US Solar Market Update Focus on PV System Pricing

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1 US Solar Market Update Focus on PV System Pricing Robert Margolis and David Feldman National Renewable Energy Laboratory IEA PVPS Task 1 Workshop, Jeju, S. Korea November 4,, 2013

2 Quarterly PV Installed (MW DC ) U.S. Installation Breakdown Q1 '10 U.S. PV Installations by Market Segment Utility Non-Residential Residential Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 ' Q4 ' Q1 ' Q2 '13 U.S. PV Installations by State (MW DC ), Q2 '13 Other 89 Next Four States* 141 New Jersey 75 Arizona 90 California 438 U.S. Installed 832 MW of PV in Q2 13, 1.5 GW in H1 13 Challenges maintaining growth rate in all sectors/states Net metering and rate design in CA, CO, AZ, TX Other markets opening up could spur demand such as MN, GA, NY (50kW-200 kw systems) Cumulative U.S. PV is expected to exceed 10 GW by end of 13 Note: Next Four States : NC, MA, HI, CO. Sources: GTM/SEIA : U.S. Solar Market Insight Q

3 Capacity (GW AC ) U.S. Large Solar Projects (> 5 MW) 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 PV - Under Construction PV - Operating CSP - Under Construction CSP - Operating Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 In September first large CSP plant placed in service since 2011 First large-scale solar project, 350 MW, about to begin construction on tribal land (Moapa) Xcel Energy asked the PUC to approve 317 MW of gas-fired generation in its latest filing to integrate renewable resources into its electric supply mix AMEC (using TSL modules) won the EPC contract to build Copper Mountain 3. First Solar built phase 1 (58MW), and is currently building phase 2 (150MW) Note: As of 010/03/13. Derate based on systems which reported both AC and DC capacities. PVTech (09/19/13). 3

4 Average System Pricing 2.5 kw 10 kw System Size Avg. System Price (Nominal $/W DC ) $7,50 $7,00 $6,50 $6,00 $5,50 $5,00 $4,50 $4,00 $3,50 $3,00 AZ CA, 3rd-party MA, 3rd-party NY CA, Host-owned MA, Host-owned NJ Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Prices for systems between kw, continue to fall Average price $4.5/W - $5/W, Exception of 3 rd -party systems in MA where Vivent Solar reported 525 systems at $7/W in 2013 and 145 at $6.85/W (26% of all MW) 2013 YTD MW: AZ (26); CA H.O. (37); CA 3 rd -P (90); MA HO (4); MA 3-P (9); NJ (18); NY (not listed). Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13; NYSERDA (09/30/13). Note: NYSERDA actually represents all residential sector data, and is the simple average price per quarter. All other data is weighted by capacity. Only Q3 13 NJ installs included before 07/31/13 (latest reporting). 4

5 Average System Pricing 10 kw 100 kw System Size Avg. System Price (Nominal $/W DC ) $9,00 $8,00 10 kw kw AZ CA, Host-owned CA, 3rd-party MA, Host-owned MA, 3rd-party NJ $7,00 $6,00 $5,00 $4,00 $3,00 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 System prices in the above states continue overall downward trajectory Average system price in Q3 13 for systems kw between $4.1W - $4.9/W 2013 YTD MW: AZ (14); CA H.O. (19); CA 3 rd -P (24); MA H.O.(4); MA 3 rd -P (1); NJ (17). Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13. Note: Only Q3 13 NJ installs included before 07/31/13 (latest reporting). 5

6 Average System Pricing 100 kw 500 kw System Size Avg. System Price (Nominal $/W DC ) 8 7,5 7 6,5 6 5,5 100 kw kw 5 4,5 4 3,5 3 AZ Host-owned AZ, 3rd-party CA, Host-owned CA, 3rd-party MA, Host-owned NJ YTD Larger systems have smaller pool, so average price varies more per quarter Average system price in 2013 for systems kw between $3.5W - $4.5/W, except for 3 rd -party owned Arizona systems, which has a higher average price than it did in YTD MW: AZ H.O. (1); AZ 3 rd -P (8); CA H.O. (28); CA 3 rd -P (25); MA H.O.(9); NJ (34). Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13. Note: Only Q3 13 NJ installs included before 07/31/13 (latest reporting). 6

7 % of Capacity Installed % of Capacity Installed % of Capacity Installed % of Capacity Installed 2013 YTD System Price Distribution by State (2.5 kw 10 kw) Majority of state 3 rd -party installs. Value Pricing or standard install? < $2.5 < $ % of MW's Inst., H.O. % of MW's Inst., 3rd-party Cum. Distrib., H.O. Cum. Distrib., 3rd-party Arizona Installed Price ($/W) Massachusetts Installed Price ($/W) % of MW's installed Cumulative Distribution > $7.5 3 rd -party skew > $ < $ New York & New Jersey Installed Price ($/W) % of MW's installed, NY % of MW's installed, NJ Cumulative Distribution, NY Cumulative Distribution, NJ Most prices between $4-$6/W, however in many states 20%-40% below $4/W < $2.5 % of MW's Inst., H.O. % of MW's Inst., 3rdparty Cumulative Distrib., H.O. Cumulative Distrib., 3rd-party California Installed Price ($/W) > $7.5 > $7.5 Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13; NYSERDA (09/30/13) Note: NYSERDA actually represents all residential sector data, and is the simple average price per quarter. All other data is weighted by capacity. 7

8 2013 YTD System Price Distribution over Time (2.5 kw 10 kw) % of Capacity Installed % of Capacity Installed New Jersey California YTD YTD < > $ $7.5 0 < > $ $7.5 Installed Price ($/W) Installed Price ($/W) Price distribution in NJ & CA shifting towards cheaper systems over time, with far fewer systems >$7.5/W and many more systems < $4/W Sources: CSI Database, accessed 09/30/13; NJ SRP & REIP, accessed 07/31/13. 8

9 2013 YTD Top 8 Installers by State (2.5 kw 10 kw) Other; 54% Vivent Solar; 2% California 127 MW SolarCity; 13 MW 19% Sungevity; 2% Verengo; 10% REC Solar; SolarMax; 5% 3% Real Petersen- Goods; Dean; 2% 3% New England Clean E.; 2% Sungevity; 2% SolarFlair Energy; 4% Other; 36% Roof Diagn.; 4% Massachusetts Vivint Solar; 26% SolarCity; 12% Next Step Liv.; 8% Astrum Solar; 6% ACOS Energy; 1% Reliable Power; 3% Verengo Solar; 4% New Jersey Other; 30% Vivent Solar; 16% 18 MW 26 MW Arizona Solar Conc.; Arizona 2% Solar Other; Sol.; 2% 25% SolarCity; 16% Trinity; 11% Allseason Roof Construction Diagnostics; ; 7% 11% Solar Topps; 2% Harmon Electric; 3% Guthrie Electric; 2% REC Solar; 3% Top 8 installers comprise 30% - 75% of some solar markets (2.5kW 10kW) Many companies sell or finance systems through SunRun and CPF Arizona SolarCity; 55% American Solar Elect.; 6% Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13. 9

10 2013 YTD Top 8 Installers by State (10 kw 100 kw) California Massachusetts 71% SolarCity Verengo Main Street Power Company Solar Universe Real Goods REC Solar 52% 1st Light Energy Alternative Energy Systems Other 43 MW 5 MW Astrum Solar SolarCity Beaumont Solar SunBug Solar 1st Light Energy Souza & Branco Second Generation Energy Pioneer Valley PV Other New Jersey Arizona 58% Trinity SolarCity Power Partners Mercury Solar Allseason Construction G&S Investors Amberjack Roof Diagnostics Other 41% 17 MW 14 MW SolarCity Harmon Electric Solar Topps Arizona Solar Solutions American Solar Electric Streamline Solar Power Arizona Solar Concepts Wilson Electric Services Other Top 8 installers comprise 29% - 59% of some solar markets (10kW 100kW) Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13. 10

11 2013 YTD Top 8 Installers by State (100 kw 500 kw) California Massachusetts 53% SolarCity SunPower Chevron Stellar Energy 46% Main Street Power Borrego Solar Sun Edison Cupertino Electric Other 53 MW 9 MW New Jersey Arizona Beaumont Solar Dynamic Solar 1st Light Energy Safari Energy Munro Distributing Altantic Boston Construction Permacity Solar 56% 34 MW Trinity Barrier Electric Greenskies Power Partners Ray Angelini G&S Investors Geogenix Derita Electric Other 21% 12 MW SolarCity Core Construction Wilson Electric Services Green Choice Solar Real Goods Solar Kitchell Contractors Scout Solar Rough Country Other Top 8 installers comprise 44% - 79% of some solar markets (100kW 150kW) Not as many projects installed at this size so installer can have a large presence in a given time-period Sources: CSI Database, accessed 09/30/13; MA SREC Program, accessed 09/30/13; Arizona Public Services, & Salt River Project, accessed 10/02/13; NJ SRP & REIP, accessed 07/31/13. 11

12 Annual PV Installations (MW) % of Total Distributed PV in CA CA Beginning to See Phase-Out of CSI % 450 CA Distributed PV CSI Systems CSI % of Total 75% % % 0 0% H1 Although CSI installs are growing, they are becoming a smaller percentage of total distributed PV in CA PG&E and SDG&E are both no longer accepting CSI applications for residential projects Non-residential rebates remain available at levels ranging from $0.025 to $0.044/kWh for commercial projects and $0.088 to $0.15/kWh for government/nonprofit projects depending on the utility Sources: CSI Database, accessed 09/30/13; GTM/SEIA Q & Q U.S. Solar Market Insight. 12

13 Frequency of Areas with HHI Score Frequency of Areas with HHI Score Impact of Competition in CA The Herfindahl- Hirschman Index (HHI) is an index used by the Department of Justice to evaluate industry concentration as a proxy for market power HHI under 0.15 considered un-concentrated (highly competitive) HHI over 0.25 considered highly concentrated (low competition) High Competitiveness (HHI score) Low High Competitiveness (HHI score) Low Competition has increased slightly in some CA zip codes from Data indicates that zip codes with less competition(higher HHI scores) report moderately higher average reported system prices Ongoing research will further explore impact of competition on unique contract structure of third-party owned systems Sources: Analysis performed by Carolyn Davidson (NREL) and Daniel Steinberg (NREL). Davidson, C., & Steinberg, D. (2013). Evaluating the impact of third-party price reporting and other drivers on residential photovoltaic price estimates. Energy Policy,

14 Reported Price (per W DC ) Utility-Scale Pricing Utility-Scale Projects (> 5 MW) $8 $7 Tracking Fixed Tilt $6 $5 $4 6 MW $3 $2 26 MW $1 $- Oct-06 Feb-08 Jul-09 Nov-10 Apr-12 Aug-13 Placed in Service Still great volatility in utility-scale system price, however in general prices are decreasing over time several installed systems $2-3/W Not a significant difference in price between tracking and fixed-tilt Source: Individual system pricing from corporate press releases & public filings. Additional information gathered from publicly available grant data from Treasury Department. Specific project location and system size based on various press releases and corporate filings. Grant basis is assumed to be 1.00/0.30 of grant award. 14

15 PPA Price ($/kwh) US Solar PPA Price (Utility Projects) $300 $250 $200 $150 $100 US Solar PPA Price (Utility Projects) 341 MW 32 MW $50 * $- Feb-08 Jul-09 Nov-10 Apr-12 Aug-13 Dec-14 Signing Date PPA prices have continued to decline due to intense competition among solar developers Macho Spring was signed for $58/MWh however benefits from a $27/MWh state tax credit As states near RPS targets and RFP s taper out, PPA s are becoming harder to find * Represents aggregation of three projects in California. Source: BNEF H NA PV Outlook. 15

16 Robert Margolis Senior Energy Analyst National Renewable Energy Laboratory David Feldman Senior Financial Analyst National Renewable Energy Laboratory Special thanks to: Carolyn Davidson, Lidija Sekaric, Elaine Ulrich, & Alan Goodrich