understanding solar: january 2013
TRANSCRIPT
Understanding SolarJanuary 2013
“Solar is so cheap today, that unless you tell me that you did a
solar analysis yesterday, not last year or last month,
then your analysis is out of date.”
– David Crane, CEO of NRG Energy
3/2012
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
1
2
3
4
5
6
7
Dollars
/Watt
DC
Solar Panel Prices Have Dropped Tremendously
Module Pricing Trends 1989-2011
Q3 2012: Reported ASPs 61¢ to 76¢ per
Watt
Source: EIA: October 19, 2011 http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb1008; 2011 data point from GTM PVNews, April 2012
Utility Solar Power Now Beats Nuclear Prices, Nears Coal
Sources: Nuclear & Coal Costs: Entergy Arkansas Testimony (Docket 12-038-U); Utility Scale Solar – EPIA, NM PRC
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Wholesale Electricity Pricing
Solar PPA
$/M
Wh El Paso Electric Co.
solar contract 57 $/MWh
Coal: 87 $/MWh
Nuclear: 144 $/MWhNuclear and
coal power
takes 9 – 10
years to build
Wholesale Electricity Pricing
Sources: Gas Plants - EIA AEO 2012er; CCNG data point: Entergy 2012 APSC Testimony; Utility Scale Solar – EPIA, NM PRC
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Solar PPA Combustion Turbine Combined Cycle NG
$/M
Wh
Utility Solar Now Beats Natural Gas Peak Power
CCNG: 9.1¢/kWh
Wholesale Electricity Pricing
New Mexico (SPS/EPE) solar contracts
California RAM solar bids
Source: EIA (actual 2010, forecasted 2011-20); EPIA mid solar residential cost forecast
Residential Solar Competes in Many States Today (with more on the way)
Residential Electricity Prices vs Solar Prices
With new finance models, Americans are installing solar at no or low upfront cost.
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$(0.00)
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
Solar
NY: 19.1¢/kWh
CA: 15.05¢/kWh
HI: 28.7¢/kWh
Competitively-priced solar has created a
virtuous cycle of market expansion and further cost
reduction.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Rest of World
China
US
Japan
Rest of Europe
Italy
Germany
Solar is Rapidly Scaling
27.7 GWSolar installed worldwide
in 2011By comparison: 4 GW
of nuclear went into operation in 2011
Source: DOE/EERE 2010 Data Book; 2011 data from SEIA/GTM Market Insight Report
Annual U.S. Solar Market Growth
US Market is Showing Healthy Growth
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
500
1000
1500
2000
2500
3000
3500
4000
4500
Cumulative MW Annual MW
MW
In
sta
lled
UP 77% First 3 Qs of
2012 over
2011
684 MWQ3 2012
installations
78% avg.
annual
growth
since 2006
The U.S. “is one of the most important (solar markets), because it is one of the few
places around the world where we are seeing market growth.”
– Steven Taub, GE Capital
Solar Adoption is on a High Tech Trajectory:
Source: CTIA – The Wireless AsscoiationUS Cell Phone Market
In a race to market maturity, there are always
winners and losers.
Consolidation is a Sign of Maturity: Early Automotive
# OF CARS PRODUCED
# OF CAR MANUFACTURERS
After 70 years of mergers and bankruptcies
Year 1984
11.5 million cars15 manufacturers
Adapted from: Howard H Baker Jr. Center for Public Policy, University of Tennessee, Assessment of Incentives and Employment Impacts of Solar Industry Development, May, 2012.
Year 1914
2 million cars350 manufacturers
Consolidation is a Sign of Maturity: Early Dot Com
Would you call the
INTERNET a failure?
NASDAQ closing prices from 1994 to 2008
~5,000
companies
acquired or
shutdown$5 trillion
of market
value
erased
Source: NADAQ Composite Index, Webmergers, Inc.
Mergers & Bankruptcies Are Nothing New . . .
OIL INDUSTRY
Behind tumultuous headlines,
solar is a true American success
story.
7x more jobs per energy unit
than coal
Solar Creates U.S. Jobs
Sources: Kammen, David M et al, 2004, Report of the Renewable and Appropriate Energy Lab, Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy, University of California, Berkeley.Wei, Max et al, 2010, Putting
Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy and the Haas School of Business, University of California, Berkeley, in Energy Policy, vol 38, issue 2, February 2010.
Solar Foundation 2011 National Jobs CensusU.S. Bureau of Labor Statistics: May 2010 National Industry-Specific Occupational Employment and Wage Estimates
120,000 Americans work in solar today
High growth despite recession
Solar employment grew 10x faster than the general economy
Completed US PV Projects
US Military Is Going Big on SolarCompleted US PV Projects
DoD committed to 1200 MW on +50 domestic basesSolarCity to install 300 MW on 120,000 military residences
“This is about the bottom line of the United States Army: it is about military effectiveness.”
- Dennis McGuinn, US Navy Vice Admiral (ret.)
American Businesses Are Going Big on Solar
Top 20 Companies Total:
1.2 million solar panels
700 systems in 25 states
$47.3 million in annual
utility bill savings
Major Financial Players Are Going Big on Solar
Berkshire Hathaway
US Bank & East West Bank
Capital Dynamics
Dupont
GE
Kohlberg Kravis Roberts
MetLife
US Bancorp
Credit Suisse
$-
$20
0
$40
0
$60
0
$80
0
$1,
000
$1,
200
$1,
400
$1,
600
$1,
800
$2,
000
$2,
200
$2,
400
$2,
600
$2,
800
$3,
000
$3,
200
Dollars Invested ($millions)
Recent Investments
$5.7BRecently
announced
investments
$109BSaudi Arabia’s
20-year solar
investment
plan
Operating Contracted (PPA Signed)
Announced0
5000
10000
15000
20000
25000
30000
35000
MW
Cap
acit
y
5-fold increas
e
20-fold increas
e
U.S. Utilities Are Investing in Solar
Utility PV Pipeline
Series10
100020003000400050006000700080009000
10000
2012
2013
2014
2015
2016
Expected Completion Date
MW
Cap
aci
ty
1.5 GW
9.3 GW
32.3 GW
Source: GreenTech Media, PV News, July 2012
“My number one fear is we’ll be pushed to build natural gas at the expense of solar and wind . . . Ben Franklin said there are two certainties in life: death and taxes. To that I would add the price of natural gas.”
- Jim Rogers, CEO of Duke Energy
The playing field and the rules of the game are still designed to support fossil power.
It’s time for a new
game.
Solar Subsidies Pale in Comparison to Fossil Fuels
Fossil Fuel and Solar
[ELI, SEIA]
[SEIA, Blumenauer, Treasury]
$72.4 billion
$2 billion
$40 billion
$7-10 billion
Estimating U.S. Government Subsidies to Energy Sources: 2002-2008Environmental Law Institute, September 2009SEIA (Solar Energy Industries Association) Federal Energy Subsidies in the United States: A Comparison of Energy Technologies, February 24, 2011“Ending Oil Industry Tax Breaks”Congressman Earl Blumenauer, Third District of Oregon, www.blumenauer.house.gov, April 2011
Estimating U.S. Government Subsidies to Energy Sources: 2002-2008 Environmental Law Institute, September 2009SEIA Federal Energy Subsidies in the United States: A Comparison of Energy Technologies, February 2011
“Ending Oil Industry Tax Breaks” Congressman Earl Blumenauer, Third District of Oregon, www.blumenauer.house.gov, April 2011
Subsidies Pale in Comparison to Fossil Fuels
U.S. Lobbying Dollars
http://www.opensecrets.org/lobby/
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Energy Spending 1998 - 2011
Utilities Oil & Gas
TOP 6 INDUSTRIES IN SPENDING
Lobbying $ (1998 – 2012)
1. Pharmaceuticals $2.39 Billion
2. Insurance $1.70 Billion
3. Electric Utilities $1.60 Billion
4. Business Associations
$1.39 Billion
5. Computers/Internet
$1.33 Billion
6. Oil & Gas $1.30 Billion
Solar lobby spending in 2011 = $14M
Bipartisan Public Support for Clean Energy
91 percent of Americans say developing sources of clean energy should be a priority for the President and Congress
85% of Republicans
89% of Independents
97% of Democrats
Sources: Public Support for Climate & Energy Policies in May 2011, Yale Project on Climate Change.
Understanding Solar
Solar is . .
Delivering record cost reductions
Achieving record market growth
Putting Americans to work in all 50 states
Transforming the U.S. energy economy
Not in 20 years. Not tomorrow. Today.