One Last Chance. Here is the link to this week’s tracker. This survey gives us the baseline, thank you for everyone that already filled it out. At noon today, the survey will close. Responders will get a preview via email tomorrow.
2019 Year In Review. Hard to think about 2019, but it was a record year for distributed generation across the County. Solar grew 23% from 2018 even in the face of tariffs. Residential solar had an impressive 2.8GW and would have absolutely crushed the 3GW in 2020 and may still do so. Community solar, waiting for its major growth year still achieved 500MW in 2019. There is a note in today’s rundown that talks about retail buyers being a key demo in solar, this is what will grow the community solar segment as well. Remember that non-residential includes C&I as well as community solar.
SEIA Comments On Corona. The forecast in the 2019 year in review makes a disclaimer that it does not include any impact by corona. In a separate statement, SEIA said that the 47% growth forecasted will be ratcheted in the coming months as we know the impact. Abby Hopper says it will be a “pretty significant crisis in the solar industry in addition to a significant crisis in the overall economy.”
Is Solar Contrarian? GTM found a gem in the Q4 Sunrun earnings call. On the call CEO Lynn Jurich said that solar may work better in an economic downturn and I agree with her rationale. Assuming the cost of capital, underwriting and liquidity remain in the market and competitive, solar will be able to continue. The only counterpoint, which was hard to predict, is that solar companies that overly rely on selling face to face will have difficulties and need to adjust to the short term changes.
Utility Shutoffs. Almost unanimously, utilities will suspend cutting offer power for non-payment during corona.
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Yann
Testing The Impact. The only way we can understand the depth and duration of the coronavirus impact on the solar market is to track the four markers: deals signed, loans closed, permits approved and projects installed. Through the SolarWakeup survey tracker and partnerships with key analytics firms, we will guide you through this. While I can deliver the data, I can’t make it up and your participation is key. We need the collective us to share information so that the data becomes most useful. The goal is to deliver weekly analytics in a way that helps you adjust your metrics. For example, when you have the first good week after the lull, is it just you or the entire market? If you see others are also doing better, you will feel more inclined to get back at it at full strength. That’s the goal, isolate quickly and then get back after it. Here is the link to this week’s tracker
Cities Shelter In Place. You may have heard that cities in and around San Francisco have a public health order to shelter in place. The headline is underpinned by details that are important to the solar industry. Let me preface with, if you can do your job from home, please do so for as long as you can. There is an exclusion for two purposes, essential businesses and minimum business operations for which necessary employees can continue working while maintaining safe distances to stop the spread. For Bay Area solar installers with a backlog of solar plus storage systems, it is up to you to determine the importance you play in advance of the wildfire season. My point is that solar will not stop because the Bay Area is working from home, our work is essential to the future of this Country because while corona may be the now problem, climate change remains as important as ever.
Bullish On Solar. Before the market opens today, there looks to be a nice bounce after yesterday’s massive drop. Losing over 12% and reaching the all-time high on the VIX yesterday, I see positive signs on the horizon after we get through some difficult times. The solar names have been beaten down, some of them trading at 50% of the price of a few weeks ago. Here’s the question you want to ask yourself; 5 years from now, will there be more solar installed on homes, buildings and farmland or less? If you agree with me, get ready to get invested because I’m bullish on solar.
Bailouts Are Coming. The airline trade association is asking for $25billion in grants and $25billion in zero interest loans while the casinos are also in DC ringing the bell. Their direct line to the White House prompted a Trump tweet, “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!” I’ve got some asks to attach to the bill.
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Social Distancing. Before we get into the headlines and solar market, let’s take a step back to recognize the gravity of the current situation. Now that it has reached the pandemic levels and changed everything about our everyday lives, we realize that what we do in normal times relies on a level of stability that currently does not exist. In the hopes of getting back to normal as fast as possible do your part and stay away from others as much as possible, there are plenty of infographics that show you what happens when people isolate and stop the spread of the virus. Not only will things get back to normal you will likely help save some lives at the same time. If you need some additional pressure of what happens when the ‘flu’ spreads across the globe, read this 1997 piece by Malcom Gladwell about the Spanish Flu.
Let’s Track The Delays. Like everything in the economy right now, there is going to be a pause to growth as people stay home to isolate and stop the spread of COVID-19. With the longer cycles of utility scale and C&I to be less affected by the short term, SolarWakeup is going to track any slowdown that may occur. This survey is meant for residential solar installers given that is where 60% of the solar jobs sit and there are weekly/daily sales, loan closings and installations. This will give us a tracking view of the market and provide the feedback we need to make our business decisions. Please take 5 minutes and fill out this survey if you are a residential installer, if you are not an installer please send it to a few that you know. This is the network effect of data that helps us all. Here is the link.
The Positive Outlook. While the CDC has asked for society to stop gathering in groups greater than 50 for the next 8 weeks, I look at the positive. 8 weeks is achievable and we should look at this in a positive way. The CDC could have said longer and there may be a few weeks coming up where we’re asked to stay home altogether. The solar market was going to grow by over 25% this year, which means that ever losing 8 weeks would mean we can rebound and catch up. With the fed rate dropping to zero, we may see better rates for solar loans across all market segments creating opportunity to scale everywhere. I’m optimistic that we will do the right thing as a society and come out ready to do big things.
Let Solar Help. Many of you may be going through business hurdles through this pandemic. I can’t promise that we can help everyone but let me speak on behalf of the industry that if there are issues or questions that are hurting your business, please let me know and I’ll do my best to advise or put you in contact with someone that could be helpful. My email is yann@solarwakeup.com.
The Survey. Don’t forget to participate in the survey and please share this tweet to get it out as much as possible.
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Yann
Pre-Corona Survey. Here are the highlights of the market survey released this week, answers coming between March 10th-11th. Respondents ranged from installers (35%), manufacturers (15%) and developers (25%). You covered every market in the Country with half of you doing business in California but MA (45%), NJ (38%), CT (31%), FL (27%) and AZ (27%) were also represented.
Q1 Improvement. While 25% of you saw no improvement in Q1 over last year, 55% of respondents were up in the first quarter over last year.
The Corona First Take. This is where timing of the survey is important. All of the responses came before March Madness, NBA, NHL, MLS and little league games were canceled due to the pandemic. 62% of the answers said that coronavirus had no impact on your Q1 sales and 48% said that you are not adjusting the Q2 forecast. My assumption is that a survey next week would have different numbers. 39% of you are adjusting the forecast by 0-20% downward.
What You’re Doing. Many of you shared with your actions in anticipation of which the most two most common were: no travel and work from home. Some also highlighted that society will now learn to wash hands once again. I’m interested to learn what companies are doing across the industry to manage their business through the crisis and if there are any changes to the economic business model of the sector. Please take your time to send your ideas and concerns to yann@solarwakeup.com, together we will manage through this.
Looking Ahead. There are going to be more questions than answers over the next week while the world settles into the reality that the virus is spreading everywhere. Without being hysteric, the way to solve the spread or flatten the curve is to isolate for as long as possible. Expect companies to have as many people as possible working from home while doing their best to keep moving business forward. I will circulate another survey next week and check the pulse of the industry. Typically I look to have podcast interviews that have some longevity to them but I will likely do a few interviews on this topic in the coming weeks to give you critical information for your business.
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Yann