Mapping System Pricing reductions

woodmac.comTrusted intelligence
Research Presentation:
Mapping System Pricing Reductions: How Far Can the
Drop In Prices Go?
Research
Ben Gallagher
Senior Analyst
Benjamin.Gallagher@woodmac.com

The title of today’s presentation is
somewhat misleading…

Weekly module spot prices have fallen by 86% since January 2011
Source: Wood Mackenzie Power & Renewables
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
1/5/2011 1/5/2012 1/5/2013 1/5/2014 1/5/2015 1/5/2016 1/5/2017 1/5/2018 1/5/2019
$/W
Global Multi c-Si Module ($/W) Global Mono c-Si Module ($/W)

Residential has fallen by 49%; Commercial by 67%; Utility by 65%
$6.15
$4.77
$4.10
$3.78 $3.72
$3.39
$3.17 $3.15
$4.90
$3.50
$2.86
$2.33 $2.24
$1.89
$1.68 $1.62
$3.02
$2.09 $1.91 $1.81
$1.56
$1.31
$1.11 $1.07
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2011 2012 2013 2014 2015 2016 2017 2018
$/Wdc
U.S. Residential PV U.S. Commercial PV U.S. Utility PV

However in any given quarter prices are less predicable
$0.63
$0.59
$0.49
$0.39
$0.38
$0.40
$0.45
$0.48 $0.48
$0.43
$0.41
$0.37
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
$0.65
$0.70
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
$/Wdc

Hey, who put lumps in my demand???
19.12
23.41
15.85
19.94
18.93
26.06
28.42
23.89
25.77 26.47
21.81
23.21
0.00
5.00
10.00
15.00
20.00
25.00
30.00
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
MWdc

The relationship between supply and demand can be rocky
42%
18%
103%
71%
83%
3…
27%
57%
57%
54%
92%
86%
0%
20%
40%
60%
80%
100%
120%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

ECR is an effective but imperfect way to predict module prices
42%
18%
103%
71%
83%
33%
27%
57% 57%
54%
92%
86%
0%
20%
40%
60%
80%
100%
120%
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
$0.65
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
$/Wdc
U.S. Module Prices Global ECR

So what is happening in 2019?

26 26
22 2323 25
28
35
0
5
10
15
20
25
30
35
40
Q1 Q2 Q3 Q4
GWdc
2018 2019
Q4 2019 will see the highest single-quarter installation total ever, topping 35 GW
Global quarterly installations, 2018 - 2019
Relatively Low
Quarterly Demand
Relatively High
Quarterly Demand
Country Total (GWdc) Q1 Q2 Q3 Q4
China 39.5
US 12.1
India 11.1
Japan 5.6
Europe 16.9
Global 111.2

130,334
142,002 141,389 146,552 142,728 143,589
111,195
123,862 120,404 122,922 121,779 121,815
…
101,161
110,654 108,338 108,488 104,348 106,084
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2018 2019 2020 2021 2022 2023 2024
MWdc
Global Upside View Global Base Case View Global Downside View
130GW of demand is plausible for this year

But Ramped Module Capacity Will Only Increase By 12%
…
11,208
300 4,489 4,939
193,427
-
50,000
100,000
150,000
200,000
250,000
Total By Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Total By Q4 2019
MWdc

The global module market will be in near undersupply by year’s end
98%
84%
70%
37%
89%
67%
73%
47%
0%
20%
40%
60%
80%
100%
120%
Q1 2019 Q2 2019E Q3 2019E Q4 2019E Q1 2020E Q2 2020E Q3 2020E Q4 2020E

This is happening as the global market transitions to Mono/Mono PERC
43.62
57.74
81.31
95.24
113.05
81.41
92.52 91.18
98.18 99.50
0
20
40
60
80
100
120
Q4 2016 Q4 2017 Q4 2018 Q4 2019E Q4 2020E
GWdc
Mono Ramped Capacity Muli Ramped Capacity

Mono PERC modules allow for significant CAPEX savings
$1.081
$1.035
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
Multi Mono
$/Wdc
Module Inverter EBOS SBOS
Labor Design & Engineering Permitting Logistics & Misc.
Civil Taxes EPC Overhead & Margin Developer Costs

Supply for mono in particular will be very tight
8.17
9.93 10.27
14.61
22.61 22.65 23.20 23.81
0
5
10
15
20
25
30
Q1 2019 Q2 2019 Q3 2019 Q4 2019
GWdc
U.S Demand U.S Safe Harbor Demand European Demand Top Runner Demand Mono Supply

Without safe harbor, 2019 U.S. demand will be 12.1GW; only 19GW of Supply
18.98
6.82
0
5
10
15
20
25
Total South East Asian Supply Total Mono Supply
GWdc
Malaysia Philipines Singapore Thailand Vietnam

Get to the forecasts already!

There is already an undersupply of Mono PERC modules in the U.S.
$0.55
$0.47
$0.44
$0.41
$0.40
$0.45
$0.47
$0.51
$0.39
$0.45
$0.28
$0.30
$0.34
$0.35
$0.24
$0.27
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019E Q2 2019E Q3 2019E Q4 2019E
$/W
U.S. Small Order (1-5MW) EU China Japan India

Less upside risk for multi modules
$0.48
$0.43
$0.41
$0.37
$0.36
$0.36 $0.37
$0.39
$0.30
$0.34
$0.24
$0.25
$0.27 $0.28
$0.22 $0.23
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019E Q2 2019E Q3 2019E Q4 2019E
$/W
U.S. Small Order (1-5MW) EU China Japan India

A price increase will be muted by the collapse of poly prices
$18.57
$17.87
$16.43
$15.75
$12.02 $11.97
$10.58
$9.58 $9.29 $8.87
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
1/3/2018 3/3/2018 5/3/2018 7/3/2018 9/3/2018 11/3/2018 1/3/2019 3/3/2019
$/Kg

By 2024, the average global polysilicon price will fall to $7.9/kg
$17.7
$21.0
$14.5 $15.0
$18.1
$9.9 $9.6
$10.6
$9.4 $8.8 $8.2 $7.9
$12.5
$15.0
$13.3
$12.7
$12.0 $11.7
$7.8 $7.2 $6.7 $6.1 $5.6 $5.3
$-
$5.0
$10.0
$15.0
$20.0
$25.0
Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019E Q4 2020E Q4 2021E Q4 2022E Q4 2023E Q4 2024E
$/kg
Base High Low

Global average multi module prices will be $0.20/Wdc by 2023
$0.45
$0.32 $0.31
$0.26
$0.22
… $0.20
$0.31
$0.34 $0.35
$0.29
$0.24
$0.22 $0.22
$0.30
$0.29
$0.24
$0.20
$0.18 $0.18
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
Q4 2017E Q4 2018 Q4 2019E Q4 2020E Q4 2021E Q4 2022E Q4 2023E Q4 2024E
$/W
Base High Low

Mono PERC prices will remain high in the U.S. until Q4 2020
$0.48
$0.37 $0.39
$0.34
$0.28
$0.23
$0.21 $0.20
$0.55
…
$0.51
$0.47
$0.33
$0.25
$0.22 $0.22
$-
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
Q4 2017 Q4 2018E Q4 2019 Q4 2020E Q4 2021E Q4 2022E Q4 2023E Q4 2024E
$/Wdc
Multi U.S. Small Order (1-5MW) Mono U.S. Small Order (1-5MW)

Even with module prices rising this year, system prices y-o-y fall
$6.15
$4.77
$4.10
$3.78 $3.72
$3.39
$3.17 $3.15 $3.03 $2.93 $2.82
$2.60 $2.47 $2.33
$4.90
$3.50
$2.86
$2.33 $2.24
$1.89
$1.68 $1.62 $1.53 $1.45 $1.35 $1.26 $1.22 $1.19
$3.02
$2.09 $1.91 $1.81
$1.56
$1.31
$1.11 $1.07 $1.03 $0.97 $0.90 $0.83 $0.81 $0.78
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E
$/Wdc
U.S. Residential PV U.S. Commercial PV U.S. Utility PV

U.S. residential PV system pricing will fall by 23% by 2024
…
$2.93 $2.82
…
$2.47 …
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2019E 2020E 2021E 2022E 2023E 2024E
$/Wdc
Module Inverter EBOS
SBOS Labor Design & Engineering
Permitting, Interconnection, & Inspection Logistics & Misc. Taxes
Customer Acquisition Overhead & Margin

>$2.50/Wdc
<$2.50/Wdc

Commercial flat-roof PV CAPEX will fall by 19% by 2024
…
…
…
… … $1.39
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
2019E 2020E 2021E 2022E 2023E 2024E
$/Wdc
Labor Design & Engineering Permitting & Inspection Logistics & Misc.
Taxes Origination EPC Overhead & Margin Developer Costs

Utility single-axis tracking CAPEX will fall by 22% by 2024
…
…
$1.03
… … …
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
2019E 2020E 2021E 2022E 2023E 2024E
$/Wdc
Labor Design & Engineering Permitting Logistics & Misc.
Civil Taxes EPC Overhead & Margin Developer Costs

Wood Mackenzie surveyed our network to better understand the market
On February 26, 2019, Wood Mackenzie Power & Renewables sent a
survey to our European network to gauge trends concerning prices,
technology, policy, and other variables. A total of 54 respondents from 17
countries participated.
Respondents represented an array of professions, including EPCs/installers,
engineers, manufacturers and financiers.
Out of 54 respondents, the type of module most commonly used is multi

4%
29%
27%
40%
Bi-Facial Mono Mono Perc Multi
Wood Mackenzie surveyed our network to better understand the market
Listed below are the responses from the survey as they relate to module prices, method of
procurement, and type.
Module price range ($/Wdc) by participant &
method of procurement
Type of module most commonly used by respondents
0 1 2 3 4 5 6 7 8
< 0.22
0.22 - 0.25
0.25 - 0.27
0.27 - 0.29
0.29 - 0.31
0.31 - 0.34
0.34 - 0.39
0.39 - 0.45
> 0.45
Number of participants by method of procurement
Modulepricerange
($/Wdc)
Direct from a vendor EPC Through a distributor

Thank You!
Ben Gallagher
Senior Analyst
Benjamin.Gallagher@woodmac.com

#gtmsolarsummitQuestions? Enter them at gtm.cnf.io
Greg
Beardsworth
NEXTracker
Senior Director,
Product Management
Hongbin
Fang, Ph.D.
LONGi Solar
Director, Product
Marketing
M
Panel: Single-Axis Trackers & Bifacial Modules: Overall
System Impacts on Performance and Costs
Benjamin
Gallagher
Wood Mackenzie
Power & Renewables
Senior Analyst, Solar
Sergio
Prado
Soltec
Sales Manager Mexico
Travis
Rose
ArrayTechnologies
Vice President, Sales

#gtmsolarsummitQuestions? Enter them at gtm.cnf.io
Robert
Spencer
NREL
Data Scientist & Software
Developer
Teresa
Barnes, Ph.D.
NREL
Group Manager, PV Reliability
& Systems Engineering
Molly
Cox
Wood Mackenzie
Power & Renewables
Research Associate, Solar
Betting on Floatovoltaics: Shedding Light on Floating PV
Opportunities in the U.S.
M

Betting on Floatovoltaics:
Floating PV Opportunities in the U.S.
Robert S. Spencer and Teresa M. Barnes
May 14, 2019

NREL | 35
Floating Photovoltaics (FPV)
Source: Adapted from Solarplaza, 2016 and Ciel & Terre, Company Profile, 2017

NREL | 36
FPV: Benefits & Tradeoffs
The net evaporation rate (dot color) and annual volumetric evaporation loss (dot
size) of each FPV feasible water body in the U.S.• Land-energy conflicts (e.g.
fuel vs. food)
• Unused space that
generates revenue
• Panel efficiency
• Water quality
• Evaporation reductions
• Land acquisition and site
preparation costs
Source: Spencer, R.S.; et. al. “Floating PV: Assessing the Technical Potential of Photovoltaic Systems on Man-
Made Water Bodies in the Continental U.S.” Environ. Sci. Technol. 2019, 53, 1680−1689

NREL | 37
Floating Solar Around the
World
0
50
100
150
200
250
2015 2016 2017 2018
CumulativeInstalledCapacity(MW)
USA Italy South Korea Japan UK China Taiwan India Belgium
• Rapid Growth in China, SE Asia,
and Latin America
• Northern European markets also
expanding
• Historically dominated by land-
constrained areas
• “Co-Benefits” increasing adoption
World Bank, 2018
Data from Solarplaza
GTM Research

NREL | 38
SERIS Floating Solar
Testbed
• SERIS in Singapore
• 1 MW
• 8 Systems
SERIS and World Bank, Where Sun Meets Water 2018
1 MW, Established 2016

NREL | 39
Floating Solar
Performance
Roof Floating Systems
Air Temp VERY HOT 1 to 3oC lower
Humidity MISERABLE OPPRESSIVE
Wind Speed ~ 1m/s 1-2 m/s
Albedo 13% 5-7%
Module Temp HOT 0 or 5-10oC lower
Energy Yield It’s Complicated
Typical PR
in
Singapore
Reference System is ideal – bifacial, well
ventilated, and low mismatch

NREL | 40
Floating Solar Challenges
www.thehindu.com, C.V. Subrahmanyam
All Systems Require O&M
Soiling
Mechanical Failure due to cyclic loading
Inverter Late Starts
Insulation test failure
PID is a real problem – buy high quality modules!

NREL | 41
FPV: Case Study – Walden, CO
• 75 kW system powers water treatment facility
• Reduces evaporative losses of drinking water
retention pond in arid region
• Minimal site preparation
• Community involvement & volunteer activity
(GRID Alternatives)
Usclimatedata.com

NREL | 42
Surviving Storms
42 kW damaged in 7550 kW plant in Aug. 2016 in Japan
https://tech.nikkeibp.co.jp/dm/atclen/news_en/15mk/090600817/?ST=msbe

NREL | 43
Reliability vs. Resiliency
• 20.5 kW testbed in the Philippines on
Laguna Lake
– 95,000 hectares
– Averages 20 storms/year
– https://youtu.be/T2wNc9Ya4fw
• 25 MW in Andijk, NL by Floating Solar BV
– 15 plants covering half of the reservoir
surface
– Tracking with storm stow for 60 mph
winds
• Other interesting cases
– Ocean – Waves + Salt
– Mining waste – pH + ?
– Floodplain PV – (Don’t do it)
https://www.pv-magazine.com/2019/05/06/a-floating-solar-island-archipelago/
https://www.theguardian.com/world/2019/apr/21/dutch-engineers-build-worlds-biggest-
sun-seeking-solar-farm
https://www.pv-tech.org/news/floating-solar-testbed-to-battle-filipino-typhoons

NREL | 44
Hydropower + FPV
• Leverage existing transmission infrastructure
• Longyangxia in Qinghai has ground mounted
PV 30 km away (World Bank)
– 330 kV dedicated connection
– 1,280 MW hydro + 850 MWp PV
– Higher dispatch setpoint during the day
and ZERO curtailment. Smooth output
• Floating + Hydropower
– 218 kWp in Portugal (World Bank)
– Thailand planning 2.7 GW in 9 reservoirs
by 2037
– $63M for 45 MW in 2020 at Sirindhorn
Dam (Bloomberg Renewable Energy
World)
https://www.renewableenergyworld.com/articles/2019/03/thailand-planning-massive-
floating-solar-power-plants-on-hydropower-dam-reservoirs.html

NREL | 45
Design Considerations
• NO specific IEC, UL, SEMI standards for floating systems or components
• Most of what we know comes from installations on calm, tropical, inland waters
• We are going to learn a lot more by 2022
Water or
Humidity
• Modules
• Cables
• Connectors
• PID
• Immersion
Environment
• Thermal
cycles
• Freeze/thaw
• Soiling
Mechanical
• Wind
• Waves
• Cyclic
loading,
vibration
• Extreme
weather
Other
• Water
quality
• Wildlife
• User conflict
Cable and connector management is critical!

The Technical
Potential of Floating
Solar in the U.S.
See more information:
https://vimeo.com/268064164/be9320425d

NREL | 47
FPV Project Characterization
Panel density as the total generation capacity per system surface area
New Insight: Higher PV panel density per unit area
FPV Current Projects
Land-Based (Fixed)
Land-Based (1-Axis)
Land-Based (2-Axis)
Average Trends
FPV Current Projects
United States
International
2.5
Acres / MW

NREL | 49
FPV Generation Potential
The percent of potential annual generation by FPV to
current annual production in 2016
The potential annual generation of FPV
National Production: 8,157 TW-hrs/yr (EIA 2017)
National FPV Potential: 786 TW-hrs/yr (9.6%)
Highest Potential: Florida 120 TW-hrs/yr
Source: Spencer, R.S.; Macknick, J.; Aznar, A.; Warren, A.; Reese, M.O. Floating PV: Assessing the Technical Potential of Photovoltaic
Systems on Man-Made Water Bodies in the Continental U.S. Under Review

NREL | 52
FPV Evaporation Reductions
The simulated net evaporation rates of open
surface water bodies in the United States.
The net evaporation rate (dot color) and
annual volumetric evaporation loss (dot size)
of each FPV feasible water body in the U.S.
New Insight: Evaporation Benefits
FPV Evaporation summarized at the state level

NREL | 53
LCOE Sensitivity Analysis

NREL | 54
Efficiency Tradeoffs

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.
www.nrel.gov
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.
Robert S. Spencer Robert.Spencer@nrel.gov
Teresa M. Barnes. Teresa.Barnes@nrel.gov
Questions? Thank you!
This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy,
LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by the
Laboratory Directed Research and Development (LDRD) Program at NREL. The views expressed in the article do not
necessarily represent the views of the DOE or the U.S. Government. The U.S. Government retains and the publisher,
by accepting the article for publication, acknowledges that the U.S. Government retains a nonexclusive, paid-up,
irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for
U.S. Government purposes.

NREL | 56
Floating Solar in Japan
Team toured a four floating solar
installations near Tokushima. Two
1.5 MW and one 681 kW system.

NREL | 57
Component Details from NREL Visit
System flex
points and
evidence of
system
flexibility
System
Components

NREL | 58
System Design in Japan
Sprinkler system, pump,
temperature sensor, and
anemometer
Evidence of
vegetation and
algae impacts

Mapping System Pricing reductions

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