This is your SolarWakeup for October 18th, 2017

Hannity Goes Solar. I wasn’t expecting to find a video with audio from Sean Hannity speaking intelligently about the solar trade case. The audio was dubbed over the video and I haven’t figured out the original airing of it yet but it’s real. Make sure to tweet it out and get it viral.
Price Inflation. GTM Research published a 201 petition analysis. The data shows that the petition has already distorted market reality and driven prices well above global average. That’s the problem with this because even if the remedy isn’t put in effect yet, impacts are already felt. Deals aren’t getting done and people are already losing their jobs. Most of all, the market isn’t looking into the future. I urge you to keep moving forward because you will regret the gap in pipeline if you pull back now.
Market Bottom Falls Out.Looking at remedies in increments of 10 cents per watt, it shows what would happen to the market (it’s not good). The utility scale market would drop 10% at 10 cents and over 50% if a full 40 cent tariff is put in place. The requirement of the 201 petition is that the benefits of the remedy outweigh the negative impacts. No responsible person could argue that a remedy would help the solar industry or the US job market in any way.
Redefine Suniva’s Ownership. Many talking points have named Suniva as a foreign owned company, which structurally is probably true. It does create the confusion because Shunfeng has come out against the 201 petition. Suniva is controlled by the court and its primary DIP lender, SQN. So when you talk about Suniva, I think controlled by an offshore hedge fund is more accurate.
Stion’s Situation. Yesterday, news about Stion ceasing business operations was reported by multiple outlets. The company, which testified in favor at the first 201 hearing, gave little comments to me at the time. They did however continue to market themselves, I received an email urging me to buy product as late as last week. Stion’s failure is one of managements doing. They spent over $200million over the past decade on a bet that silicon prices would create high commodity pricing for crystalline modules. Ask Uni-Solar, Miasole, Solyndra and other thin film how that same bet worked out.
Storage In MA SMART. One of the interviews at SolarWakeup Live! Boston will be Michael Judge, the person in charge of getting SMART drafted and implemented for the MA solar market. Part of the program is the adder for energy storage, within a matrix on % of capacity and hours of charge. I look forward to learning more about how the dispatching of solar assets will play into the market resiliency.
Presented By True Green Capital. Our current partnership, Fund III, is actively seeking investment opportunities and channel partners to deploy capital in a scalable focused on DG and small utility scale projects.  Fund III has ~$350million in equity commitments to build out a ~$1billion solar portfolio.

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Yann

This is your SolarWakeup for October 17th, 2017

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Suniva Gets Money. A judge has approved an additional $3million loan from DIP lenders. The majority of the money is going to Mayer Brown, the law firm, representing Suniva in the 201 petition with remaining dollars going to payroll and keeping the lights on. I am somewhat surprised to see that the payroll is still this high, likely representing 30-40 FTE still on the team.

For What? If you recall, SQN had between $51 and $52million in loans to Suniva before the DIP loans started. The 201 petition is meant to try and recoup as much of that as possible at the cost of the industry’s job losses. In the meantime, the only visible Suniva executive continues to get bonus payoffs comparable to singing for Ursula. SQN has no intention, in my opinion, to restart Suniva, solely focused on recouping its capital. I’ve been told that US manufacturing would be thin on labor and include more robots instead, which makes me wonder and ask people in the know what the market value of the Suniva equipment is.

China Diplomacy. I continue to be shocked that this is happening to solar. When you read the Axios article, you have to wonder why solar has to be held to the higher standard of being integrated in the US. Bankers, lawyers and developers from the US are doing business across the world in solar. SunPower stated on the record how much money they invest in R&D in the US with US labor and scientists. I bring up the iPhone again, because there is no more obvious product in our lives that relies on foreign manufacturing.

Where This Ends. Trump is scheduled to head to China in November, after the vote by the ITC on one or more remedies. While the ITC remedies will be important, I see the potential for a buffet of options to come from the commission with an array of remedies to choose from. I expect the staff to be read in to the options before the full proposal goes to the President because this is going to come up in China. The minimum price doesn’t seem likely to me and the quotas without a way to fill the gap in our market are also too damaging. The question is how high the tariff, per watt, will be. Whether through and import license or as a tariff, with a mechanism to drive some money to US manufacturers, a per watt price adder is the most likely outcome in my mind.

Podcast Plug. States are the place for solar policy drives the market. I interviewed Lucy Mason from AriSEIA here, and I look forward to speaking with MA Senator Boncore about NEM Caps and the director of MA DOER about SMART program.

Presented By EnterSolar. EnterSolar is a leading provider of solar photovoltaic solutions to the commercial marketplace that is ranked the #1 solar developer in New York State and in the top 10 nationally.  We are currently hiring at our growing company.

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Yann

Lucy Mason – Arizona SEIA’s Executive Director and Former Republican State Legislator

Yann is joined by AriSEIA’s Lucy Mason. Lucy is the executive director of Arizona’s State Chapter, a republican and former Chair of the Water and Energy Committee in the State House of Representatives in Arizona. Arizona has been the battleground for solar net metering for many years and Lucy has recently joined a settlement. We talk about how solar can speak to republicans and the mutual benefits to both sides. This is the last in the conversations with State Chapter directors. Make sure to check out SolarWakeup Live! in Boston on 10/31 and D.C. on 12/6. Tickets available but selling fast. 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='347026597' height='false']

This is your SolarWakeup for October 16th, 2017

Speakers in Boston. Senator Boncore, sponsor of S. 1824, which attempts to increase the net metering cap and Michael Judge, Director of Renewable Energy at MA DOER, will be joining our conversation in Boston. What will it take to get NEM cap raised and SMART program implemented? Join us on 10/31 in Boston.
SolarWakeup Live! DC. Tickets are now available here. Join us on December 6^th for a great conversation. Speakers will be announced soon and sponsorships still available.
Solar In Arizona. I’ve been waiting to release this podcast, a conversation with Lucy Mason of AriSEIA. Lucy is the former Chairwoman of the Energy Committee in the Arizona State legislature and a member of the republican party. Yet she leads AriSEIA and we talk about the settlement and the politics of solar in Arizona.
Closing Coal. Luminant, Texas’s largest power generator and a subsidiary company owned by Berkshire Hathaway, is closing two coal plants in Texas. The question for solar is what less coal power means for our market. In Texas the market is made by natural gas and cheap wind and not solar but the power needs will remain. Unlike most other power sources, solar isn’t getting financed as a merchant asset because the marginal cost of production is zero and the market knows that.
Inefficient and Costly. Coal plants have been depreciated many times over and most current owners of plants have either valued their asset beyond peak value or bought them as distressed assets. The plants in Texas are 30 years old and repowering them doesn’t make financial sense. Even if Trump/Perry do all they can to prop up the power markets, long term investors know that coal will be regulated against over the next 30 years if you were to build a new asset. With China halting coal construction and development, our infrastructure investors know where this will all end.
Cost of Freedom. Rick Perry, at a congressional hearing, was asked about the cost of his new ‘resiliency’ rule (code for giving billions in subsidies for coal plants). His response was priceless, pun intended. He retorted by saying, “What’s the cost of freedom, that’s not something I would leave up to the free market.” From a policy standpoint, this is well documented as the societal benefit test which regulators have had available to them for years but utilities and ratepayer advocates fight against.
Helping Miners. Maybe he can ask a coal miner what the cost of his health and well being is too, because I’d guess that he’d rather install solar than go underground and mine for coal.

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Yann

This is your SolarWakeup for October 13th, 2017

Happy Friday the 13^th. Yesterday we added Michael Judge, Director of Renewable Energy at MA DOER, to the SolarWakeup Live! Boston agenda. Michael has been leading the implementation of the SMART program and the conversation will yield vital information for solar companies interested in the market. Get your tickets here.
SolarWorld Files Their Post Hearing Brief. The briefs offer no insight into what commissioners will do, they are regurgitations of talking points. In SolarWorld’s version, it basically takes a bunch of solar reporters articles and their interviews with companies to try and shape their case. In some instances, when reporters have come out to set the record straight, SolarWorld then attacks them. The adjustment plan goes into a 5 year plan similar to my 5 year plan where I end up a billionaire. Lots of hopes and dreams about how 5 companies will make 1GW or more in the US without importing cells and setting it all up in 6-9months. I guess they expect the US solar market to shrink by 50%. They do go into detail about their sales process, hoping to be acquired by a strategic in a process run by Macquarie with the caveat that the buyer could change the adjustment plan, i.e. no promises made to the ITC.
How Many iPhones Are Made In America? How many cell phones are made in the US? Apple, Samsung and Google (HTC) manufacturer their cell phones abroad. Nobody would argue that Apple and Google are not American companies that create substantial benefits to the US economy. Imagine a small, niche company that is bankrupt and owned by a foreign investor files for relief to double the cost of your iPhone. It will be $2k now so that it can be made in the US. Sales would plummet and innovation would likely slow at the company to focus on cost. That is the exact same thing that Suniva and SolarWorld are asking for. On the other hand, Apple would never let a filing get past the front doors of the ITC.
Bernie Sanders Weighs In. Sanders is famously against trade deals including NAFTA, TPP and others. The Senator from Vermont wants US to make more stuff which is why he likely sees the 37,000 solar manufacturing jobs in the US and smiles. He also understands that a remedy must have benefits that outweigh the costs, regardless of whether the jobs affected by the remedy are caused by market competition.

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Yann

This is your SolarWakeup for October 12th, 2017

Tomorrow I will be announcing the final two speakers for SolarWakeup Live! Boston. The lineup is sure to give you the news about the MA solar market you need to know.

ITC Remedy Process Update, Filings Are In. Public versions of the post-hearing briefs were due yesterday afternoon. Most are in except for the SolarWorld public version, which will likely be uploaded sometime today. Limited surprises except for new filings from First Solar and Tesla, comments below. They’re long and mostly boring. The Q&A offers the most detail but again sticks to talking points.

Key Things About The Case. Rules require that any remedy must provide greater economic and social benefit than costs. Commissioners can propose their own remedy or multiple remedies which are voted on 10/31. Final decision rests with the President who can approve, deny or propose his own remedy, therefore we know nothing until he speaks or tweets his decision.

Suniva Goes With Fake News. In responding to SEIA’s testimony and filings, Suniva goes with “it’s not true.” That was the response in the first two points. Going issue by issue, Suniva sticks to their points that the US industry has been injured and needs relief. Suniva argues that Commissioners should ignore the job losses to the solar industry since the losses are “repercussions on those who benefitted from the assault (e.g. those who had access to historically cheap modules).” In short, Suniva is calling all investors, developers and racking manufacturers accessories in an assault on them.

SEIA Asks, How Do Petitioners Get Back On Top? The most contentious part of the hearing was when the commissioners asked Suniva and SolarWorld for an adjustment plan which is supposed to be issued. Without this, Commissioners cannot analyze how a remedy would leave the petitioners in a healthy state after the 4 year period. Moreover, Commissioners need to ask how the rest of the industry would fare if there is not enough access to cells and modules for the US market.

First Solar Goes All In, For Suniva & SolarWorld. First Solar has let the news speak for them, mainly letting the message be framed that tariffs would be good for them since they are excluded. During their Q1 and Q2 earnings calls, they spoke vaguely about their position on the case and have stayed quiet on their involvement (if any) or communication (if any) with the petitioners. They are excluded since the petition is exlusively for crystalline PV products. Now they go all in for relief on the industry, my guess because their stock has been moving up when votes at the ITC go in the petitioner’s favor. No comment from First Solar on what remedy they want or if they support the minimum price and import quotas. Instead they say they support “fair and effective” remedies.

SunPower Stays On Message, Asks For Help. SunPower has been a vocal supporter of SEIA in this case and having CEO Tom Werner speak at the hearings. In addition to supporting the SEIA filings, SunPower also filed their own response, for the purpose of asking for an exclusion to the tariff. With a self-described differentiated technology, SunPower states that their high efficiency creates a higher tariff for higher efficiency modules and since they sell a different technology would seek to be excluded from the case. Other unique products like Goal Zero also asked for exclusion from the remedy.

No Love For 8Point3 Partners. Mostly done without calling the other party out by name, SunPower and First Solar are clearly on opposite sides here. SunPower devotes an entire section outlining the quasi-monopoly that the ITC would create for First Solar with an exclusion for thin film modules. In some language, SunPower calls it an unjust enrichment.

Tesla Wants A Rising Tide, And Some Cells. I was hoping Tesla would comment in post-hearing briefs and they did. The company wrote a thorough brief on why the remedy is bad for solar even though Tesla is on the path for vertical integration and is building US cell and module manufacturing with Panasonic. They give good data on how long it takes to build a plant and the cost associated with it. It does appear that Tesla will need to import cells which defines a clear gap in US supply chain if ITC adopts the petitioners remedy. In short, Tesla would have the largest capacity in the US in short order and would benefit if remedy is issued but sees a rising tide lifting all of solar. Thank you.

The Deal Moving Towards 72-Cell Modules.  A deal has been floating and the undertone is in the filings. Developers like NextEra and 8Minute push for an exclusion for 72 cell modules for utility scale markets because neither Suniva or SolarWorld make their market here. They likely don’t want to have to negotiate with First Solar in a position of strength either. The argument is that 72 cell modules make up a separate market from the one that Suniva and SolarWorld serve, residential and C&I, and since they cannot show how they were hurt by the utility scale market it should be exempt. The deal that some are pushing for would have the remedy only placed on 60 cell modules and leave the price sensitive market of utility scale as is with current AD/CVD tariffs in place.

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Yann

This is your SolarWakeup for October 11th, 2017

This Is Why We Do It. I have renewed my sense of activism this week after sitting in the ITC hearing room. This video shows why we must become more powerful and scary to legislators. Voting against solar should carry repercussions, it doesn’t matter what party you come from.
What Will Lion Capital Say. Suniva needs more money and on Friday they’ll be in front of the judge asking for it. With SQN steering the ship as 75% DIP lender, it will be interesting to see how Lion Capital reacts to the request for additional money since they hold 25% of the DIP. Lion Capital has about $60million invested in Canadian Solar which means they’re tied to the US market in a big way.
Carbon Regulations Are Inevitable. Utilities Know It. As the administration eliminates the clean power plan, you will find every investment deck and request for regulator approval continue to discuss carbon regulations. Nobody will invest in a 30 year asset with a 50 year interconnection if they know that the plant has to sustain 4 to 5 different Presidential administrations. You can shape regulatory oversight and laws but over time the arc of renewable energy will bend towards carbon free generation.
Notice Of Coal Rulemaking. In the meantime, FERC has issued its notice of proposed rulemaking with an effective date of December 11^th of this year. ISOs and RTOs will have to file compliance in time for Christmas. So the whole idea of getting coal for Christmas may be what Rick Perry is shooting for. My hope is that the rule will cause ISOs to create pricing signals that actually drive value towards energy storage, but that is yet to be seen. Read the Notice Here
Will Energy Ever Be A Free Market? Funny how Rick Perry is no longer a free market guy, especially now that solar is competing in the Texas market, which lets the market drive pricing signals based on buyers and sellers. I think that someone should file with FERC and say that pricing for resiliency is a great idea, more frequency regulation, and grid stability would be a great value play for solar and storage.
The US Mandates All Cars To Be EVs. Over/under, when will the US Congress pass a law to ban the sale of internal combustion engine vehicles? I’ll go with never. You?

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Yann

This is your SolarWakeup for October 10th, 2017

The Scott Pruitt Hypocrisy. You should chuckle at the audacity that Scott Pruitt has. On one hand, the cabinet is pushing for subsidies for old, inefficient power plants and nuclear power is getting bailouts all over the place and on the other hand, Pruitt wants wind and solar to compete without subsidies. Solar has been clear for several years, get rid of ALL energy subsidies, including exploration credits and solar & wind with storage will rule the day.
America Without Clean Power Plan. The bad guys had a good day yesterday as the clean power plan dismantling makes some advances. CPP was always a market adder as opposed to a market maker but most of all, it made States get rid of the dirtiest power plants, which was good for everyone. History will view these people accordingly.
Make It Political. It seems like the punches are coming stronger and more often doesn’t it? We have done a bad job of making the arguments political. For example, my county commissioner voted against a resolution opposing the IOUs anti-solar bill. Now he is running for State House and that vote should cost him the election in a district that is 25% independent.
Why Solar Fails At Politics? In a $25billion solar market, which is twice the size of the gun market in the US, why isn’t solar more powerful? The answer is in our trade group budgets. Combined, the numbers are paltry and our opponents are very powerful and well capitalized. What if one of the solar trade groups had a $50million budget? What if they had an email list with 5million active solar supporters that would pick up the phone and call their legislators or activate against a bill? What if needs to become reality.
First Solar Stays Out Of Mud. It is no secret that First Solar, by being excluded in the 201 petition, benefits from a tariff. Utilities would be forced to work with First Solar solely on the cost comparison. Based on the louder pushback from utility developers, it seems clear that there is some undercurrent of disagreement here.
Presented By EnterSolar.  EnterSolar is a leading provider of solar photovoltaic solutions to the commercial marketplace that is ranked the #1 solar developer in New York State and in the top 10 nationally.

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Yann

This is your SolarWakeup for October 9th, 2017

SolarWakeup Live! Boston tickets are still available and early bird pricing of only $50 per ticket is ending soon. Get yours now and spread the word please.
Doing Good or Doing Well in Puerto Rico? Elon and Governor of Puerto Rico spoke after a Twitter conversation about rebuilding the grid in PR. The technical challenge in PR is imminently solvable. We should be having this conversation but the focus should be on doing good things to rebuild Puerto Rico, not get some free press. Outside of a few pilot projects and FEMA dollars, there is likely little work for the solar industry directly because there aren’t any paying customers.
Debt Is The Real Problem. Solving the technical problems will stay on the drawing board short of solving the PREPA credit issue. PREPA has no access to capital and its primary customer, the Puerto Rican government, doesn’t have much credit either. With bonds trading at under 40 cents on the dollar, the debt will have to be fixed in order to bring new capital to the island. Solar has been sitting on PPAs for years with almost no takers, most PPAs well above 10 cents per kWh too.
Run An Auction. My first obvious choice was for NextEra to take over PREPA. At further thought, it should be a competition and given the political risk and language barrier, it probably wouldn’t be NEE. On the other hand, some other operator should still follow the game plan, someone with access to debt. Engie makes sense amongst some others, so let’s run an auction to see who’s interested. Package the process with debt write downs and loan guarantees to attract the right people.
Cities and Corporates Want Solar. Franchise agreements between municipalities and IOUs come up for renewable every 10 years normally.  The same way that Facebook wants solar for its data centers, Cities want options for their buildings and the businesses in their jurisdiction. When the IOUs don’t give customers what they want, they will get it themselves. Also cities are incentivized to enter into long term PPAs at low costs, no ratebase, no incentive to grow demand, the interests of provider and consumer are aligned. Watch this space…
SEIA Takes Argument To The People. The point was made at the ITC hearing by O’Sullivan of NextEra. Any remedy imposed on the solar industry will be paid by the people across America. Consumers will pay more and get the same exact product. They’ll pay more on energy contracts, they’ll pay more when people lose their jobs and aren’t paying taxes and they’ll pay more by making less with greater competition in the job market. SEIA is rightfully taking the argument to the American people.

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Yann

This is your SolarWakeup for October 6th, 2017

Have a great weekend!
Facebook Cleans Dominion. Data centers are big money for States and utilities love the long term capacity need. Facebook went to Virginia to invest a billion and in return got Dominion to provide a clean energy tariff. Works well for Dominion because they’ve been a leading buyer in VA and NC recently.
Solar For Choice and Freedom. Heritage, R Street and the National Retail Federation are saying no to 201 petition. These groups swing big in DC. I didn’t see this reported earlier but 55 members of the House of Representatives wrote a letter to the ITC asking for the board to protect the solar industry.
The California AG Market. They saved solar during the tax credit fight and now in the ITC for 201. The California Poultry, Fresh Fruit and Citrus Associations have filed a letter with the commission. Saving money for farming operations is the leading driver which means higher module prices are bad for America’s farming community.
No More Press Releases On PR, Please. A lot of people want to help in Puerto Rico. A lot of companies are also planning on helping. If you are doing either, great. I am supportive of our sector helping in PR. Keep the press releases to yourselves please. Instead do the work, then take videos and pictures and publish those. Puerto Rico isn’t your backdrop for telling the sector that you know how to build solar and storage.
The Exclusion Battle On 201. A commissioner of the trade commission brought it up and First Solar was exempt from the start. Individual companies are coming up and asking for the commission to be excluded. Once a full list is available, I will send that along.
Interview With Abby Hopper. Two interviews, 10 minutes each, for you to listen to. Both were recorded at the ITC hearing, before and after the solar industry’s session. This gives you some color on the atmosphere in the hearing room.

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Have a great day!
Yann