Solar Industry Update David Feldman National Renewable Energy Laboratory Presented at: National Summit on RPS Session: Outlook for Renewable Energy Technologies: Technology and Cost Projections November 6, 2013 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
Global PV Demand 70 Q1'13 projections vs. Q3 '13 projections Historic Projection Europe 60 60 PV Annual Installations (GW DC ) ROW Europe ROW India PV Annual Installations (GW DC ) 50 50 India Japan Japan China China 40 40 U.S. U.S. 30 30 20 20 10 10 0 0 2013P 2013P 2014P 2014P 2015P 2015P 2008 2009 2010 2011 2012 2013P 2014P 2015P Old New Old New Old New -10 • BNEF predicts that in 2013 for the first time more PV will come on-line globally than wind – both around 35 GW • Continued increase in global installations expected through 2014 • As European demand declines, U.S. & developing world markets expected to grow Note: P = projection. Sources : data displayed represents the median figures from the following sources, New: BNEF (08/21/13, 09/26/13), Deutsche Bank (09/26/13), Goldman Sachs (09/30/13), Stifel Nicolaus (09/04/13) Old: BNEF (02/08/13, 03/29/13), Deutsche Bank (03/01/13), Goldman Sachs (01/03/13), Stifel Nicolaus (01/22/13). 2
Global PV Manufacturing Capacity vs. Demand 90 Historic Projection Thin-Film Mfg. Capacity 80 c-Si Mfg. Capacity Module Capacity (GW) 70 Global Installation Additions 60 50 40 30 20 10 0 2008 2009 2010 2011 2012 2013P 2014P 2015P • In 2012 global PV manufacturing had 109% more module capacity than necessary for demand • Overcapacity is projected to remain through 2015 • Thin-film still projected to remain small portion of overall mfg. capacity Note: P = projection Sources : data displayed represents the median figures from the following sources : Module mfg. capacity: GTM “WCM Database, September 2013.” Demand: BNEF (08/21/13, 09/26/13), Deutsche Bank (09/26/13), Goldman Sachs (09/30/13), Stifel Nicolaus (09/04/13) 3
Module Efficiency • Average efficiency of modules installed in CSI territory have gone up by ~1.5% in past 5 years • Will need an acceleration of efficiency improvement to get to SunShot targets • Third-party installers have historically been less likely to install high efficiency modules • Controlling for capacity, time and incentive type, systems electing PBI employ 0.30% higher efficiency modules, on average, than ones that elect rebates • Incentive structures could have impact on type of panel installed • Many other factors also influence decision-making as well Graph and analysis courtesy of Carolyn Davidson, NREL, using data from California Solar Initiative database March 2013 (unpublished). 4
First Solar 2017 Roadmap First Solar plans to cut their costs nearly in half in the next four years, again Sources : Corporate public filings 5
SunEdison 2016 Roadmap SunEdison targets similar cost to First Solar Sources : Corporate public filings 6
Best-In-Class Module Cost Reduction Q4 ‘12 – Q4 ’17 (GTM Estimate) Overall conclusion from roadmaps: industry is shooting for module costs to be $0.40/W or less in the near future – 25% margins would give a price of $0.50/W • Not clear what efficiency goals are at this price • With continued mfg. overcapacity expected by analysts, uncertain whether mfg.’s will spend money on new equipment • Major cost reductions may have to come from “soft - costs” Sources : GTM Research: PV Technology and Cost Outlook, 2013 – 2017 ( June 2013) 7
PV System Price by Country - 2012 Residential Systems System Pricing: California vs. Germany $7 $9 System Price ($/W) $8 $6 System ASP ($/W) $7 $5 $6 $5 $4 $4.81 $4 $3 $3 Price Range $2.19 $2 $2 Germany PV, < 10 kW $1 California PV, < 10 kW Typical Price $1 $0 $0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2007 2008 2009 2010 2011 2012 2013 • Reported U.S. residential prices in 2012 were significantly higher than other mature PV markets • In particular, the higher priced U.S. markets were 2-3x the price of other countries • China achieved low installation prices without the installation experience of places like Germany, Italy or even U.S. Sources : IEA PVPS (01/18/13); Bundesverband Solarwirtschaft e.V. (BSW-Solar), August 2013. Currency conversion: http://www.oanda.com/currency/average; CSI Database, accessed 9/30/13. 8
PV System Price by Country - 2012 Utility-Scale Systems Commercial Systems $7 $7 $6 $6 System Price ($/W) System Price ($/W) Price Range $5 $5 Typical Price $4 $4 $3 $3 $2 $2 Price Range $1 $1 Typical Price $0 $0 • U.S. commercial scale system prices also lagging other countries, with higher end prices up to 4x more expensive – though there is a large range • Australia’s commercial & utility -scale business, which is reportedly in their nascent stages, have prices higher than their residential market segment • In utility space, U.S. is much more comparable in price to other countries, though still on higher end • U.S. utility-scale systems installed more efficiently than res./com. sectors, and potentially able to spread costs over more MW’s Source : IEA PVPS (01/18/13) 9
U.S. Installation Breakdown U.S. PV Installations by Market Segment U.S. PV Installations by State (MW DC ), Q2 '13 1,315 1,400 Utility Quarterly PV Installed (MW DC ) 1,200 Non-Residential Other Residential 89 1,000 Next 832 821 794 861 Four 725 800 682 States* 544 141 600 318 452 477 445 498 310 California New 134 349 278 342 438 400 Jersey 50 227 94 115 168 224 175 261 304 212 245 307 243 216 75 142 180 179 167 38 200 Arizona 22 55 22 63 64 88 107 111 126 146 164 164 90 72 75 56 60 63 67 68 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 '10 '10 '10 '10 '11 '11 '11 '11 '12 '12 '12 '12 '13 '13 • U.S. Installed 832 MW of PV in Q2 ’13, 1.5 GW in • H1 2013 U.S. non-residential market was H1 ‘13 11% less than H1 2012 • • Challenges maintaining growth rate in all Other markets opening up could spur demand sectors/states such as MN, GA, NY (50kW-200 kW systems) • Net metering and rate design in CA, CO, AZ, Cumulative U.S. PV is expected to exceed 10 GW • TX in Q3/Q4 ’13 • GTM reports that developers in HI had • A PV project will be installed, on average, difficulties with changing permit fees, state every 4 minutes tax credits, and market saturation in some key geographies Note: “Next Four States”: NC, MA, HI, CO. Sources: GTM/SEIA : U.S. Solar Market Insight Q2 2013. 10
2013 YTD System Price Distribution by Region (2.5 kW – 10 kW) Arizona California 100 100 % of MW's Inst., % of Capacity Installed % of Capacity Installed Majority of H.O. 80 80 state 3 rd -party % of MW's Inst., 3rd- installs. Value party % of MW's installed Cumulative Distrib., 60 60 Pricing or H.O. Cumulative Distribution standard install? Cumulative Distrib., 40 40 3rd-party 20 20 0 0 < 2.5 - 3.0 - 3.5 - 4.0 - 4.5 - 5.0 - 5.5 - 6.0 - 6.5 - 7.0 - > < 2.5 - 3.0 - 3.5 - 4.0 - 4.5 - 5.0 - 5.5 - 6.0 - 6.5 - 7.0 - > $2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 $7.5 $2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 $7.5 Installed Price ($/W) Installed Price ($/W) New York & New Jersey Massachusetts 100 100 % of MW's Inst., % of Capacity Installed % of Capacity Installed H.O. 3 rd -party 80 80 % of MW's Inst., skew 3rd-party % of MW's installed, NY Cum. Distrib., 60 60 % of MW's installed, NJ H.O. Cum. Distrib., Cumulative Distribution, NY 40 40 3rd-party Cumulative Distribution, NJ 20 20 0 0 < 2.5 - 3.0 - 3.5 - 4.0 - 4.5 - 5.0 - 5.5 - 6.0 - 6.5 - 7.0 - > < 2.5 - 3.0 - 3.5 - 4.0 - 4.5 - 5.0 - 5.5 - 6.0 - 6.5 - 7.0 - > $2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 $7.5 $2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 $7.5 Installed Price ($/W) Installed Price ($/W) • Most prices reported between $4-$6/W, however in many states 20%-40% below $4/W Sources : CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13; NYSERDA ( 09/30/13) Note: NYSERDA actually represents all “residential” sector data, and is the simple average price per quarter. All other data is weighted by capacity. 11
3 rd -Party System Ownership by Region Residential Systems Commercial Systems 100% 100% AZ (0 kW - 25 kW) AZ (25 kW - 2 MW) AZ 90% 90% CA (0 kW - 25 kW) CA (25 kW - 2 MW) CA % of Installed Capacity % of Installed Capacity 80% MA 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010 2011 2012 2013 YTD '10 '11 '11 '11 '11 '12 '12 '12 '12 '13 '13 '13 3 rd -party ownership continues to dominate residential sector in several markets • • AZ & CA % have leveled off in past year – with continued sales of some host-owned systems • New availability of residential loans • Rebounding of housing market allow systems to be financed through mortgages or home equity loans • Some customers may prefer owning system Sources : CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13. 12
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