This is your SolarWakeup for July 6th, 2021
Boil The Ocean. In case you missed it, two separate events caused the ocean to catch on fire this weekend. Boil the ocean is an idiom meaning an impossible task, let the energy transition happen a bit faster. Gulf of Mexico, Caspian Sea.
Can It Be Done? There is some skepticism that the grid can decarbonize in the executive suite at NRG. I think there should be some faith that it can be done and that some of the cultural beliefs of the future from the David Crane days return to the HQ.
Cypress Creek Gets A Buyer. Call it a turnaround completed, Sweden’s EQT is acquiring Cypress Creek Renewables from HPS and Temasek.
Grid Readiness. This is the story of the summer. Every weather event that causes stress on the grid will be viewed from the prism of ‘is the grid ready to handle this’.
Summer Break. SolarWakeup will be off for a week taking our summer break. We’ll have one more edition tomorrow and then return on Monday the 19th.
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Yann
This is your SolarWakeup for July 2nd, 2021
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This is your SolarWakeup for July 1st, 2021
Infra By Reconciliation. Yesterday we got our first view into what the White House wants in the second infrastructure bill which is (if it happens) going to pass by reconciliation and will require the vote of every Senate democrat. Highlight that you care about is a 100% clean energy standard and our requested package of renewable energy tax credits. Manchin has been less than committed to a CES though based on the press releases in my inbox yesterday, environmentalists don’t love the definition of CES that’s floating around which may mean that Manchin has been appeased by the broadening of the definition, i.e. clean coal may be considered a CES acceptable generator. First, you need Manchin’s vote to pass anything so maybe activists will be happy with losing while being ideological and second, clean coal isn’t a thing. Based on the uproar about the CES, I wouldn’t be surprised if it’s a red herring. A large swath of the Country already has states with 100% RPS standards and how would a federal government get a CES to be enforced anyways with energy largely regulated at the state level? I’ve always viewed a national RPS to be symbolic at best, focus FERC on strengthening PURPA contracts, speeding up interconnections and expanding pricing signals for storage on both sides of the meter.
Storage Versus Generation. There’s a new market view brewing in my head. I am getting increasingly uncomfortable with the storage replaces X generation. Storage is an enabler of choice, when to produce, when to dispatch and how to dispatch. For generators with land and interconnection, the addition of storage means additional revenue opportunity with a very quick development cycle. When that revenue opportunity crosses over the IRR hurdle, you’ll see an expansion of the build rate happen.
Radical Either Way. David Roberts writes that there is no moderate way to manage policy for the climate crisis. The view is that inaction is the more radical approach than an aggressive attack to counter emissions.
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Yann
This is your SolarWakeup for June 30, 2021
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Yann
This is your SolarWakeup for June 29, 2021
Demand Response Feedback. Over the coming months and maybe even a few weeks ago, we will see how robust the grid starting point is. Given the temperature spikes happening in the Northwest aren’t actually driving demand up since there are no A/C units, grid requirements didn’t get stressed to the levels that you would think but you’d have to forecast more folks buying window and other ventilation units that may change that. CAISO had a flex alert a few weeks ago and didn’t have to manage any shut offs or loss of grid but did tap into demand response, something that will be monitored closely in the coming months with several virtual power plants and demand response aggregations in place compared to last year.
Politics Means Talking Points. Former SecState Kerry is losing some diplomatic touch in his new role as climate envoy. Likening the fight on climate change to fighting a war may be met with agreement with one side of the table but even then it doesn’t gain any traction in the political arena. The slow nature of climate change is hard to fathom and the duration of the fight makes victory seem unachievable. Voters have a short memory and when it comes to policy in this ‘fight’ how can a decision today, reap political reward now rather than 10 years from now. In some ways, Kerry may have already pushed the boulder in the right direction, capitalism has made the energy transition inevitable, consumers favoring renewable energy and electrification of everything. The policy may be as simple as, making money means fighting climate change with a side benefit of saving lives and the planet.
Consolidation. You may have seen this in our coverage last week when it was announced that the former CEO of Vivint Solar is putting together a new group of solar installers, consolidating them into Lumio. They are now joined by Pineapple Energy, which in March announced a merger with a public company that is quasi reverse merging with the core business of the original public company being sold off. Pineapple has acquired two solar installers in Hawaii in addition to Horizon Solar Power which is the current day version of what is the original form of Sungevity. There are three big paths in the resi market today, grow big, get together or leverage the democratized services and go it alone. Let’s see if there is a wrong path.
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Yann
This is your SolarWakeup for June 28, 2021
A Bipartisan Infrastructure Bill. Late last week, the bipartisan Senate group arrived to an agreement that had the support from President Biden. This agreement is largely for roads and bridges with a headline number approaching $1trillion or $600mm in new spending. Given what happened in my neighborhood, the Surfside tower collapsing and likely killing over 100, the need to improve infrastructure is a no-brainer. Biden advisors had to clean up a veiled veto threat over the weekend.
What’s Not In It. Solar and cleantech tax credit extensions and expansions are not expected to be in the legislative language. (They won’t be in this bill) The clean energy standard is also not included.
But Wait, There’s More (Maybe). Part of the dust up this weekend was Biden’s comment that he will pursue a second infrastructure bill for items that would not have bipartisan support via reconciliation, something that Manchin has already supported. The comments included a veiled threat that if the bill does not pass reconciliation, he would no longer support the bipartisan infrastructure bill. Of course that’s the truth and the reality of the politics but saying it out loud puts the republican Senators on notice and they have to pretend to be upset.
PR Win Anniversary. I’ve had the pleasure to be involved in telling and pitching many great stories in my career. Most of the time it comes as part of a pitch or relationship with a reported to tell a particular story. The coverage I am most proud of wasn’t pitched to a reporter, it was an action that was covered by reporters at CNN. June 26th is the day that the Supreme Court legalized marriage equality and it was a great day in America. On that day, I was the Global Head of Marketing and PR for Conergy and we posted a tweet in support that landed us on a list with Google, HBO and Gap.
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Yann
This is your SolarWakeup for June 25, 2021
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This is your SolarWakeup for June 24, 2021
News Of The Day. Bloomberg and Reuters are reporting that the US will start blocking polysilicon imports from the Xinjiang province and name specific companies. We’ll be following analysts’ coverage on the impacted companies and how this will affect the solar market. More to come…
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Yann
This is your SolarWakeup for June 23, 2021
Domestic Manufacturing. I got an interesting AMA question about domestic manufacturing, especially with the DC headlines this week about a tax credit for domestic factories. It seems to me that the best thing going for domestic content, cells and modules, is based on supply chain hiccups and cost. I.e. if the local cost of manufacturing can make the product more readily available and absorb the cost of offshore logistics, then more manufacturing will happen here. The best analogy is US made car manufacturing, cheaper to make them here than to offshore the manufacturing and ship the cars.
A Domestic Premium? Can domestic modules, inverters and BOS get a premium for being made in America? I wish I could say yes, but every time I’ve tried to sell the value of domestically made solar products, primarily my experience in racking, the answer was a hard no.
How To Fix. Manufacturing is good work, it has predictable hours, training for new employees and consistent ability to promote from within. The pressure to justify domestic manufacturing is complicated sometimes and in an economy driven by promoting goals through the tax code, here’s my fix for domestic manufacturing of all types. Unlike traditional labor expenses that are deducted from revenue, allow for direct shift labor expense in manufacturing to be a 2x or 3x deduction. That means that a $25 per hour employee which has a $5 tax benefit, would deduct at $16 per hour.
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Yann
This is your SolarWakeup for June 22nd, 2021
AMA. Let’s turn the table a bit as we wrap up Q2. Ask me anything about the solar market, energy storage or this newsletter. Mostly I’ll answer the email in private but any good questions will come out here. As always, you can hit reply to this email and reach me directly.
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Yann