The California Market in 2008 and Beyond

Transcription

1 CALIFORNIA SOLAR ENERGY INDUSTRIES ASSOCIATION The California Market in 2008 and Beyond Gary Gerber, President

2 What is CALSEIA? CALifornia Solar Energy Industries Association Founded in 1977; largest in US Our Mission: to expand the use of all solar technologies in California and establish a sustainable industry for a clean energy future Membership comprised of solar professionals Over 150 integrator members Over 40 distributors/manufacturers

3 Why is Solar so Important to Provides Distributed Power California? Reduces dependence on fossil fuels Creates living wage jobs Reduces pollution Strengthens California s manufacturing base Brings income tax and sales tax revenues to the state Asserts California s leadership in the fight against global warming

4 California Electricity Demand Forecast Source: 2007 California Integrated Energy Report, California Energy Commission

5 Transmission Congestion?

6 California Peak Electricity Demand CAISO says it does not anticipate any shortages on Wednesday or Thursday, but it still asks that consumers help cut energy demand during the afternoon hours. August 26, 2006

7 California Natural Gas Supply Forecasts Source: 2007 Natural Gas Market Assessment, California Energy Commission

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9 California Electricity Production 2006 Fuel Sources Source:

10 California Solar Programs Since the 70 s, California has a history of supporting Renewable Energy State initiatives: Renewable Portfolio Standard (RPS) requires major utilities to use renewables for no less than 20% of their electricity generation by 2010 Since 1998 PV Rebates, Net Metering: ERBP - CEC Since California Solar Initiative Rebates (Photovoltaic and solar thermal electric) - CPUC New Solar Homes: Rebates for new homes to meet goal to have half of new homes built with solar - CEC

11 New California Programs New: California Solar Water Heating Efficiency Act (AB1470): incentives for solar water heating with natural gas New: Greenhouse Gas regulations mandates reduction in carbon emissions to 1990 levels by 2020 (a reduction of 25%), plan due January 1, 2009 (AB32) New: Community incentives and financing (Fresno, Berkeley, San Francisco, Palm Desert) New: Zero Energy Homes will require net energy consumption equal to net energy production by 2020 New: Feed in tariff, a work in progress

12 Factors Affecting Demand for Solar in California Installed cost of product not yet competitive with retail electricity rates without subsidies U.S. Federal energy Investment Tax Credit (systems must be placed in service by 12/31/2008 to qualify) 30% tax credit for commercial 30% tax credit capped at maximum $2000 for residential California Solar Initiative Incentive Levels (now less than $2/watt) Electricity Rates Local installation requirements

13 California Solar Initiative Declining incentive based on MWs reserved

14 California Solar Initiative - Status * The non-residential customer class includes commercial, private, government, and non-profit participants.

15 California Solar Initiative - Status Since inception (2007): 250 MW of reserved applications 42 MW reserved at 8,786 residential sites 208 MW reserved at 1,031 non-residential sites (retail, commercial, industrial, agricultural, low-income, schools) 41.6 MW installed (paid or pending CSI payment)

16 Near Term Market Assessment Product prices stable but thin films and increased silicon supply will likely start pushing prices down Uncertainty over extension of Federal Tax Credits may boost sales for a few more months, then -? Electric rates throughout California do not yet reflect value of solar in some territories Local installation requirements continue to vex market

17 Factors to consider Electricity rates are increasing and rate structures are slowly changing to become solar friendly Local initiatives to create solar friendly communities Berkeley property tax plan Natural gas supplies dropping, prices increasing Greenhouse gas emission regulations Change in federal leadership, recognition of Global Warming Crisis Emergence of REC market

18 Likely Short-Term Scenario PV module costs will decrease slightly sometime in the month time period according to statements by manufacturers Installation costs may drop slightly efficiency, competition Market will continue to consolidate (M&A s) as some players attempt to create a national brand Electricity rates will increase, and reflect value of solar (TOU) Delivery concerns for dominant electric system fuel supplies (LNG and new transmission lines) will be costly and experience local opposition

19 Likely Long-Term Scenario (Just kidding)

20 Likely Long-Term Scenario PV costs will decrease significantly as new module and inverter technologies are developed Installation costs will continue to gradually drop Market will mature; though some national brands may continue, solar is basically a local service and local businesses will win Electricity rates will continue to increase as fossil fuels diminish; nuclear will be the main competitor RECs, carbon trading, smart metering, federal incentives will all benefit solar; new regulatory interference may hinder Solar industry will experience success as long as we can maintain a broad installer base and high quality control standards

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