Palm Springs, California -- Reporting from Greentech Media's Solar Summit. The U.S. solar market doubled from 2009 to 2010 and looks like it will double again to reach close to two gigawatts in 2011.
Where does it go from here?
Does it remain "a grassroots, niche, 100-percent-subsidized market," in the words of PG&E's Helen Priest -- or can the industry grow up, stand on its own, and learn to work with utilities and provide truly utility-grade solar assets?
Shayle Kann, Greentech Media Research's Managing Director, has provided an upside forecast of 6.5 gigawatts of demand by 2015, a 2009 to 2015 CAGR of 109 percent and a total market value of $13.0 billion. In 2009, the entire U.S. PV market received an estimated $2.4 billion in total project investment, a number that will be exceeded as early as 2011 in the utility market alone, according to Kann.
But that growth won't happen automatically -- and risks remain that might prevent that growth.
In the view of Simon Watson, Director of Utility Market Strategy at SunEdison, the U.S. solar industry needs to look more like an energy market rather than a solar market. Watson suggested that solar developers consider hybrid technology deployments that combine PV with wind, gas or other technologies that complement their profile. He added that solar firms must get the price right or address the variability issue and consider combining solar with energy storage and acting as an Independent Power Producer.
Ben Cook, Vice President of Project Finance, SolarCity, spoke of the potential for integrating variable pricing into the structure of a leasing agreement, as well adding energy efficiency to SolarCity's offering -- a service they've already started to provide. Cook also emphasized the need for harmonizing permitting costs across the thousands of utility districts in the U.S. According to a recent study, permitting inefficiencies can cost up to $0.50 per watt in the deployment of solar -- which seems like an enormous piece of low-hanging fruit.
Helen Priest, Director of Emerging Markets at PG&E, one of America's top deployers of solar and renewables, had these predictions about energy markets:
- Dynamic pricing is coming -- this will shift the way consumers relate to utilities
- The supply-demand gap will start to close; we will start to need more plants
- We need faster-acting demand response
- We need sustainable business models for the adoption of solar assets
Priest noted that interconnect costs are going to become more visible. She also noted that with the California Solar Initiative ending soon, that flood of CSI data and transparency will no longer be available. Priest observed that with the end of incentives, California looks like a short-term market, and utilities need to see 10 to 20 years ahead.
Priest also stressed PG&E's support for solar and noted that the market opportunity is large if the industry and utilities can work together to build a sustainable network.