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
This is your SolarWakeup for July 19th, 2017
Going Underground. Shoutout to the awesome team at Dandelion for their launch. It’s not solar but solar has given these awesome people a baseline of knowledge that will surely change the world. Go Katie and Jake!
California Goes For It. Cap and Trade gets the extension that Governor Brown argued for very publicly in the legislature. SB 100, the 100% RPS bill, looks like it is making good progress clearing some hurdles in the assembly. California will keep tracking forward regardless what DC and Red States argue for. Oklahoma announced a 10MW yesterday, woohoo!
NRG Assets Get Interest. Maybe when NRG thought about raising money to appease the activist investors, it didn’t choose renewables because of the image it created for the company. Maybe the choice was based on the ability to actually sell the assets. Think about it. What if NRG had decided to sell its coal power plants instead? How much interest for those assets and how much cash would it generate after paying off the debt? Solar is simply more valuable at this point and easier to trade.
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Yann
This is your SolarWakeup for July 18th, 2017
Show Off Your Solar. We are all fans of SunShot and their work. Now they want YOUR help to show off the best solar images you can find. In the contest titled, Hit Me with Your SunShot, you can win cash prizes and help create a solar awesome portfolio of images for everyone to use.
Don’t Do As I Said, The Outside Inside NRG Story. Don’t shy away from the length of this article because it tells you what David Crane thinks about NRG’s decision to eliminate his strategic vision for the company. I don’t want to give away the essence of the article because if you care about how solar fits within an IPP, there are great points in here. Couple of things I would like to add. From a carbon standpoint, the overall carbon footprint of the assets will stay the same given the solar portfolio will keep operating. NRG’s footprint will go terribly in the wrong direction however and I expect the post divestment cash flows won’t look good for long, especially as energy storage crushes slow moving power assets. I think NRG should continue the splitting up of the company however, much like Engie decided to focus on consumers. NRG should sell the retail business or sell the power assets. Surely Dynegy would continue to double down on power assets and then NRG would be left with a consumer facing business.
Throw Out The Rulebook. Forget the title and most of the content of the article about court rulings. The interesting story is the business dynamics of who sued and why. When Illinois passed their energy bill it did so as a cover for subsidies to be paid to the nuclear power plants that Exelon planned on closing if the subsidies did not come through. The energy sector got together and the price to get the subsidies were a variety of renewable energy policies that move the solar and efficiency markets forward. This caused other power plant operators to sue the State of Illinois for unfairly subsidizing nuclear power plants which they were hoping would be closed to remove generation from the wholesale markets.
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Yann
This is your SolarWakeup for July 17th, 2017
Hope everyone enjoyed some Summer time off, I sure did. Now back in action and refreshed, many big things happening in the SolarWakeup world which I hope to share with you relatively soon. Time for some news updates.
Before and After (Lobbying Edition). A draft of the now famous DOE grid study has come out that finds, "The power system is more reliable today due to better planning, market discipline, and better operating rules and standards." Of course this is a draft that the politicians have likely not seen and edited yet, likely leaked to a lobbying shop by staffers to attempt to stop the political changes from happening. Call this the ‘deep state’ of energy science in the Government, an action I am thankful for. Don’t hold your breath that this will not be changed, dramatically perhaps. The grid does need changes, primarily in the speed and quantity of pricing signals. The market moves far too slow still, and once it speeds up with the right buy/sell signals, generators will be able to invest more capital.
Let’s Talk About NRG. The headline many solar people saw about NRG shedding its renewables business was perceived as a negative. So here is reality. First of all, the assets aren’t getting torn down or taken out of service. They are being monetized. Why? Because Wall Street doesn’t really feel like long term, stable returns produced by solar is very exciting or create much upside. Take the NPV of the asset and generate some cash and debt availability. Look at NRG as a bank that has to continuously dole out money (invest) and make a return. Letting it sit there in perpetuity is not what public equities are made for. The political/corporate reality was that NRG really had no choice. Elliot Management is a hedge fund that has taken an activist position and now sits on the board. A depressed stock with assets will often face these issues where a fund sees a way to find value by making different decisions. Recall Carl Icahn forcing Apple to issue a dividend. The NRG management team could have taken the position that renewables are core to the business and they didn’t want to sell them. Likely they would have been shown the door and someone else would have executed the sale. Now who will buy the assets? That is the interesting story in my opinion because someone can quickly challenge some of the big players currently aggregating assets.
SB 700 Gets Punted. The CSI for storage will happen, but this year the agenda for climate related policy was quite full and maybe the wrong time to invest $1.6billion in energy storage when the contractor community was largely still on the sidelines. The policy teams pushed this hard and created a great jumping off point for next year where the chances will look better to enact this law, likely with much cheaper battery prices and an exhausted SGIP.
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Yann
This is your SolarWakeup for July 14th, 2017
Have a great weekend! Back to normal next week with daily summaries while I am in New York. Of course a Happy Bastille Day to all our French readers and a Happy 7th Birthday to my son! (though he’s not a subscriber)
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Yann
This is your SolarWakeup for July 13th, 2017
An ice shelf goes rogue, NRG has to shed solar, and DOE keeps funding.
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Yann
This is your SolarWakeup for July 12th, 2017
What’s your takeaway from Intersolar? Let me know
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Yann
This is your SolarWakeup for July 11th, 2017
No Intersolar for me this year, as I am still on vacation and soon en route to New York. Hope you are all enjoying yourselves and make sure to support CalSEIA with an awesome event at AT&T Park.
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Yann
This is your SolarWakeup for July 10th, 2017
Energy Road Show Finale in NYC. Next week will be the end of the energy storage tour. After three successful trips through California, a lot of takeaways that guide a strong guidance on where energy storage is going in the solar industry. Next week, I will be in New York to discuss with capital providers what the next steps are to get more capital into this market and the path for energy storage needs to take to scale in solar.
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Yann
This is your SolarWakeup for July 7th, 2017
Have a Great Weekend! Solar Powers America. Who is this group and who is behind them? Link
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Yann