Market Survey Pre-Read. As we get through the many responses here are some early data points. 90% of you are somewhat or very concerned about coronavirus and more than 50% of you are adjusting your Q2 forecast downward. The survey appears to have come too early to find measurable change in consumer behavior or changes to pricing in systems, modules or other hardware. More data from the survey coming tomorrow including what steps respondents are taking to keep their business operational.
DC Quick Read. The bill of bi-partisan bills in the Senate was soaked in mediocrity that it failed to get the 60 votes it needed to get out of filibuster. We now wait to see what happens with the bailout, stimulus legislation that is circulating between the White House and Congress. The White House is floating headlines for oil and gas stimulus to see where the public gets excited including a payroll tax cut that moved the markets up on Tuesday while the House is floating a paid sick leave bill before their weeklong recess coming up. Apparently we don’t know what we don’t know so let’s wait and see.
A Trade Letter. Yesterday 140 companies signed on to another letter to the White House asking for tariff related relief, read the letter in the link in the 3rd story today.
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Don’t Forget The Survey. One more day to get your survey response in, it takes 3 minutes and helps the entire industry. Here is the link
Solar Power Power. DC is going to pass a stimulus bill in the coming weeks to deal with the economic effects of corona and the oil price wars. Focusing on the second one, oil producers across the US will either stop production or lose money with the low oil price that’s now in the market. The White House is floating and the Senate will try to push into the stimulus bill a bailout or tax credit for oil companies. This is going to be the moment of truth for solar advocates in DC, does solar have any political influence that translates into results? The analysis of that question will be black and white, either the ITC returns and gets extended or solar is left out of the bill. There will be a bill and the answer will be yes or no when it comes to solar.
The Network Effect. The dealer network is a new battleground in residential solar. Module OEMs and financing companies are battling for the primary value creator for solar installers across the Country. At the same time, those that should have a bigger dealer network are underestimating the value that they can provide and in return receive from the dealers.
The Battle Is On. The original dealer network came from SunPower, so powerful that the company’s partners rebranded to SunPower by. Loan companies followed suit, Mosaic taking the lead and Sunnova quickly joining the network creation which made sense given the financial relationship that exists between the installer, homeowner and loan provider. Module OEMs have a network of platinum or elite installers but the relationship is a bit looser at this point, but don’t sleep on this.
Control Of Sales Levers. Yesterday after market close, Vivint Solar released their fourth quarter earnings and held their conference call. The quote of the call was “we like the control of sales” referring to the company’s direct to consumer sales force that allows the company to decide where and how to sell solar. While Vivint believes that they can grow faster, they don’t want to grow for growth’s sake and keep their focus on markets where they can make money and grow faster than the rest of the market calling out MA, NJ and CA. How do you control your sales levers?
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The Market Survey (Click Here). This is your opportunity to participate in a community survey about the current state of solar. While many of us came into Q1 with great anticipation for a record 2020, there have been a few curveballs thrown at us including a global public health crisis that will likely impact us personally in many ways. At the same time we are left with many questions and few answers on what to do. My hope is that we share our individual viewpoints and try to find the best way to move forward. Please share openly so that your industry colleagues can learn and collaborate. Your answers are confidential. Results of the survey will be shared as early as Friday if enough people respond right away, time is of the essence so please take 5 minutes now.
Climate Change Blinders. One of the feelings I’ve been having about coronavirus is that I just want to fast forward and come out with the best possible outcome on the other end. In some ways it reminds me of hurricane preparation, should you put up shutters, buy food and water for two weeks, get a generator, evacuate; and when you are finished with the preparations the hurricane turns and goes another way. With corona it has a similar feeling because what type of preparation should you do, especially when you don’t understand why there is no rice left on the grocery store shelves. Climate change has the opposite problem, we know what to do and what the catastrophic results of inaction could be but we don’t have the ability to grasp the scale of our needed action. The political and personal willpower doesn’t exist today because we assume that the catastrophe is beyond our time span of discretion.
Innovation Among Us. Much like the solar roads project, I like when companies push the envelope into a contrarian perspective. GAF Energy has a thesis that solar will be installed in a BIPV method at the same time as the new roof so that the roofer sells both systems at the same time at a much smaller acquisition cost than solar has today. As an executive in the racking industry, this obviously pushes my thinking in a way that is uncomfortable today. That being said, this is clearly a 20 year transition from one to the other that will get us all to innovate together.
The ISO-NE Queue. 95% of the 21GW in the ISO-NE queue are wind, solar and battery projects. From a grid operation standpoint, it would be crucial to move projects to NTP even if that means putting an operating date out into the future. Developers need time and resources to start construction and ISO-NE needs to get itself acquainted with the process. From my standpoint I would love to see a process that lets developers future bid NTP dates, how great would it be to see a solar plus 8 hours of storage offer (with collateral) for a 2026 placed in service date?
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Covering Corona. I am as much in the dark about what is to come or what to do in our business when it comes to dealing with the coronavirus. There is a humanitarian aspect to the spread of the virus that is best covered by others. My hope is that I can bring together the wisdom of the crowd. This week, I will circulate a survey and ask you to participate so that we can learn from each other about what we are doing as an industry. I hope to learn from you about what you’re seeing in consumer behavior and how you are preparing. More to come.
Oil Wars. The headlines are busy this weekend, stock market futures have triggered a stop to stop a free fall ahead of the open and oil is trading down almost 40% from Friday morning’s price. While global uncertainty is driving people into their corners, OPEC and Russia have a disagreement that caused the Saudis to increase production and lower global pricing. Maybe it’s time to charge our cars with solar instead.
The Good News. Virginia is joining the yearlong stampede to 100% policies enacted by States around the Country. Some estimates have the impact at an increase of more than 50GW of solar nationally. That means that the policies pushed by groups at the State level, led by local installers and pushed by homeowners that went solar are now helping the entire solar industry. I’ll restate this, grassroots solar supporters have pushed more solar in the US in the past year than ever before. This isn’t a statement about us versus them or me versus you. It’s a statement meant to create clarity for those that investment into DG or grassroots is a waste. Reality is that $1 into either of those segments creates 100X the impact than another report into the tariff impact.
Looking Ahead. This week we will get the earnings report from Vivint Solar that gives us the comparison between them, Sunrun and Sunnova and a great look into the residential solar market. Not a great week to have an earnings update but the data is from Q4 which will put a bow on the great 2019. I’m looking to hear whether Vivint Solar says anything about a dealer network, more thoughts on this topic soon.
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Yann