Proterra SPAC. The electric bus manufacturer is going public via SPAC, the Arclight SPAC and taking additional capital from Chamath Palihapitiya. The total deal represents a $1.6B value for Proterra. Proterra has a foundational company, as a manufacturer and system provider for other OEMs. What Proterra hasn’t figured out yet is a lesson learned by the solar industry, it’s not about the hardware but the capital used to deploy it. One of Arclight SPAC’s board members is Audrey Lee, formerly the head of grid services at Sunrun. I’m not saying that Proterra is a non-stationary energy storage company but I’m not saying they couldn’t be either.
Impeachment, Inauguration and Climate Change. The election was early November, electoral college voted on December 11th, Congress passed a omnibus spending bill in late December and on January 6th Congress certified the election. Of course we know what happened next on the day when all things fell apart and in a world where we don’t want bad news, America kept moving forward. Today, the House is preparing to start voting on impeachment which will have a record bipartisan support. That means that the Senate will start a trial on the day Joe Biden and Kamala Harris are sworn into office, a trial to convict then former President Trump. I say all of this because Schumer will be the majority leader on January 21st and Congress has an ambitious agenda ahead including climate change. Schumer says Congress can walk and chew gum at the same time, wait and see.
Will Storage Save C&I? C&I solar has struggled for as long as I can remember with low electricity prices. It’s not that commercial properties pay less on their electric bills, their bill tends to be more skewed to the demand charges that until now were not reachable by distributed generation like solar. The difference today and tomorrow is that energy storage is getting cheaper than ever, a level that makes demand charge reduction possible and desirable. In reality it’s what got Stem the valuation it got in their SPAC. This optimism is voiced in the op-ed from our friends and fellow CALSSA board member at Energy Toolbase.
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More Tomorrow. No column today, enjoy the top news in solar and make sure to send news my way to round out the rundown.
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Join The Residential Solar Rocketship. Suntuity Solar is one of the fastest growing solar companies in the Country and we’re looking to hire the best to join us. Our executive team is hiring for VP of Operations, HR Director, Director of Talent and more positions at all levels of experience. If you or someone you know is looking to expand their career, send us an email!
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Is 2021 About Supply Chain? Solar may be growing but the bumps in the road will continue. The forced labor issue in Xinjiang was covered in the New York Times, solar glass costs are rising with limited supply and global demand is higher than ever. There is also a global boom of EVs impacting the battery supply that also provides for energy storage which we are already feeling in solar. Supply chain should be agenda item number one in your management meetings not only understanding what to buy but also expanding the time horizon on when you should purchase goods. That’s the point to consider, materials are available but it takes longer to get those goods.
A Finance Pulley. When you pull on something through a pulley, you get twice as much as you expect. That’s what is happening in the banking world. Shareholders are pressuring banks to stop financing fossil fuels, the economic indicators are showing that those assets are bad investments while renewables are desired for inevitability and ESG purposes. This means that banks not only want to stop financing old assets but expand what they are investing in new energy. Good thing is that solar, in particular, is rapidly increasing both the values that investments generate as well as total investment potential.
201 Tariff Without Plaintiffs. Sunpower is closing the Hillsboro manufacturing facility in line with their work to stop producing modules after the spinoff to Maxeon. This factory is the original SolarWorld factory that sold me modules at $4/watt but more importantly SolarWorld started the global trade war in solar. The AD/CVD, in the Obama years, caused China to retaliate with tariffs against US silicon. Then came the 201 tariff brought by Suniva and SolarWorld, both companies now long gone and remnants of their domestic manufacturing gone. What’s next? That’s my question this morning.
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247GW Of Rooftop Solar. Last year I interviewed John Farrell from ILSR to talk about his plan to put solar on 30million homes. The impact of such a concept, putting solar on rooftops around the Country, has been modeled in a recent study which is covered in the LA Times. If were were to get to over 200GW on rooftops, it would save half a trillion in other grid infrastructure and generation costs.
Big Alpha In Solar. Unless you live under a rock you’ve seen the gains solar stocks have made in the past 12 months. Some stocks are up 1000% since April. More than anything, look at the rise in stock price since the Democrats won the Senate in addition to the White House. Policy, more than anything else, has doubled stock prices in the past 90 days. Take two 2021 policy initiatives for example. FERC 2222 is going to create a marketplace for behind the meter resources including solar and storage, a good policy could double the value of solar/storage on homes versus a weak policy that doesn’t move the needle. NEM 3.0 in California can also go two ways, utilities will fight to the tune of $50million plus to remove the benefit of rooftop solar versus a strong NEM 3.0 that values solar and solar plus storage the way that DERs are needed to aid in grid resiliency. I am going to personally set aside time to take meetings with anyone that wants to discuss how to budget 1% of revenue for policy and how to spend it to maximize your enterprise value.
What Biden Thinks Of Tariffs. I don’t have the answer for that but this administration stance is going to be of great interest to me and many others I am sure. How will Biden, his trade representative and advisors advance solar while maximizing made in America solar jobs.
Consolidate Your Power. As you walk back into your offices (remote or otherwise) you will realize that the conversation is about what isn’t available. Modules, inverters, wires, tax equity, labor and other core requirements are in high demand and short supply. On product supply look towards consolidating your purchasing with similar companies to maximize your access and keep your pricing competitive. We’d be happy to give you more information at the SolarWakeup Buyer’s Group.
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