Deutsche Bank: Sustainable solar market expected in 2014

Buoyed by bullish demand forecasts, and increasing utilization rates and pricing, Deutsche Bank forecasts a solar market transition from subsidized to sustainable in 2014. Italy’s solar market also appears to be at grid parity, says Deutsche Bank. REC The German bank has raised its 2013 global solar demand forecast to 30 GW – representing a 20% year-on-year increase – on the back of suggestions of strong demand in markets including India, the U.S., China (around 7 to 10 GW), the U.K. (around 1 to 2 GW), Germany and Italy (around 2 GW). Rooftop installations are, in particular, expected to be a main focus, says Deutsche Bank. A trend for projects being planned with either “minimal/no incentives” has also been observed, despite the belief that solar policy outlooks are improving, particularly in the U.S., China and India, and “other emerging markets”. Looking at India, Deutsche Bank predicts that due to state and RPO programs, demand is likely to be strong, at between 1 to 2 GW. Meanwhile, it says, “grid parity has been reached in India even despite the high cost of capital of ~10-12%.” With system prices between €1,500 to €2,000/kW, net metering for systems below 200 kW and “advanced” plans for unsubsidized projects in the south of the country, Italy also “appears to be at grid parity”. “Assuming small commercial enterprises are able to achieve 50% or more self consumption, solar is competitive with grid electricity in most parts of Italy,” says Deutsche Bank. With robust demand in the U.S., Deutsche Bank forecasts a residential solar market of around 1 GW and a commercial market of between 1.5 to 2 GW. Meanwhile, although solar demand in Germany is said to be seasonally weak, Q2 is expected to see an increase, specifically in the small commercial segment. Overall, however, the bank believes 2013 growth could be inhibited – around 3 to 4 GW – due to less ground-mounted systems and no summer rush. Prices Deutsche Bank states that utilization rates in China are on the increase, as are polysilicon, wafer and module prices. In particular, with an “improving” supply outlook, it predicts that polysilicon pricing will be kept under control, although prices are expected to remain below US$25/kg. This trend should see companies like Wacker Chemie and Hemlock ramp utilization rates back up. In terms of crystalline silicon modules, says Deutsche Bank, Chinese tier-1 prices have been increasing by between $0.03 and $0.05/W. Consequently, it says, Chinese module prices are over $0.60/W, while European module prices are over $0.70/W.

26. FEBRUARY 2013 | GLOBAL PV MARKETS, INDUSTRY & SUPPLIERS, INVESTOR NEWS, MARKETS & TRENDS

BY: BECKY BEETZ

From PV Magazine

Study Finds Solar a Bargain for New Jersey and Pennsylvania

A recent study by the consulting firm Clean Power Research showed that solar power in New Jersey and Pennsylvania delivers value to the electric grid that exceeds its cost by a large margin, making it a bargain for consumers. The study found that the value solar energy delivered exceeded its cost by 50 percent to more than 100 percent. The study was conducted on behalf of the Mid-Atlantic Solar Energy Industries Association (MSEIA) and the Pennsylvania Solar Energy Industries Association (PASEIA). Both organizations are solar-power advocates.

New Jersey and Pennsylvania are major solar markets in terms of the amount of installed solar capacity. New Jersey, the nation’s second-largest solar market with 900 megawatts (MW) of solar capacity is the first state to generate more than 1 percent of its annual electricity from solar. Pennsylvania ranks eighth in installed capacity.

Utilities in both states are mandated to buy certain amounts of solar power every year. They pay a premium for that solar power in the form of Solar Renewable Energy Certificates (SRECs) and pass the cost on to ratepayers.

The study found that solar power delivers a total levelized value, ranging from $256 to $318 per megawatt-hour (MWh). However, this includes a premium value in the range of $150 to $200 per MWh above the levelized value of the solar electricity generated. The SRECs in New Jersey currently cost about $60 per MWh and in Pennsylvania about $20 per MWh.

“This indicates that electric ratepayers in the region are getting more than a two-to-one return on their investment in solar energy,” said Dennis Wilson, president of MSEIA. “Our analysis indicates that SRECs can increase in price, deliver net benefits and still support strong solar growth. This net-positive benefit will only increase as solar technology continues to drop in cost.”

“Add together the proven public health, security and environmental benefits, and it’s clear that aggressive solar power development is a win for these states and their residents,” said Lyle Rawlings, vice president of MSEIA, New Jersey division.

The study concluded that, by offsetting the need for conventional power, distributed solar power delivers measurable benefits, such as lower conventional electricity market prices due to reduced peak demand; a valuable price hedge by using a free, renewable fuel rather than variably priced fossil fuels; avoided costs of new transmission and distribution infrastructure to manage electricity delivery from centralized power plants; reduced need to build, operate and maintain natural gas generating plants; reduced outages due to a more reliable, distributed power system; and reduced future costs of mitigating the environmental impacts of coal, natural gas and nuclear generation.

From Electrical Contractor Magazine

By
Mike Breslin
Published: January 2013

Solar Price Reductions Removing Barriers To Adoption

Solar photovoltaic technology will hold its spot as the fastest-growing technology in the U.S. energy industry for the next four years, according to new research from Frost & Sullivan. The prices of solar modules have been in a free fall since 2008, accelerating PV systems’ commercialization, while encouraging the development of new financing models for the residential sector.

According to the report, the U.S. PV market earned revenues of more than $1.73 billion in 2011 and could reach $3.04 billion in revenues in 2016.

The cumulative number of PV solar installations in the U.S. reached 4,450, which generated 1,855 MW of solar power in 2011. The residential segment accounted for 15.2% – or 282 MW – of the annual installations during 2011, and is projected to grow at a compound annual growth rate of 11.9% from 2011 to 2016.

Prices have decreased by almost 50% since 2008 on the back of the economic downturn, the resulting lower demand for solar energy and an increased supply of polysilicon. Prices will continue to decline – albeit at a lower rate – in the next four years, due to economies of scale and technological improvements, making solar energy more affordable to residential customers, Frost & Sullivan says.

“New financing methods, such as solar lease programs and power purchase agreements, are diminishing the main barriers to solar system installations,” notes Georgina Benedetti, senior industry analyst at Frost & Sullivan. “These barriers include high up-front costs and complex installation and maintenance.”

However, the PV market also experienced significant supply-demand imbalance throughout the value chain in 2011. Most solar module manufacturers reduced prices, decreased margins and, in some cases, closed manufacturing facilities.

Furthermore, according to the report, the expiration of the U.S. Department of the Treasury’s 1603 cash-grant program is expected to affect new system installations, especially beyond March.

PV module suppliers could increase the uptake of their products in the residential sector by providing a one-stop shop for all solutions – from engineering design to installation and maintenance to government grant paperwork.

“In the last two years, the expanded manufacturing capacity in the solar industry, in combination with technological improvements, has lowered the wholesale module prices, making solar panels reasonably priced,” says Benedetti. “Moreover, the escalating competition from low-cost Chinese companies is compelling U.S. manufacturers to focus on improving quality and efficiency, while simultaneously reducing costs, to stay afloat.”

From Solar Industry Magazine

Sunny Uplands

Nov 21st 2012 | from The World In 2013 print edition

Science and technology

Alternative energy will no longer be alternative
Rebranding is always a tricky exercise, but for one field of technology 2013 will be the year when its proponents need to bite the bullet and do it. That field is alternative energy. The word “alternative”, with its connotations of handwringing greenery and a need for taxpayer subsidy, has to go. And in 2013 it will. “Renewable” power will start to be seen as normal.

Wind farms already provide 2% of the world’s electricity, and their capacity is doubling every three years. If that growth rate is maintained, wind power will overtake nuclear’s contribution to the world’s energy accounts in about a decade. Though it still has its opponents, wind is thus already a grown-up technology. But it is in the field of solar energy, currently only a quarter of a percent of the planet’s electricity supply, but which grew 86% last year, that the biggest shift of attitude will be seen, for sunlight has the potential to disrupt the electricity market completely.
The underlying cause of this disruption is a phenomenon that solar’s supporters call Swanson’s law, in imitation of Moore’s law of transistor cost. Moore’s law suggests that the size of transistors (and also their cost) halves every 18 months or so. Swanson’s law, named after Richard Swanson, the founder of SunPower, a big American solar-cell manufacturer, suggests that the cost of the photovoltaic cells needed to generate solar power falls by 20% with each doubling of global manufacturing capacity. The upshot (see chart) is that the modules used to make solar-power plants now cost less than a dollar per watt of capacity. Power-station construction costs can add $4 to that, but these, too, are falling as builders work out how to do the job better. And running a
solar power station is cheap because the fuel is free.

Coal-fired plants, for comparison, cost about $3 a watt to build in the United States, and natural-gas plants cost $1. But that is before the fuel to run them is bought. In sunny regions such as California, then, photovoltaic power could already compete without subsidy with the more expensive parts of the traditional power market, such as the natural-gas-fired “peaker” plants kept on
stand-by to meet surges in demand. Moreover, technological developments that have been proved in the laboratory but have not yet moved into the factory mean Swanson’s law still has many years to run.

Comparing the cost of wind and solar power with that of coal- and gas-fired electricity generation is more than just a matter of comparing the costs of the plant and the fuel, of course. Reliability of supply is a crucial factor, for the sun does not always shine and the wind does not always blow. But the problem of reliability is the subject of intensive research. Many organisations, both academic and commercial, are working on ways to store electricity when it is in surplus, so that it can be used when it is scarce.

Progress is particularly likely during 2013 in the field of flow batteries. These devices, hybrids between traditional batteries and fuel cells, use liquid electrolytes, often made from cheap materials such as iron, to squirrel away huge amounts of energy in chemical form. “Grid-scale” storage of this or some other sort is the second way, after Swanson’s law, that the economics of renewable energy will be transformed.

One consequence of all this progress is that subsidies for wind and solar power have fallen over recent years. In 2013, they will fall further. Though subsidies will not disappear entirely, the so-called alternatives will be seen to stand on their own feet in a way that was not true in the past. That will give them political clout and lead to questions about the subventions which more traditional forms of power generation enjoy (coal production, for example, is heavily subsidised in parts of Europe).

Fossil-fuel-powered electricity will not be pushed aside quickly. Fracking, a technological breakthrough which enables natural gas to be extracted cheaply from shale, means that gas-fired power stations, which already produce a fifth of the world’s electricity, will keep the pressure on wind and solar to get better still. But even if natural gas were free, no Swanson’s law-like process applies to the plant required to turn it into electricity. Nuclear power is not a realistic alternative. It is too unpopular and the capital costs are huge. And coal’s days seem numbered. In America, the share of electricity generated from coal has fallen from almost 80% in the mid-1980s to less than a third in April 2012, and coal-fired power stations are closing in droves.

It may take longer to make the change in China and India, where demand for power is growing almost insatiably, and where the grids to take that power from windy and sunny places to the cities are less developed than in rich countries. In the end, though, they too will change as the alternatives become normal, and what was once normal becomes quaintly old-fashioned.

Geoffrey Carr: science editor, The Economist

How About 99.9 Percent Renewables?

Peer-reviewed study says wind, PV solar, and storage can do it cheaply.
HERMAN K. TRABISH: DECEMBER 31, 2012

Combinations of onshore wind, offshore wind, and photovoltaic solar, paired with battery and hydrogen storage in a widespread grid system, could meet 90 percent to 99.9 percent of expected 2030 demand at almost no increased cost, according to a new study.

“The common view,” University of Delaware researchers noted in their report, “is that a high fraction of renewable power generation would be costly, and would either often leave us in the dark or would require massive electrical storage.”

The priority of the Regional Renewable Electricity Economic Optimization Model (RREEOM) was to see if demand could be met largely with renewables at an affordable cost.

To model that, the researchers incorporated into RREEOM the “four known options:geographical expansion, diversifying resources (e.g., solar plus wind), storage, and fossil backup.”

The model used prices that left out federal and state subsidies but included the costs of fossil fuel externalities.

With storage, according to report co-author Cory Budischak, “we can run an electric system that today would meet a need of 72 gigawatts 99.9 percent of the time, using 17 gigawatts of solar, 68 gigawatts of offshore wind, and 115 gigawatts of inland wind.”

Reliability in a fossil fuel-based system, in which the operating principle is “burn when needed,” requires no computers, digital high-speed communications, or weather forecasting, the report noted. But “the ability to reliably meet load will still be required of systems in the future, despite the variability inherent in most renewable resources.”

To approximate a grid operator’s real world imperative to keep the lights on, the researchers modeled into RREEOM the PJM Interconnection system, a thirteen-state load that accounts for about 20 percent of U.S. electricity demand at approximately $0.1745 per kilowatt-hour.

The transmission model was limited to PJM’s grid and ignored reserve requirements, within-hourly fluctuations and ramp rates, all of which, it assumed, would be easily met with the hypothesized storage.

The varying sufficiencies and costs of more than 28 billion different combinations of renewables and storage were studied over a hypothetical four-year (35,040-hour) time period using actual PJM historical data to approximate real demand and real weather patterns. Historical insolation and wind data from DOE and NOAA were used for each hour being modeled.

“We find that 90 percent of hours are covered most cost-effectively by a system that generates from renewables 180 percent of the electrical energy needed by load, and 99.9 percent of hours are covered by generating almost 290 percent of need. Only nine hours to 72 hours of storage were required to cover 99.9 percent of hours of load over four years,” the report calculated.

So much free fuel from renewables would be available across the geographically dispersed 72-gigawatt PJM grid region that it would not only almost eliminate the need for natural gas reserves, but would also keep the power price low and minimize the need for incurring the cost of battery storage.

The result would be electricity at very near current prices supplied by between 90 percent and 99.9 percent renewables, because “over-generation is cost-effective at 2030 technology costs even when all excess is spilled. If excess generation displaces heating fuels, the cost is lowered further.”

Drawing on the “excess generation of renewables is a new idea,” the study went on, “but it is not problematic or inefficient, any more than it is problematic to build a thermal power plant requiring fuel input at 250 percent of the electrical output, as we do today.”

When there was excess generation, the model stored it. When there was inadequate supply, the model first used the stored generation and then, in a very few instances, natural gas for heating.

Cost assumptions, based on referenced studies, included improved renewables technologies and economies of scale but no unforeseen breakthrough changes. “At 2008 technology costs, 30 percent of hours is the lowest-cost mix we evaluated. At expected 2030 technology costs, the cost-minimum is 90 percent of hours met entirely by renewables. And 99.9 percent of hours, while not the cost-minimum, is lower in cost than today’s total cost of electricity.”

The most potentially controversial assumptions in the study were 1) that the price of renewables will be 50 percent lower by 2030, though operations and maintenance costs remain constant, and 2) that fossil fuel prices will include external costs now paid by taxpayers and health insurers [quite an assumption, even with a carbon tax — Editor].

Renewable resource supply is adequate, the researchers noted, referencing studies that concluded “a shift to renewable power will increase the energy available to humanity.” Such studies have shown, the report noted, “that global energy demand, roughly 12.5 terawatts increasing to 17 terawatts in 2030, can be met with just 2.5 percent of accessible wind and solar resources, using current technologies.”

A study from Stanford’s Mark Jacobson and Mark Delucchi, the study noted, used eight renewables in conjunction with increased transmission and vehicle-to-grid storage technology to meet the entire world’s electricity needs.

From Greentech Media

Congressional Deal Extends Renewable Energy Incentives, Avoids Fiscal Cliff

From Solar Industry Magazine

The U.S. Congress has voted to approve tax legislation that would, among other measures, extend certain incentives affecting the solar sector and other industries. The deal also allows the U.S. to avert the so-called fiscal cliff, which would have put in place sequestration measures.

The legislation extends 50% bonus depreciation through the end of 2013 and postpones for two months the sequestration that would have gone into effect if a deal had not been reached in time.
“This will give Congress time to work on a balanced plan to end the sequester permanently through a combination of additional revenue and spending cuts in a balanced manner,” the White House said in a statement.