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“We had enough assurance that the president was going to deal with them.”
The state’s senior senator, Thom Tillis, has been vocal about the need to maintain clean energy tax credits.
SpaceX has also now been dragged into the fight.
The company will use the seed funding to bring on more engineers — and customers.
Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.
The nonprofit laid off 36 employees, or 28% of its headcount.
The company managed to put a positive spin on tariffs.
The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”
“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.
Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.
But — and here’s where things get interesting — the company also offered a positive spin on tariffs.
In a slide presentation to investors, the company said that “sustained, severe tariffs may drive the country to a recession.” Sounds bad, right?
But no, not for Sunrun. A recession could mean “lower long term interest rates,” which, since the company relies heavily on securitizing solar leases and benefits from lower interest rates, could round in the company’s favor.
In its annual report released in February, the company mentioned that “higher rates increase our cost of capital and decrease the amount of capital available to us to finance the deployment of new solar energy systems.” On Wednesday, the company estimated that a 10% tariff, which is the baseline rate in the Trump “Liberation Day” tariffs, could be offset with a half percentage point decline in the company’s cost of capital, although it didn’t provide any further details behind the calculation.
Even in the absence of interest rate relief, a recession could still be okay for Sunrun.
“Historically, recessions have driven more demand for our products,” the company said in its presentation, arguing that because their solar systems offer savings compared to utility rates, they become more attractive when households get more money conscious.
Sunrun shares are up almost 10% today, as the company showed more growth than expected.
For what it’s worth, the much-ballyhooed decline in long-term interest rates as a result of Trump’s tariffs hasn’t actually happened, at least not yet. The Federal Reserve on Wednesday decided to keep the federal funds rate at 4.5%, the third time in a row the board of governors have chosen to maintain the status quo. The yield on 10-year treasuries, often used as a benchmark for interest rates, is up slightly since “Liberation Day” on April 2 and sits today at 4.34%, compared to 4.19% before Trump’s tariffs announcements.
Meta and Microsoft both confirmed plans to invest heavily in AI infrastructure.
Big Tech said this week that it’s going full steam ahead with building out data centers, and the power industry loves it. Since Microsoft and Meta reported their earnings for the beginning of the year on Wednesday, including announcements either reaffirming their guidance on capital expenditures or even increasing it, power sector stocks have jumped.
Shares of Vistra, which has a fleet of power plants including nuclear, natural gas, coal, and renewables, are up almost 7% in early afternoon trading. Constellation, one of the largest nuclear producers in the country, is up 8%. GE Vernova, which makes in-demand gas turbines, is up 4%. Chip designer Nvidia’s shares are up 4%.
Microsoft, which has been dogged by analyst and media reports that it’s canceling some data center builds or slowing down its overall pace of deployment, reaffirmed its previous guidance that it would spend around $80 billion on data centers for its fiscal year. The affirmed guidance, Dan Ives of Wedbush Securities wrote in a note to clients, came “put to rest” the earlier chatter.
Meta, meanwhile, raised its guidance for capital expenditures from a range of $60 billion to $65 billion to at least $64 billion and as much as $72 billion.
Looking at these hyperscalers, as well as the data center company CoreWeave, Morgan Stanley estimates 38% annual growth in capital expenditures for cloud computing in 2025, to $392 billion — a $29 billion or 7 percentage point jump from its estimate a month ago. This increased spending will be a “boost to AI capex/power enablers.”
These companies, which make up the larger artificial intelligence supplier complex, were some of the most affected by Donald Trump’s Liberation Day tariffs announcements, as energy production is highly sensitive to the global macroeconomy. (Not to mention power plants and power plant suppliers are themselves often major purchasers of foreign goods and commodities.) GE Vernova, for example, told investors last month that it would take a several hundred million hit thanks to tariffs.
But in the topsy turvy world of post “Liberation Day” markets, these companies’ investors are optimistic about the future again.
Microsoft chief executive Satya Nadella told analysts on the company’s earnings call that “we will be short power” when it comes to building out data centers, and that “I need power in specific places so that we can either lease or build at the pace at which we want.”
How that power will be provided is one of the key questions of the energy transition.
Big tech companies tend to have some kind of commitment to using renewable or low-carbon power, and are among the country’s largest voluntary purchasers of non-carbon-emitting power. Microsoft, for example, is helping pay for the planned restart of one unit of the Three Mile Island nuclear plant by agreeing to buy its power output.
There is a tight market for all sorts of power equipment right now, especially gas turbines, which will remain in short supply well into the back end of this decade based on current production plans. Renewable developers such as NextEra argue that solar, wind, and batteries make the most sense to quickly meet the needs of power-hungry data center developers and utilities because of how quickly and cheaply they can be built.“We should be thinking about renewables and battery storage as a critical bridge to when other technology is ready at scale, like new gas-fired plants,” NextEra chief executive John Ketchum said on an earnings call late last month, reversing the typical line that natural gas can serve as a “bridge fuel” to a low carbon future. “Gas turbines are in short supply and in high demand.”
In the meantime, load growth from data centers could push up power prices across the board. So even if you can’t build a new gas plant anytime soon, the one you’re operating that’s powering a data center right now is as good as gold.
