This is your SolarWakeup for August 26th, 2019

No Contract, No Term, Discovered. After my comments about a no FICO score community solar contract, I heard from many of you that Nexamp was doing just that so I spoke with several members of their executive team last week about their offering. As background, the company is both a developer and owner of community solar assets offering homeowners a contract that is a simple discount to the savings rate without having to run a FICO score. Homeowners are the target through mostly digital marketing and even though the contract has no term and easy cancellation, homeowners have a hard time differentiating between community solar and retail energy providers. After educating the customer, Nexamp has found success in attracting customers as well as financing projects. Financing is made easier since Mitsubishi backs the company for equity, sponsor and tax, but lenders are not charging extra for the lack of FICO. Absent of getting in a room with tax equity investors, I don’t know how scalable the approach is but it surely gives Nexamp a leg up for customer acquisition. Good to see others are playing outside of the sandbox. 

More Fires. Amazon is out with a comment that they also had a fire on a SolarCity developed and owned project. I’m getting a bit annoyed about the fires being labelled as Tesla panels because it doesn’t appear to be that accurate. All indication from O&M pros is that this is related to poor wiring and wire management practices which makes me ask why this isn’t happening on other projects. Tesla isn’t the only operator of solar projects that had subpar installations but maybe they got away with less independent engineering oversight than those using all outside capital sources. 

Matching Up To EEI. If you’re not criticizing or punching those bigger than you then you are a bully. That’s why I read with joy the critique of DTE Energy’s resource plan by SEIA. SEIA normally plays inside the lines, both Aisling their statements to achieve an outcome with a win-win understanding. This ain’t it and I want more of it. 

Next Dem Administration. When the White House eventually gets a democrat resident, the solar industry needs to stage a takeover of the TVA board. I’m talking Abby Hopper, Anne Hoskins, David Crane, solar pro types. Experience in the sector but no doubt about the fact that no-one is writing a plan to add solar by 2038! I want to write a plan to put solar on every house and power every school with solar. 

Sad Solar News. It was with great sadness that I heard yesterday that the founder and former CEO of SolarEdge passed away at the age of 54. SolarEdge is a great example of success in solar, from founding in 2006 to a market cap nearing $4billion with hundreds of millions in cash on the balance sheet. In a sea of rising boats, SolarEdge has shown capital markets that hardware in clean tech is possible and profitable. My thoughts are with Guy’s family and the SolarEdge team. 

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Yann

This is your SolarWakeup for August 23rd, 2019

But Why? In an unfortunate and entirely predictable move, the DNC voted to not host a climate debate. This will change, of course, because people are angry that they are not getting the discussion they want. I don’t understand why people don’t do the obviously right thing before people get up in arms. 

A Bold Plan. Senator Sanders has his climate plan and it doesn’t lack ambition. 100% carbon free energy by 2030 and carbon neutral economy by 2050. One of the interesting ideas is doing it all on the Federal government’s balance sheet and selling the electricity through the market. Essentially, this is a national feed in tariff or PPA plan which should go a long way to lowering capital costs. Also interesting is this is all prefaced with calling climate change a national emergency therefore giving the President broad authority to act. 

New Tweak To Green Tariffs. Separately but in similar fashion, North Carolina and Virginia is allowing large users to negotiate directly with generators. Not all is settled on the rules and dispute since you can imagine how Dominion feels about this. 

Checking In On TV. Sunpower’s CEO is interviewed about the solar market and the impact of tariffs on the market. Good use of 5 of your minutes today.

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Yann

This is your SolarWakeup for August 22nd, 2019

Inslee Drops Out. Governor Inslee announced last night that he was ending his presidential campaign. The short story is that his campaign ran out of money faster than it ran out of ideas. Just a few hours before announcing the end, Inslee’s campaign rolled out the 6th plan focused on climate change with a focus on rural land optimization. This comes on the heels of a troubling report of the impact on land due to climate change. 

The Legacy Continues. If Inslee had one main impact on the politics of today it was the climate debate. He pushed for it and fought for it and while he won’t be on the stage, it has become politically impossible for frontrunners to stay off the stage. After initially having a scheduling conflict, Senator Harris’ campaign found the political blowback untenable and made the schedule work. The Inslee plans are also alive and well, plans that other campaigns can take on in whole or parts. 

Painting A Picture. Some solar folks have been reading the Walmart complaint about the fires and I appreciate the many emails I received on the topic yesterday. There is little doubt that this had a lot to do with procedures and shortcuts on the electrical side. Not playing solar defense attorney but if a house were wired with similar craftsmanship, it likely wouldn’t make it to the end of the mortgage either. That being said, I’ve been vocal about solar’s need to get better quality out there, this is a mainstream media reminder that now is the time. 

A Plan To Focus On. When the New York Times ran a headline about flooding in Hamburg, Iowa and the mayor clearly stating that this is the living effect of climate change, the world changed in some ways. As an industry we need to tell the story of solar in farming communities, benefits of job creation, financial reward and community benefits. If I had a staff of reporters that’s the story I would want to tell. On the ground in rural communities because there is a solar overlap somewhere. 

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Yann

This is your SolarWakeup for August 21st, 2019

Not A Great Headline. Yesterday Walmart filed suit against Tesla. The suit is based centered around the portfolio of projects that SolarCity installed on over 200 locations over the past decade and 7 sites that caught on fire since 2012. Project financing aside and I haven’t seen the specific power purchase agreements, this isn’t a good look for solar installation, commissioning and maintenance. The pictures tell the story of near misses and fires starting when the sites were de-energized. More importantly, how did no-one know that the portfolio has been turned off for so long if the facts of the article are correct? I’ve said it before and I’ll say it again. We have to care about building better solar, not only do we need to keep each other honest but we also need to hold ourselves accountable. Saving a dollar and doing it the wrong way shouldn’t be an option for your business. This also provides a highlight for asset owners that try to go cheap on commissioning or send day labor to do electrical O&M. I am not going to let the customers  off the hook either, don’t make solar developers and installers get into the dirt because you will get what you pay for. If you like that 50% savings PPA then expect the corresponding installation quality. Hire consultants and advisors that will make sure the longevity of the system is taken care of no matter how many times the SPV changes hands. 
Would You Fly Electric? I drive an electric car and would love for every bus to be electric. I’m all aboard the electric trains and ferries. Not sure how I feel about a Boeing 777EV though. Love the concept but someone else needs to fly it first. At least we know the space shuttle won’t be electric anytime soon! (Physics majors stay out of my inbox)
The Microgrid C&I Future. Microgrids are great and have awesome potential but that industry is going to learn some painful lessons that C&I solar worked on for the last 20 years. It’s hard, it’s slow and you better learn to underwrite credit in a way that is more efficient than solar. 
Rent The Panels. I don’t want to double your Tesla stories but renting the panels seems like a crappier marketing tool than the original no term contract financing/lease that was presented a few days ago. It also highlights what I would consider a fatal flaw in the offering. Solar panels will be better in 5 years. Elon said that buying is better and he’s right in a sense but he’s wrong because you’re better off doing solar in this structure for 5 years, pay the $1,500 and then replace them with newer and better widgets. Find me the clause that will cover Tesla from mass removals down the road. 

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Yann

This is your SolarWakeup for August 20th, 2019

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Yann

This is your SolarWakeup for August 19th, 2019

The Yang Gang +1. Elon Musk is public with his support for Andrew Yang. Let’s see who his next tweet of support goes to. 

Solar Without Term. Late last week Tesla rolled out its next offering meant to jumpstart their solar division. The offer is that homeowners can get solar installed for as little as $50 and choose between three system sizes, small, medium or large. At any moment the homeowner can cancel and have the solar removed for $1,500. The monthly fee is able to go up according to early reviews of the offering. Before touching on the obvious questions, I love the idea. It’s simple and easy to understand for the homeowner. They’ll save money and produce solar without feeling the uneasiness of a 20 year deal. Tesla does take the ITC and would have to deal with the clawback if the system is removed in the 5 year period. I also have questions about the roof condition after the system is removed, caulk the holes? Color me curious to see how this plays out. Would love to hear from some of the finance folks though on how this could work on traditional structures. 

Where Else? Speaking of terms in solar contracts, I want to see this happening with community solar. I want to interview the solar developer that signs subscribers up without asking for credit score or requiring a term on the contract. Month to month and if you don’t pay then your spot goes to the next person. If you know such a daring individual, introduce me. 

Situational Awareness. This is DC inside baseball but Neera Tanden is important in the world of progressive politics. Yesterday she tweeted about the idea of putting solar almost everywhere in America and I gave my political blueprint. If she’s saying it out loud, don’t be surprised if campaigns are listening. 

Hot Out There. July was the hottest month in history and ERCOT is calling its second emergency in a week. Earlier the market hit highs of $9,000/MWh. Wonder if any merchant solar or storage operators were in the market during those highs and if they’re year has been made. 

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Yann

This is your SolarWakeup for August 16th, 2019

A Must Read. A Director of Finance at NRG Energy wrote a contributing article for Utility Dive with the thesis of the impossibility that 100% renewable energy by 2050. I can only assume that the author was looking to show his bosses that he’s going public for the team, a rallying cry of sorts. Unfortunately, this is going to fall flat and make his name known in Princeton in a way that he probably wasn’t hoping for.


What Happened? According to comment I received from an NRG spokesperson late last night, “What is written in the piece is solely the author’s opinion, not NRG’s.” Based on what I write below, I question his overlap with renewable energy projects within NRG because I know that the former renewable energy team at NRG was more than capable. In fact, the solar and wind portfolio was sold for over $1.3billion. I believe the company’s statement because there is no way that the company would make this bold statement, which is against the thesis of most major IPPs, without such a statement coming from the very top. 


Checking The Facts. Here are the big statements that are made. First, solar and wind are not ‘controllable’ assets, i.e. they are not dispatchable. Second, wind and solar are too expensive and energy storage still needs to ‘evolve.’ Last, “initial capital cost ($/kWh) of renewables is high.” Starting with the last statement, you can clearly see the missed $/kW knock against renewables by stating kWh but reading past that, the author does say that LCOE of renewables is cheaper than gas. For comparisons and a sample project, the article uses a 500MW solar and 1.2GWh energy storage install for a whopping $1.2billion price tag using $1.50/watt and $400/kWh for storage. 


Reality Check. Clearly the facts are wrong and the thesis is wrong. It is absolutely achievable to get to 100% RE by 2050 and I would guess if asked, NRG Energy would agree that it is not only possible but also likely. Solar in Portugal is contracting for under $0.02 per kWh. Solar plus storage is cheaper in almost every RFP in utility procurement in the US. Even a 10MW solar plus storage plan in Minnesota is cheaper than the co-op continuing to buy from their generating partner. Solar is installing for under $0.75/watt in Texas and storage is well below $300/kWh in most instances. It also excludes any price declines that the industry will see over the next 3 decades and ignores the reality that most fossil plants will be at or beyond retirement age by 2050. 

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Yann

This is your SolarWakeup for August 15th, 2019

#DefendTheITC

Show Me The Money. If the ITC drops by 4% that means investors will lose more than 5% of their capital stack. In most cases that number could be well over 7%. The same thing will happen again the following year meaning the value chain has to figure out how to find an extra 10%. For homeowners they will lose all of it in just a few years and that’s bad news for everyone.

Network Effect. I hear this often, utility-scale developers don’t think about the residential and DG market as it relates to policy. This is the most dangerous misconception. If homeowners can’t put solar on their home, solar gets the label of not working or being too expensive. If homeowners can’t get solar they are unlikely to call their politicians and ask for solar policies. You won’t get an RPS or grassroots support if you don’t have a viable residential solar market. Every utility scale developer should sponsor a residential solar installer to join SEIA or the State chapter. Like a big brother/big sister relationship that allows both segments to lean on each other.

Energy Fair Panel. Check out the latest SolarWakeup podcast. This was a great discussion between a developer, utility exec and advocate deep in the Wisconsin back country. We kept things flowing and lively. I hope you enjoy and share the episode with your friends.

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Yann

This is your SolarWakeup for August 14th, 2019

The Power Consolidation. Brookfield is said to be interested in acquiring Pattern Energy which signals that institutional investors are looking for more capital deployment opportunities. Look for this to continue. 

MIT Finds Value. Putting a price on the societal benefits of renewables has been hard to do but now MIT shows that increasing renewable energy in the communities forgotten by coal means not only job opportunities but also health benefits far surpassing the cost (which has been argued to be exaggerated).

Michigan Deal. Big release of PURPA queue in Michigan. I should have bought some of those pipelines that came across my desk. If you need some capital for your project, I don’t mind brokering those for you :).

Climate Change. Washington Post is out with a major data driven story on climate change. If you can stomach it, it’s worth the read. 

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Yann

This is your SolarWakeup for August 13th, 2019

Power To The People. Now that the earnings have come in, it’s a decent prediction to say that residential solar will have its best year ever in 2019 and 2020 shows no signs of slowing down. We get a look at the market through the largest installers, where volume was strong and financial structuring was the hurdle for stock pickers but we also see the overall market strength through the lens at both Enphase and Solaredge. At the end of the day, how many homeowners would choose not having solar if given the opportunity. 

Not The Pipeline. The Trump White House is scrubbing some of the regulations in the endangered species act. While some large scale solar developers will silently agree with this move, the regulatory change is meant to help pipeline companies. I wish there was a desire to build HVDC transmission with the same steadfastness as fossil fuel pipelines. 

At Work Too. After you power your home with solar, make sure that your company is also getting solar either with onsite generation or through an offsite energy contract. It has never been easier for this to happen and my hope is that the markets adapt to the potential of retail choice by deregulating more markets. The choice creates competition and is helpful to our market. We are close to the future were retail energy providers and solar policy advocates are aligned in policy making. 

And At School. There is an interesting question about the value of the Mayor’s commitment to renewable energy. Cities, their school districts and colleges are actually some of the largest users of electricity and more importantly have some of the best credit in the energy market. Cities across America should be opening RFPs to see what is available for them and act as quasi developers. The same is true for schools and universities, use your buying scale and credit to create markets without the need for legislation. 

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Yann