This is your SolarWakeup for August 2nd, 2017
SolarWorld Enters Insolvency. In Germany, the process for insolvency is rather tough for management. Your responsibilities and exposure can be rather onerous and the departure of the management team can be telling. Last week, rumor had it that investors were close to a deal to save SolarWorld. This could still happen but it appears less likely now that the company has entered insolvency proceedings and the team has resigned.
An Arizona Reminder. I know it’s hard to keep up with everything going on but there is still an open investigation in Arizona regarding the corporation commission election a few years ago. Since the investigation started, the investigators have charged a former commissioner and his wife as part of a broader review. Documents will be seen and dealmaking will surely happen now that there is leverage and the aim seems still to be on APS, part of Pinnacle West.
Retrospective Perspectives. Andrew Beebe has been around solar for a lifetime, which means starting between the years 2005 and 2007. I remember the days of ‘alternative’ energy and agree that the energy piece of the conversation is largely gone, now focused on renewable instead. That being said development of renewable energy still seeks capital from special situations groups instead of private equity firms built around this entire premise. Money looks for deals more than deal development. That is the natural next step in my opinion to make solar gain market share into double digits of total supply.
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Yann
This is your SolarWakeup for August 1st, 2017
Will Storage Mirror Solar? I often ask myself how the chemistry projects in storage will play out in the storage sector. 10 years ago, solar was also going through a science project with companies in thin film and organic cells trying to drive up the efficiency to lower the cost. When it all played out, costs in crystalline came down and bankability caused the science projects to struggle gain the scale required to get actionable market share. Storage could be different. The science could drive exponential advantages as opposed to just lower costs. Lithium Ion may very well be the crystalline that keeps market share because of costs, access and bankability but maybe something else will overtake that. Google seems to think so…
This Will Be Different, Shell 2.0. Shell has been hiring some big solar names, names most solar folks know. The CEO has said his next car will be an EV and capital will get deployed into renewable energy. BP had a solar factory, Chevron used to do tax equity and Total basically owns SunPower. Oil companies have been trying to see an entry into new energy for years, as long as any corporate money. This time will be different I think except that the total dollars deployed will be restricted by the drastic reduction in costs.
For You To Read. Leaving this story here without comment.
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Yann
This is your SolarWakeup for July 31st, 2017
A Corporate Deal That Makes A Difference. It seems to me that JP Morgan going corporate including a goal to deploy capital is different that the Amazon/Facebook/GM/Ikea/WalMart announcements before it. JP Morgan has quite a track record in solar, big equity and tax equity alike. Hitting $200bb isn’t just good for our industry but it’s a good thing for investors in JPM as well. Being a customer only makes sense given that investors need as many deals as possible with great offtakers.
Series 6 Paying Off. Wall Street had some doubts about First Solar’s double down on manufacturing. The company has made much of its cash on development, betting early and often on interconnections. It’s been mentioned that FSLR is a winner in the 201 petition but I wouldn’t get too conspiracy theory on that given the leap in technology that FSLR was banking on before the petition was ever filed.
Going Local For Customers. Last month, at the PAC 12 Sustainability Summit, I had a simple message to the leaders in the room. You are the perfect customer and there is no deal that shouldn’t get done. Too many meetings have happened over the years where the discussion about solar ends with “it doesn’t pencil right now.” Really the question should be posed, what does it take to get a deal done at XX cents per kWh? Do we need to go bigger? Do we need to do a virtual net metering deal? Mayors can do the same. By talking to the market, doing solar deals can be done almost anywhere in the Country.
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Yann
This is your SolarWakeup for July 28th, 2017
Have a great weekend!
A Few Of My Favorite Things. There is an irony in seeing solar skeptics get into solar. Many times this is done quietly until they are successful. I welcome them to the solar industry and I am happy to see a change in perspective. In this case, Calpine won a solar project in Texas.
Something To Ponder. The Kochs have been confusing me recently. Of course, anti-solar (except when it comes to protectionism) but in this case apparently anti-EV. This could be based on the reduction of use of oil. But being anti-EV also means being anti-natural gas becase NG is the fuel of choice for the utility which needs EVs to grow. Maybe it is now a tactic of being anti-Elon Musk.
Arizona Settlements. Regulators recommend accepting the Arizona solar settlement. Next week you will hear from the Arizona SEIA Executive Director on this topic. Stay tuned.
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Yann
This is your SolarWakeup for July 27th, 2017
Now West Virginia Is In The Game! Telling a story is more than having it. We talk over and over again about how solar can be a way out for coal miners that through no fault of their own are out of work. A hundred years ago coal meant an industrial revolution, energy that drove the economy into the 20th Century. Today we have solar, a distributed source of power that will drive us through the 21st Century. I applaud the team for putting together this amazing video. It’s short, less than 4 minutes long, but the message needs to be heard. Please forward this on, so that your friends, colleagues and family can see what our industry is capable of.
Tesla Will Fight 201 Petition. Privately, many solar people have asked me who I think is behind the 201 petition, some throwing out the Tesla name because of the Buffalo Gigafactory. I was always skeptical given the support SolarCity had put early on into the ITC extension when some could have argued that killing off competition could be in their favor, same with net metering. A Tesla spokesperson confirmed to Axios, on the record, that they will be fighting against the 201 petition even with a US manufacturing facility. Heritage is against it, ALEC is against it, SEIA is against it, Tesla is against it. Who is for this except for two bankrupt companies, one owned by Chinese and one drowning in debt from Qatar? How is this good for America and Americans?
Ratebasing It. If your business depends on deploying capital to supply energy to a growing demand, the absolute last thing you want to see is lower demand. Even taking into account the growth of population, energy sales in the US are down 3% since 2010. If you look at it per capita, sales are down 7%. This is very much a lightbulb problem and not a solar problem but it will soon become an EV solution. Utilities have to think about demand and the largest place they’ll get it is in transportation. If I were a utility CEO, which I would love to be (Recruiters: call me, I am available), I would be taking a massive initiative to put charging stations across my territory and incentivize EV purchases. I may even propose a pilot to use my cheap debt to finance EV purchases for Uber and Lyft drivers. (Call me!)
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Yann
This is your SolarWakeup for July 26th, 2017
The Industry’s Eternal Shadow. Reuters does a good job of summarizing the current shadow over the solar industry. It seems that there is always something going on, ITC, net metering, or tariff for the second time. Based on what I heard about InterSolar, the show was smaller (by a whole level), no manufacturers and a general sense of pessimism. More importantly than the tariffs themselves, I think most solar contractors/developers would like some stability in the rules. The delays and unknowns cause more disruption than most policy decisions even when the policy decisions cause a reduction in market size.
The Impact of EVs. Assuming that the full scale of EVs does not include the ability to move energy from the car to the grid, power markets will have to adjust to the needs of transportation fuels. For the first time in the industrial age, utilities will compete with oil companies, two industrial sectors that have kept clear of each other for over a century. More importantly the grid operators will need to create the right price signals so the EVs and generators can adjust to the needs of the customers. If the customers don’t get the right price signals to turn on/off their demand, the market will not be able to brute force supply the needs of a transportation sector.
Well Wishes. Eric Wesoff wrote his good bye letter from Greentech Media. This publication has covered many of the articles over the years and we wish Eric well. There is no doubt that Eric was an editor with an opinion, if you pitched stories to him or his team you have encountered it first hand. We did share the tendency to hide in the press rooms in jeans and boots!
Panda, Panda, Panda!
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Yann
This is your SolarWakeup for July 25th, 2017
The Power Of Policy. After major policy shifts and changes in Nevada and Florida, permitting for solar is through the roof. While the baseline is obviously low and percentages are skewed, a shift up is definitely due to the combination of lower capital costs, reduced cost to install and regulatory frameworks that allow solar to compete. For the contractors that stay out of policy in their States, look at this and ask yourself. “What can I do for Vote Solar or my State SEIA chapter to help my business grow?”
First For Everything. The City of Tallahassee has its own power company. Not driven by shareholders, the City is looking to lower the cost of their energy by (wait for it), swapping solar for their existing hydro plant. At $85/MWh, Tallahassee sees $50/MWh solar being a better deal for the customers.
Pushing Back On Rate Increases. Normally a ratecase goes to the regulators and the Office of Public Counsel pushes back. It is becoming more and more politically acceptable and positive for politicians to make rate increases political. Prior to the availability of distributed generation that is cheap, politicians didn’t have a second option. The conversation is now changing.
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Yann
This is your SolarWakeup for July 24th, 2017
Energy Trade Action Coalition. As I was flying home on Friday, I saw a tweet from The Hill announcing a new coalition to fight against the solar tariffs. In reading the article, I was surprised that the quote didn’t come from SEIA or SEPA, but instead of the Heritage Foundation. One main aspect of the tariff petition that has scared me is that it creates a vehicle for Kochs et al to push solar backwards. Before Friday I would have assumed that Heritage would fall into that category regardless of the protectionism argument. Now things are a bit different, this could evolve into a globalism versus protectionism versus renewables argument.
Battery Chemistry. Whether we are talking about solar or battery technologies, the lab often times trails the market. We’ve spoken about this when Bill Gates talks about solving energy through R&D, I caution the reader to think about the underwriter and independent engineer. You can have great technology delivering better outcomes, but without capital backing the project you have nothing.
Solar in the Energy Portfolio. We are going to get to a spot in energy development where all fuel sources cost the same (for arguments sake). Why is it that solar plus storage is assumed to win above all other available sources? It isn’t because fuels have to be transported, stored and burned. It really comes to the flexibility in scale and profile that solar brings to the market. On the roof, on a parking lot, on a landfill; solar wins.
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Yann
This is your SolarWakeup for July 21st, 2017
Have you booked your trip to SPI yet? Should make for a good event, make sure you remember that it is at Mandalay Bay and not the convention center.
Would You Like A Flux Capacitor With That? Growing a bit tired of the solar wall articles given that the notion combines something that is a rather dumb use of solar plus the fact it should never happen. Unless the wall ends up with 1.21GW that allows us to go back in time, I hope reporters stop giving coverage to this. (I win)
Stacking Additional Reasons For California Investments. Governor Brown seems intent on making some lasting changes in energy in California. Creating an uncertainty on storage, transmission and supply of natural gas in California added with lack of extensions of contracts to peaking plants, California is all but putting an ad out for more solar plus storage in the news.
Renew Your Office Energy. Microsoft joins a long list of corporates that seeks to leave the grid and become more of a market maker and taker. When large users no longer align their values with monopolies, they will exercise their ability to create their own contracts much to the renewable energy industry’s wishes.
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Yann
This is your SolarWakeup for July 20th, 2017
Why Didn’t Retail Energy Solar Work? As I started hearing news from people in Mass that Direct Energy was folding its solar unit, I was a bit surprised. I have long thought that retail energy providers would do very well in residential solar. They know marketing and customer acquisition extremely well and they know what customers pay better than solar companies. Or at least that’s the theory because it isn’t working out that well. In thinking about why the exits, I have to think that the sales force signing up retail customers don’t want to sell less electrons or selling retail contracts is hard enough without confusing the customers with solar.
This Is Dumb, Exhibit 742. Zuckerberg continues his campaign tour of America, this time visiting Glacier National Park. Everyone with half a brain knows that the National Park will need a new name soon because the glaciers are disappearing at an alarming pace. However, on this trip the ranger with climate science background was not allowed to tour with Zuckerberg. This is like the Nevada PUC trying to kill solar and is then surprised when thousands of Nevadans protest the change. You can’t hide reality, because it’s real.
Are We Getting Arrogant? There is no secret that our new solar policy theory is to find the common ground with companies trying to stop solar. Part of it is the financial commitment to policy has been reduced, part of it is that we may not be scared anymore because we have storage. I may be overstating this but let’s not get too comfortable because getting back something that you give away is very hard in policy.
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Yann