8 key takeaways from The Smarter E 2018

1. Module price madness

Without question, the hottest topic on the show floor was that of module prices, and specifically, how they are being rapidly affected by China’s recent policy decision, which has very abruptly changed the way the country supports its burgeoning solar industry.

While reports of predicted steep price declines emerged at the start of June – Bloomberg New Energy Finance was quick to forecast price decreases of up to 34% in 2018 – news of a global price collapse emerged during the event last Thursday, with PVInsights and EnergyTrend reporting average prices in the US$0.27-$0.37/W range. Prices for multicrystalline PV products in particular, caved significantly. Yesterday, however, PVInsights provided an update in which it showed that prices for monocrystalline products have now also fallen sharply, in the past few days.

Speaking to pv magazine at The Smarter E Mr. Zhen Guo Li, General Manager, Director at mono PV module manufacturer, Longi believes that prices will become more rational again – ending up at around 10% less than they were at the start of 2018.

Read about the latest price drops from Sandra Enkhardt; and how the ambitious PV expansion plans for China’s Tongwei, Longi, BYD and Sunport still on track, despite the policy support changes, from Emiliano Bellini and Becky Beetz.

2. An equipment upside to the downturn

The prospect of a new round of dramatic cell and module price decreases will leave few cell and module equipment or material suppliers leaping for joy. But hope springs eternal – a sentiment many tool makers have learned to live with in recent years.

“It’s difficult to know how any shakeout will play out,” said Stäubli’s Eric Ast. Supplying junction boxes and connectors to a wide range of module makers, Stäubli can gain insights into various module makers’ production status and outlook. And with many things solar, a shakeout might have an upside, observed Ast. “If the result is that some of the ‘black sheep’ in the industry leave [as the result of falling prices] then it will be a good thing for the industry. It is still the case that some suppliers have low quality product, and this flows through to installations.”

For the equipment suppliers too, there may too be an upside to the downturn. While the potential for production expansions to be shelved is unwelcome, competition on price may force other cell and modules to differentiate through adopting high efficiency technologies. Schmid’s Christian Buchner said that this could present the opportunity for production technology providers, for high efficiency cell concepts such as n-type. He said in the short term, while it could be the case that some equipment suppliers face three, four or five months without new orders he sees it unlikely that existing ones are cancelled.

On the module front, stringer supplier teamtechnik is also not seeing any short term oversupply as cause for panic. Sven Kramer, VP sales solar technology, noted that with the right partners, equipment suppliers have reason to believe that technology upgrades and existing orders will continue to be fulfilled. The increase of busbars, from two, to three, four and five, is likely to continue to deliver a steady flow of upgrade business to teamtechnik and other stringer providers throughout 2018.

3. Module technologies toughening up

Half-cut cell technologies, little heard of at last year’s event, could now be called ‘standard’, and were seen at virtually every leading manufacturer’s booth – including Longi Solar and Almaden – thus underlining the speed at which new innovations can grow into standard manufacturing practices. Bifacial modules were another former niche technology that look to have made it to the mainstream.

The rise in both of these technologies add to the impression that durability, alongside efficiency, is a key issue for manufacturers – and innovations such as half cut and glass-glass bifacial modules – which can boost mechanical strength and durability as well as efficiency – represent a win-win for the module market.

Indian solar glass manufacturer Borosil told pv magazine it had seen plenty of strong interest in its new 2mm tempered glass solution at the show, an important solution for stronger, lighter modules; while Q Cells demonstrated its new Q.PEAK DUO-G5 module, the aluminum frame of which is built for high snow and wind loads.

Another key theme on the module front was differentiation, as module makers pursue new technologies to help their products stand out in a somewhat saturated market. N-type, multi busbar and back contact modules were prominently display at various booths, and plenty of manufacturers were keen to discuss their R&D efforts into shingled modules, smart wire, and other high efficiency concepts.

4. Manufacturers going ‘beyond the module’

On top of new module innovations, it was also apparent at the show that full system offerings – bundling modules, inverters, energy storage and mounting systems into one PV package – are now a major theme. Trina Solar has provided the leading example with the recent launch of its Trina Pro package that includes inverters from Huawei and Sungrow, as well as a tracker solution from Spanish manufacturer Nclave, which Trina Solar acquired back in May.

Q Cells also exhibited its Q-HOME+ ESS-G1 storage solution, comprising a battery and inverter. It is targeting the European residential sector, and plenty more manufacturers wanted to discuss offerings, including module level power electronics, EPC operations and more, on top of supplying the latest high efficiency module technologies.

5. Keeping it small

Dedicating time to walking the many hall floors, pv magazine met with many of the industry’s small and medium-sized PV module manufacturers – that flocked from across the globe – and which still believe that The Smarter E is a must-attend event.

Among others, we spoke with: Jordan-based Philadelphia Solar; Eurener and Tamesol from Spain; Tunisia-based Ifri Solar and Shams Technology; France’s Photowatt (a unit of EDF); Open Renewables from Portugal; Poland’s Bruk Bet; Slovenia-based Bisol; Italy’s FuturaSun, Trienergia, Peimar and Sunerg; UAE-based Almaden and Maysun Solar; Russian manufacturer Hevel; Lithuania’s Solitek; Turkey’s CW Enerji; Solar Philippines from the Philippines; India-based RenewSys; and Germany’s Solar-Fabrik, Solarwatt and CS Wismar.

Although these companies may have very different business models – ranging from keeping production local, to setting up shop outside of their national borders – they share a few common principles: don’t raise capacity too much (200 MW is considered a sort of safety threshold); look for a solid client-basis and establish a strong client culture, regardless of the product you are selling; seek to diversify markets and segments in which to distribute modules; bet on innovation and quality (if you can); and hope that trade measures against Chinese products will be maintained for as long as possible.

All of them have been searching for a niche over the past years, and almost all of them claim to have found one. Mostly led by solar veterans – people who struggled to survive in the sector across several crises – these companies have been able, niche-by-niche, to create an aggregate countervailing power to both the big and small Chinese manufacturers. Now, however, they face another difficult test: upcoming overcapacity coming from China itself and more consolidation.

6. Inverters: Digital, optimal, hybrid

Inverter manufacturers presented new products and concepts to meet the demands of new solar markets, having developed new technologies for residential, commercial and industrial (C&I), and utility-scale applications. Digitalization and optimization were the buzzwords in this segment. A number of the companies pv magazine spoke to said they are offering software solutions with their inverters, to optimize power consumption, storage, and sales, in order to achieve the highest levels of profitability from residential PV systems.

The likes of Goodwe and SolarEdge presented different energy management systems and had either already introduced virtual power plant (VPP) software platforms, or announced that they will do so in the very near future. Enphase, meanwhile, said it would look into creating a whole home energy system, following on from the digital monitoring systems it already offers, which system owners can operate from their phones and laptops.

Also a hot topic in the inverter market is the increasing use of hybrid inverters, which are capable of charging storage systems in parallel to regular DC/AC conversion. On the utility-scale side, this feature is gaining traction, with manufacturers presenting different products capable of storage charging.

Read the full article on Inverter tech-trends from The Smarter E by Marian Willuhn.

7. Longer-term PPAs driving unsubsidized solar in Europe

In a session on Investing in Europe’s PV Future, hosted by BNEF, four panelists discussed jthe European power purchase agreement (PPA) market, and how it is the key value driver to unsubsidized solar. While the continent is still not offering PPAs longer than 10 – 15 years, yet, the long-term PPA market is growing, said Frederico Giannandrea, Partner, Head of Foresight Southern Europe, Foresight Group, Italy. The drivers of this change are big corporations, like Google and McDonalds, in their bids to become carbon neutral by 2020.

Looking at the unsubsidized solar market, Tomás García, Head of Business Development EMEA, Canadian Solar, Italy stated that unsubsidized solar plants are a new asset class, where investors are looking at them as a new type of investment. He added that market parity has been achieved in the Southern European countries of Spain, Portugal and Italy. The main drivers of this are: solar levelized cost of electricity (LCOE), and wholesale power prices. He was careful to point out the difference between market parity (which refers to wholesale power prices), and grid parity (which refers to retail power prices).

In terms of European markets, the BNEF panel agreed that Spain, Italy and Portugal are key markets for unsubsidized solar, and are attracting investors. Speaking of the trends being seen in Spain and Italy in particular, García said that both have ambitious national plans, announced by their respective governments, with 2-3 GW of new unsubsidized solar capacity expected to be added annually, or a total of 38-40 GW, in Italy; and 3 GW a year, or 40-47 GW by 2030, in Spain.

Read the full article on the panel discussion, by Becky Beetz.

8. A European battery landscape

The critical importance of establishing a European battery industry was underlined by Maroš Šefcovic, VP for Energy Union, European Commission, who delivered the keynote speech at the High Level Industry Forum last Thursday, organized by SolarPower Europe.

Agreeing that Europe failed to provide good support and strategic planning for the whole solar PV value chain in the past, meaning it went to other locations (read: China), he said we have to learn from this going forward. In this vein, he said that the European industry cannot depend on imports of batteries from Asia, but must capture the market. We should create manufacturing here in Europe, he said, across the whole supply chain. He added that there is still quite a lot of money for battery research available – €110 million for 2018-19 alone.

With a nod to the establishment of the Battery Alliance, Šefcovic said there has been a very positive response from the industry within a short period of time. An action plan to ensure battery manufacturing across the whole supply chain is in place, while mapping research into raw materials – which he said are critical – has already unearthed unexpected potential for precious metals in Europe.

Overall, Šefcovic said that work on regulatory requirements and standardization must proceed quickly. The provision of strong legal protection, which is translated into strong trade policy, is a must.

And finally … the new buzzword

No event would be complete without the bandying around of a new buzzword, and 2018 The Smarter E did not disappoint.

Also speaking at the High Level Industry Forum, Michael Weinhold, CTO, Siemens Energy Division presented … the flexsumer.

A progression of the prosumer, which has arisen from the normal consumer, the flexsumer is a product of the increased flexibility of the energy world, where consumers are now becoming more … flexible … in their interaction with it, which corresponds nicely to the variability of renewable energies!

On that note …