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. 

• Energy Storage News: US energy secretary – ‘We need to act now to develop domestic lithium battery capabilities’
• PV-Magazine: SEIA has a ‘strong sense’ that U.S. solar supply chains are shifting, but hard numbers are scarce
• Canary Media: Used EV batteries could get a second life storing clean energy on California’s grid
• Reuters: Falling renewables costs undercut new and some existing coal plants – study
• GreenBiz: GM plans to drive $35 billion into zero-emission vehicles
• Solar Industry: Work Under Way on New Utility-Scale Project in North Carolina
• Utility Dive: US grid needs overhaul to keep up with renewable revolution, says GE exec, Sen. Heinrich
• Axios: Why electrifying the light truck market could be tough

 Opinion

• The Advocate: ‘I thought we were an oil and gas state’ – Solar developments in Louisiana draw increased scrutiny

Best, Yann

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. 

• PV-Magazine: Solar manufacturing tax credit is introduced in the Senate
• Solar Power World: 100+ organizations request 10-year extension and direct pay option for ITC
• Utility Dive: Bipartisan $973B infrastructure proposal alarms EV advocates with annual surcharge on vehicles
• Axios: St. Croix oil refinery shuts down “indefinitely” from financial restraints
• Reuters: Shortage of people, materials can slow energy transition – Enel CEO
• PV-Tech: Canada seeks dispute settlement over ‘unwarranted’ US solar trade tariffs
• Energy Storage News: Inside Europe’s newest frequency response opportunity for energy storage, aFRR
• Canary Media: 7 cleantech segments beyond wind and solar that are luring investors

 Opinion

• RMI: Climate Finance – Between Promise and Delivery

Best, Yann

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. 

• Canary Media: Will Illinois finally manage to pass this massive clean energy bill?
• Utility Dive: In 10 years, the energy transformation will look simple. For now, ‘it can feel like a slog,’ says NextEra VP
• Washington Post: Why has Andy Karsner frightened the mighty ExxonMobil?
• New York Times: Shell Gets Greener, Even as Climate Advocates Say, ‘Go Faster’
• Reuters: From solar jobs to electric cars, Los Angeles seeks green future for all
• Axios: What to watch as infrastructure talks heat up
• PV-Tech: FERC seeks to establish Federal-State task force to support US transmission development
• RMI: Simple Tax Changes Can Unleash Clean Energy Deployment
• PV-Magazine: Two Duke IRPs shot down by South Carolina regulators

 Opinion

• Energy Storage News: Ignoring energy storage in Europe’s recovery and resilience funding would be big mistake, EC warned

Best, Yann

• Axios: Senate Democrats start playing their climate cards
• Utility Dive: Texas adding energy storage ahead of risky summer months – S&P analysis
• Reuters: California urges consumers to prepare to save energy amid impending heatwave
• Nevada Independent: Secretary Granholm on Nevada’s role in the energy transition, lithium mining, rooftop solar
• Solar Builder: Inovateus Solar diverted 67.5 tons of waste from landfills and other tidbits from its sustainability report
• Energy Storage News: Macquarie’s Green Investment Group acquires 187MWh portfolio of UK battery energy storage projects
• Canary Media: Bill Gates wants to build advanced nuclear at an old Wyoming coal plant. It’s a long shot
• PV-Magazine: How the Southeast can achieve 100% clean energy

 Opinion

• RMI: Can Electric Pickup Trucks Save the Grid in Texas?

Best, Yann