This is your SolarWakeup for December 14th, 2016
Subscribe on iTunes! EnergyWakeup is now available on iTunes and Stitcher radio, so no matter what your podcast app of choice is we are available for you. This week is shaping up to have some great commentary.
Should we be worried? Q3 2016 was the biggest quarter for solar ever. It was always going to be because this was the safe placed in service quarter before ITC sunset. The issue is in the details because residential had the first quarter over quarter since 2014 and it doesn’t appear to be small. Interconnection data from CA looks less than appealing but a positive is that Q3 numbers from the big 3 didn’t show the slowdown in their numbers but we should keep our eyes on this.
We have a Secretary of Energy. Former Governor Perry will be the next Secretary of Energy as it is doubtful that the Senate would fail to confirm him. Perry is famous for thinking or rather forgetting the name of the Department of Energy, renaming it instead ‘Department of OOPS'. He has a college degree in animal science and will be overseeing the nuclear arsenal of the United States, weapons, waste and all that comes with it.
Not so fast Thomas Pyle. The Department of Energy has responded to the Trump transition team and they will not be giving individual names of staffers. The transition team had requested the names of staffers that worked on climate change issues. DOE will be sending otherwise public information in the request for transition planning, most interesting in the request was on how nuclear power plants could be saved.
Mr. Interior from Montana. I don’t know much about Ryan Zinke, the only congressman from Montana who will be the next Secretary of Interior. A couple of thoughts. This is much better than Harold Hamm, Sarah Palin or Mary Fallin. Zinke had a 20+ year career in the Navy Seals including Seal Team Six before entering politics. He stood up against the GOP platform when they wanted to advocate for moving land from Federal to State control.
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Yann
This is your SolarWakeup for December 13th, 2016
What did you think? Bryan and I want to hear from you.What did you think after listening to the episode of EnergyWakeup ? As we clean up some of the technical items, we want to know what you want to hear us discuss next.
Elon is going to see Trump. The President-Elect has invited tech leaders to visit with him. Invited guests include Mark Zuckerberg, Tim Cook, and Larry Page. It was not clear earlier if Musk would accept but reports say that he will be in attendance. This is likely a way to bring the tech leaders into the ‘circle’ and push out potential criticism. Remember our lesson from last week when Gore and DiCaprio went to get some coffee at Trump Tower.
Obama gets a new office. I’ve actually been in the WWF building in DC where Obama is leasing office space for when he returns to civilian life early next year. Since we are in the business of reading into things that could be nothing (see above), let’s make a SolarWakeup prediction. Bill Gates, alongside other billionaires and democratic philanthropists, announce a massing clean energy fund over the weekend. Yesterday Obama signs a lease at WWF and has been saying that venture capital is of interest to him. Maybe a new Partner is coming to Breakthrough Energy Ventures? I sure hope so.
Coming to America. Besides being a great movie, the money is also coming. An Australian firm is taking a bite out of the US solar market and buying 135MW from SunPower after having bought 90MW earlier. For SunPower, this is a departure from the utilization of 8point3, the yieldco that was created with First Solar.
A power plant map. The University of Texas has a map that shows the potential LCOE of different power plants across America. A few points to take away. It is nearly impossible to build an economically viable coal plant in America. Nuclear power plants needs to reduce their costs in order to be more viable, which we know thanks to the subsidies they have gotten from NY and IL. One solution would be the carbon tax, which would definitely help nuclear go further. But the renewables map expands so drastically in a carbon tax scenario that it is likely not to happen.
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Yann
This is your SolarWakeup for December 12th, 2016
Introducing EnergyWakeup! The big day is here, the first episode of EnergyWakeup is now available for you to listen to. America is entering a difficult and confusing landscape, especially when it comes to energy policy. Hosted by Bryan Miller and myself, we take you behind the headlines on what is really going on. In the first episode we talk about the Trump transition, the witch hunt at the Department of Energy and what the nominees mean to our industry. At the end of the podcast we talk about the potential of Tillerson being Secretary of State. Please let us know your thoughts.
Quiet from Gore and DiCaprio. Where is the comment from Al Gore and Leonardo DiCaprio? They met with Trump and his team early in the week but then get Scott Pruitt and Rex Tillerson which goes counter to what they requested. Why have they been so quiet? That is a question that should be answered because maybe something else was discussed at the meeting?
$150mm for Sunrun, Unicorns for the rest of us. Last week Sunrun closed an investment for $150 million of tax equity. A worthy announcement by itself but this money was different, better in fact. We spoke to Jonathan Silver to find out how he was able to convince a Fortune 500 company to invest a total of $400 million for solar tax equity. A direct investment from a corporate at that level, now that is exciting news for our sector.
At least it’s not communism. If you were an energy staffer tasked with working on the UN Climate Change policies, your name is going on a list. The Trump transition landing team went into the DOE this week and asked for the names of staffers involved. Not clear what they plan on doing with the list but I am sure that an early Christmas gift isn’t in the plans.
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Yann
Tax Equity Unicorns – New Fund Invests $150 million From A Fortune 500 To SunRun
Large tax equity announcements usually include US Bank, State Street, Goldman Sachs, or Bank of America and not a boutique advisory firm. These tax equity providers are syndicating pools of investments into the solar market. But it seems that things are changing with a new $150 million investment for a Sunrun fund by a new firm, Tax Equity Advisors (TEA). The biggest difference is that the capital is coming from an unnamed Fortune 500 corporation, making a direct investment into tax equity for solar. In other words, tax equity supply may have just gotten the early adopter, the unicorn that solar developers have been seeking for years. SolarWakeup spoke to Jonathan Silver, the managing director for Tax Equity Advisors about the investment and what’s next for the firm. Silver told us that TEA has been working with Fortune 500 companies for over a year, an education process that meant going through many levels of understanding then approvals. Silver said, “We formed TEA to bring the opportunity of solar tax equity to corporate America. Corporations are interested in the returns solar represent but it needed to be easier for them to get the scale they need.” Corporations look at tax equity to offset their estimated liabilities, so sculpting the right investment size was a key part of the process. The $150 million first investment is just the start. The Fortune 500 that TEA is managing the investment for is looking to deploy another $250 million, of which $150 million is already allocated. In response to why a single corporation was deploying $400 million, Silver said, “Seeing an opportunity to deploy significant tax advantaged capital at attractive returns without needing to build an investment management team was a key value proposition.” The boutique advisory group is managing the investment over the span of the partnership with the sponsor, handling the compliance for the years after the initial investment is made. Last week’s announcement with Sunrun was for $150 million for the tax equity portion of the fund, meaning that Sunrun will be able to deploy at least a total of $300 million worth of solar projects. The projects are split between 2016 and 2017 placed in service and could continue a new trend away from the banks, that have long cornered the market for solar tax equity especially in the above $50 million bracket. So what’s next for the firm? Silver told us that they are talking with other corporations with differing amounts of investment needs. Through managed accounts, TEA is matching the right investment with the right investor. With TEA in the market offering a new supply, solar can be hopeful that other corporations could be looking to deploy tax equity into a market that also offers positive publicity for their brand. In a tax code filled with opportunities to invest in the economy, growing the solar market is a worthy cause for corporations that meet the hurdles of the double bottom line. By Yann Brandt, December 11th, 2016
Large tax equity announcements usually include US Bank, State Street, Goldman Sachs, or Bank of America and not a boutique advisory firm. These tax equity providers are syndicating pools of investments into the solar market. But it seems that things are changing with a new $150 million investment for a Sunrun fund by a new firm, Tax Equity Advisors (TEA). The biggest difference is that the capital is coming from an unnamed Fortune 500 corporation, making a direct investment into tax equity for solar. In other words, tax equity supply may have just gotten the early adopter, the unicorn that … Read More
EnergyWakeup – Episode 1 Sponsored by MMA Energy Capital
In our first Podcast, you’ll go behind the headlines to examine the Trump transition on energy and climate change. You’ll learn about a leaked internal memo laying out Trump’s step-by-step plan to reverse the 8 years of progress under President Obama. You’ll hear about a witch hunt Trump has launched at the Department of Energy for civil servants who work on climate issues. You’ll meet the key players who Trump has already appointed. And you’ll get a preview of the scariest potential appointment of all, which is about to become reality. It has been a historic week (for the worse) … Read More
These are the top 10 most read solar articles by your peers this week!
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The Top 10 is ranked by the number of SolarWakeup.com readers that clicked on the news article during the previous week. It is the poll of the most relevant solar news of the week as judged by your colleagues and competitors.
Have a great day!
Yann
This is your SolarWakeup for December 9th, 2016
This is a first. Utility commissioners in South Dakota, desperate for some national attention apparently, are investigating the impacts of solar policies on their customer’s rates. Only problem is that the solar policies are in another State! You can’t make this stuff up even with the nuance that the project the regulators are worried about is owned by NextEra, one of the largest utilities in the Country.
Climate policy impact explained. From the business as usual scenario where we do nothing and roll every policy back to the goal of the Paris agreement. New York Times takes you through each policy to show you the environmental impact of each. These things are wonky and complicated but creating a visual representation is always a good idea for mainstream consumption.
More details, this on the Illinois market. We’ve covered the energy bill in Illinois before but now more time has gone into reading the fine print. First off, the bill was there to save the nuclear power plants, all other items were the price of admission to get that done. One of the biggest items is that the RPS has been fixed and it could create a 1.35GW solar market by 2020. From essentially zero, that is a really great place to aim towards.
EU crafts its energy future. With Europe on deck to lead the world towards accomplishing the Paris agreement, it has released the outline of the energy package. This is at the EU level which means that it is diversified to meet the political needs of member nations. Some Countries, like Germany, have already taken many policies in their own hands but others need to be pulled along.
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Yann
This is your SolarWakeup for December 8th, 2016
Big Wakeup news coming soon. We’ve been working on a really important project given the fast moving, confusing and let’s just call it interesting political environment we are in. Stay tuned for more.
Thanks for the feedback! I hope we can do this more often, but you said it clearly that you enjoyed the summaries. I also understand the request to put the links for the stories directly in the email instead of having to come to the website. Obviously, the intent is to drive traffic to the site for metrics but that may no longer be the case. May consider doing a trial and having the article links right in the email.
It was a Trump directed headshake. Scott Pruitt will be the head of the EPA. The P used to stand for protection but will soon stand for pilfering. Scott Pruitt is the AG in Oklahoma and favorite attack dog on the EPA for the Koch Brothers. Ivanka stories, Gore meeting, those were all misdirection to this nonsense.
What does $250million buy? The Kochs may have been quiet during the Presidential election but they are far from quiet now. While the President Elect is Donald Trump, the transition is led by Governor Pence who has been close to the Kochs for years. Scott Pruitt and many more are direct contact of the Koch empire.
Out with the old. SunPower is making the cuts to ramp operational efficiency. The factory in the Philippines is one of the first factories the company opened and costly to operating. Cutting the factory will reduce capacity by 700MW and cut 2,500 jobs in the company, most in the Philippines. It will cost the company about $350 million, about 30% of which will be cash.
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Yann
This is your SolarWakeup for December 7th, 2016
How’s the new format? It’s been a few weeks since I added the summaries to the top. Are they helpful or do they get into the way of the articles that you want to read? What else would you like this publication to give you to make it even better? Reply to this email and let me know.
Solar likes a free market now. PV-Magazine has a good summary on a leaked memo on Trump’s energy policies written by former Koch lobbyist Thomas Pyle. One of the points speaks to getting rid of all energy subsidies so that the market can discover the true price. I’m all in on that, it was actually one of the best negotiating points during the ITC extension because the ITC is almost nothing compared to the rest of the energy sector. This is a fool’s errand by the way, oil and gas will never, ever let Congress get rid of their subsidies. EVER!
A windy Google search. Google announced yesterday that it reached 100% renewable energy in 2017, meaning it will get all of its electric needs from renewable sources. For Google that means over 2.6GW of power but it may be a bit unclear on how that power correlates to energy use and timing. This is almost all wind with some solar mixed in. Someone needs to get into Facebook and make them do a solar project.
The risky cost of inaction. Bloomberg, Steyer and Paulson have been running a project called the Risky Business Project. Outlining the economic risk to the US by unmitigated climate change, the analysis has transitioned from the cost of inaction to the benefits of action. Their point is that the action is now incredibly valuable for financial entities, one that is not lost to many pension funds across the globe or pretty much anyone except for the US Congress.
Mr. Trump, meet Elon Musk. During the debate, Donald Trump brought up Solyndra which means he has been briefed on the loan guarantee program. He would know that it is returning over $5billion in profits to the taxpayers and had a loan to Tesla repaid ahead of schedule. The story we know well, but the agreement on the domestic manufacturing issue is understated. Musk’s companies have created over 35,000 jobs and used State level economic development deals to do it, both a staple of Trump’s policies. We did have Elon Musk as the leading candidate for DOE Secretary in our brief last month.
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Yann
This is your SolarWakeup for December 6th, 2016
Koch and Trump make up. It appears the lobbyist Mike McKenna has been replaced as the Energy Transition leader. Thomas Pyle, a former Koch Industries lobbyist, has taken over and the record on renewable energy is exactly as bad as you would expect. We can take some comfort (very little) that most energy policy is handled at the State level where Koch funded initiatives have not been as successful as hoped. Watch this space.
Buffett speaks, do the Koch Brothers listen? One of the most interesting dichotomies in energy is the partnership between monopolies and the free market champions. Buffett hopes that he will be able to deploy more capital into solar and wind, as his utilities have done quite a bit on the large scale side. Unlike IOUs like NextEra, the Berkshire utilities have not been big on DG, and we are only talking about deregulated sides of the house. What will the Koch influence on Federal policy have on the Buffett goals?
Is greenwashing really a bad thing? I’ve been giving the idea some thought that greenwashing is actually a good thing. Let’s say that a corporation does a green project. It then hires a marketing firm to promote the brand by talking about the project. Maybe the project could have been bigger or greener but my bet is that their competitors are watching. The competitor goes out and attempts to outgreen the other, then publicizes that and the whole circle gets bigger and wider. I say we should market any attempt by corporations to improve its clean energy initiatives.
Here is your faster horse. Henry Ford famously commented that his customers would have asked for faster horses if he asked them what they wanted when he developed the Model T. TBI is known as a front for centralized power, namely nuclear power. Their new report says that history shows DG is not the best way to solve energy poverty. Pardon my French but, no shit! Never in our history have we had access to this cost of solar power, cost of energy storage and small wind. Microgrids were a luxury for forward operating bases and mines in the middle of nowhere, now over 50 are planned for the continental US.
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Yann