Speakers in Boston. Senator Boncore, sponsor of S. 1824, which attempts to increase the net metering cap and Michael Judge, Director of Renewable Energy at MA DOER, will be joining our conversation in Boston. What will it take to get NEM cap raised and SMART program implemented? Join us on 10/31 in Boston.
SolarWakeup Live! DC. Tickets are now available here. Join us on December 6th for a great conversation. Speakers will be announced soon and sponsorships still available.
Solar In Arizona. I’ve been waiting to release this podcast, a conversation with Lucy Mason of AriSEIA. Lucy is the former Chairwoman of the Energy Committee in the Arizona State legislature and a member of the republican party. Yet she leads AriSEIA and we talk about the settlement and the politics of solar in Arizona.
Closing Coal. Luminant, Texas’s largest power generator and a subsidiary company owned by Berkshire Hathaway, is closing two coal plants in Texas. The question for solar is what less coal power means for our market. In Texas the market is made by natural gas and cheap wind and not solar but the power needs will remain. Unlike most other power sources, solar isn’t getting financed as a merchant asset because the marginal cost of production is zero and the market knows that.
Inefficient and Costly. Coal plants have been depreciated many times over and most current owners of plants have either valued their asset beyond peak value or bought them as distressed assets. The plants in Texas are 30 years old and repowering them doesn’t make financial sense. Even if Trump/Perry do all they can to prop up the power markets, long term investors know that coal will be regulated against over the next 30 years if you were to build a new asset. With China halting coal construction and development, our infrastructure investors know where this will all end.
Cost of Freedom. Rick Perry, at a congressional hearing, was asked about the cost of his new ‘resiliency’ rule (code for giving billions in subsidies for coal plants). His response was priceless, pun intended. He retorted by saying, “What’s the cost of freedom, that’s not something I would leave up to the free market.” From a policy standpoint, this is well documented as the societal benefit test which regulators have had available to them for years but utilities and ratepayer advocates fight against.
Helping Miners. Maybe he can ask a coal miner what the cost of his health and well being is too, because I’d guess that he’d rather install solar than go underground and mine for coal.
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Happy Friday the 13th. Yesterday we added Michael Judge, Director of Renewable Energy at MA DOER, to the SolarWakeup Live! Boston agenda. Michael has been leading the implementation of the SMART program and the conversation will yield vital information for solar companies interested in the market. Get your tickets here.
SolarWorld Files Their Post Hearing Brief. The briefs offer no insight into what commissioners will do, they are regurgitations of talking points. In SolarWorld’s version, it basically takes a bunch of solar reporters articles and their interviews with companies to try and shape their case. In some instances, when reporters have come out to set the record straight, SolarWorld then attacks them. The adjustment plan goes into a 5 year plan similar to my 5 year plan where I end up a billionaire. Lots of hopes and dreams about how 5 companies will make 1GW or more in the US without importing cells and setting it all up in 6-9months. I guess they expect the US solar market to shrink by 50%. They do go into detail about their sales process, hoping to be acquired by a strategic in a process run by Macquarie with the caveat that the buyer could change the adjustment plan, i.e. no promises made to the ITC.
How Many iPhones Are Made In America? How many cell phones are made in the US? Apple, Samsung and Google (HTC) manufacturer their cell phones abroad. Nobody would argue that Apple and Google are not American companies that create substantial benefits to the US economy. Imagine a small, niche company that is bankrupt and owned by a foreign investor files for relief to double the cost of your iPhone. It will be $2k now so that it can be made in the US. Sales would plummet and innovation would likely slow at the company to focus on cost. That is the exact same thing that Suniva and SolarWorld are asking for. On the other hand, Apple would never let a filing get past the front doors of the ITC.
Bernie Sanders Weighs In. Sanders is famously against trade deals including NAFTA, TPP and others. The Senator from Vermont wants US to make more stuff which is why he likely sees the 37,000 solar manufacturing jobs in the US and smiles. He also understands that a remedy must have benefits that outweigh the costs, regardless of whether the jobs affected by the remedy are caused by market competition.
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Tomorrow I will be announcing the final two speakers for SolarWakeup Live! Boston. The lineup is sure to give you the news about the MA solar market you need to know.
ITC Remedy Process Update, Filings Are In. Public versions of the post-hearing briefs were due yesterday afternoon. Most are in except for the SolarWorld public version, which will likely be uploaded sometime today. Limited surprises except for new filings from First Solar and Tesla, comments below. They’re long and mostly boring. The Q&A offers the most detail but again sticks to talking points.
Key Things About The Case. Rules require that any remedy must provide greater economic and social benefit than costs. Commissioners can propose their own remedy or multiple remedies which are voted on 10/31. Final decision rests with the President who can approve, deny or propose his own remedy, therefore we know nothing until he speaks or tweets his decision.
Suniva Goes With Fake News. In responding to SEIA’s testimony and filings, Suniva goes with “it’s not true.” That was the response in the first two points. Going issue by issue, Suniva sticks to their points that the US industry has been injured and needs relief. Suniva argues that Commissioners should ignore the job losses to the solar industry since the losses are “repercussions on those who benefitted from the assault (e.g. those who had access to historically cheap modules).” In short, Suniva is calling all investors, developers and racking manufacturers accessories in an assault on them.
SEIA Asks, How Do Petitioners Get Back On Top? The most contentious part of the hearing was when the commissioners asked Suniva and SolarWorld for an adjustment plan which is supposed to be issued. Without this, Commissioners cannot analyze how a remedy would leave the petitioners in a healthy state after the 4 year period. Moreover, Commissioners need to ask how the rest of the industry would fare if there is not enough access to cells and modules for the US market.
First Solar Goes All In, For Suniva & SolarWorld. First Solar has let the news speak for them, mainly letting the message be framed that tariffs would be good for them since they are excluded. During their Q1 and Q2 earnings calls, they spoke vaguely about their position on the case and have stayed quiet on their involvement (if any) or communication (if any) with the petitioners. They are excluded since the petition is exlusively for crystalline PV products. Now they go all in for relief on the industry, my guess because their stock has been moving up when votes at the ITC go in the petitioner’s favor. No comment from First Solar on what remedy they want or if they support the minimum price and import quotas. Instead they say they support “fair and effective” remedies.
SunPower Stays On Message, Asks For Help. SunPower has been a vocal supporter of SEIA in this case and having CEO Tom Werner speak at the hearings. In addition to supporting the SEIA filings, SunPower also filed their own response, for the purpose of asking for an exclusion to the tariff. With a self-described differentiated technology, SunPower states that their high efficiency creates a higher tariff for higher efficiency modules and since they sell a different technology would seek to be excluded from the case. Other unique products like Goal Zero also asked for exclusion from the remedy.
No Love For 8Point3 Partners. Mostly done without calling the other party out by name, SunPower and First Solar are clearly on opposite sides here. SunPower devotes an entire section outlining the quasi-monopoly that the ITC would create for First Solar with an exclusion for thin film modules. In some language, SunPower calls it an unjust enrichment.
Tesla Wants A Rising Tide, And Some Cells. I was hoping Tesla would comment in post-hearing briefs and they did. The company wrote a thorough brief on why the remedy is bad for solar even though Tesla is on the path for vertical integration and is building US cell and module manufacturing with Panasonic. They give good data on how long it takes to build a plant and the cost associated with it. It does appear that Tesla will need to import cells which defines a clear gap in US supply chain if ITC adopts the petitioners remedy. In short, Tesla would have the largest capacity in the US in short order and would benefit if remedy is issued but sees a rising tide lifting all of solar. Thank you.
The Deal Moving Towards 72-Cell Modules. A deal has been floating and the undertone is in the filings. Developers like NextEra and 8Minute push for an exclusion for 72 cell modules for utility scale markets because neither Suniva or SolarWorld make their market here. They likely don’t want to have to negotiate with First Solar in a position of strength either. The argument is that 72 cell modules make up a separate market from the one that Suniva and SolarWorld serve, residential and C&I, and since they cannot show how they were hurt by the utility scale market it should be exempt. The deal that some are pushing for would have the remedy only placed on 60 cell modules and leave the price sensitive market of utility scale as is with current AD/CVD tariffs in place.
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