All Eyes On DC. With the American Rescue Plan headed to Biden’s desk today all eyes move towards the climate and infrastructure bill. It was Senator Manchin that said it could be as high as $4trillion investment and it launches Mayor/Secretary Pete into the spotlight. In bipartisan formats, energy storage standalone ITC is center stage alongside the rest of the ITC expansion/extension. This major bill would be a decade of infrastructure improvement for grids, roads, bridges and more but likely the most meaningful expansion of climate policy in the history of the Country.
Manchin’s Role And Rule. The West Virginia Senator has been saying that he will not take the bill up in reconciliation and exclude Republicans from the start. Lindsay Graham is posturing some talk about adding the GOP to the climate discussion, which quite frankly would be a welcome addition from my perspective. Manchin holds the key as the 50th vote and could be pressuring the GOP to get involved or risk being left out as they did in the latest COVID stimulus. The reality is that all infrastructure is local and when it comes to our market, it would mean hundreds of thousands of well paying jobs for many years across America.
Standard Standards. NREL Is out with a new permitting database assessing the state of permitting, in progress and inspection across 20,000 jurisdictions. Ahead of the launch of SolarAPP, NREL is showing that even though there are national standards for solar construction, there are no standards carried across the Country. NREL is currently processing and selecting the administrator for the SolarAPP platform which should help carry the program into the next phase of launch.
New Energy Demand. Markets continue to understate the role and impact that EVs will have on the grid. When we need power, how much we need and where it’s needed.
A Product Showcase. In two weeks, join CALSSA and the dozens of manufacturers in a product showcase. This is a free event if you register in advance, you can do that here. Absent in person events and a desire to stay in front of a computer all day, CALSSA brings you the best way to learn about the latest and greatest.
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In Case You Missed It. I joined FlexGen, the second largest integrator in the US, last week. Read here. I want to give you a behind the scenes of why I joined FlexGen at what I see as a crucial moment in our market and the energy transition.
The Macros. Renewables are going to continue taking addition share of the generation portfolio. Politics will drive that continuation to some degree but cost and emissions are the leading factors. Consumers are leading the charge by adding solar at record levels, remember my 1million solar homes forecast a few years from now. The climate related impacts with hurricanes on the east coast, fires in the west and heat/freeze temps causing new grid peaks. Lastly, with solar costs down 90% since I joined the industry in 2006, battery costs are also coming down. The ability for solar and storage to be market makers not market takers is a fundamental reason for me making this leap.
Grid Needs. Natural disasters caused the grid to shutoff but the heat waves and winter freezes really put the pressure on the grid. This behind the scenes in ERCOT shows just how close to long term disaster the grid came. A grid only works when generation and demand are close to matching up and when either side of the chain falls down, there is a slack in the line that can cause major issue. This slack is optimized in the ancillary services portion of the power market and result in what you would imagine the details of grid services is. So whether it was front of the meter batteries or a virtual power plant, batteries play a major role in this dispatch capability.
A ClimateTech Play. ClimateTech is the nexus where hardware meets software to enable the energy transition happening today. For the past 10 years, FlexGen has been building the most advanced software platform that spans from electron controls to trading integration in the energy management system. The energy storage systems are true systems, power electronics, controls and battery racks brought together by hardware vendors with billions of R&D in play to make technological leaps. For us, as integrators, we will always bring the most bankable technology to our partner EPCs, IPPs and other asset owners. That’s the advantage of being hardware neutral in clean tech, something I’ve believed in since making that mistake in the 08/09 years.
Maturing Market. Like solar, energy storage is finding its comfort with all of the market participants. Who does what and how does it work are going to be solved. As a technology partner to the market, Kelcy said it best. “We didn’t just wake up and say, ‘Let’s make this software capability because we think it could create a lot of value," he added. "Our software platform has been built over a decade with all the learnings and scars and bruising that occurs in being on the front edge of innovation."
Learning Together. Over the coming weeks, months and years, I hope to bring you along my learning curve. You’ve come to know me as wanting to be in every room and every conversation and I want to learn from you and explain what market discoveries I’m making as we work this in parallel. I know that we will make 100% clean energy grids a reality and that means we all have to do a lot more of what we are doing, so let’s go forth and execute together. In the meantime, I’ll be here every morning and you can hit reply anytime to say hello or ask a question.
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Personal Update. For the third time since the start of this newsletter, I have a new day job. This time I am excited to be joining the rockstar team at FlexGen as CFO. You’ve heard me talk about FlexGen in the past because over the last decade FlexGen has been at the leading edge of integrating batteries. From the military battlefields to the oil wells and now the grid, FlexGen has earned the right to be the second largest integrator in the Country and the future is as bright as ever. If you want to read more about this, please check out the great reporting from Julian Spector at GTM. I will remain based in South Florida with our company based in Durham. This platform has never been my personal lead gen site but as many of you start thinking about how, where and what around energy storage, please reach out and I’d be happy to connect you with the team. I’ll do some more FlexGen background on Monday so you know where we play in the ecosystem. In my career I’ve been fortunate to work with great people that have become friends, all of the smartest things written here come from them. FlexGen follows a trend that has allowed me to enjoy my work as I join Kelcy Pegler in this venture who joins the company as CEO, you may remember him from his greatest hits at Sofdesk (acquired by Enphase) and Roof Diagnostics Solar (acquired by David Crane’s NRG). Fun trivia for you, it was none other than solar’s number 1 supporter, Bill Walton, that introduced me to Kelcy.
Why Storage, Why Now. For 10 years energy storage was a solution without a market, with niche and pilot opportunities driving any addressable market. As outlined by the record breaking year and hockey puck quarter, storage is now an integral part of the energy transition. None of this is a futuristic notion anymore and energy storage companies are prepped for hyper growth. Storage is also the ultimate climate tech story, where hardware and software meet to create an intelligent and resilient grid. There is a lot of maturity left to find in the market, especially around scope of work to drive down the price and eliminate multiple layers of margin. This maturation reminds me of solar and makes me feel like I have an edge given the experiences I had going EPC, EpC and Epcm scopes as module and hardware scopes continued to fluctuate during solar’s growth. Energy storage also changes the game for solar as a price maker not a price taker in the power markets which enhance every aspect of the market, particularly as storage costs continue to decrease faster than any estimates in the market. In a world where I look to hit a hole in one on every hole, this market opportunity feels like the best way to do just that.
It Continues. Yes, SolarWakeup will continue and I will never stop caring about all segments of the solar market. You will be able to email me back any morning I write something you disagree with or want to ask me questions. This platform will remain a central part of who I am as a professional in the space. Thank you all for the words of support and congratulations, I remain in awe of how many of you take the time to reach out and read this little newsletter that started with 40 readers.
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