Jon Powers:

Welcome to Experts Only podcast sponsored by Clean Capital. You learn more cleancapital.com. I’m your host, Jon Powers. Each week, we explore the intersection of energy, innovation, and finance with leaders across the industry. Thank you so much for joining us.

Jon Powers:

Well, happy birthday to Experts Only. my name’s Jon Powers, a co-founder of clean capital and your host today for the Experts Only podcast. We’ve been on for about a year, and thanks to our listeners so far, it’s been a big year. We’ve released 30 episodes with leading experts ranging from investors, industry visionaries and innovators across the clean tech space and the financial market space. Focusing on that intersection of energy, innovation and finance, and we’ve invited back our first experts only guest Abby Ross Hopper, the president and CEO of the Solar Energy Industry Association.

Jon Powers:

It’s been quite a year for solar. We’ve invited Abby back to talk about it and really to talk about the state of solar. The industry has responded to the challenging political environment, the international trade case, the international climate agreement withdrawals, federal regulations intended to favor fossil fuels. It’s been a really busy year for the head of the industry group.

Jon Powers:

As many of our listeners will be headed out to Solar Power International, we hope that today’s conversation will help give you a sense of where the industry is and where it’s headed before you head out. For those headed to Anaheim, we’ll be doing a live recording of Experts Only, focus on the business opportunity of micro grids on Wednesday, from 2:30 to 4:00. You can find more details in the show notes, and of course at the SPI website. I hope you enjoy today’s conversation as we really talk about how the state of solar is strong and there’s a lot moving in this space, and I’m excited to have Abby join us.

Jon Powers:

Abby, thanks so much for joining us today. You’ve had a really busy year since we last spoke. And so I wanted to kick things off today with an update on some of the major activities happening in the solar industry over the last year, things that have impacted the industry. What an interesting year it’s been. We’ve had solar tariffs, 100% renewable goals in California, record breaking procurement and so much more. But I really want to step back and talk about the state of the industry. We’re a time now where solar represents 10% of electricity in five states, but it’s not all been roses. There’s a tremendous amount of uncertainty that I imagine you’ve had to wrestle with. So, how do you define the last year for solar?

Abby Ross Hopper:

Well, Jon, first of all, thank you so much for having me back. It’s an honor to be here again. Gosh, I would say the state of solar is strong, despite all of the challenges we have had, and I think we continue to show our tenacity, our ingenuity, our entrepreneurial spirit in the face of some pretty significant challenges, and I think the thing that I find the most frustrating is that while we’re doing all kinds of great things, we could have been doing so much more. If we didn’t have these headwinds, so we could have been growing at an even faster clip.

Jon Powers:

That’s interesting to hear. We see it on the investment side, there’s a whole new wave of capital coming into solar because of the growth we’ve had over the last decade. And even with the headwinds, I think there’s like a lot of exciting things going on. One of the biggest challenges, I think, that’s been new since we last spoke a year ago is the solar tariffs. And for folks that aren’t absolutely familiar with it, and can you talk a little bit about the international trade case, what happened and what impact you’re seeing in the industry today?

Abby Ross Hopper:

Sure. So when we last spoke, we were in the midst of this trade case. There was an incredible amount of uncertainty, and, as you know, that uncertainty by itself had a dampening effect on the market. And then at the end of January of this year, so January of 2018, the president decided to impose tariffs on sales and modules from anywhere in the world that were coming into the United States. So starts at 30% and drops down by 5% each year for the next four years.

Abby Ross Hopper:

And so the imposition of those tariffs had two effects. One was that they provided clarity. We knew what the rules of the road were. And so, and in an odd way, it unleashed some pent up demand, but it certainly has had a dampening effect on deployment. As I look at what our projections were before the imposition of the tariffs, we thought between 2018 and 2022, that there would be about 68.9 gigawatts installed during that period. And then once we figured out the impact of the tariffs, that went down by almost eight gigawatts, so down to 61.2. So again, 61.2 gigawatts over four years is great growth, but we are leaving eight gigawatts on the table. And that eight gigawatts is almost 9 billion of investment. Those are real dollars that are being impacted.

Jon Powers:

Real dollars, real jobs-

Abby Ross Hopper:

Absolutely.

Jon Powers:

… here in the US. I feel like in the market as a whole, there was just this, getting into October, November, December, there was just a pause, and it wasn’t so much these projects weren’t going to get built. It was how are you going to price the panels? How are we going to price the panels? We don’t know how we’re going to price the panels. Let’s just wait until this is done. And that’s that certainly, while painful, is there, and I think the markets recovering and continue to move forward.

Jon Powers:

At the federal level, I want to talk about the federal level for a second, a little bit of what’s happening at states, but at the federal level, outside of the tariffs, we’re facing an administration that seems more interested in propping up a coal industry than a really true competitive market in a sustainable economy. What do you guys expect, or what did you expect over the last year from this administration, and what have you seen being played out?

Abby Ross Hopper:

It’s a really interesting dynamic, I think, that’s being played out at the federal level, because we have strong relationships with the administration, with those in the White House, commerce, the department of energy, continuing to fund research around solar, obviously on the hill, we have great support for what we’re doing. And so there are some really good things to highlight. And yet there are efforts to also prop up on economic coal and nuclear plants, obviously, which we oppose strenuously. And it’s been an interesting time for us because we have found ourselves.

Jon Powers:

By the way, so does utilities and a lot of other interesting players.

Abby Ross Hopper:

Yeah. I was just going to say, we have this very unusual coalition opposed to those efforts. So we’re with the American Petroleum Institute and we’re with the American natural gas association as we stand up to the administration and say, “No, we want fair market rules. We want competition. We want to compete on price. Do not interfere with the market.” And that is a great position to be in, to be able to have a technology and a product that where what we really want are fair market rules, but it is also challenging because this administration continues to come up with ways to try to favor coal and nukes.

Jon Powers:

Yeah, absolutely. So, I think because of what came out of the Obama administration, which we both worked in, there was a lot of momentum in the space. A lot of the advocacy groups took stock and said, “Okay, the real fight here for a while is going to be at the state level.” You’ve seen some exciting things happening. California just recently announced 100% renewable energy goal. You’ve got states like Texas and Illinois and finally Florida with progress. It’s crazy that we have great solar in Minnesota, but very little in Florida right now, but we’re seeing progress now at the state level. What’s making that change? What do you see happening over the next year and the state level to continue to drive that change?

Abby Ross Hopper:

Yeah, that’s a great question. I would say two things. One, hat’s off to California, obviously continue to be a leader in the deployment of clean energy. And obviously the 100% renewable portfolio standard is important, but also the California Energy Commission’s decision to require solar on all new homes starting in 2020, that’s the kind of visionary leadership that I think will sweep across the country once folks understand that that decision was made to actually save consumers money, that leadership by California will be copied in other states.

Abby Ross Hopper:

So I think that’s one thing. And then the other thing is, as you know, as prices continue to decline, even in the face of tariffs and even in the face of some other market challenges, we just become more cost competitive. And so consumers are continuing to choose solar for economic reasons, not any other reasons. And we are more and more cost competitive in more and more markets, and so I think that will be the real driver of adoption, rather than policy.

Jon Powers:

Yeah. We’re seeing that actually in the corporate side. We’ve seen such a surge in corporate procurement. Corporations already purchased a record clean energy volumes in 2018, this summer surpassing all of 2017 combined with 7.2 gigawatts globally. Firms like Facebook, who this year was the biggest corporate buyer, are catching up to companies like Walmart and Apple. The demand is fantastic. What is driving that positive trend? I think you’ve hit on some of this already with pricing and certainty, and do you expect it to continue?

Abby Ross Hopper:

I do expect it to continue, as we look at that, just one other statistic to add to your litany of them, corporate procurement of utility scale accounts for about 12% of all projects and development, which is pretty amazing when you think of such a specialized segment of the market.

Abby Ross Hopper:

The other thing I think that drives it is customer demand. Customers of Walmart, of Facebook, of Google, of FedEx, of real estate companies that say, “You know what, I want my, fill in the blank, to be delivered or procured or built or manufactured with renewable energy.” And so I actually think that is going to be, continue to be a really important piece of the puzzle. And that’s why we can talk more about this, because that’s one of the reasons why we are really focused on how we communicate about solar. So that consumers, be they utilities, be they businesses, be they homeowners can articulate that desire and demand for solar energy.

Jon Powers:

So, yeah. Talk for a second about what SEIA’s doing to engage in that space. Because if you think about the industry as a whole, it’s always focused on the manufacturing side, the utility developers, even the finance, but now that is becoming such a amazing voice, both for obviously demand, but even places like Google’s going in and driving policy in states to get their data centers supported by renewables, so they’re just a whole new voice to the fight.

Abby Ross Hopper:

They’re a whole new voice to the fight. And I think if you think about both consumers moving companies and consumers moving policy makers, it’s a really important piece of the puzzle that we have to pay attention to. And so at SEIA, we are thinking very deliberately about what messages resonate with consumers, and what messages resonate with policymakers. And then how do we find ways and opportunities to amplify those messages.

Abby Ross Hopper:

So we’ve done some message testing. So testing, is it an economic message? Is it a climate change message? Is it a jobs message? What’s the most powerful thing that motivates people to speak up for solar? And also, you’ve seen all the polls. 90% of people think there should be more solar. Well, that’s great, but what do we have to do to get them to take some action, to either call a legislator or buy solar, or do something to move that intention to a demonstrable step. And so we’re doing a whole bunch of work and thinking about how we tell the solar story, and I can tell you that that jobs piece resonates incredibly strongly with both consumers and policy makers.

Jon Powers:

So what are we seeing in the jobs numbers that’s doing that?

Abby Ross Hopper:

So, I think what surprises people and they believe us, but it surprises them, is just the sheer volume. There’s 250,000 Americans employed in solar. That is just an incredible amount of people. And so we have seen that from our advocacy at the federal level. When we go into congressional offices and center offices, we always talk about how many people in your district are employed in solar and almost to a person, they’re surprised. We’ve talked to governors. They are often surprised by how many solar firms and how many solar employees are in their states. And so we talked about price and consumer, consumer choice, all being motivators of greater solar adoption and greater solar policy, but jobs are an important piece of that mix.

Jon Powers:

So just for our listeners, I think these job numbers, one of the things that is so important when SEIA or the Department of Energy or solar foundation are compiling these numbers, is get surveys, take the survey, fill out the data on your job so that they know where you are and what you’re doing, so they can help us tell the story better. I want to talk more about SEIA and the communications piece in a second, but at Solar Power International this year, SEIA’s releasing their new quarterly report. It has a little bit of mixed news for the industry. Utility and commercial and industrial installation seem to be on the rise. Residential remains flat. Talk a little bit about the data that’s in this report and some of the takeaways from this quarterly report.

Abby Ross Hopper:

Sure. So what we thought was likely to happen is playing out, post tariff, we think that 2018 total installations will be flat against 2017, which again, is a real lost opportunity, unfortunately. We do, however, interestingly enough, on the residential side, that market is expected to grow less, but not as less as before, if that makes sense. It was going gangbusters and then it declined last year and it’s stabilizing a bit, so it’s not growing as much as it had, but it’s not losing ground, to the same extent. Similarly, the utility scale and the commercial industrial space are not growing to the extent that they were. And so it is solid, but not, don’t go out and celebrate report.

Jon Powers:

Yeah. It’s interesting. With the headwinds that we’ve talked about there, it’s still positive news. It hasn’t turned into a roller coaster that folks, I think the real question now is how do we push through. The uncertainty in the Q4 of ’17 showed up in Q1 and Q2 of ’18. That’s just how the development pipelines work. But going back to the role of all the listeners, going back to how we can keep pushing these policies forward, it takes all of us to be active to continue to push this administration, our lawmakers and others to make a difference.

Abby Ross Hopper:

So I think that’s right. I think that’s right. And I think the other thing that we’ve been thinking a lot about are, where are there other opportunities to drive down cost that aren’t as dependent on policy? So obviously technology is one way that you can drive down cost that isn’t necessarily dependent on technology. What are the soft costs that we can try to get out of our process? Where can we cut costs on permitting? Yes, permitting is governmental engagement, but it’s different. That’s a different strategy than trying to pass a law or pass a tax credit or pass some sort of grant program. But saying, nope, let’s just cut down on the regulatory burden, and we can cut costs in that way.

Jon Powers:

Yeah. Interesting. Interesting. Yeah. I feel like, for people that don’t know, 64% of these projects or soft costs is one of the things Clean Capital is trying to address, but so many others are too. And all of those price and efficiencies that are happening in the market will continue to pay huge dividends on the price of solar. So let’s talk about SEIA for a second. You are closing in on your second year. This is going to be your second Solar Power International as the head of the Solar Energy Industry Association. You’re position in the organization, to be the voice of solar, you’re putting a lot of emphasis on destructive communications and marketing. I think this is really exciting news, but tell the audience why you’re doing that, and then how do you look to achieve that?

Abby Ross Hopper:

Sure. Well, it is such an honor and such a privilege to serve in the role that I do. My favorite part is talking to solar companies, and hearing about what’s happening in their marketplace, what’s happening in their town, what’s happening in their business, how their employees are growing and innovating. And so thinking about how, as the national trade association, we share that story, and share that enthusiasm and share that passion for solar is what we’re thinking about.

Abby Ross Hopper:

We can talk about all the benefits and talk about how great it is and we do that and we will continue to do that. But we are bringing in some thinkers to help us think about how we disrupt that. How do we present these messages in completely different ways and create completely different ways of demand for our product. This is a product that we’re selling. We’re selling electricity, that happens to be generated by the sun and how do we create consumer demand for our product, so that we can sell more of it, that’s exciting and interesting to do, and if we can do that effectively, we will not be so dependent on the machinations of policy and the vagrancies of different administrations. We will have a product that consumers will want and will continue to purchase. So that’s what we’re thinking about.

Jon Powers:

Yeah. That’s exciting. You face an interesting balance. You need to protect the markets that we’re in today while really trying to open up new markets. Where do you see some of those new market opportunities for solar?

Abby Ross Hopper:

A couple of places. One is certainly on the residential side, and getting cost competitive amongst greater number of states. And obviously, that depends on price and that’s some of the permitting and soft costs we talked about on the side are particularly impactful.

Abby Ross Hopper:

On the corporate demand side, the C&I side, making sure that we have opportunities for corporates to continue to purchase solar and galvanize their policy making ability, because they do have an incredibly unique voice, and are influential in ways that others can’t be.

Abby Ross Hopper:

Thinking about community solar and how we can continue to create opportunities for community solar and demand for community solar, I think that addresses some of the equities in our industry and ensuring that really everyone has access to this product that we’re selling.

Abby Ross Hopper:

And then, on the utility scale side, continuing to both be active and create markets through the regulatory process, but also to continue to drive down costs and make sure that the market rules remain fair so that we can compete in procurements and compete in all sorts of different ways so that we win all of those things.

Jon Powers:

Right. Right. So I’ve challenged the listeners to go to seia.org, S-E-I-A .org. You can actually get the reports that we talked about today, the Wood MacKenzie Power and Renewables report. SEIA rolls it out regularly. As we mentioned, it has increased its five year forecast to 1.9 gigawatts. Exciting stuff, but obviously, balanced with the fact that we’re wrestling with still lower than pre tariff announcements, but still great growth for the industry. I’d also, if you’re on your way to SPI, make sure to see Abby’s, I imagine you’re on a plethora of panels, but I know you’ve got a really exciting communications panel, and take part in what would be a really exciting conference this year. How do you see SPI changing, or how has it changed as we’re seeing, for instance, storage start to really come into play here?

Abby Ross Hopper:

Right, no, that’s a good question. So just for your listeners, my panel is Tuesday morning, so.

Jon Powers:

Tuesday morning, great.

Abby Ross Hopper:

Come Tuesday morning, I will be talking about this and with some, I think I’m the only solar person on the panel. So we have marketing people and communications people from a variety of different industries. I think we spend a lot of time talking to ourselves and we’re going to hear from people who don’t have such a vested interest in solar, and I think will just tell it like it is, so that’ll be fun. I would say, Solar Power International is really evolving to reflect the world as it is and the world as it’s going to be. So we have added Energy Storage International. Obviously, the two technologies are incredibly complimentary and many consumers, wherever they are on the value chain, are interested in demanding solar plus storage, and so we have a significant portion of our show and of our programming is around storage.

Abby Ross Hopper:

And then thinking more broadly about the energy system. I was going to say of the future, but it really is of now. How does demand response play into this? What kind of software systems are engaged in making sure this whole thing happens? What’s the role of micro grids? How about electric vehicles? How do they play into this system and can they act as storage and how does that happen and what technology is needed to make that happen? So I would say in a nutshell, the evolution is looking at the system, and not just a specific technology. And I find that exciting.

Abby Ross Hopper:

The other thing that I would be remiss if I didn’t say, is that I am hopeful that SPI is becoming more diverse. I went last year for my first one and there’s a lot of people that all look the same at SPI. And so being really intentional about making sure that we are bringing in men and women and people of all colors into our workforce and into our customer base and into our conferences and on our panels is incredibly important to me personally, but I think to our industry. We’re going to be much more innovative and much more thoughtful and much more powerful if we bring all these voices into our industry, and so hopefully, folks will continue to notice a diversification of our shows as we continue to reflect the world as it is.

Jon Powers:

Outstanding. How do you, as a pro now at SPI, any insider tips for the newbies?

Abby Ross Hopper:

Okay. Jon, I think you make yourself a bedtime and stick to it.

Jon Powers:

I like that. I think that’s great.

Abby Ross Hopper:

That is my super, not that fun, but I actually live by it pro tip.

Jon Powers:

That’s good. I love it. I love it. Abby, thank you so much for joining us and being part of the… This is really our anniversary show, as I said in the introduction, you are our first guest, and I appreciate you being on. And I’m really excited to continue to tell the positive story that solar has been and the track we’re on. And hopefully next year, we’re back having the same conversation and continuing to push the market in an exciting direction.

Abby Ross Hopper:

Great. Well, happy anniversary.

Jon Powers:

Thank you.

Abby Ross Hopper:

And thank you so much for having me.

Jon Powers:

Absolutely. Thank you so much to Abby for joining us. We look forward to seeing many of you at Solar Power International in Anaheim. As always, please continue to listen and share this podcast. If you have ideas for other guests, please share them with us. And I’d like to thank our producers, Lauren Glickman and Emily Connor, for their continued support. Go to cleancapital.com to get more episodes. And as always, I look forward to continuing the conversation.

Jon Powers:

Thanks for listening in today’s conversation. Find more episodes on cleancapital.com, iTunes, or wherever you get your podcast. If you like what you hear, be sure to subscribe and leave us a five star review. We look forward to continuing our conversation on energy, innovation and finance with you.