Welcome to 2017. This could be a year that defines our industry for years to come. While it does not have the variables that were anticipated, they are now constants. Let’s make some predictions for the year to come.
Federal politics will be noise, focus on States. Whether Tillerson, Perry, Zinke and Pruitt will be the final confirmed group is to be determined. Nonetheless, 2017 will likely not be affected by anything on the federal level. Your business is affected by policy and there is a great likelihood that your State will do something that affects it. Tons of whispering going on about grand bargain energy bills so get your coalitions ready. Solar will likely play softball this year and suffer some defeats so don’t let anyone speak for you if you disagree with them.
10GW, but the hard way. The megawatts will be there, I don’t doubt that. But I assure you that capital deployment will drop in a big way on a per watt basis. With the Sungevity merger off, rumors which were circling over the summer already, there will be tremendous consolidation across the board. Steeped in pipeline acquisitions, private equity firms will make moves to buy market share as cash balances get tight.
Deals with deep, diversified pockets. Solar balance sheets are small compared to diversified global conglomerates. Deals are going to get made that look at the long term and the ability find an exit for investors. Given that solar companies also raise capital at steep costs of capital, bringing in cheap corporate capital from those that can raise it makes a lot of sense if you can get a deal that works for you.
Passing $1 per watt. A few years ago, I was pondering with friends how cheap modules could get and we all agreed that the asymptote was at a $1 per watt. I am fairly certain that we are blowing passed the $1 per watt system cost and heading into the $0.80s at scale. The winter season is a refresh for everyone so getting that done by the end of the year shouldn’t be a surprise to you. The question is how to leverage this centralized solar power to reflect savings at the retail level or value to the wholesale market.
The output is a commodity, don’t commoditize talent. Nobody wants to pay for energy, that’s why you have penny PPAs in New Jersey. While that will remain true going forward, it is important to do things the right way for the right reasons. It is a rat race industry, don’t let 2017 be the year that you get away from the basics.
- GreenBiz: Meet the Four Horsemen of the Climate Apocalypse
- Greentech Media: Residential Solar Specialist Sungevity’s Reverse Merger Is Canceled
- Venture Beat: Panasonic announces $256 million investment in Tesla’s U.S. solar cell plant
- Daily Kos: Solar now cheapest new form of energy in nearly 60 countries
- Utility Dive: How will Rick Perry run the Department of Energy?
- PV-Magazine: Community solar comes to coal country
- Business Journals: California solar developer closes deal for N.C. company
- Forbes: First Solar’s Series 6 Gamble Will Likely Pay Off?
Opinion
Have a great day!
Yann