This is your SolarWakeup for February 22nd, 2019
Live! In Boston, DISCOUNT CODE. The agenda for SolarWakeup Live! Is almost final and we’ve got a very good and informative topics on deck. If you haven’t been to one of our events, you’ll get an inside look to the business and policies that make the market move. Use DISCOUNT CODE SWLB20 for 20% off your ticket at solarwakeuplive.com
Ratebasing Boondoggles. A brutal report for IOUs is out that is just plain nuts. Here are some stats about the spending by utilities which favors spending more and getting less since making money for shareholders is based on that dynamic. Transmission project spending is averaging $20billion per year up from $2billion per year in 1990. Many projects go forward with competitive bids and utilities are averaging 34% higher than estimated costs on those projects. On the other hand, when competition is allowed, bids come in 40% below those same estimates. Next time you hear monopolies talk about cost shift for solar, remember the states on rate based projects as one more reason that competition is key.
Point Counterpoint, GND Edition. Former NARUC President, Travis Kavulla, writes in the National Review about the Green New Deal. Reading between the lines, Travis is more focused on arguing that the utility model needs to change. His concern is that a Green New Deal would lead to major rate basing of projects by utility monopolies that reward higher cost, less efficient projects (see above) before transitioning to his further point. “Why not instead, if consumers are demanding clean energy, adopt policies that would make it easier for them to get it through their own choices? What the United States needs is not a Green New Deal. It needs a Customer Empowerment Act. Only 13 states allow all customers a choice of electricity supplier.” Case in point, GND gets clicks and using that to argue for consumer choice is worth it.
South Carolina Outlook. A new solar bill has passed the South Carolina State House and it heads to the Senate. It is a compromise based on a year of negotiation and a pretty contentious legislative session in 2018. However, when voted on in the house, it passed 110-0 and will now be heard in the Senate.
School Walkout, T-Shirt Ideas. On March 15th, thousands of kids will walk out of schools to make a case for elected officials to protect the environment for their future. While my kids (8 and 7) will probably be asked to stay in the classroom, I am hoping they indulge me in a t shirt messaging. I’d love to get your thoughts on t-shirts that are appropriate and clever! Send your recommendations by hitting reply.
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Yann
This is your SolarWakeup for February 21st, 2019
Small Coops Go Big On Solar. This is going to happen more often going forward, this being the coop that you’ve never heard of signing a PPA with what seems to be an extra 0. This is also true for markets that you may not be focused on, and it creates the goal for me to host a SolarWakeup Live! in every State across the Country even though Boston keeps me coming back. We added a great speaker yesterday, Marc Roper from ENGIE Storage, to talk about how the SMART program and ISO-NE rules enable energy storage to have a great revenue upside.
Tigers Know Better. Trump is creating a new climate change panel and it’s obvious pick for the chair is a climate science denier. I’ve known many impressive Princeton grads in my time and aside from their lousy lacrosse skills, they tend to be thoughtful and willing to look at the data before making up their mind. Every now and then comes along a Physics professor that believes more carbon dioxide in the atmosphere is good for the earth and in this case that professor will lead the US Government in discussing climate change. Do better Tigers!
PG&E Creates Microgrid Future. The articles about microgrids are increasing in depth and occurrence and much of that comes from people trying to understand how micrograms can help provide more resilience to the grid when transmission lines need to be pulled back for safety. The important question for regulators and legislators is why the speed of implementation of distributed generation should be held back at all and what they can do to enable the speed of development to increase capacity of renewables within the network. More discussion on this soon.
Sleep Easy Bramble Cay Melomy. A tiny rat that inhabited a vegetated cay near the Great Barrier Reef is now officially extinct due to impact of climate change. The cay had been inundated several times over the past few decades and maybe this doesn’t matter to humans given what and where this is happening. So here is the quote from Aldous Huxley that drives the point home, "That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.”
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Yann
This is your SolarWakeup for February 20th, 2019
Community Solar Goes Big Time. New Mexico passes policy in the house and brings it to the Senate. Florida files a bill and Pennsylvania is expected to be right behind it. That’s what was in my inbox today, all about community solar. This is an interesting twist on policy as I did not expect the market to lean in on community solar but I understand why it is the perfect blend for legislators. It is also a great topic to solve financing for solar in an era where capital may not trust utility contracts for the next 20 years given the PG&E bankruptcy. Part of the unknown is how to execute on the projects and that is why I am interviewing two leaders in the space at SolarWakeup Live! in Boston. Check out the agenda and get your tickets right now!
Solar Consumers Go To The Capitol. This is primarily a California story but it could come to a State near you soon. The Solar Rights Alliance is working to make consumers the central advocates for solar policy and they have unveiled the Solar Bill of Rights in Sacramento yesterday. Instead of solar pros in yellow shirts, it was everyday consumers advocating for their right to go solar. As we all learned a long time ago, you’ve got to fight, for your right, to go solar.
FERC Wants Last Say. In a court filing in bankruptcy court, FERC lawyers made the case that they will seek to have the last say to approve any changes to PPAs signed by PG&E after PG&E has convinced the bankruptcy courts that they should be allowed to cancel them. Solar will be watching this closely.
Harder Line On Shell. In a related note from my writeup yesterday, Amy Harder from Axios is looking at Shell from the other angle. A view from the companies future decisions about policy advocacy, trade associations and how it behaves in an era where it looks to be involved in a hybrid world of clean tech and oil. Becoming a tradition industrial for the 21st century may take a wide view and could require advocacy decisions that choose next decade over next year.
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Yann
This is your SolarWakeup for February 19th, 2019
Shell Buys Sonnen. Shell is on a buying spree and they’re now getting into the home with the acquisition of Sonnen, the behind the meter energy storage company. This comes just a few weeks after buying Greenlots the EV charging company and less than a year since investing in Sonnen. Sonnen had raised about $180million in venture funding which makes the exit price all the more interesting. Can this part of the value chain attract the investments and exits that make the circular momentum gain traction? I see how this may very well be the case, especially on the heels of Sunrun’s victory in the ISO-NE capacity auction which creates additional revenue upside for our market that we have long been touting. Congrats to the Sonnen team, very happy for their success and look forward to seeing what’s next in their development.
SolarWorld Price Revealed. In the annual filing from SunPower, their purchase price for SolarWorld assets were revealed. The consideration was $26million plus some contingencies. Not a bad deal for what once was worth north of a billion dollars. To put this in context, the sale of SunPower’s microinverter assets and IP to Enphase brought in $25million in cash plus 7.5million shares of the ENPH stock. Read it for yourself here, on page 4.
Renewable Energy Gets Political. This is a pivotal moment in national politics. Now that the resolution for the Green New Deal has been released, the Senate Majority Leader wants to use it in attack politics. McConnell is looking to bring the bill to the floor and tie the Democrats to the bill by making them put their votes where their talking points have been. I think it’s a strong move by the Kentuckian except that I believe that it will backfire. Democrats are likely to vote for it and make their case to the people that more renewable energy is better than less. That working on rooftops installing solar is better than being in a coal mine and that taxpayer subsidies shouldn’t be used to extract oil and gas out of the ground. Yes, it is an ambitious goal but the American people seem to be for the bill when asked about the individual items in it. I’d venture to guess that some Republican Senators like Senator Gardner from Colorado may think about voting for it as well. This is where polling may intersect with politics.
Big Money For Big EVs. Rivian, the seductive SUV and pickup truck company, has raised $700million for their vehicles. You can reserve one online, as they’ve adopted the Musk deposit capital raise plan as well. Interestingly, Amazon was a lead investor in the round which means that part of the pitch deck was a interchangeable delivery cab on the EV chassis.
Tariffs Kill Manufacturing. REC Silicon, much like Hemlock before it, is telling the market that the multiple levels of tariffs make manufacturing silicon in the US difficult. The company is planning a 2 month ‘temporary shutdown’ of its Washington State plant at Moses Lake. Manufacturing in the US is hard enough, and when you put tariffs on top of that it becomes very difficult for companies to execute a business plan. I’m looking forward to seeing the market work itself out of this temporary problem, and I use temporary as a hopeful addition.
NFL plus Solar. With consumer support of solar through the roof, especially when it’s on their roof, you will see companies doing major marketing deals with the largest consumer brands like the NFL. Powerhouse Solar is barnstorming the mid-atlantic and the midwest with their NFL partnerships as well as their amazing commercials, I’m a big fan of them! This marketing tactic is a bit out of the NRG playbook which may have mistimed the market’s ability to deliver mainstream solar to more homeowners than is possible today.
Boston. Don’t forget. Get your tickets and join me at SolarWakeup Live! Boston on March 26th. You can also sponsor and support this free newsletter.
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Yann
This is your SolarWakeup for February 15th, 2019
Boston. solarwakeuplive.com get your tickets now, the agenda is starting to be really interesting and I’m looking forward to seeing many of you.
What I’m Reading. Going into this long weekend I am interested to read the details of the changes that SunPower is undertaking while getting deeper into residential. Within some tweet storms, Trump pushed TVA to double down on coal and this appears to have been ignored and PG&E is fighting for their restructuring across many battle fronts. With wildfire season ahead (albeit the rainy season we’ve had), something will have to planned for in the next few months.
Have a great weekend!
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Yann
This is your SolarWakeup for February 14th, 2019
Tickets. We are almost halfway sold out for SolarWakeup Live! on March 26th in Boston. Get your now before they are gone, like a freight train. www.solarwakeuplive.com
Manufacturing Partnership. New reporting by Reuters is out that SunPower is looking for a manufacturing partner (I hear Flex has a new awesome CEO, according to Dan Shugar Linkedin post) that would acquire parts of the manufacturing operations in Hillsboro Oregon and make modules through a JV. This shows that SunPower is continuing the track to be focused on the market share and margins created in the residential market.
The Fight Over Storage. We will talk about this a lot over the next few months and years. Incumbent market utilities will do everything they can to limit the market access for energy storage assets including among other things the requirement for storage to be able to operate for 10 straight hours. The challenges will also attempt to require certain charging parameters for the assets in order to limit the revenue that those assets can generate.
PG&E Strike Team. Maybe Newsom has a member of his staff reading SolarWakeup, maybe we just had similar ideas. Governor Newsom is creating a ‘Strike Team’ to convene a plan regarding the PG&E situation. More on this to come!
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Yann
This is your SolarWakeup for February 13th, 2019
Job Number Headline. Solar jobs dropped in 2018 by nearly 8,000 jobs (~3%) and they did so due to the direct actions by Trump. Those are facts that can’t be misplaced. While that makes for a juicy headline, some consolidation due to efficiency in the market is a positive. I would also argue that some of those jobs are made up in the storage market. Keep in mind that both the 201 tariffs and aluminum/steel tariffs hurt the solar industry directly. So while this is the second year in a row that the employment has shrunk, the market is growing in capacity this year again.
The Report. See the results of the full report here.
The Upside. Most of the job losses came in California and Massachusetts, which aligns with the delay in the SMART program and slowdown in the utility scale procurement due to the 201 tariff process. The upside comes in the other States, some which have had to wait for the ‘free market’ to work itself out and now solar is competitive on cost alone. Florida is now the second largest jobs market for solar in the Country. I’ve been waiting for this to happen ever since 5 of us met at that hotel breakfast in 2007 to work with the Florida PSC to draft the net metering rules. The market growth is also why Quick Mount is the first manufacturer to open a regional warehouse to provide industry leading customer service to the Florida market. Don’t remind me of the irony of having lived in Florida for ten years working in solar only to move to California right when it turns around!
Manufacturing Insight. There has been a lot of pressure on manufacturing in 2018. First it came from the delay while the 201 decision was being made and then it doubled down with the tariff on all imported metals. As a manufacturer, utilization of the factory operations is instrumental to efficient company management. When the market disrupts predictable forecasts, the impacts can be detrimental to employment growth even when the market expands overall.
LA Power Plants. Mayor Garcetti announced yesterday major changes to power plant rebuilding plans at LADWP. This is an environmentally driven decision that will required LADWP to reset its views on power generation, grid reliability and energy procurement. It will also have to move rather quickly and hopefully look towards distributed generation to play a part in the process as well.
Trump/Xi Part Deux. Don’t underestimate the impact of the trade talks with China that are happening at this moment, all eyes are on the potential deal to be made at Mar-a-Lago next week.
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Yann
This is your SolarWakeup for February 12th, 2019
Climate In Presidential Politics. In prior presidential campaigns climate change was an after thought and many debates skipped over the topic altogether. With half a dozen announced candidates, I can’t think of a single speech that doesn’t touch on climate change within the first few minutes of the announcement. That includes Trump, who comes at it often from the other side of the argument, many times conflating weather with climate. There is more reporting on the fact that republicans are excited about the green new deal for the fact that it may be used against democrats in campaigns.
Listening To David Crane. At the most recent Powerhouse event, Emily Kirsch interviewed David Crane about his career. For those catching up, Crane took an economic and moral stand when he was at the top. Rarely do you see corporate courage because it tends to end poorly for the executive or at least feels extremely lonely. In Crane’s case, his vision did not align with shareholders short term vision for higher stock prices because running a public company includes daily performance reviews with every single shareholder holding a different goal. I personally enjoyed the comment about CEO’s being lonely, I find that part of the job is often to guide in the right direction (quickly) while also providing a safety net in colleagues decision making. On the other hand, the CEO rarely has a place to go to for his or her decisions.
Performance Based Utilities. Keep a close eye on the proceedings in Hawaii about performance based regulations for the utility. This is a topic that is being circulated not only in Hawaii but across the mainland as well. The idea is proposed to enable distributed generation and demand response technologies to have a valuable benefit to the utility. If utilities are the toll collector on the highway, advocates would like the utility to benefit most when renewables, DERs and EVs have equal or prioritized access to the fast lanes. Let EV charging companies interconnect within days or weeks, not months or years. Let DERs compete every minute of every day for revenue.
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Yann
This is your SolarWakeup for February 11th, 2019
Boston Live! Get your tickets to SolarWakeup Live! Boston happening on March 26th. Great event and agenda being put together to make you more competitive. If you haven’t been to a SolarWakeup event, please come out to Boston. I do everything I can to give you the information that I would want if I were in your shoes. Happy to connect you with folks that have come out and like this alternative model of conference conversations.
The BFD GND. Congresswoman AOC and Senator Markey released the draft resolution also known as the Green New Deal. This bill is part green and part new deal, highlighting some of the biggest issues facing the Country and the reasons for proposing the resolution. Note that this is not legislation at this moment, more of a battle cry to create laws that aim to execute on the proposals.
Trump Cries Socialism. The GOP and Trump have come out in favor of the GND being a label for the Democrats seeking to divide the Country on this issue. This is a battle to label the resolution as socialism while the Democrats will seek to message the resolution in its part since clean air, clean water, green jobs, renewable energy and fighting climate change all poll well over 70% favorable.
Justice For All. Green New Deal seeks to highlight environmental, financial and social justice within the policies that will drive action against climate change. The sponsors are not only looking to move forward but also seeking to ensure those that have been left behind are leading the pack.
Renewable Energy. Wonks have been quick to skip to this paragraph. Is it 100% renewable energy or clean energy? Is nuclear included? They are missing the point, this is a vision to get as close to 100% within 10 years, 15 years faster than California’s SB100. It also looks to invest billions in energy efficiency while creating a job guarantee for anyone that would like to work in the expanded fields. Any variation of this would be a big growth for the solar market we operate in, from distributed generation to community solar.
Solar Storage ISO Win. Sunrun won a capacity bid in the ISO-NE grid market. This is a big deal and it reached the twitter account for Senator Whitehouse (D-RI). While this is a big win that generates new revenues for the solar plus storage market, it is an example of the new economy fitting within incumbent markets. The capacity win is meant for fossil fuel power plants that want capacity contracts to pay for their existence while raking in double digit returns for energy sales on top of that. The pros call that revenue stacking. What would be the better way? The better way would be for operators of distributed storage assets to be able to bid into the real time market with the right pricing signals that generate additional cash flows for homeowners and businesses. One day, Sunrun may be sending ‘storage dividend’ checks to their customers who want to let the company maximize the value of their investments.
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Yann
This is your SolarWakeup for February 8th, 2019
Boston. Get your tickets to SolarWakeup Live! Boston happening on March 26th. Great event and agenda being put together to make you more competitive.
What I’m Reading. I’m looking into the details of the Green New Deal resolution released yesterday, the Sunrun capacity auction win and a potential game changing report on utility business models by Rocky Mountain Institute. More in depth coverage on Monday on those topics.
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Yann