Tag Archives: Daily Rundown

This is your SolarWakeup for June 3rd, 2020

Solar Is Back, On The Record. Bloomberg is out with a bit of a recap of the last 90 days in solar from the viewpoint of Sunnova and Palmetto, two companies that you know well and have a good macro view of the solar market. Sunnova was out early with confirmation of its public guidance, the first public company to do so. I expect other public companies to reaffirm 2020 numbers over the next few months as well, much of the underlying data tells us that homeowner interest in solar is higher than ever before and positive economic cases exist in more geographies than ever. While the volume will return, now is the time to focus on margins and make sure they are distributed evenly throughout the value chain. The solar product pricing index for May is now open for installers to submit data and expands beyond modules. With dozens of installers submitting information, they have already seen the ability to negotiate more fair pricing for their purchases.

Loan Markets Agree. Loanpal issued their latest securitization reports through Kroll Bond Rating Agency (KBRA) for about $400million in loans. Two data points that are of interest and reassure the market sentiment. First, commentary is made that while the latter half of March was down in volume, the company is now above pre-COVID levels. Second, a graph showing new originations shows March 2020 as the all time high, crossing $200million in loans in that month for the first time. Sunlight Financial also announced an expansion of its facility with Tech CU to finance over 80,000 solar homes, which equates to over $2billion in commitments.

Vivint Solar’s Double Capital. Not to be outdone, Vivint Solar filed two new financing arrangements. The first is basically a sale of future equity cash flows of their assets. In a deal with Brookfield Asset Management, Vivint Solar monetized a forward strip of revenue to the tune of $200million out of a possible $300million in the facility. The company also increased its warehouse revolver by $245million to $570million. Interest rates are looking quite aggressive as well.

Like I Was Saying. If you listened to SolarWakeup podcast 4 weeks ago, I made a prediction well before it was cool to say this. I said that 2020 is not going to be a down year compared to 2019. Hear that clip here and subscribe to the podcast. 

Opinion

Best, Yann

This is your SolarWakeup for June 2nd, 2020

My Thoughts. We are all going through the same things right now but all with different perspectives. My point of view is not what I want to hear from so I’ve spent time listening to people I respect with the reality that I would like you to have more diverse points of view as well. While I have the luxury of a voice and a big platform right now, I would rather that platform be used to amplify voices from folks that look different than me and experienced life coming from another set of circumstances. So I would like you, or those around you, to share your opinion with this platform. It can come from you individually, your colleague or even a group of you. I look forward to sharing your thoughts with the rest of the solar industry. 

Opinion

Best, Yann

This is your SolarWakeup for June 1st, 2020

Liftoff In Florida. If you’re anything like me you thoroughly enjoyed and delighted in the SpaceX Demo-2 Dragon launch from Cape Canaveral in Florida this weekend. This included staying up most of the night and watching the crewed capsule approach, dock and equalize with the International Space Station. Whether you are 38 or 3 years old like my youngest, rockets taking off for outer space brings a smile to your face. It all seems too big and too impossible (I still don’t know how they land the rocket on a drone ship) but the combined capability of humans can really do anything.

A Uniquely Terrible Business Model. National Grid published its interconnection study results for 300MW of distributed solar last week. In order to get 90MW of that capacity built, developers would have to pay $75million dollars and wait 5 to 7 years in order to get the upgrades done. This should be part of the obituary of that business, there is nothing to be said about telling customers to wait 5 years to get an upgrade done and have to pay almost $1 per watt to get it. If the infrastructure can’t handle 300MW of solar, the system needs to be rebuilt and I’ve seen most of the infrastructure in Florida rebuilt in a couple months after a hurricane.

China, Modules and More. In China, the government is imposing new restrictions on manufacturing expansion given the delay in demand globally. In the US this means that prices are dropping and catching up to the market that is coming back nicely. Over the past few months, some of you have benefitted from the Solar Module Index which publishes the April numbers this week. The module index will expand into the product index and all installers to add other parts you are buying like inverters and racking per your request. This is data that comes directly from installers and shared with each other, I only play the role to consolidate the data. For the foreseeable future, I am also making the index free to get the margin back in line for installers that are suffering from covid related slow down.

The Margin Stack. I am writing a full blog post on the topic of margin stacking because the overall cost of solar to the homeowner is much higher than it should be and the margin that the installer receives is not reflective of it. Soft costs are a problem but more than a third of the price of solar for a homeowner is neither product, labor or installer profit. More to come.

Big Picture Matters. I am glad to see that solar has for a long time and will continue to view our industry as more than just a market to product clean energy. Without getting into topics much bigger than this newsletter, I now understand more deeply why caring about the big picture matters, access for everyone matters, more diversity matters and ensuring equality matters. 

Opinion

Best, Yann

This is your SolarWakeup for May 29th, 2020

Per Capita Solar. Solar isn’t always where we think it is. A lot of it is installed in very large cities like Los Angeles and San Diego but when adjusted for population, it could be a lot better. How does your city show on this list?

The Real Pressure in Oil. There is a lot of talk about divesting endowments and pushing major climate goals for the oil majors. In reality, there are hundreds of oil companies in exploration, drilling, pipeline and more that are backed or owned by private equity. Most PE firms will have 20 oil companies for a clean energy investment and that is the real pivot that needs to happen. This isn’t a climate statement, the market is adjusting its goals of where the returns and capital preservation are maximized.

Top Modules Rated. PVEL, whose CEO visited with us on a podcast last year, is out with its annual module reliability scorecard. How does your module stack up and to what extent is your business aligned with a module supplier?

Mailbag Podcast. Send in your topics for next week’s podcast. I’ll be answering your questions about solar, the market or any other things that interest you. Have a great weekend!

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Opinion

Best, Yann