This is your SolarWakeup for May 18th, 2018
A lot is happening in solar and things are coming together after a tough year. Markets like Florida and Illinois are poised to be major going forward and we have to fight to maintain the traction we had in CT and MA. Change is hard for many, we’ll highlight some of that in today’s Wakeup. Remember, if there are stories that need to be covered in your neighborhood, send them this way. Together we make solar stronger. Have a great weekend!
Learn About Illinois. Don’t forget to mark your calendars and book your trip to Chicago. On June 21st the leaders behind the energy policy in this hot market will be giving the insight. If you are an investor looking to make your splash here, we have some great sponsorship opportunities that match you with developers in the market. You can register at solarwakeuplive.com
Corporate Solar America. Frank covers the reports from Deloitte on the attitude coming out of corporate board rooms. With the polled corporations saying that 70% of their customers expect them to drive action on the clean tech issues. That’s why I get excited when a corporate sustainability professional subscribes to SolarWakeup, it shows a level of dedication to solar.
2 Years Of SEIA, 20 Years of SEIA PAC. Let’s put one state’s utility lobbying spend in perspective. In Florida, the investor owned utilities spent $43 million in the past two election cycles. That is an understated amount considering the money that went to lobbyists, internal and external, plus the PR firms to shape the messaging. In comparison, SEIA would have funded more than years of operations and likely over a decade in SEIA PAC spending based on historical numbers. We will never outspend the incumbent market participants but we will outlive and outvote them. Half of the Florida spending went to a ballot initiative that failed due to the grassroots support for the solar industry.
Well Regulated Monopoly. John Grisham is going to move to South Carolina and write a thriller about backroom deals the utility. The plot will include a $9billion blunder and an attempt to hide the information from regulators who oversee the utility in return for double digit returns and a monopoly. Seriously though, how in the world can a regulator do the best for consumers if the corporation it is supposed to oversee refuses to comply with the oversight.
Thou Shall Not? Arizona solar numbers are on the uptick and large scale solar plus storage are coming online at amazing numbers. With the new APS RFP, it seems like APS may be stepping back in time against the sentiments of the corporation commission.
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Yann
This is your SolarWakeup for May 17th, 2018
Mainstream Climate Discussions. American Progress held its annual CAP ideas conference. One of the panels included Tom Steyer and Governor Inslee moderated by Axios’ Amy Harder. The entire discussion is available to view but we have your bullet point recap. Inslee has been seen and heard on the national stage selling the climate change opportunity and a carbon fee to solve the problem. Steyer was a bit more wonky, shocking I know. His commentary included a desire for more community solar and the actions he is supporting to increase the RPS in Arizona and Nevada.
Quality, Fast and Cheap. With over 10GW of solar going up every years in the US alone, including more than 200,000 homes, we have to create some introspection about the quality of asset we leave behind. Driving the price down upfront gets more solar in the ground but if the asset doesn’t last 25 or more years, solar is at risk of losing investor confidence in the long term. For residential that also means installing systems that keep the roof watertight for the duration of the life of the asset. I hear too many stories about installations done without quality racking systems with no regard for the quality homeowner’s roof. You can do it the cheap way to cut corners but if you do, you are going to get caught. So just do it the quality way which will make you more money with happy customers providing referrals.
Where Are The Jobs? In the case of Illinois, they are fast approaching. As I prepare for SolarWakeup Live! Chicago, every company I talk to is in the process of hiring and training personnel for all sorts of jobs. On the other hand, MA is losing jobs by adding demand charges to its customers and slowing the market down. In an economy of full employment, we are seeing amazing pay scales for solar professionals that make achieving prevailing wages possible and hopefully track with the diversity in the State. Solar can and should be a market of diversity and inclusivity.
Thermal And Efficiency. A new podcast from solar guru Barry Cinnamon with a solar thermal topic. Last week I announced the formation of the SolarWakeup residential solar advisory council and I’ve spoken to many of you. (You can still join, just send me an email). One of the interesting ideas is that solar installers are adding solar thermal and efficiency to help with savings. What unique tricks are you using to close deals?
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Yann
This is your SolarWakeup for May 16th, 2018
Two Sidesisms. There is a pushback on the solar mandate from California. It’s not coming from the solar industry but it is reaching the media and being spun as a solar versus solar fight. Requiring new homes to have solar makes so much sense to me. It eliminates customer acquisition and associated soft costs. Installing 10kW on 100 homes in a neighborhood is a lot cheaper than selling 10kW, 100 times. At the end of the day, homeowners will buy a house with 30 year low cost financing (mortgage) with an installed solar cost below the retrofit market price. The two markets work hand in hand though, because the labor force will be better trained to install solar and lower the market price. I am more worried and upset about the PR tactic that appears to be trying to divide the solar industry. Where is this coming from? How about talking about the tactics of Eversource in MA and CT? Eversource is seeking to increase the cost to ratepayers by lowering solar adoption rates through demand charges and net metering rule changes. That’s a story that the media should cover because readers love to hear about handouts to monopolies. It makes them pretty mad.
Matching Actions With Goals. I think Hawaii has done many things right when it comes to renewables. In general, it has juggled the island effect, growth of solar and utility interaction in a smart way. When it killed net metering, solar folks lost their jobs but the economy was good enough that most were able to find other work. With storage costs coming down, the intention was for the solar market to come back with a combined solar plus storage market for distributed generation. The market needs volume to kickstart, however. Everything on an island is more expensive. Hawaii had a great opportunity, which it missed this year, to drive volumes up for storage with a small incentive the same way it did with the solar tax credit. In order to get to 100% renewables there will be a balance of utility owned assets, 3rd party owners and the distributed generation market. Hawaii should revisit the growth of the DG market which can be incredibly helpful in the network.
Who’s Looking Out For DG? ILSR is all about keeping things local and they’ve got a great DG report out that’s worth looking at. The solar coaster has its ups and downs, but as long as we fight our hardest the future will remain bright. What’s great about distributed generation is that our wins benefit consumers. Every time dg gets cheaper and better, hardworking Americans get to benefit by producing their own energy on their own homes. It also translates to more competition like having the choice to buy retail energy from companies that compete. I like being on the underdog side of this fight, but I also relish winning which is why I often step out of the shadows and say what needs to be said.
Look Out For The Anti-EV Machine. A Tesla crash of any kind creates a news cycle unlike any other. My neighbors warn of risks with electric vehicles and Elon has to tweet about an accident resulting in a broken ankle. Electric cars are a better car and will drive the energy sector forward which is what scares everyone in the traditional markets. Trillions of dollars are going to shift over the coming decade, insurance, auto OEMs, utilities, and oil majors will fight a fight which will involve plenty of nasty PR.
Making Deals In Illinois. I’m excited for the Illinois market but every time I dig into a segment, whether community solar or large procurement, I realize that the regulatory environment leaves some issues resolved. I also talk to many people that are developing projects and looking for capital, whether developer or permanent. That’s why we are setting up a matchmaking network at the Chicago event on June 21st. Learn more here.
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Yann
This is your SolarWakeup for May 15th, 2018
Join me in Chicago on June 21st. This event builds on the success of previous SolarWakeup Live! events and expands to a full day. In addition, we are hosting a matchmaking series where developers and investors will be strategically matched with conference room space available for the right kind of business development. Get your tickets at solarwakeuplive.com.
Buying Solar The Right Way. When FMPA, which is the buying organization for much of the Florida municipal entities, announced the 225MW solar project with NextEra I was a bit taken aback. I’ve got several concerns but my first one was how NextEra won a competitive RFP. Come to find out that FMPA didn’t solicit the procurement widely, quite the opposite, it went small. Three of the bidders were the Florida IOUs and the others are listed in the article, SolarWakeup is the first to publish this list. My other concern is the technical issue of FMPA having to work with FPL on joint power plant ownership and other regulator transactions. It was also a longstanding understanding in Florida that NextEra would not do business in Florida. All the backroom dealing is not unexpected but my biggest concern is that solar isn’t showing its best foot here. The price could have been exponentially better, Florida is one of the cheapest solar states to build in and a real RFP would have benefitted FMPA customers in a really big way. Maybe folks should file protests with the members.
Just Tell Me The Rules. Amy Harder has interesting reporting about the administrations many deregulation efforts, this week the CAFE standards being in the spotlight. While industry is mostly in favor of less regulation, they also understand that their investment horizon is longer than the Trump White House expected lease in DC. What most in industry are looking for is a regulatory system that is more of a straight road than a yo-yo. Everyone also understands that pigs get fat and hogs get slaughtered so eliminating regulations may be good for the bottom line today, it may crush you later.
Can’t Take Utility Out Of Utility Regulator. At some point, can we talk about the value generated by distributed generation instead of only the bad stuff. Does it lower demand on the grid? Yes, it does. Does it require less investment by the grid operator for future upgrades on the system? Yes, it does. So why do we only worry about the by passable charges?
Buying Anti-Solar Support. In this case, it was a power plant hearing where a utility hired a PR firm which in turn hired actors or paid protestors, whichever way you want to look at it. This is the stark contrast where solar has rallies where we may not have the paid for political influence but we have the numbers. Look at CT as an example. Who, besides the utility, wanted net metering to be killed? In MA, the same utility (Eversource), is seeking fixed charges for distributed generation. Solar pros are hosting a protest to show the regulators that this is not what the regulation intended when SMART was put into effect. The rally details are here.
Rooftop Solar Mandates. It was titled the solar battle of our times but I don’t see that much controversy in the California mandate for rooftop solar on new homes. Even at today’s rates the numbers work based on the cost of mortgage financing. On the other hand the homebuilders are good at building with volume pricing and no customer acquisition costs it should all get much better to the upside.
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Yann
This is your SolarWakeup for May 14th, 2018
Help A SolarWakeup Reader. A longtime Wakeup reader is looking for a tax equity partner to his 1MW project. If you are deploying or looking for a way to get rid of your gains, let me know so I can connect you. This is too small for most funds so the power of the network will get this deal done.
Make Solar Great Again. Before the content of the request, note that developers got 8 GOP senators from 5 States to sign the letter. The letter asks Trump to exempt 72 cell, 1500V modules from the 201 tariff. 72 cell module exemption was floated during the 201 discussions when a deal was possible. There was some pushback from distributed generation folks in the room and it gave the feeling of a ‘look out for yourself’ brawl. While business is very much a ‘to each his own’, and I don’t have a problem with it, it does put SEIA in an odd spot. I would have preferred the exemption to be 72 cell more broadly which gives the utility-scale entities what they want without precluding residential to also use 72 cell modules. It makes one wonder who was in the room to push for DG to be pushed aside in a very specific, technical manner.
TVA And More. Frank gives you the most recent coverage about TVA’s fixed charge shenanigans. This is more about the general trend that is hurting the solar industry from those that wish to slow us down. After a loss in CT that was hard to imagine, it is time to put the gloves back on and get into the ring. It is also important to turn CT around and show the politicians that voted against solar that doing so is a bad political calculus.
Headline Gets It Wrong. Utilities don’t have to act on electric vehicles, they do not have to worry about losing to electric vehicles. More importantly, they have to worry about oil changing the speed of adoption because this is a fuel versus electricity fight, a fight of its kind since we started becoming more industrial. At the end of the day, utilities will see their fortunes in electric vehicle turn demand in the right direction. The question is why utilities don’t use this opportunity to eliminate all range anxiety and increase EV adoption in the short term. To be further discussed going forward.
Free The Market. I’ve been saying this for many years. Solar should not and can’t give up the incentives it benefits from until all energy sources do the same. If nuclear is benefitting from a revival of government support then an ITC extension and passive liability rules should be in play as well.
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Yann
This is your SolarWakeup for May 11th, 2018
The payoff. Nathan Arbitman of DSM Advanced Solar was the winner of the SolarWakeup Bracket Challenge for March Madness. Read his post about the work he is doing in today’s top story. Have a great weekend!
The PV Innovation Race is On. Like many of you, I’ve committed my career to the cleantech industry because of the moral imperative to accelerate the clean energy revolution, as well as the unprecedented wealth creation opportunity this transformation brings. And I’m always asking myself, how we can make this transition happen even faster? I joined DSM Advanced Solar, a leading PV technology provider, to create build provocative and powerful partnerships that accelerate value creation in the PV market. DSM is working with partners of all shapes and sizes to drive science-based innovation— how might we work together to accelerate your company’s growth?
Political Chaos Leads To Success. In a different world, Nevada never guts the solar market. There isn’t a deep fight, with lawsuits, that completely annihilates the solar industry. Instead, a settlement is reached that leads to slowdown but things stay in place. Which scenario would have a better solar market today? That’s my question for Connecticut today. How hard are you willing to fight? Politics is a full contact sport, don’t be a spectator.
New Pod. Don’t forget you can get Barry Cinnamon’s podcast, The Energy Show, right here on SolarWakeup.
Need To Explain? Two value of solar reports. Two States. Two Results. Do I really need to tell you why that happens? #utilities
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Yann
This is your SolarWakeup for May 10th, 2018
First The Good News. In what could be the biggest solar news in a long time, California is going to require the 65,000 new homes per year in the State to include solar. This could mean between 200MW to 400MW of additional capacity per year of distributed generation that will save consumers money and lower the infrastructure investments that utilities have to do. There is a debate on the cost of the mandate, but as California becomes the 5th largest economy in the world you have to believe that they are doing something correctly.
Talking Heads In Solar. Hats off to Kelly Knutchen from California Solar & Storage Association for joining the 2 on 1 panel on CNBC. The moderator and think tank speaker were big on the mandate talking point. The think tanker clearly threw Kelly for a loop by asking how a homeowner is going to pay for solar upfront if they take a 30 year loan. huh? Watch the 4 minute interview and watch Kelly do a great job representing solar. This is part of the problem in the universe, CNBC still views solar as a subsidized energy source and never mentioned subsidies when covering oil, gas, or utilities.
Losing a NEM Battle. I am not used to writing about NEM battles we, as an industry lose. We lost, temporarily, in Nevada and settled in Arizona. Things in South Carolina looked bad, then good, then bad, now better. In most cases, we had a republican Governor pushing against our industry. I never expected Connecticut to be truly in play but when it comes down to it, solar is a political bargaining chip that Governors will use if they need to and you saw it in play here. After some late night chaos, because solar pros know how to play politics, the State House voted to gut net metering in CT. The question now is what political prize the legislators have to play and what message the Governor gets tainted with when he pitches his environmental bill. This also reminds us all that utilities will sponsor legislators of every size, shape and color to protect their ridiculous monopoly schemes.
Solar Knows No Parties. I don’t know if I buy into this but one study says solar is installed by republicans 5 times more often than democrats. What do you think? Frank’s coverage below.
Resi Solar. Are you a successful residential installer? Is your business growing? I am building out a small group of residential installers to help me keep a pulse on the market and identify the things that matter to you. Of course you will be recognized on the platform and we can enjoy getting to know each other. Let me know if you are interested in this informal advisory council.
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Yann
This is your SolarWakeup for May 9th, 2018
SEIA’S CT Thoughts. "While we are in favor of legislation that genuinely advances solar energy, we have concerns about this bill. We support stronger renewable portfolio standards, yet it is not clear to what extent the bill would open significant large-scale or community solar markets. And importantly, any approach that doesn't also protect customer choice and provide for reasonable compensation for the value of customer-generated electricity is not acceptable.” - SEIA Press Release
I Called This. When Tom Werner wants to retire, I’m ready to step in. SunPower is leaving utility scale and focusing on distributed generation. It’s been clear to me and I believe this to be the correct move for SunPower given the market share and value proposition that the company has through its dealer network. Also with Tom Starrs leaving the SEPA board to focus on his SEIA position, this aligns the values with corporate goals. I wonder if my next strategic assumption becomes true as well.
Ratebased Utility Solar. Tampa Electric customers are seeing an increase to their bills because of a solar farm. This is part of the rate base due to the utility investing its shareholder capital for the project, a 600MW plant. Think of the developers that would come in and bid this deal, imagine TECO signing up 10, 60MW, projects. If the company signed a PPA, it wouldn’t require rate base and therefore likely not increase the bills to consumers. But then TECO shareholders wouldn’t get double digit returns either.
There’s A Better Way. I spoke with the CEO of Connexus Energy last week, he describes the better way of adding value to consumers. Maybe we need to change all IOUs to member owned cooperatives.
Everyone Wants EVs. AAA says that 1 in 5 Americans is looking to buy an EV as their next car. Tesla shorts will begin shaking in their space boots once again.
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Yann
This is your SolarWakeup for May 8th, 2018
Hello? Anyone Watching CT? The CT Senate has passed the controversial net metering bill that will turn the NEM policy into a sell all scheme. It is now up to the CT House to do the right thing and kill this portion of the bill. One State Senator had the audacity to call solar “ugly” after speaking on solar’s behalf at the solar rally just a few weeks ago. This is becoming a frustrating situation given the lack of attention this is getting nationally with the local companies struggling to show the national outrage that this should cause. There is a press release issued by active solar companies and trade groups with notable entities missing from this release or having their own. I will repeat myself. Net metering is the most important issue for solar nationally, regardless of the market you participate in. If you develop PURPA or RPS deals, you want a net metering policy in place because that is the grassroots support for solar you need from customers.
Was It All For Nothing? There are several reports of Suniva asking the bankruptcy court to allow it to sell the equipment it owns. This essentially spells the end of the manufacturing entity that could have been acquired to make premium cells within the US. With a large need for tariff free cells, this was believed to be the avenue to relief for SQN. If anything, it now seems that interested buyers will be looking to buy the capability without the corporate entity. At this point it seems like none of those exits are going to happen and it will all have been for nothing except for causing heartache to the solar industry.
Solar On Every Home. California is implementing its new building energy codes which push the envelope on net zero homes. All new homes will have to include efficiency and solar features to push cumulative consumption to zero. Some builders had voiced concerns that on efficiency alone, the code could be met but alas the solar requirement will remain. As we pick up speed on residential solar, we must remember the key for installers and financiers and that is a happy homeowner. Positive reviews and customer referrals are the best marketing and if you install it improperly, causing roof leaks, you will not have a happy customer and you will spend money fixing the leak. Going cheap on the install will always come back to bite you, install the right products the right way and ensure no roof leaks.
Don’t Assume The Inevitable. It was long thought that net metering changes would drive value towards the fixed demand charge section of the energy bill. For years, the general thought was that if NEM changes are made, energy storage would become that much more cost effective. Of course that is much more nuanced now that storage is cost effective and NEM changes are either focused on non-bypassable charges or time shifts that require too much storage to make financial sense. The solar adversaries play a long game, don’t underestimate them.
The Florida Story. It’s not going away, there is a lot going on with multiple story lines that will intersect. If you have any documents or information about the various solar RFPs in Florida, please send me an email.
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Yann
This is your SolarWakeup for May 7th, 2018
Over the past few weeks, a lot of the dialogue has been about my comments about utilities joining SEIA in some fashion. And this article summarizes my primary opposition to ANY utility involvement in our trade association and the trend continues in today’s news stories. I want you all to know that I am not sitting here throwing stones to stir things up, I am sincerely hoping for the industry to go into the direction that I believe is in all of our best interests. I want every solar company and trade group to be successful and thrive.
Why Utilities Matter. Here are the talking points from the Duke Energy President in South Carolina. “Duke has invested $6billion in renewables.” “Duke is anti-subsidy.” “Net metering is a subsidy.” All three comments are either outright false, misleading or intellectually dishonest. Taking an oped and trying to drive a wedge into public support by misleading the reader bothers me. Duke may have invested $6billion into renewables but did so mostly through its deregulated subsidiaries because they were allowed to compete. Duke is not anti-subsidy, because if they were they would not saddle their ratepayers with power plant risks, early cost recovery for unbuilt plants and fuel cost risk. Is this a company that you believe would have a voice in your trade groups that advances your business?
The Florida Solar Swamp. First the good news. Frank speaks with Sunnova’s CEO about their announcement to enter the Florida market. This comes on the heels of Sunrun taking the leap of faith and asking the PSC for a declaratory statement. More competition on residential solar will be good for a State like Florida where almost every homeowner wants solar. Keep your eyes on the adoption rate, it will surprise you. On the other hand, we have the start of a giant shady deal in Central Florida. The Florida municipal power companies have contracted in a PPA with NextEra on a 225MW transaction, made up of three 75MW solar farms. We will be looking into this in much greater deal but here is what we know already. Only 7 developers were invited to bid, this was not an open RFP. Of those 7, only two were invited to negotiate and they were not the lowest bidders according to sources. It may also be true that NextEra used FPL’s solar farms, which are paid for using rate base, as a statement of qualifications to win this deal. That raises all sorts of monopoly/deregulation firewall alarm bells. It is also very likely that NextEra has a PPA rate for FMPA lower than the cost of solar to FPL customers in the monopoly rate based solar. This makes my point for me that rate based solar should be put out for bid because the private market because competition is good for everyone. More on this soon, but it’s shady thus far.
Who Cares About NEM? The CT net metering fight worries me. From a press perspective, the media coverage of it has been slim to none. If my inbox is an indication, it almost appears that some groups have given up on the net metering fight in a State that sends an all blue congressional delegation to Washington DC. We can’t just worry about legislation that fixes a state solar market, we have to attack the markets and stop them from taking away the number 1 core value for any solar advocate, full retail rate net metering. Net metering is the rising tide in solar, without it, forget getting the support for interconnection processes that enable large scale RPS or PURPA markets.
Deep Energy State. I indulge in some tv watching and Madam Secretary is one of those Sunday night DVR specials. Normally I pay half attention as I type this newsletter but last week, I sat in awe as the natural gas CEO was in the Secretary of State’s office arguing against renewables and nuclear. Put aside the renewables piece, this was a lobbied influence campaign between natural gas and nuclear as they both argued to be the transition plan. Imagine playing the public influence campaign so thoroughly that you are pitching tv writers on your talking points.
NY ISO ‘Loves’ Solar. First, it’s the lightbulbs. Second, blaming solar for demand reduction is exactly why people consider net metering a subsidy. Demand reduction reduces the cost of infrastructure to ratepayers and therefore is a network benefit.
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Yann