Solar Is Back, On The Record. Bloomberg is out with a bit of a recap of the last 90 days in solar from the viewpoint of Sunnova and Palmetto, two companies that you know well and have a good macro view of the solar market. Sunnova was out early with confirmation of its public guidance, the first public company to do so. I expect other public companies to reaffirm 2020 numbers over the next few months as well, much of the underlying data tells us that homeowner interest in solar is higher than ever before and positive economic cases exist in more geographies than ever. While the volume will return, now is the time to focus on margins and make sure they are distributed evenly throughout the value chain. The solar product pricing index for May is now open for installers to submit data and expands beyond modules. With dozens of installers submitting information, they have already seen the ability to negotiate more fair pricing for their purchases.
Loan Markets Agree. Loanpal issued their latest securitization reports through Kroll Bond Rating Agency (KBRA) for about $400million in loans. Two data points that are of interest and reassure the market sentiment. First, commentary is made that while the latter half of March was down in volume, the company is now above pre-COVID levels. Second, a graph showing new originations shows March 2020 as the all time high, crossing $200million in loans in that month for the first time. Sunlight Financial also announced an expansion of its facility with Tech CU to finance over 80,000 solar homes, which equates to over $2billion in commitments.
Vivint Solar’s Double Capital. Not to be outdone, Vivint Solar filed two new financing arrangements. The first is basically a sale of future equity cash flows of their assets. In a deal with Brookfield Asset Management, Vivint Solar monetized a forward strip of revenue to the tune of $200million out of a possible $300million in the facility. The company also increased its warehouse revolver by $245million to $570million. Interest rates are looking quite aggressive as well.
Like I Was Saying. If you listened to SolarWakeup podcast 4 weeks ago, I made a prediction well before it was cool to say this. I said that 2020 is not going to be a down year compared to 2019. Hear that clip here and subscribe to the podcast.
- Bloomberg: This Won’t Be U.S. Solar’s Best Year Ever—But It’ll Be Close
- Greentech Media: US Residential Storage Shines in First Quarter, Nabs Fourth Consecutive Record
- Solar Builder: Residential Mounting and Racking Buyer’s Guide 2020 – The How-To Edition
- Utility Dive: The 3 key challenges to expanding the West’s real-time energy market to day-ahead trading
- Axios: The alarm over climate financial risk gets louder because of coronavirus
- Renew Economy: Solar and wind’s stunning cost advantage sparks call for mass coal closure
- PV-Tech: Wave of research bolsters case of renewable investments in post-COVID era
- Reuters: Choking on diesel costs, Somali firm turns to solar for cheaper power
- GreenBiz: This moment – An open letter to the GreenBiz community
Opinion
Best, Yann