This is your SolarWakeup for September 23rd, 2020
Deal Day, IPO Coming. Array Technologies filed for their IPO yesterday, looking to raise an easy $100million. With over $1billion in sales and EBITDA somewhere in the 15% range, Array is going to have no problem raising the capital. The question is how big will the valuation be. Couple of interesting points. First, they should have done a direct listing. The market will value them much higher than the IPO will yield for shareholders in my opinion. Second, I’m surprised a SPAC didn’t make a big bid for this real business. Last, don’t be surprised if there is a last minute acquisition of the business instead of the IPO.
Battery Day Highlight. Tesla hosted its battery day yesterday. Here’s the three things you’re going to want to know. Tesla will seek to eliminate cobalt from its chemistry. The company will seek to make cathodes in-house and in the United States, Tesla continues to be a major creator of manufacturing jobs in the US. Doing so will aim to lower battery costs by 50% allowing for a $25,000 car to be sold. We will cover the impacts of a mass market electric vehicle another day.
The Case For Power Markets. In my latest podcast we talk about the pros and cons of monopolies versus power markets. One key difference between the two is how much gas is built one way or another, because the free markets basically eliminate any new natural gas plants from being built. This makes one wonder why IOUs feel the need to continue doing so when it’s not the best path forward.
Solar Market Update Call. Register for the next Roth Capital solar market call on October 2nd at 10am Eastern. The past calls have exposed the first highlight of major market trends.
MDV-SEIA’s Solar Focus Conference. With events going virtual, it’s important for companies to support their state chapters and allows for out of state companies to participate in the virtual events. Register for MDV-SEIA’s conference.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 22nd, 2020
The Power Of Markets. There’s a new report from Deloitte that talks about the cost, feasibility and timing of the utility decarbonization goals. I don’t want to judge the conflicts of the report but it’s important to note that Deloitte makes a significant market working with utilities. Deloitte measure the feasibility as doable with significant cost and need for innovation for success. The counterpoint isn’t that it’s not feasible, it’s that the market needs to change and be competitive.
The New Pod. In anticipation of the report, SolarWakeup’s latest podcast looks at the energy market in the Southeast US and what it would look like if it was competitive. I talk with Mike O’Boyle from Energy Innovation who wrote the study. Without spoiling the report, consumers would save billions of dollars and get cleaner electricity while the States would create jobs.
RBG Environmental Opinions. Environmental laws have not had the airtime nor headlines at the Supreme Court until recently. Politico does a nice job of describing RBG’s role in the opinions, especially around the EPA’s jurisdiction over bodies of water and pollution. When the EPA runs into jurisdictional battles with States that aren’t interested in following federal rules, you can thank Ginsburg for the opinion that gave EPA jurisdiction writing, “When Congress elected to make EPA's input a prerequisite to state action under the act, it did so expressly."
It’s Battery Day. Tesla is holding its annual shareholder meeting and battery day. Watch for big headlines about battery production and the price roadmap ahead.
Corporate (Virtual) PPAs. We’ve seen several gigawatts of solar transacted between solar farm and corporate off taker. Some call them virtual, corporate or remote arrangements. What we need is for those transactions to be open-sourced, so if you are a counsel, financier, developer, owner or customer in one of those transactions it would be great for the market for that to be explained to the market and made less esoteric.
Launch of the SCF Suite 2.0. My friends over at Sustainable Capital Finance continue to innovate in the fast-growing C&I sector. They just launched their newly revamped software, the SCF Suite 2.0. The platform offers solar developers and EPC’s an efficient, centralized dashboard to receive indicative PPA pricing, download proposals, and populate & execute term sheets, EPC agreements & PPAs. The SCF Suite has been retooled with a fresh new look and the addition of many highly requested features. If you’re interested in learning more about how this software can speed up your transaction process, as well as increase your sales conversion rates through automated agreement population and e-signature features, feel free to check out their info page.
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Yann
This is your SolarWakeup for September 21st, 2020
Florida Looks Ahead. It’s well known that Florida’s net metering policy (which is more than 10 years old) is one of the fairest and straightforward policies in the Country. With the highest energy consumption per capita (residential) in the Country, distributed generation through solar and solar thermal is part of our DNA. The PSC held a workshop to discuss this and got tens of thousands of contacts from consumers asking for things to remain as is. Those that talk cost shift fail to identify many variables of why their statement is incorrect and intellectually dishonest. Florida will continue growing their solar market.
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Yann
This is your SolarWakeup for September 18th, 2020
Happy Weekend. Let me give an end of the week shoutout to the parents and teachers in the SolarWakeup family. Virtual learning has turned me into tech support and hall monitor while the snack pantry has no way of supporting a ten year old sitting through a 7 hour zoom call. Have a great weekend and for those that celebrate, Happy Rosh Hashanah!
Delays Not Reductions. This is the part that everyone is getting wrong about their analysis of the solar market as it pertains to Covid. Forecasters are tracking the end of the funnel, not the entire ecosystem. Two things happened during Covid that you won’t find in lower install volume. New sales never stopped and in many cases didn’t slow down but picked up steam. More people were home learning about solar and signing contracts. This caused the installers to grow their biggest backlogs they’ve ever had since installations had slowed down. That is why every month since June, installers, lenders and suppliers have had their best months ever, every single month.
Newsom Has The Opportunity. Newsom always says the right things when it comes to climate change and typically when he talks about solar as well. Here are several things that are in his court right now that cost nothing, help provide solutions for climate change, resiliency and the energy crisis and positive economic growth. First, Newsom can call for a statewide adoption of instant permitting for residential solar by implementing the SolarAPP. Second, he can show leadership by calling on the CPUC and SMUD to strengthen net metering, not try to destroy the policy. Third, direct the CPUC to return local resource adequacy purchasing back to the local utilities and CCAs. Fourth, work with the CPUC, CAISO and market participants to create a more granular and accessible demand response market; not just during energy crisis but at all times which will create a vibrant and resilient microgrid market. Lastly, stand with CALSSA on the Capitol steps and call on all Californians to support the 1 million solar batteries initiative. Call us, we’re available!
FERC Wants DERs. There is a realization happening in the market that distributed resources are a valuable asset to grid resiliency. The South Carolina settlement is wrapped in value placed on the assets. Yesterday, FERC passed order 2222 which tells power market operators to create rules that allow distributed resources to participate in the market. We’ll bring you more detail on this in the coming weeks.
Catch Me. If you didn’t get the chance, I was a guest on the Solar Spotlight podcast.
A New Mark. The SolarWakeup Buyer’s Group now has members doing over 200MW in aggregate. This means more vendors wanting to do more with those members and that means savings for you. If you’re curious, check out the price discovery page.
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Yann
This is your SolarWakeup for September 17th, 2020
BP Solar Comeback. 20 years ago, BP was the talk of the solar town. Just outside of DC, BP made solar modules because solar was the future. Then came Chevron with tax equity but that too passed. When you look at issues facing oil today, part of it is Covid and hundreds of parked airplanes but the other one is that oil is competing with electricity and losing. BP is in the business of powering your method of transportation, that’s why Vitol is out with an announcement expanding their power trading as well. Electricity is the new oil and that’s where the majors are going. Not too long ago, BP said that they couldn’t invest enough capital in renewables. 5 years from now they will have invested tens of billions and more; with less risk and better returns than they get today. Anyone doubting their return expectations go check out their corporate bond costs and ask your friend at NextEra if they expect 8-10% returns as well. Here’s a prediction, in my lifetime the CEO of BP will come from the renewables division and it will be the core revenue generator.
The Greater Responsibility. Peter Parker was told that with great power comes great responsibility. If you haven’t noticed, solar is being asked to do a lot more than install a few panels. Our industry will lead on creating jobs where other industries have left them behind. Remember the Gaval family in Mahanoy City, Pennsylvania living in a home worth less than $115,000? I haven’t stopped thinking about them and how the parents and two sons would surely be an asset to the solar industry and they could each live in their own house. We hold ourselves to a higher standard than just making money. Helping others, making solar inclusive and diverse while creating more jobs than any other sector is part of our DNA. With that internal bar set so high, outsiders will judge us and expect solar to fix it.
EV Charging PubCo. Chargepoint is going public via a reverse merger with a SPAC. This is a great step in the direction to bring charging to retail investors. For me, retail investors create comfort and credibility for the underlying company they are working with. An investor may look at it from a company standpoint and then realize they have 50 chargers in their County and they should get an electric vehicle. It normalizes the concept.
Farewell Spent Rods. I had some long form opinion about the state of nuclear but as much as some utility regulators hold out hope that nuclear is the future, it is merely the past. We will not see another nuclear power plant built in the US and likely other western Countries as well. There are many reasons for this but the biggest one is the lack of capability to actually build one.
SC Rooftop Solar. Vote Solar is calling the agreement with regulators and Duke Energy “the most forward thinking rooftop solar program in the US.” The NEM successor creates a system blended with demand response, storage and other variables in what some would call the biggest step towards performance based compensation. Without modeling out how this actually tracks to homeowners, I have two thoughts on this. First, a deal is a win and certainty beats uncertainty any day. Second, wouldn’t it be fantastic if the monopolies also had performance based compensation and allowed a robust power market in their territory?
Catch Me. If you didn’t get the chance, I was a guest on the Solar Spotlight podcast.
A New Mark. The SolarWakeup Buyer’s Group now has members doing over 200MW in aggregate. This means more vendors wanting to do more with those members and that means savings for you. If you’re curious, check out the price discovery page.
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Yann
This is your SolarWakeup for September 16th, 2020
No Column Today. Your solar news will return tomorrow including a new SolarWakeup podcast about the concept of a competitive power market in the Southeast United States. If you prefer to hear my podcast from the other side of the table, I joined the Solar Spotlight from Greenlancer podcast to talk about solar.
Thoughts. Take a moment to see how you can help our friends in the Gulf Coast. Hurricane Sally is going to be incredibly wet, when it passed my house last weekend we got 10 inches of rain and now is forecasted to do 30 inches in Louisiana. It’s wet and slow, one of the worst combinations for hurricanes.
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Yann
This is your SolarWakeup for September 15th, 2020
No More Naked Roofs. Every house has a roof on it so why doesn’t every roof have solar? Within our community this doesn’t seem like a stretch and even may be our goal, so why doesn’t this possibility get more airtime in mainstream news? The jobs, the distributed resilience and cost savings for consumers are all benefits that will be the side effect of this endeavor that wouldn’t actually cost anything.
The Google Promise. There are layers to the Google promise on carbon neutrality. In this latest announcement, Google said it will only use carbon free electricity by the year 2030 including in a 24/7 time matching. This will drive significant energy storage and other generation that will allow for that to happen. Second, Google has now repaid its climate debt, meaning its emissions since startup have been offset. This is the first time I’ve seen climate debt paid off, what would happen if every Fortune 500 did this going back to 2000 or earlier?
Making Climate Political. Normally politicians have to message in order to drive polling numbers in their favor. Climate and clean energy issues have long polled well in a bipartisan way but have failed to drive the politicians in their direction. One of the problems may have been that bipartisan issues don’t do well in politics. To that end, Joe Biden’s campaign seems to be happy to take the issue as their own and making it partisan. I don’t love the idea of solar becoming 100% partisan but it’s been somewhat so already. Let’s hope both sides fight over solar as their issue and who loves it more.
A SPAC To Watch. SPAC are all the rage these days. While not new, acquisition corporations are gaining favor in the capital markets as an easier and less turbulent path to public markets. This SPAC, Climate Change Crisis Real Impact I Acquisition Corp, has a notable CEO in David Crane. Crane, as you may recall, sounded the alarm about climate change when he was the CEO of NRG. The Chairperson of the SPAC is Mary Powell, former CEO of Green Mountain Power and still a director of Sunrun amongst other clean energy companies.
New Products, Lower Prices. The SolarWakeup Buyer’s Group has been hard at work to improve the product and price list over the past few weeks. If you haven’t talked with us about it, send us a note or do a price discovery.
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Yann
This is your SolarWakeup for September 14th, 2020
Here’s The Scoop. There’s something big brewing in the residential solar market. SolarWakeup has learned that industry veterans are coming back into the market in a big way, looking to to build the next national platform through acquisitions of existing market leaders. With the fragmentation that exists today, it makes sense that this would be the strategy and for those companies that seek that exponential growth it seems that the opportunity is coming up. We can’t say more at this point but stay tuned to this space…
An Expanding Market. Even with the impacts of COVID in the space, halting installations and changing sales strategies, the residential solar market is now forecasted to remain strong. After my comments were published by PV-Magazine about the finance market faltering, Woodmac responded and changed the terminology to indicate a strong investment environment for residential solar. The forecasters also increased the 2020 estimates by 700MW to remain flat year over year. This was something SolarWakeup predicted in May on our podcast episode. Even if megawatts will remain flat, SolarWakeup has the estimate at 10-15% increase over 2019 numbers, total spend will be up over 10% given the average system value has increased by almost 15% due to bigger systems and energy storage inclusion. You can now understand what drives the investment thesis in the scoop above.
500+ Air Quality. 6 of the largest fires in California, including the largest ever, are burning right now. Oregon saw fires within 20 miles of populated areas around Portland and the impacts of the fires are dramatic. Air quality measurements are reaching very unhealthy levels, over 600 AQI in some areas. At 500 AQI, you need to consider wearing heavily filtered masks inside your home at all times. We don’t know what this means for long term health but this is definitely not a positive sign of things to come.
Let’s Have Solutions. As I read about Gaval family in Pennsylvania, I think about how the solar industry can be a home for them. We are all thinking about how companies operate with more remote work, I’d love to see the idea of distributed offices instead of larger facilities in metros. Imagine a 20 person office in Mahanoy City, a coal mining town where the Gavals live. The solar industry is advocating for distributed energy, why couldn’t we also distribute our workforce in a similar way.
New Products, Lower Prices. The SolarWakeup Buyer’s Group has been hard at work to improve the product and price list over the past few weeks. If you haven’t talked with us about it, send us a note or do a price discovery.
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Yann
This is your SolarWakeup for September 11th, 2020
Head Into The Weekend. We are going to put a bow on Q3 this month and head into Q4 with the biggest backlog and solar development pipeline in the history of solar. Here are your top news for the week.
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Yann
This is your SolarWakeup for September 10th, 2020
Seeing Red. Pictures out of the Bay Area were daunting yesterday, not reminding me of my home for the past 2 years. This is the planet’s reminder that whether we believe in climate change or not, it’s here and we need to do more. It was enough to get Obama to tweet about the fires yesterday.
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Yann