Last week the world of solar gathered at InterSolar in San Francisco. After a tough year in 2012, there is some reason to be optimist: solar as a source of energy is now cost competitive with traditional sources of energy like coal. As a result, the production of solar power on the grid has soared according to the Energy Industry Association, and the market for roof-top installations continues to be healthy with a year-over-year increase in capacity above 50%.
At the same time the level of Government subsidies is coming down around the world, especially in California with the sunsetting of California Storage Initiative. This means new challenges and new opportunities. We review here the top-5 trends in solar.
- Financing is transforming the industry. The number one trend at the Show floor was the wide availability of financing options. Even Morgan Stanley was at the show along with other financial institutions. Wells Fargo decided to invest another $100M in solar projects two weeks ago. Solar makes business sense and the success of companies like SunEdison and SunRun have showed that companies need to innovate as much on the financial front as on the technical front.
- The shake-out is not over yet. Solar manufacturers such as NanoSolar and SoloPower are clawing their way out of the slump caused by the continuing reduction in PV panel prices.While financing options blossom, the number of panel makers shrinks. As a result, the tradeshow was smaller this year and the halls quieter.
- Marriage of storage and solar. On the technology side, the highlight of the show was storage. From technical workshops to new product announcements, storage was omnipresent. The commercial segment was the most active with peak shaving solutions from Green Charge Networks and Stem. The business case for storage is not there yet for residential in California according to Markus Hoener, the head of the International Battery and Energy Storage Alliance (IBESA), but it is in Germany: "We are starting to see the move from money making to money saving." IHS released a global report on PV and storage that expects to see the market grow quickly in the next 5 years (picture right -courtesy IHS).
- Bigger is better. While the distributed energy market is emerging on the demand side, the supply side is going with bigger inverter solutions. Advanced Energy introduced a 2-MW inverter that can be trucked in and installed quickly at solar farms. The majority of the solar generation in the US will continue to come from utility-scale installations.
- Solar market is global. The last trend at the show is that the solar market has become truly global. Besides the fierce competitions among solar manufacturers, opportunities are growing in India and other developing countries that have real energy needs beyond environmental concerns. InterSolar will have its first event in South America this year. InterSolar already added a show in India a few years ago.
Africa was suprisingly left off the talks. Only one session on off-grid solutions included one panelist from the UN to talk about the large opportunity that solar represents in Africa. I will write about this in a a post soon.
For now, the solar industry is focused on making the transition from a subsidized market to a grid-competitive energy sector. Germany and California face similar challenges, and the relationship between organizations across the Atlantic is growing, in particular in the area of energy storage and PV. They are preparing for the second wave of solar that the industry expects to get the sector out of its slump.