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Last week, our Cents Coverage Analyst, Kamran, wrote a great introduction to the renewable energy industry (read it here). This morning, the “Year in Review” series looks back at the industry’s 2021 and what to look out for in 2022.

A special thanks to our Cents Coverage Analysts who have helped the Cents team put these write-ups together!

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The renewable energy space is filled with different subgenres, including electric vehicles (EVs), EV charging stations (EV chargers), rooftop solar and battery storage, and utility-scale solar and battery storage. In the last decade, we have seen a boom in the emerging and evolving market of “green energy.” Key advances in technology, manufacturing processes, and government support have set the stage for decades of growth to come in the renewable energy sector. Distributed energy resources (DERs) in the form of rooftop solar panels, solar farms, wind power, and battery storage are transforming the way both utilities and customers interact with the grid and will be a driving force in capital investments in the grid infrastructure moving forward. The cost per unit for consumers is continually becoming more and more attractive each year (supply chain issues aside), and this trend is expected to continue into the future.

On the transportation side, EVs have made even bigger strides in captivating the public with both their jaw-dropping performance and breakneck rates of innovation and incremental improvement. Furthermore, as energy production slowly moves toward renewable resources like solar+storage, it’s hard to imagine a future where the cost of fuel doesn’t favor EVs over internal combustion engines (ICE). And finally, the electric charging station network that serves as the backbone of the EV story has seen the massive necessary growth and innovation to make the whole story possible. What started as an overnight charge cycle has transformed into a sub-30-minute near-full charge and is expected to continue to get better each year.

In 2020-21, we saw peak euphoria in terms of valuation and expectations, followed by a brutal revaluation of some of the more speculative pre-production, pre-revenue companies. As Justin has mentioned in recent posts and live streams, the companies that are “priced to perfection” will likely be doomed to fail as they are inherently imperfect. In the EV and green energy space, investors may have already experienced some real pain from some of the high flyers that had little ground to stand on in terms of cash flows, revenues, or in the worst cases, the ability to even produce a product.

To start, we will go over some of the big/interesting names in EV manufacturing, EV charging stations, and utility/residential solar and energy storage companies. As time goes on, we will likely add/remove names and subgenres to the list based on moves in the markets, regulations, technologies, and the renewable energy space overall. Below are some of the players in the subgenres in question:


  • Tesla ($TSLA)
  • Rivian Automotive ($RIVN)
  • Lucid Group ($LCID)
  • Ford Motor Co ($F)

EV Chargers

  • Tesla ($TSLA)
  • ChargePoint Holdings ($CHPT)
  • Blink Charging ($BLNK)
  • Enphase Energy ($ENPH)

Residential Solar/Storage

  • Tesla ($TSLA)
  • Enphase Energy ($ENPH)
  • Sunrun ($RUN)

Utility-Scale Solar/Storage

  • Tesla ($TSLA)
  • Infrastructure and Energy Alternatives ($IEA)

While some of these companies are much more speculative, pre-revenue companies ($RIVN, $LCID), others provide a solid history of growth and execution ($TSLA, $ENPH, $CHPT, $F). In all four subgenres, there are companies that are expected to see major growth in both the top/bottom lines and – if bought at a reasonable valuation – could yield a sizable return over the next decade to their shareholders.

Yearly Performance (as of 12/30/2021)

Collectively, investing in renewable energy during 2021 has yielded mixed returns. While some benefited from the monstrous continued rally of $TSLA to stratospheric valuations, the majority of the stocks in the group are down double digits. The volatility in some of the renewable stocks can be seen as a function of their high retail ownership, lofty valuations, and a macro move in the markets to de-risk from smaller-cap growth names. A summary of the performances over the last year is shown in the chart below.

Renewable Energy News in 2021 – Recap

U.S. Federal Tax Credits

  • Solar (source)
    • 30% for systems placed in service by 12/31/2019
    • 26% for systems placed in service after 12/31/2019 and before 01/01/2023
    • 22% for systems placed in service after 12/31/2022 and before 01/01/2024
  • EV/Plugin-Hybrids (source)
    • Up to $7500 for EVs
    • Federal EV tax credits are not available for automakers who manufactured > 200,000 EVs, where after this goal is reached, the tax credit begins to decline each few quarters until it reaches zero. This includes companies like GM and Tesla.
    • The $1.75 trillion “Build Back Better Act” has a $12,500 federal EV tax credit within it.
    • The Build Back Better Act and its potential $12,500 EV credit still await passage following official Congressional approval. We will continue to follow its progress and update this page with the latest as it hopefully moves forward.
    • Examples of vehicles still available for federal tax credit are shown below.
    • State tax incentives
      • In additional to any federal credits, there are a number of clean transportation laws, regulations, and funding opportunities available at the state level.
      • For example, in the state of California, drivers can qualify for a $2,000-$4,500 rebate or a $5,000 grant (based on income) on top of any federal credit received. Furthermore, states like California offer priority driving lanes and parking spots for EV drivers who qualify. In New York, residents can receive either a $500 or $2,000 rebate depending on the base price of the EV purchased.
  • EV Charger Tax Credit
    • Up to $30,000 credit for commercial charging station
    • From IRS: For property of a character subject to an allowance for depreciation (business/investment use property), the credit for all property placed in service at each location is generally the smaller of 30% of the property’s cost or $30,000.

Corporate News

  • Tesla
    • Q2 (ended June): Produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0%, and exceeded $1B of GAAP net income for the first time in its history. Supply chain challenges, in particular global semiconductor shortages and port congestion.Successfully launched Tesla Vision in Q2, which was mainly possible due to ability to use data from over a million Tesla vehicles to source a large dataset.
    • Q3 (ended Sept): Best-ever net income, operating profit and gross profit. Operating margin of 14.6%, exceeding medium-term guidance of “operating margin in low-teens”. Operating margin reached an all-time high as we continue to reduce cost at a higher rate than declines in ASP (average sales price). Fremont factory produced more cars in the last 12 months than in any other year, with more expected room for continued improvement. Additionally, ramp continues in Gigafactory Shanghai and in building new capacity in Texas and Berlin. A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed.
      • Due to strong U.S. demand and global average cost optimization, Gigafactory Shanghai is the primary vehicle export hub. For all of Q3, China remained the main export hub.
    • For standard range vehicles, shifting to Lithium Iron Phosphate (LFP) battery chemistry globally.
    • California and Texas
      • Fremont factory produced over 430,000 vehicles in the last four quarters and Tesla believes there is room for continued improvement.
      • Model S production continued to ramp successfully in Q3
      • Model X production ramp and first deliveries have begun
      • Gigafactory Texas is progressing as planned.
    • Autopilot and Full Self Driving (FSD)
      • First customers downloaded FSD V9 Beta in July, prompting strong positive feedback from current users
      •  In October, Tesla started to expand its FSD City Streets beta to more drivers, based on demonstrated driver safety and attentiveness measured through their “Safety Score”.
    • Energy Storage
      • Announced a new Megapack factory with a capacity of 40 GWh, which compares to total Megapack deployments of 3 GWh in the last 12 months.
      • Powerwall deployments nearly doubled YoY.
    • Battery and Powertrain
      • The 4680 in-house cell project continues to progress.
  • Enphase
    • Enphase announces it will acquire ClipperCreek to integrate their EV charging stations into the Enphase ecosystem.
    • Enphase expands to Italy and Brazil.
    • Enphase launches Enphase Installer Network in Europe.
    • Enphase acquires Sofdesk Inc., integrating their Solargraf™ integrated software platform to offer the industry’s leading digital tools and services for critical pre-sales engagement design, quoting and work-flow management from any PC, tablet or mobile device. In addition, Sofdesk also offers Roofgraf™, a software product that enables roofing contractors to generate homeowner proposals using advanced machine learning technology.
    • Enphase acquires 365 Pronto, Inc. to provide Installers with an Operations and Maintenance Software Platform to Service Homeowners
  • Sunrun
    • Sunrun expands home solar and battery offerings to Miami, FL and San Antonio, TX.
    • Sunrun prices securitization of residential solar and battery systems, known as Sunrun’s solar-as-a-service (The securitization consists of a single-tranche of A- rated notes with a $201 million initial balance, representing an 80.0% advance rate. The notes priced at a yield of 2.46%, representing a spread to the benchmark swap rate of 135 bps.)
    • Edward Fenster (co-founder and Co-executive chairman) issues a statement regarding the Net Energy Metering (NEM) program in California.
      • Fenster summarizes, “While we appreciate the CPUC’s efforts to encourage battery adoption, the Proposed Decision is contrary to the state’s objectives of addressing climate change and eliminating frequent blackouts. We believe the solar-customer fixed fees averaging about $700 per year are in violation of the Public Utility Regulatory Policies Act of 1978 (“PURPA”). If adopted, the proposal will cost tens of thousands of jobs, especially among the thousands of solar companies unable to offer battery storage solutions due to supply shortages. The proposal is contrary both to what Californians have clearly said they want and to editorials in all major California newspapers. Finally, the proposed reduction to grandfathering for existing customers is an outrageous violation of trust and undermines the Commission’s stated interest in consumer protection.”

Industry Comps

Note: Some of the companies discussed in this write-up are newly public or undercovered by analysts, so there is little to no data on forward estimates.

2022 Outlook

Federal Spending and Legislation

  • Build Back Better (“BBB”) bill hit a roadbump this month which we’ve followed in Morning Cents. MacroHenry recently wrote about it on the ROIC Portal here. If it passed in 2022, it will likely feature some of the spending highlighted in the table below.
    • As it stands, the $1.85 billion bill (likely to be trimmed/changed) allocates $555 billion to “Clean Energy and Climate Investments”
    • The White House says that this program “will cut greenhouse gas pollution by well over one gigaton in 2030,” as well as reduce consumer energy costs, provide cleaner air and water, and create “thousands of high-quality jobs.”
  • The infrastructure deal already passed and is expected to start in 2022.
    • This bill includes renewable energy initiatives like $65 billion allocated to power infrastructure, $7.5 billion for EV infrastructure, and another $7.5 billion for electric buses/transit.


  • Expected continued stress on supply chains into 2022 affecting ability to meet customer demand and continue growth of factories and delivery rates.
  • The launch of the cybertruck is expected in late 2022.
  • Tesla is expected to reach 1.3 million deliveries in 2022 according to Webbush.
  • Berlin-Brandenburg Factory: Build-out remains on track with testing of equipment well underway.

Rivian, Lucid, and Ford

  • Rivian (RIVN) already has around 3,800 employees at its Normal plant. On Thursday, the company announced plans to hire an additional 800-1,000 employees in Normal by the second quarter of 2022. Rivian guiding to expand the production capacity of the Normal plant from 150,000 vehicles per year to 200,000 per year.
  • Lucid (LCID) is guiding to build 20,000 Lucid Air Sedans in 2022.
  • Ford (F) anticipates deliveries for its new F150 Lightning to begin in spring 2022.
  • Ford is investing $22 billion in electrification through 2025 as part of its plan to lead electrification in areas of strength.

What We’ll Be Watching

Renewable Energy Industry (All Companies)

  • We will continue to monitor changes to federal/state subsidies and tax credits that pertain to EV manufacturers and Solar/Battery manufacturers. Companies like Sunrun, whose profitability relies on federal/state tax credits, will be at higher risk than others.
  • We will continue to monitor the implementation of the infrastructure bill and the BBB bill as they pertain to EV and EV charging subsidies, residential/commercial solar/storage, as well as Utility scale solar/battery manufacturers/installers. Companies like ChargePoint, Blink Charging, and Enphase can all see tailwinds if they are directly or indirectly given access to government funding of widescale EV charging station investments by the government. Furthermore, companies like Tesla and IEA can indirectly benefit from billions of government spending on utility scale renewables.


  • Potential continued stress on supply chains can cause lingering issues on ability to meet customer demand and continue growth of both factories and product line.
  • China exposure can provide risks if governments clash with growth/profitability of Tesla. Watch any potential news on regulators views/comments on Shanghai factory.
  • Updates on AI will provide more context for when and what we can expect to see in terms of robotaxi and AI-as-a-Service to other companies.
  • The launch of the cybertruck is expected in 2022.

ChargePoint and Blink

  • Continue to monitor the infrastructure bill and BBB distributions and structure to see how it will impact top lines.
  • Acquisitions which either improve their charging tech, AI, user experience, or market exposure.
  • Potential partnerships/developments in advertising on new charging stations that feature large screens.

Rivian, Lucid, and Ford

  • Continue to monitor developments in their manufacturing capabilities, including new factories and their respective production rates/guidance.
  • Continue to monitor cars themselves, including build quality, range, user interface, lead times, and consumer sentiment.
  • Keep an eye on developments in potential self driving tech from Lucid and Rivian.
  • Chip shortages will continue to plague all car manufacturers, especially those who do not make their own chips, which is expected to last beyond first (or second) quarter of 2022.

IEA and Tesla

  • In regards to Utility scale solar/battery investments, continue to monitor the infrastructure bill and BBB distributions and structure to see how it affect demand for renewable projects.
  • Labor shortages will be a big headwind for major capital investment projects, but trade skill dependent jobs like those of utility scale solar may not see the same reductions in labor force participation rates. Continue to track macro moves in labor markets if possible by sector and commodity prices in general.

Sunrun and Enphase

  • Continue to monitor and research Sunrun’s securitization of its PPA’s/assets.
  • Potential acquisitions to improve user experience, applications, and interconnectivity of IOT devices like EV chargers and thermometers.
  • Monitor Enphase for acquisitions, particularly in micro grids IOT connected devices. Monitor how they implement ClipperCreek into their business (like potentially implementing vehicle-to-grid programs).
  • Monitor developments in the inverter, battery, and solar tech for potentially improved margins or synergy with each other.
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