This is your SolarWakeup for March 31st, 2020
Tracking Survey. This morning I am joining Roth Capital on a conference call with investors to discuss the results of the past two week’s tracking survey. If you’re interested in the results from this week, fill out your responses today. This takes 60 seconds and provides feedback about the market and legislators looking to see what to focus on. Link.
Trouble In Texas. Oil companies are having issues keeping their businesses afloat. This comes due to a double dilemma of Coronavirus and OPEC’s price slashing. Oil prices are down dramatically and oil companies want a bailout in the form of a major purchase by the federal government and likely more.
Setting The Stage. The problem with the bailout, a $3billion purchase adding to the strategic petroleum reserve, is that Congress needs to approve it and didn’t include it in the last stimulus bill. Much like the 2016 ITC extension which was traded for the oil embargo lifting, democrats in Congress are calling for solar to also get support alongside oil.
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Yann
This is your SolarWakeup for March 30th, 2020
Discussing The Market. Join me tomorrow in a discussion with Roth Capital’s Philip Shen about the SolarWakeup Tracking Survey results. If you’re interested in joining and reading Phil’s excellent coverage of the solar universe and public solar companies, email him at pshen@roth.com.
Adjusting The Forecast. WoodMac released an adjustment to the 2020 forecast for distributed solar. Their belief is that the 2020 forecast needs to be adjusted down by 31%, likely putting 2020 down from 2019. The public analysis doesn’t differentiate between residential and commercial but my view is that this is conservative and assumes a total shutdown for 4 months. The data we are seeing in our surveys and conversations with the market is one of resilience. Yes, 2020 won’t be 25% growth from last year but solar installers are finding ways to continue selling and using self-reliance as a purchasing motivation. We’ll get more into remote sales over the next few surveys and how you are adjusting the forecast.
Building Department Insight. Last week’s tracking survey showed a potential problem in the market with building departments closing. On the other hand, there has been a lot of talk about FaceTime inspections and email permitting so let’s see what the rest of you are seeing. So in this week’s tracking survey, we ask a few questions on the topic as well as updating the week to week changes. Respondents to the survey get the full data summary in advance of the rest of SolarWakeup subscribers. Click here to participate.
The States and Cities. Here is some reality to everyone in every industry. Cities and States are fighting the pandemic which is costing them money in addition to focus. Unlike the federal government, these bureaucracies can’t print their own currency and don’t operate at a deficit. In fact, they will have to raise debt or tap into emergency pools. This means that solar and renewable goals will take a backseat to the current emergency. My hope is that in package 4 stimulus, Congress includes aid to the local level in some form (treasury debt perhaps).
Preview Of Climate Change. Not to be alarmist but you’ve seen the climate change headline about mass migration or release of gases from the permafrost. Yes, this reads like a Dan Brown novel but there are some scary thoughts of what a global climate change event looks like. Our work is as important as ever, keep up the optimism and energy!
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Yann
This is your SolarWakeup for March 27th, 2020
Sales Continue To Slow. As expected, this week’s SolarWakeup tracking survey shows that sales have dropped compared to pre-corona levels. Installers say that sales are down 33.5%, a deterioration from the 25% reduction our survey showed last week. Anecdotally, a few installers are seeing an opportunity in the market due to their online or telephone based sales process. Installers that relied less on the face to face sales tactics are seeing minor increases in sales volumes.
Installers Prep To Tough It Out. Door to door sales have stopped across the board, with no installer reporting business as usual. With the backlog of projects keeping some installation crews operational, 62% of the installers have already or plan to terminate employees. Next week, we will test this given the loan forgiveness passed by the Senate this if employees are retained.
Another Barrier Arises. While most companies across the country (and many of the respondents) have transitioned to the Zoom economy (including my children and their teachers) building departments were not prepared for not being able to process digital permit sets or inspections. 24.1% of the installers are seeing delayed inspections and 44.8% report that some or all of their building departments are closed. Even if installers are able to sell projects right now, unless building departments move online (touches permitting) projects will wait for things to normalize.
Trade Group Support. Thanks to memos by groups like CALSSA, joining today would mean a lot, installers are considering themselves essential or critical in order to continue installations. 68.9% of them are doing so with over 50% officially labeling themselves as essential.
Survey Results. This week’s survey included responses from 74 companies whose primary markets spanned 20 states. Included in these companies were 29 residential solar installers. Responses spanned from March 23rd to March 26th.
Market Chatter. In discussions this week, companies are saying that they have had record attendance on webinars and software companies are able to guide installers, developers and companies through the digitization of their processes. There are bright spots in the market as the underlying reasons for solar’s success continue to exist.
Next Week. Look out for next week’s survey which opens on Sunday afternoon, as you can see the data is helpful to your business and respondents got many more data points than this short summary.
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Yann
This is your SolarWakeup for March 26th, 2020
Building Departments. Over 60% of this week’s survey respondents say that building departments are either closed or delaying inspections. There are also talks about departments not taking new applications because they aren’t taking hard copies. Just as there is a time to start selling remotely this is also the time to do digital permitting. Instant permits will allow solar to recover from this standstill while also give building departments the process to overcome the current situation. SolarAPP was already in the works in an orderly fashion, I hope that the process and pilot cities is drastically sped up and expanded in light of the current times.
$2.2 Trillion Dollars Unlevered. Honestly, I don’t want to talk about it. In the biggest economic stimulus and bailout by a factor of many, solar didn’t get what it tried to squeeze in. The political gamesmanship was interesting between Schumer and McConnell. Schumer’s leverage was the money needed for the strategic petroleum reserve purchase and pushed for the tax credit extension but it was McConnell’s elevation of the solar ITC that got even solar professionals to think industry went too far at the wrong time. The bailout left the ITC, 1603, storage, safe harbor out with the hopes getting pushed to the next bill, stimulus package #4. This time it wasn’t enough, hard to believe with the trillion dollar price tag.
But Wait. Couple of things to watch, there’s some talk that treasury could be asked to reinstate the 1603 program without new legislation, lawyers were quick to through cold water on that idea however. Late yesterday, Trump signaled that he would find the money for the oil purchase for the SPR by reassigning funds from the Department of Energy. This removes the biggest leverage point in stimulus #4 if Trump is successful.
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Yann
This is your SolarWakeup for March 25th, 2020
Last Day. This week’s survey ends at noon today, head there now and you receive full results tomorrow in a special email. Link
Sell From Home. My FaceTiming comments from yesterday reconnected me with my good friends at SolarGraf. They have some experience and best practices on how solar installers can sell remotely from start to finish. The company is sharing some of those in a blog post and hosting a webinar today as well. Head to the blog if you want to get some of their tips. I’ll share others when I get them. Link
A Deal In The Senate. Forget billions, we’ve graduated to trillions. Early this morning, a handful of Senate negotiators came to terms on the $2trillion stimulus package (#3). At this point the only language that we know of is around small business loans and industry grants/loans plus unemployment benefits. At the time of this writing, there is no word whether the ITC is in this bill. Insiders are hedging success for this bill and more optimistic about ITC being in package #4. What, for how long, with what conditions will all be known when words actually meet paper. No point in being first here, this all takes time. Look to the Senate to vote today and see if the House has to travel back to DC (they’re on recess) if someone objects to unanimous consent.
My Optimistic View. From a market standpoint, solar companies were way too oversold and I got myself back into the market over the past few days. It could go down further but these valuations are more than fair. My position is that years from now the market will be exponentially bigger, better and more mature than today. I’ve been in solar for over 15 years and I feel better even today than ever before in this market. Things are tough but they are tough for everyone, when we come out on the other side of this societal wide crisis, homeowners will want solar on their roofs and farmland. They will want cleaner and cheaper electricity, the fundamentals will not have changed. My future is in this market, no matter what.
Welcome To SolarWakeup. The past few weeks have brought a large number of new subscribers, welcome to the SolarWakeup family. You can reach out to me anytime at yann@solarwakeup.com or contact me on LinkedIn. Like most readers, I work every day in the solar market (selling innovative racking to solar installers) but this platform is a community to works together for the betterment of the solar industry.
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Yann
This is your SolarWakeup for March 24th, 2020
Be Heard. Participate in this crucial survey, this week’s data is showing a large disparity between what is going and where. Maximize the data by joining in.
Trackable Market Data. When coronavirus first hit the US I knew that I wanted to track sentiment and sales on a weekly basis. From sales to install we also have permit data which is usually not tracked in real-time. The best data source for this in the US is my friend Chris from Ohm Analytics. Ohm Analytics has leveraged its data sources and capabilities to track solar activity on a weekly basis. Ohm is providing access to this feature for the time being to help the industry navigate the next several months. Ohm's Weekly Solar Activity Tracker will monitor solar permit and other available records in a sampling of the largest cities and counties in major solar states. This is a major data tracker that Ohm is making available for free for now and should drive you to subscribe to their fuller data set or sign up as a contractor. Thank you to Ohm for making this happen and letting SolarWakeup show it to the market.
A Bill Today? Late last night, negotiators appeared to get closer to a deal in package 3. This package is nearing $2TRILLION dollars and whether the solar ITC is part of it is up to a handful of people. In case you are wondering if it’s part of the discussion, just ask McConnell. He had some choice words about solar.
Are You Facetiming? I want to talk to solar installers still selling but without meeting their customers face to face. Do you have a unique approach or concept? I want to hear about it.
The Essential Industries. In California, many of you asked me about the various orders from County and State officials and where solar installers fit in. The state rules around essential and federal definitions of critical sectors leave room for interpretation, which is why we have strong trade groups like CALSSA to provide guidance. In their well crafted memo, they lay out clear language for you to use for your business. Keep in mind, stay safe and use your judgement, this isn’t a free pass to act like all is normal. While you’re here, representing solar industry isn’t free. If you benefit from California solar and storage policies, join CALSSA and let them know I sent you!
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Yann
This is your SolarWakeup for March 23rd, 2020
Tracking Corona’s Impact. Here is this week’s tracking survey for you to fill out. This is for everyone in the solar industry and it takes 2 minutes. If you fill it out, you get the full set of results. Please take the time and share it with your colleagues as well.
ITC In Play. Over the weekend I sent a special alert and you responded. No link in SolarWakeup history got clicked on more and you forwarded almost 10,000 times to friends and colleagues. Your involvement could mean the difference for solar as Congress addresses a stalemate at the Capitol. The Politico story will be stale by the time you see it but stay tuned to see if solar gets included in the 3rd stimulus bill coming out, likely today. Topping over $1.5Trillion, hard to fathom solar being left out.
Managing Your Business. The CEO of Soligent posted a well crafted powerpoint on things to consider as you run your business. I think Jon makes some important points and it’s worth your time to review his recommendations. At this moment, it’s crucial we all absorb as much information and advice as we can. These are uncharted waters for all of us.
Looking At The EV Future. A bright moment coming out of the shutdown is we get to see what the future looks like. Around the world, pollution is down and dolphins are swimming in the clear waters of Venice. In Los Angeles, there is a clear reduction in pollution in the air, likely caused by the lack of cars. Hence our need to convert to EVs as soon as possible, no cars and EVs are basically the same when it comes to pollution especially when combined with a 100% RPS.
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Moment Of Levity
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Yann
This is your SolarWakeup for March 20th, 2020
Survey Results, Installers. Installers are reporting that closed sales are down 25.1% from their weekly average in Q1, still operating at 74.9% close rates.
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Yann
This is your SolarWakeup for March 19th, 2020
The Permit Problem. According to the SolarWakeup tracking survey, 44% of installers are seeing building department close or delay inspections due to COVID-19. It is understandable that the situation is happening and at the same time an opportune time to talk about how solar should be permitted. Solar permits should be automated and instant, we already have the software tools at our disposal that create the drawings installers need to follow in order to build code compliant solar. If the software were vetted by a building department or state regulator, as long as the installer followed the plans, they should be able to build the system right away. Inspectors could choose to video conference the inspection with the installer or spot check the system at a later date, if the installer fails to do it correctly they would be thrown off the instant permit system and risk losing their license. If there was ever a time to create a digital bridge between solar installers and AHJs, the time is now.
Solar Is An Essential Business. There is a reason that solar installers need to be able to keep working. While sales will transition to remote, phone and video calls, installations are safe to proceed without contamination risk. Imagine if this crisis was happening in a few months when the risks of wildfires start back up? Just yesterday there was a major earthquake in Salt Lake City. Solar installers across the Country are adding solar and storage that make homeowners self-reliant and eliminate the risk of power shutoffs for at risk population. It is crucial that solar continues to install safely while maintaining social distancing. In the Bay Area, most of the counties have put a shelter in place order in force that excludes essential businesses. For me, it is very clear that solar is and should continue to be able to work in order to allow the preparation for wildfire season to continue.
The Problem With The Data. Most of us are feeling a level of uneasiness that we have never felt before, I feel it too. With three kids at home, and the prospects of no school for the next 5 months, I don’t know what happens from here. Here is my biggest problem with all of this, we need bigger data. In this vast country of 300 million people we have 60,000 people tested and 8,700 positives. That’s a terrible data set to make decisions on, for our country, society and industry we need to make the right decision based on the right data. If it means we have to shut everything down for 30 days, so be it but let’s stop messing around without knowing the facts.
Thank You. The first SolarWakeup tracking survey was a success. The results will be published tomorrow and every Friday from here on out. On Sunday each week, you will receive a link to the next survey and I hope more of you decide to participate going forward. Knowing what is happening in the market will get us to a point where we can speak with data to politicians on how they can help us through this troubled time. More to come.
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Yann
This is your SolarWakeup for March 18th, 2020
One Last Chance. Here is the link to this week’s tracker. This survey gives us the baseline, thank you for everyone that already filled it out. At noon today, the survey will close. Responders will get a preview via email tomorrow.
2019 Year In Review. Hard to think about 2019, but it was a record year for distributed generation across the County. Solar grew 23% from 2018 even in the face of tariffs. Residential solar had an impressive 2.8GW and would have absolutely crushed the 3GW in 2020 and may still do so. Community solar, waiting for its major growth year still achieved 500MW in 2019. There is a note in today’s rundown that talks about retail buyers being a key demo in solar, this is what will grow the community solar segment as well. Remember that non-residential includes C&I as well as community solar.
SEIA Comments On Corona. The forecast in the 2019 year in review makes a disclaimer that it does not include any impact by corona. In a separate statement, SEIA said that the 47% growth forecasted will be ratcheted in the coming months as we know the impact. Abby Hopper says it will be a “pretty significant crisis in the solar industry in addition to a significant crisis in the overall economy.”
Is Solar Contrarian? GTM found a gem in the Q4 Sunrun earnings call. On the call CEO Lynn Jurich said that solar may work better in an economic downturn and I agree with her rationale. Assuming the cost of capital, underwriting and liquidity remain in the market and competitive, solar will be able to continue. The only counterpoint, which was hard to predict, is that solar companies that overly rely on selling face to face will have difficulties and need to adjust to the short term changes.
Utility Shutoffs. Almost unanimously, utilities will suspend cutting offer power for non-payment during corona.
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Yann