Solar Soft-Cost Update: Evolving Markets and Challenges

Transcription

1 Slar Sft-Cst Update: Evlving Markets and Challenges Rbert M. Marglis Natinal Renewable Energy Labratry Presented at: SunSht Prize: Race t the Rftps Cllege f Nanscale Science & Engineering Albany, NY April 10, 2013 NREL is a natinal labratry f the U.S. Department f Energy, Office f Energy Efficiency and Renewable Energy, perated by the Alliance fr Sustainable Energy, LLC.

2 Outline Market and pricing trends by sectr, histrical and near term prjectins in cntext f SunSht targets Recent changes in business mdels and their ptential impact n the market and pricing Market dynamics in a lw-cst, pst-itc wrld 2

3 Glbal PV Demand PV Annual Installatins (GWDC) Eurpe ROW India Japan China U.S. Histric Histric Prjectin Prjectin E 2013P 2014P 2015P Glbal installatins expected t grw thrugh 2015 As Eurpean demand declines, U.S. & develping wrld markets expected t grw China expected t replace Germany as wrld s largest market in 13 Japan culd be #2 market, with 6-9 GW, in 13 (accrding t BNEF) U.S. expected t install ~ 4 GW in 13 India set t tender ~4 GW in 13 Nte: E = estimate, P = prjectin Surces: data displayed represents the median figures frm the fllwing surces, BNEF (02/08/13, 03/29/13), Deutsche Bank (03/01/13), Gldmann Sachs (01/03/13), GTM Research (January 2013), Phtn Cnsulting (February 2013), Stifel Niclaus (01/22/13), UBS (03/10/13) 3 3

4 U.S. Installatin Breakdwn Quarterly PV Installed (MW DC ) 1,400 1,200 1, U.S PV Installatins by Market Segment Q1 Utility Nn-Residential Residential Q2 Q4 Q1 Q2 Q4 Q1 '12 Q2 '12 ' ttal U.S. installatins were ~3.3 GW Residential installs accunted fr ~490 MW Residential sectr has been mst steady, with cumulative installs f 1.4 GW thrugh 2012 CA, AZ, NJ and HI dminated residential market in ther states installed 4 MW+ Sme lcal markets dminate in sme state (Gainesville, FL; Austin, TX) Q4 '12 TX 8 NY 14 MA 16 U.S. Residential PV Installatins by State (MW DC ), 2012 Est. PA 8 MD 9 CO 16 OR 7 NM 4 Hawaii 36 New Jersey 41 Other 45 Arizna 60 Califrnia 200 Surces: GTM/SEIA : U.S. Slar Market Insight &Q

5 U.S. Installed PV System Price Trends 2011$/WDC $16 $14 $12 $10 $8 $6 $4 $2 $0 Glbal Mdule Price Index Analyst Expectatins, Distributed PV Analyst Expectatins, Utility-Scale Reprted System Price, Residential Reprted System Price, Cmmercial Reprted System Price, Utility Mdeled System Price, Residential Mdeled System Price, Cmmercial Mdeled System Price, Utility Analyst Expectatins f Mdule Price Installatin Year Have experienced dramatic decline in installed system prices Residential: ~$12/W in 1998, ~$8/W in 2009, ~$6/W in 2011, and ~$5/W in 2012 DOE/SunSht target is $1.5/W in 2020 fr residential systems Surce: Feldman et al. Phtvltaic Pricing Trends: Histric, Recent, & Near-Term Prjectins (Nv. 2012) 5

6 SunSht 2010 Benchmark vs Targets NREL/LBNL benchmarked 2010 sft csts in the fllwing DOE pririty areas Custmer Acquisitin (CA) includes marketing and advertising, and system design Permitting, Inspectin, Intercnnectin (PII) Installatin labr Finance All Other Sft Csts including prfit Residential 2010 ($/W) 2020 ($/W) Cmmercial 2010 ($/W) 2020 ($/W) Ttal Price Sft Csts Ttal Price Sft Csts

7 Mdule Average Selling Price (ASP) $1.4 $1.2 Histric Prjectin Mdule ASP ($/WDC) $1.0 $0.8 $0.6 $0.4 $0.2 $ E 2013P 2014P 2015P 2016P D nt expect dramatic increase r decrease in APSs during next cuple f years 2016 ASP prjected t be between $0.48/W - $0.66/W Majr system price reductins are nt expected t cme frm PV mdule during next cuple f years Nte: E = estimate, P = prjectin Surces: data displayed represents the median, max, and min figures frm the fllwing surces: BNEF (02/08/13), Gldman Sachs (01/03/13), GTM Research (January 2013), Phtn Cnsulting (February 2013), UBS (03/10/13) 7

8 Sft-Csts: Linked t State and Lcal Plicies State Utility Regulatin Intercnnectin Prcess Third-Party Pwer Sales Lcal Building and Zning Cdes Slar Access Permitting Prcess As a result, we see significant variatin in pricing acrss jurisdictins 8

9 Average Residential System Price by State $7.50 $7.00 $6.50 Avg. System Price (Nmninal $/WDC) $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 AZ CA, Hst-wned CA, 3rd-party MD MA NY Q4 Q1 Q2 Q4 Q1 '12 Q2 '12 '12 Q4 '12* Prices trending dwnwards in all states Q4 11-Q4 12: Median ASP acrss states fell ver $1/W Reprted 3rd-party pricing becming mre cnsistent with hst-wned pricing Nte: all average prices, except NY, are representative f all systems in each market between 2.5 kw 10 kw. Surces: CSI Database, accessed 12/05/12; MA SREC Prgram, accessed 12/12/12. Arizna Public Services, accessed 12/12/12, NYSERDA (12/12/12); Maryland Energy Administratin (12/11/12). Nte: NYSERDA actually represents all residential sectr data, and is the simple average price per quarter. All ther data is weighted by capacity. 9

10 Third Party Ownership (TPO) by State % f Installed Capacity 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Residential TPO Systems AZ CA MD MA Surces: CSI Database, accessed 03/13/13; MA SREC Prgram, accessed 03/13/13; Arizna Public Services, & Salt River Prject accessed 12/12/12 (APS), 03/25/13 (SRP); Maryland Energy Administratin (03/12/13) Share f systems acquired via TPO in the residential sectr has increased significantly during past cuple f years In 2012 accunted fr 90% AZ, 70% CA Grwing rapidly in MD & MA TPO nw available in 13 states and grwing But als see new debt prducts entering (bank lans, PACE, etc.) 10

11 Changing Market Dynamics Emergence f third party wnership (TPO) is changing market dynamics Recent analysis in LA indicates TPO pened market t brader range f husehlds Grwing data suggests that custmers weigh several factrs in buy/lease decisin Ecnmics Cmplexity f prcess Perfrmance guarantees Maintenance cntracts Hedging value Crrelatin between PV adptin and husehld incme in Ls Angeles, CA Surce: Drury, et al Energy Plicy, 42,

12 Micrinverters in CA Residential Market 30% Micrinverters CA Res Market 30 50% Micrinverters CA Res Market, 3rd Party vs. Hst Owned % f Installed Capacity 20% 10% 0% * Micrverters Installed (MW) % f Installed Capacity 40% 30% 20% 10% 0% * MW, kw kw kw, 3rd-Party kw, Hst Owned Micrinverters used in mre than 20% f 2012 small systems in CA (% MW) Micrinverters made up almst half f all hst-wned 2012 small systems in CA 3rd-party installers much less likely t use micr-inverters Enhanced system perfrmance and features vs. price? Surce: CSI Database, accessed 12/05/12. 12

13 Significant Gap Exist Between U.S. and German System Pricing Dllars per Watt (nminal) $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 System Pricing: Califrnia vs. Germany Q2 '09 $7.88 $4.93 '09 Q4 '09 Q1 Q2 Q4 Q1 Q2 Q4 $5.96 Q1 '12 Q2 '12 $ $2.58 $ Germany: Rftp System (<100 kw) $ Califrnia (<100 kw) '12* Gap between German and U.S. system pricing ~$3/W Installatins (GW) Installatins by Cuntry Q4 Est. (Q1:) Q Germany USA Japan China Scale f market (Germany installed ~7.5 GW in 2012) => supply chains efficiencies Paperwrk and prcesses are streamlined Financing available thrugh German federal bank (KfW) Surce: German system price: BSW-Slar PV Price Index 5/2012 & 8/2012. Exchange Rate: CA system price: CSI Database, accessed 09/12/12; hst wned systems. Installs t-date: Germany (Bundesnetzagentur); US (GTM/SEIA 12 Slar Market Insight ); Japan (RTS, PV Activities in Japan ); China (SlarServer, 11/05/12); 2012 estimates: Germany (BSW-Slar as reprted by Slarserver.cm (01/10/13)); US (GTM/SEIA, Ibid); Japan (BNEF H Japan Insight Call); China (BNEF H China Market Outlk)

14 Mving Twards a Lw Cst PV Future Current PV envirnment 30% federal ITC Accelerated depreciatin Mix f state/lcal level incentives High 1 st cst Typical residential rftp system cst $20-30k (in 2012) TPO/Lease mdel prvides many benefits Technlgy, market, and plicies are changing rapidly Ptential future envirnment? What will happen t ITC and MACRS pst-2016? Mater Limited Partnerships/Real Estate Investment Trusts (REITs)? $6b tax equity vs. $900b MPL/REITs Increased pl f capital wuld lwer csts f financing What alternative financing mechanisms will emerge? Standardized slar lans? Implicatins f much lwer 1 st cst? Typical residential rftp PV system culd cst $5-6k Technlgy changes? Plug and Play, BIPV, etc.? Streamlined permitting, inspectin intercnnectin? Cmbining slar with ther services? 14

15 Residential grid parity in lw-cst, pst-itc case Observe residential market threshld belw $3/W: At $2.50/W, many states in SW and NE at r belw grid parity. Others clse. At $2/W, mst states are within 25% f reaching grid parity r belw grid parity. At $1.50/W, all but 2 states are at r belw grid parity. Grid Parity Definitin: The pint at which the levelized cst f electricity (LCOE) generated by a PV system equals the retail electricity price frm the grid. $2.5/Watt $2/Watt Assumptins: Suth facing, 25 degree tilt 15 year hme equity lan 8% nminal interest rate N Federal, State, r Lcal Incentives 1% annual electricity price escalatin 1% annual PV degradatin State average electricity rates Analysis begins in year 2020, electricity prices scaled accrdingly Used the System Advisr Mdel $1.5/Watt 15