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Solar Utility Scale Presentation 1


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- German Solar PV market
-USA solar PV market
-Regulatory environment
-Federal Resources
-Global Solar Outlook

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Solar Utility Scale Presentation 1

  1. 1. Solar PV Market Germany versus USA 3 rd Solar Convention Las Vegas October 7 th 2010 Volkmar Kunerth, MBA President, Solar Partners International Solar Partners International Solar Partners International
  2. 2. <ul><li>German versus US market </li></ul><ul><li>Grid parity </li></ul><ul><li>Implications </li></ul>Agenda <ul><li>German PV market </li></ul><ul><li>Conclusions </li></ul><ul><li>Outlook </li></ul><ul><li>US PV market </li></ul><ul><li>Conclusions </li></ul><ul><li>Outlook </li></ul><ul><li>Bureaucracy </li></ul><ul><li>Regulatory Environment </li></ul><ul><li>Federal Resources </li></ul><ul><li>Global Solar Outlook </li></ul><ul><li>Optimistic signs and challenges </li></ul><ul><li>Questions </li></ul><ul><li>Solar PV Market </li></ul>Solar Partners International Germany U.S.A. Economics Challenges Future
  3. 3. <ul><li>PV can be used anywhere </li></ul><ul><li>PV can be used in any size </li></ul><ul><li>PV is scalable </li></ul><ul><li>Grid connected and OFF-Grid possible </li></ul><ul><li>Only one initial investment </li></ul><ul><li>PV largest investment </li></ul><ul><li>PV has the highest cost reduction potential </li></ul><ul><li>PV reduces CO2 production and helps fight global warming </li></ul>Why Photovoltaic? Solar Partners International
  4. 4. <ul><li>Installations until 2009: Over 10 GWp </li></ul><ul><li>Predicted Installation in 2010 alone: 10 GWp </li></ul><ul><li>150,000 people employed in the industry </li></ul><ul><li>PV is the largest source of investment: $29 billion </li></ul><ul><li>80% of installations are roof installations </li></ul><ul><li>Dramatic growth since the introduction of the Renewable Energy Sources Act (EEG) in 2000 </li></ul><ul><li>EEG guarantees operators a feed-in tariff (FIT) fixed for 20 years and a purchase guarantee for the electricity produced </li></ul><ul><li>-> investing in a solar electricity system is a very secure investment for 20 years </li></ul>German PV Market Solar Partners International
  5. 5. German PV Market Solar Partners International
  6. 6. <ul><li>German Feed in tariff laws (FIT) </li></ul><ul><li>- “A feed-in tariff (FIT) is an energy supply policy that </li></ul><ul><li>offers a guarantee of payments to renewable energy </li></ul><ul><li>developers for the electricity they produce.” </li></ul><ul><li>- Under most FIT policies, the government establishes a legal obligation for electric utilities to purchase all of </li></ul><ul><li>the electricity produced by qualifying developers. </li></ul>German PV Market
  7. 7. German PV Market Solar Partners International
  8. 8. German PV Market Solar Partners International
  9. 9. German PV Market Source:
  10. 10. German PV market <ul><li>Advantages </li></ul><ul><li>Leads to rapid deployment of renewable energy in Germany </li></ul><ul><li>Reduced investment risk: makes it easier to finance projects </li></ul><ul><li>Faster reduction of CO2 output </li></ul><ul><li>Employment for 150,000+ people </li></ul><ul><li>Innovation engine </li></ul><ul><li>Disadvantages </li></ul><ul><li>Cost for German electricity customer until 2008: $48 Billion </li></ul><ul><li>(If calculated for 2009 and 2010 we reach $100 Billion!) </li></ul><ul><li>Prices are set too high, utilities and ratepayers are stuck with </li></ul><ul><li>those costs for the duration of the contracts (20 years). </li></ul><ul><li>The electric grid can only take so much alternative energy due to high fluctuations in input. </li></ul>
  11. 11. <ul><li>Conclusions: </li></ul><ul><li>> FIT was a very suitable model to jump-start the German PV industry </li></ul><ul><li>> FIT not sustainable business model in the long run because it is too expensive </li></ul><ul><li>> Future financial burden for German customers </li></ul><ul><li>> Current grid is limited: Smart grid technologies necessary in the future for further growth </li></ul><ul><li>> Intelligent storage technologies needed for off-grid installations </li></ul>German PV Market
  12. 12. <ul><li>Outlook: </li></ul><ul><li>After the January FIT decrease, the German parliament finally voted in an additional decrease last July </li></ul><ul><li>16% decrease for rooftops, 11% for reconversion areas, 15% for the other installations </li></ul><ul><li>No more feed-in tariff for PV installations on agricultural land; the new law is expected to considerably affect the market in the coming years. </li></ul><ul><li>Market could stabilize in the 3 to 5 GW annual installations level by 2014, if the present support scheme is maintained, with </li></ul><ul><li>adequate FIT decreases in line with the expected price decrease. </li></ul>German PV Market
  13. 13. <ul><li>USA has started to become one of the top PV markets </li></ul><ul><li>477 MW installed in 2009; 40 MW of which are coming from off-grid installations </li></ul><ul><li>State of California leading the pace in 2009 </li></ul><ul><li>2010 could see the market rise from 600 MW to a possible 1 GW of new installations. </li></ul><ul><li>By 2014, the market could reach 3 GW installed (moderate scenario) </li></ul><ul><li>Policy-Driven scenario up to 6 GW could be installed </li></ul><ul><li>Depending on market response to incentives in different states </li></ul>US PV Market
  14. 14. US PV Market Solar Partners International The EPIA Global Market Outlook for Photovoltaics (PV) from 2010 to 2014
  15. 15. US PV Market Solar Partners International The EPIA Global Market Outlook for Photovoltaics (PV) by States
  16. 16. <ul><li>Complex, evolving solar policy environment </li></ul><ul><li>Overlapping federal, regional, and state regulation </li></ul><ul><li>Solar policies are not harmonized </li></ul><ul><li>Developers have to think like power companies </li></ul><ul><li>Tax driven project financing </li></ul><ul><li>Banks and developers are sorting out the new financing structures for US solar projects </li></ul>US PV Market
  17. 17. US PV Market Source:
  18. 18. US PV market <ul><li>Advantages </li></ul><ul><li>The US has strong natural solar resources </li></ul><ul><li>Increasing energy prices and strong public support </li></ul><ul><li>U.S. peak demand will increase 17.7% by 2017 according to NERC </li></ul><ul><li>Huge long term potential </li></ul><ul><li>Disadvantages </li></ul><ul><li>Overlapping federal, regional, and state regulation; Solar policies are not harmonized </li></ul><ul><li>Developing a downstream U.S. PV market strategy requires a deliberate, highly specified approach to each application, state market and market segment </li></ul><ul><li>Funding hurdles </li></ul><ul><li>U.S. federal government is unlikely to provide level of financial subsidy as in the European markets </li></ul>
  19. 19. <ul><li>Conclusions: </li></ul><ul><li>Short term conditions challenging and main hurdles are likely to remain </li></ul><ul><li>US government’s lack of incentives by comparison to other regions </li></ul><ul><li>Overlapping federal, regional, and state regulation </li></ul><ul><li>Complicated and long negotiations with utilities </li></ul><ul><li>> Long term outlook very promising </li></ul><ul><li>The US will become the biggest and most important PV solar market in the world </li></ul>US PV Market
  20. 20. <ul><li>Outlook: </li></ul><ul><li>- Demand for PV projects in the United States is rapidly expanding as a result of falling system prices </li></ul><ul><li>The market is evolving as utility-scale projects gain steam and innovations in project financing emerge </li></ul><ul><li>With decreasing prices, a chain reaction will occur causing a decrease in project payback time, finally an increase in attractiveness of solar retail and commercial markets in the US </li></ul><ul><li>Global solar market players from all parts of the value chain are seeking strategies to gain access to U.S </li></ul>US PV Market
  21. 21. US versus German market <ul><li>USA </li></ul><ul><li>The US has better natural solar resources </li></ul><ul><li>Grid parity reached earlier due to more sun exposure </li></ul><ul><li>U.S. peak demand will increase 17.7% by 2017 according to NERC </li></ul><ul><li>Germany </li></ul><ul><li>Germany jump started the solar economy </li></ul><ul><li>High market penetration already reached. Market growth will slow down due to lower state incentives </li></ul><ul><li>German solar companies are seeking to go international and transfer technology and knowledge to international markets </li></ul>
  22. 22. <ul><li>2 </li></ul>USA versus Germany
  23. 23. <ul><li>Germany: </li></ul><ul><li>Low Cost per kWh $0.35 (residential and commercial) </li></ul><ul><li>High Cost per kWh $0.47 (residential and commercial) </li></ul><ul><li>California: </li></ul><ul><li>Low Cost per kWh $0.17 (residential and commercial) </li></ul><ul><li>High Cost per kWh $0.22 (residential and commercial) </li></ul><ul><li>Source: SGC </li></ul>USA versus Germany cost of solar
  24. 24. Residential electricity rates USA
  25. 25. <ul><li>Grid parity is the point at which alternative means of generating electricity is equal in cost, or cheaper than grid power </li></ul><ul><li>High radiation levels + high electricity prices + falling pv system prices=> faster grid parity </li></ul><ul><li>Hawaii has reached grid parity already; California will be next </li></ul><ul><li>When grid parity is reached market will grow rapidly </li></ul>Grid parity influencers
  26. 26. Grid parity-Market development
  27. 27. <ul><li>- No national market coordination </li></ul><ul><li>Bureaucracy </li></ul><ul><li>Increasing policy complexity </li></ul><ul><li>Various federal, state and local policy types for promoting solar </li></ul><ul><li>Various financing options </li></ul><ul><li>Private and commercial customers get confused </li></ul>Challenges for market growth
  28. 28. <ul><li>DSIRE: Database of State Incentives for Renewables and Efficiency </li></ul><ul><li>-DSIRE lists a total of 616 Federal State, Utility and Local Financial Incentives for Solar </li></ul><ul><li>‐ 518 Incentives for PV </li></ul><ul><li>DSIRE lists a total of 367 Federal, State, Utility, and Local Regulatory Incentives for Solar </li></ul><ul><li>‐ 356 Incemtives for PV </li></ul>DSIRE
  29. 29. <ul><li>DSIRE: Database of State Incentives for Renewables and Efficiency: </li></ul><ul><li>US Department of Energy Efficiency and Renewable Energy: </li></ul><ul><li>National Renewable Energy Laboratory: </li></ul><ul><li> </li></ul><ul><li>US Energy Information Administration: </li></ul><ul><li> </li></ul><ul><li>Energy Star: </li></ul><ul><li>http:// / </li></ul><ul><li>Federal Business Opportunities: </li></ul><ul><li> </li></ul><ul><li>US Department of Energy: </li></ul><ul><li> </li></ul><ul><li>EPA: </li></ul><ul><li> </li></ul>Federal Resources
  30. 30. <ul><li>Currently 20 GW installed </li></ul><ul><li>30-35 GW installed by the end of the year </li></ul><ul><li>Plunging prices of solar modules </li></ul><ul><li>Europe is still leading the market with installations (Germany and Italy) </li></ul><ul><li>47 countries have FIT but danger of Solar market bust in countries with FIT </li></ul><ul><li>US, China, India, Japan and France will experience significant growth </li></ul><ul><li>By 2015 cumulative solar capacity will have reached 65-100GW or more </li></ul><ul><li>- Demand for PV systems is still heavily dependent on the general economic climate and most importantly on governments’ support schemes. </li></ul><ul><li>- </li></ul>Global Solar Outlook
  31. 31. <ul><li>Questions and discussion </li></ul><ul><li>Please send e-mail to [email_address] </li></ul><ul><li>for presentation and sources </li></ul>Thank you!