Alternative Energy Outlook for Growth Remains Strong

Transcription

1 Alternative Energy Outlook for Growth Remains Strong Keith Adams, Moderator Principal Deloitte Transactions and Business Analytics LLP Tom Kimbis Interim President and Chief Executive Officer Solar Energy Industries Association Peter L. Kelley Vice President, Public Affairs American Wind Energy Association

2 U.S. Solar Market Overview 2016 Deloitte Energy Conference Tom Kimbis Solar Energy Industries Association (SEIA) July 6, Solar Energy Industries Association 2

3 About SEIA U.S. National Trade Association for Solar Energy Founded in ,000 member companies from all 50 states Our Mission: Build a strong solar industry to power America Our Goal: 100 gigawatts of solar capacity by 2020 July 6, Solar Energy Industries Association 3

4 Solar Growth with the ITC July 6, Solar Energy Industries Association 4

5 Workers Solar as an Economic Engine Nearly 209,000 American workers in solar more than double the number in 2010 at more than 8,000 companies 200, , ,000 50,000 Source: The Solar Foundation National Solar Jobs Census and Bureau of Labor Statistics solar coal mining oil and gas extraction July 6, Solar Energy Industries Association 5

6 Blended Average Solar PV Price ($/watt) Solar PV Installations (MWdc) Growth in Solar led by Falling Prices $8.00 8,000 $7.00 7,000 $6.00 6,000 $5.00 5,000 $4.00 4,000 $3.00 3,000 $2.00 2,000 $1.00 1,000 $ Source: SEIA/GTM Research U.S. Solar Market Insight Q greentechmedia.com/research/ussmi Lawrence Berkeley National Laboratory, Tracking the Sun Solar PV Installations Solar PV Prices 0 July 6, Solar Energy Industries Association 6

7 U.S. Solar Market Through Q GW of solar installed in % growth in PV market over 2014 Compound annual growth rate of 58% since 2010 Over 29 GW of total solar capacity installed Generates enough electricity to power 5.7 million homes Solar prices dropped 3% in 2015 from 2014 Price drop accelerated in Q1 2016, down 12% y/y Prices have dropped over 70% since 2006 Utility-Scale PPAs now signed for $ $0.05/kWh Solar has reached 1% of total US electric generation Up from 0.1% just 5 years ago Expected to hit 3.5% by 2020 In Q reached 1 million solar installations Will hit 2 million installs within just 2 years Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 7

8 $/watt-dc Solar PV Price Breakdown Q Quoted PV Prices Source: SEIA/GTM Research U.S. Solar Market Insight $3.50 $3.00 $2.50 $2.00 Soft Costs (63% of residential installation cost) $1.50 $1.00 $0.50 $- Residential Commercial Utility-Scale PV Module Inverter Electrical BOS Structural BOS Direct Labor Engineering and PII Supply Chain, Overhead, Margin July 6, Solar Energy Industries Association 8

9 U.S is a 50 state market 2015 Year-End Cumulative Solar PV Capacity (MW-dc) Others, 3,519 Texas, 537 Colorado, 542 Hawaii, 557 New York, 638 Massachusetts, 1,037 California, 11,987 Nevada, 1,041 New Jersey, 1,631 Arizona, 2,020 North Carolina, 2,087 Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 9

10 Megawatts Residential & Commercial (Distributed) 3,000 Yearly U.S. Solar Photovoltaic (PV) Installations 2,500 2,000 1,500 1, E Residential (PV) Non-residential (PV) Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 10

11 Megawatts-DC Utility Scale 35,000 U.S Utility-Scale PV Pipeline 30,000 25,000 20,000 15,000 8,414 30,700 10,000 5,000 13,882 13,228 0 Operating Contracted (PPA signed) Announced (Pre-Contract) In Construction Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 11

12 Extending the ITC Extended at 30% through the end of 2019 Drops to 26% in 2020 and 22% in 2021 After 2021, Commercial credit drops to 10%, Residential credit expires Commence Construction language added Projects must be placed in service before the end of 2023 July 6, Solar Energy Industries Association 12

13 Industry At Risk July 6, Solar Energy Industries Association 13

14 100 GW by 2020 with Extension July 6, Solar Energy Industries Association 14

15 Net Metering July 6, Solar Energy Industries Association 15

16 Net Metering Under current NEM rules, distributed generation solar at grid parity in 20 states Source: Shayle Kann, GTM Research U.S. Solar Market Insight Conference Keynote: The Future of Solar July 6, Solar Energy Industries Association 16

17 Net Metering If export rate is cut in half, 0 states at grid parity Nevada outcome looms large, but not emblematic of NEM policy nationally Source: Shayle Kann, GTM Research U.S. Solar Market Insight Conference Keynote: The Future of Solar July 6, Solar Energy Industries Association 17

18 Yearly Installed Solar Capacity (MW) U.S. Solar PV Forecast- Q ,000 Yearly U.S. Solar Installations 20,000 15,000 10,000 5, E 2017E 2018E 2019E 2020E 2021E Residential (PV) Non-residential (PV) Utility (PV) Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 18

19 2016 and Beyond 14.5 GW of solar expected in 2016 Nearly double the 2015 total Equal to half of the solar capacity online today Continue to see shift of 2016 utility-scale projects to 2017, 2018 Developers add to massive project pipeline Build-out pressure decreases with extension Nearly 19 GW contracted BEFORE extension of ITC New States enter the mix Continued price declines, ITC Extension, Clean Power Plan bring formerly marginal states into play Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 19

20 Solar Moving Beyond Traditional Markets: Distributed Generation Top 10 DG States by Absolute Growth Top 10 DG States by % Growth State DG MW DG MW DG Growth State DG MW DG MW DG % Growth 1 California 3,880 13,234 9,353 2 New York 510 2,711 2,201 3 Massachusetts 937 2,256 1,319 4 Maryland 306 1, Connecticut New Jersey 1,132 1, Texas Florida Minnesota Vermont South Carolina % 2 Minnesota % 3 Indiana % 4 Virginia % 5 Michigan % 6 New Hampshire % 7 District of Columbia % 8 Delaware % 9 Illinois % 10 Vermont % Source: SEIA/GTM Research Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 20

21 Solar Moving Beyond Traditional Markets: Utility-Scale Top 10 Utility-Scale States by Absolute Growth Top 10 Utility-Scale States by % Growth State Utility-Scale MW Utility-Scale MW Utility-Scale Growth 1 Texas 394 4,233 3,840 2 California 7,179 10,407 3,229 3 Utah 194 1,466 1,272 4 Nevada 777 1,978 1,201 5 Florida 21 1,173 1,152 6 Georgia 339 1,392 1,054 7 New Mexico 250 1,287 1,037 8 Oregon 26 1,042 1,016 9 Colorado Virginia State Utility-Scale MW Utility-Scale MW Utility-Scale % Growth 1 Washington Iowa Louisiana New Hampshire Virginia % 6 Minnesota % 7 Michigan % 8 South Carolina % 9 Florida , % 10 Oregon , % Source: SEIA/GTM Research Source: SEIA/GTM Research U.S. Solar Market Insight July 6, Solar Energy Industries Association 21

22 Other Issues to Watch 2016 Elections Access to Capital Workforce Development Industry will double number of employees over 5 years Committed to hiring 50,000 veterans by 2020 Technology Advances Storage, Electric Vehicles, Continued Price Declines Grid Integration What does the grid of the future look like? Post-Clean Power Plan? More ambitious plan needed to meet climate goals July 6, Solar Energy Industries Association 22

23 Thank You Tom Kimbis Interim President Solar Energy Industries Association (SEIA) July 6, Solar Energy Industries Association 23

24 Wind power: Low-cost, scalable, reliable Peter L. Kelley Vice President, Public Affairs AWEA

25 Low-cost solution

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27 Wind power is increasingly cost-competitive 2015 Unsubsidized Levelized Cost of Energy ($/MWh) WIND Source: Lazard, Version 9.0, 2015

28 Cost of wind vs. natural gas, Source: NREL

29 Falling cost of wind energy with economies of scale Source: LBNL

30 More reasons for falling wind costs Policies now predictable Optimized siting Technology accessing higher winds More transmission to cities Data-driven O&M US manufacturing

31 Long-term federal policy certainty ends boom-bust era Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2015

32 New technology reaches higher winds in more regions Wind resource potential at turbine hub height of 80 meters Wind resource potential at 110 meters

33 New power lines diversifying the grid and connecting low-cost wind energy with markets Recently developed lines Source: AWEA 2015 Annual Report. Wind project capacity includes projects under construction.

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36 Trend: Major brands cutting costs & pollution with wind Source: AWEA U.S. Wind Industry Annual Market Report Year Ending MW counted as of public announcement of contract

37 Scalable

38 Wind was biggest source of new electric power in 2015

39 Enough wind power for 20 million homes, led by Texas Most wind power Texas (17,711 MW) Iowa (6,364 MW) California (5,662 MW) Oklahoma (5,453 MW) Illinois (3,842 MW) Source: AWEA U.S. Wind Industry First Quarter 2016 Market Report

40 88,000 wind jobs today growing to 360,000 in 2030 Most wind jobs Texas (24,001-25,000) Oklahoma (7,001-8,000) Iowa (6,001-7,000) Colorado (6,001-7,000) Kansas (5,001-6,000) Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2015

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42 State RPS laws generate demand for wind energy

43 Wind is key to Clean Power Plan compliance Pounds per Megawatt-Hour Reduction of CO₂ emissions rate from wind projects, Sources: AWEA U.S. Wind Industry Annual Market Report Year Ending 2015; EPA

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45 Source: EIA; China Electricity Council, 2015

46 U.S. offshore wind energy: the new frontier

47 Grid reliability

48 Variability & uncertainty nothing new for grid operators

49 Output smooths over large areas, can be forecast Wind variability Wind uncertainty

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51 Increasing share of the grid, reliably integrated Wind share of electricity generated by state Iowa now 31% wind-powered, headed to 40% 12 states get over 10% of electricity from wind Nationwide just reaching 5% Source: AWEA U.S. Wind Industry Annual Market Report Year Ending 2015

52 High-voltage DC lines coming Source: E&E

53 Wind Capacity (GW) DOE: Wind installations on track for 20% by Trajectory to 20% by 2030 Installed Wind Capacity Source: DOE Wind Vision and AWEA Market Data

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55 Questions?