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Understanding Solar: January 2013

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Understanding Solar: January 2013

  1. 1. Understanding SolarJanuary 2013
  2. 2. “Solar is so cheap today, that unless you tell me that you did a solar analysis yesterday, not last year or last month,then your analysis is out of date.” – David Crane, CEO of NRG Energy 3/2012
  3. 3. Solar Panel Prices Have Dropped Tremendously Q3 2012: Reported ASPs 61¢ to 76¢ per Watt Module Pricing Trends 1989-2011 Source: EIA: October 19, 2011 http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb1008; 2011 data point from GTM PVNews, April 2012
  4. 4. Utility Solar Power Now Beats Nuclear Prices, Nears Coal Nuclear and coal power takes 9 – 10 years to build Wholesale Electricity PricingSources: Nuclear & Coal Costs: Entergy Arkansas Testimony (Docket 12-038-U); Utility Scale Solar – EPIA, NM PRC
  5. 5. Utility Solar Now Beats Natural Gas Peak Power Wholesale Electricity PricingSources: Gas Plants - EIA AEO 2012er; CCNG data point: Entergy 2012 APSC Testimony; Utility Scale Solar – EPIA, NM PRC
  6. 6. Residential Solar Competes in Many States Today (with more on the way) Residential Electricity Prices vs Solar Prices With new finance models, Americans are installing solar at no or low upfront cost.Source: EIA (actual 2010, forecasted 2011-20); EPIA mid solar residential cost forecast
  7. 7. Competitively-priced solar has created avirtuous cycle of market expansion and further cost reduction.
  8. 8. Solar is Rapidly Scaling 27.7 GW Solar installed worldwide in 2011By comparison: 4 GW of nuclear went into operation in 2011
  9. 9. US Market is Showing Healthy Growth 684 MW UP 77% Q3 2012 First 3 Qs of installations 2012 over 78% avg. 2011 annual growth since 2006 Annual U.S. Solar Market Growth The U.S. “is one of the mostimportant (solar markets), because it is one of the few places around the world where we are seeing market growth.” Source: DOE/EERE 2010 Data Book; 2011 data from SEIA/GTM Market Insight Report – Steven Taub, GE Capital
  10. 10. Solar Adoption is on a High Tech Trajectory: US Cell Phone Market Source: CTIA – The Wireless Asscoiation
  11. 11. In a race to market maturity, there arealways winners and losers.
  12. 12. Consolidation is a Sign of Maturity: EarlyAutomotive Year Year 1914 1984 11.5 million cars 2 million cars After 70 years of mergers 15 manufacturers and bankruptcies 350 manufacturers# OF CAR MANUFACTURERS# OF CARS PRODUCED Adapted from: Howard H Baker Jr. Center for Public Policy, University of Tennessee, Assessment of Incentives and Employment Impacts of Solar Industry Development, May, 2012.
  13. 13. Consolidation is a Sign of Maturity: Early Dot Com ~5,000 companies acquired or $5 trillion shutdown of market value erased Would you call the INTERNET a failure? NASDAQ closing prices from 1994 to 2008Source: NADAQ Composite Index, Webmergers, Inc.
  14. 14. Mergers & Bankruptcies Are Nothing New . . . OIL INDUSTRY
  15. 15. Behind tumultuous headlines, solar is a trueAmerican success story.
  16. 16. Solar Creates U.S. Jobs 120,000 Americans work in solar today 8 7 7x more jobs per High growth despite 6 5 energy unit recession than coal Solar employment grew 10x faster 4 than the general economy 3 2 1 0 Nat ural Gas Coal Nuclear Wind CCS Biomass Solar Thermal Geot hermal Solar PV Sources: Kammen, David M et al, 2004, Report of the Renewable and Appropriate Energy Lab, Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy, University of California, Berkeley.Wei, Max et al, 2010, Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy and the Haas School of Business, University of California, Berkeley, in Energy Policy, vol 38, issue 2, February 2010. Solar Foundation 2011 National Jobs Census U.S. Bureau of Labor Statistics: May 2010 National Industry-Specific Occupational Employment and Wage Estimates
  17. 17. US Military Is Going Big on SolarCompleted US PV ProjectsCompleted US PV Projects “This is about the bottom line of the United States Army: it is about military effectiveness.” -Dennis McGuinn, US Navy Vice Admiral (ret.) DoD committed to 1200 MW on +50 domestic bases SolarCityto install 300 MW on 120,000 military residences
  18. 18. American Businesses Are Going Big on Solar Top 20 Companies Total: 1.2 million solar panels 700 systems in 25 states $47.3 million in annual utility bill savings
  19. 19. Major Financial Players Are Going Big onSolarRecent Investments $109B Saudi Arabia’s 20-year solar investment plan $5.7B Recently announced investments
  20. 20. U.S. Utilities Are Investing in Solar Utility PV Pipeline “My number one fear is we’ll be pushed to build natural gas at the expense of solar and wind . . . Ben Franklin said there are two certainties in life: death and taxes. To that I would add the price of natural gas.” - Jim Rogers, CEO of Duke Energy 20-fold increase 5-fold increase Expected Completion DateSource: GreenTech Media, PV News, July 2012
  21. 21. The playing field andthe rules of the game are still designed tosupport fossil power. It’s time for a new game.
  22. 22. Subsidies Pale in Comparison to Fossil FuelsSolar Subsidies Pale in Comparison to Fossil FuelsFossil Fuel andSolar [ELI, $72.4 billion SEIA] $2 billion [SEIA, Blumenauer, $40 billion Treasury] $7-10 billion Estimating U.S. Government Subsidies to Energy Sources: 2002-2008 Environmental Law Institute, September 2009 EstimatingSEIAGovernment Subsidies to Energyin the United States: A Comparison of Energy Technologies, (Solar Energy U.S. Federal Energy Subsidies Sources: 2002-2008Environmental Law Institute, September 2009SEIA February 2011 “Ending Oil Industry Tax Breaks” Congressman Earl Blumenauer,United States: A Comparison of Energy Technologies, February 24, 2011 Industries Association) Federal Energy Subsidies in the Third District of Oregon, www.blumenauer.house.gov, April 2011 “ Ending Oil Industry Tax Breaks” Congressman Earl Blumenauer, Third District of Oregon, www.blumenauer.house.gov, April 2011
  23. 23. U.S. Lobbying Dollars http://www.opensecrets.org/lobby/
  24. 24. Bipartisan Public Support for Clean Energy 91 percentof Americans say developing sources of clean energy should be a priority for the President and Congress 85% of Republicans 89% of Independents 97% of Democrats Sources: Public Support for Climate & Energy Policies in May 2011, Yale Project on Climate Change.
  25. 25. Understanding SolarSolar is . .Delivering record cost reductionsAchieving record market growthPutting Americans to work in all 50 statesTransforming the U.S. energy economyNot in 20 years. Not tomorrow. Today.

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