This is your SolarWakeup for May 27th, 2020
30 Million Solar Roofs. A few weeks ago I linked to an article that talked about using solar to create jobs in the post-COVID recovery. The idea was bold, build 30 million solar roofs (fully funded) in the next half decade. John Farrell from ILSR was the author behind the idea and the subject of this week’s SolarWakeup podcast. I hope you enjoy, subscribe and rate the podcast on your favorite app.
Midwest Solar Rush. Alliant Energy, the Wisconsin based publicly traded utility, is looking to increase solar in Wisconsin more than fourfold. In acquiring 675MW of solar projects, Alliant will expand the 150MW of solar exponentially and looks to be taking some cues from utilities like Florida Power & Light. The announcement talks about asking the regulators to push the docket forward and (I’m assuming) letting the utility rate base the asset. Like in Florida, I am not opposed to the concept of having the utility rate base large power plant, as long as it allows the distributed market to flourish based on market conditions. It can’t be all for one and none for all.
Faster Solar Installs. Hawaii is taking a big cut to the timeline between contract signing and project install for solar. At this point in the market it is one of the most valuable market drivers that politicians and regulators can push forward. We talked about the cost of permitting in the past and how SolarAPP is the tool that enables markets and installers to provide faster solar and a more pleasant customer process for homeowners.
The FERC Fight. None of what the solar industry wants going forward is possible if FERC decides that States no longer have a say in matters affecting electricity rates and rate structures, including net metering. In the biggest attempt to remove States’ rights, the New England Ratepayers Association (NERA), is asking for FERC to remove net metering as a State by State regulation. NERA is likely fronting for someone else, though we don’t yet know who, but this is much bigger than solar alone. Vote Solar is asking you to get involved and make your voice heard, this is your call to action, Tell the Federal Energy Regulatory Commission to immediately reject this destructive and dangerous attack on your solar rights! You can also join Vote Solar for a webinar tomorrow to learn more about this national attack on solar during this pandemic.
Presented By Suntuity. Do you sell solar and see an opportunity to expand the markets you serve in a digital sales environment? Suntuity is expanding its salesforce and looking for more sales leaders to join their growing team. Based in New Jersey and servicing over a dozen States, joining Suntuity could be the sales boost you need. Learn more about our company today.
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Yann
This is your SolarWakeup for May 26th, 2020
Things Will Change. As the weeks of the pandemic move along, I am coming to realize that we don’t know what is going to happen in the future. There are predictions about peak carbon, peak oil and I’ve personally written about how the energy use will be redistributed with more people working from home. When will you get on a plane again and do you expect to work from home in 2021? These questions will drive much of what changes or not. For the solar industry, there is little that points to lower energy consumption in the home as opposed to the past. Self-reliance and backup generation will likely grow in importance during the sales cycle but the solar industry will not be alone in approaching this market with solutions. Utilities, generators and efficiency will also pursue the opportunity, look at how quick Generac was to get into California with generators during the wildfire crisis last year and with two acquisitions made themselves a real player in solar as well. The point is that every data point from every over analyzed consultant is based on a changed set of variables and the oil companies are front and center as well. No-one is driving and planes are grounded, oil usage is down and the postcard from the future has arrived in the form of a Mack truck. A world that doesn’t use oil at the same levels was something ESG and sustainability executives have been saying for years and predicted it would come some day. Oil companies must adjust they said, invest in solar and wind and batteries. How does an oil company get into the renewables space overnight and replace billions in quarterly profits? How would you do it? Can it be done? I don’t know who and how and where the battle by the big market will play out, but here is one thing that I am certain about. Those of you that service the homeowner, whether as a local installer, a regional one or a national player on the top 10 list, that market is going to top $20billion, $50billion and more. Today that market is slow, inefficient and lacks the transparency you expect in vibrant marketplaces. That will change with the growth and success of many, so things will change for everyone everywhere. For those of us fortunate enough to be in solar, hang on tight.
Catch Up. Subscribe to the podcast, no pod released today. Download the full survey results from the past 8 weeks. Catch the webinar with OpenSolar about digital solar operations and virtual selling.
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Yann
This is your SolarWakeup for May 22nd, 2020
A Favor. If you enjoy this newsletter, please forward it to one or two solar friends. You’d be surprised how many people don’t get the daily solar news. If this email was forwarded to you, you can subscribe here.
Rumor Has It. You may have seen that Enphase stock slipped by over 10% at the start of trading yesterday. A major company shareholder is Chilean investor South Lake One LLC, an entity controlled by Quiroga Moreno Isidoro. Controlling as much as 13.5million shares after a buying spree of over 1.2million shares in November 2019 at a price just under $20. Isidoro participated in a fundraising round in February 2018 when he purchased 9.5million shares for $2.10 a piece. The rumor, which is well sourced at this point, is that he has sold his entire stake in Enphase for around $61 per share. This is typical, many early investors will sell some or all of their stake in companies when they have completed their phase into success. $2 to $61 is quite the investment for a 2 year period and his shares found new investors at these levels. This marks a key date in the corporate history of Enphase, what will the company do in their next growth phase?
Because You Asked. Not that it matters because it doesn’t influence my writing nor the stock prices. I own shares in basically every solar company including Enphase and Solaredge. I don’t pick winners, I am picking the solar industry as a winner and believe that those investments will be worth a lot more when my kids go to college than today. So if you work at a solar company, public or private, I’m rooting for your success at all times.
Tesla Energy Trading. Here’s the answer to anyone asking whether Tesla or any other battery company is better on energy trading. The answer is yes, absolutely. They are also betting and advocating that the grid will reward speed of power generation, revenue stacking and growth of monetization for microgrids. As revenue streams for batteries increase so does the development and integration of those technologies.
Have A Great Weekend. Stay safe and if it weren’t for the COVID situation I would invite you all over to help me pack the container!
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Yann
This is your SolarWakeup for May 21st, 2020
Go West, Then Back East. Last week I told you about the end of my tenure as CEO of Quick Mount PV, by far the highlight of my career and a great sign that residential solar is a booming part of the market. Many of you have asked me what’s next and that answer will be clearer to me over the summer. What I do know about what’s next is that my family and I are moving back to Florida. We love California and loved being at the center of the solar industry. In a world where you live near your work, living in Walnut Creek was perfection. In a time of COVID, and flying cross-country is not feasible, we are choosing to live closer to family. So in a few weeks we will be trucking across the Country back to the Sunshine State. Over the coming weeks, I plan to spend as much time as possible talking to you about the market, what’s working, what’s not and look to identify the question about what’s next professionally. In the meantime, I want to help you in any way possible whether that is helping you refine your procurement strategy, connecting you with new capital sources or if you lost your job find a new one.
Full Survey Results. After 6 weekly tracking surveys over the past 8 weeks, the full result tabulation is available for review. You can see them here.
Early Stage Investments. Looking ahead beyond 2021, I realize that the reality of ITC sunset to 10% is possible. So I ask the many investors and IPPs on this distribution list, who is funding and taking a long term view on greenfield development for large scale solar. The strategy was a gold mine for many ten years ago, I want to hear from those with the thesis that it will be once again going forward.
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Yann
This is your SolarWakeup for May 20th, 2020
A Changing World. Here is the long awaited data. Sales are still down 22% when compared to pre-COVID February sales. If you remove NY and MA from the analysis, sales are down only 14%. That being said, 58% of the respondents say that they are at or above pre-pandemic sales levels. 42% are hiring for sales and working capital positions are much better, many thanking PPP.
The AHJ Conundrum. 57% of survey answers say that their backlog is growing which still means that sales are going faster than installations, partly due to shelter in place orders and due to slow moving AHJs not issuing permits or doing inspections. Here’s the good news, 79% of the AHJs are doing digital permitting and 68% are providing options for virtual or video inspections. If this trend keeps up and then sticks around permanently, solar will be much better off for it.
Inverter Landscape. Public markets love the solar industry through inverter companies. Enphase exceed all-time pre-COVID highs by almost 15% today, reaching an all-time high of $70 per share. Solaredge is close to the all-time high reached just prior to COVID starting to impact the market. PV-Tech does a nice job of giving you the global view on the various players that trade publicly.
Enphase Golf Clap. A golf clap is a signal of support and congratulations when everything else is so quiet. The shot, the strategy is all happening in front of us but if you don’t pay attention you may miss it until you hear the applause. What am I talking about? On Monday of this week, Enphase launched an online store for their products in Germany. They had already launched a store in the US in 2019, which you likely haven’t seen because the US store pricing was almost double what you pay when installers buy from distribution. The US platform most likely served as the testbed for everything syncing and working in the back end. The German store is selling product for about 15% less than the US store but with discount code system built into the platform they could be given to installers and bring pricing much closer to current levels. An online platform done right will increase the almost non-existent market share in Europe while also significantly increasing margins.
What It Means. Most manufacturers that sell into distribution don’t test this openly because what happens if distribution gets upset and stops buying from you. Enphase and a few others have the luxury position of being a product that customers want, distribution needs to sell the product in order to be a value added resource to installers. The signal, in my humble opinion, is that Enphase wants to understand the purchasing behavior better. More importantly, the company is kindly telling distribution partners that they need to be more consistent on how they price their products. The inverter index that SolarWakeup has quietly been checking, shows that the same inverter can move by $10 or $20 week by week, which is 3 to 6 cents per watt for most installers. GTM has the residential marketshare for Enphase at about a quarter of the market and Solaredge at more than double that. Look for that to flip in 2020 and 2021 in residential US market segmentation. An online store may seem small and quiet, but trust me when I say that a big and important conversation is being had behind the scenes that could reshape how the solar ecosystem functions and I love this innovation.
Listen Closely. Thanks to all that joined for yesterday’s Roth conference call about the solar market. If you enjoyed that and want to hear more about my live conversations, check out my interview with Rob Newman from Nearmaps about aerial imagery. Please forward this email to one colleague and ask them to subscribe to the newsletter, let’s get everyone in solar reading every morning.
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Yann
This is your SolarWakeup for May 19th, 2020
Join Me This Morning. The solar market is moving quickly and the survey results will be released on a call about the market this morning. Join us, you can register for the webinar here. It’s at 10am EST.
Margin Stacking. I remember 30 years ago going to the travel agent with my father. We sat in a mall, where the nice agent showed us a green screen of flight options, in this case flying PanAm from Hamburg Germany to Florida. There was no transparency in the pricing or competitive options to the PanAm flight and therefore we rarely took the plane. Today, you and I can go on an app and see hundreds of variations of flights by city, date, time or connections before deciding to fly. COVID aside, airlines and travelers won when transparency was created. It also made every level of margin become more transparent, hence the fees for luggage, exit row seats and faster boarding. You get what you pay for. Solar in 2020 lacks that transparency for most market participants at this point and that’s something we should all think about fixing. It is what I am thinking about constantly now as I ponder what’s next, quality and reputation should be the leading drivers of success in solar, not unknown unknowns like margin stacking. More to come.
Measure From 12,000 Feet. In this week’s SolarWakeup podcast I talk with Rob Newman, the CEO of Nearmaps. Nearmap flies planes all over the world including your house, three times per year. These planes fly between 12 and 18 thousand feet and measure your roof with accuracy of a couple of inches. For solar, it enables installers to sell projects with accurate designs without ever stepping on the roof until install day.
Will SPI Happen? While early spring events like GTM’s Summit had to move to the fall and Midwest Solar Expo has gone virtual, no word on SPI in September. SPI is a crucial source of funding for SEIA and SEPA but this year’s event is in California where distancing protocols will be stricter than other States. SPI’s website still appears all systems go but the survey respondents, by a margin of 74%, said they would not be comfortable attending.
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Yann
This is your SolarWakeup for May 18th, 2020
Forecasting 2020. There are two rules in being a public company that executives can live by both driven by overdelivering. In a crisis like COVID, most companies will underpromise publicly and then quietly spread whispers about positive outlook. This ensures that expectations are reachable but no investor thinks the company cannot weather the storm. The other way is to be contrarian and that is more situationally accurate for solar right now. Almost every solar company has withdrawn guidance and spoken with optimism. Sunnova is taking the other path by reaffirming their 2020 guidance. In a single sentence during the earnings call, Sunnova put it on the line in 2020 and putting their teams on notice. This is the year that execution is key because underdelivering on expectations is a Wall Street sin you don’t want.
My Take. If you want to know what is going on in the solar market and my update on the survey data that will be released on Tuesday, you can register for the webinar here. It’s at 10am EST on Tuesday.
SunPower Enhances Focus. It was a big week for SunPower gaining regulatory approval for the split between the module business and the ’services’ platform/dealer network. The company also sold its O&M business which goes further in raising funds and reducing operational expenses at the company. In a few quarters it will be difficult to differentiate between SunPower and Sunrun and to a certain extent Vivint Solar and Sunnova. Each has one or more of the following attributes: direct sales, dealer network, self install, outsourced sales channels, subcontracted installers and all have their own funding structure. Game on…
Big Modules. 400W, 500W. Pretty soon we’ll be talking about real modules. The first ever quote for modules I got was in 2006 for $3.95/watt for a 195W module (sans tariffs).
Supercharge Use Drops. Elon tweeted a graph of Supercharge usage that spans the past year and peaks in December/January. A few weeks ago charging usage went to 30% of the peak in both North America and European geographies. It’s on the way up again, close to 50%. But will it ever go back to the 100% mark, adjusting for the increase in cars on the road? Utility planners around the Country are studying this image to understand consumer behavior post-COVID and if they are honest with regulators will likely have to ask that homes install more solar. Why? Even if 20% of those in the workforce transition to working from home, grid infrastructure is going to have to adapt quickly and likely cost ratepayers billions. More to come
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Yann
This is your SolarWakeup for May 15th, 2020
Press Release Day. If you’ve been reading SolarWakeup for awhile you know that I avoid press releases like the plague but not today. There are three announcements that came out yesterday (don’t release news on Thursdays) that you need to know about.
Tax Equity Getting Done. Sometimes the most interesting stories in the news don’t actually get covered in a meaningful way. $40million was raised in a tax equity partnership to own DC solar projects, a niche market that has its complications but can be profitable for those that do it right. Mike Healy of New Columbia Solar has been a longtime solar professional is behind the interesting transaction that is getting done right in the middle of a pandemic. So while you may not see it in regular coverage, trust me when I say that this deal getting done now is a strong message of optimism for solar. Not just that it’s getting done now but it’s DG, portfolio of assets and a market with policy complexity. Go into the weekend with a positive outlook.
Enphase Goes Commercial. Just when you’re getting used to the way things are, a headline makes its way to your screen. Enphase has been laser focused on residential market share growth and currently sits in second place according to GTM. Then comes this headline for a portfolio of commercial and multi family projects that is being designed with the flexibility of micro inverters. In a market that has been dominated by string inverters, the need for rapid shutdown and desire for unit level monitoring/optimization, is opening engineer’s minds to other options. I’ve spent the last week asking people around the industry, what solar looks like in 3 years but reading the headlines may be setting that stage.
Solaria Is Coming To Play. Solaria, the module manufacturer of aesthetically pleasing black modules, is adding senior leadership. In what seems like a change of leadership, it is, the new CEO and President actually represent a shift towards business strategy and execution. Like a choreographed business plan, Solaria released a 400W module a few months ago and now Tony Alvarez takes the CEO spot and Howard Wenger becomes President. Many of you know Wenger as a longtime staple in solar, former President of SunPower and one of the original solar policy advocates dating back to the 90s. Alvarez increases the Cypress Semiconductor leadership in solar adding to the many executives that joined Enphase from Cypress. Big moves for a big module, add this variable to your vision of the solar future.
So Is Solar. EIA data is showing that coal is on a major decline this year and renewables are adding to their gains in the energy mix. The data is compelling enough that New York Times covered the shift. That doesn’t stop a US Senator from North Dakota from publicly tweeting about saving a coal plant that neither ratepayers want to pay for (it is a financial loser) nor the utility wants to keep open. With Great River Energy planning the closure of the plant, Cramer wants to keep it open. First, I empathize with the community, the plant is in the middle of North Dakota and must be one of the major economic drivers of the community. That being said, what does it say about the coal industry that is bankrupting in real-time and does not answer any question related to capitalism? Even with its struggles, the industry is able to push political power to a US Senator’s twitter account.
What Do You Need? I’ve spoken to between 30 and 40 solar installers this week to answer this question. What is the biggest issue facing your business as you rebound and grow post pandemic? The industry is facing MAJOR margin stacking against it while also being the lifeblood to everyone in the ecosystem. Without a strong installer community no-one succeeds including distributors, financing companies, manufacturers or consumers. I’m one person with a newsletter but if I learned anything over the passed 15 years, we need a strong market to be a profitable market.
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Yann
This is your SolarWakeup for May 14th, 2020
History Lesson. David Freeman wasn’t a name that I was familiar with before yesterday but the name means a lot to those that have been in solar longer than me and they shared some of those thoughts with me and I thought you should hear them as well. David passed away this week at the age of 94. He led TVA, LADWP and SMUD during his career in power. The solar overlap includes the original SMUD PV Pioneer program which started the path to the million roof initiative that California celebrated late last year. Some have told me that much of California’s solar success wouldn’t have been able to get to where it is today without his leadership.
Job Growth Halted. The pandemic is having its impacts on jobs around the Country including clean tech. According to the latest report by ACORE, 600,000 jobs have been lost in the industry. Not only is it impacting those sidelined from the construction jobs but it is also impacting really good employees on a more than temporary basis. We need to find the bold policy initiatives that will catapult the market back into growth mode and get people back to work as soon as possible.
AOC Picks Climate. There was question about if and how AOC would get involved in the Joe Biden campaign and we got the answer. She is co-chairing the climate change campaign committee with John Kerry. It highlights the importance that the issue has in the campaign especially for the ‘young people’ that AOC and Sanders were targeting during the campaign. It also means that Biden is willing to be pushed far on energy/climate change issues.
The Pod On Spotify. For those that asked, and thank you for doing it, SolarWakeup Live! The podcast is now available on Spotify. Do your thing and share it with friends and colleagues. We had an informative and forward looking interview with Andy Klump from CEA this week and next week will have my interview with Rob Newman from Nearmap to talk about how you never have to get on a roof to measure again.
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Yann
This is your SolarWakeup for May 13th, 2020
This Week’s Podcast. I talk with Andy Klump from Clean Energy Associates (CEA). CEA works with companies to help them procure and quality check equipment like modules and batteries. Andy usually lives in Asia but is currently stateside while the pandemic keeps most of us in our homes. I spoke to him about the status of factories, how to make sure you get the best quality equipment, and what would happen if the ITC grant requires domestic content. He also makes some bold predictions about where prices for modules could go. Check out the episode and do us a favor by subscribing and rating.
Elon’s Alameda Drama. There is going to be a time in 2020 where the location of your business has an outsized impact on the success of your business. Tesla’s Fremont factory is going through that now. I’m not saying that Alameda is right or wrong, that’s for others to opine on, but the fact that the factory is in Alameda versus Michigan or 30 something other California Counties means that the factory is still not operational. The same is true for solar installers which lacks coordination with science. Bay Area counties are letting solar with storage be installed but not without storage. That means that installing solar in this area is locationally bad for business.
Time To Buy. Engie is out and public about wanting to do more in US energy storage, renewables and offshore wind. Engie has been one of the most active corporate investors in the market and if anything they see now as an opportune time to do more.
The Pivot Is On. The biggest reason there is a delay in getting you the results from last week’s survey is that there is now a distinct difference between installers that are investing in pivoting to new tools and processes while spending more on lead generation. The good news is that we are seeing the best levels of sales since the start of the pandemic. As installers, now is the time work together in friendly competition and find that the combined volume of the marketplace gives you the power.
SolarWakeup Is Hiring. Early bird gets the worm, a job posting will be going live next week for inside sales at SolarWakeup. If you know someone interested or interested yourself, send me a note.
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Yann