disaster becomes more common. It also ensures that companies are thinking about future regulatory issues around pollution and explaining to investors what steps they are taking to mitigate this.
Ford And Rivian Week. Rivian is releasing their configurator next week if you put the deposit down and the week after if you haven’t. The 300 mile range SUV and pickup truck definitely has my eye from an appeal standpoint, they definitely should let me get a press ride in. More relevant to many of you, Ford announce an electric version of their popular work van, Transit. Around $50k for the 125 mile range work vehicle could be ideal for solar installers.
Enjoy Your Weekend! Have Friday the 13th! Check out the Buyer’s Group price list if you haven’t
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Yann