The Sunion is a publication brought by some solar industry veterans who want more people to understand their confusing, complicated, wonderful work.
Imagine you’re reading a Bloomberg News profile of a new solar power developer who is building projects representing thousands of megawatts across Texas. The company’s website sports pictures of its staff in hard hats doing site visits, of row after row of energy-optimizing robots, and its hands-on CEO pitching in to drive a forklift loaded with solar panels, while flashing the thumbs up: Everything is a go! Wait, not so fast.
There are a few things still requiring attention. Half the staff doing that site walk are lawyers. The robots, they don’t really work. The CEO drove the forklift right through a major piece of power equipment, and now is trying to write off his error. The company might be on the brink of total disaster, or this all could be standard operating procedure in the industry? Each of these situations sounds real enough, but every link in this paragraph takes you to a satiric article from The Sunion, a side project of some solar industry folks who deploy humor to try and tolerate — and explain — their confusing, complicated, wonderful work.
The Sunion’s arch headlines and jargon-heavy articles often do a better job of capturing the solar industry than any white paper or news item. It offers details about the industry that only insiders are aware of, but that anyone working in business, policy, or finance may comprehend. It’s a useful tool for explaining the nature of solar work by utilizing humor to outline the obstacles of technology, development, engineering, and financing.
Solar, more than other industries, is notorious for its jargon-laden, as established companies and startups compete with fresh product offerings and a litany of buzzwords in the hopes of attracting investors.
So, in a recent post titled Energy Storage Company Goes Bankrupt Due To Insufficient References to “AI” In Pitch Materials, the Sunion knew exactly how to approach this. Of course, when everyone tries to define their company offering using proprietary algorithms, the end result is likely to be neither of those things. It’s critical to recognize that new technology brings with it new capabilities – or perhaps those who shout the loudest about how different this time is are missing in context.
Identifying sites, negotiating with landowners and utilities, and bringing projects to the stage where they can be financed and completed are all part of the solar development business.
Development carries great risks but there’s no way around those risks if you want to succeed. So the existence of subsurface mineral rights across thousands of acres of West Texas may be more than just pinhole risk. Environmental concerns matter for solar projects too, but sadly, endangered birds are probably not willing to work things out for a share of project equity.
Eventually a project needs to move beyond negotiating with ranchers and warehouse owners, and get into engineering. Here, there is a natural tension between the risk-on nature of developers, and the more cautious mien of engineers. What is the solution to squaring this risk circle? One way is to browbeat your engineers into meeting the developer’s cost assumptions.
The solar industry eventually comes to funding after technology, development, and engineering. The Sunion shines in this area, with well-observed stories that will make any project finance banker wince with familiarity.
Two counterparties are establishing a shared deal model. Both of the “home models” used for inputs are based on the same, decade-old model developed by SunEdison, a once-prominent (and now-bankrupt) pioneering firm. What about that fantastic internal rate of return? It’s all because of a deeply-buried =IFERROR(), a terrible Microsoft Excel blunder. Developers could try to ‘routinize’ financial modeling and avoid errors using the Python programming language’s explicit logic, but hundreds have tried and failed.
When none of these technology, developing, engineering, and financing efforts seem to work, there is always the “platform investment”. What is it?
Oh, just a trite little phrase used to describe a situation where instead of investing in what you actually want to invest in (which, again, you can’t do), you invest in a company which might theoretically, some day produce investment opportunities you actually want.
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