Sustainable Capital Finance is eagerly awaiting the start of the 2013 Solar Power International Conference next week! The Solar Power International Conference is considered to be one of America’s largest and most comprehensive solar industry conferences and is powered by Solar Energy Industries Association (SEIA) and Solar Electric Power Association (SEPA). We’re also excited because Solar Power International is known for its ability to offer power packed education, training, and information components to those who attend.
The 10th annual North American conference will be held in Chicago, Illinois from Monday October 21st through Thursday October 24th. Solar Power International (SPI) is a global event that drives buying decisions and business solutions for the entire solar energy industry. The Solar Power International Conference is North America’s premier business-to-business event for professionals in solar energy industries. We’re looking forward to reconnecting and meeting so many people who share in our passion for solar!
“SPI is a well-run conference with representatives from all niches of the solar industry,” said Shiraz Madan, Sustainable Capital Finance’s CEO. “SPI is an opportunity for introduction to new companies, technology and most importantly, stay connected with industry contacts that you may not be able to see or speak with regularly. Not to mention it is in Chicago this time around; the best city in the country!”
In attendance at this year’s SPI Conference will be more than 15,000 solar energy professionals, and more than 700 leading manufactures, service providers and vendors with booths on the expo floor. We’re looking forward to learning about all the latest products and ideas happening in the industry as well as the unique networking opportunities.
Statics presented in Mercom Capital Group’s report on venture capital spending for the 3rd quarter of 2013, portray a brighter outlook for solar demand for the rest of 2013. Although VC funding for the solar industry is down 54% from the same time last year, spending has seen a recent increase from the previous 2013 fiscal quarters and appears to be gaining momentum.
Key findings from the Mercom Capital Group Q3 Report:
• Increase in venture capital spending for solar
• Rise in third-party solar financing
• Growing number of large-scale solar projects
Solar becomes more appealing to Venture Capitalists:
Global venture capital funding for Q3 in 2013, totaled $207 million, which is a slight increase from the $189 million, from Q2 of 2013. In comparison to the 27 investors who participated in funding rounds from Q2 of 2013, there were 35 venture capitalists that participated in funding rounds in 3Q13. The average deal size in Q3 came to $7.4 million, down from $9.9 million in the previous quarter. In addition, there were 37 announced large-scale project funding deals in Q3 2013. Overall, a total of 52 investors took part in project funding deals in Q3 2013.
3rd-party financing takes off:
Third-party solar financing companies raised approximately $584 million in the past quarter, with help from banks. So far with 3 months to go, third-party solar leasing firms have raised roughly $2.5 billion this year, compared to just $2 billion in both 2012 and 2011.
Financing for solar, especially utility-scale projects, continues to improve. There were 37 large-scale project funding deals listed in Q3 2013 with a total of $2.89 billion, bringing year-to-date funding deals to 106 compared with just 84 in 2012. With the addition of 37 large scale projects from Q3, the total for 2013 comes to 106, which is 22 more than projects completed for the entire year of 2012.
Large-scale solar projects experience a growth spurt:
Project acquisitions were the highest in three years, with around 5.5 gigawatts (GW) of large-scale projects announced in the 3rd quarter of 2013. Disclosed large-scale project funding came to $2.89 billion in Q3 2013; with large-scale projects totaling 1,267 megawatts (MW) announced funding this quarter.
“It’s important for utility-scale projects to be really successful in the next two or three years, because they bring the costs down for the entire industry. And as costs continue to fall, developers are jumping market to market wherever they see the best returns”, according to industry expert Prabhu.
More than half of this quarter’s 30 project acquisitions involved investment firms, not developers or solar companies. After the 2010-2012 financial collapse, developers found it difficult to get big projects financed, but the solar industry is seeing a more steady return on investments, which is seen as less of a risk for investors.
According to the LA Times, California is now equipped to produce 1,629 megawatts (MW) of solar power from 168,000 locations. Solar installations in California grew by 26% in 2012 from the previous year, according to a report by the Public Utilities Commission. A record-setting 391 MWs of solar power were installed in 2012, which made it the biggest year ever for rooftop solar installations.
California’s photovoltaic (PV) market has seen continued growth amidst the dwindling incentives offered by the California Solar Initiative. Q2 2013, ranks as the strongest second quarter in the state’s history, with installations up 78% in the residential market and 26% in the non-residential market year-over-year.
California’s solar market is the fourth most expensive in the U.S. for systems smaller than 10 kilowatts (kW), which represents all of the residential market and a majority of the commercial market as well.
The current U.S Solar Market at a glance
The recent Q2 report released by SEIA and GTM Research, forecasts a renewal of PV growth in the second half of 2013. Cumulative operating PV capacity in the U.S. now stands at 8,858 MW. PV installations totaled 832 MW in Q2 2013, up 15% over Q1 2013.
According to Shayle Kann, the vice President at GTM Research, the Q2’13 report shows that the solar market, despite experiencing continual growth, is beginning to stabilize in the U.S. Kann expressed that the solar market will not likely see the extreme growth spurts, it has been experiencing in the last few years.
Edison Electric Institute explains that solar is now “in the market” for 16 % of U.S. retail electricity sales, and has the potential to double by 2017, allowing solar to compete for $170 billion of annual utility revenue.
In the commercial PV market, only 13 out of the 28 states tracked in the report experienced quarterly growth. The non-residential market was down in Q2, continuing a relatively light year for the commercial segment.
The utility sector added 452MW of PV installations, a jump of 42% over last quarter while the residential market broke its streak of incremental quarterly growth with a flat quarter. According to the Q2’13 Market Insight Repot, there were 38 individual utility PV projects completed in Q2 2013, totaling 452 MW of new installed generating capacity. All ten of the largest projects completed were installed in the states of California and Arizona. Meanwhile, the utility PV pipeline grew marginally in Q2, reaching 12.1 GW of projects with power purchase agreements (PPAs) in place and 4.1 GW of projects currently under construction.
Solar Market Forecasts:
According to GTM Research and the SEIA’s insight report, Q2 2013 was somewhat softer than expected, but preliminary data suggests that Q3 will be considerably stronger, with the hopes of bringing the U.S. global solar shares of installations to a high of 13%, compared to the 8% in 2008.
The report stated that 4.4 GW of PV is expected to come online in 2013, compared to the 3.3 GWs in 2012. Research from the Solar Market Insight Report 2013 Q2, also predicts that worldwide installations of PV energy storage systems for commercial use will grow to 2.3 GW in 2017. The commercial sector’s share of global PV installations will also experience an extensive jump, from 5% in 2012 to 40% in 2017, the report stated.
In the IHS Electronics & Media’s report, The Role of Energy Storage in the PV Industry 2013 World Edition, it can be forecasted that North America will emerge as the world leader in commercial PV energy storage, with more than 40% of global installations in 2017.
About virtual net metering:
In California, virtual net metering (VNM) is a concept which enables all tenants of a given apartment complex or commercial building to obtain solar energy from a single solar array that does not have to be physically and directly connected to their meters. The original intent of VNM was to help low income multifamily residents receive direct benefits of a building’s solar system.
VNM now allows low income participants and other multi-unit residents and businesses to install one solar array to cover the electricity load of all tenants at the same service delivery point. According to Clean Technica, the electricity does not flow directly to any tenant meter, but feeds directly back onto the grid. Therefore, allowing the utility to allocate the kilowatt hours from the energy produced by the solar array to both the building owners and tenants’ individual utility accounts.
SB 43 Promotes Virtual Net Metering
California’s Green Tariff Shared Renewables Program, allows any customer of the state’s three largest utilities to purchase up to 100% renewable electricity for their home or businesses. Cumulative investments for this program will be capped at 600 megawatts (MW) be in effect until 2019.
“We think it’s a big deal and a game changer,” said Susannah Churchill, California policy advocate at Vote Solar. “S.B. 43 is going to allow a lot of folks to access renewable energy for the first time.”
SB 43, the shared renewables bill in California will allow 75% of its residents the opportunity to purchase clean energy without having to install clean energy on their property. If signed by Governor Jerry Brown, the Green Tariff Shared Renewables Program will become the largest shared renewables program in the U.S. and could help California create a green economy without the help of further subsidies.
SB 43 and Net Metering’s Impact on the Golden State:
Vote Solar, an advocacy organization has estimated that S.B. 43 will be responsible for the creation of 6,000 new jobs, the participation of 20,000 residential ratepayers and the generation of $2.2 billion within the economy.
Utilizing net-metering with the 3 California designated utility companies will allow residents and businesses that are unable to install a solar array on their roof to save money by purchasing clean energy while reducing their carbon footprint.Net metering PV systems also allow families and businesses to fix a portion of their utility expenses for years at a cost lower than they would have paid otherwise. Virtual net metering will also eliminate the need of the long and expensive process of expanding transmission grid capacity because metered PV solar arrays deliver electricity near the point of consumption.
Although solar energy is on the rise in California, it is still not considered to be a reliable long-term source of energy. In order for California to reach grid parity and make the transition to clean energy, the golden state needs an electric grid with the capability to store the sun’s power. In order to create a more efficient and reliable grid, along with meeting Governor Jerry Brown’s goal of 1/3rd of California’s energy coming from renewable sources by 2020, California has plans to expand their energy storage capacity to 1.3 gigawatt hours.
Benefits of Energy storage for Solar:
• Increase grid electricity and allow for the use of more renewable energy
• Help eliminate the need for costly transmission lines
• Allow for solar to become a more reliable and available source of energy
• A more flexible grid as well as energy security
According to solar industry experts, the capturing and storing of renewable energy for use at a later time can be seen as the missing link in California meeting its’ 2020 goal as well as transitioning to the use of renewables to meet the state’s energy needs. Reports from Green Optimistic showed that by 2017, California’s energy storage infrastructure is expected to be worth $10 billion.
To help advance the creation of energy storage, in 2013 California revived the Storage Act of 2011, in order to promote the deployment of energy storage technology to create a robust grid that can handle renewable energy. This incentive program for storage for renewable energy will help the state go from 30% to 70% of clean energy. Energy storage is part of the solution that will give California a more flexible grid designed to better utilize the sun’s energy. With the revived program, homeowners or business owners who have already gone solar or are now installing a solar system can invest in energy storage and store their generated electricity for use later and avoid using the energy generated from their solar systems during peak times.
Affordable and reliable energy storage for solar has the potential to promote the widespread use of renewable energy. With available energy-storage technologies, renewable energy could have the capability to be stored and then distributed through the electric grid during demand times of peak power. According to Cullen Buie, an assistant professor of mechanical engineering at MIT, “Energy storage is the key enabling technology for renewables,” Buie says. “Until you can make energy storage reliable and affordable, it doesn’t matter how cheap and efficient you can make wind and solar, because our grid can’t handle the intermittency of those renewable technologies.”
With the push toward improved energy storage for renewable energy, California hopes to generate 70% of their energy from renewables compared to the 30-40% they currently generate.