January 2024 Newsletter

Interconnection: Renewable Energy USA

Welcome to Megawatt Recruitment’s monthly newsletter to keep you connected to what’s going on in the renewable energy industry in the United States and provide more insight, knowledge, and connection to the people and companies who drive our industry.

What People Are Talking About

• BrightNight secured $375M corporate credit facility for their 31GW pipeline of projects.
• NEXTracker, which was acquired by Flex in 2015, has completed its transition back to an independent company.  This also spurred the hire of a new board member, Julie Blunden, formerly COO of Plus Power, a battery storage developer, and will require 6 additional board members.
• Effective January 1^st, 2024, Idaho moved to a “net billing” model for rooftop solar which will likely cause a 30%+ decrease in compensation for rooftop solar exported to the grid.
• A Goldman Sach’s affiliate and CPPIB provided $100M of credit to IPP Altus Power just weeks after Altus announced an acquisition of 121MW of solar assets mostly in North and South Carolina
• American Electric Power (AEP) sold a 625MW New Mexico solar business for $230M to investment firm Exus Asset Holding.
• Senator Michael Bennet led a letter signed by 14 Senators to urge the Department of Treasury to issue safe harbor guidance allowing third party leasing of geothermal heat pump property.  Once this is in place, a model similar to what is used for many residential solar systems, can be used for ground source heat pumps, allowing the market to scale.
• Fiserv, a global fintech and payments company focused on mobile banking, purchased up to $700M of advanced manufacturing production tax credits from First Solar, following the U.S. Treasury’s clarification of IRA Section 45x allowing Fiserv to reduce their tax burden and First Solar to gain more cash liquidity
• In Oklahoma, Avangrid announced its first project in the state will be a 147.5MW wind farm called Pontotoc Wind.

Recent Personnel Moves and Promotions

What the market is talking about: Three Trends to Watch in 2024

1. District Energy – If you have not heard this term before, district energy is the aggregation of systems to create power, hot water, heating, and cooling for multiple buildings or facilities, be they urban city blocks, universities, corporate campuses, hospitals, military bases, residential neighborhoods, industrial parks, or others.  The energy production systems can be on-site or off-site using PPAs and can include renewable and/or conventional generation as well as waste heat capturing.  For example, industries such as steel mills, petroleum and chemical refineries, and glass manufacturing produce large amounts of waste heat which can be captured to provide climate control and hot water for office or residential buildings or used to create steam to spin a turbine to create electricty.  While there are currently over 900 district energy systems in the United States, many of these were built in the 1970s and 1980s.  However, we should see a resurgence in interest with new incentives from the Inflation Reduction Act.  In April 2023, the Department of Energy announced a $13M initiative to support community-level geothermal heating and cooling projects.  

District heating is seeing further interest with cities such as Troy, NY and Mount Vernon, NY planning projects, however, the upfront cost of capital for these kind of projects can be challenging.   Troy, for example, plans to invest $12M to build a 200-well geothermal system to provide heating and cooling for its downtown area.  So far, it has received about $4.5M in subsidies, leaving 2/3^rd of the project costs to be borne by the taxpayers.

For a fun story, read about “The Moles” and their adventures in the steam tunnels under my alma mater, the United States Military Academy at West Point.  While these stories are from “old timers,” I can personally attest to the steam tunnels still being explored by cadets as of 2009.

2. Robotics in solar – We are seeing the growth of robotics across the value chain of solar from production facilities to installation of panels in the field to cleaning and other panel maintenance.  Here are some areas to watch:
   • R&D: With the rise of Big Data, researchers at the University of Osaka are betting that robots coupled with machine learning will be able to prioritize new material research for solar cells by searching for different material combinations, rating their level of toxicity, evaluating performance potential, and returning data on global availability of the material to help humans prioritize materials for further research.
   • Manufacturing: Through the use of drones and robots coupled with AI-powered computer vision, manufacturers of solar panels are using optical inspection to detect micro-cracks, poor soldering, and other defects before they leave the factory.
   • Installation: With estimates that there will be 400GWdc of solar installed globally in 2024 and 590GWdc installed in 2027, it is difficult to image how companies could possibly attract enough workers and train them fast enough to install this huge quantity of panels.  A San Francisco-based start-up called Built Robotics has built a robotic pilot driver called RPD-35 that can survey the area, distribute the piles, drive the piles, and inspect them.  Couple this with Sarcos’ Guardian XM robot and an Autonomous Delivery Vehicle, and you might be able to get your PV modules installed remotely as well.
   • Asset Management: it is no secret that maintaining utility-scale solar sites is hard work.  Given that many solar plants are in places where the sun is intense, there are a myriad of hazards to worker safety and well-being.  In Spain where summer temperatures routinely cross the 100 F mark, company Arbórea Intellbird, has developed a robot named Antecursor II, the world’s first autonomous robot for inspecting large-scale solar power plants to find hotspots, cracks, and underperforming panels.  There are also multiple companies that are deploying robots globally to remove dust and grime from solar panels.

3. Shorter supply chains – IRA tax credits for manufacturing renewable energy equipment onshore in the U.S. has encouraged billions of dollars of investment.  According to Deloitte, in the last 18 months alone, “companies have announced US$91 billion of investments in over 200 manufacturing projects, including US$9.6 billion in 38 solar projects, US$14.4 billion in 27 storage projects, US$1.4 billion in 14 wind projects, and US$54 million in six hydrogen projects.”  While it will certainly take time to get these projects built, the final product should benefit project developers and their EPCs by reducing shipping costs and helping meet localization requirements.  From a talent perspective, the renewable energy manufacturing industry will be seeking talent across multiple areas including junior engineers, production line workers, and factory administrators.  With there already being a talent crunch for renewable energy project developers, installers, consultancies, and service providers, companies are going to need to seek innovative ways to attract talent.

Talent Acquisition Insights: New Employment Laws for 2024 in the USA

Seismic changes possible for the construction industry: The National Labor Board made a ruling that is scheduled to take effect March 11^th, 2024 that replaces the 2020 understanding of what a joint-employer relationship is.  Whereas the 2020 ruling required that joint-employers have “substantial direct and immediate control” over terms and conditions of employment, the new ruling says it can be based on indirect or reserved control even if that has never been exercised. 

This ruling will likely have a significant impact on the construction industry as perhaps all contractor-subcontractor relationships would be effected.  According to Jackson Lewis law firm, “The very nature of the contractor-subcontractor relationship frequently and customarily involves the contractor exerting some control over essential worksite conditions such as safety, supervision, and shift hours” and that “the Final Rule creates a risk that standard-form commercial agreements, or any other boilerplate terms, that give or reserve authority to the general contractor to exercise control over even one of the seven essential terms and conditions of employment can give rise to a joint-employment relationship.”

According to Chambers law, joint-employers may also be held liable for:

1. Wage and hour violations
2. Employment discrimination and harassment
3. Family and Medical Leave Act (FMLA) obligations
4. Safety violations
5. Union obligations, collective bargaining, and blocking employee’s rights to organize

Other laws effecting employment:

OSHA issued a new rule effective January 1^st, 2024 that expands the submission requirements for injury and illness data.

Illinois and Minnesota passed statewide paid leave laws that you can read about here.  California increased how much paid leave employees can accrue and carryover while Colorado mandated that employers pay out vacation time that has been accrued but not used.  Washington and California passed laws forbidding employers from discriminating against employees and applicants based on their use of cannabis during personal time. Read more here.

White and Williams provides a table with the shifts in minimum wage requirements by state.

In New York, Duane Morris law firm summarizes new laws including:

1. Effective May 19, 2024, the hiring party of freelance workers who are independent contractors retained to provide services of at least $800, must retain copies of service contracts for 6 years which must include an itemized list of services and their value, the rate and method of compensation, the payment date, and the date by which a freelance worker must submit a list of services rendered. It also dictates that if the freelancer’s contract does not specify the date an invoice must be paid by, then the default is 30 days.

2. Employers with 4 or more employees to disclose compensation ranges for job opportunities, promotions, and transfers, which took effect September 17, 2023.

3. Employers are prohibited from mandating captive audience meetings which have the primary purpose of sharing thoughts on political or religious topics including those for supporting or joining unions.

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Thank you for joining us for another issue of Interconnection: Renewable Energy USA.  We hope you enjoyed it and we look forward to keeping in touch and exchanging ideas, insights, and opinions.  If you are a company considering hiring, we welcome the opportunity to present our services and capabilities. If you are a candidate, please check our jobs page or reach out to us to discuss your background, skills, and future aspirations.