Anti-Solar Consequences. Solar forces behind The Invest in Tomorrow Coalition PAC pushed and succeeded in helping Representative Ogles lose his primary race in Tennessee. There is a political price to pay for members of Congress that are anti-solar and it appears that this is true on both sides of the aisle. Pro-solar is pro-jobs, pro-business, anti-inflation and just makes common sense. Here is my new tagline for members, Keep your job and support solar!
232 Coming In. Last week came the 232 proclamation, with an enforcement date of December of this year. This gives limited time for folks to figure it out but a watchful eye on mass importation to try and warehouse inventory. I am getting some sense on where prices are going, would love to get your thoughts on how this develops and where the supply chain will try to expand asap. Certainly, projects will die and energy cost for solar will go up, net jobs will decline but we will have domestic manufacturing. Is 250% too steep a tax to pay for this? That is the political bet that has been made and we’re paying for.
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MIPs and TRQs. The administration is going to announce a long anticipated minimum import price under the 232 polysilicon case any moment now. Here’s what you need to know. This is meant to drive up the price of all modules imported in the US above the price that domestic producers want. With enough domestic production, you should be able to buy modules well below the MIP if the competition is thorough and there is no collusion on pricing. (Different topic). Here’s what comes next, you’re likely to see two things. A flurry of supply announcements between domestic factories and IPPs that are trying to lock in production, something that solar has actually done not enough of based on the earnings announcements this week. (You know your backlog but keep buying at the market to try and save a penny but then screw up your schedule). The bigger story that few people know is that there is likely to be a TRQ, tariff rate quota that allows some domestic producers to import parts of their module based on their investment levels (or as details emerge during the announcements). This will allow some factories to have access to imported cells while building out their domestic supply chain but not be subject to all the tariffs. This is where the rush will be to lock in the supply of pre and post factory startup. More to come, get your deals done today.
FCC Part 2. It seems likely that the FCC or other agency will expand the inverter rule to BESS and BESS software. Based on what I’m hearing from the market, EMS and possibly BMS will get placed into the FCC rule and do two things. First is limit the options you have for your software systems in BESS and second is stop your ability for firmware updates of your existing sites that are using non-domestic software or data flows. This will possibly be troublesome for any updates required by the ISO/RTOs that you are operating in.
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Minimum Import Price? The section 232 on poly looks to be coming soon, at least it seems so by some companies’ stock price pops. With a likely MIP (minimum import price) on modules, the question comes on how it will drive domestic factories and does it need a 45x extension bill in order to really drive that. At what MIP will the market slow in a way that is painful or can the off taker market manage it, those are the questions I am hearing right now.
Base Power. A residential storage company is raising $1billion at a whopping valuation of $13billion and you may not have heard of it. They don’t really sell anything to the solar market but they provide storage as a service to consumers, somewhere around 600MWh or more touting a daily build rate of 100 units. With this raise the company is also building their own 40kWh storage unit and owning the vertical supply chain. At $13b, Base is worth nearly 3x Enphase but that’s a bit apples and oranges given the infrastructure play that Base is but begs to question whether Enphase should raise a couple billion dollars and own the assets too. Of course, with 8.6GW of solar and 4.3GWh of storage, at a value of $2.3billion, Sunrun may feel some resentment.
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Yann