The Burden Of Electricity. It’s a fact that the current situation is creating increased pressure on inequality. From schooling children without internet to the cost of electricity, everything is exacerbated. Low income families spend more of their income on utilities by a large percentage than higher income families. Solar can play a vital role in helping resolve this problem through community solar or utility programs. Glad to see Vote Solar highlighting this issue.
Big Oil Has ‘Concerns’. There is an internal oil dialogue happening in public right now. API and large oil companies are concerned about socializing the losses through government intervention. Smaller companies are saying help us or we go under. This comes as the Federal Reserve opens possible avenues to help the industry with less oversight which is really what the argument is about. It will be important for members of Congress to ensure that the stimulus for energy companies helps all parts of the economy because we don’t want to be picking winners and losers do we?
Storage Peaking. BNEF published it’s updated LCOE report and highlighted the competitiveness of solar plus storage with peaking generation. Peaking plants according to BNEF generate 15% to 20% of the time which is easily achieved with storage developments. My additional input on this is that 5 years from now it will not even be close. We are rapidly approaching batteries under $100/kWh and that will continue to drop much like solar has. The key is how developers and asset owners decide to push the implementation of those assets.
Inverter Market Outlook. I’ve become increasingly interested in how the market decides the inverter market share across the Country. We have what I would consider a momentary duopoly in the US in residential solar but as market valuations increase, this will change in my opinion. Look at the global market share and it looks different than what you would think.
Survey Is Out. An early release for the survey covering the week of April 27th. Participate to get the full results next week.
SolarWakeup Live, Virtual Edition. We’re taking the show off the road on to zoom. The first SolarWakeup Live, virtual edition will be next Thursday to talk about how to turn your business digital from lead to install. Register here.
SolarWakeup Live, Podcast Edition. The podcast is also relaunched. Subscribe, rate and listen here. If you have an interesting topic to discuss, reach out to get onto the calendar.
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Yann
Get The House In Order. As we near the 8 week mark of the shelter in place orders and a new normal, it is understandable for people to expect others to adapt like everyone has. In this case I am talking about building departments and utilities, particularly PG&E. The solar industry has been patient and working with all involved to make solar installations safe. Meanwhile, PG&E was slammed in court yesterday regarding their operations around tree trimming and wire safety. The future of PG&E should be like a highway operator. The roads need to be safe and run smoothly with local exits and high speed left lanes. When it comes to toll operations, the company needs to prioritize the speed of access to the generators that match the goals set forth by the State. The State should incentivize the company to do this well and everyone wins.
Safe Solar Sales And Installs. Being allowed to get back to work is phase I of the return that centers around building out the backlog. Phase II is the pivot many are figuring out right now. One of those things is how to generate more leads like building out digital content and driving folks to your lead generation forms. Managing this lead flow all the way through project installation without ever seeing the customer means a change to your installation company’s operating system. Next week I am hosting a live webinar with Open Solar’s Andrew Birch to ask him about his experience. In 2008, in an SPI beer garden Birchy and Danny Kennedy showed me this crazy idea on the first Apple iPad where you could type your address on a map and they would send back a layout. That was v1 of digital solar sales. You can register for the webinar here, it is limited to 100 people.
Time Of Opportunity. Buying solar assets is an art that matches sellers somewhere between desperation and greed and buyers with cash burning a hole in their pockets feeling they would miss out on yet another deal. Someone once told me (okay, it was more than once) that developers always hold assets beyond peak value and now buyers are pouncing on opportunities across the market.
It’s Valuable, Not Cheap. Headlines are making the circuit today with the cheapest solar in history. Like most reviews of solar policy across the world, solar is routinely undervalued and underpriced. That’s why many storage developers are getting away from contracted cash flows and working more like generation IPPs.
The RTOs. New Jersey had threatened earlier and now Maryland is saying they may leave PJM over the MOPR overstep by FERC. The FERC chair is urging patience and caution but maybe he should take these threats more seriously. Showdown to continue…
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Yann
Essential Solar Advocacy. Today’s before and after comes thanks to the hard work of your friends at CALSSA. The California Energy Commission has formally published guidance that solar is essential as long as installers adhere to safety guidance. This is an important step for our industry to get back to work, helping people save money and become more resilient leading up to wildfire and hurricane seasons. While many of the fundraising events have had to be canceled, now is the time for you to join CALSSA so they can continue to advocate for your business. Without this guidance many installers would still have to remain closed easily making your investment worthwhile. To read the guidance you can click here, if you need an intro to Carter for membership, hit reply and I’ll get you one quickly.
Schools In Fall. Not all my questions to you need to be on solar and maybe this is a community survey that helps us all, at least those with kids. As you know, I have three kids, two of whom are in elementary school. The past few months has been something between Survivor, Amazing Race and The Real World. How are you coping with this and the norm of homeschooling the kids with two hours of zoom class per week? Part of me is trying to imagine this lasting through 2020 and wonder if anyone has good tips that don’t involve tying the kids to the chair.
Hawaii Sends Another Postcard. Rooftop solar in Hawaii is up 40% year over year and channel checks on the island confirm that interest remains strong. With 100% attachment rate of storage to solar, Hawaii’s solar companies may be the best at explaining how solar will be sold in the future. It’s nice to hear positives in the local economy coming from the island because the picture that Senator Schatz painted on Pod Save America was dire, 30% unemployment, with no tourism to speak of. Wishing our friends on the islands all the best.
What’s Your Impact. If you’re wondering what politicians are doing for solar and your business in the next piece of legislation, stimulus or bailout then you have to ask yourself what you asked them for. Their job isn’t to guess what you need. They are looking to hear and read about your story, the impact to your employees and the market you serve. Tom Matzzie described a good example of a solar installer in New York during our discussion. If you’re an installer in San Francisco, you should be talking to Pelosi’s office about the market and how it has impacted you. Same goes to everyone else across the Country.
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Talking Solar(Wakeup) Live. SolarWakeup Live! The podcast is back. A returning guest in Tom Matzzie joins me for the first episode of the relaunch. This is a straight to tape conversation about solar, power markets and politics. Tom plays in all three sandboxes and he’s really good at them. He points to the erosion in commercial power demand and the nuances of those contracts, definitely something to watch. Please find the podcast on Apple Podcast and subscribe and rate 5 stars. If you have interesting guests that want to talk solar, regulations, finance and climate tech, send them my way.
The Resi Market Fragmentation. With the Q1 PV leaderboard out in public, manufacturers are taking their moment in the sun. This time Q Cells took that top spot in resi modules with market share in the 20’s. The fragmentation in every other segment is also very real except for the duopoly in the inverter market. Software is a segment in the market that has attracted enormous investment and almost every installer uses something but the interesting thing is that none of the platforms are getting any real traction taking share. In the latest poll, we saw over 10 software platforms mentioned for use by installers. Pricing for software is as different as it is in modules. In the ongoing solar module index, the above mentioned Q Cells modules have a price range of 15% between installers for the same module. The are 3 spots left in the initial batch for residential installers looking to learn more about how their module pricing matches up.
Buy The Dip. Large investors in solar assets are frothing at the mouth for the buying opportunity which may have already come and gone. The same is true for hedge funds buying stocks and private equity firms looking to buy companies. Prices are going to be much more attractive in a space that many passed on because they weren’t sure it was going to be sustainable. Watching the solar industry’s resilience now makes everyone look at the fundamental strength of the market and consumer. Solar has a product market fit while also achieving product market cost fit and that’s the trifecta. Look at my point above about software. The segment is completely fragmented but new entrants into the US space that have achieved great scale overseas (and lessons learned) like OpenSolar are providing user friendly and robust software at no cost to solar installers. Their CEO, Birchy, is a good friend of mine and he knows what it takes to build the business as a founder and CEO of Sungevity. Hard to imagine that installers aren’t going to give the free product a few looks.
My Bullish Take. I am increasingly optimistic that the consumer behavior is going to get back to where we were with a potential increase in adoption with a definite increase of interest in solar. Putting solar on your house fits with the mold of being stuck in the home more than before. My bullishness goes further than that in three parts. First, the solar salesforce is going to be able to meet with more customers and be geographically separated from the company. This means you can live in Iowa and sell solar in California while also meeting with two or three times as many customers in any given day. This will lower acquisition costs in a big way. Second, building departments aren’t going to be in person for the foreseeable future and likely never go back to the slower way of doing things. This means that the speed from sale to installation could be cut in half or even better improving cash flows and standardization in the industry. Lastly, remote inspections are likely to gain traction across the board. An inspector goes to the site to ‘see’ what is done. For solar, a geotagged video with accompanying images can let the inspector do this much faster without the cost of driving. I’m hopeful that the days of waiting all day for the inspector could be gone for good.
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