The roiled solar power market shows how Trump’s tariffs can disrupt an industry

The roiled solar power market shows how Trump's tariffs can disrupt an industry

But when tariffs are unleashed, as businesses are learning, things don’t always go as expected. Therein lies a cautionary tale of the uncertainty in store for other industries as the Trump administration’s latest tariffs took effect Friday against hundreds of Chinese imports valued at $34 billion, including semiconductors, farm machinery, medical devices and aircraft parts.[…]

Prices on solar panels did rise last summer as the Trump administration publicly considered the tariffs, mostly on imports from China and other Asian countries. That caused U.S. companies to scramble to purchase as many foreign panels as they could to beat the looming duties.

The higher prices led two U.S. manufacturers to say they’d boost production. At least three foreign manufacturers have made plans to open American factories.

But then, on May 31, China surprisingly slashed its solar subsidies and incentives. The sudden reduction in demand led to a global oversupply of solar panels that further fueled the price drop that began after the tariffs took effect in February.

The upshot: Prices in the United States now are back where they were last summer and worldwide prices could tumble as much as 35% this year, analysts say.The roiled solar power market shows how Trump\'s tariffs can disrupt an industry

“We’re still really reeling from the impact,” Bernadette Del Chiaro, executive director of the California Solar & Storage Assn., said of the tariffs. “Almost 50% of the roiling and disruption comes from just the unknown and the uncertainty.”

The experience over the last year with the U.S. solar tariffs shows that the straightforward goal of boosting domestic manufacturing often conflicts with the real-world flow of goods. Once you launch a trade war, it’s very hard to control the consequences.

That was on full display recently when Harley-Davidson Inc., said it would move some production abroad to avoid tariffs that the European Union slapped on U.S. motorcycles. Those levies were in response to Trump administration tariffs on imported steel and aluminum that were designed to boost American manufacturing.

Solar industry executives and workers are feeling whipsawed as they also deal with the fallout from the tariffs on steel and aluminum, materials that are used in the racks that hold solar panels on rooftops and on large solar farms.

“There’s no question it’s had an impact on the size of the American solar market,” said Tom Werner, chief executive of SunPower Corp., a San Jose-based company that makes and installs solar panels.

New solar power generating capacity declined last year in California for the first time since 2009, according to state figures. And Bloomberg New Energy Finance, which uses proprietary data to analyze industry trends, recently estimated the global solar market could shrink this year for the first time ever.

farm machinery, medical devices and aircraft parts.The roiled solar power market shows how Trump\'s tariffs can disrupt an industry

“There’s just a lot of demand that could have happened that is not going to ultimately be realized because of these tariffs,” said Cory Honeyman, associate director of the U.S. solar research practice at GTM Research, a market analysis and advisory firm. The tariffs led the firm to reduce its forecast for additional U.S. solar generating capacity during 2018-2022 by 11%.

The tariffs and overall trade tensions almost certainly were factors in the decision by China’s leaders to cut its state support for solar energy development.

China had been furiously pumping money into green energy projects, accounting for nearly half of the $280 billion invested in renewable energy projects in 2017, according to Bloomberg New Energy Finance. China added 50 gigawatts of solar power last year, accounting for more than half of all global solar photovoltaic module installations. The country now has a kilometer-long highway paved with solar panels, the world’s largest floating solar farm, and panels atop countless roofs in villages and cities.

“Even a pig will fly if it’s hit by a tornado,” said Liu Shisheng, 25, using a Chinese expression to describe how his fledgling 20-employee business in central-eastern Wenzhou had soared by installing solar panels at homes and businesses.

In April 2017, bankrupt Georgia solar panel manufacturer Suniva Inc. formally asked the U.S. International Trade Commission to impose tariffs on inexpensive imported panels that the company said had crushed its business. The petition was later joined by SolarWorld Americas Inc., an Oregon company, after its German parent — a leading European solar panel manufacturer — also sought bankruptcy protection.

A commission investigation found that the mostly Chinese-made panels, which fueled the solar boom in the United States, were priced artificially low and had severely reduced American solar-panel manufacturing. It recommended that the United States impose tariffs. Trump agreed, and in January, the administration announced hefty levies: 30% the first year, declining gradually to 15% when they end after the fourth year. They took effect Feb. 7.

About 613 megawatts worth of solar panels were imported on average per month over the first half of last year, according to the U.S. Energy Information Administration. That jumped about 75% to nearly 1.1 gigawatts a month for the last six months of 2017 as the International Trade Commission considered and then ruled on the tariff case.

After what he called a “banner” 2016 for its work building large-scale solar generating facilities for utility customers, McCarthy Building Companies saw business tail off in 2017 as some clients decided to put projects on hold, he said. That led the company to cut by roughly half the number of people it employs for solar installations, to about 1,000.

Pine Gate Renewables, a solar project developer in North Carolina, also wasn’t large enough to stockpile solar panels, Chief Executive Zoe Hanes said. The company will complete only about half of the 400 megawatts worth of solar projects it had planned to finish this year. Because of that, Pine Gate Renewables didn’t hire the additional 30 people it had planned to add to its 85-person workforce this year.

The Solar Energy Industries Assn., a nationwide trade group, had estimated the tariffs would cost 23,000 jobs in the United States in their first year — a combination of layoffs and positions that weren’t added to an industry that employs about 250,000 people. So far, it’s tallied about 8,000 jobs since the tariffs took effect, said spokesman Dan Whitten.

Prana Power acquires 108MW Mexican C&I solar park from Dhamma Energy and Sunpower

Prana Power acquires 108MW Mexican C&I solar park from Dhamma Energy and Sunpower

Mexican asset manager Prana Power has acquired a 108MW Mexican solar project from Madrid-based Dhamma Energy and US-headquarted firm Sunpower, who partnered on developing the project since 2015.

This ready-to-build PV system, located in the Mexican state of Guanajuato, holds private power purchase agreements (PPAs) under a self-consumption scheme in place prior to Mexico’s energy reform. This scheme offers advantages to solar projects such as reduced transmission rates and the use of the public grid under the energy bank scheme. This scheme also allows the use of electricity from the solar park at any time of the day within a period of 12 months.

This is the second solar project under the self-consumption scheme for which Dhamma Energy has transferred the rights in the last few weeks in Mexico, after it recently closed the sale of a 37MW solar project in the state of San Luis Potosí.

Cofounder of Dhamma Energy, Philippe Esposito, said: “Mexico is one of the most dynamic markets for corporate solar PPAs. We are very pleased to participate in one of the most advanced large-scale self-consumption solar projects currently in the country.”

In Mexico, Dhamma Energy has a pipeline of over 1GW of solar projects, of which over 300MW already hold all the permits required to begin construction.

Enphase Says Share Price Headed ‘to the Moon’ With SunPower Microinverter Acquisition

Enphase Says Share Price Headed ‘to the Moon’ With SunPower Microinverter Acquisition

Enphase says it is poised for profitable growth. A month after announcing its surprise acquisition of SunPower’s microinverter business, Enphase said the boost to its AC module partnerships will buoy its bottom line. After a scary dip in share prices over the past few years and the risk of […]

A month after announcing its surprise acquisition of SunPower’s microinverter business, Enphase said the boost to its AC module partnerships will buoy its bottom line.

After a scary dip in share prices over the past few years and the risk of a Nasdaq delisting* last summer, the acquisition marks an upward trajectory that will continue, according to Enphase Vice President of Marketing and Pricing JD Dillon, during an interview at Intersolar North America.

“The amount of profitable growth in front of the company, we know how to do it, the path is clear,” he said, adding that the share price is “going to go up — higher. Quote me on that. To the moon!”

The acquisition of what could be viewed as a competitor, from a company that looked to be in a tricky financial spot, took many in the industry by surprise.

Historically, Enphase products were not powerful enough to work with SunPower products. Then SunPower’s 2014 acquisition of microinverter company SolarBridge meant that that company’s products became part of SunPower’s vertically integrated line of AC modules. Meanwhile, Enphase went on to work on other AC module partnerships with companies like LG, JinkoSolar and Solaria.

But Greentech Media had heard rumblings that the two companies were working to make a collaboration official. A former Enphase employee who asked to speak anonymously said the growth of SunPower’s market share, as well as new management at Enphase — including some SunPower alums — shifted the company’s position on a partnership.

Enphase’s Dillon said that though conversations had been ongoing, the business case for an acquisition clarified in November. Because the two companies share a vision about the importance of AC modules and both use 25-year warranties, working together made sense, Dillon said.

“A quality and reliability mindset and a belief in the business future of AC modules can overcome any past animosity,” Dillon said. “In the end, business reasons trump all.”

It also didn’t hurt that at the beginning of last year SunPower investor TJ Rodgers dropped $10 million on Enphase. Dillon said the overlap in staff between the two companies is “no mystery.” While he added that it didn’t push the sale, prior working relationships certainly made it more of a natural fit.

As Greentech Media previously reported, SunPower modules will no longer include SolarBridge microinverters. Dillon said the transition from that technology to Enphase products should start in Q4 of this year, after the sale closes, and be complete by Q1 2019. Enphase will develop a completely custom product for integration into SunPower modules.

Enphase won’t ditch SolarBridge’s technology altogether. The company brings a line of over 140 patents and some could be integrated into Enphase’s products, though Dillon said decisions on which to include have not been made.

“It’s more choices for our engineers,” he said. “If you think of patents…as a buffet, our engineers will have more and different things to eat at the buffet when they create a new technology.”

Dillon also said there are no planned changes for Enphase’s existing partnership with SolarWorld, which SunPower acquired in April.

Recently Enphase seems to be clawing its way back to a comfortable position. In its Q1 2018 earnings, the company reported its 2017 net loss decreased from the year prior and that its revenue was up 11 percent from the same quarter in 2017.

Dillon paints the future as rosy. He said he’s not concerned about Trump administration solar tariffs; all he sees is growth.

“There are tremendous opportunities for growth, and we know what they are,” he said, “The stock has to go up, just math tells you that.”

With its next-generation products, the IQ 8 and Ensemble, Enphase will focus more heavily on the off-grid and grid-agnostic market, where Dillon said appetite is growing tremendously. He predicts that more customers investigating those options will bring a “sea change” in the solar market. Enphase plans to get ahead of it.

As for further consolidation in the inverter space, Dillon said he hopes the landscape doesn’t tighten too much, lest it restrict innovation.

“The market is large enough that there needs to be a healthy number of different companies competing in different niches and ways of skinning the cat,” said Dillon.

But, he added, motioning to the trade show floor, “Our industry is an acquiring industry. If you look around, a whole bunch of these folks will probably buy each other.”

SunPower to Announce Second-Quarter Results on July 30, 2018

SunPower to Announce Second-Quarter Results on July 30, 2018

SAN JOSE, Calif., July 17, 2018 /PRNewswire/ — SunPower Corp. SPWR, -3.34% will discuss its second-quarter 2018 financial results on a conference call on Monday, July 30, 2018 at 1:30 p.m. Pacific Time. The call-in number is (866) 410-5449 passcode: SunPower, or the webcast can be accessed from SunPower’s […]

The earnings press release and supplemental financial information will be available on SunPower’s website at http://investors.sunpower.com/events.cfm at 1:05 p.m. Pacific Time on July 30, 2018.

As one of the world’s most innovative and sustainable energy companies, SunPower SPWR, -3.34% provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower’s more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, and North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.

France Could Propel a Decade of Growth for Total and SunPower

France Could Propel a Decade of Growth for Total and SunPower

Total ‘s ( NYSE:TOT ) main business today may be oil and gas, but it’s making aggressive moves to become a leader in renewable energy as well. Late last week, CEO Patrick Pouyanne said Total was ready to build 10,000 megawatts (MW) of solar power plants in France, enough to power 1.64 million homes, over the next 10 years. […]

If it follows through on that plan, Total will become one of the biggest renewable energy developers among the energy industry’s old guard. And it could help its affiliate SunPower Corp. (NASDAQ:SPWR) along the way.France Could Propel a Decade of Growth for Total and SunPower

France has launched an initiative known as #PlaceAuSoleil, a series of 30 measures intended to make more areas available for solar, create a viable economic model for investors in solar projects, and provide for more rooftop solar tenders. The wide-ranging effort should support the solar industry broadly.

For example, late last year, France announced it was increasing the volume of solar tenders it would bid out annually from 1,450 MW to 2,450 MW through 2019. The combination of Total and SunPower has dominated those tenders so far, so an expansion of the market should be great news for them. The two companies won more than 500 MW of projects in 2017, about a third of the tenders auctioned off, so they’ll likely be leading contenders for further projects.

The #PlaceAuSoleil initiatives are expected to accelerate solar deployment in France toward a target of 20,000 MW by 2023 — up from 8,300 MW installed today.

Many big oil companies have been criticized for making relatively small bets on renewable energy, but Total is more aggressive on this front than most of its peers. To deploy 10,000 MW in 10 years will require about $10 billion of investment, or $1 billion per year — more than 5% of the company’s total capital expenditures.France Could Propel a Decade of Growth for Total and SunPower

The bigger impact could be on SunPower, which is majority owned by Total. The company expects to deploy 1,500 MW to 1,900 MW in 2018, so assuming its Total’s development partner, it would benefit greatly from an average of 1,000 MW of additional annual demand for the next decade.

SunPower’s high-efficiency solar panels have also been key to Total’s distributed-generation project wins in France, which include residential and commercial rooftops, and small, ground-mounted systems. Because such panels squeeze more energy out of each square meter of solar deployed, they lower the cost of electricity from solar in high-cost locations.

The impact of Total’s plans could be big financially as well. SunPower generates between $1 per watt from a power plant development to about $2 per watt in residential developments, with gross margin generally hovering in the mid-single digits in power plants and the low-20s for residential. Gross profit from France if 1,000 MW of solar are sold could be up to $400 million annually.

Solar is booming in France

Few countries are making as concerted an effort to expand their solar industries as France. With tenders there expanding this year, and the new #PlaceAuSoleil initiative driving even more investment in the industry, Total and SunPower have a lot of potential gains ahead.

Total is not on our top “Buy” list, but these 10 stocks are
Investing geniuses David and Tom Gardner just released their best stocks to buy now — and it could pay to listen. Especially when you consider their average stock pick is up 353% vs. a mere 81% for the S&P 500.

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Options Traders Expect Huge Moves in SunPower (SPWR) Stock

Options Traders Expect Huge Moves in SunPower (SPWR) Stock

 Investors in SunPower Corporation SPWR need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 20, 2018 $11.00 Put had some of the highest implied volatility of all equity options today.[…]

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for SunPower shares, but what is the fundamental picture for the company? Currently, SunPower is a Zacks Rank #3 (Hold) in the Solar industry that ranks in the Top 12% of our Zacks Industry Rank. Over the last 30 days, no analysts have increased their earnings estimates for the current quarter, while one analyst has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from a loss of 26 cents per share to a loss of 30 cents in that period.

Given the way analysts feel about SunPower right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

 

What Does SunPower Corporation’s (NASDAQ:SPWR) Share Price Indicate?

What Does SunPower Corporation’s (NASDAQ:SPWR) Share Price Indicate?

SunPower Corporation ( NASDAQ:SPWR ), a semiconductor company based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is […]

What’s the opportunity in SunPower?

The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 2.43x is currently trading slightly below its industry peers’ ratio of 2.61x, which means if you buy SunPower today, you’d be paying a relatively reasonable price for it. And if you believe SunPower should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because SunPower’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from SunPower?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. SunPower’s earnings over the next few years are expected to increase by 87.21%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.What Does SunPower Corporation’s (NASDAQ:SPWR) Share Price Indicate?

What this means for you:

Are you a shareholder? It seems like the market has already priced in SPWR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at SPWR? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SPWR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for SPWR, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on SunPower. You can find everything you need to know about SunPower in the latest infographic research report. If you are no longer interested in SunPower, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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SunPower’s solar panels to power the first piloted stratospheric solar flight

SunPower’s solar panels to power the first piloted stratospheric solar flight

SolarStratos (prototype pictured) aims to reach the stratosphere more than 80,000 feet above Earth using SunPower solar technology /SunPower SunPower has joined the “Mission SolarStratos” expedition as the exclusive solar cell provider for its aircraft. […]

Known as one of the world’s most innovative and sustainable energy companies headquartered in California’s Silicon Valley, SunPower has a pioneering legacy of powering unique solar projects.

Within the next two years, SolarStratos is expected to be the first solar-powered plane to soar above the Earth’s troposphere and into the stratosphere – flying twice as high as a commercial airliner’s typical cruising altitude – without a drop of fossil fuel.

SunPower® Maxeon® solar cells were selected for SolarStratos aircraft’s because they are highly efficient, durable, lightweight, and about as thin as a human hair.

On the next generation SolarStratos plane, SunPower’s 24-percent efficient cells will be incorporated into the wings and horizontal stabilizer to power an electrical engine and charge a 20-kilowatt-hour (kWh) lithium-ion battery for energy supply when the sun is out of sight.

SunPower, First Solar close on sale of yieldco 8point3

SunPower, First Solar close on sale of yieldco 8point3

Pixabay The story of yieldco 8point3 Energy Partners is coming to a conclusion. Born as the result of a tryst between two large solar companies that never really saw eye to eye and had other priorities, it experienced a promising but ultimately troubled youth, and is now wed to wed to a conservative, stable asset manager. Any rumors that it has moved to the suburbs have not been substantiated.[…]

Yesterday SunPower and First Solar closed on the sale of their respective shares of 8point3 Energy Partners to Capital Dynamics, as revealed in SEC filings. First Solar received $240 million from the sale, and SunPower $360 million.

The sale of 8point3 comes as both companies have moved away from project development and back to their original mission of manufacturing. Both First Solar and SunPower are expanding their manufacturing in different ways, which inevitably burns through cash, although the circumstances of each are different.

First Solar is currently in the midst of a billion-dollar retooling of its factories to produce the new, large-format Series 6. Along with this, it is expanding its capacity at two new factories in Vietnam and a new 1.2 GW plant in Ohio, which broke ground earlier this month.

All of this activity is expensive, and First Solar has burned through nearly 1.3 billion in cash during the last three quarters. However, at the end of the first quarter the company was still sitting on a war chest of $1.9 billion in cash and equivalents to fund its ongoing work.

SunPower is in a very different situation. Despite its technological successes, even before the Section 201 tariffs the company had been consistently unable to turn a profit. SunPower was down to $261,000 in cash and equivalents at the end of Q1, and has chosen to quit its utility-scale development activities and sell off its microinverter business to Enphase.

As such, for SunPower the sale of 8point3 brings in much-needed cash. The funds have already been committed to pay off a bridge loan that SunPower secured from a French bank a month ago. This in turn allowed SunPower to pay off convertible loan certificates, much of which were held by its majority owner, Total.

While the bridge loan was for only $300 million in principal, it is unclear how much will be left over after SunPower pays for interest and fees. But this is not the end of SunPower’s financial obligations, as it is planning to acquire SolarWorld Americas’ Oregon factory for an undisclosed price.

As for 8point3, its shares will no longer be traded on the NASDAQ, and shareholders received only $12.48 per share. This was a bitter pill for independent shareholders, and the company’s stock price collapsed in early February on the news of the terms.

At last count 8point3 held 946 MW-AC of U.S. solar projects, the vast majority of which were utility-scale and located in California.

This 32kW plane will fly twice as high as commercial jets on SunPower

This 32kW plane will fly twice as high as commercial jets on SunPower

  SunPower isn’t just powering roofs and solar farms these days. The company, which touts its solar panels as the most durable and efficient on the market, is looking at other applications. I’d be hard pressed to find one as awesome as the upcoming Mission SolarStratos expedition which will be powered by its 22-24% efficient Maxeon™ solar cells.[…]

The SolarStratos is an electric plane that has the flight characteristics of a low drag glider. It has extremely long thin wings and a very small profile. However it is outfitted with an electric motor, a very efficient front propeller, and wings and tail covered with around 24 square meters of solar panels. Inside fit up to 2 pilots in fighter configuration and what appears to be a 20kWh battery (nearly the same size as the 125 mile Hyundai IONIQ).

Interestingly this plane will not be pressurized, requiring the pilots to wear space suits that are also powered by the energy from the solar panels and stored in the battery.

Some stats from the press release (below):

  • Length: 8.5 meters – about 30 feet, or the distance from the end zone to the 10-yard line on an American football field
  • Wingspan: 24.8 meters – about 81 feet, or the length of two standard city buses
  • Weight: 450 kilograms – about as heavy as a grand piano; to make SolarStratos its lightest, the cabin will not be pressurized, requiring pilots to wear astronaut suits that are pressurized by solar energy
  • Engine: 32-kilowatt electrical engine, about one-third the size of what would power an electric vehicle
  • Energy: 22 square meters of SunPower Maxeon solar cells, each reaching 22 to 24 percent efficiency
  • Batteries: One 20-kilowatt lithium ion battery
  • Autonomy: Self-generates electricity with solar to power the plane for more than 12 hours

SunPower has been part of the solar industry consolidation of late amid lower profits, tax uncertainty and squeezing margins. Pairing up with SolarStratos is likely more marketing than actual new business model, however.

That said, and the reason it is interesting to us, is that we’re slowly moving toward electric powered flight being a reality for long haul aviation. Right now, electric aviation is limited to short flights with limited cargo but with improving battery technologies, stronger, lighter building materials and theoretically solar wings, range could be improved to where electric flight makes sense for many more applications.

Solar panels as thin as a hair, almost weightless and durable that can deliver 22-24% efficiency are an important part of that mix.

If this thing can get up to 60,000 feet and fly all day, we’re on our way.