This is your SolarWakeup for November 17th, 2023
California Going Backwards. For some reason, California is undoing decades of leadership in solar with policies undermining the ability to build more solar. While the State boasts some of the highest electricity rates, which will continue to support some solar market, it does not allow for many of the largest energy users to host and benefit from solar energy. Landing in any major California airport still shows acres and acres of empty rooftops.
Trackers Creating Jobs. I am very proud to see Nevados’s growth in the tracker space. This is a company I’ve been personally close to for many years and it’s amazing to see the demand for this incredible and much needed all terrain tracking solution allow for new job growth in the form of a steel partnership. With the Nevados tracker you can build solar farms without grading and disturbing the natural landscape of your leased land, lowering costs and reducing impacts to the natural habitat. It also works to lower labor costs with more traditional utility scale solar farms. Definitely consider them in your plans when you’re selecting vendors.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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Yann
This is your SolarWakeup for November 16th, 2023
Missed Offshore Wind Opportunity. UK did what the US has thus far failed to do and that’s to renegotiate the PPAs for offshore wind developments that are now unbuildable. Thanks to inflation, supply chain issues and interest rates rising, the offtake agreements are just not bankable and the only way the generation can find its way onto the grid is with an adjustment. If the PPAs go back to bid, guess what will come back? Higher rates, but instead of now, the projects will get further time delays, so why not just get it done.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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Yann
This is your SolarWakeup for November 14th, 2023
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/
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Yann
This is your SolarWakeup for November 13th, 2023
Update The Grid, For Free. America is a great system, if you want something fixed or built, just promote it as an opportunity to make money, send the right price signal and private capital will arrive to the scene. The top article argues my point.
Nuclear Hurting Itself. A lot is made about the system being anti-nuclear but ultimately it’s up to the nuclear ecosystem to be able to build projects on budget and they repeatedly struggle with that. Look at offshore wind, massive supply chain disruptions and the fastest increase of cost of capital in decades and regulators won’t reopen negotiations but Vogtle Nuclear got a decade of increased and early cost recovery.
Batteries Are Already Saving The Grid. More and more studies are coming out about the Texas winter storm and how batteries played a role (those that were operational at least, not all storage systems are created equal). But that is also true as operators are thinking about retirements and variability from wind and solar. Storage’s role has a tune of multi-trillion dollar opportunity.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses feel the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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Yann
This is your SolarWakeup for November 10th, 2023
It’s The Friday Rundown. We’re heading into the tail end of the year, everyone is doing budgets and ready for the 2024 that 2023 was supposed to give us. Don’t forget to budget your policy spend in time and money!
Upgrades, You Need To Plan For. This hasn’t affected your solar plants but it will affect your battery plants within the first few years of operation and then many times throughout the life. You’ll need to regularly comply with regulatory specifications and upgrade your plant to take advantage of more revenue streams. Read today’s top story to see who’s doing this well and doing it now.
Utility Capital Stockage. Utilities are getting their balance sheets into shape for a massive deployment of capital in the coming years. This is causing some pain in the stock prices but ultimately should be seen as a positive for future investments being made towards the energy transition. Of course, there are trillions in external investments ready to be made for utilities as an offtaker, a path that some utilities without the needed capital will have to take if needed.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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This is your SolarWakeup for November 9th, 2023
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/
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This is your SolarWakeup for November 8th, 2023
The Grid Needs. Let’s keep it simple, in order to accelerate the deployment of capital we need: improved interconnection process, faster permitting and more price signals.
Interconnections. No deal can get to ready to build and certainly not to notice to proceed without access to the grid connection. This isn’t a simple process to fix but removing the complexity with a bunch of baby steps would come a long way.
Permitting. I’m not advocating for today’s story from Germany but too much home rule may be a problem. Land owners want to monetize their land but being stopped to do so by third parties that slow the development of solar farms. Solar farms don’t impact the neighbourhood with traffic nor change the vista, instead they create new tax revenues and jobs. Permitting and zoning for solar farms ends up being just as important as interconnections but far more arbitrary.
Price Signals. If project cost X, the revenue must be X + Y in order to make an investable return. The higher that the certainty on Y is, the lower the return has to be in order to get an investment committees approval. Solar development has to negotiate decades long revenue certainty in order to get past this step, which isn’t easy while storage is often left working on merchant revenue streams that weren’t really signaled for storage specific reasons. Power markets could create a solar plus storage rate price signal that would drive faster paths to construction for one example or could create storage specific price signals for faster deployment as well.
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This is your SolarWakeup for November 7th, 2023
Solar And Storage Finance. If you’re in New York for the conference, let me know, I will be here for the event as well.
Getting IEs Up To Speed. Technical views on the entire tech stack of your solar and storage projects. Much is made of asset performance especially now that decade plus of historicals are in the books. For solar it’s all about the technical performance based on the measured sunlight at the site. With batteries the upside is much greater given that power markets can move with volatility while having to match the market opportunity with the asset’s availability. As the asset classes come together, independent engineers will learn more about the parts and pieces that make good projects good.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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This is your SolarWakeup for November 6th, 2023
If Interest Rates Recover. You have to go back to a few months in 2000 and before that 1993 to find interest rates set by the Federal Reserve to be at today’s levels. You can have two views looking forward, rates will lower back to levels closer to those of the past 20 years or they’ll resemble the 70’s and 80’s, i.e. this is the new normal. From a residential solar perspective, rates are putting a big damper on loans and therefore growth rates while utility rates are rising, they’re not rising as quickly as the solar loan rates are competing with. So if you look at the stock levels of the residential solar companies, this could be a buying opportunity if your view is that things will get better if and when rates recover. Utility scale solar represents a different kind of opportunity for investors. PPA rates are rising partially from supply chain inflation but also cost of capital. Nobody wants to invest in a solar farm at 6% return when you can get that from putting cash into the bank at 5%. So PPA rates will increase and projects will be levered at higher interest rates, some 500bps higher than just a few years ago. But the upside could come if rates recover and projects are refinanced at lower rates with the PPA rate having been settled at today’s higher market. So if your view is that demand for solar hasn’t or will not change, but that interest rates could settle down, there’s some real upside in today’s market conditions. Just don’t get caught being too early or too late.
The Chart. In case you want to see the full history of Federal Reserve rates, see it here.
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/finance or contact capital@palmetto.com for more.
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This is your SolarWakeup for November 3rd, 2023
Managing Installer Cash Flow. Interest rates are the highest in 22 years, increasing solar financing costs and softening consumer demand for loan products. Businesses are feeling the pain of strained cash flows, labor costs and profitability pressures. Palmetto, a B2B technology company accelerating the adoption of clean energy, has announced a new partnership offering for solar installers to help stabilize cash flows and grow faster in today’s market. Built on top of Palmetto’s Clean Energy Operating Platform, this is a comprehensive suite of tools and services enabling installers to streamline operations, optimize performance, and increase profitability. Visit https://www.palmetto.com/
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Yann