Despite Slowdown, U.S. Solar Market Had Solid First Quarter
As previously predicted, the U.S. solar market slowed down in the first quarter of 2017 (Q1’17) compared to the record-shattering growth it had last year. Nonetheless, the market still added over 2 GW of PV in the quarter and saw record-low prices for utility-scale systems.
According to GTM Research and the Solar Energy Industries Association’s (SEIA) latest U.S. Solar Market Insight Report, the U.S. installed 2,044 MW of new capacity in Q1’17, marking the sixth straight quarter in which more than 2 GW of PV was installed. The report says solar was the second-largest source of new electric generating capacity additions brought online in the U.S. during the quarter, with solar responsible for 30% of new generation, second only to natural gas.
As the U.S. solar sector grows, installed system prices continue to fall across all market segments, and the report says utility-scale system prices dropped below the $1/W barrier in Q1’17 for the first time.
“The solar market clearly remains on a strong upward trajectory,” says Abigail Ross Hopper, SEIA’s president and CEO. “Solar is delivering more clean energy, adding jobs 17 times faster than the U.S. economy and creating tens of billions of dollars in investment. With its cost-competitiveness, we know solar will continue to play a growing role in America’s energy portfolio.”
According to the report, the U.S. residential and non-residential PV markets are both expected to experience year-over-year growth, even as the quarterly numbers saw a drop from last year’s record-setting pace. Specifically, more than a half-gigawatt of residential PV was installed in Q1’17, down 17% from the first quarter of last year. The report says part of the slowdown can be attributed to national installers’ pulling back operations in unprofitable geographies and customer-acquisition challenges in more mature residential state markets like California.
According to the report, residential PV installations in California will fall year-over-year for the first time this decade. Despite this, California remains the largest state market for residential solar installations.
The non-residential solar market – which includes commercial, industrial and community solar installations – grew 29% year-over-year in Q1’17, but was down 39% from a record-high Q4’16. The report highlights Minnesota’s growing community solar market, as the state nearly doubled its cumulative community solar deployment in the first quarter.
The report also notes that several other states not as well known for their solar markets saw particularly large jumps in installations in Q1’17, including Idaho and Indiana. Meanwhile, emerging state markets such as Utah, Texas and South Carolina continued their growth.
The utility-scale segment continues to drive the U.S. market, representing more than half of all PV installed during Q1’17. The report says much of the capacity comes from projects that were originally slated for completion in 2016 but ended up being pushed back due to the extension of the federal investment tax credit. And the report adds that this entire year is expected to benefit from those “spill-over” projects.
“Utility solar is on the cusp of another boom in procurement,” states Cory Honeyman, GTM Research’s associate director of U.S. solar. “The majority of utility solicitations are focused on maximizing the number of projects that can come online with a 30 percent federal investment tax credit in 2019, or later by leveraging commence-construction rules.”
According to the report, GTM Research forecasts that 12.6 GW will come online in 2017, 10% less than 2016’s boom. Total installed U.S. solar PV capacity is expected to nearly triple over the next five years, and by 2022, more than 18 GW of solar PV capacity will be installed annually.
However, the report cautions that substantial downside risk looms over the long-term outlook for U.S. solar due to the trade dispute initiated by Suniva. (For more on the trade case, see “Is A New Trade War Near?”)
LEGO And Hasbro Go All-In On Renewables
Two major toy makers, LEGO and Hasbro, aren’t playing around when it comes to sustainability.
Having supported the development of more than 160 MW of renewable energy since 2012, the LEGO Group recently achieved its 100% renewable energy target – three years ahead of schedule. The Danish manufacturer’s latest renewable energy investment was a 25% stake in the Burbo Bank Extension offshore wind farm, located off the coast of Liverpool, England.
“This development means we have now reached the 100 percent renewable energy milestone three years ahead of target,” comments Bali Padda, CEO of the LEGO Group, which is also a member of RE100. “Together with our partners, we intend to continue investing in renewable energy to help create a better future for the builders of tomorrow.”
According to the company, the total output from the LEGO Group’s investments in renewables now exceeds the energy consumed at all LEGO factories, stores and offices globally. In 2016, LEGO used more than 360 GWh of energy to produce more than 75 billion LEGO bricks sold during the year.
To celebrate the milestone, the LEGO Group has constructed what it calls the largest-ever LEGO brick wind turbine, establishing a Guinness World Records title. Built with 146,000 LEGO bricks, the wind turbine, standing 7.5 meters tall, is a tribute to the record 200-meter wind turbines of the Burbo Bank Extension. Starting this summer, the LEGO turbine will be situated at the LEGOLAND Windsor Resort in the U.K.
Since 2012, KIRKBI A/S, parent company of the LEGO Group, has invested approximately 6 billion Danish krones (approximately $903.5 million) in renewable energy on behalf of the LEGO Group. In addition to the Burbo Bank Extension, KIRKBI A/S owns 31.5% of the Borkum Riffgrund 1 offshore wind farm in Germany. Furthermore, LEGO is planning to install 20,000 solar panels on the roof of its factory in Jiaxing, China.
Separately, Hasbro Inc., whose brands include Nerf, Play-Doh, Monopoly and My Little Pony, has set a goal of achieving 100% renewable energy and carbon neutrality across its owned and operated global operations. The company, which is headquartered out of Pawtucket, R.I., says it has already achieved its previous goal of 100% renewables and carbon neutrality in the U.S.; this new, global commitment builds upon that.
Hasbro says it has already made significant progress to reach the milestone. Specifically, Hasbro purchased 25,699 MWh of renewable energy certificates (RECs) to address 99.6% of its 2016 global electricity consumption. Additionally, the company purchased carbon offsets in 2016 to address its global carbon footprint. Cumulatively, this reduction in Hasbro’s carbon footprint is similar to growing 766,411 trees per year for 10 years or not using 69,513 barrels of oil, according to the company.
“Through renewable energy advancements, Hasbro continues to demonstrate our deep commitment to the environment and our desire to play a leadership role in building a safe and sustainable world for future generations,” states Brian Goldner, chairman and CEO of Hasbro.
In 2015, Hasbro joined the U.S. Environmental Protection Agency’s (EPA) Green Power Partnership and qualified for the U.S. EPA’s Green Power Leadership Club, a distinction given to organizations that have significantly exceeded the EPA’s recommended minimum renewable energy purchase commitment, the company explains.
Hasbro has RECs and carbon offsets from 3Degrees, a provider of comprehensive clean energy services. The RECs are from a mix of renewable resources, including wind, solar, biomass, landfill gas and hydroelectric sources. Hasbro purchased the RECs from projects located near major facilities in North America, South America, Asia and Europe.
Calif. Works To Mitigate Grid Issues During Solar Eclipse
Solar eclipses might look cool, but they can also pose operational challenges for a state whose power grid incorporates a significant amount of solar energy. That’s why grid operators and regulators in California are doing all they can to prepare for an upcoming solar eclipse on Aug. 21.
California Public Utilities Commission (CPUC) President Michael Picker has called on consumers to do their part to lower electricity use statewide by 3,500 MW on Aug. 21 by reducing electricity use from 9 a.m. until 11 a.m. As CPUC explains, a partial solar eclipse will travel across California from about 9:02 a.m. until approximately 11:54 a.m. local time. The sun will be obscured from 76% in Northern California to 62% in Southern California, and this reduction in solar radiation will directly affect the output of both large-scale photovoltaic (PV) electric power plants and rooftop solar. California won’t see another eclipse of this magnitude until 2045, CPUC notes.
“When the sun goes away, so does the energy that powers our renewable solar panels,” says Picker. “If millions of Californians turn off appliances and power strips to unplug from the grid during the eclipse, we can let our hard-working sun take a break. We don’t have to rely on expensive and inefficient natural gas peaking power plants, we can have cleaner air, we can keep our system reliable, and we can send a message to the rest of the country that we can do all of that without being forced to rely on fossil fuels as the only foundation of our electricity.”
According to CPUC, nearly 10,000 MW of commercially operational grid-connected solar PV is currently operated by California’s investor-owned utilities (IOUs), and more will soon be completed. Initial estimates show that at the eclipse peak, commercial solar production for the IOUs will be reduced from an estimated 8,754 MW to 3,143 MW at the maximum partial eclipse and then return to 9,046 MW. The normal morning solar ramp will be interrupted with a down ramp beginning at 9:02 a.m., followed by a greatly accentuated up ramp beginning at 10:22 a.m. until noon.
In order for California to avoid relying on more fossil fuel generation during the eclipse, Picker is urging consumers to increase their conservation and energy efficiency efforts by unplugging any unused electronics, upgrading to LED light bulbs, and waiting to use high-energy-consuming devices, such as air conditioners and washing machines, until after 9 p.m.
“We will work with businesses, community organizations, local governments and others to mobilize Californians to do their California thing and help reduce energy use during the eclipse,” says Picker. “We can replace solar megawatts with our ‘negawatts’ or ‘BetterWatts.’ Join with us and stand in for the sun while it takes a short break on August 21st.”
In addition to CPUC’s call for residents to reduce their energy usage, the California Independent System Operator also recently conducted an analysis to help mitigate any potential grid issues during the upcoming solar eclipse.
South Carolina Utility Launches Community Solar Program
In partnership with developer Clean Energy Collective (CEC), South Carolina Electric & Gas Co. (SCE&G) has launched what the utility claims is the state’s largest community solar program.
SCE&G says the 16 MW AC program will make solar generation available to electric customers who cannot, or do not wish to, install rooftop solar panels. Through the program, residential customers and eligible non-residential customers may now purchase or subscribe to solar panels at several solar facilities to be constructed within SCE&G’s service territory.
In exchange for the electricity produced by their panels, participants will receive credits on their monthly utility bills, thereby lowering their monthly expenses. SCE&G says the program is available to residential electric customers who own or rent their homes and to schools, churches, and municipalities.
“We often hear from customers who desire the cost savings and environmental benefits of solar energy, so we’re really proud to bring those advantages to even more customers,” says Danny Kassis, vice president of customer service and renewables for SCE&G. “For some customers, this program creates a pathway to solar energy where there wasn’t one before.”
SCE&G chose CEC and the developer’s RooflessSolar product to implement the utility program. SCE&G expects to interconnect the first two of three CEC-developed solar facilities by the end of this year. As part of its community solar solution – Community Solar Platform – CEC will facilitate customer enrollment and provide monitoring and production tracking services. SCE&G is responsible for all maintenance of the sites.
“One of the largest utility-sponsored programs in the country, SCE&G’s community solar program demonstrates SCE&G’s commitment to providing customers a choice in how they meet their power needs and the growing renewable energy movement in South Carolina,” says Paul Spencer, CEO of CEC. “We are proud to be working with SCE&G to bring community solar to South Carolina on a large scale.”
SCE&G notes it energized its first utility-scale solar facility in December 2015 and has announced additional developments that will help the utility exceed its goal of generating at least 42 MW of utility-scale solar by 2020. SCE&G adds it also provides customer programs to support the development of more than 42 MW of customer-scale solar generation by 2020 and already has interconnected more than 4,000 of its customers.
How Did The U.S. Energy Storage Market Fare In Q1?
The first quarter of 2017 (Q1’17) was the biggest quarter in history for the U.S. energy storage market in terms of megawatt-hours deployed, but it also saw a typical decline in terms of megawatts, according to GTM Research and the Energy Storage Association’s (ESA) latest U.S. Energy Storage Monitor.
The report says the U.S. deployed 234 MWh of energy storage in the first quarter, which represents more than fiftyfold growth year-over-year and bests the previous megawatt-hour record set in Q4’16 by 2%.
When measured in megawatts, it was the third-largest quarter in history, only behind the fourth quarters of 2015 and 2016. Specifically, the report says the U.S. deployed 71 MW of energy storage in Q1’17 – a 50% decrease from the 140.8 MW deployed in Q4’16 but up 276% year-over-year from the 18.9 MW deployed in Q1’16. According to the report, this follows the trend of the first quarter of each year generally seeing a smaller megawatt deployment level after an active fourth quarter.
“Much of this growth can be attributed to a shift from short-duration projects to medium- and long-duration projects in the utility-scale market, along with a surge of deployments geared to offset the Aliso Canyon natural gas leak,” says Ravi Manghani, GTM Research’s director of energy storage. “Although, the industry shouldn’t get too comfortable, as with fulfillment of Aliso Canyon deployments, there aren’t that many 10+ megawatt-hour projects in the 2017 pipeline, indicating that the first quarter may be the largest quarter this year.”
In all, the report says front-of-the-meter energy storage represented 91% of all deployments for the quarter. Front-of-the-meter deployments grew 591% year-over-year in megawatt terms, boosted by a few large projects in Arizona, California and Hawaii.
The report says the behind-the-meter market segment, which is made up of residential and commercial energy storage deployments, declined 27% year-over-year in megawatt-hour terms and 32% year-over-year in megawatt terms. The report attributes much of the slowdown to a pause in California’s Self-Generation Incentive Program.
According to the report, California will remain the undisputed king of the U.S. storage market over the next five years. Arizona, Hawaii, Massachusetts, New York and Texas will all battle for second place, with each market forming a significant chunk of deployments through 2022, at which point GTM Research forecasts the U.S. annual market to reach 2.6 GW, almost 12 times the size of the 2016 market, and 7.2 GWh.
By 2022, GTM Research expects the U.S. energy storage market to be worth $3.2 billion, a tenfold increase from 2016 and a fivefold increase from this year. Cumulative 2017-2022 storage market revenues will be $11 billion, according to the report.
Solar Provided Most Global Renewable Energy Jobs In 2016
More than 9.8 million people were employed in the global renewable energy sector in 2016, with the solar industry providing the most jobs, according to a new report from the International Renewable Energy Agency (IRENA).
“Falling costs and enabling policies have steadily driven up investment and employment in renewable energy worldwide since IRENA’s first annual assessment in 2012, when just over 7 million people were working in the sector,” says IRENA Director-General Adnan Z. Amin. “In the last four years, for instance, the number of jobs in the solar and wind sectors combined has more than doubled.
“Renewables are directly supporting broader socioeconomic objectives, with employment creation increasingly recognized as a central component of the global energy transition. As the scales continue to tip in favor of renewables, we expect that the number of people working in the renewables sector could reach 24 million by 2030, more than offsetting fossil fuel job losses and becoming a major economic driver around the world,” adds Amin.
According to IRENA, global renewable energy employment, excluding large hydropower, reached 8.3 million in 2016. When accounting for direct employment in large hydropower, the total number of renewable energy jobs globally climbs to 9.8 million – a 1.1% increase over the total seen in 2015. China, Brazil, the U.S., India, Japan and Germany accounted for most of the renewable energy jobs. In China, for example, 3.64 million people worked in renewables in 2016, a rise of 3.4%.
IRENA’s report shows that the solar PV sector was the largest renewable energy employer in 2016, with 3.1 million jobs – up 12% from 2015 – mainly in China, the U.S. and India. IRENA also highlights the U.S. solar industry’s historic year in 2016.
IRENA says new wind installations contributed to a 7% increase in global wind industry employment, raising it up to 1.2 million jobs. Brazil, China, the U.S. and India also proved to be key bioenergy job markets, with biofuels accounting for 1.7 million jobs, biomass 0.7 million, and biogas 0.3 million, the agency adds.
