This is your SolarWakeup for November 20th, 2017
Short Week. I will be off for Thanksgiving and the Wednesday edition is up in the air depending on if there are enough articles to send your way. Enjoy your holiday and make sure to do something that we can all be thankful for – starting with the 1st item on the rundown.
Your Comment? Have you taken a few minutes to send comments to the trade representative ahead of the December 6th hearing? You can use this script from SEIA and send the comments on this page. Make sure to have your entire office do this as well.
Tesla’s Rig and Roadster. No doubt, Elon puts on a show. Electrification of transportation is the leap we need for climate change. At 500 miles per charge, I am also interested in the impact to the grid for the electrification of freight. With an 8-pin charger (and a dose of real-life needs), some engineers are theorizing that the “mega-charger” could be up to 1.6MW of power to charge the semi in 30 minutes. Power density times massive scale (3.5 million trucks in America) means having to re-rethink the energy grid, mostly around our highway system. Best of all, this will get financed through non-dilutive funding from 1,000 rich people that want to go fast – placing $250k payments for the new roadster. If the money were in my account, it would no longer be there either because this thing is sick.
Public Manufacturers. As JA Solar goes private with its manufacturing, I wonder how long it will take for all of them to be off the public markets. In relation to Renesola, taking the manufacturing private while keeping the public vehicle to focus on owning assets, it comes across as an internal reverse merger. This strategy makes sense to me, I wouldn’t be surprised if it is replicated again.
Another Great Speaker. I’m excited to have Amy Harder from Axios join us at SolarWakeup Live! DC. Amy has been covering energy for years and was in Bonn for COP23 last week. Axios has an incredible insight to the DC ecosystem and was the publication that brought us Trump’s “I want tariffs, bring me tariffs.” I look forward to speaking with Amy about the news of energy. Get your tickets here.
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This is your SolarWakeup for November 17th, 2017
A Nuclear Mea Culpa? Citing customer frustrations, South Carolina’s SCE&G will be canceling a set of rate increases stemming from the construction of the failed VC Summer nuclear plant. The shareholders of the utility will be ‘paying’ for $2.2billion in construction costs in what appears to be future reduced ratepayer earnings over the next 50 years. In short, it seems like the ratepayers are lending the write down of the losses. While the reporting appears to show a utility showing ‘remorse’ over its business actions – utility monopolies continue to operate in a dreamland far away from reality.
In Murphy We Trust. With the election of Phil Murphy, who ran strong on the solar issues, New Jersey is looking to reinvigorate its market. While projects are happening, it is nowhere near the scale as previous eras in the New Jersey solar market. David Crane has been named to the transition team which bodes well for us looking at markets for a long term sustainable sector. I look forward to seeing how that plays out as he takes the Governor’s mansion.
Subsidy Prescription. The DOE NOPR is looking like FERC is open to the idea, Commissioner Chatterjee is quoted wondering why anyone would consider it controversial. The article also goes into the concept of resiliency and focusing on the power plant as opposed the distribution lines. When I was in Boston a few weeks ago, a million customers lost power – some for as long as a week. They didn’t lose power because generators went down, they lost power because trees and wind took down the transmission infrastructure. In my mind the controversy is based in the cost to consumers. If ISOs offered $10billion in incentives for resiliency, I doubt a single coal plant would be offered. My interview with Jon Wellinghoff covers much of this.
MA NEM Cap. If you haven’t listened to or read the latest podcast (there is a full transcript on the page) you are missing on vital information for your business or understanding the impacts to your customers’ business. The other interview that will come out next week is with Senator Boncore about the NEM cap in Mass. While the takeaway is muted, there are a bunch of crumbs that would make me look hard to ignoring NEM caps for my business. More to come on this.
Kentucky Coal. Even in coal country with what I would assume to be a utility friendly regulatory body, PPL is shutting two coal plants that are old (~50 years) and would cost too much to make compliant with environmental standards. These aren’t the first and far from the last coal plants to close – this is purely a consumer induced move since customers want cheaper energy and clean air & water.
Live! DC. The event will now feature Congresswoman Gonzalez-Colon, the resident representative of Puerto Rico. Puerto Rico is more than a goodwill story, it has been one of the most enticing solar markets plagued with external issues. Now that the grid is torn apart and people have no energy, it represents a challenge to rebuild the grid in a 21st century way. I look forward to having this discussion and finding the path to the opportunity that it represents for the solar industry to help.Get your tickets now.
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This is your SolarWakeup for November 16th, 2017
DC Tickets. 4 of the speakers are almost confirmed, as soon as they are, you will be told their names. Andrea Luecke and Dr. Lidija Sekaric are confirmed and two more have signaled their availability. Solar Foundation is doing great work including the ongoing jobs census, analyzing diversity in solar and now their leadership on helping rebuild Puerto Rico. Dr. Sekaric spent the entire Obama tenure working on solar related issues including as the director of the SunShot initiative. She is now at Siemens working on innovation in energy including how microgrids are put together. I will be talking to her about the City that gets 100% of its power and energy from renewable energy – what does that look like and what would it cost? Get your tickets now, early bird pricing only goes until Thanksgiving.
Bourbon With Your Whine. The WTO is likely to allow retaliatory tariffs against US goods if Trump goes forward with 201 tariffs. The threat now looks to target bourbon and cheese, neither of which have really anything to do with solar except for their lobbying impact on two important individuals – Paul Ryan and Mitch McConnell. Maybe someone needs to get Duterte from the Philippines to target US investment into local real estate, that could get some attention.
CAISO Projects. Advisory work – I am looking for a few projects that have CAISO interconnection but no offtakers. If you have this or know where I could find it, please let me know. My advisory work keeps the SolarWakeup lights on for everyone.
Puerto Rico Update. An interesting pro and con take on the topic of how to rebuild the grid in Puerto Rico. Meanwhile, as Bernie Sanders points out, more than 50% of the Americans in PR still don’t have power after two months. Imagine that happening anywhere in the US – it would never happen.
On To Emissions. The finish line isn’t at 100% renewable energy for operations after all. Microsoft is out with a goal to drop emissions 75% by 2030. Google had previously outlined its energy goals to not only match geography but also time of use. It may seem like corporations were close to finished, but it seems like they are just getting started.
Solar On Coal Mines. Solar should have a quiet goal of getting Senators Capito and Joe Manchin to be as avid of solar supporters as they are coal today. Part of that is showing the value of land is greater with solar and the second would be to switch the economy into a solar focused one. There are great teams on the ground in West Virginia looking at this and doing some ‘greenfield’ development. Rocky Mountain Institute also published a report appropriately titled ‘A Second Life For Legacy Mining Sites.’
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This is your SolarWakeup for November 15th, 2017
We’ve Got You Covered On SMART. If you were to look around other publications you would be hard pressed to find information about the SMART program release in Massachusetts even though it’s the most important topic in the State in years. Not to worry, we’ve got you covered with information that you need to figure out your bidding strategy. Not to shorten it to a few words, you have a 40 minute information filled interview with the person in charge of the program. This platform isn’t about covering news, instead looking to give you exactly the facts you need to run your business.
The Point of Live! Events. It’s been two weeks since SolarWakeup Live! in Boston. The people that attended that event already knew what you are only reading today. They also know more information about NEM caps than you. My reason for creating the events and asking for your trust in the content is to change the way you have experienced conferences. Right now, you go to conferences for networking, not content. You go for several days and spend thousands on a badge. While I look forward to having people travel to SolarWakeup Live! events, I trust that you believe in the content you’ve been reading for 5 years on this site. Live! DC is coming up in a few weeks and there are still tickets available. If you live on the East Coast you should either be at Live! DC or waving signs in front of the USTR hearing on December 6th.
When, Not If. This is a unanimous assumption in the solar industry, storage is coming. It may not pencil everywhere today, neither does solar but it will grow like a hockey stick similar to the solar growth from 2007 to today. It may actually happen faster than solar since the solar penetration aids in the market growth. In the near future, I will share with you my upcoming venture which involves energy storage with a value proposition aimed at the solar industry.
Terminate That Language. Schwarzenegger is right, stop talking about climate change especially to people outside of your echo chamber. Clean air, clean water and solar energy. All of these things poll at over 70%. Monopoly utilities poll at well below 50% so play the spread between those two issues and you will win people over. Great coverage from Amy Harder at Axios from COP23 in Bonn.
Micro And MacroGrids. This may be the 2017 buzzword of the year, microgrids. Really what we are talking about is power generation and power controls inside a disconnect switch. If the grid shuts off, the home/building/network can continue to function within the designated panel loads. The trick comes with multiple power generation sources on the inside of the disconnect switch. When you look at it this way, I’ve come to learn that there are less suppliers able to participate than you would expect. Backup power may be a better way to sell this, it also allows a homeowner to buy emotionally as opposed to asking for payback numbers.
Who Is Terence Stewart? Making the case for 201 tariffs is always tricky, you have to lie to yourself and the people you are speaking to. I don’t know who this lawyer is that got to write for the WSJ on behalf of the 201 petitioners, but he did a poor job. It took GTM’s Shayle Kann more than 140 characters but less than 280 to destroy the case he was making.
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E025: SMART Program In Massachusetts and How Regulators View 201 Petition Risk with Mike Judge
On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston. Full Transcript Below. (While we attempt to make it verbatim, it may miss a few words) Make sure to rate and review the podcast! Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January. If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you. [soundcloud id='355811162' height='false'] Trancript: YANN: [00:00:00] Want to thank Mike judge from DOER for coming today, I am sure if you are in the solar industry in Massachusetts you know Mike and you know Mike’s work. Your work kind of depends on him doing his job. He is a director of renewable & alternative energy at DOER, he’s been at DOER for seven years so he knows the SREC program and he knows how to administer it. Also at MASSCEC, you’ve managed the solar carve out of the RPS amongst other things but now most recently you have been the leader in developing the rules of the SMART program. You finalized those rules but because it’s a tariff as we know it, the DPU, which has released some draft language, can you talk about where the process stands and what you make of the process so far? MIKE: [00:00:57] Absolutely so the DOER, the legislation was passed last April, requiring the DOER to create new solar programs. We started working on that last summer, we had some listening sessions, we put out the draft proposal in the fall, final proposal in the late winter or mid-winter and we issued our regulations, promulgated those in August. So now DOER’s part here is almost done with components are which I can talk about in a minute but now the model tariff has been filed by the distribution companies jointly filed at the DPU and they are kicking off that proceeding, we had a deadline to intervene, several interveners, several people intervening with their granted status today and then there was procedural conference and a public hearing last week and so right now we are waiting for them to advertise the procedural schedule for the remainder of the proceeding. Don’t know exactly what they are going to do next but we did ask at the conference where they try to aim for first order date and set up a schedule accordingly so that the transition to occur hopefully spring of next year. YANN: [00:02:13] So speaking of the transition, what is the main goal in the transition going to SREC to SMART? MIKE: [00:02:20] I think there is a few things, the biggest one I would say is trying to create certainty and bring cost savings to ratepayers. One of the benefits of SREC its different than other states is we did actually have a good job of mitigating some of the risks, our auction mechanisms and SREC values remain high but financiers still would take very, there’s a steep discount that you’d have to take when you are selling things over a long term contract. So in some cases we’ll have taking 50% of the SREC value and the problem with that from a rep air stand point is that you are still paying 100% and so when you have an SREC that’s worth 100 dollars and someone buys it a hundred and fifty and selling it back for three hundred dollars, the generator, the owner of the facility or the developer of the facility is only getting 150 but their financial backer is getting the 150 as you are paying that. So by moving to a tariff, we can create financial certainty and you can have transactions between the utility and owner of the facility which removes a lot of that soft costs and financial costs. YANN: [00:03:37] So talk a little bit about the process and the involvement of the industry to get to the final rules. MIKE: [00:03:46] Yeah so we tried to really be as inclusive as possible throughout the process and so we had these initial listening sessions at the same time we were conducting some analytical work on the necessary incentive values, that was last summer and then we put out the straw proposal, collected feedback on the industry, got over 600 pages of comments on the straw proposal, 250 sets of individual comments and lots of feedback from stakeholders and then we convened a number of working groups. So we reached out to the major associations in all sorts of different stake holder groups and ask them to appoint representatives to a working group by either there’s five working groups and so they’re established on different components of the program and they about 40 pounds over the course of the fall. All different types of people, land use advocates, small solar developers, large solar developers and low income advocates, you take utilities, the attorney general’s office and the product of that was our final proposal which we then took some additional informal comments on and then we had the formal rule making another 100 sets of comments and feedback from stake holders there and that’s when well get to the final rule. So I’d like to think its been an open and transparent process where we’ve tried to solicit as much input from the general public as possible but now there is still one final process left where we are focused more on the mechanics of the program then the policy. [00:05:32] Some important questions of the policies as we enter into that mechanics discussion but the eligibility criteria, the process of establishing incentives, all that’s really been established by the regulators. YANN: [00:05:43] So one of the major attributes of the SMART program verses pretty any other solar programs around the country, it looks like you are really working to encourage solar projects to include energy storage; why did you choose the two kind of matrix, two kind of Y axis of percentage of capacity to solar plus number of hours? MIKE: [00:06:15] So earlier in the Baker administration we launched the energy storage and it’s a 10 million dollar initiative, the majority of that fund is going towards administration projects and those administration projects will actually be awarded soon but the first component of that was comprehensive study on the benefits and the used cases of energy storage in Massachusetts and we found that there is tremendous for all sorts of different used cases for energy storage and there was a series of recommendations that came out of that and one of them was averaging the solar program to include solar plus storage. As we develop more solar regs 1600 megawatts DC and this will be another 1600 megawatts AC. So collectively when SMART is done, we will have probably somewhere between 2200 and 3500 megawatts AC of solar capacity in Massachusetts, nearly 95% or more that’s going to be on the distribution system too and then so that all acts as load reducer and when you have that much solar on the system, you really starting to see it very reminiscent of California, you see it today there’s a little bit of one today in the spring of this year, it was really very dramatic. [00:07:42] So we really need to have battery storage or some way to mitigate that and we saw this was really like a tremendous opportunity to incorporate storage from the get go because it makes more sense to have storage upfront when you are building these products rather than being retrofitting it, it’s more expensive to do it after the fact so just pair them upfront. As far as to why we structure the incentive that way with its looking at the ratio of storage capacity to solar capacity and the duration of the storage, that was done primarily because of the results of the energy storage which showed that the shorter term to medium term storage with the generally sized, approximate size to the facility is compared was going to provide the best benefits to repairs and actually if you look at that chart, as you move to longer duration or higher capacity, there is a diminishing increase in the amount of incentive that the facility has received and that reflects that same thing. It’s really a sweet spot in the 2 to 4 hour and sized to the 25-60% of the solar capacity and that’s reflected in the benefits that we identified in the storage study. YANN: [00:09:08] So talking about the mechanics of the next step of the SMART program, how much more can you do under your guidance at this point before the DPU issues the final order things like, hosting the auction, the initial auction or participating in the DPU process kind of give some guidance on things that maybe you were silent on but have an opinion on now that’s there is language around us. MIKE: [00:09:42] I think there’s still a fair amount that we can do. So the two big things that are left on our plate are the roll out of the program and being able to do the intake of application so we have solar program administrator, the distribution company’s choice who solicited for that summer. They’ve made their selection, they’ll be executing that contract possibly this week and so there’ll be an announcement on who that entity is and then the RFP for the initial competitive procurement, that’s drafted and we are first working on details with them so that should be going out soon and those are the two really kind of big items that DOER is doing, we also have to build the application platform, make sure it’s working, get the website up and running, do a lot of outreach and stakeholder communications and then plan for that transition but in addition to that we are full intervener and the DPU proceedings, we plan on providing comments and filing briefs, asking discovery questions we’ll be active with on that proceeding, not clear if we are going to issue sponsor testimony and put up a witness and that proceeding is resolved but we plan on being involved and there are certain things that are in the tariff that are not expressly called for in the reg. [00:11:08] An example would be the utilities cost recovery mechanism. So I’ll state just very briefly there the proposal is a fixed charge cost recovery and there are some details and mechanics of that. DOER will likely pick a position from that, I don’t know what that position is going to be this time, I can’t really speak to that but we’ll be participating in that proceeding and taking a stand on what we think cost recovery mechanism looks like. YANN: [00:11:41] Speaking about the auction right? because you could that's obviously everyone wants to know what the clearing price is going to be from a development standpoint but we also have this pending federal issue with the 201 petitions happening, we're module prices can be double what they are today. MIKE: [00:11:54] Yeah. YANN: [00:11:55] How do you, can you have an auction before the 201 is resolved? MIKE: [00:12:00] So I've spent a fair amount of time, I've asked this question a lot of people and the consensus generally seems to be that yes, there's no reason to delay, we should we should put something out there is obviously some uncertainty lingering out there and I think we're watching it very closely. The timing of the release of the RFP is actually maybe fortunate that it's coming out a week or two later than we originally envisioned because now people will have full visibility until at least what's recommended by the ITC and that we will be making final announcements on the result of it potentially after the White House makes a decision on what they're going to do and we can take that into account to some extent, I think as regulators, state regulators, we try to not design our policy around what may or may not happen at the federal level because it's hard, it's really hard to do that and when you have sort of optionality things that might go one way or the other that's challenging. That being said, we do have the ability to make changes to the program if necessary. So there's something really drastic happened, it's our reg, we can open that reg, not saying we want to I don't think that's you know, that's no one wants us to do that really you know, you we don't open regulations without careful consideration but we can take appropriate action if necessary. So we're watching it closely, I think we're going to run the procurement, hopefully people will be able to understand at least what their what the potential outcomes are at the time they're submitting bits but yeah we're well aware. YANN: [00:13:38] But do you see you know because this is a clearing price right? There's there there's both financial modeling as well as strategy. MIKE: [00:13:49] Yeah. YANN: [00:13:50] I mean people are going to be bidding what maybe gets them below the highest clearing price. So you know maybe they don't want their number but they're hoping to be under the clear, clearing price number you know, what if I assume a modest whatever you know, maybe I'll take today's ITC recommendation and model that into my number but someone says you know what I'm not modeling any of that and maybe there's enough of those people that unrealistically bid into the system and then all of a sudden the White House comes out with double the ITC's amount right? I mean do you see a scenario where maybe you'd say you know what there was too much uncertainty and we have to issue another RFP? MIKE: [00:14:39] Well we do routine the flexibility in the Reg to do a couple things, the Reg allows us to determine whether or not there was a non-competitive result, we can issue of additional solicitations. We can also administratively set prices so I think we're sort of in a wait-and-see, let's see what we get, let's see what happens, let's see how it plays out and then we can, we have some ability and flexibility to make decisions and modifications to a certain degree but if things are that really kind of dramatic impacts, then we can take further action as well if necessary. YANN: [00:15:16] So when do you see the RFP being issued? MIKE: [00:15:20] I'm hesitant to give like a firm date but I'd say in the next two weeks (October 31st – November 13th) or so, like it's very it's well developed and we're working, it's high priority for us. YANN: [00:15:32] So let's speak about some of the dynamics you know, solar advocates are coming back and saying listen, the block one makes sense. Block one there's a clearing price, everyone under the price gets that price and then the feedback is well after that, it moves to an average, it takes that it takes the mean of the initial bids and works down from there. Which from their standpoint can be skewed if there is a wide range of bits, what do you think about that feedback and do you think there's a fix for a process? MIKE: [00:16:08] Yeah, so part of the reason we went that way is that there was some concern that there would be a lack of participation in the initial procurement. If people could just wait for block one and get the same rate as they could have gotten in the procurement, then a lot of people would just opt-out and just wait and see what happens but by setting the block one rate at the clearing of the marginal clearing price, then you're sort of guaranteeing anyone who participates in that initial procurement is going to get a higher base compensation rate than anyone who waits for block one. That being said, people in block one can also take advantage of adders and other, they can be alternative on bail credit, they can mean that metering facilities, they don't have to be a qualifying facility. So there's some advantages to waiting to but I think that you know, there are again opportunities for DOER to make modifications to the final procurement results. If you, I'm going to throw in an extreme example here, if we saw a bid come in at one penny kilowatt hour, obviously that's probably not a very realistic bid and that's not something that someone can actually achieve if that was the clearing price, DOER does have the flexibility to say this was not necessarily competitive or administrative least set the price you know, I don't know that we would take this action, I think we want to wait and see and reserve our judgment but we could say, we'll count, we'll set the average but we're not going to count that one set bit in setting the average. So I think, we are hoping then nothing like that happens, we're hoping that people are responsible and bid in what they actually need but we're watching it closely. YANN: [00:17:51] How do you, how do you get you know, you're going to have, I mean some would argue that any project in the SMART program is going to have energy storage associated with it you know, many people say that these days. Energy storage prices are dropping and this will be a way to increase the return of the project. So having energy storage is just going to make financial sense for investors to participate in, you're going to have all of this dispatchable resource, not dispatchable but not just energy but also capacity, how do you get the distribution companies and utilities to take this energy and take this power and participate in the market? Because you know it does give them some flexibility to but they're not required to. MIKE: [00:18:47] Well this is this with respect to capacity rights and ownership or the energy? YANN: [00:18:56] The value of that. MIKE: [00:18:57] So there's actually some long-standing precedent on the net metering side in Massachusetts for the utilities taking ownership of the energy. So any energy that's exported back onto the grid they take title to and then they sell that back into the market. They actually install the interval meters on these systems and they register the assets in ISO England, most solar generators don't even know that they're doing this behind the scenes and offsetting the costs of the net metering program through that. So I'd expect that would work the same way and SMART for the energy side of things. Capacity is a bit more of an open-ended question right now and I'd be hesitant to kind of offer a position on it because I don't think the or air has a formal position that we've worked out yet. What I will say is that it's been raised as a top issue of the proceeding by a number of people with me and there are two dockets actually at the TP right now, there's one on net metering and capacity rights and then there's SMART, which is going to have to deal with this as well and in the net metering rules in 2009 order, where a lot of the net metering rules were established, the DP said that the utilities have, are allowed to take title to the capacity in order to avoid offsetting it. [00:20:12] They didn't direct them to enroll in the markets and actually do something with it, they didn't require them to take title and I think that's the question that's at hand, should that be firmed up and I think the same question will apply in SMART and the DPU has aligned those proceedings, I haven't talked to them about this or anything but it seems as though they've outline those proceedings so that they're happening coincident with one another and that they can issue sort of a unified approach to how this is all going to be settled going forward. YANN: [00:20:41] Do you see potentially this discussion including the rights to dispatch the assets? MIKE: [00:20:48] It could, I don't know exactly what the utilities position will be, I think this is all going to get fleshed out in in discovery, in the discovery phase of the proceeding when intervenors are asking questions of the utilities, there's going to be a lot of questions asked about what is your intent regarding the capacity? How do you intend to participate in these markets? How do you intend to offset the costs and it'll be interesting to see what their perspectives are because I think that will probably inform a lot of the intervenors positions when they actually file testimony and briefs later on? That's why I'm a little hesitant to say what DRS position is because I'm not entirely sure. YANN: [00:21:26] But it's an interesting sort of thesis right? If one party has the rights to the capacity, especially on energy storage integrated systems but they don't own title of the actual asset therefore can't dispatch, they wouldn't be able to bid the capacity and to market without knowing. MIKE: [00:21:47] No, it's a tough question, it's not I'm glad I don't have to grapple with it at the DPU you buy we can just offer an opinion and they but yeah it's, I think it is to me from the feedback I've received on the tariff as filed, this seems to be the top issue for, top concern among the solar industry this and the cost recovery mechanism and there's a lot of other smaller issues and a lot of other people in intervenors in the proceeding who have a specific thing a specific item they want to address but as far as kind of issues that affect everybody that all intervenors I expect will comment on, I think these are two of two of them. YANN: [00:22:30] What's the fairest criticism the solar industries offered about the rules this far? MIKE: [00:22:36] I suppose that there's some complexity to them, that I think you know DEOR ours never really shied away from complexity. I do think it is a big shift from where we have been historically and but I think the industries, I think it's less complicated than people think it may be once we kind of dig into it and that what it does really does is it creates a lot more options for business models. It levels the playing field between qualifying facilities and net metering, it creates this alternative to net metering in the event that that metering caps, it gives sort of a fixed price rec contract for behind the meter facilities, it has all these different adders. So I think it at first glance there's just a lot getting thrown at you and it takes a little while to sort it out but people seem to be finding their niche like this is what, this is the market I want to serve, this is the types of projects I want to build, this is how the business models going to work and I think once people kind of get their arms around it will start to make sense but if definite, I definitely recognize there's a lot of moving parts and it is a lot of new things and it definitely challenges people to kind of rethink how they've been doing business. YANN: [00:23:58] So another critique of the DPU rules, which I'm sure you probably because you mentioned finance ability is that some of the draft language kind of makes it seem easy to cancel a contract or cancel might be the wrong word, how important is the bank ability of a SMART project for DOER? MIKE: [00:24:27] I think it's very important, I mean that's really what we're trying to create here is certainty and price certainty, revenue certainty to the generators and cost certainty to ratepayers you know what you're getting for a revenue stream ratepayers, know what they're paying over the life of the project and that's, that hasn't been the case with net metering and extracts, both of those are volatile, uncapped well that's right kind of the cap with the ACP rate but they're volatile streams and prices and costs for those programs can shift dramatically from year to year. This program is pretty, when something, when a project gets locked in you know what they're going to get paid and just to be clear, I would say that the it isn't a DPU rule, it's the utilities proposed tariff but the, in that tariff I know there's some concerns about some of the language around, their ability to cancel things. I think some of that is intended to just be sort of pro forma from their part certainly I think wording matters and the details, those details will be fleshed out but there a lot of the eligibility criteria for participating in the program itself, that all sits with DEOR and those final decisions will be made by DEOR. [00:25:43] These are I think those are more tariff enrollment terms, there's some specific things that you're required to do as participating the tariff that could result in a cancellation and I think all that it's going to have to be washed out. YANN: [00:25:55] Do you do you worry as you add you know, you mentioned you know 1,600 megawatts AC of solar in the state, naturally as you add more solar to the grid, more infrastructure will have to be built and many times solar developers will end up having to build new infrastructure substations etc. Things that cost millions of dollars, do you worry that over time the cost of having to build up the infrastructure goes counter to the fact that the revenue streams are going down over time? MIKE: [00:26:31] Absolutely, I mean I've heard a lot of, that's another concern I think of people is interconnection costs seem to be going the opposite direction in many cases and I think storage can help mitigate some of that but and you know there's maybe work that needs to be done on the interconnection side of things at some point as well. The, but that is definitely a concern of ours and we did build into the program review, I can't remember how many megawatts, after a certain amount of megawatts are reserved, we will conduct a review and potentially make changes if necessary. So if things are going slow, if one market segment isn't really picking up, if one utilities service territory is lagging behind, we can step in and modify our rules to see if we can kind of adjust that accordingly and get things back on track. So we'll definitely be watching intricate, we watch interconnection and monitor it very closely. YANN: [00:27:31] What kind of advice can you give other states right because you know, as a lot of people have been in the weeds here and maybe they think it's too complex. There's no doubt that Massachusetts continues to make forward strides in growing its solar market whereas other states are not right? I mean the and it's not like you have this supermajority from a political standpoint you know, it's a diverse state politically and you know what kind of, what are you, are you speaking with other states about crafting language? What kind of advice are you giving them and why do you think other states that could be doing something like this, are falling short? MIKE: [00:28:15] It's hard for me to kind of speak as to why they might be I mean I think one thing that we've done is, we've haven't let perfect be the enemy the good sometimes I mean, I so our programs are complex but we also just kind of really, we put something out there and the goal is to get projects in the ground, let's get things built and then we'll learn from our mistakes and then adjust accordingly in the future. If you spend too much time on the front end trying to craft the perfect policy and then you put something out and it doesn't really work, I think that there's been some states that have seen that happen, we do talk to other states and especially a lot of our neighboring states. There's been a lot of interest in some of the land-use stuff that we're doing among East Coast states, that is a part of our program that you know we sit under the Secretariat of Energy and Environmental Affairs. So when projects get cited on farmland or on a wetland or near a wetland, then that impacts some of our sister agencies and there were all answering to the same secretary so he hears it from those agencies and it was a very important thing for him that the, that our Paul is, our solar incentive policies were in alignment with our environmental and agricultural policies so we spent a lot of time and effort crafting that and a lot of states have taken notice, spend time on the phone with Connecticut, Maryland, Rhode Island, who similarly smaller East Coast states with not a lot of land and but the ambitious goals trying to build solar and they're trying to grapple with how do we match our environmentally in our energy policy? [00:29:53] So yeah, I mean, I guess advice other states, don't let perfect be the enemy of the good, listen the stakeholders and try to be as inclusive as as many business models as possible because Solar is complicated. Every project is different and there's all sorts of different types of solar projects and solar companies and you got to try to find a way to be as inclusive as possible. YANN: [00:30:18] Speaking of stakeholders and advocates you know, maybe you're not going to give criticism but give some feedback to solar advocates on how to improve the language you know, I asked us the same question to Senator bond Cory this morning you know, how do we get, why we in this net metering fight again and you know with no foresight on when that will get resolved but give some feedback to the other side of the table that are asking you for things and how can they improve their messaging, when they're trying to get something from you? MIKE: [00:31:00] Well I will say that I think the solar community of Massachusetts has done a great job over the last few years of getting a more cohesive message and being more on the same page. A few years back, I think a lot of fractures kind of emerged where you had different sectors of the industry sort of arguing against one another, there was a bill back in 2014. YANN: [00:31:28] Or 41, 85 yeah. MIKE: [00:31:29] And there was a lot of internal debates and it was, I think surprising to the administration at the time in the legislature to watch the solar industry have infighting amongst each other and I think there's been a lot of good work done since then but it's still not perfect, I mean you have a lot of different voices to the extent that people can speak with one voice, I think that's very helpful. I know that's not always know is easy to do and actually in the DPU proceedings SIA has intervened on behalf of a number of associations so there's not different associations participating in that proceeding, there's only one voice and I think that will be helpful for the industry to not have conflicting messages being sent to the DPU about what solar is looking for out of that. I know that could be very difficult though, I think that's probably the biggest thing I would I would say and because I know legislators have said this to me too that, it seems like they don't get the same message from solar stakeholders, like one group wants one thing one, wants another thing they're all saying they want net metering cap increases but they all say something different, they say it in a different way or say something different and it's just, they don't live and breathe this every day. [00:32:47] So they spend a lot less time thinking about this than I do or the people at DOER do and so when they hear conflicting things, I think it just confuses them and they say well, we're not going to deal with that so do the extent you can unify that message that's really helpful. YANN: [00:33:06] How important is it to your success that the net metering caps are increased? MIKE: [00:33:12] Well I think that we have tried in the SMART program to ensure that net metering caps being increased are not a barrier to the success of the program. That's why we've created the alternative on bill credit, that's why we've allowed for a mechanism that would level the playing field a bit between net metering facilities and qualifying facilities because in today's environment, it being qualifying facility doesn't make a lot of sense Massachusetts. If you have SRECs in the QF rate, you're just making a lot less money than someone who has SRECs net metering but Nitor SMART it's not as much of a difference between those two and I think we've tried to ensure that continued increase of net metering caps is not critical to the program success because that was a major barrier for SRECs net metering caps weren't raised, then S trucks weren't going to get built whereas traditionally wouldn't get built and all right so I don't think it is as critical to the success of the SMART program as it was to the success of the asteroid program but certainly we remain engaged in that. YANN: [00:34:23] Discussion, do you have a handicap of your expectation for the net metering cap increase? MIKE: [00:34:30] That's on well we're just between friends. YANN: [00:34:32] Yeah. So with that I want to thank Mike for joining us today.
On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston. Full Transcript Below. (While we attempt to make it verbatim, it may miss a few words) Make sure to rate and review the podcast! Make sure to check out SolarWakeup Live! in D.C. on … Read More
MA DOER Releases 100MW RFP, Starting SMART, But Results Could Be Changed
- MA DOER has released the initial block procurement with a 100MW RFP ahead of the resolution of the 201 petition case which could increase the cost of solar modules significantly
- The MA distribution companies, that make up the SMART program, have selected CLEAResult as the administrator and the initial bidder conference will occur on November 17th, 2017
- DOER has issued the final regulations and submitted them to the DPU to enact the tariff rules. DOER has requested the tariff to be created by June 1st, 2018 but the process is ongoing
- The regulations from DOER and the RFP are meant to be final, however if the 201 case severely impacts the results of the program, DOER reserves the ability to make changes
- Developers are looking at their own situation for bidding strategy. Some bidders are considering submitting projects meant for SREC II as NEM cap increases seem unlikely and other bidders have modules reserved without 201 impact
MA DOER has released the initial block procurement with a 100MW RFP ahead of the resolution of the 201 petition case which could increase the cost of solar modules significantly The MA distribution companies, that make up the SMART program, have selected CLEAResult as the administrator and the initial bidder conference will occur on November 17th, 2017 DOER has issued the final regulations and submitted them to the DPU to enact the tariff rules. DOER has requested the tariff to be created by June 1st, 2018 but the process is ongoing The regulations from DOER and the RFP are meant … Read More
This is your SolarWakeup for November 14th, 2017
Great Response. There are days I wonder if you are listening to anything I write but then there are days like yesterday. Over 1,000 of you went to the USTR site to make your comments heard. Plus I am sure many of you asked your colleague to do the same. Keep up the pressure and ask your partner companies to do the same. Use an engineer, a lawyer, an accountant that depends on your business to be successful? Send them the link today!
National Security. Jobs, consumer cost, and now national security – all worthy editorial content on why the 201 petition is bad for America. The military has been ahead of the game when it comes to renewable energy for far longer than the rest of the government. These op-eds are crucial to show the diverse and unanimous opposition to companies that look to destroy an industry for their own good.
No Sympathy To SolarWorld. This is the third time in the US that SolarWorld looks to step on hundred of thousand jobs for the enrichment of its investors and executives. During the second anti-dumping case, I publicly called for solar people to stop supporting SolarWorld by no longer buying their products. Unless there are consequences outside of this process, like no sales, SolarWorld will continue to find bailouts wherever possible. This includes all partners. Taking money to help advance the SolarWorld goals, means you are taking sides. Lawyers, accountants, marketers – run away and find business from the solar industry away from SolarWorld. That is the only way to stop this behavior that hurts us all. This may be an unpopular opinion but I doubt I am the only thinking it.
Pennsylvania SRECs. In-State SRECs only for Pennsylvania compliance. Let’s see how the market grows from here going forward, looking for 5 year strips to drive some growth in the market.
SMART Goes Live. You heard it hear yesterday and the interview with Mike Judge will get published tomorrow. SMART RFP has been released and bidding will start soon. Be wise with your strategy and how it overlaps with the 201 case.
Kerry Plots Legacy. It sounds like John Kerry is pushing emerging economies to look at other sources of energy besides coal, namely renewable energy. He was a rockstar at the Paris COP and pushing this agenda abroad is fantastic.
Bonn Bonn. The global community is not surprised by the lack of US involvement at the COP23 hearing. I continue to be amazed and surprised by the leadership from Governors like Jerry Brown and leaders like Mike Bloomberg (Go Hopkins!). We need more Cities and State level politicians to push for 100% renewable energy policies and local leadership on solar policies. As an industry, focus on changing the rules at your City Hall, it is a much easier and immediate path to market development.
Presented By NTCIC. National Trust Solar is a subsidiary of the National Trust for Community Investment Corporation. We enable historic, new market and solar tax credit investments in support of communities nationwide. Since our beginning in 2000, we have raised more than $1 billion in tax credits. We are recruiting new sponsors and hiring for our dynamic team.
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Yann
This is your SolarWakeup for November 13th, 2017
A Moment To Write A Note. You really have no choice, today is the day that you need to take a minute and forward an email to your team. If you didn’t know, Robert Lighthizer, is the US Trade Representative. He is the one that sits in the oval office and briefs the President on trade issues. The solar 201 petition is essentially passed the trade commission phase and moving into the Lighthizer hearing phase. This hearing is happening on December 6th and while you will not be able to get into the hearing, you can send public comment. Here is your task for today. As each of your employees to write a comment and ask your customers to send one too. Together we can get 100,000 comments on behalf of the solar industry to Mr. Lighthizer. The link to comments is here, if you need a draft script, it is here.
Not What If but Would You? Everyone has done this math but it is time to execute. What if your employee cost went up by 5 cents per hour. $2 per week. What if your salary went down 5 cents per hour or $2 per week? $2 per week isn’t going to break your business or personal budget. On the other hand, if every solar professional provided 10 cents per hour to an advocacy campaign, I guarantee that your job prospect would improve and be saddled with less regulatory uncertainty. In theory, if I started a SolarWakeup advocacy campaign that was funded by our readers and their companies employees, we would have over $10million in annual budget. With that budget, we would have a mailing list of over a million American solar supporters and local officials would know better than to vote against solar. Call this SolarPledge 2.0. If 10,000 readers/employees commit to this, I’ll quit my other work and we can conquer the solar coaster together. Would you?
Power Markets & Solar. In my conversation with Tom Matzzie last week we spoke about his work in the power markets as an energy retailer. Part of being a retailer is matching generation with customer load through financial products common in the power markets. Those same products, outside of accounting rules, allow retailers to create their own synthetic community solar programs. Some cautionary messages from Tom on this as well but if you aren’t working with a retailer yet, you probably should be.
The MA SMART Program. This week you will hear the recording of my conversation with Mike Judge, Director of Renewable Energy at Mass DOER. Mike is in charge of the SMART program regulations draft and the auction process. The news he made at SolarWakeup Live! was that the RFP for the first block will come out this week or next. There was some hesitation in light of the 201 proceeding but if the SMART program were to start on time, next summer, the RFP has to go out now. Be aware that the auction could be skewed by developers that have protected modules without 201 tariffs meaning that any assumed increase of price you include could put you outside of the bidding norm.
Your Event. I want to thank MDV-SEIA for asking me to hold an interview at their event. If your group is hosting an event and want to chat about doing the same, I welcome the opportunity.
House Versus Senate. Keep your eyes on the difference between the Senate and House tax bills.
DC Sponsors. Starting today you will see logos and links for Live! DC sponsors. I want to thank Standard Solar, MMA Energy Capital, NTCIC, GAF and True Green Capital for sponsoring. Please take a moment and learn more about their work.
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This is your SolarWakeup for November 10th, 2017
Today is Veteran’s Day and a great time to thank all veterans working alongside us in the solar industry. I also want to thank the leaders that give opportunity and seek out veterans when the time comes to work as a civilian.
10 Minutes. 10 People. The trade rep hearing on the 6th is a big deal. SEIA is likely to be planning some great and public participation that you should look for. In the meantime take ten minutes and get ten colleagues to do the same to send your comments to the trade representative about what this 201 petition means to you, your job and your company. 10 minutes times ten people. That’s what we need.
Rocking The Policy. Vote Solar is doing some pretty awesome things and getting involved in policy battles across the Country. They are also growing and adding superstars to the already stacked team, (much like the Miami Heat team a few years ago). Keep watching them, and their efforts.
Steyer. Is compiling quite the email list with his impeachment efforts. Moreover, with the likely tracking code on the website, he is capturing the Fox & Friends viewers that are coming back to his website. The retargeting I would do would then show a Facebook ad for Trump support with an email capture system there. Information warfare starts with someone clicking a link. The stated goal is 2million emails, which would give him almost 2% of the last election, which is a great place to start if you want to run any sort of issue campaign.
Painter’s Union. In this conversation with Tom Matzzie he tells the story of his time as a union organizer and his experience working with a painter looking to join the union. Painters had to spend many hours working on political related advocacy to advance their union. Learning to educate those that affect their business was classified as a requirement. If you compare the importance of policy in the painting sector versus solar, ask yourself the importance of investing the time to advocate.
Dollars In Dallas. This is a brutal headline for local politicians and may be the best news push of the 201 petition. Losing $100million investment in a single County is brutal for a county admin and this is happening across the South because of the trade case. If you know a project halted, at risk, let’s put it into the newspapers.
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This is your SolarWakeup for November 9th, 2017
Live From DC! Big congratulations to the new and fantastic team at MDV-SEIA. They cover 3 (4) States and hosted their annual Solar Focus Conference this week. I had the opportunity to interview Tom Matzzie, CEO of CleanChoice at the conference and record it so you could listen as well. Tom is an amazing advocate and energy leader in our space using the power of the masses to advance renewable energy. I can’t wait for him to lead CleanChoice to 1 million customers. Tom and I are sharing some great ideas on advocacy which we will hopefully share soon!
10 Hours. In our conversation, Tom tells the story about the union painter having to spend certain amount of hours educating legislators. What would it take for you to spend 10 hours per month on policy like calling or meeting with legislators, volunteering on a campaign or educating regulators? Imagine if 275,000 solar pros spent 2.7million hours per month on policy, do you think we’d be fighting legislative battles right now?
Inverter Battles. There seems to be split happening in the microinverter battle between SolarEdge and Enphase. SolarEdge announced revenues of $166million, net income of $26million. On the other hand Enphase had revenues of $77million and lost $5.9million. The problem with technology is that winners take market share and the slide as the second place is difficult. I’d expect Enphase to pivot into something that separates the offering into another category so the comparison isn’t apples to apples and allows customers to think differently. If they don’t expect more of the split to happen.
Ratebasing Solar. There has been a flurry of requests for and investments in renewable energy. NV Energy is looking to approve PPAs at rates in the $30/MWh range. AEP, like NextEra, has focused on ratebasing renewable energy. The issue is that utilities aren’t truthful about what is best for the customers. A PPA in Florida or Ohio would likely have better rates than the LCOE to consumers, especially in the situation that would drive the utility to give zero capacity value for planning purposes and request additional gas power to make up capacity needs.
DER Data. Does anyone have data on demand side management, demand response programs run by investor owned utilities? This goes in line with capacity value for solar across distributed and central plants as I don’t remember the last time my DSM box was used for my AC unit in South Florida.
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Yann