Greentech Media's Solar Summit, held March 14 and 15 in Palm Springs, CA, was not your average solar industry event. The 275 participants, which mostly comprised of higher-level management and executives, exhibited a high level of industry expertise. Panel discussions delved deep on very technical or detailed topics; from diversification of PV product lines by market sector to increased need for inverters to respond to utility needs to the effects of regulatory bottlenecks on project finance and investor confidence.
Several sessions were specifically devoted to covering challenges and innovations in product manufacturing as well; from innovations in fully-automated manufacturing to analyzing competitiveness across several thin-film technologies. Days before the summit, GTM Research along with SEIA released their 2010 solar year in review report. (Executive summary) The highlights?
- The total amount of PV installed in 2009 doubled in 2010 (435 MW to 878MW).
- The utility-scale market is growing rapidly.
- California is not the only game in town; it was only 27% of the 2010 market. The geographic diversity is growing to include East Coast states like New Jersey (14%) and even Pennsylvania (5%).
Reviewing these numbers was an exciting way to kick off and contextualize discussions at the summit.
According to the way many panelists positioned their statements, the benchmarking of PV projects and components are changing and have been for a little while now. Where once the almighty dollar per watt was the standard, levelized cost of electricity (LCOE) is emerging quickly as the winning benchmark. Unfortunately, calculating LCOE is a much more complex process than determining dollar per nameplate watt. However, the results of LCOE calculations offer a much more precise understanding about the value of a PV system: what it will produce (kilowatt-hours). This is critical for investors as they engage in due diligence before backing a project.
In a market where module manufacturers are quickly racing toward the lowest dollar per watt costs across the technology spectrum, LCOE is emerging as a way for those manufacturers to differentiate themselves as a better value. To break this one down even further: it's the shift from talking about solar in terms of power (nameplate capacity of a system) and instead in terms of energy (amount of energy produced). As solar continues to grow as a utility-scale solution, as a few panels during the summit clearly indicated, discussion will continue to focus more on evaluating the energy production and technology choices for these projects on a LCOE basis.
Another trend that came up multiple times, though already starting to become visible in the trade show circuits, was the differentiation in product lines across application sectors. For instance, many top panel manufacturers like SunTech and SunPower are developing different module lines specifically for residential, commercial flat roof, and utility-scale applications. We should expect to see more of this market segmentation as utility-scale solar continues to grow, as that sector will require much different support than its smaller-scale commercial or even residential cousins.
Panelists also explored the relationship between the growing utility-scale solar industry and the utility providers. Unfortunately, the production supply curve of solar PV does not closely match the demand profile the utilities need to serve. As more utility-scale solar (either PV or Concentrating Solar technologies) interconnects to the grid, panelists from the major California utilities discussed the need for cost-effective storage in order to mitigate the intermittent nature of solar energy. Utility-scale solar also needs to begin to respond like other generating facilities; being both more reactive and more interactive with grid operator needs based on demand, faults, or load changes. Manufacturers of inverters were concerned with being able to respond effectively to these situations.
Overall, much of the discussion at the summit revolved around the challenges that are in the near future of the solar industry focusing on the large commercial to utility-scale sectors. The key now is scale. Solar is scaling in the US at a staggering rate, as witnessed in the jump between installed MW in 2009 and 2010. Utility-scale PV will need to respond better to the needs of the utility. Concentrating Solar Power technologies will need to better handle land-use issues and transmission interconnection hurdles. Inverters will need to help utility-scale installations react like other generating sources on the grid in the eyes of grid operators. Policies on state and federal levels need to provide a more stable environment for investors to operate and back projects. Manufacturing needs to overcome challenges in scalability to reach past 1GW production.
As Jurgen Krehnke, President of SMA America, put it, "Solar must play like any other energy source in the eyes of the utility and be reliable."