This is your SolarWakeup for February 21st, 2020

Stocks Are Hot. Maybe it’s the hot solar market, maybe it’s the fundamentals but either way solar stocks are on fire right now. There is an overlap of the growth story mixed with the maturity of the stock success. Take Solaredge and Enphase as an example. Both executed against their earnings estimates and are building their cash reserves.  Solaredge and Enphase sold more than $2billion worth of solar ‘stuff’ last year at margins over 30%. There will be lows that come with these highs but for now, Wall Street is enamored.

The Great Right Woo. One of solar’s talking points that came out after the ITC loss was that the industry created a good foundation of support on the right. The nuance in my opinion is that relationships in DC are fungible, goes with the saying “what have you done for me lately?.” Passing legislation in DC means you have support based on leverage, situational horse trading and grassroots support. So we will have to look at cards coming into 2020, where do we stand on those issues and what are we doing differently than last year? We don’t want to be doing the same thing over and over again and expecting a different result, that would be ….

A Better Way. The ISO-NE capacity auction cleared the largest coal plant for another year, getting another $8million in capacity contracts through to 2024 year. The problem I have with this is that we already know we can do better than this. Sunrun in partnership with National Grid already won a capacity auction based on distributed energy storage resources. Over the next 3 years, solar installers will build a lot of of what we’ve already done.

Debate The Transition. Speaking of transition, there was an interesting moment during the last DNC debate where Mike Bloomberg labeled natural gas as a transition fuel. I know that this label is a spark of argument and I understand the concern. Clearly there has been a move from coal to natural gas as the utilities have rate based an entire fleet exchange. Now it is the job of regulators and advocates to limit the life span of those plants. The 100% goals and RPS plans are clearly an example of that success.

Opinion

Best, Yann

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