Intersolar North America 2008 Summary – Part 2

Solar Industry

Here’s part two of my wrap up of Intersolar North America 2008.  Obviously, this doesn’t even scratch the surface of what was covered at the conference, but these were some of the things that stuck out in my mind.  Also, I haven’t added anything about the exhibition – I spend quite a bit of time checking out the various exhibits and talking to people, but they were enforcing their “no photography” policy the day I was walking the floor, and frankly, there’s not much I could say here that isn’t on the exhibitor’s websites.

• Concentrated Solar Thermal (CST) - CST still enjoys cost advantages over PV, but these are shrinking rapidly.  As the price of concrete and steel continue to climb, this advantage will erode, and will quite likely disappear and then reverse in the next 5 to 10 years:
  • Solar Thermal systems can store their heat, they can produce more power output as needed and during peak demand, which makes this more attractive for utility scale solar.
  • As PV costs start to significantly fall, combined PV – Wind systems might start to look more attractive, see next point.
• Meeting Peak Electrical Demand – Photovoltaic and Wind Power output compliments well.  As prices fall, proposals for blended systems might become more common.  See slide:

Wind and PV Power Output

• High Quality Development Land – Land use is becoming a bigger issue as flat, high solar irradiance land near transmission lines gets bought up.  The US Federal Bureau of Land Management tried to put a 2 year moratorium on new solar projects, and concerns about endangered species habitats and even flash flooding have put the breaks on some projects.
  • This hurts land inefficient applications like thin film, tracking PV and Tower Solar Thermal the most.

And finally, here are a couple more blog posts and articles covering the event.

Greentech Media has another slide show of the conference itself, and a short article on some of the other conference news items.  (If you look carefully in slide 3, I’m the green shoulder and hair visible behind the woman in the first row.)

In the San Francisco Examiner, a short summary article about the conference.  Short version of the article, it was an excellent conference, attendance was huge and if you’re at all interested in solar and can make it next year, go.

So, that’s basically it for now.  I will definitely go into more detail on some of these points in the future and am likely to cover other points raised that I didn’t mention here.

Intersolar North America 2008 Summary – Part 1

Solar Industry

This turned into a longer post, so I’ve cut it in two.  The second part will come out tomorrow.

The organizers did an excellent job of putting together the conference, and the quality of the speakers was outstanding.  In particular, Travis Bradford of the Prometheus Institute, Hal LaFlash from PG&E and Dr. Fred Morse from Abengoa were excellent.  Some interesting take aways from the conference:

• Grid parity – It’s coming sooner than people thought, with realistic dates ranging from 2011 to 2015.  This is because:
  • The price of electricity is rising faster than expected, with the price of electricity predicted to double in the next five years.
  • And the price of solar power installations is falling faster and faster.
• Renewable Investment Tax Credit (ITC) – The ITC is really important, and it would be a major failure of leadership in the US Congress to see it die.  See my previous post on the importance of the ITC.  The consequences of a failure to renew this tax credit will mean hundreds of thousands of lost jobs in the US, electricity costing more in the long run, higher CO2 emissions and basically, solar in Europe and Asia pulling further ahead of a lagging US industry.  It will mean the difference between a booming industry and a flat one.
• Tracking - Utilities love tracking PV applications.  Tracking means more total power output for a system, but more importantly, it means more power output during the later afternoon and evening when peak demand hits.  See slide:

PV with and Without Tracking

Also, here are a couple of really good blog posts about the conference from Edgar A. Gunther, another blogger that was there.  The first features a couple of slide shows of exhibitors, and the second features extensive coverage of the Dow Corning and REC Silicon presentations including some slides and video.

More to come tomorrow.

Edit: References to the failure of the ITC were premature.

The Importance of the ITC

Solar Politics

The Investment Tax Credit is the major US Federal incentive for Solar Energy in the US. The most basic description of it would be that it’s a 30% tax credit on the installation of a Solar Power system. The credit is worth up to $2000 for individuals, and with no cap for businesses provided they have sufficient tax liability. It’s currently valid through to the end of 2008, and is up for renewal right now.

But, it’s completely bogged down in partisan politics and it’s starting to look like it’s not going to go through (article dated Sunday, July 20, 2008). Basically, the Republicans want to kill it more than the Democrats want to save it. While at Intersolar 2008, almost every speaker raised the importance of the ITC to the US Solar Energy Industry. The general consensus was that without it, solar would grow in the US but slower, and with European and other non-American Solar Energy companies pulling further ahead of their American competitors.

Here are some articles and analysis that summarize different view points rather well:

• No Tax Credit, No Solar Power – A the title is alarmist, the article is specifically about two Abengoa projects that could be halted without the ITC. Good analysis though and worth reading.
• More Solar Energy Coming to California, Some Contingent on ITC
• Extension of US solar investment tax credit emerges as key issue at Intersolar/Semicon West – Summary of Intersolar panelist’s comments on the ITC.

Finally, a quote from Dr. Fred Morse, senior adviser of U.S. operations for Abengoa Solar, from this Greentech Media Q&A.

Q: Many companies expect a one-year extension to pass before the renewable-energy tax credit expires at the end of the year. Will that be enough to keep CSP moving forward?
A: A one-year extension is of zero value. It takes about four to six years to get a CSP plant sited, permitted, built and up and running. The [investment tax credit] only applies when the plant comes online. And, if you want to finance the plant today, the banks … won’t finance the project unless the [credit] will be there when it’s needed.

So what does all of this mean for the solar energy industry in general? Well, it looks bad, but the reality is that it’s “less good”. Basically, even without the ITC, analysts predict a record year for Solar in California and the rest of the US, if it passes with the 8 year extention that Democrats want, then it will be a banner year. Or put another way, it weeds out the mediocre projects and the mediocre companies. Solar investment will still be in the Billions this year and more solar farms will be built this year than last year.

Signs of a booming industry example:

• Q1 2008 Solar Investment is already 30% over Q1 2007 – Source Cleantech.com
• States are moving in to fill the funding gap, especially California and parts of New England
• Electricity is expected to double in price in the next five years while Solar energy prices continue to drop.

Not to say that the Solar Tax Credit isn’t essential for many US companies and many solar projects, but the industry in general is doing great.

More details available from the Solar Energy Industry Association (SEIA Solar Tax Credit pdf file) and if you’re trying to do research and want as thorough a description as possible, check the Database of State Incentives for Renewables & Efficiency’s (DSIRE) Federal Incentives Page.

Quick Intersolar 2008 Update

Ok, going to start summarizing what I’ve learned here tomorrow and going to be posting a few things here, some of which will appear on the other blog as well.  Couple of quick notes – some that I’ll flesh out in more detail later:

• Everyone is worried that the ITC won’t get renewed or utilities will be left out.  Basically, if that happens, the solar industry in the US isn’t going to grow as explosively as people are predicting.
• The price of solar cells is falling faster than many people predicted.
• People are expecting electricity prices to double in the US in the next 5 years.
• Which means grid parity in some regions is closer than many people think.
• Most of the breakthroughs that people are really triumphing are incremental not transformative.
• The state of the art of BIPV isn’t as impressive and I’d think – it seems to be surviving as a niche on the basis of the high barriers to entry.

I’ll definitely provide more detail on all of these points and more.  Below is a very cool slide from one of the presentations about predicted growth in several solar markets.

Solar Growth by Region

I was a little surprised to see the expected market growth in Korea and Greece, although both markets have interesting challenges.  Korea’s growth is based on very aggressive government incentives and deployment, but is focused on local job creation which will prove a barrier for overseas companies. Greece’s electricity market is heavily regulated and setting up power there is a bureaucratic nightmare.

Peace and clean power!