GTM Research: Global Solar Market Trends

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Shayle Kann, Senior Vice President, GTM Research

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GTM Research: Global Solar Market Trends

  1. 1. Solar the Disruptor Shayle Kann Senior Vice President, Research Greentech Media GTM Solar Summit April 2014 Phoenix, AZ
  2. 2. Disruptive Innovation: Ten Things to Stop and Think About -Citi, April 2013 Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business -Edison Electric Institute, January 2013 The Disruptive Potential of Solar Power -Mckinsey, April 2014
  3. 3. Solar is Not a Disruptive Technology
  4. 4. Wholesale Disruption
  5. 5. 84 178 366 882 1,622 2,788 4,723 9,497 15,211 29,940 50,599 67,628 84,656 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CumulativePVInstallations(MW) Cumulative EU PV Installations, 2001-2013 Europe Subtotal Rest of Europe UK Spain Italy Germany Alone: 39 GW Step 1: Install a Lot of Solar Source: EnBW
  6. 6. Step 2: Drive Down Wholesale Electricity Prices Source: EnBW Forward Spot Price for Baseload Electricity (€/MWh)
  7. 7. Step 3: Strand Other Generators Source: EnBW Gross Margin – Gas Plant (€/MWh) Negative Margins=Trouble -13% -24% -15% -28% -42%-45% -40% -35% -30% -25% -20% -15% -10% -5% 0% EDF GDF Suez ENEL E.ON RWE SharePriceChange,3/09-3/14 Five-Year EU Utility Share Price Change “How to lose half a trillion euros” 10/13/13 Step 4: Power Producers Lose
  8. 8. In the U.S., It’s All About the Duck Chart Source: CAISO
  9. 9. In the U.S., It’s All About the Duck Chart Source: CAISO
  10. 10. In the U.S., It’s All About the Duck Chart Source: CAISO
  11. 11. And California is Already Looking Pretty Duckish Source: CAISO 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MW Hour CAISO Load, 3/18/2014 Net Load Total Load
  12. 12. Retail Disruption
  13. 13. Step 1: Install a Lot(?) of Distributed Solar Source: GTM Research/SEIA U.S. Solar Market Insight 2013 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 DistributedPVInstallations(MW) U.S. Distributed Solar PV Growth Residential Non-Residential 2013: 1.9 GW Expected Production: 2.7 million MWh =0.04% of National Electricity Demand
  14. 14. But What About Top States? Source: GTM Research/SEIA U.S. Solar Market Insight 2013 134 703 227 204 69 131 56 2.1% 0.4% 0.4% 0.4% 0.1% 0.3% 0.2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 0 100 200 300 400 500 600 700 800 DGInstallations,PortionofTotalElectricitySales(%) 2013Distributed(Customer-Sited)PVInstallations (MW) Top Seven Distributed PV Markets 2013 DG Installations 2013 DG Installations - Portion of Total Sales Still not a big impact on overall load
  15. 15. How About Demand Growth? Source: EIA Annual Energy Outlook 2013 Next 30 Years: 1% Annual Demand Growth
  16. 16. Top Solar States: Mostly Average Load Growth Source: EIA Annual Energy Outlook 2013 0.2% 0.9% 0.9% 1.0% 0.6% 1.6% 2.3% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 15-YearElectricitySalesGrowthRate(%) 15-Year Average Electricity Sales Growth Rate National Average: 1.1%
  17. 17. Distributed Solar Is Already Having An Impact On Growth -1098% -47% -42% -47% -16% -19% -7% -100% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% DistributedPVImpacton2013LoadGrowth(%) Distributed PV Impact on Electricity Demand Growth, 2013 Source: GTM Research
  18. 18. How Much Distributed Solar Will Be Installed in 2016? Source: GTM Research 7% 32% 32% 20% 60% 33% 44% 0% 10% 20% 30% 40% 50% 60% 70% - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 CompoundAnnualGrowthRate AnnualDistributedPVInstallations(MW) Distributed PV Installations, 2013 vs. 2016 2013 2016E Annual Growth Rate (%)
  19. 19. 2016 is Even More Stark -1326% -106% -93% -78% -63% -43% -19% -100% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% Hawaii California New Jersey Massachusetts New York Arizona Colorado DistributedPVImpacton2016LoadGrowth(%) Distributed PV Impact on Electricity Demand Growth, 2016E Source: GTM Research
  20. 20. Watch it Play Out in California Source: GTM Research 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2012 2013 2014 2015 2016 LoadGrowthRelativeto2012 California Retail Electricity Sales, With and Without Distributed Solar History-based Electricity Sales Growth Sales including DG - History Based Lost Sales
  21. 21. Final Thoughts Shayle Kann Senior Vice President, Research Greentech Media kann@gtmresearch.com @shaylekann

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