An Overview of the Photovoltaic Industry part 1

photovoltaic

Changes in PV (Photovoltaic)

By Daniel Duffield

 

Some very unique circumstances have enveloped the US photovoltaic industry over the last 8 years. This industry also is somewhat unique, in that unlike manufacturing appliances or automobiles, there is an entire installation service industry associated with it. Further, these systems have to be integrated in full compliance to the local permitting authorities and with full cooperation with the local electric utility, with all of these additional associated plan set authoring, examination review and approval costs.

  • The US photovoltaic electrical systems market was incentivized via a 30% federal tax break, When other industries suffered from the US 2008 banking debacle, many businesses jumped into this industry with both feet to take advantage of the stimulated growth of products sales and services from this emerging new market. Some states also instituted an additional Person Income tax incentives or residential solar installations.
  • In many states, the public utility regulation authorities imposed or adopted an (RPS) or Renewable Portfolio Standards – which demanded, coerced or requested that large investor (publically) owned, electric utilities produce – a small but significant portion of their power renewably from wind or solar electric. This led to local utility based, customer incentive programs for solar, with REC’s or SREC’s. These incentive credits have diminished over time, but certainly helped the industry as a whole – lower overall solar system deployment cost(s).
  • The number of PV module manufacturers – first grew tremendously in number and then dropped off significantly due to attrition; because PV module pricing was repeatedly driven down – by economies of scale and direct government subsidy of offshore manufacturing of PV modules. Many, many offshore PV manufactures sold modules at below their cost to gain market share and consequently some US import duties were instituted to offer some protection from these predatory practices. Many photovoltaic module manufacturing companies that were operating viable businesses could no longer compete economically and were forced out of the PV module manufacturing business altogether. Many of the large scale PV makers hold tremendous debt on their books (a few -over a billion dollars) and are only still in business due to their government subsidized status.
  • American PV module and equipment makers saw some limited relief via the Buy America ACT (ARRA), photovoltaic modules had to be made in the US – for photovoltaic systems to be installed on federal government, or state owned or affiliated facilities, including other publicly funded projects such as schools, hospitals and other public buildings.
  • The number of PV module mounting system manufacturers also grew – over a magnitude of order in number from just a few years previous prior. American manufacturing jobs have been sent overseas, since 1981, and many US cold rolled metal manufacturers jumped at the chance to produce module mounting structures. In 2005, there were around a dozen recognized US mounting system manufacturers, where in 2012 this number jumped to over 75.
  • The global PV module industry saw a silicon shortage that briefly raised PV prices; this quickly disappeared, as global polysilicon production ramped up.
  • As the traditional expensive component of photovoltaic systems, PV module prices have dropped precipitously, the market then quickly looked at other areas to satisfy the insatiable hunger for further costs reductions. There after great pressure was placed on the balance of system manufacturers to reduce retail pricing and develop new innovative products with significant safety improvements.
  • Component cost reduction attention was focused on the solar electric inverter manufacturing industry and the photovoltaic module array mounting system industry to reduce costs and innovate.
  • The majority of all photovoltaic module array mounting structures have been redesigned to employ what are known as “top-down” module clamping methods that provide great installation labor savings and a reduced number of fastening hardware components.
  • The industry growth rate forced regulatory imposed innovations to be adopted at almost a blinding rate to normal product development cycles. These included such product developments such as PV (DC) GFIC devices, AFCI devices, non-isolated inverters, above 600VDC rated PV system equipment, Rapid (Electrical) Shutdown of roof top PV sited arrays (for first responders) and the recent UL 2703 listing for PV module mounting structures and UL 4703 for tracking PV module mounting structures
  • In addition, California authorities first adopted rooftop minimum setbacks for walkways and rooftop egress; which significantly reduced the amount of roof area for possible PV deployment – which other states and other jurisdictions quickly followed. Reducing the available deployable area for PV on a given roof, lessened the return on investment for PV customers and lengthened the period for return on investment.

Very few industries have ever experienced such dynamic growth and rate of change of market conditions in less than 10 years. Market forces have driven down PV system equipment costs in general – in hopes of gaining market share and aiming at energy cost(s) approaching grid parity on large utility scale systems.

Continued

The Investment Tax Credit is Back on Table

itc on the table

According to a research note issued by Credit Suisse, the ITC or Investment Tax Credit, which will sunset at the end of 2016, may not see that sunset yet. The note mentions a building momentum in Congress for it to be added to tax extenders legislation at the same time as the world meets to discuss Climate Change in Paris this week. It certainly would look good for the US to take such action at this time and show that they will put their money where there mouths are.

For more on this subject, click here.

There are other ways the ITC could be saved as well. GTM analyst Cory Honeyman said there was more than one shape for an extension to take.

“It’s my understanding that there is opportunity for an extension to the ITC in a formal, comprehensive tax extenders bill, and opportunities to put the commence construction rule in an omnibus spending bill sometime in 2016.

“There could be one-off legislation that extends the ITC on its own but that’s a harder process as opposed to being bundled with other tax extenders. There are definatly a number of periods of time until the end of 2016 and a few different mechanisms that could extend it in some kind of fashion,”  said Honeyman.

PRC Files Notice of Inquiry

The New Mexico PRC has filed a Notice of Inquiry, stating that they will be looking into whether public utilities constructing and owning distributed generation facilities that are dedicated to serving one or more specific retail customers might provide net benefits or detriments to consumers, the environment, public utilities and the public interest. They are trying to determine if the Commission should encourage or discourage such arrangements.

For the complete pdf of their filing, please click below.

15-00355-UT Notice of Inquiry 11-18-15

Arizona to Begin Solar Cost-Benefit Study

arizona solar study

Arizona is set to begin a full cost-benefit study on roof top solar. Arizona utilities have maintained, for the past two years, that roof top solar adds costs to the grid that customers who don’t have solar have to pay. According to a recent article posted in Utility Dive, the utility concluded that customers with distributed solar, on average, shift $67 a month in costs to non-solar customers because they “pay less for grid upkeep”.
However, solar advocates point out that the utility is not calculating the value of solar correctly. They assert that solar adds around 33 cents per kilowatt hour to rate payers. Arizona solar advocates also point to a 2013 Crossborder Energy study showing every $1.00 invested in Arizona rooftop solar produced a $1.54 benefit to ratepayers.

The regulatory commission voted 4 to 1 at the end of October to study the cost/ benefits of rooftop solar in order to determine solar’s worth.

2015 Solar Fiesta Schedule and Workshops

2015 Solar Fiesta Banner

2015 Solar Fiesta Schedule

With solar themed workshops ranging from the Homeowners Guide to Photovoltaics to DIY Tech and the Future of Renewable energy, there will be something for everyone, regardless of their experience with PV and solar technologies! Bring the family to the CNM Workforce Training Center, I-25 and Alameda, on September 26th. The Solar Fiesta starts at 10am and lasts until 5pm. Hope to see you there!

Click on the above image for the downloadable PDF of this year’s schedule and click here for the Workshop Descriptions PDF.

PNM Drops Solar Connection Fee

Unlike PNM’s previous rate request, which was rejected by the five-member PRC commission in May, the new case does not call for a new fee for solar customers to connect to the grid. The solar fee would have ranged from $21 to $26.

“We did not feel that it would be productive to include it in the refiled rate case given the need to implement the new rates in a timely manner,” a PNM spokeswoman said.

For the full application, please click this file-  04_Application (OCR)

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