Cleantech Investing

Intersolar & Need for US Policy in Global Marketplace

David Kirkpatrick — Mon, 19 Jul 2010 19:43:35 +0000

I am just back from the Intersolar conference in San Francisco and came away further convinced that the US needs to set forth a strong long term national policy to reduce emissions and foster renewable energy. German and Asian companies were quite well represented on the trade floor, as renewable and industrial policies have helped them scale rapidly. Pricing for photovoltaic (PV) modules has stabilized from the steep downward trend in 2008-2009 as demand in Europe is stronger than expected. For a sense of scale, Germany will install about seven gigawatts (GW) of solar in 2010 as vs. about one GW being installed in the U.S., despite our size and much better sunlight. Similarly, the Ontario market, with its feed in tariff (FIT) similar to Germany’s, is taking off as well. In the U.S., there is uncertainty if the ITC grant will be extended beyond December 2010, or revert to a tax credit, resulting in a rush to get at least 5% of commercial solar systems ‘in the ground’ by year end. This rush is colliding with the lower availability of PV modules as manufacturers shift product to more lucrative European markets.

The market outlook underscores the need for a long term US policy to put a price on carbon and establish a renewable portfolio standard (RPS) so that U.S. solar companies can have longer term certainty. Such policy would also encourage international firms to open operations in the US with more confidence that the market will be truly national… not just driven by state based RPS measures (which to date have been the key drivers for market growth in CA, NJ and increasingly now in PA, CO, MD, NC and other states.) Here is a good piece on the need for US policy in context of global climate change negotiations and the BP oil spill from Jeff Wolfe, CEO of groSolar, an SJF portfolio firm: http://www.renewableenergyworld.com/rea/news/article/2010/07/in-light-of-the-gulf-spill-why-we-need-climate-legislation

Other trends in evidence at Intersolar were:

• Skepticism of large scale CA and SW solar thermal power plants and interest in 3 MW to 20 MW solar PV plants sited close to utility substations

• Innovation in ‘balance of systems’ given how much PV panel costs have dropped, including…

• Inverters – both microinverters (Enphase and other entrants) and maximum power tracker (MPPT) approaches (eIQ Energy, Satcon)

• Racking and tracking system innovation for lower cost, more flexibility, less labor

• Multiple new Chinese PV suppliers looking for entrant partners for the US market, but questionable on their bankability for US projects

• Interconnect concerns with CA ISO seeking to remove small PV power producer connection set-aside

• CA utilities publicly bullish on their ability to meet next step up in RPS standards with solar, and favoring hybrid approach of some utility owned and some private PPA provided solar for next phase of growth

• Finance freeing up somewhat for solar projects, but big rush to get 5% in ground prior to ITC grant expiring at year end (unless renewed)

• Overall strong commercial interest in US market by global players but large scale deployment and investment still awaiting more stable, long term national renewable and solar policy

The market outlook underscores the need for a long term US policy to put a price on carbon and establish a renewable portfolio standard (RPS) so that U.S. solar companies can have longer term certainty. Such policy would also encourage international firms to open operations in the US with more confidence that the market will be truly national… not just driven by state based RPS measures (which to date have been the key drivers for market growth in CA, NJ and increasingly now in PA, CO, MD, NC and other states.) Here is a good piece on the need for US policy in context of global climate change negotiations and the BP oil spill from Jeff Wolfe, CEO of groSolar, an SJF portfolio firm: http://www.renewableenergyworld.com/rea/news/article/2010/07/in-light-of-the-gulf-spill-why-we-need-climate-legislation