This is your SolarWakeup for May 4th, 2018
I hope you have a great weekend. Stay tuned for info about SolarWakeup Live! Chicago, the event you will not want to miss. A full day conversation about the hottest market in solar development..
New Podcast, Live! From Midwest Solar Expo. I speak with Greg Ridderbusch, the CEO of Connexus Energy, one of the largest utility cooperatives in the Country. If you want to learn more about the value proposition coops are looking for, listen to this conversation..
South Carolina Turn Around. Looks like SC is going to get a NEM cap increase. Great that it is happening and shows the legislative skills of the solar folks on the ground there. Hopefully it makes it through the State Senate. May the fourth be with us!.
Connecticut NEM Drama. There is very little outrage about this CT NEM attack from the solar industry. The policy is part of the Governor’s plan so if you are hoping for a veto, that is unlikely to occur..
Tariffs Suck. There seems to be a shift in messaging about the tariffs coming from the national trade association. During a panel with SEIA CEO, Abby Hopper, in San Diego this week, a panelist went unchallenged about the tariff impacts. A panelist said the tariffs have caused no disruption to the business but was not asked what could have happened if we were able to buy modules at the global pricing levels. A facebook post by SEIA yesterday did show some pushback about the tariffs and the issues they cause to the industry.
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Yann
This is your SolarWakeup for May 3rd, 2018
NEM Under Attack In CT. Over the next few days, CT solar advocates will have to fight for the future of solar in Connecticut. This is your reminder that democrats can be just as influenced by utilities as republican legislators. Regulated power companies will control as many State Capitals as they can, which is also a stark reminder to SEIA that bringing utilities onto the membership rolls at SEIA is a very bad idea. The idea in CT is to replace NEM with something more like a feed in tariff. All production would flow to the grid and be repurchased by the solar owner. This is a terrible idea, not needed and just an attempt to reduce the value of solar. Step up and beat this thing back solar!
Forget 2017, What’s Coming Up. As I was manning the microphone in Minneapolis talking about growth in the midwest around community solar, some of you were in San Diego talking about growth in solar. Next time, just come with me to Minnesota and you would have seen it first hand. As expected, community solar is a large growth space in our industry and many states are looking at launching new programs around this. I also expect residential to make big strides, if the NEM fights go in the right direction, due to the homeowner’s continued desires to have solar and more states are making the economics look good.
The Money Play In Politics. The headline is more fun than the story. Solar companies give money to republicans and democrats. If you heard what Mulvaney said last week, money in politics means access to the legislators. If you are looking for administrative help to site a project, move an approval along, etc, then you are sometimes better served to make a few campaign donations. Republicans are also in charge of the House and Senate which means that’s a part of the donating strategy. This is a bit of a to do about nothing.
Dominion Is Losing Its Focus. The Virginia utility, which is interested in buying the troubled South Carolina utility, is out with his power plan going forward. And instead of a ton of solar and storage, it continues the trend of monopolies looking for giant rate base that requires ratepayers to hedge fuel costs for the utility. Will Vote Solar and others fight these projects when they’re requested?
Mercedes Stays Mobile. Mercedes, which I spoke to in an episode of SolarWakeup Live! a few months ago, is leaving home energy storage. The idea was to create a channel for batteries after they are used in the cars. The price declines and technological differences mean that batteries will simply be made for both segments.
SEIA DG Vice Chairs. In the effort of full information. Good solar folks Ed Merrick and Deep Patel are also candidates for the position. All the best to everyone that steps up and helps lead our industry.
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Yann
This is your SolarWakeup for May 2nd, 2018
Conference Keynote From Rhone Resch. Yesterday, in his first keynote appearance since leaving SEIA, Rhone gave the keynote interview at the Midwest Solar Expo. It was largely tame and focused on his current work to find disruptive technologies in the disruptive solar market, but here are some highlights. Rhone mentions that more trade uncertainty could be on the way including the tariffs on $100billion worth of Chinese imports. He says “solar is getting its butt kicked in DC” and shouldn’t have been “playing defense” while a major tax reform and spending bill were passed, both presenting opportunities for solar to gain. When it comes to the 201 trade case result, he cautions a need to temper the enthusiasm for the 30% result. “This wasn’t a victory”.
More Solar For Florida. You heard it here first. Sources close to Sunnova are telling SolarWakeup that they will be entering the Florida market. This comes behind the positive statement from the PSC for Sunrun on the fixed price lease. While the PSC statement is specific to Sunrun, I don’t expect others to follow suit and request PSC to bless theirs as well. Here is our coverage.
Spruce Exits Loan Business. Yesterday, a well written commentary on Linkedin explained that Spruce had exited the loan business. It mentioned several reasons for the exit which may leave Spruce as a company largely holding a software as its biggest asset. Word has it that an email went out to staff and a few minutes later the portal was shut down to the partners. The finance business can be as tough as the other segments and this shows the results of harsh competition.
Solar Gains More Roots In Minnesota. A 42MW portfolio of solar assets is being marketed to the residential consumers in Minnesota. Resi off takers offer the combination of highest credit values and the benefit of a FICO score. The reason this is news is most have not focused on residential because of the issues related with having this many customers and the cost to acquire them. I expect more retail energy companies to be in this space, surprised we haven’t seen this already.
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Yann
This is your SolarWakeup for Tuesday May1st, 2018
Greetings from Minneapolis, where I am for the Midwest Solar Expo for the next few days.
Biggest Risk (Value) In Rooftop Solar. I started my solar career from roofing so I may be biased but based on conversations I’ve had with installers, there is nothing worse for the customer and the contractor than a roof leak. That’s why the growing contractors are more likely to use higher quality components and sell on those strengths. Now you have a report that shows that selling quality means more sales. Put yourself in the clients shoes, what matters more than a leaking roof? That’s gotta get fixed before anything else, including solar production. How do you differentiate yourself from the competition when it comes to quality? I want to hear from you.
SEIA DG Votes. If you are a member of SEIA, voting is open for the DG committee. My friend, Costa Nicolaou, is running for Vice Chair and I’d highly recommend him for the role. When it comes to quality (see above), Costa is a solar leader on the issue and worthy of your vote.
Low Income IREC Report. Who doesn’t love a good IREC report? This goes in line with the latest topic about the scale of the low income solar market. Especially when combined with community solar, the certainty of solar costs is very attractive to people on fixed or low incomes.
Climate Change Outlook. This is really bleak and disturbing but it’s up to our generation to do something about this. Quite frankly what that means is our generation needs to take control of the political and regulatory system. I’m sorry but it’s time for the boomers to give up the gavel because we’re running out of time to do the right thing.
Illinois Is Coming Up. SolarWakeup Live! is coming to Chicago to talk about Illinois solar market developments at the end of June. We will be announcing the date by next week so you can plan your travel. Get your sponsorship budgets ready because this is a market entry event you will not want to miss.
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Yann
This is your SolarWakeup for April 30th, 2018
Jumping on a flight to Minneapolis for Midwest Solar Expo. I’ll be interviewing the CEO of a co-op, hope you can join me.
An Opportunity Missed In Michigan. Michigan PSC voted to allow the DTE natural gas plant to proceed, maintaining the status quo. Imaging the opposite decision had been made and the new energy economy would have started to sprout in Michigan. I’m proud of the work that was done by solar advocates to make this an issue, I hope this happens on every sitting plan going forward.
Yes, So What. All new supply chains have their issues and the energy storage industry isn’t much different. All hardware is going to have an inherent carbon cost and one using mined materials is even worse. But to assume that there is a price too high for the value that batteries will provide to the energy space isn’t in play for me right now. Storage will do amazing things especially as we drive the price down.
Definitely Watch This. A couple of time-lapse images of ultra large solar farms in China. Worth a watch.
Can We Discuss ITC Yet? The ITC step downs are on the horizon, already being modeled in solar development and affecting solar plus storage installs. All at the same time where oil and gas will continue to benefit from exploration credits and more importantly the active tax credit rules whereas solar has to play with passive liabilities only. Solar should drop down the tax credit when, and only when, all other energy sources lose their credit as well.
Minnesota. Tomorrow I moderate a discussion with solar leaders about the impact that the 201 and steel tariffs have had on the solar industry. What do you want to hear during this discussion?
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Yann
This is your SolarWakeup for April 27th, 2018
Eyes Wide Open. This is bigger than just Alabama. This is Michigan, Connecticut, and more. Solar net metering continues to be under attack and it’s threatening thousands of jobs and small businesses. Keep in mind that penetration is essentially negligible and provides more value to the grid than it costs. If we want major adoption of solar across the Country, solar needs to have a fair way to operate with market certainty.
Buildings Stay Open Longer Than Businesses. I agree that commercial solar will be majority 3rd party owned. It’s not because business owners don’t have access to tax equity, it has everything to do with the following. Ask a CEO if the business will be around 25 years from now, and they will be absolutely certain it will be. Ask that same CEO if they will still be in that building 25 years from now and a lot of hesitation comes across their face. Solar is a long term solution to power a building, not just the business within it and that is why the building itself is what should be underwritten in the transaction.
Pruitt Keeps Going. Here’s an unpopular opinion, I hope Pruitt sticks around. Yes, he is doing crazy stuff at the EPA and fighting science at every turn. But his non-political actions are keeping him on the front page and showing off his regulatory dismantling, to the dismay of the American people. If Pruitt goes, then so does the limelight. Who do you think will replace him? Do you think that person would do anything different on the policy front?
Press Releases Aren’t Under Oath. It may come as a shock to you but sometimes press releases aren’t everything they seem to be. I think it’s great that SunPower bought SolarWorld and First Solar is building another factory in Ohio. If you think that 201 is the reason that both of those events happened, then you need to stop trusting every press release. 201 is only a 4 year event and First Solar was exempt from it anyways. They could have built that factory anywhere in the world and doing so in Ohio had nothing to do with 201. On the other side, more complicated, is SunPower buying SolarWorld USA. For our view on why we think this happened, read here.
Enjoy Your Weekend. Will I see you in Minneapolis next week?
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Yann
This is your SolarWakeup for April 26th, 2018
The Official Schletter Update, Chapter 11. I get zero pleasure of writing these notes. I’ve been there myself, figuring out how to come up with a hail mary, worried about what to say to the team. You want them to stay focused on the task, not worry about their jobs, in the back of your mind worried that you may have to let them go. Solar is a cruel business, margins are tight but the gold mine remains unbelievably full and that is what keeps us going. Schletter has filed for chapter 11 protection in the US as it seeks a buyer for the global business. A spokesperson for Schletter says that they have interest from industry and financial investors alike. The cause for the protection is a bet into securing a pipeline which seems to imply that Schletter was doing project development to secure the sale without getting their margins crushed. We’ll Monday morning quarterback that decision and execution another day. In the meantime, let’s find these good folks new jobs so they can make a living in solar.
Fixing The Utility Monopoly. If there is ever a utility policy that reads as good as it sounds it is the legislation in Hawaii. Instead of getting paid to build stuff, regardless of how much value it creates, Hawaii will align utility revenues to consumer metrics including metrics in solar and storage. Utilities in the traditional rate base make money when things break, like after a hurricane in Florida. Replacing wood poles is a great business for those ‘investors’ when the consumer is the insurance and fuel hedge. Maybe we should consider Hawaii’s success as we craft new ways forward for Puerto Rico. On the other hand, what a difference compared to a year ago when NextEra looked like they were going to be the Hawaii electric company owner.
A Case Study For Buildings. RMI and energy consultants are posting about a project that brought a Colorado building closer to net zero. The interesting twist on this is that not only was the project feasible from a technical standpoint, it was also financed using commercial PACE assessments. As I wrote yesterday and we covered earlier, financing is not only a function of the interest rate, it is also a function of term length. Click above to see what rates and terms are available for project capital on solar projects.
Je Suis Désolé, Monsieur Trump. Macron got the last word in his visit to DC with his message to the joint session of Congress. Maybe it was the dandruff brushoff or something else that got Macron to provide a solid rebuke to Trump and Congress about climate change and transforming our economies to meet the challenge. Macron is not an ideologue on the environmental issue, he’s a financier that understands that productivity means creating and growing the sectors of the economy that mean a better future. It doesn’t hurt that the bipartisan support on this issue looks a whole lot better than coal and nuclear. This message was brought to you by the most nuclear powered nation on earth, France.
Midwest Solar Expo. Are you joining me in Minneapolis next week? I’ll be moderating a session on 201 tariffs with some great solar leaders, including longtime SolarWakeup friend, Tony Clifford, as well as hosting SolarWakeup Live! at MWSE with the CEO of Connexus Energy to talk about how a rural cooperative implements solar and storage in the Midwest. Not to late to jump on a plane and join us.
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Yann
This is your SolarWakeup for April 25th, 2018
Michigan Bellweather Decision. I’ve spoken about the importance of going on the advocacy offense and I couldn’t be prouder of the work that Vote Solar is doing in Michigan. Just yesterday, FPL’s CEO went on an earnings call and essentially outed himself and said that solar plus storage is more cost effective than “inefficient” alternatives. If the Michigan PSC delays the approval or denies DTE’s request for the gas plant this would be the first time a PSC delays a gas plant ahead of a thriving solar market. Nonetheless that is the right think to do.
Community Solar Potential. NREL was out with a study outlining the potential of bringing solar to demand even if the building can’t actually host solar. The disaggregation of solar generation from the load is a favorite topic of mine, it creates the collaboration of the lowest capital cost of solar, removes credit risk and generates more clean energy. At the same time we need to be thinking about growing the C&I market where transaction costs and credit risk make it more difficult than the residential market where the FICO score exists. I remain convinced that C&I is a combination of cash sales with long term financing through PACE is the best way to do that. Businesses that own their building have tax appetite and with assessment terms up to 30 years, why wouldn’t you want that.
Acting Like The Leader. 1366 Technologies asked for a 201 tariff exemption for their manufacturing facility. Now it appears that the request landed them in hot water for not having that facility in the US. I am sure there is much more to the story but the quote from the DOE makes me wonder if the aggressive tone is mirrored from above.
If My Way Works, Let’s Not Do It Your Way. A group of utility execs are workshopping how Puerto Rico should rebuild their infrastructure. At the same time, Sunnova, Sunrun, Sonnen, Tesla, and others have installed hundreds of micrograms on the island. Last week, when the entire grid went down again, only the solar micrograms were running including the fire stations. So tell me this, why do we have traditional power execs running this process when we already know what is working.
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Yann
This is your SolarWakeup for April 24th, 2018
Trump Tariff Impacts. In Germany, a company must file for insolvency at a much earlier date than the comparable situation in the US. While the German division of Schletter has been in self-administration for a little over a month, it appears that Schletter US has closed its doors, at least temporarily. Several employees and sources close to the situation advised that they were told to stay away from work. Emails and phones have been disconnected or go unanswered. Schletter has been a racking provider for as long as I’ve been in solar but with a large staff, 201 and commodity tariffs, it may have been too much for the parent company to continue funding. We’ve reached out to Schletter representatives without success and will update you once we hear from them. Overall, this appears to represent a broader need for consolidation in the racking market. While selling widgets is a profitable venture, there may be too many to choose from and too many with a market share that is too small causing margin pressure for large companies like Schletter.
MA Wants Storage, Needs To Act. MA may have the best market setup for energy storage after California with the start of the SMART program. That being said, the regulators and interconnecting utilities still have a lot of work ahead for them if they actually want storage to be built. If they do this correctly, storage will be built on every single solar project and I’d be happy to finance every storage installation in MA and elsewhere. (If you need me call me) Especially when it comes to DC-coupled energy storage, the interconnection is already in place, requiring a new filing makes no technical sense and only serves to dissuade developers from adding storage. So if MA wants more storage, then align rules with goals.
$1.9Billion For Solar Infrastructure. (Just kidding) From here on out, when I see a request for infrastructure improvements like a $1.9billion gas plant, I am going to point out the interconnection improvements to the network, like building a new substation, solar has to take on. I understand that energy is central to our economy and it must be reliable but it must also be clean and cost effective in the long term. Investing into infrastructure for 50 years going forward at consumer expense is not the most effective way to use rate base capital.
Bloomberg Donates Yesterday’s Earnings. Hopkins alum and notable environmental leader, Michael Bloomberg, is making up the $4.5mm shortfall that is left behind after the US departure from the Paris agreement. The money goes to the UN Climate Change Secretariat.
Certain Companies’ Power Plants. Axios’s Amy Harder has the inside the White House look at how Trump views the energy markets. Sometimes what you expect to hear is exactly what Amy is reporting in this article. Certain power plants by certain companies. When solar is generated on my roof, at least you won’t expect the government to shine light on the modules to generate more electricity. Libertarians rejoice.
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Yann
This is your SolarWakeup for April 23rd, 2018
Two major thoughts for the day. If you have additional insight, please send us a note. Everyone should think about joining me at the Midwest Solar Expo next Tuesday and Wednesday in Minneapolis.
Florida Reaffirms The Law. On Friday morning, the Florida PSC voted unanimously to approve the declaratory statement requested by Sunrun. The request, which included a solar lease template, was to ensure that Sunrun wouldn’t be considered a utility if they marketed and contracted in Florida using this structure. More importantly, this was a preemptive defense before entering the market. What Sunrun and others couldn’t do is come into Florida, sell a lot of leases and invest millions just to face a complaint by one of the investor-owned utilities. Just the process of defending the structure without this declaratory statement is a corporate risk that nobody could take.
The Market Potential in Florida. It’s been 10 years since the PSC in Florida asked for a report to be issued on the technical potential for solar in Florida. Navigant reports showed that rooftop solar had a 52GW technical potential at 2008 solar module efficiencies. With barely any capacity installs since the report, Florida’s technical potential is still intact, maybe greater than it was a decade ago. A sidenote, Florida will have higher than every other State adoption. Every Floridian wants solar on their home and showing off to our neighbors is everything for the Floridian mentality. Even though our energy rates are low, don’t be surprised how quickly the market grows in Florida. This market could give California a run for its money.
Consumer Scare Tactic. An interesting quote from the Office of Public Counsel, OPC, the entity that represents the consumer at PSC proceedings. They say that the consumer will not be represented by OPC since Sunrun (and others) will not be considered a utility. What they fail to mention is that the DBPR (licensing agency) represents consumers for all licensed contracting work which this falls under.
SunPower’s New Power. It’s been several days since SunPower announced the acquisition of SolarWorld. Most of the coverage is about 201 tariffs and we first wrote about the potential this has on their business lines. Now that the CEO has given interviews, there is another topic that hasn’t been discussed. SolarWorld USA is the sole petitioner of the AD/CVD cases and the co-petitioner of the 201 case. SolarWorld USA is now SunPower which means that any global settlement talks are now represented by SunPower folks. Trump mentioned global settlements when he signed 201 tariffs and those could be ongoing with a new team in the room. A sidenote, Tom Starrs (of SunPower) is the Chairman of SEIA and director at SEPA and is based in Oregon according to his Linkedin profile. Has SEIA started to lobby its board chair to settle the tariffs?
Tom Werner’s Focus. With all of the moving parts, it is important to remember that Tom Werner’s fiduciary duty is to his shareholders, not the solar industry. I am optimistic, however, that pendulum of success swings farthest when the market thrives. Removing barriers to silicon trade could make SunPower’s supply chain more efficient since Hemlock is seeking access to the China market once again. Definitely, a lot more to come on this story.
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Yann