Grid Parity: Are We There Yet?


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Grid Parity: Are We There Yet?

  1. 1. GRID PARITY:ARE WE THERE YET?Craig Lawrence, VP MarketingAPEC 2013 2013 CONFIDENTIAL | 1
  2. 2. ABOUT SOLARBRIDGESolarBridge is the leading supplier of microinverter technology used in AC PV Modules• Founded by world-renowned power electronics experts at the University of Illinois. Headquarters in Austin, TX• Design, manufacture, and sell microinverters and monitoring solutions used in residential and commercial PV• OEM Partner to leading solar module manufactures globally 2013 CONFIDENTIAL | 2
  3. 3. THE SOLARBRIDGE AC MODULE SOLUTION A complete ACPV solution including inverter and monitoring solution, designed as a “white label” solution for module OEMs. AC MODULES POWER PORTAL POWER MANAGER 2011 CONFIDENTIAL | 3 2013
  4. 4. GLOBAL DEMAND FOR ENERGY IS GROWING Source: EIA, International Energy Outlook 2011 Source: IEA, World Energy Outlook 2012Global energy demand rises by 35% in the period to from 2010 - 2035, underpinned by rising living standards in China, India & the Middle East 2013 CONFIDENTIAL | 4
  5. 5. OUR FUTURE SUPPLY DEPENDS ON RENEWABLES Source: IEA World Energy Outlook 2012Renewable energy sources are expected to account for over half of new global electricity capacity 2013 CONFIDENTIAL | 5
  6. 6. THE PRICE OF SOLAR IS DROPPING RAPIDLY Source: GreenTech Media Source: Yingli Green Energy and Maxim Group• The price of PV modules has dropped, rapidly accelerating the past 2 years• From 1985 to today, we have seen a 100X reduction in PV module prices• Price drops have been fueled by manufacturing process advances, and by a massive investment in production in China 2013 CONFIDENTIAL | 6
  7. 7. THE INDUSTRY IS CONSOLIDATING• Many PV Module companies focused on new technology innovation (e.g. thin film) have failed due to cost reductions of traditional crystalline-silicon technology• European and American module companies have not been able to keep pace with the Chinese• This pain felt by the “upstream” suppliers has resulted in a market boom “downstream” to other parts of the value chain who benefit from oversupply and lower costs 2013 CONFIDENTIAL | 7
  8. 8. LOWER PRICES HAVE FUELED DEMAND Source: IMS, World Market for PV Inverters 2012• Demand for PV expected to grow 20% annually through 2016, fueled by falling prices, increased electricity rates, and government incentives• Incumbent leading markets in Europe (Germany, Italy, Spain) are no longer driving growth.• Future growth to come from the U.S., China, Japan, India, and the developing world, following their increased demand 2013 CONFIDENTIAL | 8
  9. 9. FROM SUBSIDIES TO GRID PARITY Source: Stephen O’Rourke/Deutsche Bank• “Grid Parity” is a term used to describe the point at which PV is cost competitive with incumbent sources of electricity without any subsidies• Grid Parity is a local phenomenon – depends heavily on the local cost of electricity and PV. There is no one point in time that we hit parity.• We are already at Grid Parity today in many parts of the world (CA, HI, Australia, Japan)• By 2022, it is expected that 38 million homes and businesses in the US will be able to get solar cheaper than the grid without any subsidies 2013 CONFIDENTIAL | 9
  10. 10. THIRD-PARTY FINANCING DRIVING DEMAND• 3rd party financing of solar pioneered by SunEdison for commercial customers, is now available to homeowners across the country by multiple vendors• You get solar for $0 down, and a monthly lease or energy payment designed to be less then the amount you save on your bill. This is “grid parity” today for home and business owners without any capital investment.• This type of financing is the major driver for growth of PV in the United States, and is now spreading to other countries 2013 CONFIDENTIAL | 10
  11. 11. THE FOCUS IS SHIFTING TO “SOFT” COSTS Source: Lawrence Berkeley Lab• With low module prices, the majority of PV system costs are now “soft” costs – customer acquisition, design, permitting, installation labor, etc.• Mature markets, such as Germany, are much more efficient when it comes to soft costs, although they still represent a majority of the system cost• Power electronics play a unique role, as they have the ability to influence soft costs in a positive or negative way 2013 CONFIDENTIAL | 11
  12. 12. THE LEVERAGE OF POWER ELECTRONICS• Power electronics have unique leverage in impacting overall system costs.• Innovations in power electronics can influence multiple hard and “soft” cost factors and drive the industry to grid parity faster Innovation Benefit Improved Energy Harvest Lower Equipment Cost Simplified Architecture Lower LCOE Increased System Integration Lower Installation Costs Improved Safety Reduced BOS Costs Improved Reliability Reduced Permitting Costs Improved Monitoring Lower O&M Costs 2013 CONFIDENTIAL | 12
  13. 13. MANY INNOVATIONS ARE HAPPENING DC Optimizers Microinverters AC Modules• Significant innovations addressing energy harvest, system architecture, safety, reliability, monitoring, etc. are occurring in the industry today• Driven by both incumbent power electronics companies, and new start-ups, these are having a real, measurable impact on the drive to grid parity 2013 CONFIDENTIAL | 13
  14. 14. MICROINVERTER MARKET TRACTION Microinverters have seen rapid adoption in markets where they have been introduced. In the US, they have captured 30% market share of DG Motivation for adoption: → Higher energy production → Simplified design and installation → No single point of failure → Module-level diagnostics reduce operations and maintenance costs → Safer, no high-voltage DC Source: California Solar Initiative (CSI) Data, 2013 2013 CONFIDENTIAL | 14
  15. 15. POWER ELECTRONICS - LINK TO THE “SMART” GRID• Solar energy is an intermittent source of energy. As the penetration of solar increases, the impacts on the grid will become significant, and will ultimately increase the cost to grid operations (which get passed to consumers)• As the only “intelligent” portion of the PV system, power electronics can and will play a key role in helping integrate more PV to the grid without increasing it’s cost• Utilities may need or require several new capabilities from PV systems  Remote on/off and Power limiting  Voltage and frequency ride-through limits  Support local grid voltage (transition voltage control mode)  Reactive Power, VAR control  Short- and Long-term energy forecasting 2013 CONFIDENTIAL | 15
  16. 16. THANK YOUCraig Lawrence, VP MarketingAPEC 2013 2013 CONFIDENTIAL | 16