This is your SolarWakeup for October 19th, 2020
Solar Permits Discussed. Tomorrow morning, join me on a conference call with Chris Collins from Ohm Analytics and Phil Shen from Roth Capital to talk about the trend of solar permitting from across the country. You can register (free) here.
Monopolies Bank Political Power. Even when consumers have the ability to choose a retail electricity provider, they typically don’t. According to the EIA, less than 20% of consumers with choice actually participate. This makes the absurdity of monopoly protection by politicians even less palatable. There is no political reality where Governors of North Carolina, Florida and South Carolina agree that one corporation has massive control over their infrastructure and Georgia would clearly expect them to be next. The only way that this actually happens is if Nextera is willing to expand consumer choice with retail energy choice. Doing the math, they are likely to only lose a small percentage of their customer base and still control a huge amount of infrastructure.
A Failure Of Resiliency. In engineering school you learn a lot about the weakest link, even more so when you go through fire academy. The key is to plan for the weakest link to fail and make sure it doesn’t have an outsized impact on the rest of the system. What I’m referring to is the sudden shutdown of Diablo Canyon nuclear plant unit 2 last week, right as CAISO was headed into another weekend of potential issues and new fire starts. That’s the problem with nuclear, it’s too big to fail but more often than not, it isn’t there when you need it and you can’t make that up with adequate reserve margin leaving only demand response, and yes, blackouts are a form of demand response. That’s why part of the equation has to be the aggregation of large scale with long duration storage, as we see in the RFP today, with the cumulative scale of millions of rooftop solar. As grid operators we have to start thinking about the C&I roofs as well, they represent the most underutilized real estate that already has interconnection and demand on site.
The EV Platform. My favorite company in the clean tech space has long been Proterra. It’s scrappy and big in potential. Now it’s getting its balance sheet ready for more with Blackstone coming back fresh off the Vivint Solar sale. Look for this company to do much more.
Sentiment Is Everything. Sentiment can create trends and traction in public markets but that trickles down every other part of the investment world. This is positive and watch for these numbers to get even better.
Covering The ITC. In the last 15 years, the Investment Tax Credit (ITC) has allowed organizations to benefit from substantial cost savings to solar installations. This sustainability-driven program has helped revolutionize the renewable energy industry. Regardless, in 2021 ITC benefits will shift; here is what you need to know from my friends at M Bar C Construction and how we can help you and your organization take maximum advantage of these savings while they last.
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Yann
This is your SolarWakeup for October 16th, 2020
The $ARRY IPO. It was a big day for solar, New Mexico and the venture founded by Ron Corio in 1989. Array Technologies went public yesterday at $22 per share, pricing $1 above the $19-$21 range. Underwriters also upsized to the maximum levels. At the close of the after-hours market, $ARRY was trading just north of $38, an amazing 73% IPO day pop. Some of you got in at the first print of around $30, still a nice return. This also means that Ron is the first known solar billionaire, he sold 23 million shares at the IPO and still holds ~21.7 million shares. #solarwealth is the word of the decade because not only are we leading the energy transition, this is the single largest wealth creation opportunity of our collective lifetimes. Congrats to Array, the team and Ron for sticking to the vision.
What It Means For Sector. Array is a pure play solar company that makes the underlying structure needed to get the most out of solar modules. It manufacturers principally in the US and the majority of its revenue comes from the US market. There are dozens of solar trackers in the market but what sets Array apart along with Nextracker is the team and execution. I spent two years in racking on the resi side and this is exactly the type of exit that could have been possible if the focus weren’t on near term, consultant driven margin. Here’s what happens next, two predictions. I think Nextracker is going to have to look at spinning out from Flex and being a standalone. As the market share leader, Nextracker drives a global business into the public markets. Oaktree, the majority shareholder of Array, also owns Shoals Technologies. I wouldn’t doubt that Shoals is far behind on their S-1 filing and don’t be shocked when you see the margins of the widget manufacturer. Every asset manager and investment bank is meeting this week looking to get smart and get into solar, and that’s great for all of us.
Solar Vs Climate Policy. Biden talks a lot about climate change and even renewable energy. He has a multi-trillion dollar plan to combat climate change (the issue) and knows how he wants to solve it (the plan) but what does that mean for the actual execution. How does solar and storage fit into climate policy from a legislative perspective? Last night, Biden took a question about fracking and he did something that should be positive news for all in clean tech. He pivoted from fracking to solar panels on rooftops and batteries in the basement (his words) while highlighting the entire program as a jobs plan. We’ve come a long way. That being said, I still don’t have a clear vision for how his administration plans on getting us there though I hope that folks I know and perhaps read this newsletter will be doing so from 1600 Pennsylvania Ave. Here’s the clip on the issue from last night’s town hall.
Storage and Grid Wars. Fluence (a Siemens and AES venture) has acquired AMS. This follows Generac’s acquisition of Enbala, LS Power’s acquisition of CPower and evGo, Engie’s acquisition of Green Charge, Enel’s acquisition of Demand Energy and Enernoc, Wartsila’s acquisition of Greensmith and I’m sure some that I’m missing. That leaves Stem as one of the remaining grid/storage companies, but having raised $371million, the price of entry will be hefty. Your thoughts and missing acquisitions are welcome.
State Capital Battles. The BP CEO talked a bit about climate advocacy in State capitols, which is my signal to remind you of the biggest head to head contests about to meet state legislators. With oil in transportation at record low levels and the electrification of buildings and transportation, oil companies and utilities are meeting head to head for the first time. They’ve mostly managed to ignore each other’s issues for a century but that’s changing. Look out for major battles and unlike utilities, I see some alignment of interests between our industry and oil that could benefit us.
Philly Gets Permits. Faster and cheaper permits in Philadelphia? They get it, let’s help them get to instant permits.
Thank You! Yesterday, CALSSA members stood up and raised $195 thousand dollars to keep the policy wheels moving. After a motivational, NBA Championship caliber speech from Hall of Famer Bill Walton, members dug into their pockets. We are $5k away from our goal of $200k and I’m hoping that you can help make up the gap. You can make a donation today!
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 15th, 2020
Array Tech Prices Above. ARRY is pricing at $22, a bit above the range listed in the filing. Congrats to the New Mexico based team for what starts a great future as a public company. Note that most of the capital is going to shareholders selling shares.
CALSSA All-Member Meeting. Join us this Thursday for the largest membership meeting ever held by a solar trade association. If you’re not a member of CALSSA, it’s easy to join and I’m happy to help you do just that. Register here for the all-member meeting.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 14th, 2020
IPO Pricing Day Super Sized. Array Technologies, soon to be ARRY, increased the share sale that could reach nearly $1billion if underwriters exercise the options, which they are likely to do. Today we get the IPO pricing and expect the company to start trading on Thursday. Here’s a SolarWakeup prediction, with the success of Array’s IPO I think we will see Flex spin NexTracker out into its own public company.
I’m Not A Scientist. Louisiana Senator Kennedy asked the SCOTUS nominee if she believed in climate change, but she’s not a scientist and has no firm view on the issue.
New Lipstick, Same. PG&E headlines tend to repeat themselves. It seems like the wildfires may have overlapped with some equipment issues and a judge wants to hear more as regulators investigate. Governor Newsom will soon realize that the path forward means turning PG&E into a wires only company and letting CAISO expand its DER pricing signals.
Solar Policy Is Climate Policy. Axios’ Amy Harder has a thorough interview with BP’s CEO. Amongst many topics, he outlines the company’s focus on advocating for climate policy. Whether it’s BP or Amazon, it’s time to understand that the best way to drive climate policies forward is to invest in solar advocacy. Bloomberg understood this with the beyond coal campaign. This generation’s way forward is with solar advocates.
CALSSA All-Member Meeting. Join us this Thursday for the largest membership meeting ever held by a solar trade association. If you’re not a member of CALSSA, it’s easy to join and I’m happy to help you do just that. Register here for the all-member meeting.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 13th, 2020
Solar Access Requires Regulators. Anti-solar advocates often attach solar for helping the rich only and not democratizing the benefits to everyone. This is especially aimed at low-income residents or renters that may not be the typical single family solar customer. The responsibility for this disparity mostly falls on regulators that do not open the market to all property types. Tools like community solar easily solves this, like is has done successfully in several markets. More importantly, regulators could take a new look at the excess production rate which is well below market value for energy costs. The problem with solar financing is the requirement for long term contracts secured by appropriate credit. For low-income or renters, it doesn’t match the solar financing. If regulators had a backup energy rate in case of default or vacancy, more competition over that market would follow.
The Work On Climate. Since it’s often lost on us that we are working on a bigger issue that affects everyone, I thought I would share an interesting realization I had over the weekend. Climate change sometimes seems too big for us to impact, what could one of us possibly do to help. The impacts from climate are serious and we have all felt them over the past few years. But, a few months ago when the national shelter in place was happening, we saw how fast the climate can change in a positive direction. We don’t have to believe a thesis, no cars on the road gave us the cleanest air we’ve seen in decades. We are so close to having a grid without coal and vehicle electrification on the way, it is possible that we will see immediate impacts from the positive gains our industries are making.
The Price And Compensation Signal. Grid operators and utility executives manage their work based on signals. Grid operators look at reserve margins within generation to match demand forecasts while utility executives look at the share price. On the technical side, we’re realizing that we cannot manage a grid only on the generation side, our reserve margin through demand shaping and demand response needs to be much closer to 20% or more. Same goes for executives, regulators have the opportunity to hold them to their climate goals and tie rate of return to achieving the decarbonization that is needed. If the utility profits drop when they fail to meet climate goals, executives will lose money because the share price will drop.
Diversity In Solar. Solar CEOs from several prominent companies are looking to improve the diversity in solar. The CEO collective has written the note linked below outlining their thoughts and actions.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 12th, 2020
Trump Still Anti-Solar. On Saturday, the White House released a proclamation signed by Trump (now we know what he signed at Walter Reed) pushing for the bifacial tariff exemption to be eliminated. He also called for the 201 tariff drop to not go to 15% but 18% instead. Taxing Americans access to solar continues to be his priority.
OakTree Shaking IPO Foliage. With Array Technologies about to have a monster IPO, it won’t be long before the best exhibitor at solar conferences, Shoals, follows suit. Take it from me, widgets have great margins. From racking to wire accessories, this part of the BOS ecosystem is ripe for investors.
Vehicle To Grid Auf Deutsch. In a German article, follow the twitter thread here to read the original article, the head of Volkswagen’s charging division talks about electrification and vehicle to grid capabilities in the future. In a DC coupled architecture, you could see a cable from the car to the stationary energy storage already installed at the home.
The Subsidy Of Crappy Deals. In a new analysis, MISO shows that uneconomic coal power plants ‘lost’ over $400million in a 4 year window. Lost is a big word, because it’s really a subsidy. Add this to the long list of subsidies that generators, utilities and incumbents have received when solar plus storage is already economically viable.
Laudato Si, Iterum. You may recall the Pope’s Laudato Si from several years ago. The Pope is once again calling for action on climate change. You could see Joe Biden, a practicing catholic, echo those words to make the case on this basis as well.
The Michigan Farmer. Last week’s news that Biden was releasing a climate change ad in Michigan is out. This has the potential to get traction in other states, like Iowa and North Carolina for example.
Energy Storage Gold. Check out these ERCOT market prices from this weekend, energy storage operators are paying their bills.
Bad Solar TikTok Dance. Now there is a solar TikTok. In this video, a man escapes a collapsing roof and you should watch til the end to discover the likely issue here.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 9th, 2020
VSLR RUNs Away. Vivint Solar officially stopped trading yesterday and owners of VSLR shares will see RUN shares in their portfolio instead. This makes the acquisition official after a near unanimous approval by shareholders. If the future is a debate of central versus distributed, monopolies versus deregulation, then Sunrun will be distributed utility fighting the 20th century behemoths.
Tracking Big IPOs. Array Technologies S-1 filing has been revised and the company has increased its capital raise to $675mm from the initial plug in number of $100mm. This makes the case that the virtual roadshow has gone well, with the IPO banks able to upside it to over $800million. Array has $92million in EBITDA in the first 6 months of 2020, 87% of their revenue coming from the US and the company is principally manufacturing in the US. Oaktree is a major investor in the company after an investment in 2016. S-1 Filing
The Veepstakes. A prolonged section in the VP debate about climate change had some wondering what they were watching. While the climate echochamber on Twitter wants to either, stop arguing whether climate change is real or complain that Senator Harris didn’t dig into the Green New Deal or state that the Biden admin will ban fracking. I will remind everyone once again, politicians can’t do anything until they are in power. If they feel like they need to straddle the middle to satisfy a voter in Pennsylvania, then they will. It was crazy to see VP Pence talk about the Trump administration’s environmental record, the list of deregulated pollutants during the last 3 years, the MOPR, solar tariffs and more make the case for this being an environmental disastrous administration.
MNSEIA Roundtable. The Minnesota Chapter is hosting an important roundtable with other state chapters and SEIA. Click the image above to register for the event being held next week during their two day gateway event.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 8th, 2020
Happy Birthday. 9 years and 1 month ago, my wife told me I should start a solar newsletter that talks about the previous day's top stories. For the past 9 years she mostly regrets that (I'm joking). Well it's my wife's birthday today and I'm thankful for her push and support in this and many of our adventures in the solar coaster.
Cleantech Journalists. A must see for business leaders and PR pros. Today I join other clean tech editors to talk about issues we are looking at and the best way to get your story in the news. Register here.
Congrats. Personal message of congratulations to the CALSSA Board President, Ed Murray. Yesterday, he announced that his Aztec Solar was being acquired by East Coast’s Sigora Solar. If you listened to the capital market update calls, I predicted that regional installer consolidation was on the way. Way to go Ed!
Policy Moves. Just in time for distributed solar’s time to shine, policy pro Walker Wright is returning to Sunrun as VP of Public Policy. Walker is a rockstar advocate, one of the fiercest defender of solar regulations in the Country and knows how to duke it out, whether in the halls of the Capitol or back room at the smoky steakhouse.
Situational Awareness. In a tweet exchange, PG&E board member doesn’t remember the last time his company made a move to kill net metering. I reminded him.
Yann On A Pod. I joined Tim Montague to talk about solar markets and the Buyer’s Group on his youtube based podcast. It was a great conversation.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 7th, 2020
Build It And They Will Come. Bloomberg’s BNEF is out with a revised forecast for residential solar in 2020 and increases their estimates to 3GW, almost 10% higher than 2019. This is in line with what SolarWakeup has been saying since May and the data points that you heard on the Roth Capital solar market update call last week. This means that in a time where the industry thought that new sales would crater because of the lack of face to face sales, solar demand was higher than ever. Not only will 2020 have the highest capacity on record but the backlog will be substantial across the market, watch out for Q1 numbers. Suppliers should be ready to adjust Q1 supply chain accordingly.
The Golden Grid. Two headlines with one message, distributed solar is creating value well beyond energy production especially when paired with storage. Generac continues to acquire companies, this time acquiring grid services company Enbala. Generac already has a bit of a 100% storage attachment strategy especially when installed with Generac generators. In short, Generac is building the residential microgrid company. Only question is which utility will buy Generac? Sunnova is following in Sunrun’s footsteps and entering the ISO-NE capacity market, increasing the value generated by their customer’s solar and storage equipment. Next step is a 3rd party provider that provides that benefit to homeowners that are not part of the Sunrun/Sunnova platforms and want to aggregate with neighbors.
Speaking About Value. Later in 2021, the California regulators will take up the decision about net metering 3.0. Yesterday, some advocates filed their opening briefs including CALSSA which did a great job talking about the value that non-solar owners get from solar homes and lowering their costs of electricity. I link to the brief from the NRDC, a supposed environmental firm, that lacks an intellectual grasp of how solar works. They write, “non-NEM customers should not continue to or further subsidize NEM customers in excess of the total energy system and climate benefits all customers receive from NEM exports.” They continue to write that focus should be on large scale solar. All of that will be intriguing to execute when the grid goes down because there isn’t enough demand response on the other end of the line. We just went through two events where distributed solar and storage created more than 1.5GW of free capacity so that ALL users could continue to have power. This green on solar attack won’t be tolerated on this platform and I’m happy to moderate that debate publicly anytime.
Michigan Climate Voter. Biden is out with a climate ad in Michigan. Biden is old school, ads are tested, polled and scripted exactly to match the target demo. My prediction is that if Michigan voters like it, you’ll see it in Florida soon.
Yann On A Pod. I joined Tim Montague to talk about solar markets and the Buyer’s Group on his youtube based podcast. It was a great conversation.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann
This is your SolarWakeup for October 6th, 2020
Utility Scale Solar At Risk. Utility scale solar has been and continues to boom across the Country, both in utility and 3rd party owned segments. This has helped the cost of solar to drop across all segments and scale has caused modules to get to sub 30 cents per watt which is helping everyone. But here is the important counterpoint that everyone needs to keep in their mind. In the past few days we’ve seen announcements of solar in Louisiana, Arkansas and Nebraska to name a few. Solar is the biggest interconnection backlog in Michigan and ERCOT amongst others. The reality is that utility scale solar grows in strength everywhere that consumers have an increasing ability to put solar on their own roof. Residential solar is 10% of the capacity compared to utility scale but is 99% of the public opinion. 10 years ago, my neighbors in Florida would tell me solar doesn’t work because they can’t put it on their house. Those same neighbors (even with their Trump lawn signs) have solar panels on their roof now and they trust large scale solar to be just as effective. This is a symbiotic relationship that our industry often overlooks at its own detriment.
Blue Wave Scenario. In the first of the scenarios let us look at a what is possible if Biden takes the White House, democrats the house and senate and remove the filibuster. Basically control of all law making. First the downside. In this scenario so many things will be focused on that energy policy would probably not reach the top 5. You would also have to think about how clean energy and climate policy may intersect or deviate. You could see solar advocates push for some or all of the following (I wonder if the wish list already exists): national RPS, strengthening PURPA for renewable qualified facilities, national carbon policy, standardized permitting laws, extension of the ITC with direct pay, job training, R&D dollars and a greener TVA. Fundamentally, I could see policy that aims to achieve carbon free energy generation and solar on every rooftop as the goals. Execution will be up to the legislative writers. There are some great folks working hard on Clean Energy 4 Biden that would make great staffers in the administration if this happens and New York policy folks will have a big impact on Senator Schumer’s position on this as majority leader.
Exxon Planning Disaster. An internal document from ExxonMobil says that the corporation is planning on increasing carbon emissions. What happens next with institutional investors especially university endowments will be interesting to watch. If they hesitated full divestiture from fossil fuels, leaving Exxon will be an easy decision.
Chasing C&I Gold. Siemens and Macquarie (Green Investment Group) are forming a new joint venture to target solar plus storage on commercial buildings. Storage is the silver bullet for the C&I market that always had a problem with the default/downside scenario with tenants that leave or off takers that default.
Yann On A Pod. I joined Tim Montague to talk about solar markets and the Buyer’s Group on his youtube based podcast. It was a great conversation.
Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page.
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Yann