This article was published in the November/December 2011 issue of Renewable Energy Focus.
California has been the home of SPI for many years now – and for good reason. The Golden State represents the bulk of Photovoltaic (PV) installations, and has long been the engine for U.S. solar enthusiasm. But keynote speaker Rhone Resch, president of the Solar Energy Industries Association (SEIA), was quick to emphasise the renewable credentials of Texas.
Texas for example leads the U.S. in wind power capacity. And while it may be late to the solar party, it now boasts the 16 MW Blue Wing Solar Energy Generation Facility in San Antonio, while utility CPS Energy has launched a 400 MW distributed generation program to showcase solar PV.
So how would Texas compare to 2009's 24,000 attendees in Anaheim, and 2010's 27,000 in Los Angeles? It aced both of these with 30,000 visitors in Dallas, as well as a highest ever number of exhibitors - well in excess of 1000.
Hopeful visions and stark realities
Julia Hamm, president and ceo of the Solar Electric Power Association (SEPA) offered an optimistic keynote on a possible solar future. This was predicated upon a national energy policy being adopted by 2013, the bulk of U.S. cars running on electricity, solar becoming the largest job creator in the country, and reaching 30% of utility energy portfolios by 2031.
But due to the unfortunate scheduling of an Executive Utility Roundtable afterwards, Hamm's vision was immediately clouded by the harsh realities of major power providers. They discussed topics such as energy policy, carbon legislation and the viability of solar. And they were candid in laying out the economic barriers to wider solar adoption.
Robert Powers, president of American Electric Power (AEP), said that while he viewed solar as a disruptive technology due to dramatic improvements in efficiency and reliability, it was unlikely to become a major player in his portfolio. “Solar will be a small part of the total,” he said. “Wind in some areas, for example, is priced so low that it makes it difficult to bring in solar when wind is half the cost.”
Armando Olivera, president and ceo for Florida Power & Light Company (FPL), was a little more upbeat. He viewed solar as a part of an overall strategy to provide cleaner energy. “Solar is a zero cost fuel in a system that is becoming more and more dependent on natural gas,” he said.
FPL has 110 MW of solar to date. Based on his experience installing that capacity, he believes that the company could build the same facilities 30% to 40% cheaper than it did three years ago. Per FPL surveys, customers seem willing to pay US$3 extra on their bills to gain access to solar: “We built a 110 MW solar plant and the first year impact was US$0.96 per customer,” said Olivera. “We think we can build over 500 MW at a cost of US$2 a bill.”
Both Olivera and James Rogers, chairman, president and ceo of Duke Energy, firmly believe that CO2 legislation is coming to the U.S., and that it will be a major spur to solar expansion. After walking the show floor, he was struck by what he called the energy and excitement of the event. “You really don't appreciate solar until you come to this show,” said Rogers.
Duke Energy has been taking baby steps with solar–10 MW so far. That will change gradually, he said, as the price of electricity nationally rises as a natural consequence of carbon legislation, as well as ongoing efforts to change out ageing coal, gas and nuclear facilities. Solar will pick up some of the slack, he believes. “Utilities are uniquely positioned to help solar expand in this country,” said Rogers, “due to our understanding of grid demands and our access to lower cost capital.”
While conservatism was clearly evident among the various members of the panel, Doyle Beneby, president and ceo of CPS Energy of San Antonio, was the closest to a cheerleader for the solar industry. CPS may only have 45 MW of solar currently, but it has more than 1000 MW of wind contracted. He is keen to contract more solar for his customers. “Solar beats wind as there is more opportunity for peak power,” said Beneby. “The fixed price of solar over 30 years makes it an incredible bargain.”
While Hamm looked ahead, and the utility executives provided insight into the realities of the energy mainstream, Rhone Resch took time during his keynote to highlight solar job growth, counter media negativity and call for policy advances.
“100,000 American jobs; over 3,100 MW of solar power in place and more than 4,000 MW under construction; and a positive trade balance with China. Solar works for America,” said Resch.
During his keynote he tackled the wave of bad press following the Solyndra bankruptcy. Conservative radio pundit Rush Limbaugh, for instance, made a comment that the solar industry “didn't even exist”. According to the Solar Foundation's jobs census, countered Resch, solar employs more than 100,000 Americans. And no industry in the country is growing faster than solar.
Other facts rattled off: the industry is made up of 5,000 American companies, most of them small businesses; over the past year, PV installations have grown by 69 percent; and according to SEIA's Trade Balance Report, the U.S. was a net exporter of solar products to the tune of US$2 billion in 2010 – and even has a positive trade balance with China despite the onslaught of Chinese solar panels into the North American marketplace. In addition, Resch highlighted the boost to the manufacturing base from 30 new solar factories opened in the past year, making it over 400 plants in total.
Policy, of course, was never far from his mind. The 1603 Treasury Program, along with the underlying solar investment tax credit (ITC), he claimed as “hands-down one of the most successful policies ever enacted to deploy renewable energy.” According to the SEIA, it has allowed the development of more than 19,000 solar projects in 47 States (and the District of Columbia), and has supported over US$4.4 billion in economic investment. The only problem is that it expires at the end of the year: “Letting the 1603 program expire is the equivalent of raising taxes on one of the few industries that is adding jobs in this country,” said Resch.
Returning to the issue of Solyndra, Resch cited the market conditions that drove down the price of solar panels and ultimately led to the collapse: “No one in 2008 predicted that the price of solar would be below US$2 per Watt today, let alone approaching US$1 per Watt,” he said.
Other speakers echoed this sentiment. Paula Mints of Navigant Consulting dismissed the Solyndra scandal: “It represents a tiny amount…when compared to bank bailouts,” she said. “Let's move on.”
Solar market trends – what the experts say
SPI is always a place to take stock of how the industry is doing. And there were plenty of analysts this year covering every aspect of the sector, particularly from a U.S. perspective. Shayle Kann managing director of Solar at GTM Research, said that the home market was becoming a lot more important globally: “U.S. PV is going to grow from about 5% to 7% of the world market today - to 18% by 2015,” said Kann.
Within PV, he said that the residential market remains the bedrock of the U.S. market and is holding steady, though third-party ownership is gradually gaining ground. California, of course, remains the largest market. Within it however, residential is relatively flat, with growth coming primarily from the utilities.
New Jersey, said Kann, had developed into a “huge commercial market”, though it was heading for a crash. The reason: a glut of installations has caused the price of solar in that State to collapse. “New Jersey is in decline after a lot of capacity build-out in late 2010/early 2011,” said Kann. “Until the backlog of orders is worked through, we won't be seeing much new capacity coming online.” By contrast, the fastest growing state for residential installations was Hawaii, which saw a 48 percent increase in the last year.
Kann also contrasted the pros and cons of the utility pipeline. Currently, the U.S. has 515 MW installed, with another 10 GW in Power Purchase Agreements (PPA) signed, and 25 GW of projects announced that have yet to gain PPAs.
Unfortunately, a glut of developers makes for a highly-competitive marketplace, which inevitability brings about low quotes. This is making it hard to be profitable.
“It's a frothy market,” admits Kann. “While there is a ton of development ongoing, there are less PPAs available.”
Navigant's Paula Mints meanwhile laid out the overall figures for 2010: 18 GW of PV, 1 GW of Concentrated Solar Power (CSP) and .05 GW (50 MW) of Concentrating PV (CPV).
Sam Wilkinson, an analyst with the PV group at IMS Research, began with some perspective on the global market, which has grown 12-fold in four years. Recently, that has been driven by monumental growth in European countries such as the Czech Republic, Italy and Germany. However, previous subsidies/tariffs have been withdrawn resulting in a crash in prices.
Despite that boom and bust cycle, global PV installations are expected to continue to grow over the next five years. Wilkinson believes Europe will stagnate while the U.S. and Asia will boom.
2011, he said, was the first time the U.S. exceeded 1 GW in a year. And from a total solar PV capacity of less than 3 GW in 2011, the U.S. will come close to 10 GW by 2015, he predicts. By that time, it will account for almost a quarter of the world market.
Thin film technology
In the U.S., thin film is maintaining a 25% to 30% share, which is significantly higher than its worldwide share (which is actually declining), said Wilkinson.
“Thin film strength in the U.S. is being boosted by Cadmium Telurium (CdTe) and CIGS players,” said Wilkinson. “Globally, thin film will lose market share due to price competition from c-SI.” While PV modules prices are volatile, average c-Si prices are over 35% lower than at the end of 2010, according to IMS Research. And in the last two and a half years, prices have fallen around 50 percent. But that has a downside. “These prices are unsustainable unless suppliers can reduce costs,” said Wilkinson.
Becky Campbell, research director at theSolar Electric Power Association (SEPA), spoke about utility growth in the U.S. – this rosefrom 347 MW of new capacity in 2009 to 779 MW in 2010. 63% of the additions, she said, came from utilities outside of California. While California is still a big utility market for solar, 7 of the top 10 solar utilities were outside of that State, with four in the eastern seaboard. Each of the ten added at least 20 MW last year.
“The largest PV project is PG& E's 48 MW Copper Mountain,” said Campbell. “The only CSP project in the top ten was FPL's 75 MW Martin Hybrid Project in Florida.”
Larry Sherwood, a consultant with Sherwood Associates, characterised all sectors of the U.S. as taking a “big jump” last year. PV installations doubled, with utility installations quadrupling and commercial installations up by 60%. California accounted for 75% of total installations a few years ago, and is now down to a little over 30% despite its total installations rising. After California come Nevada, Arizona and Colorado.
CSP and CPV woes
CSP, said Sherwood, continues to struggle. 75 MW was installed in 2010, compared to 12 MW in 2009, nothing in 2008 and 63 MW in 2007. He noted, though, that there were many CSP projects in the development pipeline.
Andrew Skumanich, president and ceo of SolarVision, concurred: “CSP still looks challenged, but has advantages at large scale in terms of cost of energy (COE),” said Skumanich. However, “CSP is at the ‘need to prove itself’ stage.”
CPV, on the other hand, has the potential to grow faster, he said. For utility-scale solar to really take hold, however, he advised the industry to learn from the experience of wind as it moved into large-scale production: “Wind has an order of magnitude more in terms of installed capacity than solar, so we can learn a lot from them,” said Skumanich. “As our installed capacity goes up, the cost goes down.”
Solar water heating
One area of the solar landscape that doesn't draw much attention is heating. Yet it is expanding rapidly in the U.S.
According to SEIA's Resch, solar water heating grew by 5 percent last year, while solar pool heating grew by 13 percent: “Combined, 66 thousand systems were installed, with the equivalent of 814 megawatts thermal,” said Resch.
FLS Energy and Atlantic Marine Corps Communities, for instance, have installed 2,200 solar hot water systems on military bases in the last two years. Earlier this year, the first solar water heating system tied to a district heating network was installed by District Energy of St. Paul, Minnesota. They installed a 1 MW peak system on top of the local convention centre, and are sending the excess thermal energy to nearby buildings.
Looking to the future
SEIA said that the utility-scale solar market grew by 171 percent in the last year. It expects nearly 800 MW of utility solar to come online in 2011. “We've commenced construction on over 600 MW of new CSP plants and nearly 3,000 MW of utility-scale PV projects,” said Resch. “And for those of you who think utility-scale solar is only for the Southwest, you'll be surprised to know that the second largest state for utility solar in the second quarter was the second smallest state in the country – Delaware.”
According to IHS iSuppli, U.S. solar installations are predicted to rise 166 percent this year. California will top the list with a total of 967MW of newly installed solar, rising in 2012 to 1.2GW. “New Jersey is expected to be second, with 260MW, followed by Arizona with 240MW,” said Mike Sheppard, analyst, Photovoltaics at IHS iSuppli.
Market research firm Solarbuzz noted that 1,865 non-residential projects totalling 25.9GW have either been installed, are currently being installed, or are in their development phase since 1 January 2010 - in the U.S. California accounts for 61 percent of the total U.S. project pipeline.
NB: Paula Mints and Dr Andy Skumanich were special guest presenters at our recent webinar, which looked at solar electric technologies.
About the author: Drew Rob is a graduate of the University of Strathclyde in Glasgow. Currently living in Los Angeles, he is a freelance writer focusing on engineering and technology.