As we prepared for our final Board Meeting of the year, we looked back at some of the key themes of 2020 with a slant toward our business.
- C&I Solar – Opportunity Meets Competition: US C&I Market offers 145 GW of unused commercial solar potential – Wood Mackenzie worked with Station A’s building-level data for a new C&I solar market analysis. Historically, measuring commercial solar potential has been challenging due to a lack of reliable data. There is massive market potential. Only 3.5 percent of all commercial buildings have solar and another 1 percent are attached to community solar. And of course this opportunity has led to increased competition. New or reinvigorated entrants over the last quarter include Apollo, Carlyle, Boralex, Magnetar and Rockland Capital to name a few.
- ESG becomes more prominent – At a macro level the ESG craze is continuing and leading to a push for mandatory climate reporting supported by the likes of BlackRock. Speaking of BlackRock, CEO Larry Fink made noise early in 2020 with his letter to CEO’s stating that ‘climate risk is investment risk.’ Overall the value of ESG-driven assets has tripled over the last 8 years to more than $40T. This activity will continue to bolster the transition to clean energy.
- Wholesale energy market activity increases – As FERC adds new commissioners, there will be a close eye on how wholesale markets shake up during the next few years. PJM is still debating the MOPR and initiated a discussion on carbon pricing, corporate like Google want to increase renewable energy access and several industry players are making a push for the southeast to implement a wholesale energy market. It is also worth noting FERCs landmark order 2222, which opens up wholesale market access for DERs.
- Solar under Biden – We complied the best reads of what to expect under Biden. The industry received a Christmas present with the 2-year ITC extension as part of the end of the year stimulus package. He is expected to rejoin the Paris Climate Agreement, push for a job/stimulus plan and the solar industry hopes for removal of tariffs and a storage related ITC.
- SPACtion – Growth companies are using the Special Purpose Acquisition Company (SPAC) tool to raise capital. As of late October, SPACs represented ~$53B of investments and ½ the IPO market. EV and mobility related businesses and battery storage companies account for much of the activity.
2021 is shaping up to be an exciting year at MEI and the industry overall and these key trends will continue to play a role in the year to come.