Latest / Clean Power Hour / Section 232 Is a Price Floor, Not a Tariff: Solar Module Prices Explained.

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Section 232 Is a Price Floor, Not a Tariff: Solar Module Prices Explained. · Clean Power Hour

• 0:53
  Unknown: Live.
• 0:53
  Tim Montague: Welcome to the Clean Power Hour live. Today is september 4. We have a special guest today. We're joined by none other than Chris Letman.
• 0:59
  Tim Montague: He's a returning guest. He is a solar module supply chain and technology expert with Imperial Star. Welcome, Chris Letman.
• 1:11
  Chris Lettman: Hey, gentlemen.
• 1:11
  Chris Lettman: Thank you for having me again, Tim. Really appreciate it, John.
• 1:13
  Chris Lettman: Great seeing you again.
• 1:17
  Tim Montague: Yeah, and I am very pleased to have my regular co-host here, John Weaver, the Commercial Solar Guy. What's going on, John?
• 1:26
  John Weaver: Ah, everything, dude. Construction stress, beautiful weather, rain, projects closing, other projects coming back for interconnection, buying modules, having to deal with this crap. That's why we got Chris here to teach us something about reality.
• 1:45
  Tim Montague: Yeah, we're doing a deep dive. We're doing a deep dive on what's going on in the solar module space this week, which is why Chris is here, and it's complicated. But my hope is that as a listener, whether you're on the live or on the recording, you can have a few action items. One of which would be to contact Chris Letman on LinkedIn. He's easily findable, L-E-T-T-M-A-N, and but as as most solar professionals know, it's a very dynamic landscape.
• 2:17
  Tim Montague: There's old there's old impacts.
• 2:23
  Tim Montague: There's O triple B impacts.
• 2:23
  Tim Montague: There's new tariffs, Section 232 tariffs, and and then the ever you know, ever changing supply and demand. So solar solar module pricing is one of the most dynamic aspects of our industry, and it's one of the most expensive components in a solar project. So it's relatively important. But John and Chris, how do you like to frame this topic.
• 2:56
  Chris Lettman: Yeah, I'll go first. So this isn't this isn't a tariff story. It's a price floor story, and that's what it's about. It sets a new price floor. You have no choice.
• 3:08
  Chris Lettman: There's not a you know lower the price, adjust it according to a newly newly revised or newly implemented tariff, the MIP or minimum import price you have to deal with, and it's across the board. Polysilicon and all of its derivatives are impacted, so you have you have the minimum import price, and with the exception of raw polysilicon, you have the additional 15% ad valarium tax, right? So polysilicon escapes the 15% However, ingots, wafers, cells, and then of course the modules have the minimum import price on top of the additional 15% add value tax. Okay, so you've got to deal with that. So that's that's very very you know different from what we've seen in the past. And what that prevents is that prevents the import module companies going from different countries and and you know avoiding certain you know changes and increases from different tariffs that were set in different countries and going to different countries and getting a lower or avoiding a different tariff altogether, right? Yeah, we need to. That changes.
• 4:33
  Tim Montague: We need to set the table a little more, though, Chris. I think you kind of jumped into the deep end there.
• 4:39
  Tim Montague: You know, just real quick. I liked what
• 4:42
  John Weaver: he was saying, Tim.
• 4:42
  John Weaver: I just want to let you know, I loved what he was saying. I actually, there was a thing I took out of there. So, good, good. What, what is, what is your, what is
• 4:50
  Tim Montague: your takeaway from that.
• 4:52
  John Weaver: Well, the first, not my full takeaway. I would just say one aspect of it that I need to think about is you're talking about this 15% adder and where that goes. And so, if we have a minimum 38% import, does that 15% go on top of that? Does that mean we have a minimum effectively of 38 plus 338?
• 5:10
  John Weaver: That's like an extra four and a half, five cents. Does that really mean that the base price of this is 38 plus five, so 43, and that's true cost. So if a true cost is, then somebody needs to make pay for shipping, pay maybe shipping's included in cost. I don't know how that works, but pay for shipping, and then somebody's got to make money, and right. And then you have your margins.
• 5:34
  John Weaver: Yeah. Right. So that's, but that's for a purely imported solar panel. So now that means there's truly the base price in reality, Chris. It's not 38 for guys like me who are medium to smaller CNI shops. We got to buy through distribution or something, so that means I'm 45 cents or maybe 50. Right,
• 5:57
  Chris Lettman: right. Yeah. So
• 5:58
  Tim Montague: as as you as you tweeted John on on Blue Sky, if there there there are three basic tiers. There's modules that are imported with you know cells made in Southeast Asia for the most part. There's domestically assembled modules made with imported cells because we make very few cells, relatively speaking, in the U.S.
• 6:22
  Tim Montague: yet, and then a and then a 10% Okay, thank you. And then domestically produced cell and module, and and those and those are the three main tiers, cheap, which is now more expensive because of the 232 tariffs, right? The fully imported module is more expensive now, right?
• 6:44
  Chris Lettman: Yep. Yeah.
• 6:46
  Tim Montague: As is as is the imported cell module.
• 6:50
  Chris Lettman: Right.
• 6:50
  Chris Lettman: Altogether, it closes it closes the gap. It raises all of the prices, but it closes the gap across the board across all three categories that you just described. Okay,
• 7:01
  John Weaver: all stuff is going up actually. And so one
• 7:03
  Tim Montague: of my questions is: Is this good for domestic manufacturing? Is it actually incentivizing U.S. factories to either build, continue to build, or expand is that is that is this is that the concept and is it working?
• 7:25
  Chris Lettman: So so before I answer that question, I do want to point out the the the raw polysilicon minimum import price, without adding the 15% was by design, and that is to protect the wafer and cell manufacturing domestically.
• 7:44
  Chris Lettman: Okay, that's that was by design.
• 7:44
  Chris Lettman: Okay, so to to incentivize and to keep that moving forward, and to increase that, in my opinion.
• 7:56
  Tim Montague: And who is doing wafer and cell manufacturing in the U.S. today?
• 8:00
  Chris Lettman: Well, we're seeing announcements, right?
• 8:02
  Chris Lettman: We're seeing we're seeing new announcements on on the on the cells. You know, we know ES Foundry and Saniva, which make up about just shy of six gigawatts, right? That's why I mentioned roughly 10% of what we what we need compared to what we have in domestic module manual capacity in the U.S. Then we have other companies. Then we have Q cells, right? We have Q cells. Then we have a few other companies that are making announcements recently. I know there was a few companies. I'm not going to name them here, but John, you might know of a few ones. There's some in Texas.
• 8:41
  Chris Lettman: There's some here in California.
• 8:45
  Chris Lettman: There's a few others in. I think in Oklahoma was another one that was mentioned recently in a couple different articles and magazines, online articles and whatnot over the past couple weeks. Those remained to be operating, but there there's announcements. Okay, so
• 9:09
  Tim Montague: I take those with a big grain of salt, but absolutely, I'm more interested in Canadian
• 9:14
  John Weaver: solar's Canadian solar six gigawatt Indiana heterojunction. I think modules can be gotten from them, or cells, HJT cells can be gotten from them. Maybe right now, definitely before the end of the year, I might not be able to buy 1.6 megawatts from them until February of next year. Is what Warren, my sales guy, told me.
• 9:38
  John Weaver: But I think you can get some sales from them right now. Maybe you know, there's they're they're already what I'm told defined to utility scale customers. They're HJT. Right.
• 9:50
  John Weaver: But I don't know if that's delivered like right now. But I do know that you know Canadian Solar's hammering it, and they they just made a big announcement. They're in Indiana for the cell factory HJT.
• 10:02
  Tim Montague: And so in the current environment, if you're a if you're a medium sized developer or EPC, let's say you're buying megawatts, not not hundreds of megawatts, but megawatts of solar panels. Are is solar equipment getting more expensive because of what's going on, or staying the same, or getting cheaper? I
• 10:27
  Chris Lettman: think it's getting more expensive, but John, you're you're seeing it firsthand.
• 10:31
  John Weaver: Yeah, yeah. So modules are getting more expensive. I'm right now trying to figure out. So I have about 1.6 megawatts of light domestic product that I need for projects that will get PTO in 27. I have another 1. Six-ish, or maybe it's 1.9 and one six. Whatever, it's in the just over one and a half megs of each. I need domestic light, and I need domestic cell because the carports and ground mounts; those need domestic cells to get domestic content. 10% rooftop MLPE, da da da da, domestic light. Those are the two types of modules I'm procuring, and I'm very specifically Tim going after them because everybody, and I included some in the document. Everybody that's emailing me is saying module prices right now, through December, two cents a watt per month going up, and I'm trying to figure out how to protect myself from plus one dime or more across my portfolio, which would hurt because right now I'm booking stuff at 35 cents. I don't want to pay 45, 48, 50.
• 11:38
  John Weaver: That's that would, you know, that's going to hurt for the projects I own. I guess it gets made up for in the tax equity.
• 11:47
  John Weaver: But right now, what I'm trying to do, because I've done the math, trying to buy my modules for the next year, about three and a half meg's worth, and I'm gonna drop them in storage.
• 11:58
  John Weaver: Because I've done the math on interest and storage, and two cents a month, Tim, that's like five to 6% monthly interest.
• 12:05
  John Weaver: That's like a 60% annual interest rate. So if I can get an 8% interest and I pay one cent, roughly 1.3, I'm doing my math on storage. That's how I'm mitigating my risk. I've never done this before. That's the biggest procurement I've ever looked at. But that's my plan: is to spend 50 grand on interest, 100 on storage, to save 400 grand on price increases.
• 12:35
  Chris Lettman: So, so in response to that, John, that's that's a good plan. That's a short-term solution for a long-term problem that we're facing in this industry.
• 12:46
  John Weaver: I can't think about 2028. Um, um, yeah, that's yeah.
• 12:51
  John Weaver: What's the what is the long term problem you see? Just because you know, I got some people saying they're going to have an issue making these domestic light modules now, and they don't know if it's going to work. And then other people on my little document say they're not even going to import to the U.S. anymore. Yeah, like just just I saw Jim
• 13:08
  Tim Montague: Jim Wood at Seg Solar posted that he thinks the the increase in cell price really hurts him. Doesn't doesn't help him. He's a he's a panel assembler, right? He's importing cells and assembling panels in Texas. And we want, in my opinion, we want all all of the above. We want to be able to import panels. We want to make.
• 13:31
  Tim Montague: We want to do panel assembly, and then we want to have the soup to nuts. I mean, that's the penultimate is the soup to nuts vertically integrated solar industry. So we're we're more buffered from those global shocks that happened, like during COVID, where the ports got jammed up and things like that. That was very painful. We want to avoid that if we can.
• 13:53
  Tim Montague: But Chris, do you see a day when the U.S. is making pure domestic content solar panels for the for the 60 to 100 gigawatts that we're installing annually.
• 14:15
  Chris Lettman: I mean, from from the from the wafer up.
• 14:21
  Tim Montague: Not in the near future. Not
• 14:23
  Chris Lettman: not my lifetime.
• 14:24
  John Weaver: We're doing it right now. That's that's an. How long are you going to live,
• 14:27
  Tim Montague: Chris? I'm all.
• 14:27
  Tim Montague: This is an unfair
• 14:30
  John Weaver: answer. No, I just this is an unfair answer. Q Cell is making poly and wafers in cells right now in Georgia, unless I'm wrong. Somebody correct me.
• 14:39
  Tim Montague: They've announced that they are. I don't know. Has announced started up. Some people cacheed on that, but they have announced that they're doing that.
• 14:48
  Chris Lettman: Yeah, I mean they have.
• 14:51
  John Weaver: Sorry, focus.
• 14:52
  Chris Lettman: They're making a lot of investments in Cartersville. They really are. I mean, it's it's amazing what they're what they're doing out there for the local community and investments in in in that state out there. I mean, I I I want to see, I want to see jobs.
• 15:10
  Chris Lettman: I want to see local domestic manufacturing, but I want to. I want to see it on par on pricing and making it competitive because not every not every job, not every project is going to require or need that domestic component. If it doesn't require it, you know, for whatever reason, whether let's say the ITC
• 15:37
  Tim Montague: is gone, which it will be if anything changes by the end of 2029, the ITC is gone on solar panels, and so you know, then you're not trying to get that 10% adder anymore. It's not relevant, and so in that landscape, let's just talk about that. 20. Let's pretend it's 2030.
• 15:59
  Chris Lettman: Okay.
• 15:59
  Tim Montague: As the solar industry, do we do we care where the modules come from? I care, but I'm just curious what you guys think.
• 16:12
  John Weaver: It's too late for me to care. People are dying from climate change right now. I don't see why we should.
• 16:18
  Chris Lettman: If if if you know if we're if we're behaving on a global scale, to John's point, and we're worried about things changing on a global scale, let's get what we can where we can. I mean, all things you know being equal and and things being you know above the table and and you know the the manufacturing being safe and being you know within the guardrails of where they should be, let's get solar installed where it needs to be installed on land where it needs to be installed. But if I'm Jim
• 17:45
  Tim Montague: Wood, if I'm Jim Wood, am I now thinking about how to how to prop up sell manufacture in the U.S.
• 17:59
  Chris Lettman: It's got to make sense. It's got to make good financial sense. It's got to be a good business decision too. I mean, you're not gonna you're not gonna do it if it's not gonna be you know profitable.
• 18:09
  John Weaver: It won't work at some point. His bankers won't let him. You know, but he's between a rock
• 18:14
  Tim Montague: and a hard place.
• 18:14
  Tim Montague: He's saying it's not gonna work financially to import cells. So,
• 18:23
  John Weaver: so somebody really smart I know who I'm not allowed to tell say his name because he doesn't have approval from his company to talk on this topic, but he thinks there's going to be a real challenge with where the pricing nuances are of the wafer and the cell. He was just they were they got spreadsheets they work they're really smart group and he's like, I he's worried about where those lines were set, and he, they, you know, I can't fully grasp it myself because I'm not in the cell in the module world. You know, I've seen the spreadsheets of all the subcomponent costs, but it's not like natural to me, and so, but I'm, you know, I'm hearing stuff, and that it could be a challenge, and that is it.
• 19:07
  John Weaver: That Jim needs to push for cells, maybe, to be domestic in order for him to be viable, and that's the whole purpose of the way the structure stuff is structured, Tim. The goal is to motivate the domestication.
• 19:21
  John Weaver: Whether they do it well, we'll see.
• 19:23
  Tim Montague: Well, honestly, I think the goal is to create friction and chaos.
• 19:28
  John Weaver: Well, I'm trying not to be too political, Tim.
• 19:31
  Chris Lettman: And I think, and I think that's why. And Tim, that's a good point. And I think that's why, you know, looking at other technologies, you know, at HJT and other upcoming technologies on the on the wafer and sell, you know, as we see that start to get commercialized, you know, HJT looks promising. It that could change the landscape if that if that becomes commercialized and we're seeing it, you know, that's you know that's rounding the corner. That's gonna I think that's gonna happen, right? That looks very promising right now.
• 20:05
  Chris Lettman: I think we're going to learn more about that probably in the next month. That could be, you know, I don't know if it's a game changer, but it could lead to something better. It could lead to something.
• 20:21
  Tim Montague: And to be clear, Chris, what are scalable? What are the domestic cells that you're buying today? What what is the technology in those cells?
• 20:28
  Chris Lettman: It's perk. Perk's the only domestic that's available right now. You know, there's some there's some claims out there right now for other other technology, but it hasn't been commercialized yet. You know, we're we're you know we're talking. I'm you know, I've been talked to, or you know, someone's approached me. A couple people have approached me on other technologies, but it it hasn't been commercialized. They they said they're going to open up, you know, cell manufacturing facility and you know, state you know X Y Z, but they haven't. So hey,
• 21:04
  John Weaver: Chris is right. You know, I haven't heard very much about reality outside of anybody. You know, Canadian Solar and their big factory is the only new one I've heard recently. The smaller ones in Texas, and I, you know, I hear these names floating around. And then, of course, you know. But I, you know, is it? Let me ask you a question. I am upset that the only cell that right now seems to be available is a perk.
• 21:31
  John Weaver: I'm pissed off at that because we don't have the top cons and the back contacts that the Chinese manufacturers have moved so far ahead, so far and. You know, the only one I'm hearing of coming in TopCon is Canadian.
• 21:43
  John Weaver: Well, because of the first solar lawsuits,
• 21:47
  Chris Lettman: but because there's companies out there, there's companies out there that implement marketing and sales strategies that involve litigation, and there's only a few companies that that do that.
• 21:56
  Chris Lettman: I don't, I can't name those companies, but that's part of their sales strategy. It's interesting that in in their marketing and sales tactics, that's you know IP litigation is their sales strategy. That I mean, to me, that's not only
• 22:17
  John Weaver: IP litigation but also political funding. I I think I know who you're talking about, Tim. I'm allowed to say stuff because they don't like me already. But yeah, it's it
• 22:31
  Chris Lettman: wouldn't it wouldn't be the first time we heard that name.
• 22:36
  John Weaver: Yeah, I mean, listen, I'm gonna say it. I don't like First Solar. They're an asshole company. They do.
• 22:41
  John Weaver: They make the litigation and they make the political politicization. I can't even think of words. They politicalize the solar industry.
• 22:50
  John Weaver: They are the driver of these sales. They have a great lawyer, Smyrno. I think a friend of mine can't stand him because he's so good at pushing tariffs. I'm mad at him, but I probably shake his hand, and you know they're the company that's pushing it. In fact, I heard somebody give them the greatest compliment, and I have to recognize it in the world we exist in. But Tim, you want to get him on the show?
• 23:17
  John Weaver: He's got a manufacturing show for PV Magazine down in Austin next month. But he said that First Solar has done the best job at bringing together the complex legal, financial, politics, everything to to exist in this world because they're fighting the Chinese who have a different model, economic model.
• 23:38
  John Weaver: Their companies don't necessarily have to be profitable because the Chinese look longer with their business plan, they want jobs in local stuff. They're not looking for just individual companies that are profitable. They want a profitable state region, a profitable nation state. So jobs factor into that individual company's incentives that they get. We're a little, we're two or three degrees further for that. We're a little more free market, a little more capitalist. So, so first solar, as much as I hate it, just like I want to fight Nextera all the time, but they're too damn smart to fight. These are the companies, these are the beasts that have done things with the market they have, and it sucks for some layers. Other layers, it's I guess it's good. They're smart, obviously. They're doing the job, and they're and you know what, Chris and Tim, when we say, "Hey, is there somebody who makes wafers and cells? Yes, there is. There's First Solar who makes like 1520, gigawatts.
• 24:27
  John Weaver: It's not the same thing. It's vapor deposition, but I think we're being rude and disrespectful when we say something like only 10% of cells. No, First Solar is the dominant utility scale company in this country. When you take into
• 24:41
  Tim Montague: account the First Solar production. How much? How much you're saying? How much of our of of you add that in of our 50 gigawatts can we produce in the U.S. meaning cells or or their thin film
• 25:04
  John Weaver: module? and just
• 25:09
  Chris Lettman: with 14 film.
• 25:09
  Chris Lettman: Sorry, 14.5
• 25:12
  John Weaver: is what Magoog says. Local global 23, but 14 and a half
• 25:18
  Tim Montague: of first solar.
• 25:19
  John Weaver: Yes, sir. Domestic specifically
• 25:21
  Chris Lettman: 25% of our module capacity, roughly, just off the top of my head.
• 25:27
  Tim Montague: Yeah, you know, John, looking at that at the at Kelly Pickrell's story in Solar Power World from august 24 on Section 232 tariffs. I mean, it's just a litany of people being negative about it, including Jim Wood, who I've referenced already, but she also talked to ES Foundry, and they're making cells that you're buying. I think Chris, right?
• 25:51
  Tim Montague: But they're using imported, they're using imported wafers, right? And the and the 232 tariff impacts that their business, right? And then she talks to Aravon, which is a big asset owner, and they're like,"Yeah, no, this is just more chaos and noise. We don't like it. I don't. They don't see an upside. So, who sees an upside?
• 26:11
  Tim Montague: I mean, that's my question. Do we? Do does anyone here think that this is going to drive more manufacturing in the U.S.
• 26:26
  Chris Lettman: I I don't I just see I just see the I just see the buck getting passed to the next the next person downstream in in terms of of cost right so the pricing goes up to to your your point the pricing goes up to ES boundary. Or the wafer, they increase their cost on the cell. They pass that cost along to the module manufacturer.
• 26:51
  Chris Lettman: Module manufacturer increase their price to the installer or the distributor, right? Because guys like John probably can't get a one megawatt order from companies that are producing, you know, anywhere north of 50 megawatt orders, you know, per run, you know, 100 megawatts or more, you know, is is going to be the norm. So one megawatt order, you know, unless it's a surplus overrun, they're going to have to buy from a distributor. Distributors have a profit margin on top of the increased cost, so now you're getting hit twice. You have the carrying cost from the distributor on top of the additional cost the distributor paid from the increased cost associated with the increased cost from the wafer and the cell. Yeah,
• 27:42
  Tim Montague: and then we have a question from Clean Titans. I'm not sure who that is, but SpaceX and Tesla plan 100 gigawatt of solar per year. What do you think of that? The number that stuck in my mind was 50 gigawatts for Tesla. But is what's Elon up to?
• 28:00
  John Weaver: Started at 100. It started at 100 for Tesla and 100 for SpaceX. So I was like,"What? Then it was 100 full stack manufacturing. Now it's 1010. gigs is the current number that's being pushed a little further. So
• 28:16
  Tim Montague: yeah, I mean that's a big number. 10 gigs is a big number for any solar panel company in the U.S.
• 28:22
  Chris Lettman: Right, right.
• 28:22
  Chris Lettman: Well, not for a Chinese company, but
• 28:25
  Tim Montague: for a U.S.
• 28:25
  Tim Montague: company.
• 28:26
  Chris Lettman: Yeah, 10 gigs wouldn't go, wouldn't fly under the radar, nor would 100 gigawatts. So you know, some a company that size making those kind of moves. I mean, you know, why are we not hearing or seeing anything about permits? You need you need water recycling permits. You need air permits are running.
• 28:48
  John Weaver: No, okay. Permits are running for Tesla Texas. PV Mag covered it a week or two ago. That's how we got some data. Ryan Kennedy, smart guy. I love him. I'm not just saying that because he's my boss, but he he wrote an article. And there's a facility in Texas where they're negotiating the tax thing. That's how we always figure out about the tax
• 29:07
  Chris Lettman: abatement. Yeah, the tax abatement stuff. 312 and 313. Yep, yep.
• 29:12
  John Weaver: Oh well, there you go. Now you probably had to deal with this because you're a facility. I used to
• 29:15
  Chris Lettman: develop. I used to do some development in Texas.
• 29:17
  Chris Lettman: I remember those numbers.
• 29:17
  Chris Lettman: Lennon's
• 29:19
  John Weaver: a smart guy. Yeah, I mean, I heard I heard that Elon
• 29:23
  Tim Montague: is getting in the solar panel game. I mean, he's been in and out of it over the years with his partnership with Panasonic, but he's thinking about data centers in space.
• 29:33
  Tim Montague: He's thinking about Starlink, you know, and and so he's like, yeah, I'm going to vertically integrate. I'm going to play the BYD game, and and that's a smart move, I think. And and he absolutely could do it, right?
• 29:47
  Tim Montague: He knows how to build factories, and the question is, where is he going to get the equipment to make solar panels? Is he going to have to buy that from China, or can he reinvent that equipment himself?
• 30:02
  John Weaver: So I'll just throw in one piece of data. Let you guys chew on that in your heads for a moment. But there was, for a little bit, and there was including during Trump's recent visit to China, a pitch where Elon was trying to get 100 gigawatts of gear, cutting edge.
• 30:14
  John Weaver: I think it was made by Maxwell, and I think it was a Perovskite tandem deal. But from what I've heard, well, this is just me reading, including from Roth, who's my favorite, one of my favorite deep sources these days. That China and they've stated this: they don't want to export wafer at least technology, maybe even sell for strategic techs anymore because it's now a global thing. You know, solar cells are now oil, and so they've they're holding back a little bit what techs they're going to allow to move around the world. And I think one of the reasons Elon was on the airplane to China was to get those machines. Now, as Clean Titan said, you know, Elon is already importing tons of gear from China. Everybody is, but there's specific gear that he's-I don't think he's being allowed to get. So, I don't think he's going to be able to reinvent solar cell technology.
• 31:15
  John Weaver: You know, I'm nothing against the guy, but he did just fail fail at my favorite solar panel product, the solar roof from Sun from Sun Solar, whatever, many years ago. So I don't see him reinventing solar cell manufacturing at 25 percent, 28 percent, where we're at today.
• 31:32
  John Weaver: But he can import from China without tariffs the manufacturing machines that has been that specifically stated as importable. Document that it's not tariffed because we want to grow it, but yeah, and I think I think he does have a good chance of doing it. He is working on it. I think those modules might be going for data centers for SpaceX. That's because SpaceX owns Twitter. Twitter is where the data centers, I guess, are based out of XAI, and some little mix in there, and he's saying 10 gigs a year. It'll be 100 gigs eventually, but, and I do think he can do it. I, I hope he does. I don't know where he's going to go with it though, and I don't know if he's going to succeed. I also don't, I don't doubt though that he should do it because the term I'm learning is called speed to power, and that's deploying speed to power is the speed at which we get data centers up, and solar and batteries are going to defeat some gas turbines by five years, and so. But can a factory making cells beat a turbine. I don't know. That seems tough. If anybody could pull it off, though, it's Musk and his, you know. Well, I
• 32:51
  Tim Montague: I was just I'm fresh back from Tennessee. Shout out to Gil Huff and Company for great conference in Chattanooga.
• 32:57
  Tim Montague: I interviewed the Memphis utility CEO, who's you know dealing with Elon and that data center where Elon put in temporary gas turbines, which got his facility up and running, the data center called Colossus, and at the cost of polluting the local neighborhood, and which the neighborhood has not been happy about, but eventually that's going to get grid connected, and they'll be able to, you know, power that facility with cleaner electrons.
• 33:29
  Tim Montague: But Elon is absolutely, I would say, on the on the bleeding edge of how to prop up data centers quickly, and I'd like to see more data center developers doing solar and battery microgrids as the speed to power solution, but it's it's a both and. But it's it's hard to get generators. Period.
• 33:55
  Chris Lettman: Yeah. And the
• 33:57
  Tim Montague: and the other the other data point that is you know important for us to recognize is there are 200, approximately 230 gigawatts of data center applications out there now, interconnection applications, and the U.S. grid on on average, my understanding is, is only around 500 gigawatts. We have 1500 gigawatts maybe of of capacity, but we're humming around 500 gigawatts. So that addition of 230, let's just say it's 100.
• 34:25
  Tim Montague: You know, half of that. That's a lot of of addition to the to the U.S. grid. And so, you know, we need to clean that grid. That that that data center grid or build out has to be made cleaner. We need to be adamant about that, and the states are the are taking the lead on that as they should. We're not going to get federal leadership on that, I don't think. So, but we're digressing a little bit.
• 34:57
  Tim Montague: Does anyone have comments based on Clean Titan's comment about China and multi-junction?
• 35:03
  John Weaver: Come on, Phil or Phil, Tim, Phil. I was thinking about somebody I work with. Tim, why would you ask me if I want to make comments on multi-junction cells? That's really well. This shows you. Is
• 35:13
  Tim Montague: that a reference?
• 35:13
  Tim Montague: Is that a reference to perovskite cells? Yeah. Yeah.
• 35:16
  Tim Montague: Yeah. Which we're fond of. We're fond of here. I'm still in the very cautious camp. John is in the more optimistic camp. Where are you at on prov's guides, Chris?
• 35:32
  Chris Lettman: So I learned this a long time ago in my my pharmaceutical sales career. If it's not in the bag, you don't sell it and you don't talk about it. Chris, that's my answer.
• 35:42
  Chris Lettman: Person
• 35:42
  John Weaver: I know. Yeah, Chris has bills to pay. Chris, do you have kids? That's funny. No, that's the right answer. Chris is a module sales guy. You can't talk about stuff that may or may not even exist. Right. It's cool. It's cool shit.
• 36:01
  Tim Montague: What about what?
• 36:01
  Tim Montague: What I I had an informal conversation with Helene recently, and they they drove home that they only manufacture to order. They don't they don't make solar panels without somebody having signed on the dotted line. Is that true of many solar companies, Chris?
• 36:19
  Chris Lettman: Yeah, yeah, yeah.
• 36:19
  Chris Lettman: So that is
• 36:23
  Tim Montague: that is the standard practice.
• 36:26
  Chris Lettman: I don't know if it's a standard practice. I mean, Imperial Star Solar. You know, we're at two gigawatts currently. We'll be at four gigawatts by the end of this year. We're we're not manufacturing modules and then warehousing them and trying to sell them. You know, after. The fact, so we are essentially, you know, made to order. So it can be a challenging, a challenging situation for commercial solar guy for a one megawatt order.
• 36:54
  Chris Lettman: It's not impossible, and you know, John and I have had conversations before. I have many conversations with some of your listeners on smaller orders, it's just a coordination, if you will, of multiple orders. So, and that's what I I do daily is is coordinate that so that if I can line up everything close enough, I can get you know compiled orders together with a relatively close delivery dates, domestic components, what have you, same you know power bin class and everything, and then manufacture those those modules, multiple orders, and set out and deliver those modules accordingly. But yes, it is a challenge with that. Some of these companies, including ours, you mentioned the other company as well, manufacturing to order.
• 37:56
  John Weaver: So, what volume do you guys aim for, and then What subcomponents drive the volume that you guys have chosen?
• 38:09
  John Weaver: Because my guesstimate, and I again I've never manufactured, but I do run a business. My guesstimate is that you guys looked at various cliffs for pricing and purchase from your suppliers, and you said, "All right, we our smallest purchase price is of aluminum frames, and it's exactly 72 megawatts worth, and thus that's our purchase. Do you guys have like what drives your minimum capacity? Is it access, rental time, amount of time the machines run? You know, I'm wondering about that.
• 38:40
  Chris Lettman: Well, yeah, I mean, because I don't know what what component drives that? I I do know what's taken into account is the amount of downtime on the production line if we have to switch out machines to accommodate a specific power bin class, switching from like a 144 half cut cell to a 156 half cut cell module, switching you know, lines and everything. The size of the order has to be large enough to justify the downtime in switching the production lines. But that's why we're increasing our capacity so we can run multiple modules at any given time to accommodate different size modules to run simultaneously.
• 39:26
  John Weaver: You just said something interesting to me, to us, the switching out of machines. So do you have some person going in there with a jack, with a pallet-not a pallet jack, but a pallet jack? You know, a smart one, so it doesn't break the million-dollar machine, and like physically move it, and then you slide a new one into this line so that the the hardware can move smoothly. Does that occur?
• 39:47
  Chris Lettman: I don't. You know, I I haven't witnessed it myself personally, so I honestly don't know what the process is.
• 39:54
  Chris Lettman: But given our background and our our roots as being you know starting out as an OEM manufacturer, we're pretty darn efficient in doing it. That's what I can I I do know that part. I do know that part. The down, the downtime is pretty pretty minimal.
• 40:09
  John Weaver: So now I just
• 40:10
  Chris Lettman: haven't seen it.
• 40:12
  John Weaver: So in in exchange for me advertising Imperial Solar, we need a video of this switch out, mr. Letman. Okay, needs to be posted on the internet.
• 40:23
  Tim Montague: What is causing the switch out?
• 40:25
  Chris Lettman: I'll be there.
• 40:25
  Chris Lettman: I'll be there in two weeks. So when you when you switching production lines, certain certain pieces of equipment. Not mind you, not every not every piece of equipment along the line is going to need some sort of adjustment or modification or or completely. And I don't mean removing and replacing equipment. I'm just there's some sort of adjustment. But what is the technology
• 40:50
  Tim Montague: shift that causes major equipment to be swapped?
• 40:53
  Tim Montague: Cell size.
• 40:54
  John Weaver: He said like well one frame
• 40:56
  Chris Lettman: size frame size.
• 40:56
  Chris Lettman: So if you're going from a 144 to a 156, so your your your long side of the frame is changing, right, and your short side, the the number of cells right from 144 to 156 is changing. We do a lot of customized work right now. We're doing a lot of hail resistant glass modules. We're going from the standard two millimeter on the front, two millimeter on the back. We're doing some 3.2 on the front.
• 41:24
  Chris Lettman: We've done some 4.0 on the front. We recently did just over 90 megawatts of an Earthhos FRP frame module. So we're fiberglass resin. Polymer frame.
• 41:38
  Chris Lettman: It's it's a non conductive material that doesn't require grounding on on the frame
• 41:49
  John Weaver: for Earthos. So they have a custom frame so that they can run this wire and these weird clips through the frame.
• 41:55
  John Weaver: So they got holes in it that holds it down to the ground.
• 41:59
  Chris Lettman: Yeah,
• 41:59
  John Weaver: awesome. But
• 42:00
  Tim Montague: Earthos Earthos will use a traditional module as well, right? They don't have to have FRP frame, right?
• 42:07
  John Weaver: They can't have aluminum, but they definitely can't use a standard module.
• 42:09
  John Weaver: Their module runs have to be separate for the frame,
• 42:13
  Chris Lettman: right? Right. And and that glass requirement has to accommodate both the cleaning robot that they use, which is part of so is that the four millimeter
• 42:25
  Tim Montague: glass, the Earthos project?
• 42:26
  Chris Lettman: Yeah, yeah.
• 42:28
  John Weaver: Be careful. Are you allowed to talk about their project? Earthos is awesome, by the way. It's
• 42:32
  Chris Lettman: it's out there.
• 42:32
  Chris Lettman: Um, it's it's out there on on on LinkedIn. They're they're um yeah. It's out there. It's like 92 megawatts. It's it's in Texas, so we didn't have far to travel
• 42:42
  John Weaver: to 9292. megawatt Earthos project. Yes, good job, Earthos. And we
• 42:49
  Chris Lettman: and we supplied 100 of those modules from our Tomball factory. Oh,
• 42:55
  Tim Montague: cool! I didn't know that you you you supplied.
• 42:58
  Tim Montague: Okay, yeah. Now I'm now I'm getting the picture. I guess I did. Chris
• 43:02
  John Weaver: actually carries them. That's actually his job.
• 43:05
  John Weaver: One of my backgrounds. Are you
• 43:07
  Tim Montague: doing? Are you doing more with Earthos? Is there more happening? That's that's the concern about Earthos that everyone has. Is like where's the where's the where are the projects? It's
• 43:17
  Chris Lettman: yeah been very slow to see the light of day.
• 43:20
  Chris Lettman: That's not my that's not my baby.
• 43:23
  Tim Montague: Yeah.
• 43:24
  Chris Lettman: So I don't I don't know, but you know, stay tuned for that. Yeah, follow either one of the companies.
• 43:32
  Chris Lettman: You'll you'll you'll hear about it, I'm sure, with when that gets announced.
• 43:37
  Tim Montague: What do you mean, companies, Earthos or well
• 43:40
  Chris Lettman: between between Imperial Star and and Earthos? I mean, if any new projects get announced, you're going to hear you're going to hear it from one one of the two companies.
• 43:48
  Tim Montague: Yeah,
• 43:48
  Chris Lettman: you know, which we get.
• 43:51
  John Weaver: Sorry, Earthos did just announce a small one somewhere in California. Yeah, yeah. And just
• 43:56
  Tim Montague: to be clear, anyone listening who doesn't know what Earthos is, it's flat to Earth solar, so there's no racking. It just uses cabling to basically build a mesh of solar panels that lays flat on the ground, right? And it's very unique. It's an interesting concept. It is 35 tons less steel. Jim, their CEO, was on the show, and and that's a
• 44:17
  compelling statistic: 35 tons less steel per megawatt. Um, so it's a lot less steel. The question is, will the module survive being on the ground, and will the wiring get eaten by squirrels, or mice, or not? And nobody knows. The experiment is running, and I'm glad they're getting 100 megawatt project
• 44:41
  Chris Lettman: done. So interesting stuff.
• 44:44
  John Weaver: There's a. here's an Earthhos installation that just occurred. It's really I think the yeah you can see is that the one
• 44:56
  Chris Lettman: yeah
• 44:57
  Tim Montague: that's that's not 100 megawatts but no no no no no this is the much
• 45:01
  John Weaver: smaller one yes is
• 45:02
  Chris Lettman: that the one in Northern California?
• 45:05
  John Weaver: I believe so. Yes.
• 45:05
  John Weaver: Yeah. This one just hit the news, so I mean, obviously, but it's it's much smaller. It's
• 45:10
  Tim Montague: very clean looking, though. I like it a lot, and
• 45:13
  John Weaver: super dense.
• 45:14
  Tim Montague: And it is very land efficient, right?
• 45:17
  John Weaver: Yeah. Here's some quick stats on it that I did.
• 45:19
  John Weaver: Here's a post I had on. So per megawatt, 250. versus south facing, 300 percent greater than single. Panel efficiency though is lower output, 15 percent less versus a fixed, 35 percent less versus a tracker. Generation density though this is a super interesting number, kilowatt hours per acre, and this one I this is why I wanted to get to it for this post. Double essentially everybody else, and in the world of cheap modules, well maybe not in the U.S.
• 45:55
  John Weaver: because we don't have cheap modules, but in the world of cheap modules, this is super interesting, and this is a price per watt number. I'm not certain where I got the Earthos number, but it might be real. 70 cents versus a buck versus a buck 10.
• 46:09
  John Weaver: This is Earthos fixed and tracker. So it's real interesting project. There's one guy though who who commented here. So here, so Chameleon Athos. I have no idea who this is, but somebody who follows me, who chats with me on Blue Sky, compelling stats: never sign up for O and M, and this is what you just said, Tim. Putting aside vegetation and interior module replacement, yeah, how the hell do you get the middle?
• 46:35
  John Weaver: Rodent nesting is surely going to lead to wire damage, so mice and rats. Love spaces like this, so exactly what you said, Tim.
• 46:43
  John Weaver: But super interesting project that entertains me.
• 46:50
  Tim Montague: Yeah, it's it's it'll be good to see how that plays out. And then real quick, just because Clean Titans is asking some good questions, they they ask about 5b in Australia, which has an accordion-style racking. They pre they pre-assemble the racking in the factory. It folds up into containers and then just unrolls out on site. It's it's very interesting. We haven't seen them come to the U.S. I don't think yet, but conceptually, it's it's a good approach. I'm all about factory, you know, construction.
• 47:33
  Chris Lettman: Interesting.
• 47:34
  Tim Montague: It's very it's very analogous to Earthos. It's just that then that it's an east west. It's not going flat. It's going east west. But very high ground coverage ratio, and again, it's very similar to peg or jurchin or planted. There are several companies that do this very high GCR and low, low or on the ground, and you know, there's room for everyone.
• 47:58
  Tim Montague: There's
• 48:00
  Chris Lettman: yeah,
• 48:01
  Tim Montague: whatever generates the lowest cost of energy.
• 48:04
  Chris Lettman: Yeah.
• 48:06
  Tim Montague: But what else about solar modules should should we know before we wrap this up? It's a long weekend. I don't want to keep you guys much longer, but I really appreciate you being here, Chris. Yeah, absolutely. No,
• 48:17
  Chris Lettman: it was fun. I always enjoy seeing you guys, and I'm always on online listening you guys, and seeing what you guys are up to. No, there's always there's always something going on. I mean, stay tuned for some announcements from us later this year. You know, we're growing, as I mentioned. You know, our our expansion is taking place, and that's that's underway right now. I'll be heading out to the Tomball factory in about two weeks. I'll be spending a week out there. So that looking forward to that, you know, and you know our industry is always growing. We're always going to figure something out. You know, you you put up a wall, we're going to either climb over it, go under it, go around it, or knock it down and and just keep going. You know, might take us some time, but we'll figure it out. I would I wouldn't be in the industry for almost what going on 1819, years. If I didn't love what I'm doing, so and and John, you're the same way, and Tim, I know you are, and there's probably about 1000 more plus people that do the same thing for the same reasons.
• 49:19
  Chris Lettman: So we'll figure it out.
• 49:21
  Tim Montague: It's not going to stop us, right? Tariffs will not stop the solar industry. It's just it's it's just friction, and it's unnecessary. I I I think we do need to recognize that it's a global industry. I want U.S. manufacturing, but I want options for developers and asset owners to buy whatever is most cost-effective and time-effective, and and it remains to be seen if America can truly become a manufacturing powerhouse again. We were that in the 50s and 60s, and we've been waning since the late 80s, Early '90s,
• 50:05
  John Weaver: we're actually just weird little number. We're actually the second largest manufacturing country on earth, behind China. We are a superpower. It's just that we're not the superpower. We're amongst the superpowers. That's you know we we make a lot in the United States. Most of our product is very expensive, though. And is that
• 50:26
  Tim Montague: measured by GDP, John, or what is the measure there? It
• 50:30
  John Weaver: is. So the measure there, when I talk about just over a trillion dollars of of money from manufacturing, is that on a per pound basis, we're like 70 times more expensive than Chinese manufacturing. It's just that we do expensive manufacturing in the U.S.
• 50:44
  John Weaver: whereas Chinese does cost-effective. So we are the number two manufacturing company country on earth. We are a powerhouse. It's just that of
• 50:54
  Tim Montague: stuff, but not solar modules.
• 50:56
  John Weaver: No, not well. We are. We're we're we're maybe we're number three now. India has passed us, but we're the third largest on Earth, just that we're all comparing ourselves to somebody who made it. Is
• 51:06
  Tim Montague: that true? We're the third largest solar manufacturer in the world. I don't believe that.
• 51:11
  John Weaver: Oh, who's who's bigger?
• 51:14
  Tim Montague: Heck, it would be easy for Indonesia or Thailand to be bigger.
• 51:18
  John Weaver: None of them.
• 51:18
  John Weaver: Thailand, all of Thailand's modules. First solar is bigger than all of them. Any of those countries, first solar on their own is bigger than any country.
• 51:26
  John Weaver: Okay, well I learned
• 51:27
  Tim Montague: something new today. That's great. Number three, I'm happy with being number three.
• 51:31
  John Weaver: Used to be number two, and then the Indians, man, the Indian and Chinese. I love it. We got 2.5, 3 billion people fighting to make solar panels for us, dude. That's good for the species. Man, half the planet wants to dominate its solar panels. I'm, I'm bullish.
• 51:44
  John Weaver: I'm bullish on solar, dude.
• 51:49
  John Weaver: Sorry. End of story, Tim. You got to go, Chris. You got to go.
• 51:52
  John Weaver: Get back to work. Just open off on. All right.
• 51:56
  Tim Montague: Well, check out all of our content at CleanPowerHour.com. Tell a friend about the show. That's the best thing you can do to help others find this content.
• 52:02
  Tim Montague: We'll be back on september 18.
• 52:02
  Tim Montague: John, how can our listeners find you?
• 52:07
  John Weaver: CommercialSolarGuy.com.
• 52:07
  John Weaver: Also drinking beers with Tim every once in a while.
• 52:12
  Tim Montague: Yeah, we'll be at Vegas in November. I'll be there for four days, so come to Vegas and hang out with us. I I don't like Vegas, but I like seeing people, so it you know it's a necessary evil, and Chris Luttman, how can our listeners find you?
• 52:28
  Chris Lettman: Easiest way LinkedIn, Chris Lutman, imperialstarsolar.com, Star Solar. There you go.
• 52:41
  Tim Montague: All right, gentlemen, have a great weekend.
• 52:42
  Tim Montague: Thank you everyone for being here. And let's grow solar and storage. Take care.
• 52:46
  Unknown: All right.