Solar Permits Discussed. Tomorrow morning, join me on a conference call with Chris Collins from Ohm Analytics and Phil Shen from Roth Capital to talk about the trend of solar permitting from across the country. You can register (free) here.
Monopolies Bank Political Power. Even when consumers have the ability to choose a retail electricity provider, they typically don’t. According to the EIA, less than 20% of consumers with choice actually participate. This makes the absurdity of monopoly protection by politicians even less palatable. There is no political reality where Governors of North Carolina, Florida and South Carolina agree that one corporation has massive control over their infrastructure and Georgia would clearly expect them to be next. The only way that this actually happens is if Nextera is willing to expand consumer choice with retail energy choice. Doing the math, they are likely to only lose a small percentage of their customer base and still control a huge amount of infrastructure.
A Failure Of Resiliency. In engineering school you learn a lot about the weakest link, even more so when you go through fire academy. The key is to plan for the weakest link to fail and make sure it doesn’t have an outsized impact on the rest of the system. What I’m referring to is the sudden shutdown of Diablo Canyon nuclear plant unit 2 last week, right as CAISO was headed into another weekend of potential issues and new fire starts. That’s the problem with nuclear, it’s too big to fail but more often than not, it isn’t there when you need it and you can’t make that up with adequate reserve margin leaving only demand response, and yes, blackouts are a form of demand response. That’s why part of the equation has to be the aggregation of large scale with long duration storage, as we see in the RFP today, with the cumulative scale of millions of rooftop solar. As grid operators we have to start thinking about the C&I roofs as well, they represent the most underutilized real estate that already has interconnection and demand on site.
The EV Platform. My favorite company in the clean tech space has long been Proterra. It’s scrappy and big in potential. Now it’s getting its balance sheet ready for more with Blackstone coming back fresh off the Vivint Solar sale. Look for this company to do much more.
Sentiment Is Everything. Sentiment can create trends and traction in public markets but that trickles down every other part of the investment world. This is positive and watch for these numbers to get even better.
Covering The ITC. In the last 15 years, the Investment Tax Credit (ITC) has allowed organizations to benefit from substantial cost savings to solar installations. This sustainability-driven program has helped revolutionize the renewable energy industry. Regardless, in 2021 ITC benefits will shift; here is what you need to know from my friends at M Bar C Construction and how we can help you and your organization take maximum advantage of these savings while they last.
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Yann
The $ARRY IPO. It was a big day for solar, New Mexico and the venture founded by Ron Corio in 1989. Array Technologies went public yesterday at $22 per share, pricing $1 above the $19-$21 range. Underwriters also upsized to the maximum levels. At the close of the after-hours market, $ARRY was trading just north of $38, an amazing 73% IPO day pop. Some of you got in at the first print of around $30, still a nice return. This also means that Ron is the first known solar billionaire, he sold 23 million shares at the IPO and still holds ~21.7 million shares. #solarwealth is the word of the decade because not only are we leading the energy transition, this is the single largest wealth creation opportunity of our collective lifetimes. Congrats to Array, the team and Ron for sticking to the vision.
What It Means For Sector. Array is a pure play solar company that makes the underlying structure needed to get the most out of solar modules. It manufacturers principally in the US and the majority of its revenue comes from the US market. There are dozens of solar trackers in the market but what sets Array apart along with Nextracker is the team and execution. I spent two years in racking on the resi side and this is exactly the type of exit that could have been possible if the focus weren’t on near term, consultant driven margin. Here’s what happens next, two predictions. I think Nextracker is going to have to look at spinning out from Flex and being a standalone. As the market share leader, Nextracker drives a global business into the public markets. Oaktree, the majority shareholder of Array, also owns Shoals Technologies. I wouldn’t doubt that Shoals is far behind on their S-1 filing and don’t be shocked when you see the margins of the widget manufacturer. Every asset manager and investment bank is meeting this week looking to get smart and get into solar, and that’s great for all of us.
Solar Vs Climate Policy. Biden talks a lot about climate change and even renewable energy. He has a multi-trillion dollar plan to combat climate change (the issue) and knows how he wants to solve it (the plan) but what does that mean for the actual execution. How does solar and storage fit into climate policy from a legislative perspective? Last night, Biden took a question about fracking and he did something that should be positive news for all in clean tech. He pivoted from fracking to solar panels on rooftops and batteries in the basement (his words) while highlighting the entire program as a jobs plan. We’ve come a long way. That being said, I still don’t have a clear vision for how his administration plans on getting us there though I hope that folks I know and perhaps read this newsletter will be doing so from 1600 Pennsylvania Ave. Here’s the clip on the issue from last night’s town hall.
Storage and Grid Wars. Fluence (a Siemens and AES venture) has acquired AMS. This follows Generac’s acquisition of Enbala, LS Power’s acquisition of CPower and evGo, Engie’s acquisition of Green Charge, Enel’s acquisition of Demand Energy and Enernoc, Wartsila’s acquisition of Greensmith and I’m sure some that I’m missing. That leaves Stem as one of the remaining grid/storage companies, but having raised $371million, the price of entry will be hefty. Your thoughts and missing acquisitions are welcome.
State Capital Battles. The BP CEO talked a bit about climate advocacy in State capitols, which is my signal to remind you of the biggest head to head contests about to meet state legislators. With oil in transportation at record low levels and the electrification of buildings and transportation, oil companies and utilities are meeting head to head for the first time. They’ve mostly managed to ignore each other’s issues for a century but that’s changing. Look out for major battles and unlike utilities, I see some alignment of interests between our industry and oil that could benefit us.
Philly Gets Permits. Faster and cheaper permits in Philadelphia? They get it, let’s help them get to instant permits.
Thank You! Yesterday, CALSSA members stood up and raised $195 thousand dollars to keep the policy wheels moving. After a motivational, NBA Championship caliber speech from Hall of Famer Bill Walton, members dug into their pockets. We are $5k away from our goal of $200k and I’m hoping that you can help make up the gap. You can make a donation today!
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
Array Tech Prices Above. ARRY is pricing at $22, a bit above the range listed in the filing. Congrats to the New Mexico based team for what starts a great future as a public company. Note that most of the capital is going to shareholders selling shares.
CALSSA All-Member Meeting. Join us this Thursday for the largest membership meeting ever held by a solar trade association. If you’re not a member of CALSSA, it’s easy to join and I’m happy to help you do just that. Register here for the all-member meeting.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
IPO Pricing Day Super Sized. Array Technologies, soon to be ARRY, increased the share sale that could reach nearly $1billion if underwriters exercise the options, which they are likely to do. Today we get the IPO pricing and expect the company to start trading on Thursday. Here’s a SolarWakeup prediction, with the success of Array’s IPO I think we will see Flex spin NexTracker out into its own public company.
I’m Not A Scientist. Louisiana Senator Kennedy asked the SCOTUS nominee if she believed in climate change, but she’s not a scientist and has no firm view on the issue.
New Lipstick, Same. PG&E headlines tend to repeat themselves. It seems like the wildfires may have overlapped with some equipment issues and a judge wants to hear more as regulators investigate. Governor Newsom will soon realize that the path forward means turning PG&E into a wires only company and letting CAISO expand its DER pricing signals.
Solar Policy Is Climate Policy. Axios’ Amy Harder has a thorough interview with BP’s CEO. Amongst many topics, he outlines the company’s focus on advocating for climate policy. Whether it’s BP or Amazon, it’s time to understand that the best way to drive climate policies forward is to invest in solar advocacy. Bloomberg understood this with the beyond coal campaign. This generation’s way forward is with solar advocates.
CALSSA All-Member Meeting. Join us this Thursday for the largest membership meeting ever held by a solar trade association. If you’re not a member of CALSSA, it’s easy to join and I’m happy to help you do just that. Register here for the all-member meeting.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
Opinion
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Opinions:
Have a great day!
Yann