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.

News

Have a great day!
Yann

Bipartisan Tariff Repeal Bill Introduced In Congress – Any Chance It Passes?

By Frank Andorka, Senior Correspondent What Happened:Five Congresspeople – two Democrats and three Republicans – have sponsored the Protecting American Solar Jobs Act (HR 5571). If the bill passed, all duties and tariffs revert to previous rates and allow companies that imported any affected solar products under this new tariff to receive retroactive reimbursement. Under the current leadership in the House of Representatives, it’s unlikely the bill will even make it out of committee – but that doesn’t mean the willingness to fight the noxious tariffs is insignificant. SolarWakeup’s View:  Showing an unusual level of bipartisanship, five Congressman have introduced … Read More →

The Energy Show – Regional Energy Policy Leadership with Tim McRae

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The Energy Show with Barry Cinnamon Public policies have a tremendous influence on the energy we use, as well as the condition of our environment. State and Federal legislators make these policies with input from private citizens and businesses. The solar industry quite frankly has thrived with policies in favor of clean renewable energy, and it’s no accident that California is a leader in solar and clean renewable energy. The Silicon Valley Leadership Group (SVLG) helps advocate for favorable business and citizen policies in Silicon Valley and they have made a tremendous impact not only in California but also in … Read More →

Interest Rates Are Rising, But Solar Is Still A Good Investment (For Now)

By Frank Andorka, Senior Correspondent What Happened:Bloomberg Technology reports that despite rising interest rates, banks are still finding money to invest in solar. According to Bloomberg, “While the cost of borrowing has been increasing since 2016, some banks are taking a smaller cut to win deals from solar developers. How long solar is able to withstand the headwinds of higher costs of capital remains to be seen. SolarWakeup’s View:  Interest rates are on the rise after years at being near zero. While normally such increases in capital costs would inhibit investments in solar projects, Bloomberg Technology (BT) reports that is … Read More →

Florida Public Service Commission OKs Sunrun’s Petition – So It’s Full Speed Ahead

By Frank Andorka, Senior Correspondent What Happened:On a vote of 5-0, the Florida Public Service Commission has approved Sunrun’s request that its third party leases not be considered a sale of electricity and that: Offering its solar equipment lease to customers in Florida will not cause Sunrun to be deemed a public utility under Florida law; The residential solar equipment lease described in its petition will not subject Sunrun or Sunrun’s customer-lessees to regulation by the Commission. SolarWakeup’s View:  In a victory for third-party leasing in the state of Florida, Sunrun has JUST been granted the right to sell its … Read More →

This is your SolarWakeup for April 20th, 2018

What a week for the solar industry! As we begin the cycle once again in the storage industry, descending to the storage conference, I hope you enjoy your weekend.

Watch The Florida PSC. Starting at 9:15am, the Florida PSC will be hearing the request by Sunrun to have their lease ‘approved’ for use in Florida without being considered a regulated utility. Stay tuned for the result and a refresher on the issue here.

Solar’s Dilemma. I feel that most in solar have a set of values that many struggle with when solar argues against environmentalists on regulations. This is the case in the BLM land siting issue where solar is left with little available space to develop projects in due to environmental concerns. We’re going to need more solar going forward and we have to find where to put it but we want to do so responsibly, hence the dilemma.

The Little Story. This isn’t a big story but it’s the local victory that keeps us going. With the help of DOE SETO, the artist formerly known as SunShot, the municipality was able to move solar forward its own rules to promote solar. SETO is out with another solicitation for $105million.

Interest Rate Pressures. Over the past year interest rates have been creeping up, the 10-year yield is up to 2.91% as of yesterday. That’s over 1% higher than just a few years ago and that kind of debt cost increase hurts solar, where many projects are back levered. The positive side of this is the risk, the spread, has decreased to less than 2% more than the treasury rates. We’re still a long way from mortgage rates however.

SolarWakeup Live! Chicago. The event will occur at the end of June, dates to be announced soon. This will be a day long SolarWakeup Live and continue the SolarWakeup Live tradition of great content that helps drive the market. If you have a good idea for content that you’d like to hear, reach out. We will also have some special sponsorship opportunities if you are interested.

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Have a great day!
Yann

Don’t Let Utility-Scale Solar Be Used As A Fig Leaf

By Frank Andorka, Senior Correspondent What Happened:Sammy Roth of The Desert Sun is one of my mainstream solar writers, and he takes a fascinating look at the Trump Administration’s decision to reopen the Desert Renewable Energy Conservation Plan. The Trump Administration and Secretary of the Interior Ryan Zinke talk about reopening the Desert Renewable Energy Conservation Plan, which was finished in 2016 and was designed to balance environmental protection and renewable-energy development. But even the large-scale solar developers are suspicious of Trump’s motives behind the plan reconsideration. SolarWakeup’s View:  First off, read the whole Sammy Roth article that I link … Read More →

Athens, Ohio, Project Proves Sunshot Works

By Frank Andorka, Senior Correspondent What Happened:Thanks to a grant from the U.S. Department of Energy’s Sunshot Initiative’s Solar In Your Community Challenge, one coal-country Ohio town is moving toward a community solar installation. A group called Upgrade Ohio is trying to change the town’s laws in a way that would allow regular citizens – not just wealthy investors – get in on the ground floor of the array. Despite being in the heart of coal country, the citizens of Athens are excited about the prospect of opening up a new energy future for the poverty-stricken area. SolarWakeup’s View:  Full … Read More →

This is your SolarWakeup for April 19th, 2018

For the trade lawyers, as you read this. What does SunPower buying SolarWorld and Suniva asset sale mean for a global tariff/duty settlement? Does SunPower get to speak for SolarWorld on this issue now?

Not All Bad Deeds Go Punished. SunPower has entered into an agreement to acquire the shares of SolarWorld Americas, Inc. This took most of the solar industry by surprise, myself included, when the news broke before the market opened yesterday. The market has reacted positively with a 11% bump in stock price based on the notion that SunPower has a way to get around 201 tariffs. A few hours before those news broke, the comments about the 201 exclusions came out in which SolarWorld supported SunPower’s request for exclusion which seemed odd given the market segment, residential, that both companies operate in.

Reading Between The Lines. I don’t actually think this is about 201 tariffs. If SunPower were to acquire SolarWorld for 201, why not wait until the exclusion was rejected? I think that SolarWorld was in a bad place and needed a buyer which means that the price was right. At the same time, SunPower needed to add a product that could both be labeled as Made in the USA and cheaper. SunPower installers love the premium product but all of them carry a second product so they don’t lose deals purely based on price. Now, SunPower could offer a two tiered offering into its dealer network, which is as good as it gets. To summarize, SunPower buying SolarWorld is more of a play for residential market share than 201 tariffs.

Future Of Suniva. In the ongoing bankruptcy proceedings for Suniva, SQN has let the court know that they are selling some (or all) of the companies manufacturing equipment. This means that most of the value of the company aside from any intellectual property is leaving the company, if a buyer comes around. The 201 trade case is ending much quicker than it started, we haven’t even gotten to the point where prices can prop up local manufacturing.

The Business Of Solar. The annual solar means business report is out and Target is the big leader, adding 40MW in 2017 and the first to reach 200MW. Congrats to the Target team, many of whom are readers, for showing great corporate leadership. The other takeaway is Walmart putting the brakes on its program or at least taking a hiatus. Would be interesting to hear what caused the slowdown of deployment.

The Charging Infrastructure. Now VW is getting into the race to deploy more charging infrastructure. I question the OEM specific nature of this and why the utilities aren’t out front leading the development. When I go to my local Whole Foods, there is a charging station there that is free for me to use, a benefit for Whole Foods since I stay in the store longer than I otherwise would.

News

Have a great day!
Yann

Suniva Being Sold For Parts (Literally), Just Like We Said

By Frank Andorka, Senior Correspondent What Happened:And now in this corner, from the other end of the Section 201 tariff case, comes the news that Suniva is literally being sold for parts by its creditor SQN Capital Management.: Who could have seen this coming? (Everyone. Everyone saw this coming.) SQN Capital Management is the same outfit that famously offered to sell Suniva off to the Chinese Chamber of Commerce for a cool $55 million left on a Central Park bench at 3 a.m. Now they’ve gotten the OK to sell off the manufacturing equipment at a public auction, does anyone … Read More →