As any listeners of The Energy Gang or regular commenters know, Jigar Shah is a rare and uncontroversial voice at GTM.
So we were as shocked as anyone when Shah took the stage at the Energy Storage Association's conference and started offering up some blunt advice for storage developers.
As a "business model innovation" evangelist in the PV industry, Shah was invited to share some lessons that solar can teach storage. He followed up SunPower CEO Tom Werner from last year, who described batteries as "a big deal for our industry."
However, Shah was far less interested in talking about the value of storage paired with PV.
"If the storage industry is dependent on backing up solar, it’s hopeless. You should quit your job today."
His point: behind-the-meter batteries and utility-scale storage offer far more value than simply backing up solar systems. And it's up to developers to communicate that value clearly, particularly to those financing projects.
"[Solar] is not your lowest hanging fruit. Some of the other applications are way, way higher value," said Shah.
"When you say you’re in the residential solar financing business, I understand what that means. When you say you're in commercial solar power purchase agreements, I know what you mean. When you say you're in the storage business, what the hell does that mean?"
Demand charge reduction, frequency regulation, transmission and distribution upgrade deferral, and voltage support are much more tangible and competitive services, he argued. Those are the kinds of projects his new company, Generate Capital, is looking to finance.
Solar Grid Storage, a company founded by a group of solar pioneers to pair large-scale batteries with commercial PV systems on a single inverter, offers an example of a confused business model.
After a completing a handful of projects, the company found that using an inverter for frequency regulation services can conflict with the PV system. Frequency regulation needs are higher in the middle of the day, but Solar Grid Storage was not able to bid at full capacity in the PJM market because the solar needed the inverter during times of high production.
Shah invested in one of the first projects, which he said was financed with high-cost money.
SunEdison recently acquired the company to beef up its storage strategy. Tom Leyden, Solar Grid Storage's CEO, suggested in an interview that SunEdison would be looking to co-locate storage with solar or wind projects, rather than pair them on a single inverter.
"I think what you're finding for investors is that the solar-plus-storage finance opportunity is a lot less attractive than solar and storage co-located at the same place," said Shah in a recent Energy Gang podcast.
Wrapping up his speech at the Energy Storage Association conference, Shah reiterated that he's more interested in deals that more clearly define how a battery or other storage device will be providing its own set of services.
"When I marry solar with storage, does the solar carry the storage project? Or does the storage sink the solar project? It’s all well in good solar plus storage, but you don’t want to sink it," he said.
Elon Musk said he had the developing world in mind when he initiated the Powerwall project. On a planet where 1.3 billion people are not connected to the electric grid, a technology that can take advantage of locally produced power will be instrumental in expanding energy access to areas where the grid has not yet reached.
If you have no or limited access to electricity, you're faced with a stark choice: burn expensive kerosene at night, or sit in the dark.
Could solar-plus-storage be an economic option?
At $3,000 for a Tesla Powerwall storage unit alone, the technology is well beyond the reach of the world's poor. However, one U.K. company is offering combined solar and storage to 11 African nations on a "rent-to-own" basis that takes 18 months or less for most customers to pay off.
Azuri Technologies has a variety of pilot schemes across sub-Saharan Africa and is about to provide 100,000 homes and businesses in Ghana with two different packs that include PV, lithium-ion energy storage, LED lighting and phone recharging. After paying a small one-time installation fee, customers pay in regular weekly installments -- often via their cell phones.
For the basic system, this payment unlocks the unit, allowing it to harvest the sun's energy and store enough electricity for six hours of phone recharging and light from two of Philips' specially designed LED lamps. Without phone recharging, the period of light goes up to nine hours for two lamps, and up to 18 if you restrict yourself to one. A larger, slightly more costly unit offers up to four lamps to illuminate a dwelling, plus additional recharging facilities.
"Although the price varies from country to country," explains marketing director Emily Ord, "we ensure that the weekly payment will be less than our customers would otherwise have to spend on kerosene and mobile call recharging. To give a guideline price, in Kenya, for example, the total cost paid by households ranges from $130 to $180 (according to distributor and region), paid over 12 months. This equates to $2.50 to $3.50 per week."
Once the total cost has been paid in installments, the unit is permanently unlocked, available to be used by the owner whenever they want. Azuri keeps its prices affordable by using appropriate technology to meet the very specific needs of the market.
Although energy consumers in developed countries may opt for more flashy systems from Tesla, consumers in the developing world will be better served by lower-cost alternatives.
"Having high energy density and expensive storage in attractive boxes is not the priority. Other more conventional (and cheaper) battery technologies could do the job," said Dr. Jonathan Radcliffe, a senior research fellow in energy storage at the University of Birmingham in the U.K.
Existing, cost-effective storage solutions are available today. What we need is an understanding of market conditions and appropriate business models to exploit them.
Inside Climate News: Coal Use Would Drop Sharply and Quickly Under Clean Power Plan
Production of coal in the United States would drop by one-fifth in the next five years and almost one-third by 2025 under the Obama administration’s regulatory crackdown on carbon emissions from electric power plants, the Energy Department’s statistical branch said on Friday.
Retirements of coal-fired power plants would double, with about 50 gigawatts more in lost capacity compared with business as usual, the new analysis by the department’s Energy Information Administration found. At first, power plants would mainly switch to natural gas, but over time, solar and wind capacity would soar.
Council on Foreign Relations: The World Needs Post-Silicon Solar Technologies
Earlier this month, The Future of Solar report from the MIT Energy Institute presented an excellent rejoinder to advocacy of deployment at the expense of innovation in solar PV energy. Their argument...is that solar panels face a moving target for achieving cost-competitiveness with fossil-fuel-based power that becomes more difficult as more solar panels are installed.
As a result, even after the expected cost reductions that accompany increased experience with silicon technology, solar PV cannot seriously challenge and replace fossil-fuel generation without advancing beyond the economics of silicon.
Bloomberg: Iraq About to Flood Oil Market in New Front of OPEC Price War
Iraq is taking OPEC's strategy to defend its share of the global oil market to a new level.
The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programs, signaling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout. The additional Iraqi oil is equal to about 800,000 barrels a day, or more than comes from OPEC member Qatar.
Guardian: Shell Boss Endorses Warnings About Fossil Fuels and Climate Change
Ben van Beurden, the chief executive of Shell, has endorsed warnings that the world’s fossil-fuel reserves cannot be burned unless some way is found to capture their carbon emissions. The oil boss has also predicted that the global energy system will become “zero carbon” by the end of the century, with his group obtaining a “very, very large segment” of its earnings from renewable power.
And in an admission that the growing opposition to Shell’s controversial search for oil in the Arctic was putting increasing pressure on him, van Beurden admitted he had gone on a “personal journey” to justify the decision to drill.
Reuters: German CO2 Emissions Down 4.2 Percent in 2014
German carbon dioxide (CO2) equivalent emissions regulated under the European emissions trading scheme (ETS) in 2014 fell by 4.1 percent to 461.2 million tonnes, according to official national data released on Friday.
The number was published by Germany's carbon registry DEHSt and underscored the general trend of lower pollution in the EU last year.
Last month, the California Public Utilities Commission proposed a new regime for how most of the state's residential customers are charged for their electricity, including some major changes that could have a negative effect on the economics of rooftop solar power and household energy efficiency.
On Friday, CPUC Commissioner Mike Florio offered his own Alternate Proposed Decision (PDF) aimed at avoiding some of these effects, while still meeting the terms of the rate reforms called for by 2013 state law AB 327. In simple terms, Florio’s rate proposal does two things differently, both aligned with what most solar, efficiency and environmental groups have been asking for.
The first difference has to do with changes to California’s four-tier monthly rate structures, which can vary from about 13 cents per kilowatt-hour for the lowest tier to as high as 42 cents per kilowatt-hour for the highest tier.
Last month’s proposal would allow the state’s big three utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, to move to a two-tier system with only a 20 percent difference between the top and bottom tiers. But Florio’s proposal would keep three tiers instead, and leave a wider 33 percent differential between the top and bottom rates.
“I’m concerned the tier flattening of the Proposed Decision shifts too many costs from high-usage to low-usage customers,” is how Florio explained that decision in a Friday statement. “Low-usage customers typically have fewer means of conserving; their consumption is already limited to basic needs.”
Monthly tiered rates can also lead to high end-of-month charges for high-consuming customers, and increase the value of net-metered solar or energy efficiency improvements that help reduce those outsized bills. But they’re also seen as an unfair burden for high power users, since they don’t link what customers pay to the actual price of electricity, which changes on a daily and seasonal basis, not a monthly one.
The second big difference with Florio’s proposal has to do with minimum monthly charges on customers bills. Last month’s proposal would allow a minimum bill of up to $10 per month through 2019, and then allow a fixed charge to be imposed instead. Florio’s alternate proposal keeps the minimum bill, but rejects the idea that a fixed charge could ever take its place -- a subtle yet important difference that can shore up the value of solar and efficiency for customers with smaller monthly bills.
Florio’s alternate proposal does keep one important idea from its predecessor proposal in place, however -- the switch to time-of-use (TOU) rates. Both plans would require the state’s big three utilities to start TOU pilots by next year, and to file proposals by the end of 2017 to move to a default TOU rate structure by 2019.
This chart outlines the key differences between last month’s proposal and Florio’s alternate proposal.
The Sierra Club certainly prefers Florio’s proposal, since it “completely rejects adding a regressive fixed charge on energy bills and ensures conservation by incentivizing less energy use, not more,” according to a Friday statement.
Both proposals are set to be considered by commissioners at the CPUC's June 25 meeting.
Here’s our previous coverage of the CPUC’s residential rate reform, focused on its expected effects on the economics of solar in the state.
This week, California utility regulators issued a long-awaited proposal to reform the complex, multi-tiered rate structures for residential customers of the state’s big three investor-owned utilities. And as solar advocates expected, it contains some good news and some bad news for the economics of customer-owned net-metered solar PV systems.
At the same time, the proposed decision from the California Public Utilities Commission (PDF) leaves open some big questions on how future rate design decisions will affect solar economics. These pending issues include coming changes to the state’s net metering policy, and how new time-of-use rates might incentivize customers to alter their energy use to support a more renewables-rich grid.
As Shayle Kann, senior vice president of research for Greentech Media, noted, “the CPUC is still considering options for a successor net energy metering program, which could have a bigger impact on the solar value proposition than these rate structure revisions. With that said, this proposal goes both ways for solar.”
Tuesday’s decision comes two years after the passage of AB 327, a law that put into motion many different changes to state energy policy. AB 327 was initially opposed by solar and environmental groups, because it would allow utilities to do two things that could reduce the economic benefits of investing in solar or energy efficiency.
The first change would reduce the four-tier structure that charges customers a lot more per kilowatt-hour as they use more power over the course of a month. Those rates now range dramatically, from about 13 cents per kilowatt-hour for the lowest tiers, to as high as 42 cents per kilowatt-hour for consumption in the highest tiers.
Tuesday’s proposed decision calls for shifting to a two-tier monthly rate structure, with much less stark price differences between the two, over the next three years. That could hurt the economics of net metering, which pays customers back for the solar power they generate at retail rates. In simple terms, the higher a customer's typical monthly bill, the more valuable rooftop solar is in reducing it, particularly at the high-tier margins.
Collapsing the state's four-tier system into two tiers could also have significant implications for third-party solar providers like SolarCity and Sunrun. These companies have signed up a number of high-energy-consuming households and calculated their long-term net metering paybacks based on the existing rates.
It's unclear how flattening rate structures will affect these companies' long-range financial projections. SolarCity CFO Bob Kelly told analysts in a July 2013 conference call that shifting to a two-tier structure shouldn't have too much of an effect on the company's business model. But The Alliance for Solar Choice (TASC), a solar industry group, said in a Thursday statement (PDF) that the CPUC's proposed decision would allow the state's big utilities to fairly rapidly phase out the high-priced top tier rates in a way that could "pose a challenge for the solar industry."
At the same time, “the tier-flattening portion was largely expected and also goes both ways,” GTM’s Kann said. “It erodes solar project economics for high-energy users, but potentially opens up the market for low-energy users that previously couldn't see savings from solar.”
The benefits for lower-energy-consuming customers could become even more apparent as California’s utilities create time-of-use (TOU) rates for their residential customers -- and under Tuesday’s proposed decision, those TOU rates will be coming by the end of the decade. The decision orders Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to start TOU pilots by next year, and to file proposals by the end of 2017 to move to a “default TOU rate structure to begin in 2019.”
Unlike monthly tiered prices, which don’t correspond to the cost of grid power, time-of-use rates create a direct linkage between the cost of generating electricity and the prices customers pay. Energy use spikes during hot summer afternoons, when air conditioners across the state are running full blast, and during late evenings in spring and fall, when people come home from work and power up their household lights, appliances and electronics. Utilities have to ramp up expensive marginal generation units to meet those peaks in demand, pushing wholesale prices far higher than their overnight lows.
Well-designed time-of-use pricing regimes are also “key to helping customers better align their use of energy to when we’ve got more clean energy on the grid,” James Fine, senior economist with the Environmental Defense Fund, said in a Thursday interview. That’s a bit tricky, however, because traditional TOU prices that peak in the afternoon might not help push customers to use more energy at times when the dreaded “duck curve” strikes the state’s grid.
The duck curve represents a day with cool temperatures, and thus less air conditioning use, but lots of solar power that reduces midday energy demand. Then, as the sun goes down and people start coming home from work, energy demand ramps steeply upward, putting pressure on grid operators and generators to ramp up production to meet it.
As CPUC’s proposed decision notes, “Impacts on the grid that need to be considered include not just peak usage periods, but also the deepening afternoon valleys resulting from increased deployment of solar, and the need for flexible ramping capacity. A default TOU rate must be flexible enough to address these changes while providing a degree of consistency for customers.”
Creating TOU rates that can shift between mid-day peaks and evening peaks could help manage these changing grid conditions, and also increase the payback on customer-owned solar, according to an EDF analysis (PDF). The following charts show the net present value of a residential solar system under the current four-tier structure, the proposed two-tier structure, and using hypothetical TOU midday and evening price structures, first for high-energy-using households in sunny Fresno and foggy San Francisco, and then for average-load customers in both cities.
These charts back up the assertion that lower energy-using households could actually see solar become more attractive under a two-tier system, since the lower tiers will have to rise to make up for revenue lost from the removal of the highest tiers. But the real boost to solar’s value will come with the creation of TOU prices that provide incentives to generate and consume power when the grid needs it most.
“We simply need to update time-of-use, both the prices and the time windows, to align with the needs of the grid -- and then continue to improve our skills in communicating this to customers and our devices,” Fine said.
The second big change that AB 327 opened up was to allow the state’s big three investor-owned utilities to charge flat fees of up to $10 per month to every customer, no matter how much power they consume. Utilities say they need that fixed fee to pay their fixed costs of maintaining the grid -- but solar advocates and ratepayer advocates say that they’ll penalize low-income customers and reduce the impetus to invest in solar and energy efficiency.
The CPUC’s proposed decision does allow for a monthly charge of up to $10, starting this summer -- but it does it in the form of a minimum bill, rather than as a fixed charge. That’s an important distinction, and one that GTM Research has determined will be much less harmful to net-metered solar’s economics, compared to the fixed charges being imposed on solar-equipped customers by utilities in Arizona.
The reason is fairly simple. A fixed monthly charge would add up to $10 to every bill, no matter what, while a minimum charge would simply fix the least amount of money a customer pays per month at $10. That means that net-metered solar household that spins its meter backwards to reduce their kilowatt-hour charge to $11, for example, would pay only $11 under a minimum monthly bill regime, compared to $21 under a fixed charge regime.
Here’s an analysis by GTM Research of the benefits of minimum bills vs. fixed charges in in Massachusetts, the first state to enact them.
“A minimum bill is generally preferable for solar and, for most solar customers, will have a minimal but non-zero impact on their bill savings,” Kann noted. TASC agreed, noting that “[m]inimum bills are more effective and fair than fixed charges. The excessive monthly fixed charges requested by the utilities are not justified and are contrary to the interests of customers who desire to invest in solar and energy efficiency.”
CPUC’s proposed decision does open the possibility for the state’s investor-owned utilities to request fixed charges in the future, striking a sour note for minimum-bill supporters. But it also requires the state’s big three utilities to “identify fixed costs for purposes of calculating a fixed charge” in future rate cases. That data could help inform another big CPUC proceeding, one asking utilities to determine how to incorporate the value of distributed energy resources like customer-owned solar into their distribution grid plans.
[Editor's note: We've covered Hanergy's past photovoltaic acquisitions and current woes -- its Hong Kong exchange stock was just suspended. Last month, John Hempton of Bronte Capital snapped some photos of Hanergy's solar factory in Heyuan, Guangdong province, one of the gigawatt-scale sites in the Hanergy PV portfolio, and we're reprinting his blog post about the visit. Hanergy does have other planned or operating sites; its Chengdu factory is home to 600 megawatts of active amorphous-silicon production.]
Now that Hanergy has been suspended, I can let these out.
I went to visit Hanergy's main factory in China about six weeks ago. It was almost entirely silent. There was essentially no production of solar cells at all, and the accounts that suggest significant production and sales are entirely fraudulent.
There was some evidence that someone was exploring starting production -- and I will get to that -- but the factory was almost entirely idle.
Here are a few photos.
This is the plant. There were almost no cars, despite a vast car park. All gates except one were locked.
There was a single truck being loaded with solar cells -- so there was some production. However, this truck was being loaded when we arrived and was still there when we left two hours later. This plant, if it had any production at all, had it only on a trial basis. The accounts that suggest substantial production are false.
This is another photograph of the main drive to the plant. One car was parked there, and there was no movement.
This I found particularly bizarre. There were solar cells set up around the plant. Some of them were set up in triangle-patterns. This is the only place I have ever seen solar cells set up so that they are not oriented toward the sun.
I walked around the enormous plant. Not a truck went by, and the only people we saw except at the side were the gardeners. (There were several of them, and we asked them if it ever got any busier. They confirmed it did not.)
However, on the side, there was a shaded area with some motorbikes parked, which suggests that the plant is not entirely idle. Just almost.
Strangely, two white guys walked out of the plant. I think they were Americans trying to sell some technology -- maybe sales guys from AMAT -- but I am only guessing. I tried to signal for them to come over but they did not.
There has been much press that compares Hanergy to other solar companies and suggests there may be disruptions in the market for panels. Garbage, I say. The right comparison is Sino-Forest or Longtop Financial Technology.
Hanergy barely existed.
Hempton writes, "Disclosure that will annoy my clients: Despite sitting on these, we were not short Hanergy. Too much squeeze risk for my liking."
John Hempton is the Chief Investment Officer at Bronte Capital, an Australian-licensed and USA-registered fund manager focused on global long/short equity investing for non-retail clients. Reprinted with permission.
A dispute about net metering in Nevada may soon be resolved -- for now.
The deal, which was arranged by Nevada Governor Brian Sandoval, will increase the amount of solar eligible for net metering through the end of the year.
The state's current net metering law allows for solar penetration up to 3 percent of NV Energy's peak load. As the solar industry moves closer to the cap, installers have been lobbying the legislature to increase it.
Earlier this month, Nevada lawmakers passed a bill giving utility regulators the option of adding monthly fees to residential solar systems. The bill failed to increase the net metering cap.
After heavy lobbying by the solar industry, an amendment to Senate Bill 374 was passed by an assembly committee over the holiday weekend. The amendment will allow an additional 235 megawatts of residential systems to qualify for net metering through the end of the year. It will also move the issue from the legislature to the state's public utilities commission, which will be responsible for crafting a new rate structure for solar.
If commissioners cannot agree on a new set of promotion policies for residential solar systems, the current net metering policy will continue indefinitely.
There are more than 3,300 residential systems currently feeding electricity into the grid under the state's net metering law.
The solar industry has claimed that 6,000 jobs were at risk without an increase to the cap.
NV Energy, like many other utilities around the country, argued that net metering over subsidizes solar by failing to account for fixed grid costs.
"Maintaining the status quo and allowing DG customers to continue to be served by residential rates that do not reflect the costs of serving DG customers and which shift costs to other customers is arguably the situation that would be deemed unreasonably discriminatory," wrote a former executive for Berkshire Hathaway, the company that owns NV Energy, in a strategy document last summer.
However, a study commissioned by state regulators last summer found that Nevada's net metering policy does not shift grid costs to non-solar customers. This is because solar system owners must now pay public-purpose charges, which are used to fund programs that benefit all ratepayers.
Mosaic, a residential solar financing platform, announced that Robert Kelly, former SolarCity CFO, is joining the privately held firm as a member of the company's board of directors. Prior to SolarCity, Kelly was CFO of Calera, a startup seeking to convert waste CO2 into useful materials. Mosaic also announced that Olaf Janke is joining the company as CFO. Previously, Janke was CFO at Aequitas Capital Management.
Richard Stuebi, formerly managing director of Early Stage Partners, is joining National Grid as VP of U.S. strategy and group technology. Stuebi writes, "With a market capitalization of about $50 billion and annual revenues of over $20 billion, National Grid is one of the world’s largest electric and gas utilities. Based in the United Kingdom, National Grid operates the high-voltage power transmission system and the natural gas transportation pipeline network in England and Wales In the U.S., National Grid delivers electricity and natural gas in the Northeast, with service territory covering much of the area between Boston, Brooklyn and Buffalo." He adds, "I will be investigating and pursuing a wide range of interesting opportunities -- such as “big data,” advanced grid concepts, on-site power generation and energy storage, in addition to conventional growth avenues."
EnerNOC, a provider of "cloud-based energy intelligence software," appointed Eric Erston as VP of global sales. Prior to joining EnerNOC, Erston served in a variety of sales roles at RSA, the security division of EMC.
Greg Saunders, president and CFO of PACE financing developer Clean Fund, was promoted to CEO. Prior to joining Clean Fund, Saunders was EVP/CFO at Project Frog, a builder of modular buildings, and Tioga Energy, a commercial solar developer.
ReNew Power Ventures, an Indian independent power producer which claims to have close to 600 megawatts of installed clean power capacity, named Ajay K. Goel as president of solar and chief new businesses. Goel has work experience at SunEdison, BrightSource Energy, and McKinsey.
Locus Energy, a performance monitoring and data analytics platform for the solar PV market, added Jyoti Jain, formerly with eMeter, as director of software product management. Locus has 1 gigawatt of solar performance monitoring capacity in the U.S.
Capital Dynamics, a global private asset manager, announced that managing director John Breckenridge will be the global leader of the firm's clean energy and infrastructure investment business. Prior to joining Capital Dynamics, Breckenridge was a managing partner at Bregal Energy. Capital Dynamics currently has $19 billion in assets under management.
On the VC front: Melissa Taunton has joined New Enterprise Associates as a partner focused on talent. She previously was with Khosla Ventures. Ilya Fushman, formerly of head of product at Dropbox, a principal at Khosla Ventures, and a solar engineer a long time ago, has joined Index Ventures as a general partner. Ev Williams’ Obvious Ventures just closed a $123,456,789 round and led a $3.7 million in energy-smart marketplace provider Enervee's series A funding round. According to a release, "Enervee is the world’s first energy-smart data and commerce platform that connects utilities, retailers, manufacturers and governments through integrated product rankings and recommendations."
From last week's column:
Varentec, a Khosla Ventures- and Bill Gates-funded startup focused on distribution power grid control and management, named Mehrdod Mohseni as CCO. Mohseni was previously CEO of Utility Integration Solutions (UISOL).
Sungevity named Jan Slaghekke as chief global officer, a role responsible for managing the online solar sales company's expansion in markets outside the U.S., including its partnership with E.ON and entrance into the German market. Prior to joining Sungevity, Slaghekke held executive roles around the globe with BP.
An investigation into Arizona Commissioner Bob Stump’s phone records found that he exchanged hundreds of text messages with a utility executive at Arizona Public Service, the head of a "dark money" group with ties to APS, and two pro-utility candidates in the weeks leading up to the Arizona Corporation Commission’s primary election on August 26, 2014.
The information was uncovered by the Checks and Balances Project, a nonprofit funded by the sustainability group Renew American Prosperity and clean energy philanthropists and donors. Checks and Balances claims the text message history reveals inappropriate ties between the Arizona regulator and the state’s largest utility, as well as possible electioneering.
The two Republican candidates Stump exchanged messages with, Thomas Forese and Doug Little, went on to win the primary and the general election. Forese and Little ran against two pro-solar Republicans, Vernon Parker and Lucy Mason, who were supported by the rooftop solar advocacy group Tell Utilities Solar Won’t be Killed (TUSK).
Ahead of the election, Parker and Mason said they believed Arizona’s largest utility, Arizona Public Service, was donating to their opponents via the Free Enterprise Club -- a dark-money group headed by Scot Mussi. APS has neither confirmed nor denied these allegations.
Text metadata show that Stump exchanged 46 texts with Mussi between June 28, 2014 and July 26, 2014 while serving as chairman of the ACC. He also exchanged 18 texts with Thomas Forese, and 160 with Doug and Linda Little, between May and August of last year.
“The question needs to be asked, being that he received [government] reimbursement for this Verizon cell phone on which he sent and received texts, if he was coordinating funding for two pro-utility candidates, was he involved in illegal electioneering using public funds?” said Scott Peterson, executive director of the Checks and Balances Project.
Leading up to the election, Stump also exchanged 54 messages with Barbara Lockwood, APS’ general manager for regulatory policy and compliance.
“I think overall his credibility is at stake; his texts and emails appear to show he’s working far too closely to promote the interests of monopoly utilities,” said Peterson.
Checks and Balances announced last Friday that the bipartisan group Arizona Citizens Clean Elections Commission has asked for Stump’s records in order to conduct its own inquiry. If an initial review of the text record raises legitimate concerns, the Commission could call for a formal investigation.
So far, the ACC has not released the content of the text message exchanges, only the metadata. Checks and Balances is still pressing for those records, which the group says would be easier to obtain if Stump had used his official email address.
These accusations of inappropriate ties between regulators and utilities come on the heels of a report from whistleblower Antonio Gill, who said that former commissioner Gary Pierce frequently met in secret with the CEO of APS. The Arizona attorney general’s office is reviewing Gill’s allegations. However, Attorney General Mark Brnovich has recused himself from the case after benefiting from utility campaign spending from APS’ parent company.
While Gill’s claims are being taken seriously, it’s worth noting that regular meetings between commissioners and utilities, as well as solar lobbyists and consumer advocates, are not unusual.
Commissioner Stump noted in an e-mailed statement that members of the ACC have been communicating with a wide range of stakeholders on a variety of topics since it was established in 1912. With respect to the recent allegations, he said, “Checks and Balances, a left-wing dark money group, is cherry-picking text logs to paint an absurdly distorted picture."
For instance, in the months immediately before and after the 2014 ACC election, Stump said he sent 898 texts to an analyst at the Residential Utility Consumer Office, a ratepayer advocacy group; 70 texts to a lobbyist at the Southwest Energy Efficiency Project; and 285 texts to the solar advocacy group The Alliance for Solar Choice (TASC).
The commissioner said he communicates via text with scores of stakeholders, including Barbara Lockwood of APS, to reschedule meetings when his assistant isn’t available.
With respect to Doug Little and Thomas Forese, Stump said it’s no secret he was a public supporter of their campaigns and considers them to be close friends, but he did not help coordinate funds for their election. He is also a long-time friend of Scot Mussi’s, but said they did not discuss political campaigns.
“I wasn’t aware of Scot’s involvement [with Free Enterprise Club] until it hit the papers,” Stump told AZ Central. “I learned when everyone else did.”
Stump said the record likely shows he also exchanged text messages with solar advocate Court Rich, and would consider him a friend, too.
"It would be ridiculous for me to institute a moratorium on speaking to friends in the solar or political community at large simply because we were in campaign season," he said. ”I continued to be in contact with representatives of SolarCity, for example, even though TUSK (a solar advocacy group funded by SolarCity) was actively involved in the 2014 campaign for the Corporation Commission.”
At the heart of the Stump investigation is an ongoing battle in Arizona over rooftop solar policy, and whether or not solar customers are paying their fair share for using the grid.
In 2013, under Stump’s chairmanship, the ACC approved a $5 monthly fee on rooftop solar customers.
The decision was highly controversial. Pinnacle West Capital Corp., which owns APS, spent $3.7 million on advertising campaigns to change the state’s solar policies that year, according to The Arizona Republic. The solar industry spent about $436,000 on efforts to block the changes.
The $5 fee comes in well below APS’ original request for a fixed fee between $60 and $100. The utility says the higher fee is needed to cover the costs of modernizing the grid to accommodate intermittent solar resources. Earlier this year, APS proposed a compromise, asking for a $21 monthly fee.
Bob Stump isn’t the only utility regulator under scrutiny for supporting an anti-solar agenda. Earlier this year, the Checks and Balances Project launched a systemic investigation into state public utility and state corporation commissions, dubbed the Captured Regulators initiative. In addition to Stump, the group is targeting California Commissioner Mike Florio, Wisconsin Commissioner Ellen Nowak and Florida Commissioner Art Graham.
"Public utility commissions generally aren’t watched,” said Peterson. “But they have enormous influence over electricity rates and the future of rooftop solar. That’s why we’ve been putting a microscope on these people.”
Las Vegas Sun: NV Energy Fights to Keep Rooftop Solar From Cutting Into Its Profit
The future of solar energy in Nevada is at stake in a furious battle that likely won’t be resolved as the 2015 state legislative session nears an end next month.
Solar advocates, Nevada businesses and solar industry reps are pushing for more rooftop solar, saying it’s unfair to force consumers to remain chained to the grid and warning that the state could lose thousands of jobs if it doesn’t adapt. State utility NV Energy claims more household solar means increased prices for traditional customers who can’t or won’t install solar panels on their houses or businesses.
Quartz: Mass-Market Electric Cars Will Go 200 miles, but Are a Long Way From Being Profitable
Several major automobile makers are racing to create electric cars within an upper-mass-market sweet spot -- traveling 200 miles or more on a charge, and costing $30,000 to $40,000. But a new report adds to doubts that they will make money, especially at first.
Electric cars are currently in a variation of the innovation world’s infamous “valley of death,” the pre-profit period when most new products die. In this case, relatively few electric cars are selling well, mainly because they cost too much, go too short a distance before running out of charge, or both.
Sydney Morning Herald: Solar the Most Popular Energy Source in Australia
Solar energy is the most popular source of electricity in Australia, with more than three times the backing of coal-fired or nuclear power, a survey by Ipsos has found.
The poll of almost 1,200 people around the country found that solar panels on rooftops were supported by 87 percent of respondents, with large-scale solar farms "strongly" or "somewhat" backed by 78 percent.
NBC: Quake Hits Tokyo Days After Japan OK's Third Nuclear Restart
An earthquake shook buildings and halted train lines in Tokyo early Monday, days after Japan's nuclear regulator green-lighted the restarting of atomic energy at a third plant.
The quake, with a preliminary magnitude of 5.6, was centered in Ibaraki prefecture just northeast of the country's capital, the Japan Meteorological Agency said. There was no tsunami warning.
Bloomberg: Your Home Doesn't Matter for Tesla's Dream of a Battery-Powered Planet
Elon Musk has done something remarkable. He built a 220-pound battery to hang on the garage wall and convinced a huge number of people that owning one is a lifestyle choice -- like having a compost bin in the garden and reusable diapers on the baby. His battery is personal, and it's going to change the world with your help.
If only it were so. While the pairing of home batteries with solar power makes deeply intuitive sense, the problem is that it doesn’t make financial sense. Not now, not anytime soon, and definitely not in the U.S.
The billionaire CEO of a soaring solar firm shorted his own company's stock days before the company lost $18 billion in value and the CEO lost $15 billion in personal wealth.
As we reported, Hanergy Thin Film (HTF) stock plunged 47 percent on May 20, "probably due to forced liquidation" and the "firm's failure to repay stock-collateralized loans," as reported by China Business News. Reports suggest that Hong Kong's Securities and Futures Commission is investigating market tampering of HTF shares.
According to CNN Money, CEO Li Hejun "increased his short position by 796 million shares" on May 18.
A few days later the stock crashed.
Short sellers are "motivated by the belief that a [borrowed] security's price will decline, enabling it to be bought back at a lower price to make a profit."
Trading in HTF stock remains suspended.
Here's a look at how Hanergy lost half its value in one second, from "Tyler Durden" at Zero Hedge.
One might wonder about the technology and business progress of acquired solar firms Alta Devices, MiaSolé, Solibro, and Global Solar amid this stock-price adjustment, suspension, and Hong Kong SEC investigation.
Here's our reporting from earlier this week.
Hanergy just lost $18 billion in market value as its stock dropped 47 percent and triggered a shutdown in trading. The Wall Street Journal suggests that the sell-off was prompted by Yingli's recent financial news and weakness in the China solar market. But Hanergy has plenty of reasons to shed shareholder value.
It's hard to know what to make of Hanergy's announcement that it will be opening up to 1,500 retail stores to sell its solar products. But that's just the latest in a series of startling announcements from the world's most highly valued solar firm.
The market value of Hanergy Thin Film Power, a Hong Kong-listed company, has increased sixfold so far this year. Here's a table comparing Hanergy's market cap (as of yesterday) to the market caps of actual solar companies:
|Hanergy||Thin film solar products||$38.64 billion|
|SunEdison||Project developer, manufacturer, EPC||$8.03 billion|
|SunPower||Project developer, manufacturer, EPC||$4.18 billion|
|SolarCity||Residential PV installer, financier||$5.86 billion|
|First Solar||Project developer, manufacturer, EPC||$5.55 billion|
|Trina Solar||Silicon solar modules||$1.01 billion|
|Yingli Solar||Silicon solar modules||$215 million|
So Hanergy was purportedly worth more than the combined market caps of the entire public solar sector. That makes no sense, considering Hanergy's meager solar production, sales, and costs. Hanergy has not guided on annual production or sales for 2015.
Still, Li Hejun, the founder of Hanergy Group, was China’s fifth-richest man.
He might be a little lower on the list after today.
Over the last few years, Hanergy has acquired a number of thin-film solar companies that had run out of gas in the U.S. and Germany.
In 2012, Hanergy, the owner of gigawatts' worth of hydropower, wind and solar assets, acquired MiaSolé, a technologically accomplished CIGS thin-film solar firm, for a fraction of that company's original VC investment. In 2013, Hanergy acquired gallium-arsenide solar developer Alta Devices for an undisclosed amount. Alta and MiaSolé joined CIGS firms Solibro and Global Solar Energy under the Hanergy roof. With little synergy amongst the acquired firm's technologies, Hanergy's solar shopping spree appeared less than focused.
None of these acquisitions were immediately accruable to the bottom line. MiaSolé was valued at billions during the VC solar bubble, but was valued at $50 million in the VC funding round prior to acquisition. Alta Devices made technical strides in flexible gallium-arsenide photovoltaics, setting records for the materials system and boasting NREL-verified 28.8 percent cell efficiencies for a single-junction solar cell and 30.8 percent for a dual-junction cell. These days, Alta seems to be focused on powering drones, because its PV material is "ideal for embedding onto the skin of an aircraft."
Hanergy Thin Film Power Group has also revealed plans to open 1,500 retail stores globally for its suite of thin-film solar products by 2017, according to PV Tech. According to reports, Hanergy's thin film group has already "opened 60 flagship stores and ‘experience centers’ in China that will be extended to 300 by the end of 2015."
Here's a notable quote from that article: Liu Min, deputy chairman of Hanergy Thin Film Power Group and chairman of the board and CEO of Hanergy Global Solar Power and Applications Group, said: "Thin-film solar has ushered in a mobile energy era and is fundamentally subverting the energy utilization mode of mankind. The implementation of a thin-film solar all-channel sales strategy by Hanergy Thin Film Power enables more residents to benefit from distributed power generation through online and offline O2O three-dimensional channel platforms and accelerates the spread of thin-film power products for civil use."
Congrats, China -- your press-release-word-salad aptitude has totally caught up with the U.S.
Here are some recent announcements from and about the firm:
An industry source suggests, "MiaSolé equipment is still a hobby shop, and integration/expansion is not moving forward in a well-organized fashion," adding that although the "Solibro process expansion in China is progressing...the capacity expansion ordered is below public announcements."
Here's a comment from short-seller Anthony T. Bozza of Lakewood Capital on Hanergy Thin Film Power.
"Hanergy Thin Film Power is perhaps the most astonishing stock in the entire market today. Shares of Hanergy, a manufacturer of solar panel equipment, are up more than 500% over the last year and over 3,000% in the past three years. With a market cap of over $40 billion, Hanergy is one of the largest companies listed on the Hong Kong stock exchange, and its founder, Li Hejun, is now the wealthiest person in China (at least on paper). The company is now the most highly valued solar company in the world by a wide margin, and it is the largest holding of the Guggenheim Solar ETF (the last stock we encountered that had the top weighting in this ETF was GT Advanced Technologies, which is now in bankruptcy). For seven straight weeks this year, the stock spent nearly every minute of the trading day at a price between HK$6.70 and HK$6.90 per share. If this isn’t odd enough, consider a recent analysis conducted by The Financial Times that showed over a two-year period, all of the monumental gains in Hanergy’s stock occurred in just the last 10 minutes of the trading day (an investor who only held the stock during the first 6 hours and 20 minutes over those two years actually lost money!). We have considerable experience analyzing some pretty peculiar situations, but even the untrained eye can detect something isn’t quite right here. When the stock soared in March following its inclusion in a large market index (which in turn freed up considerable borrow), we started a small short position in Hanergy’s stock.
Last year, Hanergy recorded revenues of $1.2 billion, an increase of nearly 200%. If these figures are real, the shares are pricey at 30x revenues. The company is majority-controlled by Hanergy Holding, a private company owned by Li Hejun. Up until last year, nearly all of Hanergy’s sales had been to its parent. In 2014, the parent company accounted for just 60% of Hanergy’s revenues, but much of the remaining revenues were related to a sale of solar power stations to a Chinese investment vehicle called Hongsheng, which was curiously only incorporated 13 days before the deal was announced. One of the three shareholders of Hongsheng lists the wife of a former Hanergy board member as its legal representative. Also, the company’s robust revenue growth has barely translated into any actual cash flow as receivables have ballooned. I could go on. Simply, we believe this is a manipulated stock with manipulated financials. There is a significant anti-corruption drive in China right now, and given the company’s sizeable market capitalization and importance to the Hong Kong market, it should be only a matter of time until this distorted situation comes to an end."
Here are some screen shots of Hanergy's online solar product offerings.
With 2015 right around the corner, it’s a good time to reflect on the past year and think about how we as the solar industry can improve. Since 2014 was a good year for the industry, here are three New Year’s resolutions for the U.S. solar community to keep in mind for a happy and […]
If you’re like me, you’ve read many of the recent posts from Jonathan Silver, the former director of the U.S. Department of Energy’s loan program, proclaiming the program’s success. If you can get past the claims where skeptics were simply “proven wrong,” he paints a picture wherein the loan program is performing exactly as planned […]
Despite the ongoing incremental improvements in conversion efficiencies and cost reduction taking place in the solar manufacturing community, it would be a stretch to call most of the players truly “high tech.” Industry executives like Trina Solar’s Jifan Gao can tout his company’s “emphasis on technology breakthroughs” and its efforts to “remain at the forefront […]
My recent poster presentation from Solar Power International 2014, “Using Seven Forms of Waste and Critical Path Method to Lower Residential Solar Soft Costs,” lays out a methodology that residential solar installers can use to help them most effectively target soft cost reductions. This methodology pulls best practices from automobile manufacturing and other industries as […]
If Nelson Mandela were alive today, he would be proud of the rapid growth of solar power in his beloved South Africa. It’s been nearly a year since he passed away last December 5, and during that time, several hundred megawatts of photovoltaic projects have moved from the developmental pipeline to actively converting photons into […]
Before the speeches by Sen. Harry Reid and DOE Secretary Ernest Moniz bookended the industry executive panel during the second general session at this year’s Solar Power International in Las Vegas, a slick aspirational video kept the audience’s attention and caught my eye. Rather than hitting the viewer over the head with a heavy commercial […]
Few places in the world have all the critical elements needed to create a profitable solar power market, but Saudi Arabia stands out as one of them. From vast deserts that can accommodate large installations and high solar resources that guarantee maximum energy yields, to adequate financial resources and a well-established construction industry—the Kingdom has […]
LONDON–The rise of Grupotec Renewables’ bourgeoning U.K. solar business is indicative of the growth seen in solar deployment across the country in recent years. On entering the market in 2011, the company set ambitious targets of installing 100MW of PV in a three-year timeframe. Two years later, the company boasted a successful portfolio of more […]
Last month, the Indian government decided not to impose antidumping duties on solar cells and modules imported from China, Malaysia, Taiwan, and the United States. The step has been celebrated by many within the industry as a win for solar. To gain a greater understanding of what this means for the future of the Indian […]
In recent weeks there have been various examples of just how much impact politics continues to have on the solar industry. In the U.K., the fallout from the government’s enforced incentive switch from the Renewables Obligation (RO) scheme to Contracts for Difference (CFD) and resultant legal battle rumbles on. In India, what would be the […]