This is your SolarWakeup for July 2nd

Certainty And Security. This week Shoals won a long fought battle to protect its IP in the eBOS segment at the International Trade Commission. This underpins an important factor that I’ve heard over and over again from IPPs and EPCs alike, the value is in a good product but more importantly for the project execution, it’s the certainty of delivery with minimal risks. Shoals sits at that forefront of having a great product but also mitigated risk in upstream supply chain and delivery given its now expanded domestic manufacturing. 

95% AI. Amazon is spending 95% of its time on AI says Jeff Bezos. And that’s a quote from a year ago. Building the compute that it needs for itself and selling the excess compute or enhancing its need by leveraging the needs of others. Yesterday, Meta’s stock popped 10% on the same premise of selling excess compute. The funny thing about excess compute or any compute for that matter is that it is meaningless if the power for the data center isn’t there. And the backup systems, i.e. batteries, aren’t available and working as designed. The entire GDP growth right now is based on power being available for this need, regardless of the growth rate. The value of that compute is many multiples over current wholesale and retail rates, data centers would still get built if electricity prices increased 2,3,4x from current levels and while that’s an interesting signal for our industry, it certainly sucks for the retail consumer. 

ITC Thoughts. Your feedback on the ITC question came back almost unanimous. Solar should be ready to let go of the ITC and move forward without asking for things from policymakers. A rational thought, which I happen to disagree with wholeheartedly. The foundation of solar is such that we know we can grow our market without the ITC and that we can deliver the most affordable energy without the ITC. But the reality is that politically speaking, the ITC is possible, definitely not easy, but why would we give up the credit now instead of asking for a 2 year extension. Some of you made the point that the cost transfers from the power markets to the treasury, sure so what, the tariffs go right into the treasury as well. Having power deals and homeowners get access to a credit means cheaper operating costs for business, grids and homeowners alike. I don’t see this as a question of whether solar can succeed without it, it’s about having the political power to sit at the table and get our plate filled. That’s life in the big leagues and when our industry supplies 91% of the Q1 power additions to the grid and the GDP needs energy to grow, let’s be the solution that also lowers the cost of electricity for consumers in the battle for affordability. 

Opinion

Best, Yann