This is your SolarWakeup for October 13th, 2017
Happy Friday the 13th. 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 11th 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
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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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Yann
This is your SolarWakeup for October 5th, 2017
Big Solar. Especially In China. China gets blamed for cheap solar panels, especially in the 201 petition. In 2016, their market was more than 2x the US, over 30GW. Coal is drastically declining there too. IEA, which isn’t known for great data is lifting its solar outlook in response to real data.
The Truth About Peaking Power. Don’t take anyone’s word for it. Peaking power plants are losing their value because the capacity contracts and repower approvals aren’t getting done. Solar with storage is too cost effective so I ask again. What are you doing to make your solar project dispatchable with dc-coupled storage? I ask selfishly because that is my focus today in helping develop these projects.
Storage In Massachusetts. Engie is building a storage project, interesting on a few counts. We’re coming down from the 4 hour system into a 2 hour system which lowers costs and keeps the flexibility aspects there. It’s still small though, 3MW doesn’t move the needle and we need to go much bigger. See above, dispatching solar projects is the real need in the market.
ISOs Respond to Perry. PJM doesn’t like it. ISOs say that this would harm their free market pricing signals. FERC is independent of DOE so I look forward to hearing the testimony.
Your Answers On My Question. Thanks for the feedback on my question about charging for the newsletter. Dozens of you wrote that I should get sponsors instead, which I tend to agree with but solar doesn’t do digital advertising, we prefer lanyards. That is why I started SolarWakeup Live! Mini-conferences. Boston and DC in 2017, New York in January and San Diego in February. Many said you wanted to help grow this platform we all share, sponsor one or more conferences and our conversations will flourish.
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Yann
This is your SolarWakeup for October 4th, 2017
The Tone Of The ITC Hearing. It was boring through the prepared testimony but hours of questions from the commissioners was telling. Commissioners were much more demanding of answers to Suniva/SolarWorld starting with their request to understand how a 201 remedy would help them survive. Crickets from the petitioners on that point.
Craziest Thing Said By Suniva/SolarWorld. The minimum price and tariffs would not affect the market because the RPS policies would require utilities to buy solar at whatever price it costs and the tax credit adjusts to higher pricing. It was also said that there was no elasticity in the utility scale market meaning that cost of install was detached from market size.
Best Point(s) By Anti 201 Witnesses. 1. There is no obvious and stated circumstance where Suniva and SolarWorld end up in a better position 4 years from now with a requested 201 remedy. (SEIA lawyer Matthew Nicely) 2. Solar industry may have grown through solar tariffs 1 and 2 but silicon wasn’t as fortunate, the US leadership was lost when China retaliated to the tariffs. 3. Don’t forget the consumers and the higher price of energy they would have to pay if the proposed remedy is recommended.
Advice To Solar Industry From SEIA President. I spoke with Abby Hopper of SEIA and asked what solar companies should be doing. Patience is the answer because there is nothing happening today, tomorrow or the next few weeks. SEIA is going to the White House today and Trump goes to China in November. Expect more deal talks to heat up over next weeks and months.
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Yann
This is your SolarWakeup for October 3rd, 2017
The ITC Remedy Hearing. As I prepare for the remedy hearing that starts in a few hours, I am looking at the witness list that consists of solar professionals, lawyers and diplomats. This is a hearing to discuss the remedy that is requested by the petitioners and the answer by the trade association. SEIA rightfully pointed out that Suniva’s request for module tariffs is above the allowed 50% tariff under the 201 petition. SolarWorld is requesting an import quota on cell and modules and is not expected to support a minimum price. SEIA also proposed some options which include doing something with the tariff deposits from the first two tariff cases and an import license that could create monies for domestic manufacturing.
What Isn’t Expected To Happen. Anything off script. Most people in the room don’t expect to hear anything that they don’t plan on hearing. All sides will say what they planned for and nobody is expecting any surprises. No deal is expected to be announced but don’t be surprised if you start hearing talk about a deal being discussed. Too many what if scenarios to really get into now and there isn’t a lot of precedent when it comes to the 201 petition.
What Happens Next? Depending on how the feedback, if any, from the commissioners affects the mood in the room, expect the parties to keep talking. It doesn’t seem like there is a path where this doesn’t end up on the President’s desk so there will remain a wild card until the end. I also remain skeptical that without a corporate solution for Suniva and perhaps SolarWorld, that a deal can be had. I will be looking for sidebars and one on one conversations tomorrow at the hearing. The remedy vote will be on October 31st, same day as SolarWakeup Live! Boston and a topic that is expected to be discussed in detail.
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Yann
This is your SolarWakeup for October 2nd, 2017
Yann Goes To Washington. I don’t expect new news to come out of the remedy hearing but there was too much nuance involved in the process. So I am on my way to Washington this morning and will be in the ITC hearing room tomorrow as Suniva and SolarWorld make their arguments. I want to see the body language, the tone and facial expressions in the room. I am not interested in the news, other reporters will cover that. I am trying to figure out where this is going to end up and if any of solar’s messaging is getting to the commissioners. No dinner plans for tonight so I may have to hit up my favorite Indian restaurant in DC, I must celebrate globalism after all.
SolarWakeu Live! Boston. On October 31st, we will take on Boston with SWu Live. Our first speaker that we are announcing is Daniel Hullah, Managing Director of GE Ventures. Daniel has over a decade in cleantech VC with GE, National Grid and Rockport. This is a conversation I am really interested in. When GE moved into Boston, Jeff Immelt highlighted the need for innovation and startups to shape GE, and corporate development in cleantech is quite active. Get your tickets now, 3 more great speakers to be announced soon.
So Much Going on, Read It all. New York Times covers renewable energy jobs going to coal country. The Florida PSC continues to be a retirement home for legislators, this time with a guy that has shown his roots long ago. More loan guarantee for Vogtle, it still won’t get built. DOE wants subsidies for coal and nuclear plants (totally crazy, I know). Puerto Rico still needs energy and water and food and help. If you can help visit unidosporpuertorico.com and make a donation. If you have materials that you want and can donate, please email me.
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Yann