EnergyWakeup – Episode 5 – EnergyWakeup With Senator Wiener Of CA And Assemblyman Brooks Of NV

These are the top 10 most read solar articles by your peers this week!

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Yann

This is your SolarWakeup for February 17th, 2017

I supportish Solar. This Governor’s letter about a carbon tax is utter nonsense. Yes, it makes everyone feel good and fluffy inside that maybe the Country is unifying around saving the polar bears and solar will be on every house. That’s not how politics works. The NRA spends barely any money compared to their industry’s profits, what they do is activate a million phone calls and swarm a legislator if they step out of line. Solar could have the same exact impact, our associations should have a phone and email list in the 10’s of millions that activate when called upon. Want to change the law? Make it political. How do you think solar won all of those net metering battles before we started losing?
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California is flat. You saw it here first several months ago. Residential data in California doesn’t look pretty, new interconnect apps are down and now installers have to transition to NEM 2.0. With more on the grid, you are going to see slowing growth rates which makes sense but doesn’t bode well for the public companies. Arizona, Nevada and Hawaii are basically closed as markets and they were leading the pack behind California. I’m not saying it’s doomsday but OneRoof, Verengo and NRG Home Solar are all out of the residential market. If I am selling into the residential supply chain, I would figure out my plan B quickly because cheap Chinese goods are coming for any margin that may still exist.
Time to buy? Last week I said it would make sense for First Solar and SunPower to join forces. Yes, Buffett says that two desperate companies don’t make a profitable bigger one but I think we can look behind the curtain here. First Solar has a strong balance sheet and remains quite competitive in the utility scale business. Governments and utilities are not going to stop their solar farm build out and Series 6 modules are pretty impressive albeit the write down the company has to take to skip Series 5. First Solar could be a buyer here, the SunPower technology has a strong footprint in the residential sector that is growing, cash and loan deals, with the independent contractor base they have built for the past decade. With a market cap under a billion, the technology is becoming intriguing as an acquisition target.

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Yann

This is your SolarWakeup for February 16th, 2017

Political Strategy. We discussed this on EnergyWakeup, that the solar policy teams and politicians that support solar don’t push the envelope hard enough. It doesn’t mean that you have to get that ideal outcome on day one, but it makes the forward progress seem like a negotiated settlement. It’s crucial that with the public support the industry gets, that we help politicians file bills that go above and beyond today’s standards.

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Tax reform. I asked Conor McKenna from CohnReznick this exact question because tax reform can throw a solar model sideways for tax equity investors. This should impact ITC except reducing future demand for the credits. The main cause of discomfort is the cash value of the depreciation if the tax rates are reduced. Keep watching this space, Speaker Ryan says that tax reform is going to be taken up late spring and summer of this Congressional session.

The Path for Utilities. Who knew? It would take Kansas City Power & Light is putting in 1,000 EV charging stations across its service area. Kansas regulators declined the request to ratebase the $20million investment and Missouri has yet to rule but the utility appears to move forward regardless. This is a smart use of shareholder capital because they already have the credit and collection mechanism to charge users for the energy and growing sales will mean more ratebase investments for power plants or infrastructure once everyone drives an EV.

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Yann

This is your SolarWakeup for February 15th, 2017

2016, What a year! Congrats to everyone for a stunning achievement. We blew by 10GW and ended the year with over 14.6GW of total capacity.
The Florida Way. After a constitutional amendment passes in Florida, it shall not immediately be so. The legislature has to pass an implementation bill outlining how it becomes law. Amendment 4 was the commercial property tax exemption that was voted on overwhelmingly by the voters and now a bill is starting to move. The legislature starts in March and goes for 60 days. The only required bill that Florida legislators have to pass is the budget, expected to top $80bb this year but don’t miss the fireworks because there is some infighting already.
Iowa! Wouldn’t it be great if solar becomes a thing in Iowa? The first in the nation State with solar policy to campaign on? It’s worth the fight for the solar industry just for that in my opinion.
NRG Activists. No, not the type you saw on TV campaigning against coal plants. This time you have activist investors getting themselves on the board. I find it peculiar that NRG touts its greenness, of which they have stuff to talk about, when they need to deploy capital with good returns. But when it comes to blaming the issues the company has, it somehow always goes back to David Crane and his ‘crazy’ ideas about electric vehicles and solar panels. I’d like Mauricio to stand up and explain that the green NRG makes NRG money!

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Yann

This is your SolarWakeup for February 14th, 2017

Time for Corporations to lead. I’ve been a vocal advocate for the disaggregation of solar production and solar consumption. Community solar does a lot of that but always relies on the regulatory body to ensure the rules don’t change. Corporate offtakers through financial transactions like contracts for difference or energy hedges. Getting the markets to drive these segment is crucial to its longevity and investments, because companies making deals to make money is the best subsidy there is.
Digging deep on tax equity. Tax equity is the cheapest and most expensive money at the same time. It requires complicated structuring that takes advisors and cash from the sponsor. Without the ITC our industry would be suffering through a bad time right now so when I saw the announcement that SolarReserve was able to get $78million for a concentrating solar plant with molten salt storage, I was intrigued. Listen to my conversation with the financial advisor on the deal, CohnReznick, to hear about the complexities and how it got done.
20 Governors. Have sent a letter to the President urging to continue on a path for more solar and wind. One interesting mention is the value generated for land owners from rent for those power plants. Let’s watch this space and see where it goes.

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Yann

This is your SolarWakeup for February 13th, 2017

Turn the LePage. There is a serious problem in Government when executives have a problem with not having a dictatorship. Study after study shows that net metering is the best policy when it comes to merging fair with simple. Most States would have to create a time of use structure that ends up more financially attractive to solar customers if they really looked at the value of solar. LePage calling for the resignations of the regulators is the least crazy thing the Governor has done but good grief it’s time for him to go.
Spectators sit on the sidelines. Arizona looks like a mess to me. Solar doesn’t lose much but ahead of crucial votes that kill markets, the policy teams were pitching and organizing hard until a year ago. Now there are nothing but crickets. No marches, no pickets and no news stories. Just bad decisions. I’m tired of hearing that solar needs to be a market player and negotiate common ground, when was the last time that the NRA gave up so easily or negotiated at all?
Tariffs don’t work. Sad to see people lose their jobs around the world at SolarWorld. Not sad to see Qatari backed Asbeck lose, over and over again.
Wonk out. How does NYC get its electricity? Worth a read

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Yann

EnergyWakeup – Episode 4 – Interview With Conor McKenna From CohnReznick Capital Markets

This is your SolarWakeup for February 10th, 2017

Going inside tax equity. In this EnergyWakeup episode we speak with Conor McKenna, Managing Director at CohnReznick Capital Market Securities. Conor advised a $78 million tax equity investment for the Crescent Dunes Solar Project by SolarReserve. The innovation here is that the Crescent Dunes solar project uses molten salt energy storage technology from the SolarReserve concentrating solar tower site. We couldn’t leave the interview without asking Conor about his thoughts on tax reform and how it could impact the markets.
The easiest way. When it comes to energy, not all things are created equal. Regulators are still failing to compare the power sources correctly, leaving out the usage of water or other societal costs. Also, the healthcare cost shouldered by taxpayers from the pollution of fossil fuel plants. That is why a flat carbon tax makes sense, it achieves what the market regulators are failing on. Pollution also doesn’t stop at State borders and doing it on a national or continental level can and should work.

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Yann

This is your SolarWakeup for February 9th, 2017

This could work. Assuming you could get the executives on board (hardest part of any merger), bringing Sunpower and First Solar together would make a lot of sense. Both companies are rooted in manufacturing and have products that offer a strong value proposition. First Solar does really well in the utility scale segment with modules close or better than 72 cell poly panels. On the other hand Sunpower is leaving the utility scale and focusing on distributed, mostly residential. The companies already share 8point3, the publicly traded yieldco. With the public markets down on solar, now would be a great time for a buyout of all three public companies. First Solar has a solid balance sheet but is entering a difficult time as they skip the Series 5 and go straight to Series 6 panels. If a PE firm is interested in this idea, give me a call!
A 5 billion dollar profit for taxpayers? It didn’t do what it was supposed to do, lose money. Get rid of it, total loser. Sad!
Solar farms in Florida. The biggest disappointment in solar over the past 10 years has been the market in Florida. One of the largest users of energy, sunny (Sunshine State after all) and plenty of land. Good to see some of Sunedison’s legacy projects getting to the finish line.

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Yann