Solar Reality Show. “You know, they dump ‘em - government-subsidized, lots of things happening - they dump the panels, then everybody goes out of business,” Trump said (to Reuters in the Oval Office) just before teasing that the announcement on tariffs is forthcoming. Advocates appear to be indicating another level if the tariffs come back bad for solar. They are saying that tariffs could be the baseline towards a global settlement on modules and silicon but analysts are not optimistic that this could happen. Either way, we will be going through this in great detail at SolarWakeup Live in New York in a few weeks. For one day only, you get 50% off by using code LIVE50 thanks to the bigger theater space we moved into.
SolarWakeup On The Road. Over the next few months you will have plenty of places to meet me and talk solar. I will be hosting a keynote interview at Midwest Solar Expo in May and COSEIA’s Solar Power Mountain West in March. In February I will be in DC for a few days for a DOE event and speaking at a storage event in San Francisco. Pretty much if there is a microphone that needs to be spoken into, count on me to try and stand behind it. Come say hello at all of these events and look out for the next SolarWakeup Live after New York.
Storage Versus Gas. Gas is getting cheaper and it is much more flexible than peaker plants. It dispatches faster and for shorter periods of time as needed. That being said, stand alone storage economics will be hurt by the volatility of the charging price unless colocated with generation plants, preferably solar plants. If colocated with solar than you must be thinking about dc-coupled because redoing your interconnection and using additional bidirectional inverters will change the way you finance your solar plant. I’d like someone to challenge me on this thinking because I haven’t heard an argument for ac-coupled on colocated plants.
Social Cost Of Business. Blackrock’s CEO, Larry Fink, knows business and he knows businesses that make money. He is also out with a new letter saying that businesses owe society a bit of a social contract and the requirement to think about the longer term. For many of us in solar, we realize our work is hard and oftentimes without thanks. We work on projects with thin margins and a tough road ahead but we know our mission is worth it. Similar to Fink’s social impact I want to ask the following question to solar companies. If you were asked to give $10,000 a year to solar advocates like Vote Solar or your State Chapter, would it kill your business? If yes, do you think your business has issues other than market/regulatory? If no, can your business be killed by market/regulatory changes?
Power Market Mayhem. January has been a crazy month for power markets. ERCOT went to over $2,000/MWh and gas prices in New York went to over $175/mmBtu. Both crazy.
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Growing Power Demand (Finally). PG&E is out with the goal to install 7,500 EV charging stations in their service territory. EVs are the gift to utilities around the Country that have been losing power demand to LED lightbulbs. Utilities make their money by building more infrastructure to keep up with more energy demand and if the demand doesn’t grow neither does a utility’s rate base. 7,500 level 2 chargers are a drop in the bucket, just wait until utilities propose 100,000 fast charge stations at 100kW+ each.
Christie Out. Murphy In. After a bill to keep the NJ solar market going passed the legislature, Chris Christie decided he was done working for the people of New Jersey. He put the bill away and killed the bill with a pocket veto. The new Governor, Phil Murphy, was inaugurated and now the bill has to go through the legislature once again. Good news for NJ however as Murphy is making quick work on energy and appointments to the DPU.
Making A Deal And A Plea. Various reports will come out until the White House issues a ruling. Here’s a scenario that will keep people hopeful even after a ruling. A straight tariff doesn’t really do anything for Suniva and SolarWorld, because they wouldn’t access of that cash. All it does is increase the market price and that isn’t really their problem, they need cash. Additionally it would likely result in more tariffs against American goods by China. The ideal scenario for everyone is a deal that drops the initial trade tariffs and removes the barrier for Hemlock to sell silicon to China once again. Ideally the deal then results in tariffs to be charged on imports that create cash for US manufacturers. This is a simple fix for this problem and I’m a bit surprised it hasn’t happened yet. Maybe someone call tell me what the barrier is.
Play With PACE. How many of you have used PACE for a solar project? What were the barriers you were able to overcome by using PACE? Now that more than just California is getting into the game and SEIA is mainstreaming the PACE plus PPA, I can see more contractors leveraging this standardized solution. I’d love to hear from you on this topic.
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Listen Closely. I went back and listened to my interview with Amy Harder from Axios yesterday. Inside the conversation there were some things that were coming true in reality. The Goldman group inside the White House doesn’t seem to be having the impact we were expecting, much like the conservative think tanks, Sean Hannity, etc. Also the argument about jobs and job losses don’t seem to be moving those inside the conversation. More than anything, the bad actor label on China seems to be coming to the forefront. Go back and listen to hear what I’m talking about.
Don’t Click The Bait. We are done breaking low cost of renewables records. The conversation needs to drive towards, what do you need in order to have this energy need come from solar, wind with or without energy storage. The data from Colorado says absolutely nothing. Without knowing the ratio of storage to generation, you cannot ascertain anything at all. You also don’t know what they are doing with storage, what grid services they will provide and how many hours of capacity they are proposing. Don’t look at these results for any business metrics. Your cost of money divided into the capital costs minus operating costs will still give you the best view of the bid price. Rant over.
EVs Rule The (Future) Road. I love the additional investments into electric cars by other auto OEMs, Ford announced an $11billion push towards EVs. I’ve been an EV owner since 2012, first a Volt then a Tesla. The Volt buying experience was eye opening and I wouldn’t be surprised if it was the same today. The sales person knew nothing, nobody at the dealership did. How to charge, how many miles of range, what happens at the end of the range? All the OEMs will need to invest in education of the sales force. If I were Autonation, I would have an EV only showroom. Completely separate the force from the traditional vehicles and make it a competition and not a closing exercise. Tesla doesn’t have this problem by only selling EVs. At the end the solar industry wins because EV owners want solar and EVs will drastically drive down the price of batteries.
You Get A Job, You Get A Job. Energy jobs keep growing especially at the labor and middle class level. If you want to make more than the average American in your job segment, then being in solar is a great place to be. On the other hand, you may have to work through the solar coaster, stand at rallies and enjoy the sunshine. I can only imagine how many jobs solar would create in Florida if our policies opened up just a tiny bit. The same is true for Kentucky, West Virginia and Ohio where most of the remaining 60,000 coalminers live.
China Is Dumping Projects Too. $0.3Trillion was invested in clean energy worldwide last year, half of it in solar. Half of the solar investments came from China which begs a curious question relating to the 201 proceeding. Should US capital file a complaint about Chinese capital buying too many projects? Is that unfair as well? Maybe that is the correlation to the real estate market that the White House would understand.
Are You Coming? There is a surprise addition to the SolarWakeup Live! event in New York. We will have an unnamed speaker (for now) that has been in almost all the meetings around the 201 case. By the time we meet in New York, the tariff should be decided and you will get to hear how it happened and we may indulge in some conversation looking back at the process. This is inside a cool theater in midtown, join us. 2 for 1 offers available if you email me.
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Amazing Hypocrisy. A Chinese company complaining about Chinese aggressive path into solar module manufacturing? You’ve got to let that sink in for a minute to realize how pathetic the argument from Suniva and SolarWorld really is. SolarWorld was bailed out by Qatar which is not known as a friendly global actor. Meanwhile Suniva, which couldn’t survive with tens of millions in grants, had to be bailed out by Shunfeng, a CHINESE fund. It was only once management failed to run the business properly that the former CFO saw an opportunity to run a scam on the American people with the 201 filing. Trump is being played by these folks that have misled everyone on their way to this moment.
Label The Opposition. No matter the result of the trade case, solar will look back at its tactics and realize that it played flag football in a full contact sport. There was a level of purity that the good team wanted to maintain and that wasn’t the right way to go. Think about the logic of a bankrupt Chinese company with no money and no path to ever opening up again being given the same credibility in the process as 270,000 solar professionals. In politics, you either brand your opponent or they will brand you and solar made their impact of a bad decision the argument and not the poor messenger that was trying to destroy solar.
Shell Acquisition. A few weeks after BP made the investment into Lightsource, Shell is following suit and acquiring shares in Silicon Ranch. Much of the summaries written by reporters is to hyperbolize the impact this has on the energy markets, an oil company buying a solar company. All that is BS. This is about diversifying investments and revenue streams. It would be managerial malpractice for energy companies not to have exposure into solar and the associated interconnections to the electric grid.
PG&E Must Lead The Way. We may look back on this week in a few years and saw the regulatory start to shifting away from natural gas plants. The CPUC is asking PG&E to solicit energy storage instead of making a deal with Calpine. At the same time solar advocates are pushing Michigan regulators to review the DTE request to build a new gas plant. The fundamental argument I use against regulated gas is the subsidy given to the utilities by consumers. Unless the IOU takes the fuel cost risk, the consumers should be paid for the hedge on the fuel price. The value of that hedge needs to be included in the comparison to long term renewables contracts that have no fuel cost risk.
The Q&A You Wanted. You asked for it and you’ll get it. When SolarWakeup Live happens on January 31st, we should know what is going on with the 201 case. Many of you asked me to include a Q&A so that we can talk about the various issues in the solar industry and my thoughts on the state of the market. We also moved into a larger auditorium that can hold a few extra folks. If you email me, I’ll give you a 2 for 1 coupon code so that we can have a full theater and make the networking that much better. Tickets here.
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