This is your SolarWakeup for March 17th, 2020
Testing The Impact. The only way we can understand the depth and duration of the coronavirus impact on the solar market is to track the four markers: deals signed, loans closed, permits approved and projects installed. Through the SolarWakeup survey tracker and partnerships with key analytics firms, we will guide you through this. While I can deliver the data, I can’t make it up and your participation is key. We need the collective us to share information so that the data becomes most useful. The goal is to deliver weekly analytics in a way that helps you adjust your metrics. For example, when you have the first good week after the lull, is it just you or the entire market? If you see others are also doing better, you will feel more inclined to get back at it at full strength. That’s the goal, isolate quickly and then get back after it. Here is the link to this week’s tracker
Cities Shelter In Place. You may have heard that cities in and around San Francisco have a public health order to shelter in place. The headline is underpinned by details that are important to the solar industry. Let me preface with, if you can do your job from home, please do so for as long as you can. There is an exclusion for two purposes, essential businesses and minimum business operations for which necessary employees can continue working while maintaining safe distances to stop the spread. For Bay Area solar installers with a backlog of solar plus storage systems, it is up to you to determine the importance you play in advance of the wildfire season. My point is that solar will not stop because the Bay Area is working from home, our work is essential to the future of this Country because while corona may be the now problem, climate change remains as important as ever.
Bullish On Solar. Before the market opens today, there looks to be a nice bounce after yesterday’s massive drop. Losing over 12% and reaching the all-time high on the VIX yesterday, I see positive signs on the horizon after we get through some difficult times. The solar names have been beaten down, some of them trading at 50% of the price of a few weeks ago. Here’s the question you want to ask yourself; 5 years from now, will there be more solar installed on homes, buildings and farmland or less? If you agree with me, get ready to get invested because I’m bullish on solar.
Bailouts Are Coming. The airline trade association is asking for $25billion in grants and $25billion in zero interest loans while the casinos are also in DC ringing the bell. Their direct line to the White House prompted a Trump tweet, “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!” I’ve got some asks to attach to the bill.
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Yann
This is your SolarWakeup for March 16th, 2020
Social Distancing. Before we get into the headlines and solar market, let’s take a step back to recognize the gravity of the current situation. Now that it has reached the pandemic levels and changed everything about our everyday lives, we realize that what we do in normal times relies on a level of stability that currently does not exist. In the hopes of getting back to normal as fast as possible do your part and stay away from others as much as possible, there are plenty of infographics that show you what happens when people isolate and stop the spread of the virus. Not only will things get back to normal you will likely help save some lives at the same time. If you need some additional pressure of what happens when the ‘flu’ spreads across the globe, read this 1997 piece by Malcom Gladwell about the Spanish Flu.
Let’s Track The Delays. Like everything in the economy right now, there is going to be a pause to growth as people stay home to isolate and stop the spread of COVID-19. With the longer cycles of utility scale and C&I to be less affected by the short term, SolarWakeup is going to track any slowdown that may occur. This survey is meant for residential solar installers given that is where 60% of the solar jobs sit and there are weekly/daily sales, loan closings and installations. This will give us a tracking view of the market and provide the feedback we need to make our business decisions. Please take 5 minutes and fill out this survey if you are a residential installer, if you are not an installer please send it to a few that you know. This is the network effect of data that helps us all. Here is the link.
The Positive Outlook. While the CDC has asked for society to stop gathering in groups greater than 50 for the next 8 weeks, I look at the positive. 8 weeks is achievable and we should look at this in a positive way. The CDC could have said longer and there may be a few weeks coming up where we’re asked to stay home altogether. The solar market was going to grow by over 25% this year, which means that ever losing 8 weeks would mean we can rebound and catch up. With the fed rate dropping to zero, we may see better rates for solar loans across all market segments creating opportunity to scale everywhere. I’m optimistic that we will do the right thing as a society and come out ready to do big things.
Let Solar Help. Many of you may be going through business hurdles through this pandemic. I can’t promise that we can help everyone but let me speak on behalf of the industry that if there are issues or questions that are hurting your business, please let me know and I’ll do my best to advise or put you in contact with someone that could be helpful. My email is yann@solarwakeup.com.
The Survey. Don’t forget to participate in the survey and please share this tweet to get it out as much as possible.
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Yann
This is your SolarWakeup for March 13th, 2020
Pre-Corona Survey. Here are the highlights of the market survey released this week, answers coming between March 10th-11th. Respondents ranged from installers (35%), manufacturers (15%) and developers (25%). You covered every market in the Country with half of you doing business in California but MA (45%), NJ (38%), CT (31%), FL (27%) and AZ (27%) were also represented.
Q1 Improvement. While 25% of you saw no improvement in Q1 over last year, 55% of respondents were up in the first quarter over last year.
The Corona First Take. This is where timing of the survey is important. All of the responses came before March Madness, NBA, NHL, MLS and little league games were canceled due to the pandemic. 62% of the answers said that coronavirus had no impact on your Q1 sales and 48% said that you are not adjusting the Q2 forecast. My assumption is that a survey next week would have different numbers. 39% of you are adjusting the forecast by 0-20% downward.
What You’re Doing. Many of you shared with your actions in anticipation of which the most two most common were: no travel and work from home. Some also highlighted that society will now learn to wash hands once again. I’m interested to learn what companies are doing across the industry to manage their business through the crisis and if there are any changes to the economic business model of the sector. Please take your time to send your ideas and concerns to yann@solarwakeup.com, together we will manage through this.
Looking Ahead. There are going to be more questions than answers over the next week while the world settles into the reality that the virus is spreading everywhere. Without being hysteric, the way to solve the spread or flatten the curve is to isolate for as long as possible. Expect companies to have as many people as possible working from home while doing their best to keep moving business forward. I will circulate another survey next week and check the pulse of the industry. Typically I look to have podcast interviews that have some longevity to them but I will likely do a few interviews on this topic in the coming weeks to give you critical information for your business.
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Yann
This is your SolarWakeup for March 12th, 2020
Market Survey Pre-Read. As we get through the many responses here are some early data points. 90% of you are somewhat or very concerned about coronavirus and more than 50% of you are adjusting your Q2 forecast downward. The survey appears to have come too early to find measurable change in consumer behavior or changes to pricing in systems, modules or other hardware. More data from the survey coming tomorrow including what steps respondents are taking to keep their business operational.
DC Quick Read. The bill of bi-partisan bills in the Senate was soaked in mediocrity that it failed to get the 60 votes it needed to get out of filibuster. We now wait to see what happens with the bailout, stimulus legislation that is circulating between the White House and Congress. The White House is floating headlines for oil and gas stimulus to see where the public gets excited including a payroll tax cut that moved the markets up on Tuesday while the House is floating a paid sick leave bill before their weeklong recess coming up. Apparently we don’t know what we don’t know so let’s wait and see.
A Trade Letter. Yesterday 140 companies signed on to another letter to the White House asking for tariff related relief, read the letter in the link in the 3rd story today.
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Yann
This is your SolarWakeup for March 11th, 2020
Don’t Forget The Survey. One more day to get your survey response in, it takes 3 minutes and helps the entire industry. Here is the link
Solar Power Power. DC is going to pass a stimulus bill in the coming weeks to deal with the economic effects of corona and the oil price wars. Focusing on the second one, oil producers across the US will either stop production or lose money with the low oil price that’s now in the market. The White House is floating and the Senate will try to push into the stimulus bill a bailout or tax credit for oil companies. This is going to be the moment of truth for solar advocates in DC, does solar have any political influence that translates into results? The analysis of that question will be black and white, either the ITC returns and gets extended or solar is left out of the bill. There will be a bill and the answer will be yes or no when it comes to solar.
The Network Effect. The dealer network is a new battleground in residential solar. Module OEMs and financing companies are battling for the primary value creator for solar installers across the Country. At the same time, those that should have a bigger dealer network are underestimating the value that they can provide and in return receive from the dealers.
The Battle Is On. The original dealer network came from SunPower, so powerful that the company’s partners rebranded to SunPower by. Loan companies followed suit, Mosaic taking the lead and Sunnova quickly joining the network creation which made sense given the financial relationship that exists between the installer, homeowner and loan provider. Module OEMs have a network of platinum or elite installers but the relationship is a bit looser at this point, but don’t sleep on this.
Control Of Sales Levers. Yesterday after market close, Vivint Solar released their fourth quarter earnings and held their conference call. The quote of the call was “we like the control of sales” referring to the company’s direct to consumer sales force that allows the company to decide where and how to sell solar. While Vivint believes that they can grow faster, they don’t want to grow for growth’s sake and keep their focus on markets where they can make money and grow faster than the rest of the market calling out MA, NJ and CA. How do you control your sales levers?
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Yann
This is your SolarWakeup for March 10th, 2020
The Market Survey (Click Here). This is your opportunity to participate in a community survey about the current state of solar. While many of us came into Q1 with great anticipation for a record 2020, there have been a few curveballs thrown at us including a global public health crisis that will likely impact us personally in many ways. At the same time we are left with many questions and few answers on what to do. My hope is that we share our individual viewpoints and try to find the best way to move forward. Please share openly so that your industry colleagues can learn and collaborate. Your answers are confidential. Results of the survey will be shared as early as Friday if enough people respond right away, time is of the essence so please take 5 minutes now.
Climate Change Blinders. One of the feelings I’ve been having about coronavirus is that I just want to fast forward and come out with the best possible outcome on the other end. In some ways it reminds me of hurricane preparation, should you put up shutters, buy food and water for two weeks, get a generator, evacuate; and when you are finished with the preparations the hurricane turns and goes another way. With corona it has a similar feeling because what type of preparation should you do, especially when you don’t understand why there is no rice left on the grocery store shelves. Climate change has the opposite problem, we know what to do and what the catastrophic results of inaction could be but we don’t have the ability to grasp the scale of our needed action. The political and personal willpower doesn’t exist today because we assume that the catastrophe is beyond our time span of discretion.
Innovation Among Us. Much like the solar roads project, I like when companies push the envelope into a contrarian perspective. GAF Energy has a thesis that solar will be installed in a BIPV method at the same time as the new roof so that the roofer sells both systems at the same time at a much smaller acquisition cost than solar has today. As an executive in the racking industry, this obviously pushes my thinking in a way that is uncomfortable today. That being said, this is clearly a 20 year transition from one to the other that will get us all to innovate together.
The ISO-NE Queue. 95% of the 21GW in the ISO-NE queue are wind, solar and battery projects. From a grid operation standpoint, it would be crucial to move projects to NTP even if that means putting an operating date out into the future. Developers need time and resources to start construction and ISO-NE needs to get itself acquainted with the process. From my standpoint I would love to see a process that lets developers future bid NTP dates, how great would it be to see a solar plus 8 hours of storage offer (with collateral) for a 2026 placed in service date?
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This is your SolarWakeup for March 9th, 2020
Covering Corona. I am as much in the dark about what is to come or what to do in our business when it comes to dealing with the coronavirus. There is a humanitarian aspect to the spread of the virus that is best covered by others. My hope is that I can bring together the wisdom of the crowd. This week, I will circulate a survey and ask you to participate so that we can learn from each other about what we are doing as an industry. I hope to learn from you about what you’re seeing in consumer behavior and how you are preparing. More to come.
Oil Wars. The headlines are busy this weekend, stock market futures have triggered a stop to stop a free fall ahead of the open and oil is trading down almost 40% from Friday morning’s price. While global uncertainty is driving people into their corners, OPEC and Russia have a disagreement that caused the Saudis to increase production and lower global pricing. Maybe it’s time to charge our cars with solar instead.
The Good News. Virginia is joining the yearlong stampede to 100% policies enacted by States around the Country. Some estimates have the impact at an increase of more than 50GW of solar nationally. That means that the policies pushed by groups at the State level, led by local installers and pushed by homeowners that went solar are now helping the entire solar industry. I’ll restate this, grassroots solar supporters have pushed more solar in the US in the past year than ever before. This isn’t a statement about us versus them or me versus you. It’s a statement meant to create clarity for those that investment into DG or grassroots is a waste. Reality is that $1 into either of those segments creates 100X the impact than another report into the tariff impact.
Looking Ahead. This week we will get the earnings report from Vivint Solar that gives us the comparison between them, Sunrun and Sunnova and a great look into the residential solar market. Not a great week to have an earnings update but the data is from Q4 which will put a bow on the great 2019. I’m looking to hear whether Vivint Solar says anything about a dealer network, more thoughts on this topic soon.
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Yann
This is your SolarWakeup for March 6th, 2020
DC Is Watching. Folks in the White House and those trying to get into 1600 Penn read the same articles then we are. In this case, it’s the impact of climate change on the upcoming election from the perspective of the leaders at Axios. Agree or disagree with the opinion, know what the insiders are thinking.
A Missed Opportunity. Without many of your realizing, a major energy bill is gaining traction with the potential of passage. Senators Murkowski and Manchin brought together several dozen policy proposals that had bipartisan support and got that bill to be debated on the senate floor. Senator Wyden told attendees at an ACORE event that including tax credit extensions is highly unlikely. This means that less than a year after solar touted major inroads with republicans, it has no ability to get support on a bipartisan basis which means the ITC loss talking point is just that, a talking point. It also means that it is time to change tactics, because the methods of the past aren’t working. Second, the house could still scuttle the bill altogether by demanding inclusion of tax credits and building codes as a must have. While it kills some energy policies that are interesting, once those bills get passed it eliminates this vehicle in the future. If you are so inclined, call your member of Congress and have your voice heard.
Contactor Data. Solar installers now have a way to get themselves better data for their business while seeing how they compare to their local competition. Ohm Analytics tracks solar installations through permit data and recently released a contractor portal where you can sign up for free. Contractors provide confirmation of their data in return get to see what is going on in the market. Give it a look here.
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Yann
This is your SolarWakeup for March 5th, 2020
Little Markets, Big Opportunity. The Netherlands represent less than 3% of the European population but in a surprise move, the already great solar market is doubling down on solar by doubling the rebate for installing solar. This is a massive sign of support for distributed generation and an overt statement that everyone should go solar. Imagine if the US supported each block of 17 million people with the equivalent of $4billion in support.
Impact Of The Day. The growth in Netherlands is a sign of the broader market. This is merely the start of the market in Europe that is driving massive growth of solar over the next decade and more. If more than 1GW of rooftop solar gets installed in the Netherlands this year, imagine what this means to every other Country in Europe and around the world. It also reiterates the importance of geographic diversity for solar companies. Some markets may normalize while others grow, whether it’s a Country in Europe or a State in the US. Companies that have geographic diversity can whether potential risks while also having the necessary infrastructure to take advantage of the opportunities that come up.
The Banks Are Lending. Energy storage, EV infrastructure or solar on homes are a growing asset base for many banks or other asset based lenders. This is creating a new level of importance in the market around bankability. Module OEMs have long shown their bankability reports and touted their BNEF tier 1 status. This is also enhancing value in the energy storage market by the majors like LG Chem and Samsung. Investors are also becoming pickier on inverter selection given the decade of changes in the market in that segment, residential solar may as well be a duopoly at this point between Enphase and Solaredge. Loan companies have limited their bankability and code-compliance to modules and inverters only but are learning more about the importance of the mounting and racking equipment installed on customers homes. With billions going into residential solar per year now, expect more scrutiny on product and installation methods used by your businesses.
Continued Growth Of Load. General Motors showed analysts 10 versions of their electric cars ranging from 50 to 200kWh. EVs make up 99% of what we talk about in vehicles but only 1% of total sales. Imagine the change in consumer behavior when every GM dealership has sales people incentivized to actually sell electric cars and trained on the nuance of owning one. EV owners want to charge at the store and at the office, that makes it easiest for them and eliminates the assumed range anxiety that is mostly only reality in the minds of non-EV owners. Watch this space…
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Yann
This is your SolarWakeup for March 4th, 2020
California Dreamin’. Super Tuesday has come and gone and California is going to take its time to give us the results. At the time of this writing it looks like Biden may come out in the lead when all the results are in though the expectations were that Sanders would be ahead by at least 50 pledged delegates. For solar, there is going to be a discussion over the next few months what the trade environment would look like in a Sanders administration versus how aggressive a Biden administration would be on energy topics.
Big Day For Vote Solar. Vote Solar has been actively making its case to advance solar policies in Florida and New Mexico. In Florida the goal was to make the largest community solar program accessible to low income families albeit owned by the utility. First getting the proposal expanded to be more attractive to more people and then having the program approved by the PSC. In New Mexico, the Governor will sign a revival to a modest tax credit which will make solar a little bit more attractive for homeowners, another win for solar.
Hold Your Gas Powered Horses. As Wall Street sours on coal, it’s too far to say that investors are giving up natural gas in favor of utilities. Investors for those two buckets are not interchangeable for one and the sustained low natural gas prices may be what is causing investors to park their money elsewhere. At the same time, investors have an unlimited appetite for renewable energy infrastructure investments. The limitation to total deployment remains project pipelines.
Look Out Global DG. The renaissance happening across the world is happening behind the meter. Consumers have long wanted to add solar and ROI was typically the biggest limitation to that effort. With the global price of solar more likely than not to be less than the cost of the grid, DG solar is booming in the US and abroad. While DG is not without complication, it is ripe to be disrupted in more ways than one and ready to get much bigger than anyone is forecasting.
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Yann