Sunedison! Sunedison is back on the New York Times pages with a story about fees paid to McKinsey in relation to the restructuring at the end of the corporation’s life. Reading between the lines it looks like a bit of PR battling by the solar restructuring firms and I wouldn’t be surprised if shareholders and debt holders were taken for a bit of a ride.
Finance Woes? The US is going to build around 10GW this year and there will continue to be more capital than solar projects. A balance between finding the deals and paying the right price goes agains the need to deploy capital and at times that means making deals work just to get money out the door. Moreover, the PG&E situation and lack of some long term contracts will increase the cost of debt and equity in the solar space as developers look for capital to take bigger risks. The solar market will remain hot and projects will get done but at this very moment the cost of capital will bend the wrong direction, momentarily.
Pipeline Wins Again. Cubico is a renewable IPP that is part bankers and backed by tremendous pension fund capital. The mandate was to deploy hundreds of millions per year and get good return in stable investments and Cubico looks to have found that in the Cypress Creek pipeline.
Save Us. A new poll is out with interesting data on Americans support for a carbon tax. 44% of the respondents said they support the tax/dividend. While the group of economists that are supporting the initiative are looking for the tax to be returned to taxpayers as a refund, most Americans prefer the money to be used to fund initiatives that invest in nature and eco-restoration. Second in line comes renewable energy R&D at 59%.
Water Plays. Is there a point when water consumption comes in play for power players and gas drilling? If so, when and where is it most likely to create a regulatory barrier for market participants?
Yann
News
Opinions:
Have a great day!
Yann
Powerhouse Ventures. A great day for solar startups. Powerhouse, the incubator we all know and love, is out with a venture fund. CEO, Emily Kirsch, teased the venture at the Powerhouse fundraising event months ago but now the news is official. The startup fund will invest in 30+ startups over the next 5 years and has some notable names as investors. It has already invested in several startups to get itself started on the right path. Congrats to all involved.
Making Bank On Climate Change. At first look, the headline would appeal to those of us in the solar space. With further investigation it seems that corporations are finding ways to make money from the impact of climate change, not to alleviate the ongoing climate crisis. One company (Merck) even said, “As the climate changes, there will be expanded markets for products for tropical and weather related diseases including waterborne illness.” For solar it continues to mean the need for capital at all stages and the appetite to own long term operational assets with long term contracts and those operating on trading platforms.
Safe Solar. Congrats to Conti Solar and many of the other solar installers that had a wonderful and safe 2018. I am continuously amazed at the work this industry can create while also providing a safe and enjoyable work experience (muddy/rainy days aside). I have rarely been at a solar farm or on a home when installers weren’t enjoying the work they were doing which makes me feel great about the industry that we are in.
New Mexico Community Solar. New Mexico is trying to jump on the community solar bandwagon. With a new bill filed, HB210, NM could create the opportunity for solar to be a reality for those that either rent or live in a home that isn’t an ideal candidate for solar. “It’s time for all New Mexicans to have access to the benefits of our solar,” said Art Terrazas, Interior West Director at Vote Solar. “Community solar means that all New Mexico families and tribes, regardless of income or any other factors, can save money from our state’s plentiful sunshine.” Let’s see that Facebook comes aboard the policy push and help get it passed.
Boston Wakeup. You can now get your tickets to SolarWakeup Live! Boston which is our first repeat city in the series. If you’ve been to a recent event, please come again. With SMART in full effect, we will have the top investors in the room with term sheets in hand. The deals and money will be flowing and so will the news. As always, you will get the most relevant update to the market regulations. If you want to sponsor or have a great idea for a speaker, reach out by hitting reply to this email.
Yann
News
Opinions:
Have a great day!
Yann
Utility Model, Your Questions. Some of you have posed the question why PG&E should be liable for the wildfires given that they are natural disasters. Shouldn’t PG&E be held harmless for something that is out of their control? This is a reasonable question and one that I’ve been looking for an answer to. One answer is proposed on the Vox ‘Today Explained’ podcast that aired last week. If PG&E is allowed to rate base the cost of the infrastructure and has the responsibility to keep those wires free of debris and in top order, receiving additional rate base for that maintenance, should PG&E therefore be held to the standard of having performed the work that they claimed to be doing? If PG&E had felt that wires were unsafe and required additional work such as tree clearing, modernization or even under grounding, why didn’t the company with the expertise request the capital in order to alleviate the concern? You can credit Voltaire or Uncle Ben but the truth is that “with great power comes great responsibility.” It is now up to the regulators to decide what type of responsibility that is.
Ford Follows SolarWakeup Advice. This may be the most important headline for the next decade because an electric F150, that performs as you would want an electric F150 to perform, will create a mass consumer shift from fossil based transportation to EVs. Ford sold 910,000 F-series trucks in 2018 and I would absolutely trade my EV in for an electric F-150 so I can only hope for the execution to happen fast and properly. More importantly, Ford needs to make sure that the look and comfort of the truck stays the same while creating an electric incubator within their dealerships. No salesperson of the traditional ICE vehicles should overlap with the electric drive sales process, it should be a competition that allows the market to decide without sales incentives getting in the way. For solar and utilities, this means understanding that the next decade is about electrifying everything and I know from speaking with utility execs that they very much welcome the news from Detroit.
Catching Up With Kelcy Pegler. Ever wonder what it’s like to build a business to 500 employees, selling it and growing it to 2,500? Or what it’s like to make Bill Walton the greatest solar spokesperson in the history of the world? If those two questions were keeping you up at night, you should definitely listen to my conversation with Kelcy Pegler Jr. the former CEO of NRG Home Solar.
Good Old Fashioned Global Warming…
Yann
News
Opinions:
Have a great day!
Yann
109GW. 2018 is going to surpass the 100GW mark and boost its size to 109GW according to BNEF. While the headline shows reduced investments, the headline’s negative connotation actually is a positive. More solar and lower costs means a better deal for more consumers. There is still a lot of extraneous cost in the system that can be reduced by eliminating senseless tariffs and faster installs through instant permitting initiatives.
$60Billion. A new report is estimating the growth of the Li-On market to reach $60billion in 2024. A combination of drastic cost reductions, BNEF already sees costs under $200/kWh, and increased demand by renewable generators and EVs should make this estimate reality. Look for pricing of energy storage to follow a cost curve in line with the market growth but in the opposite direction.
Cuomo Trying Catchup. Governor Cuomo in New York is trying his best to make renewable energy and climate change mitigation a reality in the State he leads. While the headlines are there, the execution is still lacking and implementation has been slow. This may be due to the diverse energy markets in New York, ranging from Watertown to Manhattan, or the incumbent regulatory/utility environment that halts changes to the status quo.
Carbon Dividends. All living former Federal Reserve Chairs, 30 Noble winning economists and others in this class of DC economy circles have come out in support of a carbon dividend policy as a policy to replace other, less effective, carbon regulations. Trent Lott is lobbying on the effort.
Watching SC. Hoping for better outcomes in 2019!
News
Opinions:
Have a great day!
Yann