This is your SolarWakeup for August 10th, 2020
WFH Reimbursement. With companies having their employees working from home, some going permanently remote, the load profile is shifting for the grid. It also begs the question of how companies will provide stipends to their employees. You could imagine a stipend for a separate bedroom, high speed internet or energy consumption. Which company will strike the first deal to put free solar on employees’ homes with the company picking up the monthly bill?
GM To Investors, Is Pepsi Okay? GM is contemplating the spin-off of its electric vehicle business. This would be very good for that division, able to focus and deliver better products but it would be a disaster for the old GM. The old company shareholders would be left knowing that their business has a decade left before most of its market share evaporates, with exception for a few niche market segments. There is no way that this happens and the CEO should have enough conviction to say so.
The New First Solar. Last week I wrote about the new SunPower, shedding its manufacturing to focus on sales and install of residential and C&I markets. First Solar is doing the same but looks to be focused on being a module manufacturer, centered on the implementation of the series 6 module. It already sold its O&M business and is now looking to sell its development arm. Interestingly it cites headwinds in tax equity, given that the company was a major opponent of the tax equity extension a few years ago. Development platform deals appear to be heating up, rumor has several other firms also being acquired.
Venturing Into Solar Investing. Investing in solar related startups is going to get better. As we get digital and the energy production gets smarter, teams of bright minds will be able to change the way things are done. This inevitably gets faster and better through pivots and iteration. Solar investing, into corporates, is very limited though there are now more folks that appreciate the space that have made good money doing that. I toyed with the idea of a Wakeup fund to seed companies a few years ago but neither the pipeline nor the investor base was there then. Not sure how this plays out but I’d love to see a solar angel fund circling the startup universe.
The Veep Week. We are likely going to hear Biden’s pick this week on his vice presidential nominee. The noise around energy being a counterpoint is getting louder so we will cover that angle when it comes up.
A Price Challenge. The SolarWakeup Buyer’s Group is presenting a price challenge. Take your favorite and most commonly used products and if they are on the price sheet for the buyer’s group, we’ll respond with your transparent cost for it. No frills, no negotiations, just the best price we could bring to the market using bigger volume. In the past week we’ve had outreach from every major manufacturer that appreciates the transparency and we look forward to adding more products to the portfolio. Of course you can always sign up and see for yourself.
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Yann
This is your SolarWakeup for August 7th, 2020
Storage Wars. Q Cells is acquiring Geli, the software that helps manage your storage assets. Geli has been around for many years and has been focused on the C&I market which Q Cells is seeing possible upsides in. The reality is that storage is the undervalued, under compensated and correctly hyped part of the solar market.
Situational ALertness. Trump reinstated a 10% tariff on certain Canadian aluminum. This can include US made aluminum that has to go to Canada for painting or manufacturing.
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Yann
This is your SolarWakeup for August 6th, 2020
The New SunPower. By all accounts from management, SunPower and Maxeon will be two separate companies this quarter. That means that the new SunPower will no longer have the burden of manufacturing and focus on being a large installation business. You can read all the details in their slides but a note on a data point that was spoken on the call, which is why you should always read the transcripts. In July, SunPower reached a new milestone of 1,000 appointments and exceeded that number every week since then. That means that demand for solar, at least from SunPower’s perspective, is stronger than ever.
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Yann
This is your SolarWakeup for August 5th, 2020
Midweek Recap. The SolarWakeup Buyer’s Group is launched and we doubled in size yesterday alone. You too can join the group and save. More info here as well as online portal for easy registration.
Uber For Solar. Palmetto closed their series b with $29 million in new venture money. I talked with their CEO and President just a few months ago (here). The software company enables more residential solar to be built and helps those that want to get into the industry.
Ideology Meets Reality. Biden wants 100% by 2035 and some are getting stuck on the definition of 100%. I want to hear how we get to 100% even if it means 80% and how it would happen politically. What rules have to be changed and what markets open up for this industry to create opportunities for jobs and growth?
PG&E Has No Shame. PG&E, freshly out of bankruptcy and still a convicted felon, is offering incentives for energy storage installations. Except that the program, SGIP, is legislative and CALSSA, solar advocates and partners were the driving force to get the bill passed in spite and not because of PG&E. They may administer some of the funds but today is a good day to remember your need to renew or increase your funding for CALSSA.
Seeing Green. Solar stocks are hot, no denying that. It’s also great to see that solar pros that took a bet on their companies by getting paid in shares, options and stock grants are seeing a real return for their hard work. We have genuine 8 figure value creation in this industry now. Enphase reported yesterday, positive results but down for the quarter as expected with a positive guide for Q3 as well as being sold out of their energy storage system for Q3. SunPower and Vivint Solar report today after the market closes.
Not So Green. BP cut its dividend in half, that won’t be good for the investors that trust on that quarterly payment.
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Yann
This is your SolarWakeup for August 4th, 2020
SolarWakeup 3.0. 2 years ago I joined the residential solar market and it changed my view on everything. Armed with a great product and a strategy to talk to every solar installer in the Country, the conversations began. Since leaving Quick Mount in May, it has been my absolute focus to eliminate as much margin stacking and inefficiency levied on the residential solar installer. From the factory to the customer’s rooftop, products can double in cost due to those inefficiency. Most importantly, installers do not have a clear view of what they are paying for. Rebates, transportation, logistics, credit terms, margins all make up some of that cost. Some installers pay 50% more for a product just because. Let me be very clear, this week you will hear exactly how tenacious and resilient solar installers are across the Country. We all play our part in putting solar on every rooftop in America and together we will make it a mature, transparent and efficient market.
The SolarWakeup Buyer’s Group. Not all installers buy 200MW of product per year, most don’t and shouldn’t. That doesn’t mean that they shouldn’t have the ability to buy product competitively without markups for things they don’t need, namely logistics and credit. The SolarWakeup Buyer’s Group is a group purchasing cooperative that will provide access to installers to some of the most commonly used products at pricing that matches the scale of a top 10 installer. By this time next year I expect the buyer’s group to be the largest single block of purchasing in residential solar. As the Buyer’s Group grows, installers will benefit from each other driving the price down and expanding the product portfolio. Group purchasing organizations are active in many other industries and my expectation is that we can work together to create a sustainable purchasing community in solar as well. You can join the group online or if you want to have a conversation, hit reply to this email.
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Yann
This is your SolarWakeup for August 3rd, 2020
Venture Ventures. GE Ventures is continuing to divest its portfolio, with the latest deal selling GE’s shares in 11 startups to 40 North Ventures. This story has two points of relevance for our industry. First, some of the companies are in clean energy including Enbala, Volta and Proterra. Second, 40 North Ventures is part of Standard Industries which owns GAF and GAF Energy. GAF Energy is the roof integrated solar product that spun out from GAF last year but has been internally built at GAF for a decade.
VP Portfolio. Every VP list coming from DC pundits has Senator Harris at the top of the list. Typically, from a strategic standpoint, a vice presidential nominee with legislative power would put forth new bills that bolster issues relevant to the campaign. Senator Harris is about to introduce environmental justice legislation. This isn’t the first time, 15 years ago as the San Francisco District Attorney, Harris pursued environmental crimes that disproportionately targeted poor communities. The bridge between climate change, income inequality and fossil fuel generators exists and Senator Harris, potentially as VP candidate, will be making that case nationally.
2 Out Of 50. Bribery charges in Ohio and Illinois largely hasn’t surprised most in solar advocacy, maybe the scale of it, but we’ve all seen how utilities maneuver the legislative limbo. The New York Times comes in with a well written documentation that makes the issue understandable by those outside of the industry. The NY Times asks for opposing views, which will be interesting to read if they come out. The real story that I hope get picked up is that this is happening in every State. Each instance may differ in degree but with the right investigative budget, the New York Times would find dozens of reportable cases. Even better, the New York Times should hire Energy and Policy Institute to do the investigation.
Arizona RPS Laughs. A regulatory body that seemed aligned to increase the RPS in Arizona ended up closing the proceedings rather abruptly when a difference of opinion of how to proceed became apparent. Twitter had some fun with this one but I’ll leave you with the coverage. Let’s see if the regulators have their staff coordinate and come back with good news.
It’s Kentucky. 50MW PPA signed in Kentucky, if Kentucky wants more of that in the future residents can call their senior senator and ask for the ITC to be included in the stimulus package.
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Yann
This is your SolarWakeup for July 31st, 2020
Weekend Vibes. Happy Friday and end of July. Here’s your rundown and fast feedback on today’s news in solar.
Support Energy News. EPA doesn’t like the coverage they are getting from E&E News and canceled their subscription. If you can, support E&E by subscribing. They used to have a fantastic TV studio that I’d love to host SolarWakeup TV in. In the meantime, solar should make a deal with coal plants across the Country, shut down the coal plant and replace it with solar plus storage and use the savings to clean up the site and help with job training of the displaced employees.
Virtual Power Plant Contracts. A month ago, if you listened to the SolarWakeup podcast, we had this story in my conversation with Nick Chaset from East Bay Community Energy. This is another virtual power plant using local resources. This type of project will become harder to do in the future based on the decision by the CPUC to take local resource adequacy responsibility off the hands of CCAs and giving it to PG&E and SCE.
Home Electrification. In a double newsday keeping my PR friends busy, Sunrun signed a JV with SK E&S, a Korean conglomerate. Each company will contribute $75million to a joint venture aimed at home electrification, which will be interesting to watch and understand what that means. SK E&S will also buy $75million worth of Sunrun shares at $36 per share.
Earnings Season. Sunnova beat and reaffirmed guidance for the year. Generac is predicting positive cash flow in clean energy in 2020. Next week we get Enphase and Solaredge. In case you missed it, listen to the Generac earnings call and you’ll get a look at how a CEO should handle an earnings call. It was a easy flowing conversation off the cuff without talking points and scripts. Solar companies should take note.
Utilities As Public Good. Utilities get monopoly status because they have a public responsibility, a responsibility to serve. This has been hijacked by shareholder desire for growth and dividends. First Energy is not out of the woods as 5 people get indicted by an Ohio grand jury including the Ohio Speaker of the House. It shows how far utilities are willing to go to get what they want from politicians and regulators. It seems beyond potential to rectify the situation but let’s hope it can be done.
CPV Project Goes Bust. A SolarReserve project has gone bust and a DOE loan guarantee will lose a little over $200million. Digging into PR talking points from 5 years ago, here is what the SolarReserve CEO had to say about the future of CPV at the time “We can’t power the planet with rooftop solar and the case for developing CSP when PV is cheaper.” I think rooftop solar won.
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Yann
This is your SolarWakeup for July 30th, 2020
No Column. Catch up on this week’s podcast about virtual batteries with the CEO of Extensible Energy. You can find it on your favorite platforms.
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Yann
This is your SolarWakeup for July 29th, 2020
Stimulus Package Gets Stuck. DC politics are thick right now around the stimulus package. There was a path to a quick passage in the Senate but that will not happen which means your work to advocate for solar to have a chance to be included continues. Politics are a fluid race to the finish but the finish line is always moving, it’s also the industry we’re in so let us take a deep dive on politics, policy and solar.
Bipartisan Means What? Poll after poll shows that solar support from voters is bipartisan, in some cases even a swing issue. Solar pros often tout the bipartisan nature of what we do, and I agree with them. I also agree that solar is resilient to withstand most solar politics, the industry is still doing well under Trump which was considered a major risk. But, there is a caveat. Solar is not that bipartisan, most instances of solar market creation by State and Federal government happened when political power shifted from republican to democrat. I asked my Twitter followers for good examples and here are some of their views. NJ, VA, and MD are some examples. I think SC is an example where a GOP majority worked with the industry.
Why Does It Matter? 7 GOP Senators gave solar the bipartisan support that we seek as an industry, here is a public policy poll that shows you why it was sent. Maine, North Carolina and Arizona all have clean energy jobs as +40 when polled. Senators from all three States signed on to the letter, betting that the letter is the only action needed to get some of that vote. This is an important note to consider because it underpins the comment “solar will be fine regardless of who is in charge”. Polling and experience suggests that neither party wants to destroy the solar industry but differs in their willingness to grow the market.
Like It Or Not, Policy Matters. Status quo may be enough for some but growth in this market means being involved in policy. Look at the work done in Virginia by advocates that took dominion from <200MW to a future of 19,000MW. That is policy at work. Florida still benefits from the policy pushed in 2007 by then Governor Charlie Crist and Vote Solar. It is very dangerous for the solar industry to be spectators in policy, you can advocate hard for policies without being partisan. This is my call to action because we are still underinvesting in policy, your budget should include at least 1% of revenue for policy activities.
Just Look At Oil. The big 5 oil companies are spending nearly $1million per day just to lobby on the topic of climate. That doesn’t include the millions spent on PR and marketing consultants to get stories like today’s New York Times story. Add the State level lobbying dollars and you realize that we’re not in a fair fight.
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Yann
This is your SolarWakeup for July 28th, 2020
FERC Gets Nominees. Trump nominated two commissioners to FERC yesterday, both of which had clean tech Twitter giddy, including a thought bubble that he may be lobbying for votes in the clean energy industry. Allison Clements comes from the Energy Foundation and NRDC, serving as the Director the Sustainable FERC Project at the time. Mark Christie is on the Virginia SCC currently and will allow the Virginia Governor to nominate a new commissioner to fill the seat. Christie is described as a by the book lawyer and has years of experience in regulatory oversight.
Ponies At The Petting Zoo. Some utility dockets are dry and otherwise uninteresting to the solar market. And if it seems that sometimes there isn’t anything in it for our industry, you would be right. That doesn’t mean that turning that docket around gets pro-solar overnight but solar advocates have gotten really good at the incremental gain, a step forward. Duke was proposing a grid plan that had the opposition of our advocates and now will amend their plan to include climate change as a factor. A step forward and we get to see the ponies.
A Clean Grid. Speaking of a clean grid, UK grid operators are forecasting negative emissions in 13 years. National Grid is the utility that is active on both sides of the Atlantic and could be a quick leader in the US with their lessons learned in the UK. Over the next decade it shouldn’t be hard for us to decarbonize the grid, I follow this strange bot on Twitter that tweets out EIA data on an hourly basis and coal is almost always the top generating source. Coal still represents 15x solar in terms of generation and it is the low hanging fruit when it comes to fighting pollution. It’ll take everyone to get this work done.
Two Points. Two points that I’d like readers to consider on having solar as a major part of the solution. First, utilities that are monopolies should no longer be allowed to lobby. Regulatory capture is too real and merging that with a lack of competition in a non-free market has shown to be a disaster. Either they are monopolies or they play politics, not both. Second, regulators need to figure out how to bring more solar to C&I rooftops. The large warehouses don’t match energy load to potential capacity but represent a distributed location for GW of capacity that needs to be leveraged.
Innovating Trade Groups. COVID has made trade groups get creative on reaching out to members and the industry. With a natural bias, CALSSA has been raising the bar including hosting informative web-based content every week since the shutdowns began. This week that includes content on inverters that is useful to installers across the Country. You get to hear from all major inverter companies with expert moderation. At $50, this is a steal for the content you get. Register Here.
Oil Money Will Get Sunny. Solar investments are often merged inside portfolios that also invest in other fuel sources. Bankruptcies, headwinds and oil major losses mean that those portfolios need to diversify and realign their investments. Don’t be surprised if you start seeing oil and gas related funds interested in solar, just look at the solar stocks. Solar was expected to suffer a deep and long pullback but appears to have had a few week drop and will come out with a growth year in 2020. Solar is a safer investment, aligns with the future politics and has the best return on investment in the energy space.
Friends. If this was forwarded to you or you have friends that don’t read SolarWakeup, please get them to subscribe. A friendly post on LinkedIn (tag SolarWakeup) would be greatly appreciated.
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Yann