Weaving fiber to make a strong rope is a 6000 years-old idea, but it suddenly seemed fresh last week. Solar’s annual supershow, Solar Power International along with four conferences from other distinct but related industries created a “big tent”, calling themselves North America Smart Energy Week. It was effective and, upon exposure, evident. Side by side were the storage, EV, hydrogen, wind, microgrid and solar folks, learning about each other and exchanging ideas. Suddenly thinking of going to just a solar show seemed archaic. I have attended this event since 2006 in San Jose, and this conference felt like something new.
The elevation of the branding is strategic and critical going forward. It’s good for the trade organizations positioning themselves. But it’s even better for each of those industries, and the ultimate winner is the environmental movement. A single “Smart Energy” vertical can gather the growing social and political uplift under a powerful set of young, growing wings. It’s big oil, natural gas, and weakened coal against Smart Energy. Bring it on.
As a walk-about experience, the unification theme was well executed, with large icons representing each industry, like Olympic disciplines. Displayed together they were flag-like, and individually they marked regions of show floor geography, personal affiliation, sessions and cross-communication games.
On the product and technology side, the theme of integrated energy solutions resonated . Panasonic introduced its residential solar-and-storage-in-one product, EverVolt, offering solutions for both AC retrofit and all-DC new system installations. SunPower presented its own integrated pv+battery residential offering, Equinox system, after watching the industry a while. Newcomer component company Span, proposing a smart electrical panel featuring smart-home energy monitoring and control on your phone, illustrated the momentum toward building-energy independence, in any and all ways it can be gained.
What about the ITC?
The elephant sitting amidst boisterous happy hours and parties was, of course, the solar Investment Tax Credit (ITC) extension. The densest contribution I caught came at the Roth Capital Symposium lunch, which featured Akin Gump’s John Marciano as a luncheon speaker. Chair of the tax committee for the Solar Energy Industry Association, he gets and creates direct interactions with Capitol Hill staff and elected officials. The intensity of their interest and inquiries on the ITC, the tone and phrasing of their comments guide SEIA’s extension barometer. When pressed in front of a room of asset managers and financiers, Marciano gave a 60% chance of extension (an up arrow compared to four months ago), though he enumerated a wide range of formulas for what it might look like if it came to pass. It could be anything from a one year to a five-year prolongation; it could involve other program features not currently existent. Should it come to pass, the key to making it veto-proof would be to tie it to something that the current administration wants; what may thrill the smart energy industry might tie the environmental industry in knots, should it come to pass.
Modeling reaches for financing’s demands
Improvements in project modeling and performance tracking arrive as financiers need storage modeling accuracy and reliability, and solar asset managers are lamenting underperformance. At an off-the-record dinner by an industry leading bank, solar asset portfolio owners spoke with resignation about their power production numbers not matching their promise. In that context it was good to learn about new efforts like FracSun (benefactor of a DOE grant) that tracts the impact of soiling on production in real time. On the storage side, the marriage of Energy ToolBase with Pason Power provides hope for reliability in a fully integrated “solar and storage” cash flow modeling tool; that might help institutional investors get more comfortable with providing 3rd-party financing for battery systems, as other new tools like Nikola Power come into the market wanting to address the battery design modeling conundrum.
Financing - Ag and VPPA’s
A new agriculture-specific infrastructure fund made its debut, finally. Fresno-based CalCom is putting $100 million to work on PPA’s for America’s breadbasket. This should put some relief on a key sector that has been under the thumb of a distressed utility and very high tariffs.
Businesses with numerous small operating locations have long been left out of the renewable energy option. Think large food or clothing chains. The vast majority lease their locations, or simply do not have usable exposed space for solar or wind. Virtual Power Purchase Agreements provide an alternative to those utility “green tariffs” which in the past seemed to have been designed to discourage you from signing up, given their premium cost. At this show, I heard the acronym VPPA more than ever before, with Bay-Wa and Apparent among firms to promote it in discussions with me. It involves a credit agreement with participating utilities. The concept seems to presage a future of blockchain energy trading for those very applications. Currently rather cumbersome and limited, considering that it is at the mercy of local utility cooperation, the idea of providing renewable energy to any and all who can’t host clearly has significant market potential.
Obviously, myriad other relevant ideas were unwrapped and dissected in the course of the week, including those related to microgrid developments, community choice aggregation and the continued evolution of the powerful utility scale business. For me, the key take-away of this show is that “the industry” of Smart Energy is finding ways to organize itself into a technology and lifestyle movement with social consequences as dramatic as smartphone communications. Chatter about an uncooperative White House seemed more social commentary than industry analysis, even given the ITC issue. There was a sense in this hall that the power from a generational shift of environmental consciousness is stronger than the combined resistance of current politics and entrenched utility interests. This show had significance; it signaled that Smart Energy is shepherding all of its strands to bore into an inevitable future.
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