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International Energy Agency: Photovoltaic International Energy Agency: Photovoltaic Power Systems Power Systems Programme Programme (IEA PVPS) (IEA PVPS) Zacatecas, Mexico Zacatecas, Mexico Status of the U.S. Segment of the PV Industry Status of the U.S. Segment of the PV Industry U.S. Department of Energy U.S. Department of Energy Susannah Pedigo, M.B.A Susannah Pedigo, M.B.A National Renewable Energy Laboratory National Renewable Energy Laboratory

International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

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Page 1: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency: Photovoltaic International Energy Agency: Photovoltaic Power Systems Power Systems ProgrammeProgramme (IEA PVPS)(IEA PVPS)

Zacatecas, MexicoZacatecas, Mexico

Status of the U.S. Segment of the PV IndustryStatus of the U.S. Segment of the PV IndustryU.S. Department of EnergyU.S. Department of Energy

Susannah Pedigo, M.B.ASusannah Pedigo, M.B.ANational Renewable Energy LaboratoryNational Renewable Energy Laboratory

Page 2: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Available Resource:

Value of the U.S. solar resource is more pronounced when compared to the solar resource of Germany where PV markets have thrived

State Priority:

-21 states implementing RPS/incentive programs to promote solar

-Most of these states are outside of the Southwest

-The number of states adopting pro-solar policies is growing!

Solar Resource:

States w/ RPS in 2007:

Page 3: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

• PV Trends in the U.S.Highlights of Business and Policy Activity

• Investor Perspective: What Does Wall Street Care About? Consensus of PiperJaffray and other institutional investors

• Solar America Initiative StatusReducing Solar Costs to Grid Parity in All U.S. Markets By 2015

To Learn More About U.S. Solar Manufacturing and Installation Data,please visit www.iea-pvps.org to download:

•The PVPS Annual Report

•The U.S. International Survey Report (Coming in July)

Overview

Page 4: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

PV Trends in the U.S. Market

PV Supply Chain

• According to CleanTech Venture Network, 2006 cleantechinvestments totaled $2.9B, a 78% increase over 2005

• System integrators consolidated in response to pro-solar policies

• Multi-national strategic alliances & joint ventures forming as a result of poly-Si shortage, e.g., Evergreen, REC & Q-Cells

• Crystalline PV producers struggled—BP Solar, SCHOTT Solar, & GE struggled to procure poly-Si

•Nearly all increase in U.S. PV production came from thin film (First Solar)

Page 5: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

• Policy landscape is changing--more states adopting RPS (21) and local govts are starting to act; additional states have voluntary standards

-climate change concerns-desire to hedge against volatile energy pricing

• Codes/Standards & Training/Certification issues getting needed attention by NABCEP, IREC, & states that are adopting pro-solar policies; Solar America Initiative formulating national working groups to tackle…in addition to above reasons…

-strong desire to diversify economy/job creation-eliminate commercialization barriers

PV Trends U.S. Policy

Page 6: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

National:

• Federal Tax Credit for PV Implemented in 2006 for 2 years; working to extend this to 2016

California (80% of US Grid-Connected Market)

•Recently enacted the California Solar Initiative-Goal to create 3,000 MW of new, solar-produced electricity by 2017-PV incentives starting at $2.50/W for systems up to 1 MW-Performance-based incentive program (>100 kW) high-performing solar projects-$3.2B budget incl. $50M for R&D and $100M for solar thermal

New Jersey (2nd Largest US Market)

• 10 MW already installed in 2006; Program over-subscribed and is being revamped; shifting from rebate to market-based system with RECs; NJ looked upon as setting standards for policy

• RPS requires utilities to obtain 22.5% power from RE by 2021; 2.12% solar set aside

New York

• $4.00/W incentive through the Energy $mart Solar Electric System Incentive Program; covers almost 50% of the system price

PV Trends: U.S. Policy Highlights

Page 7: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

U.S. Policy Landscape:U.S. Policy Landscape: Regulatory environment is critical Regulatory environment is critical to understanding the market potential for renewable to understanding the market potential for renewable energyenergy

PV rebate programs are of little value without corresponding net-metering and interconnection standards

-Net metering establishes frameworks to dictate value of PV & allows system owners to sell back electricity (Economics)-Interconnection standards provide uniformity across a utility service territories & renders the entire process transparent for installers & consumers (Infrastructure)

PV Trends: U.S. Policy Framework

Page 8: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

PV Trends: U.S. Policy

System Size Limit

External Disconnect Switch

Additional Insurance Requirement

Standard Interconnection

Agreement

State

25 kWYesNoNoWashington

25 kWYesNoYesWyoming

25 kWNoNone SpecifiedNo Oregon

20 MWNoNoNoNevada

10 kWVaries by utilityNoYesFlorida

NoneYesNoYesPennsylvania

25 MWYesYesYesConnecticut

NoneYesNoYesHawaii

10 MWNoNoYesColorado

10 MWYesNone SpecifiedYesTexas

NoneYes, at util. discretionNoYesMassachusetts

2 MWYesNoYesNew York

VariesNoVaries by UtilityNo, varies by UtilArizona

2 MWNoNoYesNew Jersey

10 MWFor systems> 1 kWNo YesCalifornia

Source: “Smart Regulation Speeds Growth,” PV News, Oct 2006

Page 9: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Why Are Investors Interested in Solar?

• Best growth sub-sector of Technology• Unlimited future growth at grid parity• Trend toward socially responsible investing• Best performing stock sector within technology• Compelling long-term themes of alternative energySource: Piper Jaffray, “What Does Wall Street

Think About Solar,” March 2007

Page 10: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

What Concerns Investors?

• Economic jitters• Is this a solar bubble?• Dependence on subsidies• Supply chain friction• Who has better business model?

-poly >wafer>cell>module>integrator-poly-based vs. thin-film-horizontal vs. vertical integration

Source: Piper Jaffray, “What Does Wall Street Think About Solar,” March 2007

Page 11: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Investor Perspective:Poly-Silicon Issue

Watching Poly-Si supply issue closely:• short-term: benefits to investing (’07-’09)• mid-term: poly-Si glut? (’09-’11) • long-term: grid parity; buy low-cost, hi-volume

producers & next-gen technology (’11-’13+)

Source: Piper Jaffray, “What Does Wall Street Think About Solar,” March 2007

Page 12: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Investor Perspective:Themes to Watch

• Theme 1: Cautious on Poly-Si Supply• Theme 2: Looking for Lowest Cost; Who is

‘Samsung’ of Solar?• Theme 3: Looming Margin Compression

Source: Piper Jaffray, “What Does Wall Street Think About Solar,” March 2007

Page 13: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Investor Perspective:Industry Risk

• Reduction or elimination of government subsidies:would significantly reduce demand for solar

• Poly-Si Shortage: lack of poly may limit the growth of the solar industry

• Interest Rate Risk: increases in interest rates may put solar installation projects on hold

• Geopolitical & country specific risk: the industry is largely concentrated in 4 countries. Geopolitical events could have material adverse effect on the industry

Source: Piper Jaffray, “What Does Wall Street Think About Solar,” March 2007

Page 14: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

The Solar America InitiativeThe Solar America Initiative

Page 15: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

SAI Strategy in BriefReducing Solar Costs to Grid Parity in All U.S. Markets By 2015

SAI Photovoltaic (PV) R&D activities will emphasize technologies with the greatest potential for cost reductions to meet SAI goals. SAI will also continue current efforts on CSP systems R&D.

To accelerate attainment of systems goals, SAI will employpublic-private partnerships to pursue component and system technologies and demonstrate manufacturing approaches that deliver low-cost, high-reliability commercial products.

The Solar America Initiative (SAI)

Partnership members will market and distribute PV systemsdeveloped under SAI, while SAI market transformation efforts tackle non-R&D barriers to market penetration for both PV systems and CSP technologies.

Tech Pathway Partnerships & Market Transformation:Knowledge Transfer • Partnership • Collaboration

Page 16: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

SAI: Grid Parity by 2015

Page 17: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

• Projects will have a significant impact on the domestic energy economy: -Enable U.S. PV production capacity expansion from 240 MW in 2005 to as much as 2,850 MW by 2010 (10-fold increase)- Research toward lowering the cost of electricity from PV to $0.05 -$0.10 per kWh by 2015

• Projects to include cross-section of U.S. industry:- Involving over 50 companies, 14 universities, 3 non-profits, more than 10 major cities, & 2 national laboratories in 20 states across the U.S. - Teams will contribute 50+% of the funding for these projects.

• Selected projects will be lead by the following corporations:Amonix (CA)BP Solar (MD)Boeing (CA)Dow Chemical (MI)General Electric (DE)Miasole (CA)Nanosolar (CA)

Sunpower (CA)Powerlight (CA)United Solar Ovonic (MI)Konarka (MA)GreenRay (MA)Practical Instruments (CA)

SAI: Progress

Page 18: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

SAI: Project Portfolio Balances Technology, Maturity & Risk

Page 19: International Energy Agency: Photovoltaic Power Systems ......International Energy Agency Photovoltaic Power Systems Programme PV Trends in the U.S. Market PV Supply Chain • According

International Energy Agency Photovoltaic Power Systems Programme

www.iea-pvps.org

Thank you!

For further information:

[email protected]

CleanTech Venture Network, www.cleantech.com/

Database of State Incentives and Renewable Energy, www.dsireusa.org

Go Solar California http://www.gosolarcalifornia.ca.gov/

New Jersey Solar Program, www.njcleanenergy.com/

Piper Jaffray, “What Does Wall Street Think About Solar,” March 2007.

Prometheus Institute, www.prometheus.org/

PV News, Paul Maycock, www.pvenergy.com/index.shtml

SolarBuzz, www.solarbuzz.com/

Solar America Initiative, www1.eere.energy.gov/solar/solar_america/index.html

Solar Energy Industry Association, www.seia.org

The Green Power Network, www.eere.energy.gov/greenpower/markets/netmetering.shtml

Sources