New Spending, No Tax Increase. Biden and Senate republicans are going back and forth on the infrastructure bill which will be massively popular with voters. Biden looks to give in on tax hikes as long as republicans agree with $1trillion of new spending. Senate dems are putting up a 10-day shot clock before making their case for doing it by reconciliation. Solar advocates say that ITC extension looks solid but issues around labor and domestic content remain, though outcomes appear workable.
Climate Warning Signs. Two independent transactions with high-profile names are getting into climate event prediction and analytics. I guess knowing that your house will flood before it floods can be considered a valuable data point. This also marks TPG’s Rise Fund’s first major investment announced since former Treasury secretary Hank Paulson joined the fund as executive chairman.
AB 1139 Defeated. This was a bad bill doing bad things that are completely counter to the market and climate goals in California. Moreover, legislation that undermines existing market rules would create a new risk analysis in solar that would have impacted all parts of the ecosystem. Led by CALSSA and it’s 600+ members plus allies, advocates came out and maneuvered the opposition to victory.
Talk About Capital. I’ll ask this on a high level with a promise to talk more about it with you in the near future. Solar and wind investors look for stable returns on contracted cash flow with conservative assumptions for tail revenue post contact term. Energy storage can play a role for solar+ contracts but what capital pool will be an investor in the merchant storage assets and how will a stand alone storage ITC get a tax equity deal done? Same pool of capital but higher hurdle rates or different capital all together?
Enjoy your weekend!
- Politico: GOP balks at Biden’s revised infrastructure plan
- GreenBiz: Benioff-backed software startup helps companies get smarter about climate risk
- Utility Dive: ESG issues weigh on utility credit ratings, particularly PG&E, Edison and FirstEnergy – Moody’s
- Axios: TPG invests $100 million in Climavision, a new weather company
- PV-Tech: California lawmakers reject controversial net metering bill
- PV-Magazine: Solar and wind gain, prices fall as PJM auction secures future capacity
- Energy Storage News: VIDEO – Financiers discuss the US energy storage investment landscape
- RMI: Why Grid-Interactive Efficient Buildings Feature Prominently in Biden’s Plans
Opinion
Best, Yann