Tag Archives: Solar Industry Growth

Yikes! Is California’s interest in Solar Energy Collapsing?

GTM Research and the Solar Energy Industries Association (SEIA) released their US Solar Market Insight 2015 Year in Review on Wednesday, March 9. We’ve been tracking their PV capacity reports for the past several years, and in the figure below we plot the 2015 capacity increases reported in their Executive Summary.

While there was strong national growth in installation capacity this past year, California’s capacity additions were less than in 2014. After a couple years of providing over half the annual capacity additions in the country (57% last year), California’s share has fallen to a mere 45%.

 Annual PV Installations: California and U.S. Total (2010-2015)

Annual PV Installations: California & U.S. Total (2010-2015)

We picked ourselves up off the floor and asked “What is happening; is this for real?” So we called GTM Research and checked other sources to find out what in the world was going on. Turns out that despite the disastrous looking change, solar growth in California remains alive and well.
Turns out the primary reason for the downturn is a sharp decline in Utility-scale PV projects. According to GTM, these additions fell to the vicinity of 1800 MW last year. [I wish we could afford the $2000 – $6000 for the full report that our SEIA Membership entitles us to so that we could access all the GTM data. But we live in lean times and use information from diverse public sources such as US Energy Information Agency (EIA) and California Energy Commission (CEC) as well as GTM’s summaries to inform our understanding.]

According to EIA information published in late February, it appears that Utility-scale solar PV expanded by 2000 MW in 2014, but only 1100 MW (preliminary) in 2015. Data from diverse sources rarely match-up year-to-year, but the trends are identical—California’s utility-scale PV installations experienced a sharp reduction in 2015.

After checking the CEC’s most recent Tracking Progress, Renewable Energy-Overview, we can see why—the utility industry is ahead of target for meeting the state’s 2016 Renewable Portfolio Standard (RPS) 25% goal. The industry achieved almost 25% renewables in 2014! The state added approximately 4000 MW of utility scale PV capacity between 2013 and 2015. Utilities are meeting their target early; the apparent slowdown is a temporary pause while utilities work on the installations that will get the state to 33% renewable electricity by 2020.

Distributed generation activity remains strong in California, both in the Residential and Non-Residential segments. The state’s residential customers generated demand for approximately 1000 MW of installations—almost half the national total of 2100 MW. And other distributed generation customers (eg, commercial rooftops) account for about another 300 MW.

So for the first time in years, California’s share of new solar PV installation is now less than half the national total. Good news! The rest of the country is waking up to the benefits of solar energy with capacity increasing in numerous states. The Utility sector is leading this expansion, while the residential sector growth is accelerating. We’re pleased to see this expansion.

A Sunny Future for Utility-Scale Solar

By John Finnigan, The Energy Collective

Utility-scale solar and distributed solar both have an important role to play in reducing greenhouse emissions, and both have made great strides in the past year.

Utility-scale solar, the focus of this article, is reaching “grid parity” (i.e., cost equivalency) with traditional generation in more areas across the country. And solar received a major boost when the federal tax incentive was recently extended through 2021. The amount of the incentive decreases over time, but the solar industry may be able to offset the lower tax incentive if costs continue to decline. New changes in policy and technology may further boost its prospects.

Some of the world’s largest solar plants came on-line in the U.S. during the past year, such as the 550-megawatt (MW) Topaz Solar plant in San Luis Obispo County, California and the 550MW Desert Sunlight plant in Desert Center, California. Last year saw a record increase in the amount of new utility-scale solar photovoltaic generation installed – about four gigawatts (GW), a whopping 38 percent increase over 2013, and enough solar power to supply electricity to 1.2 million homes. This number is expected to increase in 2015 when the final numbers are in.

Read complete article from The Energy Collective

A Trifecta for Solar Energy and Distributed Generation

We all have good weeks and bad weeks. For proponents of Solar Energy (and all other inhabitants of our planet) this has been an historic week, with major achievements at the International, National and California-state levels. Setbacks will be inevitable, but the events of this week will have memorable and lasting impact.

The first and International achievement was the December 12 Agreement of 188 countries at the United Nations Conference on Climate Change in Paris to take measureable actions with the eventual goal of keeping global temperature rise to less than 2ᵒ Celsius (3.6ᵒ Fahrenheit) by 2050 compared with pre-industrial levels. As we have repeatedly been informed, this is the level estimated by numerous scientists to avoid the worst affects of atmospheric warming and ocean rise.

Though yet to be ratified (a process that starts in April 2016), the agreement commits those countries that do ratify the agreement to establish national emission targets and report on progress every 5 years. While the agreement calls for zero net anthropogenic greenhouse gas emissions to be reached during the second half of the 21st century, lowering the target would (according to some scientists) move this goal forward to the 2030 – 2050 timeframe. Either way, implementation of this agreement puts pressure on countries to support low- and non-carbon energy sources, solar very much included, accelerating their deployment and continued improvements.

The second and national achievement has not been enacted as this is written, but is the tentative agreement by Republican and Democratic House party leaders incorporated into the Appropriations bill that would extend tax credits for solar and wind projects from the current end-2016 expiration date through 2021. The agreement was the result of a compromise where-in Democratic Representatives would support eliminating the ban on US oil exports in exchange for Republican support for the Tax Credit extension.

While the vote can still go awry, a senior analyst at GTM Research (who closely follows the Solar market and industry) commented “the extension to the federal ITC is without question a game-changer for U.S. solar’s growth trajectory. Between now and 2020, the U.S. solar market is poised to see a number of new geographies open up with a 30% ITC, within both distributed and utility-scale solar.”

Finally, the third and California state achievement was the December 15 proposed ruling by the California Public Utilities Commission (CPUC) to leave in place most of the charges and fees now in place between the state’s major investor-owned utilities (Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric) and customers who have installed residential and commercial PV systems. Though yet to be finalized (in January 2016), the proposed ruling leaves in place most of the terms that allow customers with PV systems to recoup their investments in a timely manner thereby increasing the desirability of these systems.

Challenges to PV-favorable net metering terms and (lack of) other fees have been raised in many states, and regulator decisions have been mixed. The proposed CPUC ruling is perhaps the strongest pushback by any state regulator to utility claims of the high costs distributed PV systems impose on other (non-PV owning) rate payers. While new costs are proposed, and some uncertainty is introduced by requiring PV-system owners to be placed on Time-of-Use rates (with unknown impact on their bills), the proposed ruling is seen as leaving the business environment favorable for continued expansion of distributed generation.

For now the sun shines on distributed generation and the growth of solar-sourced clean energy. Let us hope that all three events help realize solar’s potential contribution to our future energy mix for the sake of maintaining our habitable planet.

The Silicon Valley Idea That’s Driving Solar Use Worldwide

By Mark Chediak & Christopher Martin, Bloomberg News

Silicon Valley has something to offer the world in the drive toward a clean energy economy. And it’s not technology.

It’s a financing formula. In a region that spawned tech giants Apple Inc. and Google and is famous for innovators and entrepreneurs like Steve Jobs, a handful of startups began offering to install solar panels on the homes of middle-class families in return for no-money down and monthly payments cheaper than a utility bill. This third-party leasing method — which made expensive clean energy gear affordable — ignited a rooftop solar revolution with annual U.S. home installations increasing 16-fold since 2008, according to the Solar Energy Industries Association and GTM Research.

“There is a reason why California is a tech Mecca for the world because the infrastructure is here to attract that talent,” said SolarCity Corp.’s Chief Executive Officer Lyndon Rive, whose company popularized third-party solar leases for homeowners starting in 2008. “All the major innovation is going to occur in California. One of the innovations is the financing of solar assets.”

SolarCity took the leasing model that SunEdison Inc. first developed for the solar industry by a graduate student named Jigar Shah. SolarCity adapted that model for residential consumers in 2008 and many more offered similar arrangements including Sunrun Inc., which developed the first one in September 2007, and Vivint Solar Inc. And now the idea is spreading to other industries trying to sell expensive capital equipment that reduce pollution and fossil fuel consumption.

Read full article from Bloomberg News

Brown signs climate law mandating 50% renewable power by 2030

By David R. Baker, The San Francisco Chronicle

By the end of 2030, half of California’s electricity will come from the wind, the sun and other renewable sources under a new law that sets one of the country’s most ambitious clean-energy targets. The legislation, SB 350, signed into law Wednesday by Gov. Jerry Brown, accelerates California’s shift away from fossil fuels as its dominant source of energy and marks another milestone in the state’s fight against climate change.

The law expands a transformation already well under way. For more than a decade, California has required its electrical utility companies to use more renewable power, with the Legislature repeatedly raising the goal. The requirement led to a construction boom for solar power plants and wind farms. But the activity slowed in recent years as developers waited to see whether the Legislature would once again set a higher target. The new law eases that uncertainty, ensuring that California remains a major market for companies that design and build renewable power facilities.

While some business groups have complained that California’s aggressive climate and energy policies could burden local companies with higher costs, the same policies have helped create a thriving clean-technology industry in the state. Supporters of the new law say it sends those companies a signal that the state won’t back off its goals.

Read full article in the San Francisco Chronicle

Solar Power International: Moving into Second Gear?

It’s a challenge to summarize what transpired over four days at an event with 600 exhibits, 70 concurrent sessions (forcing choice between 6 at a time), 15 manufacturer-sponsored hands-on training sessions, 10 workshops, plenary sessions, parties and, oh, did I mention solar-supportive keynote remarks by Vice President Joe Biden to an enthusiastic audience.  With participants from over 75 countries, it’s easy to see why Solar Power International (SPI) claims to be the largest and fastest growing solar conference in North America.  But let me try to extract a few themes from this mid-September event sprawled across all four Exhibit Halls at the Anaheim Convention Center.

Clearly the industry is growing.  In advance of the conference, the Solar Energy Industry Association and GTM Research released their quarterly update.  With 1,393 Megawatts of PV capacity installed in the second quarter, the US Solar industry remains on track for an annual forecast total of 7,700 MW.   Of this, 840 MW (60%) was installed in California.  (A brief reminder that the capacity of a typical nuclear powerplant is 1,000 MW.)  The fact that the California Senate and Assembly passed SB350 increasing the state’s current Renewable Energy target of 30% by 2020 to 50% by 2030 days before SPI added to the conference’s buoyancy.  Repeatedly cited was the statistic that California has over 55,000 employees working in the industry (more employees than the state’s top 5 utilities combined).

Clearly the industry faces challenges.  The major one is the currently scheduled expiration of the 30% residential tax credit and reduction of the commercial investment tax credit (ITC) from 30% to 10% fifteen months from now, the Administration’s request for a permanent extension of the ITC not withstanding. A Bloomberg forecast released at the conference anticipates that without an extension, 2017 will see installation activity dropping to its 2012 level.  The loss of the tax credit would hit California’s businesses as hard as elsewhere.  In addition, the fact that California’s Public Utility Commission (CPUC) is in the process of redesigning the utility rate structure, including deciding on an appropriate level of compensation for customers who generate their own solar energy, has the industry on edge.  Utilities have requested the compensation (or credits) allowed solar customers be reduced by 40%, and that fixed fees be added to solar users’ bills.  (If this sounds completely contrary to the legislative action on SB350 cited above, welcome to the world of Government.)

But beneath these Good News / Bad News headlines, several themes emerged that cut across the gazillion specific new product and service announcements.

Energy Storage developments are booming with a variety of technologies and products. Over 50 firms provided products or services related to Storage.  Those in California are as diverse as 90-year old Trojan Battery Company of Santa Fe Springs and Milpitas-based JuiceBox Energy, a start-up barely out of the garage.  Many clustered together on the exhibit floor in a zone known as the “Energy Storage Pavilion.” The CPUC mandate to the state’s three largest Utilities and other energy service providers to procure 1.3 GW of energy storage by 2020 creates an immediate market in California.  And the recognition that commercial electric customers can utilize storage to reduce their bills through reductions in their peak demand charges creates a market rationale for growing storage demand beyond the utility mandate.

Finance is another area experiencing dramatic change.   While the discussion only a couple years ago focused on lease or buy, a plethora of new financial instruments and capital sources have emerged.  Sessions and exhibits provided information on new approaches to debt financing for non-residential projects (which appears to focus on financial support for Commercial and Industrial (C&I) customers, a growing solar niche), Tax equity markets, and the pooling of solar project cash flows (in what’s become known as a YieldCo).  The good news is that investors (not just system owners) are seeing value (!) in PV installations.

And of course there were new panel developments, racking system improvements, Inverter advances and the like.

So what’s the take-away?  The Solar industry is growing through its increased cost-competitiveness as a result of new product and service innovation. This dynamic was well captured by Vice President Biden’s comment, “Anyone who thinks it (Solar) is not happening just take a look at the market.  It’s a competitive choice for consumers. …  Look, this isn’t a government mandate, this is the market working.”  Yes, but the uncertain future of tax credits and utility pushback (in California and elsewhere) continue the uphill slog.

State Policy, Utilities Ignite Community Solar Growth

By Rebecca Kern, Bloomberg BNA News

The community solar market is heating up thanks to favorable state legislation and interest from utilities in installing solar panels that provide cost-sharing among consumers who don’t have access to rooftop solar. With nearly 50 percent of the households and businesses unable to host rooftop solar systems, community solar is a largely untapped market for consumers looking to invest in solar, which is becoming cheaper than retail electricity in parts of the country.

Developers, analysts and utilities predict that the pace of community solar will continue to grow in the future as prices of solar decline and more utilities get involved. Solar developers and utility companies are driving a lot of the growth in the community solar market, leading to a projected 59 percent annual growth rate over the next five years. Legislation in a handful of states encouraging the development of community solar systems has also driven a lot of the growth in community solar over the past several years.

Minnesota, California, Massachusetts, Colorado, and New York are the states that “have set forth mandates in a very cookie-cutter program design to attract a lot of companies that are looking to scale up their community solar presence quickly,” Cory Honeyman, a senior analyst at GTM Research, said. Much of the near-term growth in community solar is concentrated in those four or five state markets “that have the right design in place for scale,” and 90 percent of the installations expected in 2015 and 2016 will take place in states with community solar legislation in effect.

Community solar is currently economically viable in parts of the country where electricity rates are high and has the potential to become more competitive in the future, analysts and developers say. The savings that community solar subscribers receive depend on the cost of electricity in the region and the solar resources in the state, and the electricity rates depend on the competitiveness of the electricity market, Glen Andersen, energy program manager at the National Conference of State Legislatures, said. “They have high electricity rates in California, for example, so it does make [community solar] more competitive. But if you were in a state like Kentucky, where electricity rates are really low, whether or not you’re going to see savings over just buying it from the utility is more questionable,” Andersen said.

Read full article from Bloomberg BNA

Related article: Note to Utilities: Here’s Why 2015 is the ‘Tipping Point’ for Community Solar (Aug 11)

 

InterSolar 2015: Industry Growth or Decline is Up to Us

By Gerald W. Bernstein
Managing Editor, California Solar

One advantage of living in San Francisco is that the world periodically beats a path to our doorstep. For solar professionals and aficionados, this has happened for the past eight July’s with InterSolar North America at the Moscone Convention Center, the show claiming the highest attendance of any solar event in North America. I have attended these since 2012, by which time attendance had reached approximately 18,000 visitors (excluding exhibitors), a level it has since sustained.

What I find interesting in trade shows is walking the exhibit floors, talking with company reps, talking with press people who have attended many conferences over time, and “taking the pulse” of the event. InterSolar expands this opportunity with the companion conference comprised of 45 sessions on a variety of solar topics and over 200 speakers at the InterContinental Hotel next door.

This year’s emerging issue was storage. Conference sessions, press announcements and exhibits provided perspectives on utility scale, commercial, institutional and residential-scale systems with possibly favorable economics (subject of course to the individual user’s tariff structure) and numerous non-quantifiable benefits. But what I sensed as the mood of the show was different. I will be surprised if the organizers write “the mood of the show was optimistic” (as followed the 2012 show) or “the mood of the show was very optimistic” (as followed the 2013 show). I found exhibitors enthusiastic about their products, but I would not describe them as “optimistic.” More telling was the observation of a long-time attendee that the number of exhibitors was down to perhaps 500 this year from 750+ a few years earlier. (And yes there have been recent consolidations, but when have there not been?)

The conference and plenary sessions I attended also conveyed two tones. Industry (including trade association) leaders spoke of the growing number of megawatts and gigawatts of installed PV in an increasing number of states. Declining installation costs were often cited as a driver for future sales, driven both by declining panel prices and by reductions in other (balance-of-system and soft) costs. Individual states have additional demand drivers, such as the proposed RPS increase to 50% in California (in 2030), growing demand for community shared solar systems, and efforts to develop carbon cap & trade systems or markets.

But the elephant in the room (actually, overhanging all events) was clearly the possible effect of the 30% investment tax credit reduction to 10% for commercial investors and the possible elimination of the 30% tax credit for homeowners at the end of 2016. Some speakers minimized these impacts in light of favorable demand drivers such as those above. Conversely, one speaker (citing findings from an unnamed Stanford Business School-George Washington University study I have not been able to identify) warned listeners to “expect a massive drop in the PV industry.”

Yet the dominant theme of speakers was that solar does not have to be a political issue. There are blue and red state customers of solar technology who benefit from lower electric costs. Benefits accrue to rural and urban families. Individuals of all beliefs need to let their senators and representatives know that extending the tax benefits is good for consumers, businesses and the 170,000 individuals employed in this industry.

No one can realistically predict what will happen to the solar industry after the 2016 reduction in tax credits. But one thing seems certain: if we all participate in determining governmental policies regarding solar energy, we can build on recent success. If we stand up for solar, if we become even more engaged, more active, more committed to influencing decision-makers, thought leaders, and policy wonks — that can only bring benefit to our planet.