Monopoly Overreach And Insanity. This got my blood pressure up early yesterday when Twitter started circulating the news that NextEra approached Duke with the intention to acquire the Carolina utility. Even though Duke is based in Charlotte, it has operations in North and South Carolina as well as Florida. NextEra which already has well over 50% of Florida’s consumers can’t get enough when it comes to a regulated non-competitive market. Imagine the power that such a utility would have across the Southeast, politicians would have to allow them to do anything because what other choice would they have? This is incredibly dangerous but entirely plausible.
Nonstationary Power. When Tesla first released the power wall they called that division stationary power. I publicly opined on this platform years ago that stationary power implies non-stationary power to be on the auto side of the company. Delaware had done a vehicle to grid pilot a few years ago and Enel has been showing off their programs in Italy online. With the CPUC enabling some testing of V2G we’ll look a bit into how that overlaps with the solar industry. Homes with EVs often have 70kWh plus in their driveway, it makes sense to have the ability to use that energy in certain situations.
Speaking Of EVs. Do any SolarWakeup readers know anything about ev conversions for internal combustion vehicles? Please reach out and share your tips.
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 on October 2nd at 10am Eastern.
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
First In 12. Much to my surprise and many others, Chris Wallace went off script last night (there wasn’t much of a script at this point anyways) and asked a climate change question to Trump and Biden. This was the first climate change question in 12 years according to Grist reporting in a presidential debate. I won’t cover the answers, it ranged from raking the forest to weatherizing buildings and regulating methane. Biden did call out the SunShot success in lowering the cost of solar to record levels, a nice mention of our industry.
The Role of Labor. We don’t talk about this often, our industry is different, but it should also be part of the discussion. Many of the utility and oil infrastructure jobs are part of major labor unions. Labor has been one of the major political forces fighting solar policies in State capitols. The crush on oil, COVID aside, has very little to do with our industry that would fall more on the EV infrastructure and utility sector. The utility sector tends to take a very strong position fighting against labor unions. Solar on the other hand is largely silent but we shouldn’t be. I believe that I would be directionally correct in saying that 50% of solar capacity is installed in partnership with labor unions including large scale solar in California, many public projects across the country as well as DG projects in states like NJ, MA, NY and IL. I would love to hear your view on this, including data that may support or refute my thoughts.
No Congressional Acts Likely. Senator Whitehouse is holding out hope for the Senate to take up climate legislation. As much as I would love for the Senator to be right, he may have thought this to be true before last night’s debate.
EPA, SCOTUS, and What If. In the week’s leading up to and after the selection of Kamala Harris as the VP, we wrote about how she could lead the fight against climate change by taking on polluters with laws like the clean air and water acts. In reality, these laws are on more nuanced standing after the passing of Justice Ginsberg who wrote the opinion giving the EPA the power to regulate emissions. The case for regulatory overreach was often argued by Justice Scalia including as recently in 2015 in Michigan v EPA where Scalia wrote the opinion for the 5-4 majority. If you recall, I quoted Justice Ginsburg’s 6-2 majority opinion from the EPA v EME Homer City in 2014 which gave the EPA more ability to regulate emissions across the Country. With the balance of the court changing, based on Judge Coney Barrett’s comments that Scalia’s views are her views, you can imagine some ability for a Biden/Harris administration having more difficulty executing on the pollution enforcement strategy I outlined just a few weeks ago.
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 on October 2nd at 10am Eastern.
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
Canary In the Cali Mine. If at times this page has felt California heavy to you, I agree. But in reality that is where almost 50% of solar is being installed and where the future of solar rules nationally get tested. More recently, California has experienced the impacts of climate change, grid resiliency and aggressive policy that will be the showcase for everyone else. It makes sense to take inventory of some of what is currently happening and expected to be implemented in the future.
Climate Change Impact. Coming off a tandem of major heat waves and experiencing one of the fiercest wildfire seasons, California is no longer waiting to see how climate change will impact its population and environment. It is testing the resiliency of the infrastructure including a power grid operated with central planning, purchasing and generation. Climate change will look different in some ways across the Country but power lines will be the weakest link whether we are talking derecho in Iowa, snowstorms in the Northeast or hurricanes in the Southeast. Tomorrow we will take a look back to our Kamala Harris prediction regarding climate policies if she wins the Vice Presidency.
All Electric Transportation. Not only does California have a 100% RPS goal in the not too distant future but now has an executive order signed by Governor Newsom last week that most cars sold will have to be electric by 2035. The governor discusses this with Kara Swisher on her new podcast Sway where I will soon be a guest (I wish, but call me Kara!). In reality, Newsom is making a headline of what many already predict to be true. Electric cars will be the norm within a decade. As an aside, there seems to be tension between Newsom and Tesla given the many opportunities that Kara gave the governor to talk about the auto OEM partners he talked with. It is important for the goal to exist, even as an executive order, so to make the rest of the energy ecosystem think about what needs to happen if oil loses the market share to electricity within 10 years (not a long time in energy world).
Future Of Distributed Assets. Some of us think about the policy that drives the solar market on a full-time basis, many of the readers of this newsletter do it 24/7 and as a director on the board of CALSSA I can attest that the CALSSA team does it better than anyone else. Our industry, namely solar and storage, is at the center of the climate change and electric vehicle venn diagram. The ability to manage through heat waves and matters affecting grid resilience requires the robust use of demand response, much of it distributed (see the point about the weakness of transmission above). It also includes the future of vehicle to grid (V2G) technology where cars are a form of nonstationary power as well as eliminating charging as a function of demand response. With some 80 million single family homes in America, the future of the grid will be in a good place if homeowners are made part of the grid not just a user, resiliency will depend on that.
It Takes Regulators. More than anything, Newsom needs to name a distributed solar expert to the CPUC and other governors should follow. Over the next few years, there is little that we can do that is more important than becoming part of the system that regulates us and the incumbent market participants. This isn’t just to drive positive policy but it is also meant to create comfort. Here’s a recent example. Local resource adequacy (local RA) is implemented through projects like a portfolio of solar with storage projects that are in homes, multifamily and businesses where a system operator can dispatch those assets during certain events. CCAs have been leaders in piloting and adopting these virtual power plants with great success. When local RA procurement came to the CPUC, the CPUC didn’t trust the procurement to the local aggregators but gave that power to two investor owned monopoly utilities showing that there is a lack of trust and comfort with newer participants. Policies like that have to adapt to the new normal, a norm that is smaller in scale and more distributed than ever. Resilience in many ways means duplication, a plethora of what if scenarios, and needs to take some new realities into account.
Oil Company Takeover. In over 100 years, oil companies and electric utilities never competed. If anything utilities used to be a major client of the oil companies but when it came to transportation it was smooth sailing for major corporates. If transportation goes electric, that stirs major competition that will meet in the hall of every Capitol across the country unless oil companies are also in the electric business. The advantage they have is that they are fundamentally traders whereas utilities are not always very good at it, unlike their IPP cousins. Just last month Portland Gas & Electric took a >$100million loss on a bad trade. The change from oil to electric could yield major volatility and trading benefits to these companies. When you read about oil companies adding a renewables arm, that means they are adding an electricity division and getting into the game. Note to the reporters covering this, all the oil companies are already in electricity but only seek headlines when they need more deal flow.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
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
It’s Friday. Have a great weekend! On Monday we will cover what it takes to get to 100% clean energy by 2030 with no ICE cars by 2035 and when it has to start.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann