logo
Zero: Labor Shortages Are Holding Back Electrification

Zero: Labor Shortages Are Holding Back Electrification

Bloomberg04-06-2025

Western economies need to electrify and fast, but where are all the skilled workers going to come from to install the heat pumps, solar panels and batteries needed? This week on Zero, Akshat Rathi talks with Olivia Rudgard about the shortage of labor in electrification industries, and why some experts are calling it an 'existential' crisis. This is the second episode in Bottlenecks, a new series exploring the lesser known obstacles standing in the way of our electrified future.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Sunrun Stock (RUN) Plummets 40% as U.S. Senate Targets Solar Credits
Sunrun Stock (RUN) Plummets 40% as U.S. Senate Targets Solar Credits

Yahoo

time40 minutes ago

  • Yahoo

Sunrun Stock (RUN) Plummets 40% as U.S. Senate Targets Solar Credits

The solar sector is reeling after the release of the Senate Finance Committee's proposed tax-and-spending bill, which targets renewable energy sources. Sunrun (RUN), a major player in residential solar, was particularly vulnerable to the news, shedding almost 40% of its valuation in the past week. Having traded as high as $13.20 per share in late May, the stock is now languishing at ~$6 following this week's news. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter In my view, the proposed incentive cuts pose a significant threat to Sunrun's viability, particularly given its ongoing inability to generate profits despite these benefits being in place. Without that financial support, a turnaround seems even less likely, leaving me firmly bearish on the stock. For those unfamiliar, Sunrun primarily operates under a third-party ownership (TPO) model. Instead of homeowners purchasing solar systems outright, Sunrun installs and owns the panels, allowing customers to either lease the system for a monthly fee or pay for the electricity it generates at a fixed rate. This model has gained popularity because it enables homeowners to adopt solar with little to no upfront cost. Thanks to the Inflation Reduction Act (IRA), which extended and enhanced the federal Investment Tax Credit (ITC), Sunrun, as the system owner, can claim a tax credit typically worth 30% of the system's cost. This significantly lowers installation expenses and enables Sunrun to pass those savings on to customers, making the model more financially appealing. The Senate Finance Committee has recently proposed eliminating solar tax credits in favor of supporting other energy sectors, such as geothermal, nuclear, and hydropower. If passed, this legislation would require Sunrun to absorb the full cost of its solar systems, which would inevitably be passed on to customers. The result would be a significant squeeze on margins and an acceleration of the company's ongoing cash burn. Senate Republicans are reportedly aiming to pass the bill before the July 4th holiday. Upon closer examination, this appears to mark a broader shift in U.S. energy policy away from residential solar and wind. The market has already begun to react, with notable declines in Sunrun's peers, including Enphase Energy (ENPH) and SolarEdge Technologies (SEDG), underscoring the potential sector-wide impact. There's still hope for solar advocates. The proposed bill faces strong resistance from Democrats, particularly from the original architects of the clean energy tax credits included in the Inflation Reduction Act. The clean energy industry is also mounting an aggressive lobbying effort, warning of potential job losses and higher energy costs. And while the bill is led by the GOP, not all Republicans are aligned in support. The legislation still has a long way to go. It narrowly passed the House in May with a 215–214 vote, and the Senate draft was just introduced on June 16. While the Senate version includes more extended phase-out periods for some clean energy incentives, it still calls for the elimination of Section 48E credits, which are key to residential solar leases. A Senate vote is expected soon, and if proponents can secure a simple majority, the bill could advance to President Trump's desk. For context, the current Senate makeup is 53 Republicans, 45 Democrats, and two Independents. In the near term, Sunrun could experience a temporary boost in demand as customers rush to take advantage of tax credits before they're phased out. However, expectations for 2026 and beyond point to a sharp and sustained decline in demand. A closer look at Sunrun's financials reveals troubling signs. The company has consistently reported negative operating cash flow, with a loss of over $100 million in Q1 2025 and nearly $800 million in total for 2024, highlighting the financial pressure it faces even before potential incentive cuts take effect. Meanwhile, Sunrun, in its pursuit of growth opportunities, is becoming increasingly leveraged, increasing its risk profile should things take a turn for the worse. Moving forward, ongoing tariff pressures and the disappearance of incentive credits spell long-term trouble for solar installers. Analyst sentiment on Sunrun (RUN) stock is mixed. The stock carries a consensus Hold rating, based on seven Buy, six Hold, and four Sell ratings over the past three months. Despite the cautious stance, RUN's average price target of $10.44 suggests significant upside potential—about 70% from current levels. Mizuho analyst Maheep Mandloi has a Buy (Outperform) rating on RUN with a price target of $16. He notes that the House's 'One Big Beautiful Bill' won't derail grandfathered credits until 2028. He also believes that demand for renewable energy will remain high without government incentives because it is 'still the cheapest option.' However, not everyone shares Mandloi's bullish outlook. Jefferies analyst Julien Dumoulin Smith downgraded RUN to Sell (Underperform) with a price target of $5. Due to the same legislation, Smith notes that Sunrun is exposed to 'both near- and long-term headwinds.' He believes that the market is underestimating 'how consequential the 'One Big Beautiful Bill Act' is uniquely on residential solar.' The so-called 'One Big Beautiful Bill' poses a major threat to solar companies like Sunrun. The company's growth has heavily relied on tax credits tied to third-party ownership (TPO) systems. Even with those incentives, Sunrun has struggled to achieve consistent profitability. Without them, serious doubts emerge about its ability to maintain its current business model. If the bill passes, Sunrun—and others in the space—will likely be forced to pivot toward new strategies or market segments. That said, the bill could still fail, or be amended in ways that lessen the impact on Sunrun. Additionally, the proposed phase-out period provides a window for the company to adjust. From my perspective, I'd prefer to stay on the sidelines until there is more regulatory clarity. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Quiet town beating the rest of Australia in big national race: 'Saving $6000 annually'
Quiet town beating the rest of Australia in big national race: 'Saving $6000 annually'

Yahoo

time5 hours ago

  • Yahoo

Quiet town beating the rest of Australia in big national race: 'Saving $6000 annually'

As Australia pushes to cut carbon emissions and reduce household bills, electrification has emerged as a key focus — from the cars we drive to the way we power our homes. But while rooftop solar is booming, the transition to electric vehicles (EVs) and fully electric homes remains modest. Nationally, just 2.7 per cent of vehicles on Australian roads are electric, according to the Electric Vehicle Council. While over 10 per cent of new cars sold are now electric, that figure still trails the UK (17 per cent), Germany (19 per cent) and Norway (over 80 per cent). At the household level, gas is still widely used, and many homes are poorly equipped to make the switch. Advocates argue the future of EVs in Australia looks bright, but in a quiet corner of Victoria's Bass Coast, one community has already quietly surged ahead, offering a glimpse of what a fully electrified future could look like. At The Cape, a purpose-built sustainable estate in Cape Paterson, more than 30 per cent of households now own an electric vehicle. Every home is powered without gas, using rooftop solar and passive solar design principles, and achieves an average eight-star NatHERS energy rating — well above the national average of 6.2 stars for new builds. "More than 30 per cent of households have an EV," Director and resident Brendan Condon told Yahoo News Australia. "Homes are 100 per cent electric with no gas connections, powered by rooftop solar, and designed using passive solar principles. This community-wide commitment to electrification, from the grid to the garage, makes [us] a national front-runner and an insight into the future of a fully electrified Australia." The estate comprises 230 residential lots, with about 140 homes completed and over 250 residents. More than 95 per cent of EV charging is done at home, helping cut costs and reduce strain on the wider grid, particularly in a regional area where public charging infrastructure remains limited. "Even in regional areas, most trips are local or to nearby centres like Wonthaggi and Inverloch, which are well within EV range," Condon said. "A round trip to Melbourne is under 300 kilometres, which is easily achievable by numerous long-range EVs now on the market." The Cape also challenges the notion that electric living is the preserve of wealthy inner-city enclaves. While upfront costs are still a barrier, residents claim long-term savings. Condon says homes that pair solar with energy-efficient design and an EV can save upwards of $6,000 annually. Once fully built, the community is projected to save more than $1 million a year. "These are 'super bill-busting' homes," he said. "That money stays in household budgets and bank accounts, which is significant in the current cost-of-living crisis." Experts agree that electrifying homes and vehicles is essential to meeting emissions targets. The Climate Council estimates that switching to solar and electric could save households $3,000 to $5,000 a year and cut domestic emissions by up to 42 per cent. It also supports energy independence and grid resilience by decentralising power generation. Still, challenges remain. Critics point to the cost of EVs and the difficulty of retrofitting older homes. There are also concerns about supply chains, mineral dependency for batteries, and whether the national grid is ready for widespread electrification without major upgrades. Empty Bunnings shelves sparks major change theory Plea to electric car owners ahead of expected 'hottest summer on record' Driver spots Tesla in shocking highway act: 'Licence revoked' But Condon believes communities like his show what's possible when sustainability is designed from the ground up. With the federal government introducing a New Vehicle Efficiency Standard in 2025 and aiming for net-zero emissions by 2050, more neighbourhoods may follow suit. "[We're] a real-world blueprint," he said. "It shows how communities can decouple from expensive fossil fuels and thrive — creating zero-emissions, climate-resilient neighbourhoods that aren't just imagined, but built." Love Australia's weird and wonderful environment? 🐊🦘😳 Get our new newsletter showcasing the week's best stories.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store