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Two weeks into the energy storage road show and we are learning a lot of things. I’d like to thank the many people that met with us and shared your experiences. There are big things happening in energy storage for sure, but things are still nuanced. More to come as we head to the Bay Area next week.
Market Segmentation Is In Focus. With the bankruptcy filing from American Solar Direct, you have to wonder where the market focus is going to be now. Growth is slowing, yes, but residential solar will continue forward. From my perspective, as a solar strategist, I would take a single market segment and make that profitable. It goes against most executive’s grain to have a single revenue stream but lack of focus lacks profits.
Judging Solar On Jobs, Alone. The trap is being set, I can see it coming. If the solar industry is only successful by growing the total number of jobs, then eventually we will have a year of decline. We do have hyper growth right now and 2016 was the ITC sunset year. Solar isn’t successful because we have the jobs, that’s only part of the story. Solar is good for consumers and ratepayers as well. Fixing the cost of energy for decades benefits businesses that don’t like the unkown of operating expenses and ratepayers on fixed income. If you budget $100 for electricity, wouldn’t it be nice to know that you can get the same amount for your money next year than you do right now?
The Solar Eclipse Debate. A few years ago there was a debate about how Germany would handle a solar eclipse while solar production was in peak output. California has enough solar to have a similar impact, a side effect of success I guess. The point is that a grid with the right pricing signals can manage energy needs, capacity forecasts and regulate frequency in any condition.
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Yann
Growth of Community Solar. There is a lot of value from a development standpoint for community solar. First it separates offtaker from the solar farm location. The geographical separation enables the second value generated by community solar, credit risk mitigation. If an offtaker defaults, moves or otherwise decides to stop paying, the solar farm can put in a new offtaker. Additionally, you can make a play to shorten the offtaker contracts or even go month to month like a cable bill. You lose the distributed network value but solar doesn’t really benefit from that anyways in most cases. If you can get your investors around the regulatory pricing risk, then we should continue to see a growth in this market.
Q1 US Solar Market. Always interesting to see the headlines from one publication to another even though they all got the same data the day before. 2017 will be smaller than 2016 and Q1 was smaller than Q4, no real surprises here. Cost of solar continues to drop in price and we will see how that impacts the future of the market, even in the circumstance of a minimum price situation.
Last night I came back from Los Angeles and will be in San Francisco the week of the 19th to talk more energy storage in a solar market. Looking forward to hearing from many of you.
Is Perry Going Rogue? The comments from nomination hearings to the current comments, Rick Perry seems to be continuously leaving the door open for training for job replacements from coal to renewables. I don’t think it means much nor do I read too much into it except perhaps placating the critics enough to keep doing what he really wants, prolonging the market for incumbent entities.
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Yann
Terraform goes to Brookfield. The courts have cleared the way for Terraform to become owned by Brookfield. In one transaction, Brookfield grows its renewables portfolio in a large way even though it has owned hydro projects for decades.
The SMART program. In Mass, SREC 2 is coming to a close and the SMART program will start being implemented. There are still a few steps in the rulemaking but it looks positive for the next iteration of one of the most lucrative solar markets. The NEM cap needs to be raised and customers need to be reeducated about the expectations but SMART should create a 1.6GW opportunity for the solar market.
NC Solar Reform. The bill is news to me but based on the headline, and what I expect from a NC legislature, the reforms should reduce expectations for the market going forward. Interconnections have slowed down dramatically and a broader PURPA conversation is happening. Let’s see how this bill goes through the process and what happens if it passes.
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Yann
I am finding myself in Los Angeles on the day that Strasburg and Kershaw face each other in a daytime matchup between the Dodgers and Nationals. I know that there must be someone with nice corporate tickets to the Dodgers and cant find anyone to give them to. Sooooo, let me be helpful and take a few off your hands, or join me and we can talk solar while watching a few hall of famers pitch against each other.
Which way would the panels face? Trump pitched the idea of having solar panels on the Mexico wall. This raises a lot of questions for me about which way the panels would face and where the energy would go. You could envision a microgrid wall that takes the energy and powers the technologically advanced wall itself or provide energy to communities near the wall. I’d be interested to see how this would work.
Oh, the games we play. One of the takeaways from many conversations in California about storage is the ‘rate window’ discussion. Everyone knows the windows are changing but no one knows what they are changing to. That is not by accident I think, as IOUs hope to create a market freeze on the solar front before releasing the new time schedules at which point storage and solar will be easily paired together.
Solar Sin City. In one of the most dramatic turn arounds from a policy front, Nevada will go from killing solar to passing a slew of solar friendly bills. As I had reported last month, the timing looked right and now you have net metering coming back, an RPS passing legislature and community solar looking to make an entrance. That is a big swing from a State that had to lay off thousands of solar employees that hopefully will find their way back into the market.
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Yann