SunbitsSass Peress – CEO of ICP Solar – Solar Blog

Below is an excerpt of Obama’s speech with deals with clean energy. All I can say is…thank you BP. Perhaps now rather than treat your solar division as an afterthought, you might actually invest something in it…

“Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs -– but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation –- workers and entrepreneurs; scientists and citizens; the public and private sectors.
When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill –- a bill that finally makes clean energy the profitable kind of energy for America’s businesses.

Now, there are costs associated with this transition. And there are some who believe that we can’t afford those costs right now. I say we can’t afford not to change how we produce and use energy -– because the long-term costs to our economy, our national security, and our environment are far greater.

There are signs worldwide that the stimulus packages which were enacted by governments across the world earlier this year are finally making their way into the general global economies and having a positive impact. It would appear that housing starts have bottomed, and some economies are reporting upswings. I guess with the cost of capital so low, pumping money into the economies is finally taking its positive toll.

What I hope is that once the economies start, the governments will be able to rollback some of the planned deficits because all we are really doing is putting on our kids backs the ills we helped to cause. The correction to the internet industry of the early 2000’s was followed by a correct of the banking industry in the last year or so and yet the difference is that while one was internal to a new industry created by technology changes, the latter was a more macro based correction in an old industry which suffered because of technology changes gone rampant and greed.

I hope we’ve all learned our lessons about over-borrowing, yet I fear that memories are short, that credit card balances will go back up and that banks, if ever left to their own devices again, are programmed to repeat the mistakes of the past.

Sass

So here they are building new high voltage power link lines rather than individual solar power systems? And charging $0.20 per kilowatt hour which is about what solar goes for today? Where is the sense?

Not only is the Afghan government now dependant on a foreign power, yet once again its non-renewables and its expensive. It seems that political convenience still rules the day in some areas and I wonder what form of true independance we are giving the next generation when we insist on continuing to use these old electrification models.

Oh well, guess we can’t change the world in a day..so we’ll just have to keep going until EVERYONE is listening…

Sass

It never ceases to amaze me how are our own worst enemy. The Democrats, after 8 years of drought, plug up the best opportunity to show the “change” they represent by putting things like condoms in a bill meant to help the economy of the USA get out of the toilet? With credit to the new President, he was actually fighting alongside the moderate republicans enough to get a few of them to vote with him (this time), yet it is clear that the house Democrats who have their “now its time for me” thinking caps on, are going to be one of his toughest challenges to work through in Washington.
Sometimes the enemy is within, and I hope he has the wisdom to keep them close.

It used to be that when governments announced they would be “buying us out of recessions”, it was all about building roads. In this new era of awareness of the cost of environmental destruction, a new trend has appeared.
Starting with the announcements by Barack Obama about intent to include investments in renewable energy as part of the bailout package “infrastructure renewal”, the canadian government is being urged to create up to 160,000 new jobs in the environmental sector as part of its new budget.
What we see now is “smart investing” being urged to accomplish several tasks, the most important of which is to create jobs which will be sustainable in a “new economy”. Now we’ve heard this “new economy” before with the internet boom…and then bust! What we are experiencing in the solar industry right now, with the credit crunch coming down hard on solar projects financing, is exactly the same with one big difference…the energy angle is far more important for the future of our planet in the HEARTS and minds of consumers, than is the internet.
This is the angle to be used by governments in justifying such massive intervention on behalf of renewable energy. It will not only create jobs, it will help reduce carbon emissions, reduce energy costs in the long run and dependency on oil from the middle east. It hits all of the sweet spots that politicians love to be seen as heroes for, yet they are all real and true. So I do hope that the Harper government takes the advice of those proponents of investment in renewables to heart, no longer because they are truly green (which conservatives are not by nature) yet because it will create the sustainable jobs that our economy needs to replace the “old indusry” jobs which are probably lost for a very very long time.
Sass

Tomorrow is the inaugural event for Barack Obama. The expectations are so high that Obama will be the saviour of the global economic crisis, that I am beginning to wonder if indeed we have hit rock bottom yet, or will we see a bump up and then a crash down again, because no single man can be our saviour alone in this time of economic crisis.
One fear that I have is that the money being put into the system doesn’t help the companies which need credit to borrow to be able to invest. Without investment, jobs are lost. If Obama is going to put money into traditional infrastructure, it will create jobs in several months from now. Giving a small tax rebate to millions of americans will only go into paying down debt for most, and not really create an atmosphere of confidence in which companies rehire.
What we need is to invest in new industries, like renewables, and divest from old ones (like the automotive machine) with a measured approach that helps transfer jobs from one old industry into one new one. With methodical application of funds, we can create new jobs in new technologies in the same areas that are most likely to be hit by rising unemployment when we finally stop funding the old jobs which are no longer needed nor competitive on the global marketplace. We have automotive workers sitting playing cards in union halls being paid wages…why? These same workers could be retrained to work in new industries and this could liberate those old industries from the overpowering loads of the legacy deals signed with unions or the factories which no longer are competitive.
I just hope that we temper our expectations of this man and that he gets the right guidance to help the american (and thus global) economies going in the right direction. My belief is that we are in a recession for at least another 6 months before seeing hope of getting out…
Sass

As we see companies which were previously called “blue chip” fall down one after the other, I was looking to see if there is commonality between them and came up with the following observation: most have substantial funds tied up in legacy agreements or capital assets which are not reflective of today’s business realities.
GM is one case in point. Tons caught up in their legacy distribution and branding model (many brands for same items), factories that have lots of improvements required to catch up to the manner in which Japanese car makers run theirs (with far fewer workers, they put out far more cars per employee) and with brands that have suffered in recent years due to the image flip (japanese now better than american), these are companies stuck in the past.
When I decided to offload the factories which ICP Solar had built or acquired it was because I learned that the value of the capital asset today is far less than the value of the intellectual asset (your brand, your products, your vision). It is in fact the root of ICP Solar back in 1988 when I founded it, to be focused on product and brand development. Being now in that mode, ICP Solar’s future is assured, with or without the potential merger to Ibersolar (announced earlier this month).
My fear for the current economic situation is that government rarely runs things better than the free market and so the injections are being put left, right and center yet must be done in a manner to reward or protect the productive sectors of our society. If it is done to protect legacy sectors which have no future, it is throwing good money after bad. If it is done to help those sectors reposition and then ensure a repayment to society which is equitable, then by all means protect them now yet hold them accountable for the future. CEO’s of such companies should be taking substantial paycuts or moving aside to let those that have a history of addressing the issues I mentioned above with proof of delivery.
It is not an easy time for most, yet with the largest order book at this period in recent history, ICP Solar is poised to capture market share in an increasing market. We believe that the funds being pumped in by various governments around the world will eventually reach those in need and help to stabilize things, yet the only assurance of a positive future is if there is a mindset change in those industries in which we depended on and a focus on the new industries, such as renewable energy, where the new jobs will come from.
Sass

The world woke up to a black president of the United States on Wednesday. The sober moment when Obama delivered his acceptance speech was an amazing footnote to an amazing presidential contest.
He delivered his words carefully and with keen attention to pace, content and care. He called upon his people, the American people, to rally around him, understanding that these are challenging times. And yet above all the enthusiastic celebration, comes the realization that nobody can say that Martin Luther’s dream has not come true. The day when a nation’s leader is of his color, is the day when he has found the promised land he spoke of so eloquently decades ago.
And with this moment, comes a transition from entitlement to empowerment. It is the realization of many generations who have waited for this day and with it will bring much thought about the programs which were put in place particularly to permit a young man like Obama to succeed. And yet, is he really a product of those programs, or is he more a product of his own design, of a loving family, and of sheer brilliance and determination. Is he the exception that cannot change the rule or is he the example that can enpower a generation of young men who did not believe they could achieve such heights.
With empowerment, entitlement is to be questioned. Is it necessary anymore? Does the NAACP still serve a purpose? I am not answering any of these questions, it is not my place to say. I am simply putting forth some thoughts which could not have been expressed just a week ago when this dream was not realized.
I salute Mr. Obama. Whether or not we have the same political beliefs is immaterial. What is important is that he has the opportunity to drive us out of the mess we are in and into a better place.
Sass

A funny thing happened on the way to the bank…they aren’t lending anymore! Consumers are nervous about their jobs, so guess what that does to discretionary expenses..they disappear. Holidays, dinners out, everything that you don’t really NEED, goes out the window for a while, for middle class families, until such time as they feel secure again.
We have the perfect storm which hit the world markets and are still being felt across the globe. We have loose rules in the USA which created sub-par mortgages on homes not worth a fraction of what was being lent against them. And we have governments trying not to look panicky, although some presidential candidates were ready to throw in the towel and call off their campaigns just two weeks ago.
Luckily for all of us, this is not the 1930’s, where the reaction time was too slow to avoid a great global depression. Governments have reacted strongly, albeit a bit late, to the major issues facing banks and will fund us out of a recession. They permitted the banks to flood the markets with capital without regulations and now they are basically flooding the banks with money to back up those stupid decisions, once again in the hope that rising sentiment will become a self-fulfilling prophecy.
What does this mean for our industry? Well if we can continue to make the case for money saved, we win. If we use carbon savings (without accompanying credits), its a tougher case to make in today;s reality. People need to see real savings in their pocketbooks. Surely, incentives, subsidies and net metering will lead many to continue to covet solar systems, yet those on the edge, will now fall off, until such time as ROI calculations come down.
Expect falling prices in our industry to become the norm as oversupply hits us in 2009. I also expect that in the current turbulence of world markets, with capital being squeezed, you’ll see some smaller players bought up by bigger ones.
Hold on, its going to be a bumpy solar ride!
Sass

The US is deciding whether or not to open up new areas for more oil exploration on the hope that it can save a few pennies in several years? You have to see right through this as a last ditch attempt by Mr. Bush to satisfy his friends who want more money in the oil companies coffers rather than a true attempt to resolve the current “energy crisis” being manufactured in the US for political purposes.
I suspect they know that if a Democrat comes into power, their chances of opening up these fields disappears…for a while. So rather than spend that money on more renewables, he’d rather take a last stab at this crazy scheme which really won’t make a dent in american’s pocketbooks.
How sad that energy policy in the country which uses the most is being so myopic at the highest level.
Sass