Trade Talks. You recall the name Robert Lighthizer, the US Trade Representative, from the 201 solar tariff discussions. Solar advocates met and advocated on our behalf in front of him and his staff. He has made a play to be the lead negotiator on the China trade talks that were started on December 9th when Trump and Xi came to a 90 truce. (Here is a great deep dive on Lighthizer). In the meantime, one of the biggest issues facing the solar industry is the potential escalation of the trade war instead of a deal. Solar is a global market place and the US is not in a position to keep our growth on the same track without the global supply chains even beyond China. Look for Lighthizer to give more updates on this topic, we are all watching closely.
EV Growth, What It Means. 2018 was a banner year for electric vehicle adoption in the US. It reached 361,000 up from 200,000 in 2017. The key here is that the number of available EV’s in the market is still minuscule, Tesla offers just 3 models and most Detroit OEMs have one or two at most. Consumers love the electric experience and the curve of adoption will skyrocket from here and we will reach over a 1 million new EVs on the road by 2021. All of this adoption will change the way the grid moves electricity and how much electricity is needed. Stay tuned…
PG&E Rating. A day after the Newsom inauguration, S&P cut the credit rating for PG&E to B from BBB- which means the corporations debt is now junk. In response, several executives retired and left their posts. This isn’t the end of the story but instead is the start. The market is saying that they are unsure of what the legislature will do given that PG&E is going to need policy action in order to potentially stave off bankruptcy or other restructuring.
Utility Risks For Solar. When utilities change their credit rating that affects anyone that sells to that utility because their receivables insurance could be lost or the receivables line of credit adjusts the available capital. For solar, changes in the IOU credit means more expensive debt, if it is available at all. At a B rating, solar projects under PPA with PG&E for example will have a hard time to refinance or find debt. This means that projects could be sidelined or the price per kWh will have to increase. A worse credit rating means more expensive solar for consumers.
Colorado Coal Costs. $2.5billion in savings if Colorado shutters its coal plants while increasing solar and wind from its current levels. That’s a solar spill that pays for its own cleanup!
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Modernizing Development. The interconnection process is filled with unknowns and utility control especially when it comes to larger distributed and utility scale projects. With the release of the ICA maps by California IOUs, it shows the solar industry what development could look like if the process was made more transparent and standardized. It would be great to overlay additional information if storage was added at nodes that had limited capacity in order to allow solar developers the ability to show customers what would be required for their ideal project to move forward. Farmers have a particular issue with trying to add MW sized projects for energy savings, often having to wait months to learn of the interconnection fate.
Palmetto State, Comeback. South Carolina played legislative tricks on solar last year for the policy initiatives that would have done well for Gamecocks/Tigers throughout South Carolina. With the legislature coming back to work, SEIA and allies are pushing for a bill that includes a solar bill of rights along with market enabling policy. This isn’t a function of incentives, this is a debate about letting the market work for consumers. When it comes to energy choice in South Carolina, consumers can benefit financially from going solar because the free market has made it so. Instead of supporting the incumbent monopoly, South Carolina’s elected officials should do what they believe and let consumers have a choice going forward.
Growing Economy Not Pollution. According to the Rhodium Group, whose partner is Trevor Houser (former energy advisor to the Hillary Clinton campaign), 2018 saw an increase in the carbon emissions in the US. This is the first annual increase in emissions since 2010 and caps the declines that crested in 2015. This is the byproduct of the economic growth we have seen and lower fuel costs caused more people to drive. With business thriving, even with natural gas plants replacing coal, the emissions increased by over 3% last year.
SolarEdge Strategizes, Acquires. SolarEdge is getting beyond the solar sector with the acquisition of Italian e-mobility company SMRE. This goes into the strategy of merging solar, storage and electric vehicles in a distributed setting. SolarEdge had previously acquired Kokam, the energy storage manufacturer.
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Newsom Takes Over, Prediction. The 5th largest economy in the world now has a new Governor, California is now led by Gavin Newsom. Under the leadership of his predecessor, Jerry Brown, CA signed SB100 with the goal to get to 100% carbon free electricity in the next 30 years. Newsom has campaigned on an aggressive continuation to fight climate change, showing his agenda in a series of tweets yesterday. I’m excited to see how the agenda plays out and the support he gets from the legislature. Starting this year, Newsom will have to take a position on the future of PG&E given the horrible wild fires likely caused by power lines. I predict that PG&E will have to pay a steep price if there is a bailout by the ratepayers for a second year in a row. This is the political leverage that Newsom and the legislature could use to push a giant climate agenda.
GOP On The Sidelines. SEIA solar champion, Carlos Curbelo, participated in Meet The Press’s climate change episode and retired GOP congressman, Ryan Costello, is back in DC advocating for a carbon tax. This comes the week that SEIA government relations pro, Brandon Audap, moved to Citizens for Responsible Energy Solutions to continue the push for “commonsense solutions for reliable energy while preserving the environment.” The shift could show that there is a future for bipartisan legislation that passes Congress to move clean energy markets forward.
GreenBiz Outlooks. I enjoy reading prediction pieces in the beginning of the year because you get different perspectives. GreenBiz publishes some of the most relevant stories that are deep on topic and the editor’s view of 2019 does show some things that make you ponder the future. From nuclear energy to non-lithium energy storage, the upcoming year may provide some interesting ideas. I do hope that more folks, especially tech billionaires hoping to reverse climate change, would put some focus on the development that the solar market has been able to achieve.
Hear Some Changes. GTM’s Stephen Lacey announced yesterday that he would be pursuing a new venture, a podcast production company called Post Script. Stephen will continue to produce and host The Energy Gang and The Interchange but will leave his post as Editor in Chief. All the best in the new venture and it will be great to hear more clean energy thoughts coming out of this platform.
Help SolarWakeup. SolarWakeup has been running for 6 and a half years, longer than I ever expected and I appreciate you giving me a few weeks off. The newsletter goes out over 125,000 times per month and is a great platform to gain visibility for your business. If you provide a service to the solar industry, I guarantee that your potential customers are readers. Consider advertising here and on the SolarWakeup Live! podcast for your business so that the newsletter keeps coming.
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Welcome To 2019. By a big margin, we are in the best solar market in history. With low costs, high demand and expanding markets around the Country, your business will thrive this year if you run your business correctly. I appreciate the time that you take to educate yourself and engage in discussion on the issues with me and others on the SolarWakeup platform. If there are topics you want covered and see in the news, please send them to yann@solarwakeup.com. You can also send tips and company updates to me.
Recapping 2018. In case you missed it, check out my annual recap of the solar news in 2018 with some predictions dropped in. From the legislative victories in California and the 201 tariffs that kicked off the year, you’ll want to make sure you catch the news. It’s available here if you accidentally deleted it. This is a good moment to get your friends and co-workers to subscribe to the most read newsletter in solar with a single click
Stories Shaping 2019. Starting where we left off at the end of the year, Meet The Press spent an entire episode talking about climate change from a political perspective while 60 Minutes covered the Green New Deal just last night. I said it a month ago, the political dynamics and the public opinion on our industry has shifted from next big thing to why don’t we have more of it.
Big 2019 Prediction. The ITC will be made permanent at 30% this year. Instead of stepping down from the 30% mark, it will be negotiated as a permanent rate. The politics around this work for everyone, including republicans that can take a climate victory with a mechanism they support, the wind and solar tax credits will be used as a negotiated item during some spending bill this year. While I don’t think this will happen, I hope that our trade associations will argue for the solar ITC to be eligible on active income as well for all investors.
Storage Play For Solar. Storage will become part of solar and stand next to the inverters. Solar with 4 hours of storage in Hawaii is now in single digit cents per kWh following on the sub 5 cents per kWh on the mainland. With BNEF revising the storage cost estimates to below $200/kWh, the market will need to get ready for the future of sub $100 and $50/kWh for the battery packs in the next 10 years.
Get Aggressive But Be Better. This is your year, regardless of the segment you focus on. Execute and get aggressive on the growth that is ahead for you. You have years of stability ahead for the business and you can think in that timeframe. Keep that future in mind when you make decisions on the type of work you provide your customers today. As an industry we have to do better for our customers that are making a 25year+ commitment to solar, whether it be the homeowner that doesn’t know about a roof leak 5 years from now or the corporation that expects a certain level of production from the solar farm they are buying energy from.
Housekeeping. SolarWakeup has been running for 6 and a half years, longer than I ever expected and I appreciate you giving me a few weeks off. The newsletter goes out over 125,000 times per month and is a great platform to gain visibility for your business. If you provide a service to the solar industry, I guarantee that your potential customers are readers. Consider advertising here and on the SolarWakeup Live! podcast for your business so that the newsletter keeps coming.
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Yann