Solar PV Market Germany versus USA

3rd Solar Convention Las Vegas October 7th 2010 Volkmar Kunerth, !" #resident, Solar #artners $nternational

Solar #V
%erman(
%erman #V market Conclusions Outlook
&S #V market Conclusions Outlook

Agenda
arket

&-S-"-

*conomics

%erman versus &S market %rid 'arit( $m'lications

!ureaucrac( )egulator( *nvironment +ederal )esources

Challenges

+uture

%lobal Solar Outlook O'timistic signs and challenges ,uestions

Solar Partners International

Why Photovoltaic?
.#V can be used an(/here .#V can be used in an( si0e .#V is scalable .%rid connected and O++.%rid 'ossible .Onl( one initial investment .#V largest investment .#V has the highest cost reduction 'otential .#V reduces CO2 'roduction and hel's 1ight global /arming

Solar Partners International

German PV Market
.$nstallations until 20023 Over 10 %4' .#redicted $nstallation in 2010 alone3 10 %4' .150,000 'eo'le em'lo(ed in the industr( .#V is the largest source o1 investment3 622 billion .708 o1 installations are roo1 installations .9ramatic gro/th since the introduction o1 the )ene/able *nerg( Sources "ct :**%; in 2000 .**% guarantees o'erators a 1eed.in tari11 :+$<; 1i=ed 1or 20 (ears and a 'urchase guarantee 1or the electricit( 'roduced ..> investing in a solar electricit( s(stem is a ver( secure investment 1or 20 (ears

German PV Market

German PV Market
. German Feed in tariff laws (FIT) . ?" feed-in tariff (FIT) is an energ( su''l( 'olic( that o11ers a guarantee o1 'a(ments to rene/able energ( develo'ers 1or the electricit( the( 'roduce-@ . &nder most +$< 'olicies, the government establishes a legal obligation 1or electric utilities to 'urchase all o1 the electricit( 'roduced b( Auali1(ing develo'ers-

German PV Market

German PV Market

German PV Market

Source: www.recurrentenergy.com

German PV market
Advantages
Leads to ra'id de'lo(ment o1 rene/able energ( in %erman( )educed investment risk3 makes it easier to 1inance 'roBects +aster reduction o1 CO2 out'ut *m'lo(ment 1or 150,000C 'eo'le $nnovation engine

Disadvantages
Cost 1or %erman electricit( customer until 20073 6D7 !illion :$1 calculated 1or 2002 and 2010 /e reach 6100 !illionE; #rices are set too high, utilities and rate'a(ers are stuck /ith those costs 1or the duration o1 the contracts :20 (ears;<he electric grid can onl( take so much alternative energ( due to high 1luctuations in in'ut-

German PV Market
Conclusions: .> +$< /as a ver( suitable model to Bum'.start the %erman #V industr( .> +$< not sustainable business model in the long run because it is too e='ensive .> +uture 1inancial burden 1or %erman customers .> Current grid is limited3 Smart grid technologies necessar( in the 1uture 1or 1urther gro/th .> $ntelligent storage technologies needed 1or o11.grid installations

German PV Market
.Outlook: ."1ter the Fanuar( +$< decrease, the %erman 'arliament 1inall( voted in an additional decrease last Ful( .1G8 decrease 1or roo1to's, 118 1or reconversion areas, 158 1or the other installations . o more 1eed.in tari11 1or #V installations on agricultural landH the ne/ la/ is e='ected to considerabl( a11ect the market in the coming (ears. arket could stabili0e in the 3 to 5 %4 annual installations level b( 201D, i1 the 'resent su''ort scheme is maintained, /ith adeAuate +$< decreases in line /ith the e='ected 'rice decrease-

US PV Market
.&S" has started to become one o1 the to' #V markets .D77 4 installed in 2002H D0 4 o1 /hich are coming 1rom o11. grid installations .State o1 Cali1ornia leading the 'ace in 2002 .2010 could see the market rise 1rom G00 4 to a 'ossible 1 %4 o1 ne/ installations.!( 201D, the market could reach 3 %4 installed :moderate scenario; .#olic(.9riven scenario u' to G %4 could be installed .9e'ending on market res'onse to incentives in di11erent states

US PV Market

The EPIA Global Market Outlook for Photovoltaics (PV) from 2 ! to 2 !"

US PV Market

The EPIA Global Market Outlook for Photovoltaics (PV) b# States

US PV Market
.Com'le=, evolving solar 'olic( environment .Overla''ing 1ederal, regional, and state regulation .Solar 'olicies are not harmoni0ed .9evelo'ers have to think like 'o/er com'anies .<a= driven 'roBect 1inancing .!anks and develo'ers are sorting out the ne/ 1inancing structures 1or &S solar 'roBects

US PV Market

Source: www.recurrentenergy.com

US PV market
Advantages
<he &S has strong natural solar resources $ncreasing energ( 'rices and strong 'ublic su''ort &-S- 'eak demand /ill increase 17-78 b( 2017 according to I*)C Juge long term 'otential

Disadvantages

Overla''ing 1ederal, regional, and state regulationH Solar 'olicies are not harmoni0ed 9evelo'ing a do/nstream &-S#V market strateg( reAuires a deliberate, highl( s'eci1ied a''roach to each a''lication, state market and market segment +unding hurdles &-S- 1ederal government is unlikel( to 'rovide level o1 1inancial subsid( as in the *uro'ean markets

US PV Market
Conclusions: . Short term conditions challenging and main hurdles are likel( to remain . &S governmentKs lack o1 incentives b( com'arison to other regions . Overla''ing 1ederal, regional, and state regulation . Com'licated and long negotiations /ith utilities .> Long term outlook ver( 'romising .<he &S /ill become the biggest and most im'ortant #V solar market in the /orld

US PV Market
Outlook: . 9emand 1or #V 'roBects in the &nited States is ra'idl( e='anding as a result o1 1alling s(stem 'rices . <he market is evolving as utilit(.scale 'roBects gain steam and innovations in 'roBect 1inancing emerge . 4ith decreasing 'rices, a chain reaction /ill occur causing a decrease in 'roBect 'a(back time, 1inall( an increase in attractiveness o1 solar retail and commercial markets in the &S . %lobal solar market 'la(ers 1rom all 'arts o1 the value chain are seeking strategies to gain access to &-S

US versus German market

!"A
<he &S has better natural solar resources %rid 'arit( reached earlier due to more sun e='osure &-S- 'eak demand /ill increase 17-78 b( 2017 according to I*)C

German#

%erman( Bum' started the solar econom( Jigh market 'enetration alread( reached- arket gro/th /ill slo/ do/n due to lo/er state incentives %erman solar com'anies are seeking to go international and trans1er technolog( and kno/ledge to international markets

USA versus Germany

.2

USA versus Germany cost of solar

German#: Lo/ Cost 'er k4h 60-35 :residential and commercial; Jigh Cost 'er k4h 60-D7 :residential and commercial; California: Lo/ Cost 'er k4h 60-17 :residential and commercial; Jigh Cost 'er k4h 60-22 :residential and commercial; Source: SGC

Residential electricity rates USA

Grid parity influencers

.%rid 'arit( is the 'oint at /hich alternative means o1 generating electricit( is eAual in cost, or chea'er than grid 'o/er .Jigh radiation levels C high electricit( 'rices C 1alling 'v s(stem 'ricesL> 1aster grid 'arit( .Ja/aii has reached grid 'arit( alread(H Cali1ornia /ill be ne=t .4hen grid 'arit( is reached market /ill gro/ ra'idl(

Grid parity Market development

!hallenges for market gro"th

.Io national market coordination

.!ureaucrac( .$ncreasing 'olic( com'le=it( .Various 1ederal, state and local 'olic( t('es 1or 'romoting solar .Various 1inancing o'tions .#rivate and commercial customers get con1used

#S$R%
.9S$)*3 9atabase o1 State $ncentives 1or )ene/ables and *11icienc( ///-dsireusa-org .9S$)* lists a total o1 G1G +ederal State, &tilit( and Local +inancial $ncentives 1or Solar . 517 $ncentives 1or #V 9S$)* lists a total o1 3G7 +ederal, State, &tilit(, and Local )egulator( $ncentives 1or Solar . 35G $ncemtives 1or #V

&ederal Resources
9S$)*3 9atabase o1 State $ncentives 1or )ene/ables and *11icienc(3 ///-dsireusa-org . &S 9e'artment o1 *nerg( *11icienc( and )ene/able *nerg(3 htt'3MM///-eere-energ(-govM . Iational )ene/able *nerg( Laborator(3 . htt'3MM///-nrel-govM &S *nerg( $n1ormation "dministration3 . htt'3MM///-eia-doe-govM *nerg( Star3 . htt'3MM///-energ(star-govM +ederal !usiness O''ortunities3 . htt's3MM///-1bo-govM &S 9e'artment o1 *nerg(3 . htt'3MM///-energ(-gov *#"3 . htt'3MM///-e'a-govM

Glo'al Solar (utlook

.Currentl( 20 %4 installed .30.35 %4 installed b( the end o1 the (ear .#lunging 'rices o1 solar modules .*uro'e is still leading the market /ith installations :%erman( and $tal(; .D7 countries have +$< but danger o1 Solar market bust in countries /ith +$< .&S, China, $ndia, Fa'an and +rance /ill e='erience signi1icant gro/th .!( 2015 cumulative solar ca'acit( /ill have reached G5.100%4 or more . 9emand 1or #V s(stems is still heavil( de'endent on the general economic climate and most im'ortantl( on governmentsK su''ort schemes.

)hank you*
,uestions and discussion #lease send e.mail to kunerthNgmail-com 1or 'resentation and sources