solar energy sam software
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PV in the USA: Technology Evolution,Expanding Markets, Advancing Technology
Scott Stephens
U.S. Department of Energy
Solar Energy Technologies Program
Energy Efficiency and Renewable Energy
http://www.eere.energy.gov/solar
Email: [email protected]
Tel: 202-586-0565
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Agenda
U.S. Department of Energy (DOE) Background andDOE Solar Program Evolution
Expanding Industry – APEC Opportunity
Solar America Initiative Preparing forUnsubsidized Grid Parity
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Organizational Structure:
U.S. Department of Energy
Formed: August 4, 1977
Annual Budget: $23.4 Billion
(2006)
Energy Efficiency,
Renewable Energy (EERE)Annual Budget: $1.255 Billion
(FY09 Request)
10 Programs (5 EE, 5 RE)
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Solar Energy Technologies
Program (SETP)
Annual Budget: $168 Million(FY08)
~20 Staff (incld contractors)
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The mission of DOE’s Solar Program:
Market Transformation
Grid Integration
Photovoltaics (PV)
Distributed Generation, on-site or near point of use
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Concentrating Solar Power (CSP)
Centralized Generation,large users or utilities
To accelerate the wide-spread adoption of solar electric technologies across theUnited States through a program of applied research and development,
demonstration, and market transformation activities.
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Historical record efficiencies - 30 years of R&D success
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Historical Role of DOE:
• Focus on narrow and quantifiable metrics: $/W, cell efficiency, g/W, etc.
• Fund risky technologies (private Sector wouldn’t invest in PV)
• Provide long term support for struggling yet promising companies
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History of Photovoltaics
Cumulative installed grid-connected and off-grid PV power in the reporting countries ? Years 1992-2006
4000
5000
6000
P o w e r ( M W )
Grid-connected
Off-grid
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0
1000
2000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
I n s t a l l e d P
V
Predictions of centralized power production (GW solar
farms) or rural electrification were mistimed or misguided
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PV funding focuses on Levelized Cost of Electricity
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Technology Pathway
Partnerships
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Three very different technologies all have viable
strategies to reach grid parity by 2015
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Binning technologies allows an “apples to apples” comparison.
Approach ensures best-in-breed funding across all promising technologies.
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Agenda
U.S. Department of Energy (DOE) Background andDOE Solar Program Evolution
Expanding Industry and the APEC OppertunitySolar America Initiative Preparing forUnsubsidized Grid Parity
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Trend #1 – Manufacturing shifts: US EU Asia
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Preliminary Data –
PV News, March 2008
Preliminary Data –
PV News, March 2008- European manufacturing growth was stimulated by Feed-in-Tariffs
- Initial Asian growth was based upon labor, manufacturing support, tax incentives
- Projected continued Asian growth due to aggressive business strategies
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Trend #2 – Modules flow from Asia to Europe
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- Germany remains the only significant, heavily subsidized, uncapped market
- Asian advantages may diminish as EU manufactures automate, ramp production
- This export trend is unsustainable particularly as world PV production takes off
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In a rapidly growing market with demand reliant on
government incentive programs, oversupply is a risk…
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Policy and market risks in an oversupply situation
Policy risksGermany may revisit accelerated EEG cuts in 2009 - currently uncapped – could assign carbon conditions
Spain may stick to lower caps - recently a 500MW/yr cap has been enacted
EU Nations grow increasingly concerned about uncapped programs
Korea could slash post 2009 subsidy program
Market risksExcessive profits at >35% margins could erode public support
Global recession / inflation could halt expensive programs
German utilities may have difficulty integrating >15GW of PV on grid
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APEC Opportunity – Domestic Demand Growth
APEC advantages
High Electricity Rates
Solar ResourceLow Labor Costs
Lower Indirect
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Manufacturing incentives (SEZ)Progressive Policy Action
Interconnection, Smart Grid
Commitment to infrastructure
PHEV, Centralized Storage
Climate change sensitivity
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Agenda
U.S. Department of Energy (DOE) Background andDOE Solar Program Evolution
Expanding Industry and the APEC OppertunitySolar America Initiative Preparing forUnsubsidized Grid Parity
14R. Margolis NREL
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DOE can have a unique leadership in the growth of the
solar industry
Universitiesand National
Labs
StateLegislators
andRegulators
FederalPolicy
Makers andOther
Agencies
Technology Innovation
and Policy
New Markets
and Applications
The PVindustry hasthe potential
to enter a
“virtuous cycle” oflower cost,
newtechnology
andexpanded
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Utilitiesand End
Customers
BuildingIndustry andWorkforce
Dev Groups
FinancialIndustry
Solar andOther
IndustryGroups
DOEEERESETP
Cost Reduction
Private
Investment
Manufactur- ing Scale-Up
markets.
To reach it’sfull potential,
the PVindustryrequires
close
coordinationbetween anumber ofpublic and
privateentities.
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October 3rd 2008 – U.S. Congress passes 8-year 30%
investment tax credit (ITC) for photovoltaics.
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ITC provides a tax credit for 30% of fully installed system price until January 1st 2017.
Also, the ITC removes the tax credit cap for residential installations and opens up the
credit to electrical utilities for centralized and distributed solar installations.
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Local and regional photovoltaic support programs
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The 8-year ITC is a major addition to a collection of other small scale sustainable support programs
including renewable portfolio standards, renewable energy credits, low interest bonds, efficiency
standards on new building construction, and installations on government buildings/land.
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Innovative business models take advantage of solar’s
unique modular advantage
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Power Purchase Agreements (PPAs), installation aggregation, “solar options” on
new home constructions, are all business strategies which streamline
installations and accelerate adoption curves.
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Market penetration begins - 2007 residential PV and
electricity price differences with existing incentives
Currently PV isfinanciallycompetitive where
there is somecombination ofhigh electricityprices, excellentirradiance and/or
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state/localincentives.
Employing DOE resources including detailed solar maps, utility rate information, and
financial modeling software (SAM), along with state solar subsidy reporting, SETP plans
to provide “parity maps” which are updated frequently.
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Conservative forecast: 2015 residential without
incentives and (1.5% PA) increase in electricity prices
PV is less expensivein 250 of 1,000largest utilities, which
provide ~37% of U.S.residential electricitysales
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nearly 870 utilities)are projected to havea price difference ofless than 5 ¢/kWhbetween PV and gridelectricity
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Realistic forecast: 2015 residential installations without
incentives and (2.5% PA) increases in electricity prices
PV is less expensivein 450 of the 1,000largest utilities, which
provide ~50% of U.S.residential electricitysales
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nearly 950 utilities)have a pricedifference of less than5 ¢/kWh between PVand grid electricity
DOE also publishes reports highlighting secondary benefits such as carbon reduction,
price stability, domestic security, technology development
www.nrel.gov/analysis/pvclearinghouse/
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Longer lead efforts Grid Integration / Energy Storage
Interface Module
Inverter/controller marketsare segmented inautomotive, telecom,mobile, & retail end-usesSolar energy marketquickly becoming thebiggest contributor toinverter markets; 2007~$2Bn sales, 2010 ~$10BnsalesHigh Penetration PV
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SETP is working to develop smart grid standards and eliminate barriersCoordination with 1000+ utilities, 10+ smart grid and demand response companies, othergovernment regulatory offices.
Conducting Studies to establish photovoltaic installation thresholds:www.eere.energy.gov/solar/solar_america/rsi.html
Example: SolarCity (Residential PPAs) + Fat Spaniel (Monitoring) + GridPoint (DR)
Major drivers that will propel accelerated growth
Increasing time-of-use pricing offerings – pressure to expand net metering caps
Growing demand response program practices
Increasing use of intermittent renewable generation and continued power quality / grid reliabilityrequirements
Integration with smart grid, microgrid, and PHEV
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Preparation for a solar future:
Expect lower costs
Acknowledge the need for domestic PV demand growth
Push for long-term and sustainable subsidy programs
Leverage domestic strengths: low labor costs, strong
policy support, aggressive business investments, IC
workforce, SEZ
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Quantify secondary benefits including energy securityand carbon reduction
Anticipate, foster, and coordinate local support
programs
Bypass “dumb grid” investments by promoting
synergistic technology solutions (PHEV, TOU, DR,
Storage)
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For More Information:DOE Solar Program/Analysis: http://www.eere.energy.gov/solar/solar_america/
PV Value Clearinghouse: www.nrel.gov/analysis/pvclearinghouse/ SNL PV Systems R&D: www.sandia.gov/pvNREL Solar Research: www.nrel.gov/solar
Si n u for our Newsletter and Market Anal sis: Send email to solar ee.doe. ov
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Questions on this Presentation:
Scott Stephens
[email protected]: 202.586.0565M: 612-720-5446