Tag Archives: Daily Rundown

This is your SolarWakeup for August 11th

The Point of 232. Stop relying on foreign made solar panels and create a domestic manufacturing ecosystem. Through a series of duties and tariffs, the US has built out a supply chain for domestic module assembly, nearing 60GW and growing while starting a cell manufacturing ramp up. There is a hopeful mission that can be written as a headline with an undertone of shifting margin to a few companies that are taking victory laps for the 232 proclamation that gives domestic suppliers room to breathe in that 40cent per watt range. I don’t know that this is the end of the road though and whether the runway exists to drive the Capex for the full build out of the domestic supply chain given the ITC and 45x sunsets. 

Fixing The Downsides. The cost of modules is going up and that’s going to hurt the economics of every project that isn’t taking delivery by December, which means they’ve likely already ordered the modules. There are a couple of things that are worrisome, first is the 10-15cents per watt that projects will have to absorb, second is what happens to the projects that are circa 2030 and don’t have an ITC to support the current off take levels pre-232 costs and third is how the manufacturers will raise the capital for the Capex of the production plants. If you take all of those into a simple umbrella, the solar industry is looking at a future that needs an extension of the ITC and 45x, ideally soon. Soon, so that certainty allows for capital to continue to be invested for projects and manufacturing. The reality is that there is significant pressure on PPA itself with most of you being told that off takes will have the need to adjust the pricing, a message that I am being told you should be pressure checking because the people in the room don’t know how likely that is. 

Scenarios Of 2030. Here are the variables I am thinking about in the Post ITC, post 45x world. How will the domestic market look and what is the total demand for solar in 2030 and beyond? What elasticity do we see in the PPA market from the utilities, CCAs, corporate off takers? How close will the solar+storage LCOE get to the gas turbine LCOE for the data center universe? What does the development success for data centers look like given the local opposition? Will the solar industry and Congress come together to find a way to extend the ITC and/or 45x or does the industry stay on the sideline? 

Wakeup Premium. I am soft launching this to figure out the back end of this concept. Here’s my idea, to take this dialogue of the SolarWakeup commentary into a smaller group for a ‘micro-consulting’ concept, giving you another voice/opinion/data point to consider in your day to day, then shape the topics that are most important to you for me to consider writing about. You can find the signup on the SolarWakeup website if you desire to get involved early, you’ll see this commentary shifting into a separate mailing list in the coming weeks. 

Opinion

Best, Yann

This is your SolarWakeup for August 10th

Anti-Solar Consequences. Solar forces behind The Invest in Tomorrow Coalition PAC pushed and succeeded in helping Representative Ogles lose his primary race in Tennessee. There is a political price to pay for members of Congress that are anti-solar and it appears that this is true on both sides of the aisle. Pro-solar is pro-jobs, pro-business, anti-inflation and just makes common sense. Here is my new tagline for members, Keep your job and support solar!

232 Coming In. Last week came the 232 proclamation, with an enforcement date of December of this year. This gives limited time for folks to figure it out but a watchful eye on mass importation to try and warehouse inventory. I am getting some sense on where prices are going, would love to get your thoughts on how this develops and where the supply chain will try to expand asap. Certainly, projects will die and energy cost for solar will go up, net jobs will decline but we will have domestic manufacturing. Is 250% too steep a tax to pay for this? That is the political bet that has been made and we’re paying for. 

A Political Merger. The Governor of Virginia has come out and is intervening in the Virginia review on the Nextera – Dominion merger. When folks asked me at the time what I thought of the merger, I didn’t answer with a business, strategy or other opinion except for saying that the two Governors (Florida and Virginia) had presidential ambitions and that would have some caveats. 

Opinion

Best, Yann

This is your SolarWakeup for August 7th

Opinion

Best, Yann

This is your SolarWakeup for August 6th

MIPs and TRQs. The administration is going to announce a long anticipated minimum import price under the 232 polysilicon case any moment now. Here’s what you need to know. This is meant to drive up the price of all modules imported in the US above the price that domestic producers want. With enough domestic production, you should be able to buy modules well below the MIP if the competition is thorough and there is no collusion on pricing. (Different topic). Here’s what comes next, you’re likely to see two things. A flurry of supply announcements between domestic factories and IPPs that are trying to lock in production, something that solar has actually done not enough of based on the earnings announcements this week. (You know your backlog but keep buying at the market to try and save a penny but then screw up your schedule). The bigger story that few people know is that there is likely to be a TRQ, tariff rate quota that allows some domestic producers to import parts of their module based on their investment levels (or as details emerge during the announcements). This will allow some factories to have access to imported cells while building out their domestic supply chain but not be subject to all the tariffs. This is where the rush will be to lock in the supply of pre and post factory startup. More to come, get your deals done today. 

FCC Part 2. It seems likely that the FCC or other agency will expand the inverter rule to BESS and BESS software. Based on what I’m hearing from the market, EMS and possibly BMS will get placed into the FCC rule and do two things. First is limit the options you have for your software systems in BESS and second is stop your ability for firmware updates of your existing sites that are using non-domestic software or data flows. This will possibly be troublesome for any updates required by the ISO/RTOs that you are operating in. 

Access. Starting in September, this content will be limited to the premium SolarWakeup subscribers. The initial access will be limited to 100 subscribers so that the dialogue will be focused on what those readers need to know. We’ll be releasing that list shortly, email me if you want a heads up on that. 

Opinion

Best, Yann