Liftoff In Florida. If you’re anything like me you thoroughly enjoyed and delighted in the SpaceX Demo-2 Dragon launch from Cape Canaveral in Florida this weekend. This included staying up most of the night and watching the crewed capsule approach, dock and equalize with the International Space Station. Whether you are 38 or 3 years old like my youngest, rockets taking off for outer space brings a smile to your face. It all seems too big and too impossible (I still don’t know how they land the rocket on a drone ship) but the combined capability of humans can really do anything.
A Uniquely Terrible Business Model. National Grid published its interconnection study results for 300MW of distributed solar last week. In order to get 90MW of that capacity built, developers would have to pay $75million dollars and wait 5 to 7 years in order to get the upgrades done. This should be part of the obituary of that business, there is nothing to be said about telling customers to wait 5 years to get an upgrade done and have to pay almost $1 per watt to get it. If the infrastructure can’t handle 300MW of solar, the system needs to be rebuilt and I’ve seen most of the infrastructure in Florida rebuilt in a couple months after a hurricane.
China, Modules and More. In China, the government is imposing new restrictions on manufacturing expansion given the delay in demand globally. In the US this means that prices are dropping and catching up to the market that is coming back nicely. Over the past few months, some of you have benefitted from the Solar Module Index which publishes the April numbers this week. The module index will expand into the product index and all installers to add other parts you are buying like inverters and racking per your request. This is data that comes directly from installers and shared with each other, I only play the role to consolidate the data. For the foreseeable future, I am also making the index free to get the margin back in line for installers that are suffering from covid related slow down.
The Margin Stack. I am writing a full blog post on the topic of margin stacking because the overall cost of solar to the homeowner is much higher than it should be and the margin that the installer receives is not reflective of it. Soft costs are a problem but more than a third of the price of solar for a homeowner is neither product, labor or installer profit. More to come.
Big Picture Matters. I am glad to see that solar has for a long time and will continue to view our industry as more than just a market to product clean energy. Without getting into topics much bigger than this newsletter, I now understand more deeply why caring about the big picture matters, access for everyone matters, more diversity matters and ensuring equality matters.
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Yann
Per Capita Solar. Solar isn’t always where we think it is. A lot of it is installed in very large cities like Los Angeles and San Diego but when adjusted for population, it could be a lot better. How does your city show on this list?
The Real Pressure in Oil. There is a lot of talk about divesting endowments and pushing major climate goals for the oil majors. In reality, there are hundreds of oil companies in exploration, drilling, pipeline and more that are backed or owned by private equity. Most PE firms will have 20 oil companies for a clean energy investment and that is the real pivot that needs to happen. This isn’t a climate statement, the market is adjusting its goals of where the returns and capital preservation are maximized.
Top Modules Rated. PVEL, whose CEO visited with us on a podcast last year, is out with its annual module reliability scorecard. How does your module stack up and to what extent is your business aligned with a module supplier?
Mailbag Podcast. Send in your topics for next week’s podcast. I’ll be answering your questions about solar, the market or any other things that interest you. Have a great weekend!
Presented By Suntuity. Do you sell solar and see an opportunity to expand the markets you serve in a digital sales environment? Suntuity is expanding its salesforce and looking for more sales leaders to join their growing team. Based in New Jersey and servicing over a dozen States, joining Suntuity could be the sales boost you need. Learn more about our company today.
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Commercial Solar In Trouble. Financing rooftop solar for commercial customers is going to be more complicated than ever before. Putting most companies through a pandemic risk assessment increases the return requirement in a market already tough to make the financials work. This is going to drive more developers to either propose cash purchases as opposed to financing where a third party owns the solar asset. The tax code was amended to allow for the depreciation losses to go back 5 years but this market desperately needs a grant in lieu to kick start again. How the community solar or virtual PPA market adopts these customers will be interesting.
EVs Are Better (And Cheaper). Anyone that has driven an electric car knows that it’s a better driving experience. Even car companies have accepted this and adopting full product lines in this decade. EVs will nationalize once a cultural icon like the F-150 gets an electric version and fleets actually roll out large scale implementation. How regulators and utilities execute on this will be important especially as the market seems to be trending towards utility ownership of charging stations. The best part in this new data set, EVs are drastically cheaper assets to own as well.
Southern Co Wants Headlines. I’d like to fast forward to every utility announcing a 100% clean by 2050 goal. With every coal asset or older power plant to be first moved to a gas investment and then magically by 2050 it will all be renewable. The issue with the headlines and details isn’t the goal, it’s that none of the executives in the board room today will be there in 30 years and the goal doesn’t impact this quarters financial performance. Until the incentive of rate basing a new gas plant next year is removed and replaced by building a better solar plus storage asset, we will get more lofty goals with short term gas power plants being built.
Podcast Mailbag. Make sure you catch my podcast about the 30 million solar roof idea by John Farrell. The podcast is now available on spotify as well as other streaming platforms. Next week’s episode will be a mailbag where I talk about the headlines and answer your questions, send over topics you want me to cover.
Act On FERC. During the coronavirus pandemic, a small shadowy association just launched an unprecedented attack on our solar rights, and we need your help to stop it. This secretive group is trying to end the fundamental, state-based solar energy policy of net metering that allows solar users to earn fair credit for the surplus electricity their solar panels produce. The deadline to stop this attack is in just a few weeks. Tell the Federal Energy Regulatory Commission to immediately reject this destructive and dangerous attack on your solar rights! Thank you for lending your voice to this important issue during this challenging time. If you want more details on the petition before FERC, click here or join Vote Solar on a webinar on May 28th at 3pm MT.
Presented By Suntuity. Do you sell solar and see an opportunity to expand the markets you serve in a digital sales environment? Suntuity is expanding its salesforce and looking for more sales leaders to join their growing team. Based in New Jersey and servicing over a dozen States, joining Suntuity could be the sales boost you need. Learn more about our company today.
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Yann
30 Million Solar Roofs. A few weeks ago I linked to an article that talked about using solar to create jobs in the post-COVID recovery. The idea was bold, build 30 million solar roofs (fully funded) in the next half decade. John Farrell from ILSR was the author behind the idea and the subject of this week’s SolarWakeup podcast. I hope you enjoy, subscribe and rate the podcast on your favorite app.
Midwest Solar Rush. Alliant Energy, the Wisconsin based publicly traded utility, is looking to increase solar in Wisconsin more than fourfold. In acquiring 675MW of solar projects, Alliant will expand the 150MW of solar exponentially and looks to be taking some cues from utilities like Florida Power & Light. The announcement talks about asking the regulators to push the docket forward and (I’m assuming) letting the utility rate base the asset. Like in Florida, I am not opposed to the concept of having the utility rate base large power plant, as long as it allows the distributed market to flourish based on market conditions. It can’t be all for one and none for all.
Faster Solar Installs. Hawaii is taking a big cut to the timeline between contract signing and project install for solar. At this point in the market it is one of the most valuable market drivers that politicians and regulators can push forward. We talked about the cost of permitting in the past and how SolarAPP is the tool that enables markets and installers to provide faster solar and a more pleasant customer process for homeowners.
The FERC Fight. None of what the solar industry wants going forward is possible if FERC decides that States no longer have a say in matters affecting electricity rates and rate structures, including net metering. In the biggest attempt to remove States’ rights, the New England Ratepayers Association (NERA), is asking for FERC to remove net metering as a State by State regulation. NERA is likely fronting for someone else, though we don’t yet know who, but this is much bigger than solar alone. Vote Solar is asking you to get involved and make your voice heard, this is your call to action, Tell the Federal Energy Regulatory Commission to immediately reject this destructive and dangerous attack on your solar rights! You can also join Vote Solar for a webinar tomorrow to learn more about this national attack on solar during this pandemic.
Presented By Suntuity. Do you sell solar and see an opportunity to expand the markets you serve in a digital sales environment? Suntuity is expanding its salesforce and looking for more sales leaders to join their growing team. Based in New Jersey and servicing over a dozen States, joining Suntuity could be the sales boost you need. Learn more about our company today.
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Yann