The Leadership Outlook. SunPower’s CEO, Tom Werner, may have the most direct, yet politically correct statement about the Biden victory. When asked about the fact that Biden isn’t a climate denier Werner said,” It helps a lot.” He goes on to add that a stable regulatory environment would be a great benefit to the solar market. This is in line with what I got from my conversation with Abby Hopper, the CEO of SEIA. That is why everyone is working hard on the ITC extension now, businesses have to plan in a way that takes the peak and cliff away from the strategy side.
Buy What You’re Selling. If you were on our resi market call last week you heard me say that solar companies need to start believing in their own growth. The solar market is in one of the tightest supply markets I’ve seen since 2007 mostly because manufacturers were nervous about the COVID effect on market demand and forecasts were cut to 2GW when in reality we will pass 3GW and have Q1 and Q2 reach all-time highs. No matter the size of your solar company, you should be thinking about ordering now for Q1 and Q2 deliveries. Manufacturers should be running their businesses as if the ITC has already been extended, time to buy into our own market.
The Maps In The Oval. Joe Biden is going to look at the energy transition from a big picture perspective, like the smart grid map that he talks about. The map that Madam Vice President Harris will look at is what Axios is reporting on today, local pollution at the neighborhood level. The Environment Defense Fund has been doing methane measurements across the Country that do similar data visualization. The local pollution maps are going to drive the legal strategy for showing that polluters harm minority and low-income communities to a much higher degree than others. For the handful of coal plants that are still without retirement dates and weaker plants sitting in neighborhoods, watch for those to be replaced by energy storage before the end of the first term.
Solar Steel. Nucor, the steel manufacturer, has signed a 250MW PPA with EDF Renewables in Texas. This should be the steel going into all the trackers and C&I racking equipment, good old American made steel with American sunshine. In Texas. Are we mainstream yet?
Will The MOPR Go SWOPR? The MOPR was an attempt by the Trump team to upend local energy markets to prop up coal and gas plants against solar and wind projects. There was hope for a national 100% RPS but that is unlikely in a GOP Senate or even a 51-49 Dem senate. Perhaps the opposite of a MOPR, executive action towards solar and wind is possible if some adjustments to FERC are made. It still would find opposition from State and regional energy markets but likely align with their goals more than that MOPR ever did.
Spotlight On Community Clinic. This 412 kW-DC solar carport installation at Vista Community Clinic (VCC) will provide long term renewable energy for the sustainability-driven healthcare facility. M Bar C Construction, CollectiveSun, and VCC leadership joined together in bringing this system from funding to design to installation. Solar energy produced from the installation will free up facility resources allowing VCC to continue to serve their patients and the surrounding community while setting a powerful example of their commitment to renewable energy.
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Market Analysis Conference Call. In a few hours you can join me and other solar pros as we talk about the the current state of the solar market. We’ll talk about the election, ITC, supply chain shortages and more. Call is open to anyone for free, you can register here.
The Top 3 Policies. I asked Abby Hopper what the top three policy issues were in the next Congress and White House. First was the ITC, getting it extended and hopefully back to 30% with the addition of energy storage. Second was trade, fixing it and improving it to make domestic manufacturing thrive. Third came in two parts but with the same intention of putting more solar under the sun. 3a is the lack of efficiency in the interconnection process for solar farms, we’ve talked about how bad the interconnection queues are right now. 3b is permitting for residential solar, with the goal of making it digital, standardized and instant. Listen to the whole conversation here.
Trillion Dollar Voice. This is a big deal, BlackRock’s Larry Fink is publicly backing mandatory climate reporting by corporations. This is a risk issue, companies that have thousands of employees in a single location for example could be at risk if a natural disaster becomes more common. It also ensures that companies are thinking about future regulatory issues around pollution and explaining to investors what steps they are taking to mitigate this.
Ford And Rivian Week. Rivian is releasing their configurator next week if you put the deposit down and the week after if you haven’t. The 300 mile range SUV and pickup truck definitely has my eye from an appeal standpoint, they definitely should let me get a press ride in. More relevant to many of you, Ford announce an electric version of their popular work van, Transit. Around $50k for the 125 mile range work vehicle could be ideal for solar installers.
Enjoy Your Weekend! Have Friday the 13th! Check out the Buyer’s Group price list if you haven’t
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Post Election Interview. As promised, yesterday I spoke with SEIA’s CEO, Abby Hopper. SEIA and the solar industry have to maneuver a divided government in an effort to move solar forward for the solar+ decade. We talk about the ITC extension, trade issues and improving interconnection/permitting issues for all parts of solar. You can find the podcast on your favorite stream or here.
Post Election Market Update. On Friday you can join me on Roth Capital’s solar market update call. Register for that here as we talk about politics, supply chain constraints and just how fast the market is growing.
Biden Makes Moves. The President-elect named his long time advisor and former ebola czar as the next White House Chief of Staff. Ron Klein has been Biden’s COS before and knows where the keys to the situation room are. There are names floating for cabinet members and also the idea of creating a climate czar or climate department. Governor Inslee, recently reelected, is often the name that comes up when discussing a climate leader but don’t get too lost in the headline names. The key is to find the staff that get into the weeds of the policy. I’m more interested in the chief of staff to the FERC commissioners or the legislative affairs director for energy policy than the climate czar. Be patient, hiring will happen over the next two months.
The Smart Grid Poster. It’s not the most exciting topic but interconnection queues are well over 100GW and the cost to upgrade the grid is getting higher every day. There is a misaligned interest between the grid operator and generators while the grid is in bad shape. It was built decades ago and that is why there was a map of a 21st century smart grid in Joe Biden’s office as Vice President. Also, think of where this grid would be built. Tens of billions of dollars would be invested in a lot of the states that have republican representation in the Senate. Biden is going to want FERC to get RTOs to clear queues and let wind and solar projects move forward. Maybe we will have infrastructure week coming soon after all.
Buy Smarter. Solar products don’t get to installers in a straight line. It goes through layers, packaging, repackaging, unloading and reloading of containers to get to its final destination. Most of the time, installers pay more than double than the original cost to manufacturer because of those inefficiencies. Plus the pricing for products is not transparent which makes one installer pay more than the next. Take some of that inefficiency out of the process by joining the SolarWakeup Buyer’s Group, a membership organization that puts the purchasing power back in installers’ hands. Find out more at solarwakeup.com/pricing
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What Can Joe Do? In the past 4 years America learned a lot about what is and is not possible for the executive branch to do without congressional approval. The Supreme Court has heard several cases that made that box clearer including ability to designate a national emergency and issue executive orders. Whether Biden, a politician who favors tradition, gets his hands dirty in this path is to be determined.
Is Solar VC Hot? I think so, there are multiple investment opportunities that the informal SolarWakeup syndicate is looking at to participate in. We are also seeing traditional VC getting involved. A lot of this is because ‘passing the hat’ is possible within this readership that was not just a few years ago. Not everyone has the appetite to do angel investing but more and more of you are doing well and have strong conviction about where the market is going. No longer is the first slide in every deck, trying to sell the future of the solar market growth. Raising a couple million dollars in solar is now much more possible than ever before and when a market invests in itself, outsiders don’t want to be left behind.
Interested In A DC Job? Clean Energy 4 Biden is taking names of solar pros that are interested in learning more about working in DC. This is not directly affiliated with the administration but it could be a great way to make it know that you are interested in working for President Biden. You can enter your information on their intake form.
NextEra Wants More. In the past month NextEra has approach Duke for an acquisition and now has offered $15billion to Evergy the parent of Kanas City ower and Light and Westar Energy. Evergy has 5000 employees with and over $5billion in revenues while serving over 500,000 customers. This is a core geography for NextEra’s wind unit and may be a strategic initiative to be more aggressive than the oil companies who also have the cash to do this.
Let’s Talk DERs. Two of the Bay Area’s leaders in distributed resources, Nick Chaset, CEO of EBCE a CCA based on Oakland, and Cisco DeVries, CEO of OhmConnect, wrote what many of us are saying. California needs to get its act together with regard to distributed resources. At the end of the day consumer behavior and benefits will follow the pricing signals that the market sends. If DERs get recognized, watch out for major growth in storage for solar installations.
Buy Smarter. Solar products don’t get to installers in a straight line. It goes through layers, packaging, repackaging, unloading and reloading of containers to get to its final destination. Most of the time, installers pay more than double than the original cost to manufacturer because of those inefficiencies. Plus the pricing for products is not transparent which makes one installer pay more than the next. Take some of that inefficiency out of the process by joining the SolarWakeup Buyer’s Group, a membership organization that puts the purchasing power back in installers’ hands. Find out more at solarwakeup.com/pricing
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Yann