Six Summaries from Mercom Capital Group
Solar Quarterly Market Update
• Mercom forecasts global solar installations to reach 64.7 GW in 2016 from 57.8 GW in 2015.
• China has installed 9.9 GW and is on track to achieve installations of about 19.5 GW in 2016.
• The U.S. will install about 13 GW in 2016, becoming the second largest solar market in the world behind China.
• Mercom estimates Japan to install about 9 GW of solar in 2016 amid grid issues, curtailment and a reduced feed-in-tariff.
• Mercom expects 2015 calendar year installations for India to total about 2.15 GW and is forecasting 2016 installations to reach approximately 3.6 GW.
• Mercom expects the U.K. to install approximately 2.8 GW of solar in 2016.
• Germany solar installations are expected to reach about 1.5 GW in 2016.
• France is expected to install about 1.1 GW in 2016.
China is expected to install approximately 19.5 GW of solar in 2016 and will continue to be the largest solar market in the world. China has installed almost 10 GW in the first three quarters this year, well ahead of 3.79 GW installed in the same period last year. Curtailment and delayed subsidy payments remain a challenge, but China announced an additional 5.3 GW installation quota for provinces that have so far met or exceeded their installation goals but these projects have a deadline of June 2016. This new installation quota is likely to help China get close to meeting its installation goals this year and ensures a strong 2016. The government is expected to increase its 2020 installation target to 150-200 GW.
The United States is forecasted to install about 13 GW of solar next year which will by far be the best year for the industry. The U.S. solar market is expected to experience robust growth for the next 13 months as the industry rushes to complete projects before the 30 percent investment tax credit (ITC) drops to 10 percent.
The industry is hopeful, but not betting, on a possible extension to maintain the ITC at 30 percent. There has been growing momentum to extend the ITC in one form or the other due to the large number of solar jobs across the nation that could be affected, putting pressure on members of congress to act. If an extension were to pass, it would be a game changer for the industry and will change installation estimates for 2016.
The last four months have been rough for public solar companies, especially yieldcos, which have lost substantial market value making financing at low rates difficult going forward.
Japan is expected to install about 9 GW of solar in 2016. The Japanese solar industry has experienced two feed-in tariff (FiT) cuts this year as the government looks to trim solar subsidy costs. Japan has so far approved a little over 80 GW of solar projects under its FiT program out of which about 25 percent have been installed. Japan is looking to trim the pipeline of projects under its FiT program as most are dormant projects that are not being built.
Japan is also going through a transformation in the energy sector with a change in energy mix going into 2030, giving more weight to renewables and cutting back on nuclear energy. Japan is also in the process of deregulating its utilities and breaking up monopolies. Japanese domestic solar module shipments have dropped the last two quarters following the reduction in FiTs.
Indian solar installations are expected to reach about 3.6 GW in 2016, significant growth compared to the 2.1 GW forecasted for 2015. Momentum has picked up after the government set a target of installing 100 GW by 2022. Aggressive bidding in its recent auctions have caused some concerns to the viability of these projects due to unrealistic low bids.
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Solar Residential and Commercial Funds Totaled $997 Million in Q3 2015
Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in the third quarter of 2015. Total global corporate funding in the solar sector, including venture capital/private equity (VC), debt financing, and public market financing raised by public companies, came to $6.2 billion, compared to $5.9 billion in Q2 2015.
Raj Prabhu, CEO of Mercom Capital Group, commented, “The third quarter of 2015 has been eventful, especially in the equity markets. Although solar power demand continues to grow, solar stocks have made a complete U-turn in the last three months, affecting public market financing, which was down by about a billion dollars excluding IPOs.”
After two record quarters, residential and commercial solar funds announced in Q3 2015 dropped with $997 million in five deals. Year-to-date residential and commercial funds announced have now surpassed the $4 billion raised last year, making 2015 the best year on record for these funds. Of the $997 million in residential/commercial funds announced this quarter, $777 million went towards the lease/PPA model and $200 million was for loan products.
U.S. Connected 33 MW of Large Scale Solar Projects to the Grid in October 2015
A total of 33 MW from four large scale solar projects were connected to the grid in the US in October 2015. Cumulative installations up to October 2015 totaled 1,407 MW from 173 large scale solar projects, compared to 1,928 MW connected in the same period last year. Among new generation connected from large scale energy projects in October 2015 solar is behind wind (200 MW).
Solar Generation Highlights
• AP North Lake Solar’s 20 MW Diamond Valley Lake Solar Phase 1 Project in Riverside County, California is online. The power generated is sold to Riverside Public Utilities under long-term contract
• Sustainable Power Group’s 10 MW SEPV Palmdale East Solar Project in Los Angeles County, California is online. The power generated is sold to Southern California Edison under long-term contract.
European Union to Review Antidumping and Anti-subsidy duties on Chinese Solar Products
The European Commission (EC) announced that it will review the antidumping and anti-subsidy duties it imposed on Chinese solar products in 2013. In a document published on the European Union (EU) official journal, the EC said that the duties, which were set to expire on December 7, 2015, will remain into force over a period of 15 months, the time required to conduct a further review on the matter.
China's Ministry of Commerce said that it would harm interests of both sides to extend the measures, and it hoped the EU terminates the policies as soon as possible to improve China-EU economic ties. Solar panels and related components are significant to the development of clean energy and will help countries to achieve their emission-cut goals to tackle climate change. (Source: Xinhua, Photon, MOFCOM)
New Plastic Solar Cell Minimizes Loss of Photon Energy
As the world increasingly looks to alternative sources of energy, inexpensive and environmentally friendly polymer-based solar cells have attracted significant attention, but they still do not match the power harvest of their more expensive silicon-based counterparts. Now, researchers at the RIKEN Center for Emergent Matter Science and Kyoto University's Department of Polymer Chemistry have shown that a newly developed polymer can minimize energy loss as well as silicon-based solar cells when converting photon energy from sunlight to electricity.
Solar cells work because photons from the sun strike electrons and move them into a position where they can create an electric current. Photon energy loss - the amount of energy lost when converting photons energy from sunlight into electric power - was greater in polymer-based solar cells than in silicon-based ones. In polymer-based plastic solar cells, larger photon energy loss causes lower voltage. This has been one of the largest limiting factors for efficiency.
As the group began working with the new polymer, where oxygen rather than sulfur atoms are located at key positions, and found that the new material was able to overcome some of the key obstacles to extracting and utilizing greater energy from sunlight. Since this new polymer greatly reduces photon energy loss, it has allowed us to achieve a superb power conversion efficiency of nearly 9% with a very high open-circuit voltage in plastic solar cells.
Japanese research team demonstrates an unconventional means to achieve more efficient and robust conversion of solar energy into electricity Source: Kyoto University
An efficiency of 15% is usually seen as a breakthrough level that will allow polymer-based cells to be commercialized. By achieving both a high short-circuit current and a high open-circuit voltage, achieving a power conversion efficiency of 15% in single-junction cells is a realistic goal. This would have huge implications for the solar energy sector. (Source: Kyoto University) More information: http://www.kyoto-u.ac.jp/en/research/research_results/2015/151202_1.html
More American Businesses are Installing Solar than Ever Before
According to a study released by the Solar Energy Industries Association (SEIA), growth in the use of solar energy has surged 183 percent among America’s top companies in the four years. The study also highlights a 59 percent growth in solar installations since just last year.
Many more of the country’s most recognizable and best-run companies continue to expand their use of solar energy. IKEA and Costco are powering stores with solar. FedEx distribution centers are powered by solar. Apple and Verizon data centers are powered by solar. The headquarters and offices of Mortenson Construction, L’Oreal, the Better Business Bureau and Forever 21 also rely on solar. Auto manufacturers such as General Motors, Ford, Toyota and Volkswagen use solar energy, and so do manufacturers such as Owens Corning, Intel, and Johnson & Johnson.
Across industries, America’s business leaders are choosing solar to cut costs, help their bottom line and plan for the future. From manufacturers to retailers, to tech companies, real estate agencies and financiers, more US businesses are reducing costs by taking advantage of the sharp decline in the cost of solar. The growth in solar adoption by America’s business community represents just one piece of the broad-based growth in solar installations in the US over the last decade. Spurred by investments in solar made at the residential, commercial and utility-scale level, installed solar capacity in the US is 30 times greater than it was in 2006. By the end of 2015, there will be enough solar electricity generated in the US to power more than 5.5 million homes. (Source: SEIA)
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