Tag Archives: Daily Rundown

This is your SolarWakeup for October 21st, 2020

A Look Ahead. With Biden ahead in the polls a lot of talk is heading into the what if and how things would look in solar so let’s partake in the punditry on the various topics in today’s news.

Mad Money Returns To Solar. Jim Cramer is no stranger to talking about the next big thing in solar, here he is with David Crane 5 years ago. Couple of things are different today, solar has a lot more to offer in the public markets and some of the hottest stocks in solar have great positive cash flow, GAAP EBITDA and the benefits of a growing market. No doubt that the solar stocks are benefitting from the what if valuation that expect 2021 and beyond to be the start of the solar decade. If you listened to our market call yesterday you saw the underlying data that showed 2020 was off to a greater than 20% growth and lagged only from April to July and is back to 2019 levels. What’s happened at the same time is a massive growth of backlog both in residential contracts and interconnection queues.

Roofs And Parking Lots. This is the goal, how do we get solar on every roof and parking lot in the Country that has the technical potential for it. That’s what a Maryland siting report is confirming, we can meet a lot of the goals with existing infrastructure. For presidents, the first 100 days and getting actual results in the first term is key. For Biden, and planet earth, increasing the pace of solar construction at the start of the administration would be a key indicator of a change. And for executives, KPIs are a great way to measure success.

Climate Change, AKA King Tide. Miami has become one of the leading examples of how climate change will impact everyday life, we even have a word for it that doesn’t scare everyone. There are days in the month and times of the year when the water levels are so high that docks are under water and water comes out the storm drains. Right now, we are at the peak season and you wouldn’t believe it but roads to the most expensive beachfront homes in Broward County were closed. Why, you ask? The roads were underwater.

EPA Is Ground Zero. Trump’s EPA may be trying to change coal ash regulations but it’s doubtful that those regs would stay intact if Biden wins in a few weeks. The follow up to that is what might a Biden EPA do for coal ash regulations to have cleaner air and ultimately make sure that coal plants close at a much faster pace. Rumors of Inslee getting tapped for EPA administrator are a signal of where climate would reside from an executive function but names like Mary Nichols also open up the possibility that electrification of transportation is a priority as well.

Covering The ITC by M Bar C. In the last 15 years, the Investment Tax Credit (ITC) has allowed organizations to benefit from substantial cost savings to solar installations. This sustainability-driven program has helped revolutionize the renewable energy industry. Regardless, in 2021 ITC benefits will shift; here is what you need to know from my friends at M Bar C Construction and how we can help you and your organization take maximum advantage of these savings while they last. 

Opinion

 

Best, Yann

This is your SolarWakeup for October 20th, 2020

Solar Permits Discussed. This morning at 10am eastern, join me on a conference call with Chris Collins from Ohm Analytics and Phil Shen from Roth Capital to talk about the trend of solar permitting from across the country. You can register (free) here.

More Racking Acquisitions. It looks like there is more welding of racking companies to happen according to reporting by PV-Magazine. This isn’t surprising, especially on the coattails of the Array Technologies IPO. One of the things that I hope gets revisited in the new administration is the removal of the aluminum tariffs for the raw commodity. This artificial increase in price has been the foundational reason for closing of US manufacturing plants by racking companies and that’s been a bad trend. Until recently, my former company (Quick Mount PV) made almost all of their products in their California plant, now closed by the new owners unfortunately. That being said, accessories to the growing solar markets are a great and profitable business.

How To Electrify. SolarWakeup’s friend and fellow CALSSA board member, Barry Cinnamon of Cinnamon Energy Systems, tells his story of electrifying his home in the Bay Area. Personally, I haven’t quite made it to full electrification at my home but anyone that hasn’t tried induction cooking is missing out. If you’re curious but want to be sold on it, you can get a plug in version for under $100. It does pose the question as to how solar installers will integrate (or not) generators in a generac system. It also becomes a topic of discussion for utilities looking for virtual power plants that include residential generators or grid charged electric vehicles.

Imagine The Memo. In a $10billion transaction ConocoPhilips is acquiring Concho Resources, resulting in one of the biggest footprints in the Permian Basin of West Texas and New Mexico. It reminded me of a discussion I had with a former boss of mine about whether we should buy projects in Argentina. He said, we can only buy this project if we get our money back before the next election. Conoco must be asking itself how fast it can get its money out of this project with continued low pricing and a future where methane regulations, flaring prohibition and environmental inspections actually become a reality.

The LCOE Review. Here is your 14th annual LCOE report from Lazard and their 6.0 of the storage analysis. This annual report has been a long time trend line that shows solar getting cheaper. Here’s your prediction for version 15.0/7.0 and 1.0. Not only will things get cheaper, but more valuable. The 1.0 will be the combined value of both and the benefits it creates for their portion of the grid.

Covering The ITC by M Bar C. In the last 15 years, the Investment Tax Credit (ITC) has allowed organizations to benefit from substantial cost savings to solar installations. This sustainability-driven program has helped revolutionize the renewable energy industry. Regardless, in 2021 ITC benefits will shift; here is what you need to know from my friends at M Bar C Construction and how we can help you and your organization take maximum advantage of these savings while they last.

Opinion

Best, Yann

This is your SolarWakeup for October 19th, 2020

Solar Permits Discussed. Tomorrow morning, join me on a conference call with Chris Collins from Ohm Analytics and Phil Shen from Roth Capital to talk about the trend of solar permitting from across the country. You can register (free) here.

Monopolies Bank Political Power. Even when consumers have the ability to choose a retail electricity provider, they typically don’t. According to the EIA, less than 20% of consumers with choice actually participate. This makes the absurdity of monopoly protection by politicians even less palatable. There is no political reality where Governors of North Carolina, Florida and South Carolina agree that one corporation has massive control over their infrastructure and Georgia would clearly expect them to be next. The only way that this actually happens is if Nextera is willing to expand consumer choice with retail energy choice. Doing the math, they are likely to only lose a small percentage of their customer base and still control a huge amount of infrastructure.

A Failure Of Resiliency. In engineering school you learn a lot about the weakest link, even more so when you go through fire academy. The key is to plan for the weakest link to fail and make sure it doesn’t have an outsized impact on the rest of the system. What I’m referring to is the sudden shutdown of Diablo Canyon nuclear plant unit 2 last week, right as CAISO was headed into another weekend of potential issues and new fire starts. That’s the problem with nuclear, it’s too big to fail but more often than not, it isn’t there when you need it and you can’t make that up with adequate reserve margin leaving only demand response, and yes, blackouts are a form of demand response. That’s why part of the equation has to be the aggregation of large scale with long duration storage, as we see in the RFP today, with the cumulative scale of millions of rooftop solar. As grid operators we have to start thinking about the C&I roofs as well, they represent the most underutilized real estate that already has interconnection and demand on site.

The EV Platform. My favorite company in the clean tech space has long been Proterra. It’s scrappy and big in potential. Now it’s getting its balance sheet ready for more with Blackstone coming back fresh off the Vivint Solar sale. Look for this company to do much more.

Sentiment Is Everything. Sentiment can create trends and traction in public markets but that trickles down every other part of the investment world. This is positive and watch for these numbers to get even better.

Covering The ITC. In the last 15 years, the Investment Tax Credit (ITC) has allowed organizations to benefit from substantial cost savings to solar installations. This sustainability-driven program has helped revolutionize the renewable energy industry. Regardless, in 2021 ITC benefits will shift; here is what you need to know from my friends at M Bar C Construction and how we can help you and your organization take maximum advantage of these savings while they last.

Opinion

Best, Yann

This is your SolarWakeup for October 16th, 2020

The $ARRY IPO. It was a big day for solar, New Mexico and the venture founded by Ron Corio in 1989. Array Technologies went public yesterday at $22 per share, pricing $1 above the $19-$21 range. Underwriters also upsized to the maximum levels. At the close of the after-hours market, $ARRY was trading just north of $38, an amazing 73% IPO day pop. Some of you got in at the first print of around $30, still a nice return. This also means that Ron is the first known solar billionaire, he sold 23 million shares at the IPO and still holds ~21.7 million shares. #solarwealth is the word of the decade because not only are we leading the energy transition, this is the single largest wealth creation opportunity of our collective lifetimes. Congrats to Array, the team and Ron for sticking to the vision.

What It Means For Sector. Array is a pure play solar company that makes the underlying structure needed to get the most out of solar modules. It manufacturers principally in the US and the majority of its revenue comes from the US market. There are dozens of solar trackers in the market but what sets Array apart along with Nextracker is the team and execution. I spent two years in racking on the resi side and this is exactly the type of exit that could have been possible if the focus weren’t on near term, consultant driven margin. Here’s what happens next, two predictions. I think Nextracker is going to have to look at spinning out from Flex and being a standalone. As the market share leader, Nextracker drives a global business into the public markets. Oaktree, the majority shareholder of Array, also owns Shoals Technologies. I wouldn’t doubt that Shoals is far behind on their S-1 filing and don’t be shocked when you see the margins of the widget manufacturer. Every asset manager and investment bank is meeting this week looking to get smart and get into solar, and that’s great for all of us.

Solar Vs Climate Policy. Biden talks a lot about climate change and even renewable energy. He has a multi-trillion dollar plan to combat climate change (the issue) and knows how he wants to solve it (the plan) but what does that mean for the actual execution. How does solar and storage fit into climate policy from a legislative perspective? Last night, Biden took a question about fracking and he did something that should be positive news for all in clean tech. He pivoted from fracking to solar panels on rooftops and batteries in the basement (his words) while highlighting the entire program as a jobs plan. We’ve come a long way. That being said, I still don’t have a clear vision for how his administration plans on getting us there though I hope that folks I know and perhaps read this newsletter will be doing so from 1600 Pennsylvania Ave. Here’s the clip on the issue from last night’s town hall. 

Storage and Grid Wars. Fluence (a Siemens and AES venture) has acquired AMS. This follows Generac’s acquisition of Enbala, LS Power’s acquisition of CPower and evGo, Engie’s acquisition of Green Charge, Enel’s acquisition of Demand Energy and Enernoc, Wartsila’s acquisition of Greensmith and I’m sure some that I’m missing. That leaves Stem as one of the remaining grid/storage companies, but having raised $371million, the price of entry will be hefty. Your thoughts and missing acquisitions are welcome.

State Capital Battles. The BP CEO talked a bit about climate advocacy in State capitols, which is my signal to remind you of the biggest head to head contests about to meet state legislators. With oil in transportation at record low levels and the electrification of buildings and transportation, oil companies and utilities are meeting head to head for the first time. They’ve mostly managed to ignore each other’s issues for a century but that’s changing. Look out for major battles and unlike utilities, I see some alignment of interests between our industry and oil that could benefit us.

Philly Gets Permits. Faster and cheaper permits in Philadelphia? They get it, let’s help them get to instant permits.

Thank You! Yesterday, CALSSA members stood up and raised $195 thousand dollars to keep the policy wheels moving. After a motivational, NBA Championship caliber speech from Hall of Famer Bill Walton, members dug into their pockets. We are $5k away from our goal of $200k and I’m hoping that you can help make up the gap. You can make a donation today!

Get The Power. Later this year, the residential solar market is going to get some major savings with most of their balance of systems when the shift to higher power solar modules really gets going. With power density going up more than 10%, those savings will trickle down to mounts, rails, inverters, labor and wire and hopefully into installers’ wallets. Make sure you are getting the best modules and pricing possible by joining the SolarWakeup Buyer’s Group. You can see the pricing on our price discovery page. 

Opinion

Best, Yann