This is your SolarWakeup for June 25, 2021
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Yann
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
This is your SolarWakeup for June 21st, 2021
Land Of Complicated Energy Policy. 3 years ago, I hosted a SolarWakeup Live! event in Chicago as the last energy bill made its way to reality. But politics in Illinois has never been easy and there is another clean energy bill trying to make its way to fruition. The top story today digs into whether that can happen.
Transformation Is Difficult. NextEra, the utility turned clean energy giant thanks to its amazing corporate capital, has been the leading voice commenting on the energy transition. 15 years ago you heard from Florida Power & Light that nuclear was the only way forward and that Florida was too cloudy for solar. Fast forward and they were the first utility to say that solar plus storage was cheaper than combined cycle gas plants. The company has been successful in regulated and deregulated markets while also building one of the deepest C&I solar portfolios in the Country. The sentiment today is that the energy transition is a messy transformation but 10 years from now will look obvious to where we started. I agree with the additional comment that it’s messy today because the markets and incumbents are clinging on to yesteryears.
Oil Majors Have A Moment. Andy Karsner, the former Bush 43 DOE official, has a write-up in the Washington Post as he joins Exxon as the third elected director nominated by an activist investor focused on Exxon joining the energy transition. Shell gets their own spotlight in the New York Times though you’ve seen Shell get involved in our industry through their acquisition of Sonnen and Silicon Ranch. I have written extensively that the oil majors are uniquely situated for the electrification since they are much more active in energy trading than the current electric utilities. That trading gives them insights to the ‘new pipe’ of electricity and expanding their well portfolios to more renewable generation.
Strategy Without Execution. Los Angeles wants to be the greenest city in America but it seems to me that more often than not, what they want to do is not followed up with the appropriate sentiment in policy or lobbying. LA is still one of the slowest solar markets in California with onerous rules and regulations for putting solar on homes, just ask Bill Maher for his experience. Strategy without execution is just bullshit, you have to lead with action, not words.
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Yann
This is your SolarWakeup for June 17th, 2021
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Yann
This is your SolarWakeup for June 16th, 2021
Summer Days. Many of you are on vacation and we’re trying to take it a tiny bit easier here at SolarWakeup too. So over the coming weeks, pardon our brevity on some days and enjoy the outdoors. It’s sunny out and we’ve got a solar spill to clean up!
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Yann
This is your SolarWakeup for June 15th, 2021
Infra Drama. The latest headline is the GOP mulling a bipartisan approval of the infrastructure bill in the $900billion range and assuming that the Democrats can’t get the moderates to pass anything else by reconciliation. Insiders tell me that the ITC is likely to remain as part of the core infrastructure bill even though many of the headlines about climate change policy speak to that portion getting pushed to the second bill. The climate change portion includes the national RPS which has garnered some negative feedback from Senator Manchin and others.
Lorde’s Solar Power. SolarEdge isn’t the only group that can make a solar song. If Lorde wants to get real about solar though, headlining CALSSA’s Battle of the Bands is the only place to do it.
Heat Wave Headlines. We’ve highlighted the impacts of heat waves over the past few months and we’re about to see the grid get put to the test and how assets respond. We’ve had a year of record DER and front of the meter energy storage additions, whether they are properly used and compensated will determine future build rates.
Paywalls. More publications are adding paywalls, which I don’t have a problem with. I will continue to post stories from those publications and leave it to you whether you become a subscriber or not. The alternative is to reduce the number of stories on the daily newsletter which would also have the negative effect of not driving your eyeballs to good reporting that you may want to support.
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Yann
This is your SolarWakeup for June 14th, 2021
The G-7 Summit. Leaders from the G-7 met in the UK this weekend and climate was a central point. The big headlines came in around transportation and competing with China in supporting developing nations with infrastructure investments that align with climate goals. Australia’s presence in the room made any joint statement around coal difficult but as we talked about in the past, that ship has sailed. The group did make bold forecasts on fossil fuel cars, eliminating subsidies for fossil fuels and expanding foreign financing to match policies abroad.
A Note About Capital. The communique labeled the support to the tune of $100billion per year. That number is completely meaningless. What governments need to focus on is creating a bankable environment for the development of the projects that they are looking to be built. Allowing for streamlined zoning and permitting and access to revenue streams would create the path for the trillions of ESG capital, in all currencies, to get involved. Policies not headlines would rule the day here.
Markets React To Price Signals. National Grid wants FERC to do more for grid stability and I say that all the RTOs should figure out how to create a deeper market for the price signals that create a stable grid. Ancillary services are in the market but can lack trading volume that saw the frequency response market in PJM lose a build signal a few years ago. Part of the solution is creating a more dynamic market with shorter time spans potentially, allowing for trades to happen far more often that they do today.
Hot Price Signals. California is starting to see the warm weather and a message from the grid operator to expect shutoffs raised the price signal. A long summer ahead.
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Yann
This is your SolarWakeup for June 11th, 2021
Have A Great Weekend. Keep your eyes on the news coming out of the bipartisan talks for the infrastructure bill. See you on Monday!
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Yann