This is your SolarWakeup for June 18th, 2018
This is a big week in SolarWakeup, our first full day SolarWakeup Live! event in Chicago is on Thursday. I’m excited about the solar market these days and even though there are challenges, we have markets like Illinois to look forward to. I’d love to see you there, get your ticket at solarwakeuplive.com
Another Tariff. Solar Silence. On Friday the Trump White House added another layer of costs on solar by imposing 25% tariffs on cells and modules from China. The impact is minimal on the face of it because AD/CVD already caused much of the supply chain to be out of China. This reality is more complicated after the 201 tariffs and several manufacturers planning on building module plants in the US. Those plants are now in jeopardy because they essentially lost access to the Chinese supply chain of cells. My question, as usual, is who wanted solar on the list of tariffs given that we were just on the tariff list? Where was the industry’s lobbying efforts and quite frankly it’s time to change our lobbyists because I see this as 0 for 4 in the tariff fights. The silence is deafening indeed.
IPP Deals Show New Grid Resilience. Tomorrow, a lot more on this topic but let me give you a highlight. The past decade has been about intermittent solar being added to the grid. First, there isn’t enough solar to matter. Second, we have to limit the amount of solar and charge them for the grid services. Third, we have stop letter solar connect because the caps have been hit. Now we are going to see a fundamental shift of solar being the solution to grid services with energy storage. I have said this publicly, we are less than a decade away from every solar installation having energy storage on it and even retrofitting most of the solar plants that are already operating.
Energy Subsidies. Solar will stop fighting for its subsidies when the energy sector and monopolies give up their subsidies which are much bigger and more effective than solar’s.
Solar Fires, A Big Story? My question to you. Are these stories coverage of events or worthy of a discussion?
PACE In PA. Frank has a great story about one of my favorite markets within solar, PACE. PACE was one of the fastest growing legislative movements in the 2010 era and since then has tried to find its place. I think we are really close to that reality coming true because PACE is now pricing below the cost of debt with longer terms for many solar projects. It also has the potential to open up the C&I markets by removing the credit barrier for DG PPAs. Great for the PA solar market to get this moving in the right direction. Make sure to click on the CleanFund link below to get some idea on the pricing available.
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Yann
This is your SolarWakeup for June 15th, 2018
Will Suniva Find A Buyer? SQN has taken over the company formerly and still, for now, known as Suniva. It will now seek strategic partners, i.e. sell the company, to someone interested in the intellectual property, equipment, and other assets. The obvious name that comes up is the manufacturer that recently announced a Georgia module plant for which it will need cells, which Suniva used to make in Georgia and ship to Asia to be assembled. We shall see.
Industry Wants Certainty On Climate. Amy Harder of Axios has the industry insight on a letter sent Trump stating that climate regulations would create American jobs. Solar also has some great American jobs, some manufacturers making many of the solar mounts and associated equipment in the US.
The New Utility Normal. No more coal, slowing down gas and more renewables. Next week, I will highlight what is happen in the IPP market because those that don’t operate in the monopoly utility market have a particular insight on what is going to happen next for the power plant owners and investors.
SunPower Continues Adapting. We had this first but here it is officially, a partnership between SunPower and Sonnen. I’m a fan of the solar plus storage play having lived in a hurricane zone for many years.
SolarWakeup Live! This Thursday in Chicago. Top solar folks and a marathon day of interviews with me. And if you have seen my interviews, you know that you are going to get information out of the conversation that helps your business. SolarWakeuplive.com is the place to get your tickets.
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Yann
This is your SolarWakeup for June 14th, 2018
Chicago Is The Place To Be. 1 Week Out! We are about to be at capacity and our agenda looks great. Folks from around the industry are flying into Chicago to be a part of the SolarWakeup breakdown of the Illinois solar market. Get your ticket at solarwakeuplive.com
Trump Gets FERCed. We have a standoff. Perry wanted a coal bailout, then a grid stability study and Trump went for the bailout. But when FERC went to the US Senate, no commissioner would state the need for the bailout, because as we all know it is not needed. What we should be talking about is creating a shorter response time market in the ISOs so that storage and real flexible assets can find the value that they create. Give me a 30 second market and you’ll see the 21st century grid come to life.
Mr. Governor, Instant Permits? The event I have yet to attend and would like to is VERGE in Hawaii produced by GreenBiz. In his comments, Governor Ige spoke about the need for governments to be agile in disruptive moments and when it comes to renewables Hawaii has definitely attempted to stay with the advancements even with the setbacks that were sometimes enacted. So in a week when we look to bring behind the meter small solar to our utopian vision of instant solar installed perfectly, let’s ask Hawaii to be the first to buy into the idea. If you haven’t caught my conversation on the topic, catch it here.
First Solar Rocks Ohio. The plant is not news but the plant has now broken ground. First Solar is investing hundreds of millions in the expansion of the plant to take on the capacity that the utility scale market is looking to fill. With gigawatts of coal and gas coming offline across the Country and solar plus storage offers reaching incredible numbers as we outlined earlier this week, solar will be asked to fill the gap and First Solar is bound to take advantage of this. If you ever wondered how well Wall Street understands our market, look at the one week chart on FSLR after the announcement from China.
Bit Me Up Scotty. Captain Kirk is all in on solar mined bitcoin, while it may not be Potcoin (I will share my Dennis Rodman story with you all at a later time) this is better. It’s almost as good as the solar powered honey that my friends at Connexus Energy sent me after my interview with their CEO at the Midwest Solar Expo a few months ago. Solar powered everything, feel free to send it my way.
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Yann
This is your SolarWakeup for June 13th, 2018
AC Modules Take Two. Enphase is buying the Sunpower micro inverter business, some of which tracks back to the Austin based inverter company, Solarbridge Technologies. A cash and stock deal also gives Enphase a path into Sunpower’s AC modules which caused the stock to jump up. Sunpower already has the market share in resi with its strong dealer network, which now translates to more market share for Enphase. Great deal for both sides in my opinion, well done.
A Tough Day At Tesla. Elon went to Twitter to publish his company wide email yesterday announcing a 9% cut to the workforce at Tesla plus the end of the retail relationship with Home Depot. I don’t have the details on the 9% that are going to lose their jobs but I have to think that solar will not be unaffected and I always hate to hear that. This will lead to a stronger Tesla and that is something I support. If any solar folks from Tesla are looking for the next big gig, let me know and I’ll do what I can to support your search.
An Idea For Elliot. Elliot which is behind the sale of NRG renewables unit is also involved in the Sempra divestment of its solar assets. I think Elliot should consider doing the same in the IOU business units, many of which have surpassed the monopoly revenue streams. I’m not going to call out particular names but some could double their market cap if they were split and I’m not a financial guru like the analysts are Elliot. Let’s see where they go next.
Big Money For Resi Solar. Vivint tapped the capital markets to lower its cost of debt funding for its projects. This is not only to lower the costs but also to refinance some of the likely shorter term capital for the projects that were placed into service. In any scenario $811million in capital is a big deal and it’s good to see the interest to get involved in this.
Growing US Solar. The quarter’s solar market insight is out and 2018 is on track to be on par with 2017, which is unfortunate because it could have been so much better. On the bright side, we have new great markets in Illinois which we will discuss next Thursday in Chicago, a few tickets remain at solarwakeuplive.com
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Yann
This is your SolarWakeup for June 12th, 2018
10 Days Out, Chicago! Next Thursday, join your solar colleagues in Chicago for a full day event hosted by yours truly. We’ll be going over all segments of the solar market in Illinois under the Future Energy Jobs Act and putting the industry in a room to get matched up for dealmaking. Join me and register at solarwakeuplive.com
Incremental Cost Of Solar. The words, we can add solar at no incremental cost, are dying and will be replaced with, we can add solar at a savings of. Don’t take it from me, listen to Vote Solar’s Adam Browning in this epic tweet thread, which outlines the recent pricing for solar plus storage across the Country. Add this to the value generated by distributed generation and the future is sunny!
Get Involved, Get Efficient. Many of you listened to my interview with Andrew Birch about the solar permitting initiative that the solar industry is rallying around. The objective, in short, is to have solar installed instantly after a customer signs on to the project. The key result is gaining initial municipalities to opt in to accomplish this and take over the Country from there. Are you close to a mayor that wants more solar? Send me a note and let’s get this going. High quality solar installed quickly!
Innovate, Locally. Puerto Rico went through a horrible year rebuilding after Hurricane Maria. After every major power group talked a big game on changing the energy economy it seems that the local solar/storage sectors are taking on the future locally. I guess that makes sense because if you ask EEI to come up with a future vision for Puerto Rico it looks much like the 20th century grid. Self generation isn’t just for power, its for policies as well. Check out the SESA-PR group.
Changing Economies. When I was looking at solar markets across the world it always dawned on me that solar was creating new economies in those Countries. Now that solar is creating incremental savings (see above), it’s great to think about the double bottom line that our industry creates. Plus the environmental benefits to boot!
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Yann
This is your SolarWakeup for June 11th, 2018
I’ll Take Instant Permits for $1. Imagine a solar market where you can install solar like it was an air conditioner. Sell it, install it and then pull the permit. It puts some pressure on you to do it right but it solves so many more of the solar market’s inefficiencies. This idea, not without prior attempts, is being spearheaded by Andrew Birch and many others and I sat down with Andrew in this episode of SolarWakeup Live! podcast. We talk about why, why now and what’s next. If there is a conversation you want to be listening to, this is one of them.
A Meeting To Make It Happen. The starting point on the execution towards instant permits is a two day summit which happened last week. Day 1 hosted at Sunrun and day 2 hosted at Mosaic in the Bay Area. Co-chairing with Andrew Birch are Lynn Jurich and Billy Parish. Facilitated by the Rocky Mountain Institute and with involvement of SEIA and The Solar Foundation this makes it a venture to be looked after. More details about the meeting in the podcast and how you can get involved.
Where Do We Go From Here. This is just the start! After the meeting comes a decision of how to proceed, how to raise money and where to get the early victories. SunShot invested in this idea through Broward County, a venture that appears to have failed as the program was passed to the Florida Solar Energy Center and the website is dead. Unfortunate but hopefully recoverable by the trade groups and private sector. The residential advisory council from SolarWakeup will be involved and advising the course of this endeavor to make sure that small solar installers have a seat at the table because without the small installers this will not go as well as it can.
Laudato Si Se Puede. The Pope is doing the work that few can assemble. Bringing oil and gas to the table and asking them to understand the needs of the planet as part of their business. The Pope and I believe in some different things but on this issue, we are in sync.
Chicago! One last panel to put speakers on, the one that has billions at stake so I’ll let you give me some ideas. Development of large scale solar in Illinois is already in the works and I want to hear from those working on it. If you know of anyone that would make a great panel discussion at SolarWakeup Live! Chicago.www.solarwakeuplive.com
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Yann
This is your SolarWakeup for June 8th, 2018
Have a great weekend. See you all in San Francisco next week and in Chicago the week following.
CUSTOMER Side Of The Meter. This may sound like NH’s Liberty Utility is acting with good faith but let’s be real. Anytime the utility wants to own equipment on your side of the meter, they are taking your ability to control your own energy usage away from you. This is the storage version of net metering, owning storage in rate base is one way to exert more control by the monopoly.
The Toll Trump Tariffs Take. Just the 201 tariffs are taking a massive toll on the industry. More than anything, it’s the uncertainty that it caused in an industry that is already struggling to keep its growth going. Every time someone mentions a company having problems to me, the joke quickly follows “Think they’ll file a 201 case?” The aluminum and steel tariffs are going to be a business planning issue as well. Hopefully the industry associations understand that these issues need to be resolved, quickly. The unknown is potentially worse than the result. So between 201, commodity tariffs, and coal bailouts, how many calls have you made to your representative?
Can CCAs Go National? As we see solar go below 3 cents per kWh, you would think that off takers would be on the prowl for more solar generation but that isn’t the case. A lot of new solar is going to the CCAs in California. Solar finance pros are ignoring (out of necessity) some of the credit issues but big solar means big dollars going into projects.
1970 Called, Wants Energy Policy Back. Take a moment and read this ridiculous article about the politics of energy in Trump world. Wouldn’t it be great if solar is the policy that gets Congress to work in a bipartisan way?
Presented By Chicago. Are you investing hundreds of millions into solar projects in Illinois? Make sure you know the rules and for $250, this is the best education you will get. solarwakeuplive.com for your tickets
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Yann
This is your SolarWakeup for June 7th, 2018
How Big Will Florida Be? Big! Here’s a couple of things to consider when you think about Florida. First, it’s a really, really big State. It takes 8 hours to drive from Miami to Tallahassee which justifies the 3rd highest usage of electricity in the Country. Second, the building codes here are as tough as they come because of a long history of hurricanes destroying homes. As such, the building officials care about the installation methods and products used, so I expect a quick stop to any subpar installation methods. Third, and most important, ‘everyone’ in Florida wants solar on their home. This is based on being in the Sunshine State and the fact that Floridians have a unique view on consumerism, more on that soon.
Consumers Come First For IPPs. NRG is shedding its power plants, the fossil ones this time. Earlier, NRG had announced it was selling its solar business to a private equity invest at the pressure of an activist investment firm. Getting rid of fossil fuel power plants is the trillion dollar game of hot potato for IPPs and that was foreseeable years ago. Much of the David Crane strategy centered around de-carbonization of the fleet but was also rooted on the fact that coal was finished. This time Wall Street is buying into the strategy, given that that customers are as well. Next step is getting back into EVs so that NRG comes full circle and gives Crane a board seat for his vision.
A Story About Tesla. It’s not all race cars and rocket ships at Tesla. At the shareholder meeting, Tesla announced it has reached a cumulative energy storage capacity of 1GWh. Given the average size of the systems, that is quite impressive and adds a level or storage scale to the company trying to lower the cost of batteries for car buyers. Look back at today as a funny milestone, because it’s so small, compared to what’s coming up.
What’s Next For Trump’s Coal Bailout. The immediate next step is likely a hearing or directive from FERC to the ISOs that will be subject to the coal bailout. It’s also indicative of the absurdity that Exelon came out with a statement against the policy. Good coverage from GTM on the legal aspects of the case.
The Jobs Of The Future. Not too many Wells Fargo carriage coachmen around anymore. That’s what happened when Ford came out with the Model T and the innovation that followed. Solar and wind plus batteries will replace much of the central power plant portfolio. Each time the innovation changes a fundamental sector, jobs have to adapt. The blacksmith became a toolsmith and so on. The same is true for internal combustion motor manufacturing sector, it is going to go away as EVs take the segment over. That is a reality of the future of work, but it isn’t going to happen overnight and economies must plan for it.
Sponsor SolarWakeup Live! Chicago. Join a great crowd of sponsors and attendees for the Chicago event on June 21st. We have a few more sponsorship slots left, email me for more info. Tickets at solarwakeuplive.com
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Yann
This is your SolarWakeup for June 6th, 2018
Are You Registered? Our Chicago event is coming up soon and you will not want to miss this because the who’s who of solar is flying in for the full day event. Get your tickets at solarwakeuplive.com and do it quickly because only about half of the tickets are left. This will definitely sell out before event day.
What Can A Major Do For You? My operating assumption is that the solar and storage ecosystem is going to be surrounded by ‘majors’ from oil, auto and energy. Look at the cap tables for energy storage companies that haven’t been acquired yet, it’s the who’s who of anyone that things the future of energy is based on intermittent generation. Look at the solar companies that have regional or segmented platforms and they are being acquired to be turned into a bigger platform to achieve goals like deploying capital or tax liabilities. What would your company look like if a major corporation invested or bought it, what would it allow or deny your team to accomplish?
Can Puerto Rico Attract Investment. I worry about Puerto Rico, even a year after Hurricane Maria destroyed much of the infrastructure. The problem isn’t about what can be done or what should be done. My concern is how it can be deployed financially. Puerto Rico isn’t in a financial position to spend the billions it takes to rebuild with renewable microgrids and it hasn’t fixed the underlying credit problem that would allow outside investors to be comfortable with the risk.
China Slows, What’s Next? This is the question I asked myself all day yesterday. If China’s market slows and there is an oversupply of modules what does that mean for the US market. This could spell a 2018 where prices reduce dramatically in the US from the oversupply but it could also mean issues around supply chain that can be bad for quality. Stay tuned…
A Greener Hawaii. Forget 100% renewable energy, Hawaii is looking to go carbon neutral in the next 20 years. Lots of work ahead but definitely achievable for this island paradise.
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Yann
This is your SolarWakeup for June 5th, 2018
Strategic Reduction In China’s Solar Market? China’s solar market is in for a shocking halt after an announcement by the governing body last week. Most of the publicly traded solar companies had a bad day yesterday after being downgraded on the change in subsidy policies that kept that capacity flowing at a massive pace. Let’s see how that affects the market pricing in the US, the oversupply could create competition that will center around pricing for the domestic projects. BUT I wouldn’t be surprised if there isn’t an impact that tries to stop the oversupply from coming this way given the 201 and AD/CVD tariffs are all percentage based charges.
Big EV Infra. I was amiss in speaking about this when it happened over the weekend but multiple regulatory bodies in CA and NY approved over $1billion in EV charging infrastructure to be built by the utilities. This is a massive upside for utilities that not only get to rate base the infrastructure, something I support, but also benefit from the increased load this will create from the EV adoption curve that this will cause since consumers will no longer worry about range. The conversation with regulators should be that any increased demand should be supplied with solar and storage and not rate based power generation.
Will The Consumers See This? The Trump coal and nuclear bailouts are going to cost money but the cost isn’t bourne by taxpayers but it may cause a two stage impact. The first level is similar to steel and aluminum tariffs with manufacturers and will affect the retail energy companies. Some may not have a way to pass the additional cost to the consumers while they are under contract and consumers that are about to renew will be in for a shocking price increase. Not only will consumers pay the actual increase but there will be a regulatory risk premium that otherwise would not have been there in a rational market. The price of the unknown is sometimes bigger than the actual price increase especially when a risk committee has to think about crazy possibilities.
Settling In North Carolina. Environmental and solar groups settled with Duke on their grid modernization efforts which were originally slated for greater than $7billion and settled at $2.5billion with some pro renewables policies attached. This comes in parallel with some leading indicators that Duke may be trying to stop energy storage to be added to solar projects, more on that to come.
Climate Change Financing Risk. Do you look at the climate change risk of a property that you are looking to fund a deal on? How do you do it and have you lost a deal because of it?
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Yann