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GTM Research: The State and Future of U.S. Solar

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Presenter: Shayle Kann, Senior Vice President, GTM Research This session will open the conference with a data-driven, visionary outlook on the U.S. solar market from the head of GTM Research. Bringing together analysis of current trends in project finance, regulation, policy and business strategy, this session will help illuminate solar¡¯s future path in the U.S.

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The Next Wave of U.S. Solar! !!! Shayle Kann! Senior Vice President, Research! Greentech Media! !! U.S. Solar Market Insight 2014! San Diego, California!
Fifteen Years of Growth¡­ 4 Source: GTM Research/SEIA U.S. Solar Market Insight 4 11 23 45 58 79 105 160 298 382 852 1,919 3,369 4,776 6,476 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Annual PV Installations (MW) Residential Non-Residential Utility
¡­And an Increasingly Diverse Landscape¡­ 4 Source: GTM Research/SEIA U.S. Solar Market Insight
Federal IncentiveState Incentive Pre-ITC 1% 30% ITC-Driven 99% No State Incentive 8% State Incentive 92% ¡­Driven by One Paradigm Source: GTM Research +
Fortunately, Solar is Cheaper to Install Than Ever Best-in-Class Source: GTM Research/SEIA U.S. Solar Market Insight $3.60 $2.27 $1.68 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Residential Commercial Utility Q3 2014 Bottom-Up Average System Price ($/W) Modules Inverters and AC Subsystem DC Electrical BOS Structural BOS Direct Labor Engineering and PII
Traditional Grid Parity Analysis Ignores Rate Structures Connecticut Proves Why That Matters Source: GTM Research 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% False Parity 2013 2014 2015 2016 2017 2018 2019 2020 Connecticut Residential - Year One Bill Impact from PV Net Bill Impact Due to Solar (%) - Full Retail Net Bill Impact Due to Solar (%) - Actual Rate Grid Parity
Here¡¯s How We Calculate Grid Parity 1. Solar Cost! 2. Electricity Bill Impact! 3. Forecasting! Source: GTM Research Solar Cost (LCOE) Modeling Irradiation Levels Hourly Customer Load Profile Hourly PV Production Profile Solar Avoided Cost Modeling Solar Input Forecasts Electricity Price Forecasts
The Tipping Point:" Can You Offer a Customer 10% Year-One Net Savings?
A Caveat: We Assume No State Incentives But They Do, And Will, Exist
2014: Three States Already at the Tipping Point >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL Source: GTM Research 2014 regional system price inputs range from $3.28/W-$3.72/W; WACC 9.6% AZ CA NV HI NJ NM SC
2014: Three States Already at the Tipping Point FL Source: GTM Research 120 100 80 60 40 20 AZ and CA Data Reflect Year-to-Date Residential Installations (Q1-Q3) AZ CA NV HI NJ NM SC CSI Funded Non- 27% CSI Funded 73% State Incentive 44% No State Incentive 56% 0 Q1 2010 Q4 2010 Q3 2011 Q2 2012 Q1 2013 Q4 2013 Q3 2014 (MWdc) Residential Commercial
2014: Three States Already at the Tipping Point >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NM SC Source: GTM Research 2014 regional system price inputs range from $3.28/W-$3.72/W; WACC 9.6%
2016: The Market Begins to Blossom >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT CO CT GA ME MD MA MI RI TX UT WY WI Source: GTM Research 2016 regional system price inputs range from $2.80/W-$3.17/W; WACC 9.6%
2017: ITC Reduction Kills Marginal Markets >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT Source: GTM Research 2017 regional system price inputs range from $2.59/W-$2.87/W; WACC 8.2%
ITC Expiration: The Utility Market Feels the Most Pain Source: GTM Research/SEIA U.S. Solar Market Insight 5,267 7,236 791 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2015 2016 2017 MWdc Contracted Utility PV Pipeline by Planned Operation Date 1.3 GW with a Post-2016 PPA
Despite PPA Prices (With the ITC) Consistently Around $50/MWh-$70/MWh Source: GTM Research U.S. Utility PV Market Tracker $200 $175 $150 $125 $100 $75 $50 $25 $0 2008 2009 2010 2011 2012 2013 2014 2015 Utility PV PPA Price ($/MWh) Contract Execution Date
2017: Retreat to the Southwest! >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT Source: GTM Research 2017 regional system price inputs range from $2.59/W-$2.87/W; WACC 8.2%
2020: The Real Fun Begins >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT CO CT GA ME MD MA MI RI TX UT WY AL AR DE FL LA MN MS MO NE NY NC OH SD VA WI Source: GTM Research 2020 regional system price inputs range from $2.09/W-$2.35/W; WACC 8.2%
Rate Structures Pose the Biggest Risk to Solar Competitiveness Example: Just-Approved Fixed Charge Increases in Wisconsin Source: GTM Research 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% New Rate Structures Put Wisconsin Solar Market Back Five Years! 2013 2014 2015 2016 2017 2018 2019 2020 Wisconsin Residential - Year One Bill Impact from PV Net Bill Impact Due to Solar (%) - $9 fixed charge Net Bill Impact Due to Solar (%) - $16 fixed charge Grid Parity
28 States ¡°In the Money¡± by 2020, and 14 at the Tipping Point Source: GTM Research 1 3 4 8 4 7 14 14 2 3 4 6 4 6 8 14 2013 2014 2015 2016 2017 2018 2019 2020 # of States At or Below Parity - Residential 0%-10% Savings >10% Savings
Solar: Meet the Connected Home Source: GTM Research
Thank You!! ! Shayle Kann! Senior Vice President, Research! Greentech Media! ! Questions? Visit www.gtmresearch.com! Or contact kann@gtmresearch.com!

More Related Content

GTM Research: The State and Future of U.S. Solar

  • 1. The Next Wave of U.S. Solar! !!! Shayle Kann! Senior Vice President, Research! Greentech Media! !! U.S. Solar Market Insight 2014! San Diego, California!
  • 2. Fifteen Years of Growth¡­ 4 Source: GTM Research/SEIA U.S. Solar Market Insight 4 11 23 45 58 79 105 160 298 382 852 1,919 3,369 4,776 6,476 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Annual PV Installations (MW) Residential Non-Residential Utility
  • 3. ¡­And an Increasingly Diverse Landscape¡­ 4 Source: GTM Research/SEIA U.S. Solar Market Insight
  • 4. Federal IncentiveState Incentive Pre-ITC 1% 30% ITC-Driven 99% No State Incentive 8% State Incentive 92% ¡­Driven by One Paradigm Source: GTM Research +
  • 5. Fortunately, Solar is Cheaper to Install Than Ever Best-in-Class Source: GTM Research/SEIA U.S. Solar Market Insight $3.60 $2.27 $1.68 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Residential Commercial Utility Q3 2014 Bottom-Up Average System Price ($/W) Modules Inverters and AC Subsystem DC Electrical BOS Structural BOS Direct Labor Engineering and PII
  • 6. Traditional Grid Parity Analysis Ignores Rate Structures Connecticut Proves Why That Matters Source: GTM Research 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% False Parity 2013 2014 2015 2016 2017 2018 2019 2020 Connecticut Residential - Year One Bill Impact from PV Net Bill Impact Due to Solar (%) - Full Retail Net Bill Impact Due to Solar (%) - Actual Rate Grid Parity
  • 7. Here¡¯s How We Calculate Grid Parity 1. Solar Cost! 2. Electricity Bill Impact! 3. Forecasting! Source: GTM Research Solar Cost (LCOE) Modeling Irradiation Levels Hourly Customer Load Profile Hourly PV Production Profile Solar Avoided Cost Modeling Solar Input Forecasts Electricity Price Forecasts
  • 8. The Tipping Point:" Can You Offer a Customer 10% Year-One Net Savings?
  • 9. A Caveat: We Assume No State Incentives But They Do, And Will, Exist
  • 10. 2014: Three States Already at the Tipping Point >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL Source: GTM Research 2014 regional system price inputs range from $3.28/W-$3.72/W; WACC 9.6% AZ CA NV HI NJ NM SC
  • 11. 2014: Three States Already at the Tipping Point FL Source: GTM Research 120 100 80 60 40 20 AZ and CA Data Reflect Year-to-Date Residential Installations (Q1-Q3) AZ CA NV HI NJ NM SC CSI Funded Non- 27% CSI Funded 73% State Incentive 44% No State Incentive 56% 0 Q1 2010 Q4 2010 Q3 2011 Q2 2012 Q1 2013 Q4 2013 Q3 2014 (MWdc) Residential Commercial
  • 12. 2014: Three States Already at the Tipping Point >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NM SC Source: GTM Research 2014 regional system price inputs range from $3.28/W-$3.72/W; WACC 9.6%
  • 13. 2016: The Market Begins to Blossom >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT CO CT GA ME MD MA MI RI TX UT WY WI Source: GTM Research 2016 regional system price inputs range from $2.80/W-$3.17/W; WACC 9.6%
  • 14. 2017: ITC Reduction Kills Marginal Markets >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT Source: GTM Research 2017 regional system price inputs range from $2.59/W-$2.87/W; WACC 8.2%
  • 15. ITC Expiration: The Utility Market Feels the Most Pain Source: GTM Research/SEIA U.S. Solar Market Insight 5,267 7,236 791 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2015 2016 2017 MWdc Contracted Utility PV Pipeline by Planned Operation Date 1.3 GW with a Post-2016 PPA
  • 16. Despite PPA Prices (With the ITC) Consistently Around $50/MWh-$70/MWh Source: GTM Research U.S. Utility PV Market Tracker $200 $175 $150 $125 $100 $75 $50 $25 $0 2008 2009 2010 2011 2012 2013 2014 2015 Utility PV PPA Price ($/MWh) Contract Execution Date
  • 17. 2017: Retreat to the Southwest! >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT Source: GTM Research 2017 regional system price inputs range from $2.59/W-$2.87/W; WACC 8.2%
  • 18. 2020: The Real Fun Begins >5% Loss 0%-5% Loss >10% Savings 0%-10% Savings FL AZ CA NV HI NJ NH NM PA SC VT CO CT GA ME MD MA MI RI TX UT WY AL AR DE FL LA MN MS MO NE NY NC OH SD VA WI Source: GTM Research 2020 regional system price inputs range from $2.09/W-$2.35/W; WACC 8.2%
  • 19. Rate Structures Pose the Biggest Risk to Solar Competitiveness Example: Just-Approved Fixed Charge Increases in Wisconsin Source: GTM Research 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% New Rate Structures Put Wisconsin Solar Market Back Five Years! 2013 2014 2015 2016 2017 2018 2019 2020 Wisconsin Residential - Year One Bill Impact from PV Net Bill Impact Due to Solar (%) - $9 fixed charge Net Bill Impact Due to Solar (%) - $16 fixed charge Grid Parity
  • 20. 28 States ¡°In the Money¡± by 2020, and 14 at the Tipping Point Source: GTM Research 1 3 4 8 4 7 14 14 2 3 4 6 4 6 8 14 2013 2014 2015 2016 2017 2018 2019 2020 # of States At or Below Parity - Residential 0%-10% Savings >10% Savings
  • 21. Solar: Meet the Connected Home Source: GTM Research
  • 22. Thank You!! ! Shayle Kann! Senior Vice President, Research! Greentech Media! ! Questions? Visit www.gtmresearch.com! Or contact kann@gtmresearch.com!