This is your SolarWakeup for April 18th, 2018

The (Not So) Dark Side Of Solar. If you follow energy conversations on Twitter, there is a set of a half dozen energy Phd’s that educate (troll) solar conversations quite a bit. Yesterday, when I saw the article from Varun Sivaram, I rolled my eyes but then you made it the most clicked link. The oped is non-sense, Frank does the breakdown, and I’d be happy to defend my calling it non-sense. The danger is the real estate Varun is getting his message into, namely Brookings blog and Washington Post. Solar folks will read the article and know that it wasn’t factions of the solar industry fighting for tariffs, just two bankrupt companies. Solar may be able to get itself into political conversations but definitely doesn’t have political clout. Look at South Carolina, what did Varun want solar to argue for in addition to the NEM cap increase that solar didn’t get? Varun is anti distributed generation and against the ITC, in short, his message is to co-opt the public opinion support solar enjoys for more of the same 20th century message.

Storage At The State Level. State level energy storage targets are close to topping 10GW in the first real year that these legislative and executive order targets are proposed. So what’s next with these targets? Should I raise my hand and say that I have projects ready for construction with project finance capital and need a revenue stream? Aside from the SMART program in MA, we are still in a likely regulator process that will require pricing signals to happen. The money is still lacking on the energy storage side, a problem I am working to solve for you, but project pipelines are also nonexistent with any real scale. More announcements on the storage investment capital coming soon.

Sunny Insurance. Farmers spend as much of their time and resources hedging and forward selling their output as they do actually farming. As the weather becomes the unknown, the agricultural market has created insurance products to minimize the risk of weather. Solar is now being served by similar products, like kWh Analytics’ revenue put, that limits the risk to debt and ideally lowers the cost of capital. Look for credit default products to be created as well, another way that C&I could be fixed.

Private Equity Buys Into Solar. Conti Solar, part of Conti Group, is selling a majority stake of the business to ARES EIF, the private equity group’s energy infrastructure fund. Management will stay in place and financial terms were not released by the companies. Conti Solar installed 175MW in 2017 and if I were to guess, this is as much as a focus on growing the EPC business as it is creating a pipeline for projects to invest in. This is what the board room would call a ‘platform play’.

Completing The Turnaround. Enphase is getting positive reviews from Wall Street analysts. The company has struggled a bit in past years but now sees light at the end of the tunnel. 2017 was a tough year for residential and large customers limited their growth so the distribution channel had to come back to life, and it has. The democratization of capital available to local installers is also helping residential solar bounce back in a big way. So as costs decline, Enphase is at the center of the installation that adds value to the homeowner, maybe even with some nifty consumer focused data, creating real value to the market. Turnarounds are hard and turnarounds in solar are more so, hats off to the Enphase team to execute.

Opinion

Have a great day!

Yann