This is your SolarWakeup for May 12th, 2020
Post Pandemic Impact. In reality the entire rundown today could have been some version of ‘COVID recovery needs to be climate solution’. This is the overlap of politics, regulations and economics that has an impact on our work beyond the recovery. Realists will say, nothing will change, I even said it to someone on a call yesterday. But the answer is that there is more to politics than what Senator McConnell wants because 50 States also look to find a way to get Americans back to work. Permitting can be a federal act of congress or it could be driven by your state and local leaders as one example.
Buffett’s Day In The Sun. A week after Buffett said he regrets his $10billion oil investment there is a double headline day for Berkshire, both from an off taker perspective. NV Energy’s project with Arevia Power got the green light from the feds while Pacificorp is readying a huge RFP for renewables. While this isn’t the sunniest region for the most part, there is no doubt that the storage aspect of the RFP is going to be breaking records and could make for interesting timelines and modeling around the ITC.
It’s a Global Market. I looked at the global inverter market share and had to do a double take for two reasons. First, 2019 found 126GW of solar installed around the world. Second, there are a lot of names on the list that don’t make a mark in the US market. That either means there is much more upside for US leaders abroad or for the market share list in the US to change.
Talking Solar. Join me next Tuesday on a call with Roth Capital’s Phil Shen. This is the 4th call we’ve had together since the pandemic started and created a lot of clarity for those that dialed in including a Q&A segment. You can register for the free call here.
Sending Good Thoughts. All of you know Frank Andorka, long time solar writer and former rock star solar correspondent at SolarWakeup. Frank has been in a battle with COVID-19 for over a month including a multi-week stay in the ICU near his home in Ohio. Frank recently moved out of the ICU but remains in the hospital. Please keep Frank in your thoughts and prayers, remembering that this pandemic is indeed close to us all in one way or another. Find him on Facebook, if you wish to reach out directly and leave him a kind note.
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Yann
This is your SolarWakeup for May 11th, 2020
My Update. Just over 22 months ago I joined the team at Quick Mount and moved my family to the Bay Area. After 13 years developing, financing and leading teams in C&I and utility scale solar, I joined the residential solar segment. Quick Mount revolutionized the mounting space going back to 2006 and in a competitive market I was asked to get Quick Mount back to its leadership position. What originally was estimated to be a 3 year process, ended up in a sale of the company in 14 months from the moment I arrived. The team was best in class and ownership trusted us to grow it with great additions and success followed with a new strategy implemented. With the turnaround and sale complete, I remained with the acquiring company to help with the integration and now is the time to move on to find the next great company in solar. The past 2 years have been the greatest time in my professional career and a real sign of the maturity in solar today. In the meantime there will be time to catch up with family and consulting while the opportunities present themselves as they have in the past.
The People. If I learned one thing in the last 2 years it is that the people in residential solar are amazing and what’s proof in the past month is that their resilience is like no other. I’m overjoyed to have had a chance to work with this group of solar professionals and look forward to doing much more with you.
The Market. I published my bullish outlook of the market a few weeks ago which has now been confirmed by half a dozen public companies during their earnings calls. In my interview with Palmetto’s CEO and President we talked about how the company had some of their best sales in the past month and I predicted that 2020 wasn’t going to be a down year compared to 2019. I believe that not only is 2020 going to be a better year than expected but I see great promise in the years ahead, investors are saying the same by buying in on the company stocks. Whether it is public or private markets, solar’s investment environment has never been better.
SolarWakeup. SolarWakeup will continue publishing the newsletter and expand into serving the solar market with reports and information. Many of you have already participated in the module index which will expand its reach and value that it creates for manufacturers and installers alike. Just like Expedia expanded air travel, so will a transparent marketplace for installers. You already see manufacturers expanding clarity with online stores and dealer networks as proof of the path forward. More to come on this tomorrow.
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Yann
This is your SolarWakeup for May 8th, 2020
Virtual Edition Rewind. You can catch yesterday’s virtual edition of SolarWakeup Live! About virtual sales and digital operations here. Thanks for all that joined.
Big News Monday. Stay tuned for some big news on Monday. In the meantime, here is the one thing that caught my eye in reviewing the earnings slides for each report outlining the performance in Q1 this year. Note that COVID impact largely started with two weeks left in the quarter and the commentary is more indicative of what the future holds. That being said, there is a consistent message that Q2 will be 30% of 2019 and we have already hit bottom.
Sunrun. 2020 brings thus far the highest percentage of leases as a function of total projects, back to early 2018 levels. Q1 this year was bigger than Q2 2019. Slides.
Vivint Solar. The company also exceeded Q2 of 2019 and every quarter in 2018. System installation cost are the highest they’ve been in years, unsure what would have caused that. Company now has cumulatively installed 1.3GW of solar on homes. Slides.
SunPower. Slides are showing the company in a quasi split environment, anticipating the manufacturing to go away in 2020 to the Maxeon entity. The manufacturing plants are either back up and running or scheduled to. Balance sheet still shows the 2 million shares of Enphase the company owns from the sale of Solarbridge a few years ago. Note to SunPower execs, anything you want to do for my Solarbridge inverters on my house circa 2012 would be appreciated. Slides
Enphase. In Q1 2019 the company generated net income of $2.7million. In Q1 2020 that increased to $68million with margins at almost 40%. The stock is trading nearly at pre-COVID levels while upside is still huge given revenues are less than half that of Solaredge and GTM reports market share to be about half in US residential. Slides
Solaredge. The company shipped more optimizers and inverters and delivered higher revenues in Q1 2020 than in Q4 2019. In this quarter that company shipped 1.8GW of inverters. Slides
First Solar. Here’s some scale for you, the First Solar pipeline is over 12GW now and their module roadmap presents a 500W module in the near future. Not too bad for low efficiency thin film. The manufacturing plants are up and running at nearly full capacity. Slides
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Yann
This is your SolarWakeup for May 7th, 2020
Last Push. Fill out the survey which closes today at noon. We’ll be releasing the data next Monday.
Podcast. Would love to hear your thoughts on the podcast, where we focus on the content and not so much on the production. A great episode with a big prediction from me at the end, check it out here, rate and subscribe.
Cleanup At Oil Well #4. Oil wells are apparently being abandoned by companies and unfortunately causing many to lose their jobs. It is also causing environmental disasters in rural communities across the Country which are asking for government to hire those workers and cap the wells. Right after they do that, they should pay them to go through a solar training program and we can help place them into installation jobs in solar.
Solaredge and Sunrun Report Earnings. A trend is coming out in the earnings calls that the bottom in residential solar may be behind us and Q3 could be better than expected. A few more companies need to report so we get the whole picture but I tend to agree with the positive sentiment going into the second half of the year. The difference will be seen in how companies adapt to the way of working in their areas and how well their building departments react.
What’s Your Virtual Future? I am starting to hear from many of you that working from home is the long term normal for you regardless of the shelter in place rules. Now that you have seen how it is possible, as soon as the kids go back to school, you don’t want it any other way. This is also going to impact the conference circuit we’ve been on in the past decade. One trade show, Midwest Solar Expo is going virtual. I toured the concept yesterday and I was impressed. It’s an environment where you can walk through exhibits and auditoriums like you do at shows. The coolest part is the 3D sound of conversations as you walk through the floor.
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Yann
This is your SolarWakeup for May 6th, 2020
Get Your Survey On. A great response yesterday from many of you, let’s get one more push for the tracking survey to see how far from the bottom we have bounced back from. Please contribute to the survey before we close this tomorrow.
New Pod and Live! Last week I interviewed the CEO and President from Palmetto Clean Technology. As a mostly digital and remote solar company that supports residential solar execution, I wanted to see how the pandemic was impacting their operation and what their perspective was going forward. We also talk about their launch of a working capital solution. Don’t forget to subscribe and rate the podcast. You can also join me live! to talk about digitizing your business operations on Thursday morning pacific time, register here.
Impact Of COVID. I am starting to gather my thoughts on the market piece by piece which I will share more in the next week. This week we have earnings calls from solar companies including Enphase and Solaredge which give us a really good indication of where we are. Yesterday Enphase talked about Q1 which was stronger than Wall Street expected and guided to a COVID impacted Q2. During the call they mentioned what we at SolarWakeup have seen in the survey, we’ve hit the bottom and rebuilding the pipeline, backlog and getting back to work. More to come on this.
A New Loan Player. It’s the most obvious move in solar that you may be surprised to hear it. SunPower raised $1billion to finance loans and leases originated by their top of class dealer network. Partnering with Tech Credit Union, a long time solar player, SunPower will be lowering their financing costs and possibly see upside in any potential securitizations down the line. I will be interested to see how much of the financing efficiency flows down to the dealers when compared to traditional loan providers.
Electricity As The Indicator. Italy is seeing an uptick in energy consumption, a reminder that overall consumption is an economic indicator and unfortunately also a precursor to increase in pollution. How much goes back to the same old ways versus a new normal?
What Does Local Mean? Joel Makower from GreenBiz talks about an interesting topic that has personally spent a lot of time in my mind. I moved to the Bay Area almost two years ago to be close to the center of solar, being local to many of you. Now we’re close but I may as well be sitting in Paris. The opposite is also true, traveling to see family in Florida was easy 2 months ago and something we did often. Will I get on another airplane this year? Will you? At the end of the day, the most local of things in my life has been this newsletter, the relationships have no withered and actually grew in the past 2 months. Today is a big day as yesterday we reached 5,000 subscribers and I don’t take it for granted that every day a huge auditorium full of dedicated solar professionals reads these words.
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Yann
This is your SolarWakeup for May 5th, 2020
Survey #6. Dare I say it? You all are slacking with the survey contributions. They went from weekly to bi-weekly. Here is an example of how the data gets used: two weeks in a row your contributions say that building departments are slowing their use of digital solutions and not getting you permits. Regulators, who read this newsletter, contact me to see who is doing a good job and I introduce folks that then deliver digital permitting. At the same time, people with access to legislators are retelling your aggregated story to push for legislative solutions. My point is that my opinion doesn’t get the job done, your voice needs to come out. Fill out the survey.
Thursday’s Webinar. We have less than 20 seats left for the webinar on digital and virtual lead generation to sales solutions. If you are trying to understand what goes into having a digital operating system for your company and investing more into lead generation, join us on Thursday. You can register here
Resi Capital. The survey has yet to say that resi solar is having a capital issue for loans or leases and a new capital raise by Spruce seems to second that motion. Great to see
IRP Growth. Dominion adjusted their long term IRP which changes the game for their solar and storage projections. Early reporting doesn’t show what this means for their coal and gas forecast nor how this is impacted by COVID related changes in consumer behavior.
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Yann
This is your SolarWakeup for May 4th, 2020
An Index Is Launched. We did a soft launch of the solar module index on Friday to the first 25 installers that contributed. Would it surprise you that the same module sells at a spread of 25% depending on who bought it? On average the delta was over 15% from high to low. For May, SolarWakeup is opening this up to all residential installers to participate. The hesitation of providing your information is understood, it is entirely confidential. In return you see what others are paying and arms you with the information you need to negotiate better pricing and that is the intention of everything I do at SolarWakeup. I want the installers to be armed with tools and data that make their businesses thrive. To participate in the index, to read more about it.
Lead Generation In Focus. An interesting thing happened over the past few weeks. The solar industry hit a bottom in sales decline and then bounced back up. While we are still below pre-COVID levels, there is a path back to the growth plan we had going into the year. The path is different now though but companies are adapting to the normal and restarted their lead generation investments. That is the focus of this week’s tracking survey, open now for participation.
A Safer Power Grid. On Friday, Trump issues an executive order aimed to protect the power grid from foreign adversaries. The executive order highlights the bulk-power systems in critical infrastructure and gives the Department of Energy some power to get involved. As most of your legal teams have highlighted, we don’t really know what this means for our industry but it could be big.
Big Storage. Not withstanding the potential impact of the executive order mentioned above, SCE signed a big storage deal for 770MW of 4-hour battery if the story is accurate. This is scheduled to come online in 2021 and on the end of Tesla’s earning call saying that they don’t have enough storage capacity to meet the demand growth. More to come on this including a podcast I recorded about storage manufacturing, costs and supply chain. You can hear that by searching for SolarWakeup in your podcast app, subscribing and rating.
Webinars For All. B2B marketing is reaching a new level because trade shows and in person meetings are no longer available and I don’t think that’s such a bad idea. SolarWakeup will also take our in person events digital and host at least a monthly webinar with interesting speakers on topics relevant to your business. Many of those content ideas come from the feedback I get from you when you email me or write it on the survey. The first zoom SolarWakeup Live is with Andrew Birch, c0-founder of Sungevity and co-founder of OpenSolar. We’re spending an hour taking your questions and talking about digital solar installer operations. Register here.
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Yann
This is your SolarWakeup for May 1st, 2020
The Burden Of Electricity. It’s a fact that the current situation is creating increased pressure on inequality. From schooling children without internet to the cost of electricity, everything is exacerbated. Low income families spend more of their income on utilities by a large percentage than higher income families. Solar can play a vital role in helping resolve this problem through community solar or utility programs. Glad to see Vote Solar highlighting this issue.
Big Oil Has ‘Concerns’. There is an internal oil dialogue happening in public right now. API and large oil companies are concerned about socializing the losses through government intervention. Smaller companies are saying help us or we go under. This comes as the Federal Reserve opens possible avenues to help the industry with less oversight which is really what the argument is about. It will be important for members of Congress to ensure that the stimulus for energy companies helps all parts of the economy because we don’t want to be picking winners and losers do we?
Storage Peaking. BNEF published it’s updated LCOE report and highlighted the competitiveness of solar plus storage with peaking generation. Peaking plants according to BNEF generate 15% to 20% of the time which is easily achieved with storage developments. My additional input on this is that 5 years from now it will not even be close. We are rapidly approaching batteries under $100/kWh and that will continue to drop much like solar has. The key is how developers and asset owners decide to push the implementation of those assets.
Inverter Market Outlook. I’ve become increasingly interested in how the market decides the inverter market share across the Country. We have what I would consider a momentary duopoly in the US in residential solar but as market valuations increase, this will change in my opinion. Look at the global market share and it looks different than what you would think.
Survey Is Out. An early release for the survey covering the week of April 27th. Participate to get the full results next week.
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Yann
This is your SolarWakeup for April 30th, 2020
Get The House In Order. As we near the 8 week mark of the shelter in place orders and a new normal, it is understandable for people to expect others to adapt like everyone has. In this case I am talking about building departments and utilities, particularly PG&E. The solar industry has been patient and working with all involved to make solar installations safe. Meanwhile, PG&E was slammed in court yesterday regarding their operations around tree trimming and wire safety. The future of PG&E should be like a highway operator. The roads need to be safe and run smoothly with local exits and high speed left lanes. When it comes to toll operations, the company needs to prioritize the speed of access to the generators that match the goals set forth by the State. The State should incentivize the company to do this well and everyone wins.
Safe Solar Sales And Installs. Being allowed to get back to work is phase I of the return that centers around building out the backlog. Phase II is the pivot many are figuring out right now. One of those things is how to generate more leads like building out digital content and driving folks to your lead generation forms. Managing this lead flow all the way through project installation without ever seeing the customer means a change to your installation company’s operating system. Next week I am hosting a live webinar with Open Solar’s Andrew Birch to ask him about his experience. In 2008, in an SPI beer garden Birchy and Danny Kennedy showed me this crazy idea on the first Apple iPad where you could type your address on a map and they would send back a layout. That was v1 of digital solar sales. You can register for the webinar here, it is limited to 100 people.
Time Of Opportunity. Buying solar assets is an art that matches sellers somewhere between desperation and greed and buyers with cash burning a hole in their pockets feeling they would miss out on yet another deal. Someone once told me (okay, it was more than once) that developers always hold assets beyond peak value and now buyers are pouncing on opportunities across the market.
It’s Valuable, Not Cheap. Headlines are making the circuit today with the cheapest solar in history. Like most reviews of solar policy across the world, solar is routinely undervalued and underpriced. That’s why many storage developers are getting away from contracted cash flows and working more like generation IPPs.
The RTOs. New Jersey had threatened earlier and now Maryland is saying they may leave PJM over the MOPR overstep by FERC. The FERC chair is urging patience and caution but maybe he should take these threats more seriously. Showdown to continue…
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Yann
This is your SolarWakeup for April 29th, 2020
Essential Solar Advocacy. Today’s before and after comes thanks to the hard work of your friends at CALSSA. The California Energy Commission has formally published guidance that solar is essential as long as installers adhere to safety guidance. This is an important step for our industry to get back to work, helping people save money and become more resilient leading up to wildfire and hurricane seasons. While many of the fundraising events have had to be canceled, now is the time for you to join CALSSA so they can continue to advocate for your business. Without this guidance many installers would still have to remain closed easily making your investment worthwhile. To read the guidance you can click here, if you need an intro to Carter for membership, hit reply and I’ll get you one quickly.
Schools In Fall. Not all my questions to you need to be on solar and maybe this is a community survey that helps us all, at least those with kids. As you know, I have three kids, two of whom are in elementary school. The past few months has been something between Survivor, Amazing Race and The Real World. How are you coping with this and the norm of homeschooling the kids with two hours of zoom class per week? Part of me is trying to imagine this lasting through 2020 and wonder if anyone has good tips that don’t involve tying the kids to the chair.
Hawaii Sends Another Postcard. Rooftop solar in Hawaii is up 40% year over year and channel checks on the island confirm that interest remains strong. With 100% attachment rate of storage to solar, Hawaii’s solar companies may be the best at explaining how solar will be sold in the future. It’s nice to hear positives in the local economy coming from the island because the picture that Senator Schatz painted on Pod Save America was dire, 30% unemployment, with no tourism to speak of. Wishing our friends on the islands all the best.
What’s Your Impact. If you’re wondering what politicians are doing for solar and your business in the next piece of legislation, stimulus or bailout then you have to ask yourself what you asked them for. Their job isn’t to guess what you need. They are looking to hear and read about your story, the impact to your employees and the market you serve. Tom Matzzie described a good example of a solar installer in New York during our discussion. If you’re an installer in San Francisco, you should be talking to Pelosi’s office about the market and how it has impacted you. Same goes to everyone else across the Country.
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Yann