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How to turn the usa into the world's biggest pv market

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How to turn the usa into the world's biggest pv market

  1. How to Turn the USA into the WorldsBiggest PV MarketJigar ShahSolar Industry Veteran
  2. Attacking Conventional WisdomPath to Changing the Electricity MixBusiness Model Implications for EnergyProvidersPolitical Will as the Necessary Catalyst
  3. • Attacking Conventional Wisdom – Solar Energy is only around because of subsidies – no it is around because people hate their utility company and want energy Independence• Path to Creating 100,000 jobs per year through 2020 – Short term: Universal Access, interconnection & net metering – Mid term: Change rate tariffs, combine energy efficiency• Business Model Implications for Energy Providers – When the individual is cheaper than the collective, the electric utility model has to change• Political Will: Converting consistent positive public opinion into a potent political force
  4. Challenge ScenarioSet up Scenario: • Weak global economy, need growth engine Political Will • Energy prices shave 1-3% for off Global GDP growth Infrastructure • Geopolitical concerns lead to growing view of fossil fuel supplies – “Unacceptable Risk”
  5. Challenge ScenarioSet up Scenario: • Loss of Local Jobs – town/city Political Will • Small Towns sending $Billions for out of the local economy for Local electricity/fuels at a time that local jobs are desperately Development needed through • Local Solutions have gone from Government Infancy into their Teenage Years (solar and energy efficiency) Facilitation
  6. Which is better: Environmental Arguments (Moral) or Economic Arguments (Jobs, Pocketbook)Why does this accelerate change? • Whereas environmental concerns provoke only modest immediate concern and change scenarios • Economic security create perception of acute nature of risk – providing significantly accelerated change • Electric Utility rate increases and reliability present a big problem in local communities Political Will
  7. Third Industrial RevolutionDemocratization of Energy Distributed Generation Positive Power Buildings Next Generation Grid Smart Grid / Electric Vehicles
  8. Job CreationSolar PV has the largest political support across the board.Solar does not have NIMBY problems. Solar can specificallyalleviate congestion on local distribution grids and create themaximum local jobs/economic developmentInvestment and Job Solar PV Buildings Next Smart Grid / (Energy Generation Plug-inCreation through Efficiency) Grid Hybrids2016Private Sector Investment $200B $200B $200B $200BLocal Job-Years 2,000,000 2,000,000 50,000 100,000Manufacturing Jobs 100,000 500,000 800,000 1,100,000Annual Customer Savings $10B $21B $2.3B $2.3B
  9. What about Coal and Natural Gas?• Neither fuel will lead to sustainable job creation• Natural Gas is a volatile fuel that will continue to be volatile – particularly if used for electricity• Coal is under siege and will be destroyed by EPA and Natural Gas• Both technologies use significant water resources – identified by the CIA as the biggest risk to the Western United States
  10. New Mandates So…New Mandates are CreatedWe must choose a timeframe: 2016 For Mass Adoption of Solar
  11. Attacking Conventional WisdomPath to Changing the Electricity MixBusiness Model Implications for EnergyProvidersPolitical Will as the Necessary Catalyst
  12. Theory of the Possible What would it take to significantly advancethe take up of Solar Electricity to have a major impact on US electricity supply?
  13. Global Investment in New Renewables ($B)
  14. Global Investment in New Renewables ($B)
  15. Who is the largest at attracting Clean Energy Investment?
  16. Solar PV Pathway to 2014 Goal Solar System Cost Reduction Impacts Avg. Retail Electricity Price Cents per Retail kWh Solar Panels Solar Panels Balance BOS/ of System/ Install Installation BOS/ Labor Install O&M O&M Total Cell Mfg. Mfg. Scale Silicon Balance of Installation 2012 ownership Efficiency Yield (MWs) Material System Efficiency goal cost 17% to 19% 90%95% 1 2 GW  50% (BOS) Scale/Speed Reliability* All advances have already been discovered to achieve above benefits, implementation and optimization through scale isrequired
  17. Why SunEdison Succeeded in the USA Commercial electricity prices have, on average, increased 4.76% each year for the last 8 years. McKinsey another 4%+ for ten more years raising rates from $0.105/kWh to over $0.15/kWhSource Electric Power Monthly, DOE/EIA-0226; and Electric Power Annual, DOE/EIA-0348. 17 Source: US EIA
  18. What is RealisticBy 2013 Solar PV will reach grid parity for 330+ utilities across 30+States, representing 22% of total electricity sold. Over $80B of solar PVcan be installed without local incentives in 2013. Area of solar competitiveness 2020 2015 2012 Electricity Price Rising
  19. Government ChallengeBiggest Challenge – Achieving Momentum• Technology is Mature But… – Need Securitization to ensure more low cost capital – Have to phase out our solar tax credit earlier than 2016 – Need Universal Customer Access – Need to Figure out Utility 2.0 Business Model
  20. Public WillWhat will it take to drive acceptance? • Familiarity comes from knowing someone that has put solar on their home, business, school, church, etc. • Cost breakthrough on the installation side is a function of local experience/learning curve – need training! • Technology deployment is a function of perceived return on investment by Regulators – Solar is still not considered mainstream by our Political Champions! • Need to focus on Soft Costs – friction with the permitting, utility, regulators, etc.
  21. Will it Work? Are we Winning?Net new capacity additions in the EU
  22. Will it Work? Are we Winning?Net new capacity additions in the USA
  23. Advantaged CostWe can get to parity in electricity costs… How do we Deliver Customers Cost Advantage?
  24. Attacking Conventional WisdomPath to Changing the Energy MixBusiness Model Implications for EnergyProvidersPolitical Will as the Necessary Catalyst
  25. What about other Renewables?Implications for Renewables Broadly • Solar captures the imagination • Wholesale renewables are driven by RPS, not tax incentives • Transmission is a bottleneck to high penetration – after 2016 • Customers want a technology that helps them control their energy future – solar and energy efficiency • People want local renewables, not just in the overall state or country
  26. Electric Power BusinessImplications for Power Business • Solar is taking most profitable customers • Not paying for their “profit centers” • Stealing money from them by delaying or eliminating required utility investment in increased generation, T&D expansion/maintenance • Creating a “real” alternative • Utility does not have the software to handle Utility 2.0
  27. Solar SuppliersSummary • Large well-capitalized companies have already entered into this new space • New companies are also well capitalized • Huge opportunity to create local jobs/local economic development for Rural America and Electrical Unions
  28. RisksBiggest Risks to Scenario: • Fight between renewable energy technologies over tax equity • Continued Reduction of Installed Cost – Improving labor productivity – Sustaining the current cost reduction curve on equipment of 5% per annum through R&D support
  29. Attacking Conventional WisdomPath to Changing the Energy MixBusiness Model Implications for EnergyProvidersPolitical Will as the Necessary Catalyst
  30. Likelihood of Political WillDrivers of Political Will Weak Global Economy Energy Inflation Risks Geopolitical RisksAdd to this: Opportunities for Political and Economic Upside
  31. UpsideOpportunities for Upside If you were a US Political Leader Trying to Inspire your Electorate… • What investment could achieve this level of impact? – America invented solar power, they now perfect solar power – Large capital investment in our Service Economy – Union support for this program (IBEW) – Predictable productivity enhancement matching the gains Germany and Japan have already made – Potential for significant emissions reductions
  32. Putting it into Perspective
  33. Putting it into Perspective

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