A rapidly evolving solar market in which opportunities will abound for PV was the picture painted at the opening session of this years GTM Solar Summit. Along with a rapid growth in community solar, the proliferation of post-Renewable Portfolio Standard (RPS) utility scale arrays, and the emerging solar+ ecosystem will together form the center of the next stage of rapid evolution within U.S. solar.
Looking at the PV power plant sector, Kann noted the rapid growth of projects outside of RPS requirements in the U.S. GTM Research figures have tracked some 5.7 GW of projects that either have or are being developed in the U.S. beyond RPS regulations, which require utilities to include renewable energy into their electricity generation portfolios.
While Kann cited a number of mechanisms under which utility scale PV has been developed outside of various RPS programs, it was what was he termed offsite wholesale solar that offered the most transformative potential for solar and electricity supply in the U.S.
Projects such as Apples 130 MW tranche of the California Flats array, the 70 MW Kaiser Permanente project with NRG, the University of Californias 80 MW Fresno County system and the 22 MW of the First Solar Barilla Solar Project in Texas supplying Rice University, were all projects showing the way for how PV projects can be developed to supply large electricity consumers, either directly or a virtual fashion.
Looking at the potential of this market opportunity, the GTM analyst concluded that it could easily total in the tens of GW, and that there were few restrictions to this development in site.
Underpinning the emergence of offsite wholesale solar, and all post-RPS developments, was falling PPAs under which solar can be developed. Kann said that solar PPAs in the U.S. now range between US$60 and $50/MWh, but that he has seen contracts signed around $40/MWh.
Solar+ ecosystem and the power of the community
While the utility-scale segment is moving rapidly in a transformative direction, it is only a fraction as transformative of what will happen in the distributed market, said Kann. One emerging transformative development, argued Kann, was community solar.
GTMs Kann noted that while there are 130 million households in the U.S., only around 9 million are suitable for a rooftop solar array, given how many residents own their own home, what state regulations exist, and householders credit ratings. Of this market solar has achieved only 7% penetration leaving a major upside, however Kann argued that the potential to unlock the remaining rooftops is huge.
We are confident it [community solar] is real, it will be big and there will be a huge proliferation of community solar in the next couple years, said Kann. To date GTM calculates that around 25 MW of community PV had been developed.
Key to the emergence of community solar, he argued, was that utilities are less resistant to it than they are to current systems such as net metering.
Its an attractive alternative [to net metering]. Over the long term, which in solar is pretty short, theres no reason that the community solar market should not be as big as residential solar currently, if not bigger, said Kann. GTM predicts the community solar market to expand to around 400 MW in the coming years.
The growth of the solar+ ecosystem was the final piece of the transformative puzzle set out by Shayle Kann in his opening presentation. He made the case that as net metering comes under pressure and time-of-use (ToU) pricing and demand charges potentially become more commonplace, storage and demand control products and services will proliferate and providers converge.
Kann argued that the crucial point will occur when the addition of storage or demand control will push a residential solar+ project over the financing threshold, it gets really exciting and changes things in a really big way.
Convergence of companies offering solar+ products and services is inevitable, said Kann, with the signs already in place that this is occurring, with solar companies such as SunEdison, SolarCity, Kyocera, Enphase, SunPower and Sunrun having already coupled with storage providers. On the energy management side, Nest Labs has agreements with Enphase, Sunrun and SolarCity amongst others with SunPower teaming up Tendril and Enernoc to serve both the commercial and residential spaces.
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