The pv magazine weekly news digest

Picture Brazil and thoughts invariably turn to the easy clichés – the sashaying hips of a bikini-clad beach beauty strolling along Ipanema beach; a smiley kaleidoscope of shanty town-dwelling children; the golden yellow jerseys of the famous soccer team and, as a backdrop to it all, copious amounts of glorious sunshine.

Sun is seemingly ever-present in Brazil. But for a country with a growing economy, a rising middle class and a population that recently pushed past 200 million without looking back, the nation has been oddly blind to the potential of PV. While Chile, Mexico and a handful of other Latin American countries have fully embraced solar power, Brazil had been rather reticent.

Until, it seems, this week, when a selection of headline-grabbing stories emanated from the country, coinciding serendipitously with the Intersolar South America exhibition, which was successfully held this week in Sao Paulo.

On Monday, Brazil’s second reverse auction was held, delivering more than 800 MW of PV at an impressive $0.08/kWh – some 13.5% below the maximum price set for the auction. Two of the most successful companies in the auction were Spain’s Solatio and Italy’s Enel Green Power – the later awarded 553 MW of projects over the course of the auction. The U.S. firm SunEdison was also awarded two projects worth 16 MW in the Bahia municipality.

Encouraging news, certainly, but GTM Research analyst Adam James warned that an auction approval does still not guarantee successful project realization in Brazil. At least, not yet.

"The projects that clear in the auction will still need to overcome some barriers to development, especially currency risk with PPAs signed in [Brazilian currency] Real and high taxes on PV equipment," the analyst said.

Despite these notes of caution, positive vibes reverberated out of the country all week, not least the news that Globo Brasil has inaugurated the country’s largest – at 180 MW – PV module factory over the past few days. The facility, located in the city of Valinhos, can produce 2,000 modules a day and will provide direct and indirect employment for 240 people.

China’s Canadian Solar was also in Brazil this week to secure 185 MW of solar contracts in the country, spread across five projects in Minas Gerais. The company also struck a 20-year PPA deal with a Brazilian government entity to purchase solar power produced at the plants for $84/MWh.

A further sign of Brazil’s maturing energy market was issued Thursday, when the governments of the states of Goias, Pernambuco and Sao Paulo agreed to provide a tax exemption to the ICMS tax for net metered renewable energy systems – thus easing the brakes that had hitherto slowed clean energy development in these regions.

Storage says hello

It comes and goes in cycles. Up, and down. Charged, and empty. This week was all about the charge as a series of solar+storage stories kept the pv magazine editors busy.

Headlining the assault of batteries was a GTM Research report into the U.S. energy storage markets. The report found that the grid-tied energy market segments across the states enjoyed a strong Q2, with 46.5 MW deployed – 80% of the previous year’s entire volume in just three months.

Behind-the-meter deployment was also strong, with 4.9 MW installed. Around 90% of that figure was deployed in commercial and industrial buildings, and most was in California. Residential storage reached just 400 kW, however, highlighting just how far that particular industry has to go before it can seriously begin changing the solar landscape.

In Europe, Japanese electronics giant Panasonic announced it is preparing to set the proverbial cat amongst the pigeons with a Q4 German launch of its residential storage system – pitting the company in direct competition with its "frenemy", Tesla.

In October, Panasonic’s home battery hits the Australian market – which promises rich pickings for companies that can get their storage offering just right – before entering Europe before the end of the year. Panasonic produces batteries for Tesla’s electric vehicles, and is a key partner at the forthcoming Gigafactory in Nevada, so this head-to-head in Germany could prove decisive in determining which storage system gets the upper-hand in Europe.

German battery specialists Younicos has already attracted the attentions of Panasonic, with the latter planning an investment in the company as it seeks to spread its presence in Germany – a market that will likely pioneer a transition to the self-consumption+solar+storage model.

Fossil fuels, your time is up… conservatively speaking

Nobody likes to see coal given a hard time more than pv magazine (our new Solar Superheroes are certainly itching for a fight), so it was edifying to report this week that the International Energy Agency (IEA) report that said fossil fuels’ cost advantage over solar is narrowing – even when based upon the most conservative solar pricing models around.

According to the report, the median cost of producing baseload power stands at $200/MWh for solar, compared to around $100/MWh for natural gas, coal and atomic plants. However, in 2010, solar’s figure stood at $500/MWh, while the cost for gas and coal resources rose over that five year period, and remained stable for nuclear energy.

These baseload figures for solar exceed prices already quoted in recent auctions (not least Brazil), but are still rosy enough to suggest that coal’s day in the sun is – ironically – set to end very, very soon.

Seasons in the sun

Contrasting tales of success and woe now, as two solar companies with vastly different cultures, business models and fortunes also grabbed the headlines this week.

Beleaguered Chinese thin-film firm Hanergy confirmed it is to cut 2,000 jobs under its restructuring plan as it seeks to handle a 90% net loss in the first half of the year. “Under the new strategic arrangement, the Group will strengthen its business sense in operation and become more performance oriented, to further strengthen the performance management of the Company, and implement strict elimination mechanism in order to build an excellent team," Hanergy said in its 1H earnings.

More encouraging financial wizardry was on display over in the U.S., where SolarCity announced another round of funding – $400 million to be precise – that took the company’s initiated funds to well over $9 billion, which is an incredible amount of securitization for a company that posted Q2 revenues of just $103 million.

With hedges, bets, you name it, on future revenue built into its clients’ contracts, SolarCity’s future looks secure, and its ability to attract low-cost capital acts as a competitive differentiator – SolarCity is a safe bet in everybody’s eyes.

"The value SolarCity brought to the U.S. market has been innovation of financial structures. They have been at the forefront of some of these models, but everyone else is catching up too," said Mercom Capital CEO Raj Prabhu.

Also in the news…

The European Commission is preparing to blacklist a further two Chinese PV manufacturers from the EU Minimum Price (MIP) agreement following an investigation that found Chint solar and Sunny Energy failed to report EU sakes in 2013 and 2014 within the specified period mandated by the agreement.

In India, JA Solar has signed a MoU for the development of a 500 MW solar cell factory and a 500 MW solar module factory in the country’s Andhra Pradesh state, in a move GTM Research’s Mohit Anand called an encouraging sign of international companies’ growing confidence in India as a bonafide solar market of the future.

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