So, you’ve packed your pantsuit, your Shoals party confirmation and plenty of business cards to paper the hands of all you meet at this year’s Solar Power International.
All you need now is a brief refresher on what exactly you should be talking about this week. That’s where Greentech Media can help. (The illustrious Julian Spector also has advice on suits — and conversation-starters on energy storage — if you’re looking.)
Read up below on the themes we expect to be the talk of the convention center. Think we've missed something? Let our reporters know onsite in Salt Lake City.
Solar stocks are hot again
Summer may be over, but cleantech stocks, and solar stocks in particular, are still sizzling.
“Investing in cleantech stocks in general has been very popular of late,” Pavel Molchanov, a senior vice president and equity research analyst at Raymond James & Associates, tells GTM. “Sentiment right now on the whole of cleantech — solar included — is probably the best it’s been since before the global financial crisis a decade ago.”
The Wilderhill Clean Energy Index, which tracks performance of clean energy companies, is up 40 percent year-to-date. Solar is doing even better: The TAN index, which focuses on solar companies, is up 60 percent this year.
Of course, solar insiders also got another stock to watch this year, with Sunnova becoming the first solar company in several years to hold an initial public offering.
Despite the tailwinds, Molchanov cautions against overexcitement. He described solar and cleantech more broadly as “extremely emotional” stocks — meaning they’re closely tied to the whims of investors.
“On the way up and on the way down the stocks tend to overreach,” said Molchanov. “When it’s a bear market for solar stocks, they tend to fall too much, and when it’s a bull market — and the last six months have been a bull market — they tend to rise to excessive levels.”
Other solar finance trends to read up on ahead of the show: refinancing, solar insurance products like the Solar Revenue Put and the EneRate Credit Cover, and the “frothy” landscape created by a rush of new investors in the solar space.
The fate of the Investment Tax Credit
As everyone in the solar industry already knows, the phase-down of the federal Investment Tax Credit looms. The Solar Energy Industries Association (SEIA) is officially all in on an extension, calling it their “number-one priority.”
An extension of the credit at 30 percent out to 2030 (longer than the five-year extension SEIA is currently lobbying for) provides significant upside to the industry, according to recent research from SEIA and Wood Mackenzie Power & Renewables. That extension would add about 81 gigawatts to the consultancy’s base forecast from 2019 to 2030. The great majority of that capacity, 77 percent, would go toward the utility-scale sector.
As of July, there’s legislation to extend the credit under consideration in Congress. Whether it goes anywhere is another story. Back in 2015, the industry won a Hail Mary extension right before lawmakers left Washington, D.C. at the end of the 2015 session, which suggests another continuation of the credit will come similarly late in the game, if at all.
Most solar executives have given another extension unlikely odds, while fervently hoping for its passage. Meanwhile, companies are prepping for the credit’s stepdown in 2020.
So far, the industry’s favorite ITC qualification technique appears to be safe-harboring, which requires a developer to incur at least 5 percent of a project’s cost in 2019 to secure the credit’s full value. According to WoodMac analysts, most developers have ambitious plans to safe-harbor all PPA'd projects in their pipelines plus 35 to 45 percent of pre-contracted projects by the end of 2019. Most plan to use modules to do so, with inverters the next equipment of choice as module supply tightens.
At SPI, expect lots of talk about safe-harboring tactics and the likelihood of an extension, and prep your own perspectives accordingly.
Rise of the two-faced panel
Last year after SPI, GTM contended that, though bifacial modules had piqued the industry’s interest, they hadn’t yet reached “hype-cycle status.” That’s largely still true, but the two-sided technology is getting a lot more buzz of late, helped along by an exclusion to the Section 201 tariffs granted in June.
Whispers of bifacial’s potential have given way to big-time deals like the 1.8-gigawatt order Canadian Solar inked in May, the largest in the manufacturer’s history. Earlier this month, Duke Energy Renewables also bought a 200-megawatt AC bifacial project Canadian developed in Texas.
In a forthcoming report, WoodMac analyst Xiaojing Sun argues that bifacial technology is finally “ready for prime time.”
Global bifacial capacity is slated to double from the 2,600 megawatts installed in 2018 to 5,420 megawatts by the end of this year, according to WoodMac. In the next five years, analysts say the market will increase in size tenfold.
Solar manufacturers are taking note of the expected boom. Canadian Solar dropped a new bifacial module in June and is adding “bifacial-compatible” manufacturing. JinkoSolar also unveiled a new bifacial module this year and keeps bumping its view that the technology is going “mainstream.” On its Q2 earnings call, the Chinese manufacturer said it expects U.S. demand to shift toward bifacial.
In other technology news, storage also got high billing at SPI 2018, so much so that Smart Electric Power Alliance President and CEO Julia Hamm proclaimed that SPI “isn’t just a solar show anymore.” We prepped another primer on what to watch for in the storage space this year.
The deal on the Green New Deal
We’re more than a year away from the 2020 election, but try telling that to the news cycle.
This time around, climate change is getting much more attention among Democrats vying for that party’s candidacy. Candidates from top of the pile to bottom of the polls have released plans to tackle the crisis.
Several have said their administration would extend wind and solar tax credits, while others have proposed public support for renewable energy projects. All candidates want to significantly build out clean energy generation. And unless Sen. Bernie Sanders’ plan to publicly produce electricity wins out, an energy transition endorsed at the highest level of government would mean significant business opportunity for the solar industry.
Will the country move toward the more flexible 100 percent clean energy or 100 percent renewables, and can solar-plus-storage get us there? How might former Vice President Joe Biden model his proposed ARPA-C, a “cross-agency Advanced Research Projects Agency focused on climate”? Is $16.3 trillion, as Sanders proposed, enough to remake a clean energy economy? And what could the industry do with the $400 billion in research and development funds tied to Sen. Elizabeth Warren’s Green Apollo Program?
If you have a conference floor epiphany about what the Green New Deal should look like, let us know. We’re just here to ask the questions.
Are you at SPI? Come visit GTM and Wood Mackenzie at booth 7342.