A little over one week ago the Solar Power International (SPI) trade show closed its doors at the Las Vegas Convention Center. Organizers SEIA and SEPA report that visitor numbers exceeded 2013, with over 15,000 people attending. In a sign of ongoing consolidation within the industry, exhibitor numbers were down on the previous year, however show floor space was up, with a number of firms taking out big, impressive booths.
The mood was high
Often the chatter on the trade room floor and the expression on attendees faces give somewhat of an indication as to how the industry is faring. On the basis of this, admittedly unscientific, metric the U.S. solar market is in robust health and prospects for ongoing growth strong.
SEIAs Rhone Resch chose the event to make a renewed push to strengthen efforts to support the Investment Tax Credit (ITC) beyond 2016. While some remain optimistic that solar can continue to grow even without the ITC, Resch declared that 2014 will mark the beginning of concerted efforts to lobby in support of the ITC.
Its inspiring to see such active participation in our industry the sort of involvement that must also translate to ensuring that the ITC is extended, said Resch, SEIAs President and CEO. I urge all industry members and advocates to join us in this absolutely crucial effort.
IHS Researchs Ash Sharma said he foresees strong growth in the U.S. market through 2016 and that the market benefits from high levels of visibility.
The U.S. is really 50 different markets rolled into one, said Sharma. There is not one single market and there is policy by state so that kind of creates some stability by fragmenting the demand. But there is much more visibility in this market than there are in others where there are changes to FITs and so on. IHS predicts the U.S. to install around 7 GW in 2014.
Continued efficiency growth and glass/glass a must have
Looking towards module manufacturers, it was clear at SPI that efficiencies continue to grow. Solar developer Jake Wiley, from New Orleans-based firm Solar Inverted, observes that he was impressed with continuing efficiency gains.
Most of the manufacturers I saw that were dedicated to P-type production were showing 60 cell modules in the 280 W range, wrote Wiley in a post on LinkedIn. I am happy to report that efficiencies are coming up still. N-type productions are seeing 60 cell modules in the 300 to 315 W range.
Additional to standard modules, many producers also unveiled glass/glass modules although most are yet to reach market. SolarWorld was one of the first in the glass/glass space and it demonstrated the robustness of its offering, by having a team member perform a series of bike tricks on top of its modules. Chinese producer BYD pushed boundaries by claiming that its dual glass module will have a productive lifetime of over 40 years.
The BYD glass/glass offering is called the 4-3-0 Dual Glass Module, with the name coming from its claimed 40-year lifetime, less that 0.3% annual degradation and zero Performance Induced Degradation (PID). A key feature of the BYD dual glass offering is its use of silicone encapsulate, developed and supplied by Dow Corning. The use of silicone delivers the PID-free performance, reports BYD.
Downstream innovation and the O&M opportunity
Innovations in terms of racking abounded at SPI, with installation demonstrations frequently pulling big crowds amongst the crowded halls. BoS supplier Shoals Technologies Group made a splash and the distribution of wristbands to its wonderfully named Best. Night. Ever. party attracted a stream of visitors.
Shoals President and CEO Dean Solon attended SPI, and his companys party, and he said increasing the speed of installation and reducing man-hours required to install an array is a crucial lever for achieving cost reductions in the industry. Shoals, in Solons words, manufacturers and supplies, everything excluding the module and the inverter, and the mercurial CEO said that Shoals cables and connectors are designed with an eye to ensuring connection errors do not take place.
The Warren Buffets of this world require ultimate reliability of power plant assets, said Solon. We design systems so installers cant cross connectors, blue to blue, red to red, its idiot proof. Solon said that well designed components can push down labor costs and protect assets by ensuring mistake-free installation. At SPI Shoals also displayed a military drone aircraft CEO Solon says can be used to survey installations and spot faults using thermal imaging.
The maturing O&M opportunity being presented by markets such as the U.S. was one theme that was apparent at SPI. Major companies are stepping up their O&M operations such as First Solar and SMA. IHS Ash Sharma said that this is partly due to reduced margins in the component manufacturing space.
More and more we are going to see from manufacturers, as we start to see growth slow in hardware sales and margins begin to reduce even further, is that it is only natural to look outside of that for opportunities and O&M is a great space for some of those players to go into, said Sharma. There are very stable revenues, very predictable business, so it is very different to shipping modules.
Trade case strategies
While the Las Vegas desert sky remained bright over the three day show, one dark cloud continues to hover over the U.S. industry: the ongoing trade dispute. Chinese module suppliers, who attended SPI in force, continue to pay sizeable tariffs on modules shipped to the U.S. and a number of different strategies for coping with the tariffs have emerged.
ET Solar pays a tariff of a little over 24% on modules it ships to the U.S. on modules using Taiwanese wafers and cells and 30% on all-Chinese modules. ET Solars Lingui Sui said that it works with an O&M producer in San Jose to produce a small volume of modules, using cells from Malaysia, to serve the residential and small commercial market in the U.S.
The U.S. market is very strong, even though we have had a hiccup due to the tariffs, said Sui. We will continue to use our China base to maintain market share, in the meantime we are seeking production outside China to totally avoid the tariff. This is the only way. We are working with the solar industry association with China to try and settle the case. But it is not easy. We have to find a way by making modules outside of China. ET is looking to produce cells and modules in Southeast Asia for future supply to the U.S., with Malaysia a likely location.
By contrast, Hanwha SolarOne believes it can produce modules at its expanded facility in China at a sufficiently low cost that will allow it to pay anti-dumping duties and still turn a profit. Under the leadership of new CEO Seong-woo Nam, who came from Samsung, Hanwha SolarOne reports that it has a renewed and fierce focus on cost reductions. It is currently expanding its U.S. sales team and has a sales target in the hundreds of MW for the U.S. in 2015.
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