Tag Archives: Daily Rundown

This is your SolarWakeup for April 23rd, 2020

Creating Shared Experiences. Solar advocate, Alex McDonough, joins in an editorial about the need to fight climate change. Flattening the curve is a term that 6 weeks ago meant nothing to most and living the life of a less habitable planet was a figment of an unreachable imagination. Now that our living situation has surpassed the wildest Hollywood script, can we learn and prevent the climate crisis collision course we are steaming towards.

UN Has A Thought. On the 50th anniversary of Earth Day the UN is calling for an economic recovery rooted in environmental benefits. Similarly to the statement by Tom Steyer I covered yesterday, the opportunity to build new jobs in building an expanded climate positive economy.

Let’s Build, Smartly.  Marc Andreesen has been quieter when it comes to his digital footprint. As the author of ‘Software will eat the world’ and perhaps the father of tweet threads, when Marc writes it gets talked about. In his article ‘It’s time to build’ he makes the case that we do too little thinking and even less doing when it comes to the big issues facing our Country. I agree with his general thesis and note that the reason may not be doing these things is that capitalism doesn’t reward that kind of execution.

Take The Helm. “The CPUC will closely monitor the selection of PG&E’s next CEO” is the comment that caps the news that PG&E’s Bill Johnson, formerly of the TVA as the highest paid federal employee and formerly of Progress Energy Florida, is leaving this summer. I definitely have some hopes and recommendations for PG&E’s shareholders on how to maximize their value. Here’s the thing, Nextera beat expectations and is going to invest billions on solar and storage and their Governor doesn’t even really care. In California, Governor Newsom not only cares, the legislature has passed policy saying that the goal is 100% renewable energy. Imagine being able to do good, follow policy and maximize shareholder value at the same time.

What Is Climate tech? Alternative energy, renewable energy, clean tech and now climate tech. What does that mean and “what’s in a name? That which we call a rose By any other name would smell as sweet.” That’s the real trick here, I’ve been in solar for 15 years and some of you much longer and it’s always been a market that generally moves up and to the right even as punches and bruises happen along the way. Climate tech has the ability to make the smell a rose because when it comes to free market capitalism, the hope for enormous return requires sentiment on our side. Climate tech is the name today for what we already know but this time everyone wants to get on the train.

Get Involved. Yesterday, many of you started to get involved and some reached out to learn more. The solar module index is exactly what the name says, you (the installer) will share confidentially information about what you’re paying and in return get to see (without names) what everyone else is. It’s like buying an airline ticket online, you have information to make better decisions. I expect that the free slots in the index will run out today so if you’re interested, head to the survey or get more info on the website. 

Opinion

Best, Yann

This is your SolarWakeup for April 22nd, 2020

Product Pricing Volatility. Solar products, especially modules, are constantly changing prices. In a global market, the price being quoted to installers and developers is only good for a very short period of time. This can be harmful when they are going up but can also cost companies tens of thousands of dollars if pricing is dropping like it is now. This is especially true when volumes are at the residential scale. Over the past week, you may have seen the link at the bottom of the newsletter about the solar module index. Even at this early level of participation, I can assure you that the range in pricing for the same module is double digits and volume is not as big of a factor as you would assume. I invite residential installers to join the index so that you can learn what others are paying for the modules you are buying as well. During these uncertain times, you can see that the headlines are tracking pricing volatility as well, make sure you benefit.

California’s Opportunity. Governor Newsom has tapped Tom Steyer to co-chair the task force looking at reopening the economy in California. Part of the work is to understand where the growth can be long term while also understanding the short term impacts to industries like oil. Part of what I’ll be looking for is how California creates a roadmap for the rest of the Country on issues in solar. For example, there appears to be widespread understanding on permitting and inspections in an environment of social distancing. Agencies have released information on how remote inspections occur through continuous video and geotagged photos. If supported legislatively, you could see a solar industry no longer having to wait a day for an inspector to show up and you could see services where homeowners can hire solar experts to review project quality remotely. Better solar, done faster and more cost effectively for consumers. Count me in. The data in the survey this week also highlights the building departments adaptations. I’ll be discussing them at 10am EST this morning with Roth Capital.

Clear Skies, More Sun. Production data from solar projects around the world show higher output with cleaner skies. Less pollution means higher capacity factors for renewable energy, one more reason to make the transition go faster.

Storage Attachment Rises (In Value). One of the questions I asked you this week was how storage is playing in the recovery of solar post-pandemic. We already see very high rates of attachment in California and nearly 100% in Hawaii but the rates of storage utilization is also rising in places like Florida and the northeast. On the other hand, the value of storage in solar is also going up. Here is an interesting view of what that looks like when you dig into the numbers.

Liquidity And Comfort. There are two capital markets deals that caught my eye this week. Mosaic, the residential solar loan company, has expanded its warehouse facility by $50mm with additional length on their term. This should allow the company to go longer between securitizations or moving the loans in larger tranches saving on transaction cost amongst other volume based benefits. Hannon Armstrong was also able to raise new debt for their capital pool at strong rates, in fact able to upside their raise from their anticipated $350mm to $400mm. One concern I had coming into the pandemic was the loss of credit markets a la 2009 but it appears thus far that capital and loans will remain in the market with little change.

DC Headlines. Stimulus package #4 has been replaced with a mini deal of $484billion to refill the PPP funds. For the 20% of you that have not received PPP funds due to fund depletion should be able to benefit from this move. The larger stimulus package now loses some time sensitivity that was politically unappealing given the PPP issue now starts up for debate between Pelosi, Trump and McConnell. Package #4 will be most interesting for solar if oil bailout funds are argued for, that is the opportunity for our market to get stimulus as well. Note that the jobs lost in oil are in line with our losses at this point in the crisis, the need is similar our sector with a much higher upside potential to get folks back to work going forward. 

Opinion

Best, Yann

This is your SolarWakeup for April 21st, 2020

The Positive Outlook. I am pleased to see some positive signs that the solar industry is adapting to the new normal, some of which could make the industry more resilient in the future. Don’t get me wrong, the work ahead is going to be grueling and long but the work has begun. In this week’s survey I ask where the leads are compared to before the pandemic because word has it that leads are up, including based on recent polling done by LG Solar. Participate in this week’s survey so that we get a clear view of the market and can act accordingly. More on the positive future outlook on building departments coming this week.

What Are Your Questions? Wednesday, bright and early, you can join me and other residential solar execs as we discuss the state of the market. This is the third such call which covers distribution, loans and installations. I’ll also be going over the results from this week’s survey. Like all the cool cats and kittens today, you can join the zoom call by registering here.

SunPower Idles Plants. In an already challenging year for SunPower, they have to contend with the pandemic while still carrying the manufacturing capacity. This is the downside of controlling both the supply and demand of your business since the SunPower downstream business makes up most of the demand for the factories. That being said, the dealer network appears to be building new momentum as sales are picking up for the downstream side of the business. What this means for the split is yet to be determined.

Options Fireworks. The oil markets made for great television yesterday as expiring May crude contracts were left without anyone to actually use the oil. Without a place to put the oil, those futures (which are current) went negative, i.e. whoever took the oil got paid to take it. I enjoy trading options and the upside of those is that worst case scenario, they go to zero. In physical commodities, traders now learned that negative pricing is possible.

Not NEM, Just Federalism. Last week I wrote about the FERC filing asking for energy sale to be considered a federal issue. Here’s the thing though, this has very little to do with net metering regardless of intention. This is a broader statement that most of what State regulators oversee is actually a federal issue. With this case, FERC is being asked to render utility commissions meaningless for pretty much any issue (maybe a good thing I didn’t take the Florida PSC job). I’ll be looking for some regulators to interview on the topic to see how they feel about this. 

Opinion

Best, Yann

This is your SolarWakeup for April 20th, 2020

State Of The Solar Market. This Wednesday at 10am EST, I’ll be going over the current state of the market. The discussion will highlight the results from this week’s survey which you can participate in by clicking here, it takes a few minutes and is completely confidential. Register for the discussion here. And here is the survey link, please feel free to forward it to partners and colleagues.
Jobs Are Going To Be Lost. It’s hard to gloss over this in a headline or a brief paragraph because there is a real impact on the livelihoods of many in our industry. The pandemic crisis hit the industry like a brick wall at a terrible moment and is beating us up on both ends of the spectrum. Every company in the market was planning on growth this year, investing in it and in some instances stretching themselves to take advantage. Now the industry has to deal with the inability to meet the customers in person and building departments unable to provide permits and inspect projects. Summary, the industry has lower revenues and can’t collect on the backlog. What’s coming next is a potential cash crunch and consumers that can’t take advantage of the tax credit because 2020 liabilities are going to be down significantly.

Empty Offices. On Friday I joined Tigercomm in a panel discussion with other clean tech journalists and editors. In that discussion I posed the question I want to ask you. Isn’t it hard to imagine that the commercial office use will be the same a year from now than it was 3 months ago? What’s going to happen with the energy consumption in buildings and how is that consumption going to change the load in the residential sector with people staying home?

Hearing From Public Companies. Over the next month or so, we will hear from many public companies when they hold their earnings call. This is an ideal time to hear how they are impacted by the pandemic and how they plan on working with their customers to get through this. This is a topic I am interested in hearing more about, many of these companies will be able to make it through the moment but if their customers or customer’s customers can’t then they will have a market problem.

The Installer Base. One of the reasons I started the survey was to make sure I understand what installers are going through. This gives me data and perspective when I speak to suppliers and investors in the space about what you need to get help with especially through this moment. Installers have felt the margin squeeze even as the market was growing leaps and bounds. Competition is tough and you’re all in this fight in a way that feels lonely. You don’t have the information and leverage you need to make your point heard and I hope to play a role to help you do just that. The survey is step one. For 8 years I’ve published this newsletter and today more than ever I understand how I can help the market most, by helping the installers. If there is particular idea you need help with hit reply to this email or go to the survey. 

Opinion

Best, Yann