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The Tariffs Are Taking A Devastating Toll

By Tony Clifford, CDO of Standard Solar

As a general rule, it doesn’t hurt to be right—but when it comes to the devastating effects the Section 201 solar tariffs are having on the industry, I wish I’d been wrong.

Last year, two foreign-owned companies held the U.S. solar industry hostage to their own selfish needs, and 9,800 people lost their jobs in 2017 alone. And I have to be blunt: 2018 has not gotten off to any better start.

I’ve heard some so-called industry “experts” suggest the tariffs are having the desired effect, i.e. that solar manufacturing jobs are coming back to the United States. They point to a handful of companies that say they’re expanding their module factories and one new factory planned in Jacksonville, Florida, as evidence.

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But as one industry commentator pointed out, the number of jobs gained in the expansions are nowhere near what they’d need to be to make up for the losses. And those who were counting on the Jacksonville factory to make up the difference…well, I’ve got some bad news for you.

The number of jobs that factory is now supposed to be half of what the company had originally pledged (400 vs. 800), and the financial investment isn’t anywhere near the amount of money originally envisioned.

Meanwhile, elsewhere in the industry, jobs are still being lost. So far this year, we’ve seen some installation companies laying off employees by the hundreds, and one major racking manufacturer is closing its U.S. operations (in that case, the tariffs were just the fatal blow to a company already suffering from other financial strains, but without the tariffs, I believe they might have survived).

And here’s the infuriating irony: Those two foreign-owned firms for whom the entire industry held its collective breath as their trade complaint made its way through the process, ostensibly so those two companies could survive and advance?

One company was recently purchased by its well-capitalized competitor, and the other—about which I warned you innumerable times last year—is being sold off for parts (literally) by its rapacious largest creditor.

So one wonders if there might have been ulterior motives there after all. Personally, I think the trade complaint was filed primarily to boost valuations for both of the companies in question. As a result, the executives at both may walk away with impressive golden parachutes while the remains of those companies burn to ashes.

Oh, and by the way, no new jobs will be created at either (though in the one case, the sale might mean the 300 employees at its manufacturing plant might keep their jobs so, you know, small victories and all that).

All of this is to say that when I called last year’s trade complaint destructive and devastating, I wasn’t kidding. And though I currently look like some sort of doomsday Nostradamus, there is possibly light at the end of the tunnel—a national bill to remove the tariffs is currently pending before Congress. But it’s something that’s going to take all of us fighting as hard as we ever have to bring that light to the industry.

Fortunately, the solar industry has been in fights like this before and won, so I have no doubt we can win this one, too. It’s time to pick up the phone and start making calls—the battle is too important to your livelihoods to stand idly by and do nothing.

We’ve Got No Wires To Hold Us Down: SEIA Completes Grid Modernization Series

By Frank Andorka, Senior Correspondent

Is the image of the sun setting on a utility pole too heavy handed? I worry it’s a little heavy handed.

In the future, there will be no wires to hold down the transmission of electricity – at least that’s what the Solar Energy Industries Association (SEIA) believes is part of the future of grid modernization, according to a white paper it released last week.

The paper , DER and the Non-Wires Solutions Opportunity, examined how utilities are investing in distributed electricity production instead of the traditional centralized model that has dominated grid development since the 19th century.

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“Today, customers are increasingly seeking more control of their own energy, and with the rapidly falling cost of solar power, utilities are realizing the traditional business model needs to change,” said Sean Gallagher, SEIA’s vice president of state affairs. “By strategically modernizing the electric grid, distributed energy resources like solar can flourish and provide reliable, low-cost power and grid services to consumers and utilities alike.”

The white paper outlines case studies involving California and New York as being cutting-edge examples of what policymakers can do to encourage utilities to move toward distributed generation. It also discusses how to improve the grid planning process to include DG deployment.

“This report brings an important aspect of grid modernization to the forefront – how distributed energy resources can provide a technical solution for grid management issues and save ratepayers money,” said Stephen Kalland, executive director of the NC Clean Energy Technology Center. “Most importantly, the report discusses how rate design can support these solutions, how utility business models must be modernized to fairly evaluate non-wires solutions, and how planning processes should be evolved to consider these solutions.”

To read the entire, year-long series of white papers and see what conclusions SEIA reached, click here.

SEIA Efforts To Court Utilities Misguided

By Frank Andorka, Senior Correspondent

What Happened: Since January 1, the Solar Energy Industries Association (SEIA) has made moves that indicate it is considering wooing utilities to become part of its membership – a move that may be well-intentioned but are far more likely to be self-defeating.

SEIA President and CEO Abigail Ross Hopper told SolarWakeup last year that she was willing to talk to anyone (which apparently really does mean anyone) to expand the solar industry.
In the past few months, SEIA floated the idea of bringing on utilities as members of the association to some board members.
SEIA approached SEPA to acquire their ownership stake in the SPI production company, SETS, but instead renewed the joint venture .

SolarWakeup’s View: Sometimes, the enemies of your enemies are still your enemies, too.

While I have no doubt the intentions of Abigail Ross Hopper and the rest of the SEIA team are honorable, the idea of bringing utilities in as part of the national solar association makes me uneasy – and apparently I’m not the only one.

Since the beginning of the year, the subject of allowing utilities to become members of the association has come up. In one instance, the executive team met with resistance from the board when utility membership was discussed. Dan Whitten, the association’s vice president of communication, disputes that characterization of what happened at the meeting, though sources requesting to remain anonymous to discuss the plan freely outlined it as reported above.

“A range of options with regard to utilities was discussed at our most recent board meeting,” Whitten told SolarWakeup. “There was some pushback, and there was also interest in pursuing this further. The conversation is not over.”Likewise, recent negotiations surrounding the co-sponsorship of Solar Power International with the Smart Electric Power Alliance also came under discussion. Sources tell SolarWakeup that SEIA tried to buy out SEPA’s interest in the show but were rebuffed. An of the partnership was signed instead. SEPA, unlike SEIA, has investor-owned utilities on their board and takes in millions of profits from SPI and other shows produced by SETS (Solar Energy Trade Shows).

Whitten again disputes that characterization as well. “It was among a full range of options that we have batted around including renewal, the one we landed on,” he said.

An extension under the previous agreement should concern any SEIA member, however. After all, most of the revenues from the show come from SEIA members and members’ customers, but SEPA’s annual budget is more than 50% funded by the SETS joint venture. The bottom line? SEIA’s members – that’s you – fund an organization with close ties to the utilities that are trying to mess with your business. In other words, SEPA needs you more than the other way around, but it’s SEIA’s members that get hurt in the process.

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“There is no question that we are looking at all opportunities to better represent the full solar industry from local installers, to providers of advanced technologies, to large-scale solar providers and sponsors,” Whitten said. “We want a big tent, but we want to do it in a way that will keep the solar industry together. A solar industry divided is an industry with limited to no political power. [We want solar to become] one that can represent the entire $20 billion and growing industry can wield serious influence in Washington and in states.”

Look, I get it. For years – nay, decades – the national association has struggled to find ways to raise the necessary money to battle against a well-funded utility industry, a battle it knows it needs to fight. And I understand the temptation to go where the money is. After all, there is no question the utilities are well funded and have money to burn – just look at EEI and NEI. Look at all the cash they’re spending trying to dismantle net metering – maybe the most effective pro-solar-penetration legislative policy in history – and the money they get from charging exhorbitant fees for interconnection access.

But that’s just it, isn’t it? Can we ever trust the utilities to support the solar industry fully, given the threat it poses to most utilities’ monopoly power on electricity generation? Wouldn’t we essentially just be giving cover to a group that, if they don’t want to destroy the solar industry entirely, at the very least want to slow it down long enough for utilities to figure out how to keep the power of solar for themselves? What would that mean to SEIA’s position on ratepayer-funded solar within utilities’ monopoly markets?

But I’m a big believer in playing out the potential unintended consequences of any move before deciding on a final course of action. And the potentially devastating consequences of alliance between solar’s national association and groups hellbent on hobbling solar’s growth are bridge too far for me.

They should be for you, too.

More:

The Solar Energy Industries Association

What Is The Threat To The Utilities From The Solar Industry?

Zombie Lie Returns; Time To Kill It Again

APS Is Trying To Kill Steyer-Backed RPS Initiative

South Carolina Solar Soul Under Attack

Hey, California Utility: John Grisham Would Like His Latest Plot Back

Bonus:

It just seemed appropriate.

How Should We Categorize Community Solar?

By Frank Andorka, Senior Correspondent

What Happened: A debate, started by SolarWakeup founder Yann Brandt, has been joined over this simple question: Where should community solar be slotted in the U.S. Solar Market Insight report?

Currently, the Solar Energy Industries Association (SEIA) and GTM Research categorize community solar as part of the commercial & industrial segment for report purposes.
Yann Brandt, on the other hand, believes the location of the system is more important than the offtaker, which would instead put the majority of community solar projects in the utility category.

SolarWakeup’s View: If you were coming to this article expecting me to take a strong stand on where community solar should be slotted in the U.S. Solar Market Insight report, I’m afraid I’m going to disappoint you.

On the one hand, I can see SEIA and GTM Research’s point. If you’re talking about the scale of project, then you might be able to make the argument that, because of their generally smaller size, community solar might fit into the C&I category.

Speaking for myself only, that’s how I’ve always thought of community solar.

But during a discussion in the SolarWakeup offices, Yann made a pretty compelling argument, at least from where I sit.

In essence, community solar isn’t so much an independent category of solar as much as it is an innovative way for the owner or developer to attract offtakers to purchase electricity from the project.

And in no other segment of the industry is the offtaker considered when placing projects in different categories. So since the majority of community solar projects are ground mounted utility scale, shouldn’t they be considered utility projects?

Now, I recognize that discussion isn’t black and white. Some community solar projects are rooftop, carports or adjacent properties. Some ultra large scale solar farms are selling energy to corporate offtakers. Where do those fall within the current industry segmentation?

And while this discussion won’t be wrapped up neatly in a bow in one post (especially when I myself can see both sides), it’s certainly a discussion worth having. Because when we report numbers that will be used by the non-solar community, we need to make sure they’re as accurate as any human endeavor can be to avoid the general public misunderstanding our industry.