‘Massive risk’ to number of solar players flying under radar, says GLJ Research

GLJ Research highlights a report published by PV Magazine on August 26 that says California is currently considering shifting NEM 1.0 and 2.0 customers to the less advantageous NEM 3.0 structure, pushing their energy bills higher. In the view of the analyst, “the bottom line of the proposal is that Net Metering 3.0, the change that (for all intents and purposes) destroyed California Residential Solar, will be extended to NEM 2.0 and NEM 1.0 faster than anticipated.” The firm, which concludes that “this massive risk to a number of solar players is flying completely under the radar,” adds that if this proposal passes in almost any form, the ABS transactions that finance solar power purchase agreements, or “PPAs,” will have their cashflows significantly curtailed and the residuals of these transactions, which are the largest assets on the books of Sunrun (RUN) and Sunnova Energy (NOVA), “would, obviously, be close to worthless.” Solar energy service, system and equipment providers that could be impacted include Sunrun, Sunnova Energy, SunPower (SPWR), SolarEdge (SEDG), Enphase Energy (ENPH), JinkoSolar (JKS), Canadian Solar (CSIQ) and Daqo New Energy (DQ).