Solar Deployment and Policy. Justin Baca. Director of Research Solar Energy Industries Association

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1 Solar Deployment and Policy Justin Baca Director of Research Solar Energy Industries Association

2 About SEIA Founded in 1974 U.S. National Trade Association for Solar Energy 1,000 member companies from around the world Members from across 50 states Largest companies in the world as well as small installers Our Mission: Build a strong solar industry to power America Our Goal: 10 gigawatts (GW) of annual installed solar capacity in the U.S. by 2015 July 18, Solar Energy Industries Association 2

3 Key Solar Policies Federal 30% Investment Tax Credit (ITC) through 2016 Commercial credit drops to 10% on January 1, 2017 Residential credit expires January 1, 2017 Renewable Portfolio Standards Net Energy Metering for Customer-Sited PV Value dependent on rate structure, load profile and solar generation profile Interconnection Policy Improved Financing to Ease Tax Equity Crunch July 18, Solar Energy Industries Association 3

4 Policy is Not Just About Incentives Net metering, interconnection and utility procurement policies define market access for solar. Carbon policy will play a role. Watch how 111(d) develops. For customer-sited systems, the permitting process has the potential to break a market through inefficiencies. The housing and financial markets impact financing options for solar. Trade policy matters July 18, Solar Energy Industries Association 4

5 Solar Workers Solar Workforce 143,000 Solar Workers in , , , , ,000 80,000 60,000 40,000 20,000 0 U.S. Solar Employment SEIA Rough Estimate TSF National Solar Jobs Census July 18, Solar Energy Industries Association 5

6 Solar Businesses 6,100 businesses engaged in the solar industry employing 143,000 people July 18, Solar Energy Industries Association 6

7 N/A Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Megawatts Solar Installations PV installations up 79% in Q vs Q ,000 Solar Installations by Quarter 2,500 2,000 1,500 1, CSP Utility Non-Residential Residential 0 Pre-2010 Cumulative SEIA/GTM Research U.S. Solar Market Insight July 18, Solar Energy Industries Association 7

8 Megawatts Year to Date Solar Installations 6,000 Annual Solar Installations 5,000 4,000 3,000 2,000 CSP Utility Non-Residential Residential 1, SEIA/GTM Research U.S. Solar Market Insight July 18, Solar Energy Industries Association 8

9 Megawatts Outcomes Driven by Different Policy and Market Structures 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Cumulative Solar Capacity by State Residential Non-Residential Utility CSP SEIA/GTM Research U.S. Solar Market Insight California Arizona New Jersey North Carolina Nevada Massachusetts Hawaii Colorado New York New Mexico Pennsylvania Florida Texas Other Maryland Georgia Ohio Connecticut Oregon Tennessee Indiana Delaware Illinois Missouri Vermont Washington Wisconsin July 18, Solar Energy Industries Association 9

10 $/Wdc System PV Prices Continue to Decline Typical residential system now about $3.73/W dc Typical commercial system now about $2.53/W dc Utility system now $1.77/W dc $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 National Average Installed Price of PV Residential Non-Residential Utility 2010-Q Q Q Q Q Q Q Q Q Q Q Q4 SEIA/GTM Research U.S. Solar Market Insight July 18, Solar Energy Industries Association 10

11 $/Wdc Non-Incentive Policies Impact PV System Costs Top two components largely driven by non-incentive policies. $6.00 $5.00 $4.00 Typical PV System Pricing Breakdown Q Supply Chain, Logistics, Customer Acquistion, Overhead and Markup Design, Engineering, Permitting, Interconnection Direct Labor Structural BOS $3.00 Electrical BOS $2.00 PV Inverter PV Module $1.00 Base Total $0.00 Residential Commercial Utility Low Pricing SEIA/GTM Research U.S. Solar Market Insight July 18, Solar Energy Industries Association 11

12 Installations (MWdc) No Secret that Costs Matter Small changes can have a large impact 1,200 California Historical Solar Installations and Prices $8.00 Incentives decreased over the time shown in the chart Most new deployment in CA now done without rebates or PBIs 1, $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $ Sum of Installations (MW) - Residential Sum of Installations (MW) - Utility Average of Price ($/Wdc) - Residential Average of Price ($/Wdc) - Utility i 2014 Solar Energy Industries Association 12 Sum of Installations (MW) - Non-Residential Sum of Installations (MW) - CSP Average of Price ($/Wdc) - Non-Residential Average of Price ($/Wdc) - CSP SEIA/GTM Research U.S. Solar Market Insight.(Utility pricing reflects national average, not state specific value.)

13 Residential Retail Parity $2.00/Wdc with ITC at 30% $2.00/Wdc with no incentives Source: NREL Residential PV Breakeven Scenario Viewer July 18, Solar Energy Industries Association 13

14 Megawatts Solar Installation Forecast 38 GW dc of PV and 2.6 GW ac of CSP expected to be online by the end of ,000 Solar Installation Forecast 12,000 10,000 8,000 6,000 4,000 CSP Utility Commercial Residential 2, E 2015E 2016E SEIA/GTM Research U.S. Solar Market Insight July 18, Solar Energy Industries Association 14

15 Solid, Timely Data is Critical to Policy and Markets The Energy Information Administration has a critical role to play Continue to improve solar coverage: more data, better data, faster access Policymakers/regulators depend on data and analysis to inform their decisions Integrated Resource Plans (IRP) forecasting informs investments in assets that will exist for decades Outdated or inaccurate data and can lead to sub-optimal decisions Markets thrive on accurate data Consumers develop confidence Financiers can lower costs when they have access to reliable data on asset performance July 18, Solar Energy Industries Association 15

16 Thank you Justin Baca July 18, Solar Energy Industries Association 16