This is your SolarWakeup for December 11th, 2017
I am on my way to San Francisco for a few great interviews. Always good to travel into the center of the solar industry universe.
Tax Reform Explained. The tax reform bill is in conference committee and no one really knows what will come out of this step. Whatever has been voted on can get completely rewritten and come out looking different. But the core pieces will get put into the final version that goes to both houses to vote on. Last week, at SolarWakeup Live! DC, I sat down with tax lawyer, Greg Jenner, and project finance lawyer, Audrey Louison, to go through the main provisions. The entire interview is available in podcast or video format. If this interview feels different than what you typically get at a solar conference it’s because I come at it from your side of the table. I have to make the same business decisions based on political and regulatory issues that you do and know what information I need to make that decision. My interviews come from a different perspective to drive information to you, not to fluff up the news. Hope you enjoy it.
BEAT Provision. In the interview you’ll find my discussion with Greg Jenner about the BEAT provision and he explains why BEAT, or some version of it, needs to be in the bill. Think of it as a way to stop companies from parking cash abroad. The House version uses a more piecemeal approach but in my conversation with multiple sources of tax equity, they seem to be unaffected thus far. That being said, the rules aren’t final and as Greg said, they have to do some form of BEAT. Don’t expect it to go away.
Corporate AMT. It was thrown back into the Senate version at the last minute. It’s causing a stir with donors/lobbyists and it’s going to be taken out and ‘fixed’.
Rates. Probably the most overlooked part of the bill and the most obvious is the impact of lower rates on the tax equity market. First, less tax liability means less tax equity supply. Second, lower rates means that depreciation is worth less and your projects will have to be repriced with the new rates in mind. All of these issues could cause contractual problems which we also discuss in the interview under the ‘change in law’ provisions of your agreements.
Will It Pass. Yes, says Greg Jenner. I tend to agree that it has to pass because as more political folks have called it, the ‘donor relief act of 2017’ is a political must have for the GOP. Let’s see where it goes from here, because in DC nothing is ever certain (except that SolarWakeup Live! DC will always get you the info you want to hear).
Don’t Miss. A great highlight of the power the utilities have pushed at the State legislature level across the South, harmful to consumers and hopefully the end of the monopoly system. A single city aims to be all EV mass transit in China. McIntyre takes over as chairman and promptly delays the NOPR decision by 30 days. As Phoenix files for insolvency, I want to talk about the downstream pains in solar in more detail this week.
SolarWakeup Live! New York. Tickets going on sale shortly but book your day to join us in New York on January 31st. The first 50 tickets will be 50% off, so get them quickly. If you are interested in sponsoring, hit reply to this email and I will get you more info.
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Yann
SolarWakeup Live! Video: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin
In this episode of SolarWakeup Live! I talk about the current Tax Reform Bill with Audrey Louison from Mintz and Greg Jenner from Stoel Rives. The tax reform bill was in conference committee at the time of this recording and had several issues that impacted the solar industry. The corporate AMT, a lower corporate tax rate and the BEAT provision. I walk through each of the items with Audrey and Greg, get an explanation (because nobody understood the BEAT provision) and how it impacts solar project financing going forward. Greg has been around tax law for many years, including as a … Read More
This is your SolarWakeup for December 8th, 2017
Tax Reform Explained. A quick turnaround for this important issue, a podcast on the tax reform bill. On December 6th, I was joined on stage at SolarWakeup Live! DC by Greg Jenner, a tax lawyer at Stoel Rives, and Audrey Louison, a project finance attorney at Mintz Levin. Greg did a great job of explaining the various issues, from the corporate AMT, tax rates, BEAT and business income allocations while Audrey translated the potential effects on the partnership contracts. As someone that has had to live inside these agreements, I tried to get the information you need to think about as you raise capital for your projects – this was not a typical fluffy interview. Thanks to Audrey and Greg for bringing their knowledge to the SolarWakeup family.
The Goose Rule. Duke Energy is making a big deal as they acquire the remaining shares of REC Solar. Part of their commentary is how they plan on servicing the C&I segment. The irony is thick here as Duke brings a PPA case in North Carolina to the supreme court to stop a church from being able to buy solar energy while benefitting from the same policy in areas outside of its service territory. The rules of the monopoly should require consistent regulatory positions from the utilities. The deregulated side of the house benefits from the cost of capital provided by ratepayers but does not have to live within the same rules and that needs to change. I would like to see a regulatory body require the deregulated side of a monopoly to live by the same rules.
US Manufacturing. As the USTR held a hearing on the 201 issue to decide on tariffs, First Solar was updating its investors on the impressive Series 6 module. While First Solar has a factory in Ohio, it is also exempt from the 201 case which only pertains to crystalline technology. As First Solar has come out in support of tariffs, it is also adding another 1.2GW factory…in Vietnam. Great for America, I guess, as an American company innovates and develops in the US while manufacturing around the world.
GE Power. GE is active in renewable energy on the hardware and finance sides of the market. They are well aware that traditional power is changing and new energy sources like wind, solar, energy storage and efficiency are replacing the load and generation. Now the impact is felt widely by the power unit with layoffs which is unfortunate given the many attempts by GE to lead in the solar space.
Energy Lobbying. Name 4 companies that lobbied hard for tax reform and I wouldn’t have listed NextEra as one of them but Vox has reporting stating it was. I’d like to hear what solar lobbyists would say about that.
Sponsored by Mintz Levin. Mintz Levin is an Am Law 100 law firm with a nationally recognized Energy & Sustainability Practice that has completed more than 500 transactions across energy sectors totaling over $7.5 billion since 2006.
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Yann
E028: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin
In this episode of EnergyWakeup I talk about the current Tax Reform Bill with Audrey Louison from Mintz and Greg Jenner from Stoel Rives. The tax reform bill was in conference committee at the time of this recording and had several issues that impacted the solar industry. The corporate AMT, a lower corporate tax rate and the BEAT provision. I walk through each of the items with Audrey and Greg, get an explanation (because nobody understood the BEAT provision) and how it impacts solar project financing going forward. Greg has been around tax law for many years, including as a … Read More
This is your SolarWakeup for December 7th, 2017
USTR Hearing. There is great video online of the rally organized by SEIA in front of the trade hearing that only allowed about 100 folks into the room, mostly those testifying and their attorneys. Folks inside the room said the officials asked good questions and seemed more in tune with the issue, in some instances trying to understand the nuances of the impacts that a tariff could create. Many predictions about the possible next steps but nothing will be certain until the President makes up his mind.
South Carolina. The PAC, Solar Powers America, is focused on South Carolina and its Governor. In particular, around the 201 trade issue, no State is more directly impacted by tariffs than South Carolina. In October, the Governor of South Carolina directly intervened with the President as covered by the article highlighted below. There are no boundaries around political parties and this is a great exhibit of that.
GOP Members. 6 US Senators, all republicans, sent a letter to the trade representative urging the board to stop further tariffs from being enacted. Notable are the two US Senators from South Carolina, continuing the theme of good lobbying having a proportional result. Also a new radio ad from Sean Hannity on this issue, ignore the Obama bashing (it’s the price of admission).
DC Live. Thank you to everyone that showed up at SolarWakeup Live! DC and our happy hour afterwards. I hope you enjoyed the drinks and the good time with your solar colleagues. The discussions were great and our speakers brought news to the audience, including timely conversations about tax reform. Stay tuned for those conversations to be released in the very near future.
Presented by MMA Energy Capital. At MMA Energy Capital, we partner with developers, EPC contractors, and system owners to provide project capital necessary to develop, build, and operate world-class renewable energy systems. We are currently hiring at our growing company.
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Yann
This is your SolarWakeup for December 6th, 2017
Everyone Is In DC, Except. Rick Perry. He’s got his toes in the dunes, butt in the sand while touring Saudi Arabia on his America First Energy tour of the Middle East. As American solar workers are traveling to DC to rally in front of the USTR hearings, which could only accommodate about 100 people, Rick Perry is as far away as possible. If you can’t be in DC tomorrow, make a call to your Congressman/woman and ask them to help with the trade case. It will take a few minutes of your day and make a big impact.
America First Solar Plan. Yesterday morning, in a press conference held in DC, SEIA unveiled its America First Solar Energy Plan. SEIA CEO Hopper highlighted the fundamental risk of tariffs, more solar manufacturing jobs in the US will be lost than gained. Also speaking was the President of renewables at Swinerton and a Sunrun employee who served 5 years in the US Army and is now a disabled combat veteran. SEIA also secured additional messages signed by members of the Senate and House to be forwarded to the US Trade Representative ahead of the hearing later today.
Add Tax Reform. I will be joined by experienced tax and project finance lawyers tomorrow during SolarWakeup Live! in DC to talk about the potential impacts of the tax reform bill currently in conference. The goal is to turn this content around quickly and get it published for you to review. If you have thoughts on good content you want to hear about during our New York event, please send me a note.
A Rigged Game? No surprise here in my opinion but Suniva met with the US Trade Rep office before filing the 201 petition. This seems like they met with the jury before filing a lawsuit. Going from a bad business to bankrupt to corrupt financial engineering in hopes of destroying the solar industry was just another day in the Suniva board room I guess, but that’s just what it seems like from where I sit.
Obama Goes Local. At a climate summit in Chicago, President Obama (come back, we miss you) praised and pushed Mayors to lead the fight on climate change. In Florida, a mayor is running for Governor and a big part of the platform is climate change. Glad to see Obama taking this issue on and lending his platform to Mayors.
SEIA Elected Seats. The SEIA Board has approved the election and notified the winning candidates for the elected seats which complement the board seats gained through membership level. These 5 seats are elected by the membership and is your opportunity to ask folks to carry your issue to the board at SEIA.
Presented By Standard Solar. With access to $300 million in low-cost project capital, Standard Solar delivers superior solar projects—from start to finish. From development and engineering to construction and maintenance our extensive team of experts guide our partners through each step of the solar-project process.”
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Yann
This is your SolarWakeup for December 5th, 2017
Monday Flights To DC. I sat down in my seat to be surprised to have a member of congress sitting across the aisle from me. As we started our descent, I introduced myself to the Representative as working in solar. Right away, “Why do utilities in Florida make it so hard to go solar? The prices really dropped so much, I should look at it again. The Florida PSC is totally owned by the utilities.” As I explained that solar is making small advances, I brought up the tax reform issue and the 201 case. “We shouldn’t be increasing the price of solar, we should be incentivizing people to do more of it.” The member is a Republican. Solar needs to do a better job educating members, so we need to go back to discussing the idea from last month where everyone spends 10 hours a month on political outreach and education.
Conference Committee. Last night, the House voted to send the bill to conference committee which starts the next step in the process of reconciliation between the House and Senate versions. This is where a lot of the lobbying gets done once again, once the conference agrees there are likely to be no changes. If solar is looking to stop provisions like BEAT from becoming law, this is the point where it would happen.
Coal Tax Credit Request. Coming out of nowhere, in addition to the FERC NOPR process, the coal lobby is seeking a tax credit to the tune of over $60billion over the next ten years. The hypocrisy is thick on this one and it’s a topic I will be covering with Amy Harder on Wednesday at SolarWakeup Live!
Choice For TVA Customers. Solar is an underused political issue. A recent poll of 600 Tennessee residents showed overwhelming support for more solar. All three questions below came back in the mid 80% approval range including when residents were asked if they would use solar in their homes if offered at the same price, whether Tennessee should use more solar and letting their local power company buy solar from generators. All of this while TVA, a public entity, prohibits the use of power purchase agreements. I’d like to see this used by campaign staff in the upcoming elections.
New Tax Equity. Listen to the latest podcast from SolarWakeup and my discussion with SunWealth CEO, Jon Abe. In part of the discussion I ask him about his capital sourcing from tax equity investors. If you are worried about the tax reform bill, you may want to arm yourself with information on how to diversify the tax equity pool of capital.
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 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 December 4th, 2017
Another DC Week. I will be heading to DC this morning for a week of solar activities culminating in SolarWakeup Live! on Wednesday which is occurring at the same time as the solar rally in front of the US Trade Representative hearing on the 201 case. Of course the conversation about tax reform supplements the 201 process that is ongoing. At Live! we will talk about much of this with Amy Harder, Rep. Gonzalez-Colon, Lidija Sekaric, Kerinia Cusick, Andrea Luecke, Colin Murchie and Tony Clifford. Last minute tickets still available.
BEAT Tax Issue. The Senate’s version of the tax reform bill includes the onerous BEAT (base erosion anti-abuse tax) provision that could reduce the ITC investments by multinational corporations significantly. As the bill proceeds to the conference, lobbyists from many sectors are mobilizing to argue their points. Expect to get some coverage on this topic from SolarWakeup this week once I chase down a tax lawyer for you all.
Small C&I. A new podcast is out today, my conversation with SunWealth CEO, Jon Abe. SunWealth is doing interesting things around the small C&I market from a financing standpoint and how they evaluate the credit profile in that segment. The company also partnered with a corporate to help with scaling, perhaps a sign of things to come. Catch the conversation here.
Sign My NDA. The headline from late last week was the Canadian Solar and Longi had engaged in conversations with Suniva for the purposes of acquisition. My reporting says that this has not gone much further than opening a data room for the companies by the Suniva representatives. This is in many ways like using a signed NDA as a way to show you’ve advanced a project. I remain skeptical that any 201 deal would get Suniva approval unless one of the following happens – a retroactive tariff payment to US manufacturers that yields cash in SQN’s pocket or an acquisition of the company entirely.
NY Storage. Big headlines out of New York about energy storage as the Governor signs a promising policy. More to come on this topic soon and it will be part of the conversation at SolarWakeup Live! New York.
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
E027: Financing Small Solar With New Tax Equity and Power Of The Crowd With SunWealth CEO Jon Abe
In this episode of energywakeup I am joined by Jon Abe the CEO of SunWealth. Sunwealth is a solar start up based in Boston Massachusetts focused on financing small commercial and nonprofit solar projects. The innovation at sunwealth is getting new capital into solar by educating them about the small C&I market. In our conversation Jon tells you about his work to grow a partner network for scaling and partnering with a corporate investor to fund the business. Jon is a solar veteran that made the jump to a startup and is looking to do great things. This podcast was … Read More
This is your SolarWakeup for December 1st, 2017
SEIA Board Elections. Today is the last day to vote for the elected seats of the SEIA board. I do not know all of the candidates but I know too many to tell you who to vote for. So let me highlight the folks I know, that read SolarWakeup, or have introduced themselves to me in advance of this writing. The top story today is the link to the login for your SEIA membership so you can vote. Please do so. In general, I would recommend you vote for people that have helped you move your business forward, have gone out of their way to advocate in your State or helped the industry even if it didn’t look like it would help themselves. In no particular order, my highlights below. I do ask you however, that you vote for Kendra Hubbard, my reason below.
Kendra Hubbard. Currently with UniRac, Kendra is passionate about solar. I first met her at InterSolar when she came to the conference even though she wasn’t working in solar yet but knew she wanted to get herself into it. I’ll never forget sitting at the dinner speaking with Kendra and wondering to myself who would do such a thing. Kendra should be on the board, her passion is needed and I hope you will cast this vote for Kendra.
Chris Diaz. Chris has been in solar a long time a Principal at Seminole Financial based in Florida.
Bret Sowers. Bret is with Southern Current and works very closely with Solar Powers America, the PAC working to educate legislators on a bipartisan basis.
Tom Hunt. Tom is with Clean Energy Collective based in Denver and a loyal reader of SolarWakeup.
Adam Shor. Adam is based in Golden, Colorado and Principal at Shor Power.
Brad Stutzman. Brad is the COO and co-founder at O3 Energy based in Dallas, Texas.
DC Agenda Is Final! We will have 5 fantastic conversations. Three 1 on 1 interviews and two discussions with two speakers joining me. The interviews are with Amy Harder of Axios, Congresswoman Gonzalez-Colon of Puerto Rico and Andrea Luecke of The Solar Foundation. The discussions will be about how 100% renewable energy is feasible and what would need to happen to execute on this and what it will take to reinvigorate the Maryland solar market. Join us if you can, we added a few more seats for last minute registrations.
Sponsored by Mintz Levin. Mintz Levin is an Am Law 100 law firm with a nationally recognized Energy & Sustainability Practice that has completed more than 500 transactions across energy sectors totaling over $7.5 billion since 2006.
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Yann