Head Into The Weekend. We are going to put a bow on Q3 this month and head into Q4 with the biggest backlog and solar development pipeline in the history of solar. Here are your top news for the week.
Baseload To ELCC. You should go back and read the LA Times interview with the head of CAISO that talks about the impact of the energy transition and what’s real or not. In the discussion about going to 100% renewables there are lessons that will be learned and one will be that we need to look at reserve margins and resource adequacy. Those two factors, especially local RA and local capacity will be key in execution a reliable renewable grid.
Words Mean Something. In this day and age we tend to minimize the importance of words, especially in headlines or blog posts. The word, falter, means start to lose strength or momentum. Readers of SolarWakeup know I have been critical of the 2020 residential solar forecast published by Wood Mackenzie and their August blog post saying that resi solar finance would falter in 2020 prompted a post on LinkedIn. It’s important that when platforms are used to say something we pay attention to the words we use. It’s reasonable for conservative thinking to say that solar loans would face headwinds in 2020 to reach their original hopes of 25% growth. It’s another thing to say it would lose momentum, especially when the market is saying they are breaking records and accessing capital markets that hope for more. You can see my view in greater detail in the article from PV-Magazine that saw my social media post.
Let’s Manufacture in America. Having spent more than two years running a solar company that manufactured in California, the largest such factory in the US which is unfortunately being shut down by offshore investors, I have a view on how to best incentivize made in America manufacturing. In reality, local manufacturing has advantages for working capital, logistics and quality but the lack of trained and reliable labor plus the payroll difference makes offshoring manufacturing too easy to pass up. Here is how I would grow manufacturing, Congress should pass a deduction multiplier for direct labor payroll. Instead of deduction $15/hour for labor that’s working the line with a tax benefit of $3, direct labor should have a 3x deduction. Not only does this lower the cost of manufacturing for the supplier, it makes it easier for them to pay higher wages which in turn drives the economic growth and lowers tax burden making the deduction pay for itself. If you don’t think this works, I present to you the MACRS tax code.
Climate Debt. 6 months ago when we stopped driving we saw the impact society has on the environment around us. Now the debate centers around the cost to combat climate change. Let’s be clear about one thing, every day that you don’t pay your bill to fix the problem you add principal, interest and penalties to the overall tab. Like paying off your credit cards, you’re better off doing as much as you can every month rather than wait til the end.
Q2 Solar Market. The second quarter solar market index is out and the rays of solar’s resilience are shining through. The latest SolarWakeup market survey, you’ll see some results next week, shows that Q3 will have growth of over 30% year over year and we have strong expectation that 2020 will be up year over year in number of installs and definitely in total consumer investment.
SolarWakeup Hiring. SolarWakeup is hiring inside sales reps for the Buyer’s Group, with our initial traction we are growing to do even more. Email your resume or reach out if interested, this is a remote position. I don’t care if you travel the Country in an RV while helping installers save money and take back their margin.
Opinion
Best, Yann
