Power Line: Tesla's solar slide, the fastest growing battery industries, and Shell's big bet on hydrogen
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In two words: Not great.
- SolarCity was once the nation's largest residential solar installer, commanding a whopping 34% of the market, according to the research firm Wood Mackenzie.
- Today, its market share is about 4.6%.
- Making things worse: On Wednesday, Tesla's panel-manufacturing teammate, Panasonic, announced that it's bailing on the solar partnership.
But: Musk's firm saw a small bump in installations in the last three months of 2019.
- "Demand is very strong" for Tesla's solar glass roof, he said in a recent call with investors.
So is the future bright for Tesla's solar business? We asked analysts for their perspective.
The good: "I think they have the opportunity to grow," Colin Rusch, an analyst at Oppenheimer & Co., said. He brought up the firm's brand strength and the potential advantage Tesla has through crossover sales (getting people who buy cars to also buy panels.)
The bad: "The likelihood that [Tesla's solar business] becomes as big as the EV business is difficult to see," Joe Osha, an analyst at JMP Securities, said. "I don't think anybody really thinks they can make a go for it in conventional panels." He also said the solar glass roof is "pie in the sky."
The worse: "The idea that they're going to explode in demand is, for lack of a better word, laughable," Gordon Johnson, an analyst at GLJ Research, said of Tesla's solar business.
On Thursday, the rooftop solar giant Sunrun released its 2019 installation numbers, and they show the company's widening lead.
- Sunrun deployed more than 400 megawatts (MW) of residential solar panels in 2019 - up 11% from 2018.
- For reference, Tesla's annual installation came in at just 173 MW.
- On a call with investors, CEO Lynn Jurich said that in 2019 Sunrun "added as many customers as the next two largest residential providers combined."
More than 90% of investors don't care about Tesla's solar business, Jeff Osborne, an analyst at Cowen, told me. They've got other interests - namely, cars.
And that's good news, too, because …
Who can even imagine that much money. It's larger than the GDP of Iran and Norway, for reference.
But it's coming, according to the research firm Lux Research. By 2035, the global battery market will generate $546 billion in revenue.
We took a look at the six industries fueling that enormous growth.
- EVs are waaaay out in front. "Everybody is pursuing the electric vehicle market," Lux's Chloe Holzinger told me.
- In second place is residential storage, which I find a lot more surprising.
- The growth of the residential storage market spells good news for solar companies Sunrun and Sunnova that are increasingly upselling at-home battery packs.
The news: On Thursday, Shell and a couple of partners announced they're planning to build the world's largest green hydrogen plant.
What's "green" hydrogen? Hydrogen gas made with an electrolyzer that's powered by renewable energy.
Why do we care? Hydrogen is a widely used industrial feedstock, and it's a clean fuel source. The problem is that most of it comes from fossil fuels.
- Green hydrogen has the potential to clean up industries that have been hard to decarbonize like steel production.
- It also provides a way to store potential energy like a battery.
These are the people who are set to transform the energy sector - through their company, role, or research. You can find details and the link to submit nominations here.
FYI: We're looking for individuals, not companies.
Finally, here are this week's top updates
- Highview Power, a startup specializing in long-duration storage, raised $46 million from Sumitomo Heavy Industries.
- JPMorgan Chase says it won't "directly finance new oil and gas development in the Arctic and will significantly curtail its financing of the extraction and burning of coal," Axios reports.
- BP is pulling out of three industry trade groups that don't align with its climate policies, "a move that comes after the company vowed to reach net-zero carbon emissions by 2050," the Washington Post reports.
That's it! Stay safe, and have a great weekend.
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