Build It And They Will Come. Bloomberg’s BNEF is out with a revised forecast for residential solar in 2020 and increases their estimates to 3GW, almost 10% higher than 2019. This is in line with what SolarWakeup has been saying since May and the data points that you heard on the Roth Capital solar market update call last week. This means that in a time where the industry thought that new sales would crater because of the lack of face to face sales, solar demand was higher than ever. Not only will 2020 have the highest capacity on record but the backlog will be substantial across the market, watch out for Q1 numbers. Suppliers should be ready to adjust Q1 supply chain accordingly.
The Golden Grid. Two headlines with one message, distributed solar is creating value well beyond energy production especially when paired with storage. Generac continues to acquire companies, this time acquiring grid services company Enbala. Generac already has a bit of a 100% storage attachment strategy especially when installed with Generac generators. In short, Generac is building the residential microgrid company. Only question is which utility will buy Generac? Sunnova is following in Sunrun’s footsteps and entering the ISO-NE capacity market, increasing the value generated by their customer’s solar and storage equipment. Next step is a 3rd party provider that provides that benefit to homeowners that are not part of the Sunrun/Sunnova platforms and want to aggregate with neighbors.
Speaking About Value. Later in 2021, the California regulators will take up the decision about net metering 3.0. Yesterday, some advocates filed their opening briefs including CALSSA which did a great job talking about the value that non-solar owners get from solar homes and lowering their costs of electricity. I link to the brief from the NRDC, a supposed environmental firm, that lacks an intellectual grasp of how solar works. They write, “non-NEM customers should not continue to or further subsidize NEM customers in excess of the total energy system and climate benefits all customers receive from NEM exports.” They continue to write that focus should be on large scale solar. All of that will be intriguing to execute when the grid goes down because there isn’t enough demand response on the other end of the line. We just went through two events where distributed solar and storage created more than 1.5GW of free capacity so that ALL users could continue to have power. This green on solar attack won’t be tolerated on this platform and I’m happy to moderate that debate publicly anytime.
Michigan Climate Voter. Biden is out with a climate ad in Michigan. Biden is old school, ads are tested, polled and scripted exactly to match the target demo. My prediction is that if Michigan voters like it, you’ll see it in Florida soon.
Yann On A Pod. I joined Tim Montague to talk about solar markets and the Buyer’s Group on his youtube based podcast. It was a great conversation.
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
Utility Scale Solar At Risk. Utility scale solar has been and continues to boom across the Country, both in utility and 3rd party owned segments. This has helped the cost of solar to drop across all segments and scale has caused modules to get to sub 30 cents per watt which is helping everyone. But here is the important counterpoint that everyone needs to keep in their mind. In the past few days we’ve seen announcements of solar in Louisiana, Arkansas and Nebraska to name a few. Solar is the biggest interconnection backlog in Michigan and ERCOT amongst others. The reality is that utility scale solar grows in strength everywhere that consumers have an increasing ability to put solar on their own roof. Residential solar is 10% of the capacity compared to utility scale but is 99% of the public opinion. 10 years ago, my neighbors in Florida would tell me solar doesn’t work because they can’t put it on their house. Those same neighbors (even with their Trump lawn signs) have solar panels on their roof now and they trust large scale solar to be just as effective. This is a symbiotic relationship that our industry often overlooks at its own detriment.
Blue Wave Scenario. In the first of the scenarios let us look at a what is possible if Biden takes the White House, democrats the house and senate and remove the filibuster. Basically control of all law making. First the downside. In this scenario so many things will be focused on that energy policy would probably not reach the top 5. You would also have to think about how clean energy and climate policy may intersect or deviate. You could see solar advocates push for some or all of the following (I wonder if the wish list already exists): national RPS, strengthening PURPA for renewable qualified facilities, national carbon policy, standardized permitting laws, extension of the ITC with direct pay, job training, R&D dollars and a greener TVA. Fundamentally, I could see policy that aims to achieve carbon free energy generation and solar on every rooftop as the goals. Execution will be up to the legislative writers. There are some great folks working hard on Clean Energy 4 Biden that would make great staffers in the administration if this happens and New York policy folks will have a big impact on Senator Schumer’s position on this as majority leader.
Exxon Planning Disaster. An internal document from ExxonMobil says that the corporation is planning on increasing carbon emissions. What happens next with institutional investors especially university endowments will be interesting to watch. If they hesitated full divestiture from fossil fuels, leaving Exxon will be an easy decision.
Chasing C&I Gold. Siemens and Macquarie (Green Investment Group) are forming a new joint venture to target solar plus storage on commercial buildings. Storage is the silver bullet for the C&I market that always had a problem with the default/downside scenario with tenants that leave or off takers that default.
Yann On A Pod. I joined Tim Montague to talk about solar markets and the Buyer’s Group on his youtube based podcast. It was a great conversation.
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
Vote Save Solar. On Friday’s episode of Pod Save America podcast, former Obama official Dan Pfeiffer commented that the first person to knock on his Bay Area door since the pandemic started was a solar salesperson. Sometimes I get my market data in the strangest places and for those wondering, he was not interested to talk to anyone at his door. Anyone know whose salesperson is door knocking in San Francisco?
To Clean Or Not To Clean. NextEra is celebrating the news of their new market cap surpassing Exxon’s by spinning themselves as a clean energy company. NextEra is first and foremost a monopoly that is primarily gas. Being a monopoly has enabled the company to invest in many gigawatts of wind and solar across the Country which gives them the ability to make the clean energy headline. Fundamentally, NextEra would build anything that makes them money regardless of its cleanliness. For years, their CEO was loud and proud that solar wouldn’t work, even spinning Florida too cloudy for PV. I think the Florida consumers that subsidize NextEra should be beneficiary of the company’s success, but obviously I am just dreaming.
What’s The Legislative Forecast? For the next 30 days, we will cover the what ifs of various election results, maybe even look at certain states that have flippable legislatures. Looking at polling, the options ahead for DC tend to expect a Biden White House, Blue House and toss up in the Senate. The Senate toss up has layers given how the institution operates and the unknown about the filibuster. Tomorrow, we’ll look at the blue wave scenario with removal of the filibuster and how energy policy would look in that scenario.
Solar On Schools. Every school in America should be covered in solar and now should have a microgrid as well. Schools are at the center of every community and in many cases the source of safety for natural disasters or emergency events. This is just common sense at this point.
A Recap Pod. How many of your are podcast listeners and would like to have a weekly solar market recap podcast from this platform? We’re looking into format options and whether people are interested. Shoot us a note, hit reply and let us know. If any companies like the idea and would like to sponsor that, give us a ring.
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
Weekend. Have a great weekend. If you have any market insight that’s worthy of updating capital markets in a few hours hit me up.
Solar Market Update Call. The solar market can be considered complex and fast moving but if you join this monthly market call you can make sense of it. Register for the next Roth Capital solar market call happening at 10am Eastern 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.
Opinion
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Opinions:
Have a great day!
Yann