This is your SolarWakeup for May 11th, 2017
SolarWorld goes Insolvent.The German parent company of SolarWorld US has filed for insolvency. A few things to consider and trust me, I don’t have any of the answers. As a publicly traded company in Germany, the standard for directors to have to file is a much lower bar than in the US. The company has been in financial turbulence in the past and must now try to restructure itself again. No statements or reporting has thus far made clear if the US entity will have to take any action or what this means for the operations here. What is likely to happen is that buyers of product will become more cautious going forward due to the financial uncertainty. One thing to note, the European markets have had a minimum price for several years and yet, this result happened. It should be clear to Commerce staffers in the US that a minimum price has not worked in the past and will only harm consumers across all markets.
Trade Questions. I don’t understand the trade cases well. I am not sure what the minimum price means, how it could or would get negotiated down from the 78 cents per watt and when it would start. Here are questions that I would want answered if I was currently running a solar company. If a minimum price is put in place, could any of my orders for modules be retroactively taxed? Who would have to pay that tariff? Would the minimum price increase the margin for imported modules? Wouldn’t this be worse than a tariff which creates a pool for local manufacturers to reinvest into new production? What has happened thus far to the tariffs collected from the first trade case? Who did it go to and how did it help?
The Energy Storage Road Show is happened starting May 22nd in San Diego!
Interesting NRG Reports. In one move, NRG could create a massive renewable energy company. Reports say that activist investors in the company are asking for the renewable energy assets to be sold off. NRG Yield is 5GW on its own plus any of the ongoing projects being added to a potential sale. So the question is, does an existing investor come in and acquire the projects or is this a perfect entry point for a private equity player to finish what NRG started?
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Yann
This is your SolarWakeup for May 10th, 2017
Storage going big time. These are welcome news as I start planning my research trip through California on the topic of energy storage. Navigant has come out with a new report saying that energy storage will be a $50billion market in 2026, which is less than 10 years away. Keep in mind that this is adjusted for the rapidly reducing hardware costs creating a 27GW market. The leading market in 2026 is expected to be Asia Pacific followed by Western Europe. The US is expected to be a $10billion market. I look forward to seeing how this lines up to what I hear from you. If you are a contractor or developer working on energy storage, please send me an email and let me know.
The FERC Gets New People. The NARUC President, a regulator from Pennsylvania, and a staffer from Senate Majority Leader McConnell’s office have been picked by the President to join the commission. NARUC applauded the selection but no word on the specific views on items related to PURPA, which is likely one of the leading topics of interest to the solar industry. According to Politico, the co-lead of Jones Day’s Global Energy practice is expected to be named next, potentially as chair.
The Energy Storage Road Show to speak with contractors and developers integrating batteries is on the calendar. San Diego area during the week of May 22nd, Los Angeles area the week of June 5th and Bay Area the week of June 19th. If your company is working on storage, hit reply and reach out directly.
Unfortunate news from TenK. News started trickling in yesterday that TenK Solar was winding down operations. A product with some innovation given the reflective racking solution. From GTM’s reporting it seems like a major problem was in the inverter and not the module part of the system. Solar hardware remains hard and creating profits through hardware innovation continues to elude most. I wish the employees all the best.
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Yann
This is your SolarWakeup for May 9th, 2017
SEIA/SEPA Complications. Yesterday I wrote about the need to bring more money to the State chapters by renegotiating with SEPA on how the revenues from SPI are split. This is a complicated topic because there is a contract between SEIA and SEPA on their JV for Solar Energy Trade Shows, LLC (SETS). I believe that SEIA should approach SEPA and ask for 25% of the total profits to go to the benefit of State SEIA chapters. (More on how later) You may not know that the Chair of SEIA’s Board of Directors, Nat Kraemer, recently stepped down as the Chair. The Acting Chair is now Tom Starrs, the VP of Market Strategy and Policy at SunPower.
How it gets Tricky, Quickly. Tom Starrs is now the acting Chair of SEIA and may run for the permanent Chair position when election happens later this year. As the VP of Policy, Starrs is also a member of the board of SEPA and has been for several years. So when it comes to renegotiating the SETS JV agreement Starrs would have a clear conflict. Given that this has gone under the radar for several years, I don’t know what the solution is. The SEIA Board appears to need an introspective review on what it stands for or what values it seeks from the members of the Board. The Board, if you recall, is a leading revenue driver for the association and allows companies to pay for a seat, somewhere north of $125k per year. I don’t have a problem with the paid for board but I do think we, as an industry, need to define central values on items like net metering for the members. Currently we have members of the Board that diverge from what many of us would consider good for all of us. Most of the time we don’t know how issues are pushed in committees by various members because small companies tend to stay out of that process, a divergence from State chapters which is a problem.
The Energy Storage Road Show for Solar Contractors & Developers in California is officially on! I will be traveling throughout California in the next 8 weeks. If you are looking at or have installed C&I and large scale energy storage, send me an email so we can get together. More specific dates coming soon but get on the list now.
What happens beyond SEPA? I’ll start with this. I don’t have a problem with SEPA or their mission but let’s be clear about their mission. This is the utility’s non-profit to access the solar industry. The board is made up of current and former utility execs and solar companies working in utility segments. Starrs was a member of the board of directors at SEPA when SEPA’s executive committee voted to reject the SEIA request to help in pushing for the extension of the ITC. Moreover, SunPower is a PowerPlus member of EEI, the group that last year was caught looking to fight solar by branding itself more cleverly and could use studies like today’s top story to define solar to consumers. I don’t know Mr. Starrs and I am not questioning his motives but the solar industry should have an acting Chair of their trade association that has no appearance of conflicts. I don’t see how we can fix our State level issues which require a negotiation with SEPA unless the direction is very clear.
Make sure you listen to the latest episodes of EnergyWakeup. Listen to the importance of State level solar policy from Rebecca Cantwell, the executive director of COSEIA. And hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based analytics and proposal tool.
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Yann
This is your SolarWakeup for May 8th, 2017
Learning about SEIA Chapters. I have spoken to many people in and around State SEIA chapters. One thing that becomes clear early in the conversation is that SEIA chapters and national SEIA are separate entities. No sharing of revenues, no flow of funding and oftentimes separate policy intiatives. In the latest episode of EnergyWakeup, Rebecca Cantwell from CO SEIA spoke about the dockets in Colorado. While CO SEIA intervened in all three dockets, SEIA also intervened in two dockets. Our industry is already stretched on resources of time and money, are we really that divided that National and Colorado associations need to intervene separately? Especially in a State like Colorado that is operated with an executive director and solid membership base, couldn’t SEIA help funding the intervention instead?
Getting more money to States. We know we need more money for State policy fights. We also need more money to make State chapters stronger. There needs to be a more transactional approach between SEIA with a $10 million budget and States like Colorado that only have a $250 thousand dollar budget. The question is, where can the money come from? States have the problem when pitching national companies that they are already members at SEIA and some paying $150k to be on the board. Don’t get me wrong, I understand the point the companies have and that there are limited sources of money to go around. There is a pot of money available though, read more below the pitch.
Are you offering storage for your solar projects in California? I want to hear from you. In the near future, I will be doing a learning tour and meeting with contractors and developers throughout California working in and around energy storage.
How to give money to State Chapters. 38% of SEIA’s budget comes from SPI according to the 2015 filing. SPI is the lifeblood of the solar industry when it comes to budgets, much like the State conferences are for State Chapters. SPI actually makes double the amount that goes to SEIA, half of the profits go to SEPA. SEPA got $3.7million from SPI in 2015 which was about 56% of their revenues and less than $1million in revenues came from members as opposed to SEIA’s $5.7million dollars. I’ve been to SPI and one thing is certain, board members of SEIA have much bigger booths than SEPA’s board members. A 50/50 split between SEIA and SEPA doesn’t seem like a fair arrangement anymore. SEPA probably agrees with this given the demographic of the exhibitors and attendees are strongly slanted towards SEIA. If the split were to change, as it should, use that pool of capital to fund a matching pool to State chapters. Bring temporary EDs to new States and get more local companies involved in policy. More on these topics this week.
Make sure you listen to the latest episodes of EnergyWakeup. Listen to the importance of State level solar policy from Rebecca Cantwell, the executive director of COSEIA. And hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based analytics and proposal tool.
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Yann
This is your SolarWakeup for May 5th, 2017
Happy Cinco de Mayo and have a great weekend!
A new mile high podcast. We continue the conversation with State SEIA chapters, this time with Rebecca Cantwell from COSEIA. Colorado has been in the news recently with a settlement that took nearly a year and got Colorado back on the right track to get back into the Top 10 solar States. One thing that is glaringly obvious is the need for more funding. COSEIA makes most of its money from its great conference but even after that revenue it is less than $300 thousand per year to run the entire association. Compared to the millions spent by utilities, how can COSEIA compete? As an industry, we must figure out a way to arm our advocates with more. Just look at Florida’s victory from yesterday. The press release came from Vote Solar and SEIA, not from the State level chapter.
Ivanka’s influence. The President’s daughter will be heading to the EPA and meeting with Scott Pruitt to discuss the Paris agreement. I don’t really have any commentary, just summarizing the article.
Are you offering storage for your solar projects in California? I want to hear from you. In the near future, I will be doing a learning tour and meeting with contractors and developers throughout California working in and around energy storage.
Power to the people. The era of big energy storage costs are over but we cannot go back to letting utilities add fixed fees to the bills. SGIP in California is going to drive the volume of storage up and bring a new pipeline of storage deals to the market. Who is financing this? Is it all cash? PACE? SGIP levels will decline and possible run through funds relatively fast, less than a year perhaps.
Make sure you listen to the latest episodes of EnergyWakeup. Listen to the importance of State level solar policy from Rebecca Cantwell, the executive director of COSEIA. And hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based analytics and proposal tool.
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Yann
Rebecca Cantwell, CO SEIA Executive Director, about settling with Xcel and moving solar forward
Rebecca Cantwell is the Executive Director of COSEIA, one of the best State level trade associations. Rebecca has been the director for 5 years and brought COSEIA through a multitude of regulatory issues. With a small budget of about $250,000, COSEIA brings results in a true David versus Goliath fight. COSEIA is an independent entity. It may be listed as an affiliated partner, COSEIA does not report to or receive funding from SEIA. This is a separation that has been made clear to SolarWakeup by many State SEIA groups. Most recently, COSEIA was in the room where it happens. Negotiating … Read More
This is your SolarWakeup for May 4th, 2017
Seeing the bigger picture. I was pretty upset at Suniva last week. I’ve spent my days and nights looking at the filings, speaking to experts and trying to understand the various issues. When it came down to it, Suniva didn’t have a choice. Either they shut the door and walked away or took the chapter 11 money. From a fiduciary standpoint, I don’t think employees had a choice. SQN was the available lender and their caveat was filing the 201 petition. I am certain that given the choice, Suniva would have chosen an alternative path. As I continue my work, I need to hear from you and your ideas. We have to look at every opportunity to stop the petition to help our industry. This is an issue to affects us all, do not ignore this. At the very least look at your projects and change your module assumption to a $0.78/watt price and tell me what it does for you.
Tax Free Florida. Voters in Florida overwhelmingly voted to pass a tax exemption for commercial solar, fixing a mistake from a constitutional amendment voted on 10 years ago. The bill isn’t perfect, hasn’t left the legislature and it isn’t signed by the Governor but it looks promising. Baby steps, one foot in front of another, or whatever metaphor you like.
Are you offering storage for your solar projects in California? I want to hear from you. In the near future, I will be doing a learning tour and meeting with contractors and developers throughout California working in and around energy storage.
Utilities versus IPPs. There is a circuit including talking points in the wholesale markets. IPPs have been speaking at energy conferences and they are not happy with the zero emission credits given to nuclear power plant operators. Specifically Dynegy believes that the ZECs given to Exelon in Illinois is a bailout that will cause the markets to stop functioning because it absorbs the valuable capacity value. It’s happened at two conferences that I read about, we shall see if it happens again.
Make sure you listen to the latest episodes of EnergyWakeup. Hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based energy bill analytics and proposal tool. I also speak with Tony Clifford from Standard Solar about being acquired by Gaz Metro and his work at SEIA.
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Yann
This is your SolarWakeup for May 3rd, 2017
Would you be angry? I wonder how I would handle the situation. Imagine driving a vision for a massive company that changes the path it is on, a pivot but not in a startup. Public companies are impatient and creating the new path gets you fired. Don’t get me wrong, I’m not shy and have been known to rock a boat or two but this takes major guts. After getting fired, a few quarters go by, and the company realizes you were right. A few years pass and the company is executing on your original vision because it was the right financial play. Do you sit and smile about being correct? Beat yourself up for rocking the boat? Or get angry for being fired and saying I told you so? Annoying if you ask me but NRG is an interesting case study for leadership in public companies.
Influencing the policy. We covered Thomas Pyle, the former transition chair for DOE. Now one of his former employees is taking over as the acting head for EERE. Why? To pretty much do the opposite of and undo the work of the Obama administration. EERE covers a lot of solar related activities and improves job opportunities across America, including job training, education and empowering regulations. Dan Simmons is the man you will hear about today and going forward regarding EERE matters.
Are you offering storage for your solar projects in California? I want to hear from you. In the near future, I will be doing a learning tour and meeting with contractors and developers throughout California working in and around energy storage.
As goes Ohio? The solar industry in Indiana was hoping that they could get the Governor to veto an anti-net metering bill that the legislature passed. Unfortunately that wasn’t a successful venture. This is politics and the market wasn’t big enough to pressure the Governor into making the right decision. That being said, I’m always disappointed that a reporter transcribes the utility talking points when they are so obviously untrue.
Make sure you listen to the latest episodes of EnergyWakeup. Hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based energy bill analytics and proposal tool. I also speak with Tony Clifford from Standard Solar about being acquired by Gaz Metro and his work at SEIA.
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Yann
This is your SolarWakeup for May 2nd, 2017
Anyone have $4million to spare? The politics of this 201 petition are circular. Let’s recap. SQN Capital is the bankruptcy lender. In further reading the first motions by Suniva’s CRO, SQN is offering $4million through the bankruptcy. The loan is at 12% per year plus some fees and has the first lien security. I find the interest rate rather cheap given the circumstance which raises a red flag but let’s ignore for now. We need some allies in defeating the petition. First off, the Chinese modules makers should buy the debt from SQN right now on the condition of withdrawing the 201 petition. The cheapest $4million market entry price ever. Second, the utilities across America are going to have a problem. A $0.78/watt minimum price is going to significantly reduce the amount of solar they can ratebase. EEI must be hearing from its members on this topic, what will they do?
Defining Climate Change. I didn’t read the NY Times oped on climate change. The headline was annoying and I don’t feel like losing time reading a skeptics dissertation. That being said, we need to stop talking climate change. It doesn’t poll well, it’s partisan and too complicated to argue with skeptics. How do you convince someone gravity exists if they don’t believe it? We need to change the conversation. Clean water, clean air and solar energy. We all like that, we all want that. You can live in deep red States and your neighbors will be pro-solar and want to breath clean air. March for Science and Climate Change was great, for our echo-chamber but it leaves many outside of the bubble wondering what the agenda is. Preach solar. That’s our coalition.
Are you offering storage for your solar projects in California? I want to hear from you. In the near future, I will be doing a learning tour and meeting with contractors and developers throughout California working in and around energy storage.
A budget deal. House negotiators have come to an agreement to keep the Government running through the fiscal year. Let’s just say that Trump isn’t getting his wish in gutting the EPA and DOE budgets for this year. This doesn’t mean that good things will come of the money, likely many programs will stall because of lack of staffing and effort. You can see more in coverage on the issue.
Make sure you listen to the latest episodes of EnergyWakeup. Hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based energy bill analytics and proposal tool. I also speak with Tony Clifford from Standard Solar about being acquired by Gaz Metro and his work at SEIA.
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Yann
This is your SolarWakeup for May 1st, 2017
Happy SGIP Day. For many contractors across California today is an exciting day. The first window for SGIP funding is opening today, assumed to be fully allocated within minutes. Legislators in California have gone big in funding the incentive and they have thought it about it logically, similar to the CSI, SGIP will step down quickly. You would assume that the quickly dropping battery costs will keep up with the drops in incentive. Here is my question to California contractors. How did you choose your partner? Once you chose the battery architecture, i.e. Lithium Ion, how did you pick the rest of the system. The software? The power electronics? The manufacturers? This is going to be a big market and I am contemplating a road trip through California to learn how storage is affecting your business. More on the road trip soon.
Was it up to Suniva? Suniva first got into trouble financially in 2015, when module pricing was much higher. That is when Shunfeng came in and acquired 63% of the company. More recently, as money was running out once again, Suniva had hired their former CFO, Jim Modak, as a consultant to raise more money. Modak had been the CFO for 8 years but left the company in March of 2016, staying on for 6 months as a consultant. Modak is now the CFO of SQN Capital Management. This is where it gets interesting. Shunfeng and Wanxiang were not willing to put in more capital into Suniva, forcing the company towards a Chapter 7 filing. One lender was willing to provide post-bankruptcy capital, SQN Capital, under certain conditions. The first condition was to file the 201 petition for a tariff. If Suniva wanted tariffs, they could have filed it a year ago, this seems to have been a requirement of SQN. I don’t know how much SQN is providing but it’s a financial play betting that Suniva assets are worth more if a minimum price is put into place.
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The pension funds. Pension funds are playing in solar. They’ve long circled the wagons, waiting to see if scale is there to make an initial investment with enough room to follow on year after year. The consolidation of assets is also creating new market opportunities because unlike utilities, pension funds will likely outsource asset management, O&M and other functions. This also creates a nice value to investment bankers that specialize in the field like MVP Capital. Pension funds are lean operations and solar is likely to create outsized returns compared to asset classes like real estate.
Make sure you listen to the latest episodes of EnergyWakeup. Hear from solar entrepreneur, John Gurski, the founder of Energy Toolbase, a cloud based energy bill analytics and proposal tool. I also speak with Tony Clifford from Standard Solar about being acquired by Gaz Metro and his work at SEIA.
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Yann