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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Have a great day!
Yann

Hawaii Revolutionizes Consumer-Utility Relationship With New Law

By Frank Andorka, Senior Correspondent What Happened: Hawaii has rebalanced the relationship between utilities and their customers with a new law tying rate increases to performance data. According to Hawaii Public Radio, “The Hawaii Ratepayer Protection Act will require the Public Utilities Commission, the PUC, to develop incentives for local electric companies to modernize and manage costs.’ The law takes effect July 1st. The PUC will then be required to create an incentive framework by January 1, 2020. SolarWakeup’s View:  To call Hawaii’s solar situation “complicated” would be like calling World War II a “kefuffle.” Ever since October 2015, when … Read More →

Does Chapter 11 Shelter Schletter From Employee Wrath?

By Frank Andorka, Senior Correspondent What Happened: Schletter’s bankruptcy just got more interesting to me, based on some public information a friend of mine shared with me. Did you know that Schletter had been sued by its employees in the Western District of North Carolina – the same one in which they have field bankruptcy – after one of their employees fell prey to a W-2 phishing scam that caused the sharing of all the employees’ private information with some identity thieves? Did you also know that in late March (full document below) the judge dismissed Schletter’s attempts to dismiss … Read More →

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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Have a great day!
Yann

Michigan Utility Under Fire For Alleged PURPA Violations

By Frank Andorka, Senior Correspondent What Happened:DTE Energy is in the news again, and it is yet again not for a good reason. Greenwood Solar has filed a complaint against the utility alleging that it is not negotiating to buy their electricity in good faith as is required under the Public Utility Regulatory Policies Act of 1978. Under PURPA, utilities are legally required to buy power from independent power producers (IPP) if it is below their cost of generation from other sources, also known as “avoided costs”. Congress passed PURPA at the height of the 1978-1979 oil crisis, when Western … Read More →

Schletter U.S. Files For Chapter 11

By Frank Andorka, Senior Correspondent What Happened: Schletter’s U.S. subsidiary filed for Chapter 11 bankruptcy protection in the Western District of North Carolina, where the company’s headquarters are located. By written consent of the company’s board of directors, Schletter is seeking protection from between 299 and 1,000 creditors. The filing, signed by Schletter U.S. President and CEO Russell Schmit, confirms what SolarWakeup first reported on Monday, which was that the company was on the verge of closing. ch SolarWakeup’s View:  We hate to say we told you so, but … oh, who are we kidding? We LOVE telling you we … Read More →

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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Have a great day!
Yann

Forbes Article Reveals 320 GW Of Untapped Solar Potential

By Frank Andorka, Senior Correspondent What Happened:Long-time solar industry denizen Silvio Marcacci took to Forbes to argue that low- and middle-income Americans could represent a 320 GW untapped solar market in the United States. Marcacci’s conclusions are based on a new report out of the National Renewable Energy Laboratory – the first of its kind – that made the assertion. Marcacci writes: “NREL’s research shows that most rooftop solar technical potential is highly concentrated in the states and urban areas with significant building stock and high levels of existing residential solar deployment: California, Maryland, Massachusetts, and New Jersey.” SolarWakeup’s View:  … Read More →

Decision On Fate Of $1 Billion DTE Natural Gas Plant Looms

By Frank Andorka, Senior Correspondent What Happened:The clock is ticking on the future of DTE Energy’s $1 billion natural gas boondoggle, with a decision expected by Friday. Links on the Michigan Public Service Commission website to rebuttal testimony over the next three days are broken, so the public doesn’t have access to them. Solar advocates across the country are watching what happens in Michigan to see if the aggressive tactics will succeed in stopping the plant. Proposed natural gas plants are increasingly being denied in various states as unnecessary, particularly in solar-friendly states like California and Arizona. But the DTE … Read More →

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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Have a great day!
Yann