As demand for bifacial panels takes off, early field learnings are seen as critical to optimizing performance.

Bifacial panels are forecast to represent 17% of the global solar market by 2024, Wood Mackenzie said in a recent report. Some 30% of new U.S. utility-scale projects will use bifacial systems by 2025, according to the US National Renewable Energy Laboratory (NREL).

A new study by German developer Enerparc shows how optimization of key bifacial parameters such as albedo (ground reflectance) and tilt angles can significantly boost power production.

Over a year, Enerparc studied the performance of bifacial panels at an operational solar facility in southern Germany. Enerparc has developed over 3 GW of PV projects globally, including over 1 GW in Germany.

The study showed that for plants with fixed structures, high ground coverage ratios and a typical albedo of around 20%, bifacial modules can increase output by 4%, Miriam Guari Borrull, Systems Engineer at Enerparc, told the conference in Munich on March 6.

Bifacial modules introduce a greater number of performance variables and some are key to boosting output.

Operators can double the bifacial gains by using commonly-available materials like gravel to improve ground reflectance, Borrull said.

"When we [use] an artificial albedo we [found] a simulated bifacial gain of 8%," she said.

Winter boost

To perform the tests, Enerparc installed 10 strings of bifacial modules under the same conditions as monofacial modules.

Enerparc used standard row layouts and simple and proven installation methods and assumed a fixed tariff revenue arrangement.

The bifacial modules had 290 W frontside power and 75% bifaciality. The modules were fixed using standard mounting structures at a height of 0.7 meters, a base case tilt angle of 20 degrees and 3.5 m row spacing.

The ground coverage ratio was 65% and albedo (ground reflectance) was measured at 17%.

Over the whole year, the bifacial gain was 4%, but this rose to over 7% during winter, Borrull said.

Gains increased in the winter due to lower temperatures, higher levels of diffuse irradiance which reaches the rear side of the module, and snow coverage, she said.

Some developers are now exploring bifacial projects in northern regions of Europe and North America to capitalize on the high reflectance qualities of snow.

As fixed tariff subsidies expire in the coming years, bifacial plant operators could take greater advantage of higher wholesale prices in the winter.

                   Average wholesale power prices in Central Western Europe

                                                           (Click image to enlarge)

Source: European Commission's quarterly electricity market report

Revenue bounce

In its tests, Enerparc found that the type of ground surface has a dramatic impact on the albedo and the gain in output was directly proportional to the increase in albedo, Borrull said.

Fresh snow was estimated to have an albedo of around 80 to 95%, compared with 15 to 25% for green grass and 10 to 20% for bare soil, she said.

For sites with similar conditions, operators might look to use quartz-sand gravel, limestone gravel or open-pored concrete to increase albedo, Borrull said.

"Of course you have to keep in mind biodiversity and which material you have available [close by]," she said.

In the U.S., NREL is currently developing the first ever database of albedo values for different regions and different types of ground surface.

Data collected will include types of vegetation and soil, data from surface radiation, CO2, water and energy flux networks.

Another key performance driver is the tilt angle of the modules and the optimum tilt angle depended on the ground coverage ratio of the modules, Borrull said.

For a 30% ground coverage ratio, the optimum tilt angle was around 30 to 40 degrees while for a 55% ground coverage ratio, the optimum tilt angle was around 20 degrees, she said.

Future uses

Creative installation of bifacial modules could open up new deployment opportunities.

"There are lots of different use cases. One case could be dual-use of the available area, for example agri-PV," Armin Scherl, Head of System Engineering at Enerparc, told the conference.

PV panels can even be installed vertically, for example to serve as fences or noise prevention, and this can have additional benefits, Scherl said.

The vertical installation of PV panels facing east-west can help to match up supply with peak demand periods—and higher wholesale prices-- in the morning and evening, he said.

"The feed in curve comes really close to the curve of demand-- with the morning and the afternoon peak," Scherl said.

"This could make sense for the future...where we sell energy on the spot market and not on fixed tariffs," he said.

Robin Sayles

On March 28, Spain tightened nationwide coronavirus restrictions, prohibiting all "non-essential" outside work, including construction, for two weeks.

The move came as Spain's daily coronavirus mortality rate rose above 800 and its total death toll was the second-highest in the world after Italy. Some experts predict European nations will require lockdowns of varying severity for months.

Spain's solar sector has been booming as developers race to meet construction deadlines and falling costs spur unsubsidized projects. Prior to the crisis, Spain was forecast to install 3.5 to 4 GW/year of new capacity in the next five years, according to SolarPower Europe.

Following the latest lockdown, project partners are working together to limit delays and maintain the integrity of the industry.

Spanish utility Iberdrola will now halt construction work on six new projects it is developing in Extremadura, the company told New Energy Update.

However, the company will continue planning for this 2 GW of new capacity and is implementing measures to minimize job losses down the supply chain, the company said.

Iberdrola is "supporting our suppliers so that they are not forced to take measures that could be irreparable to their future activity," it said.

Common objective

Spain's solar suppliers are aligning company and worker goals to minimize the length of project delays, Jose Donoso, chief executive of Spanish solar industry group UNEF, told New Energy Update.

Iberdrola does not expect significant delays to projects currently under construction, the company said.

Spanish solar companies are adopting smart home-working practices and workers unable to work are required to take paid holiday for the initial 15-day period, Donoso said.

When the crisis is over, employees will be required to make up the lost hours of work, presumably through overtime or not taking paid holiday, he said.

This will enable companies to minimize delays and limit the impact on worker income, he said.

There is a general understanding along the supply chain that force majeure will apply during the coronavirus crisis, Donoso said.

Depending on the contract, force-majeure can excuse non-performance, adjust commercial terms according to market conditions, or in some cases, terminate the contract.

Subsidy payments will also remain valid, despite project disruption, Donoso added.

“All parties involved in contracts will understand it,” he said.

Projects developed without subsidized tariffs could face greater challenges in the coming months as developers seek to secure long-term power purchase agreements (PPAs) with businesses amid an uncertain economic outlook.

Critical operations

The latest restrictions also allow "essential" operations and maintenance (O&M) to continue at existing solar plants.

Iberdrola is able to continue O&M activities at its operational solar assets, the company said.

“The company has established a rigorous health and safety system, aligned and coordinated with the administrations responsible," the spokesperson said.

O&M workers in Spain are encouraged to travel in single occupancy vehicles and are provided with personal protection equipment, including masks and gloves, UNEF said in a statement March 24.

The staff are given documents approving their right to move around during the day and operators are using remote online monitoring tools to minimize labor needs, it said.

Grid-ready

After rapid construction last year, Iberdrola's giant 500 MW Nunez de Balboa PV project is now set to start commercial operations slightly later than planned.

Europe's largest solar facility, Nunez de Balboa is located on a 2,470-acre (1,000-hectare) site in western Extremadura and was due online in Q1. Funded by European and Spanish banks, the facility is expected to produce 832 GWh of power per year and Iberdrola has signed long-term power purchase agreements (PPAs) with Kutxabank, telecoms group Euskaltel and supermarket group Uvesco. The remainder of the power will be sold to retail customers or the wholesale market.

Construction was completed in December and Iberdrola has completed all testing, including energization, and set up the O&M team, the company told New Energy Update.

Iberdrola is now awaiting one single registration document before it can start operating the plant.

“This procedure could be temporarily affected by the [coronavirus] alarm status, but we do not foresee [a significant] impact from this situation in our renewable development plans,” the company said.

Reporting by Neil Ford

Editing by Robin Sayles

Half of US solar workers impacted by COVID-19 cuts, survey shows

Some 55% of US solar workers have been laid off or are working at reduced hours or lower pay due to the ongoing COVID-19 pandemic, according to a survey performed by the US Solar Energy Industry Association (SEIA).

The findings are based on a survey conducted between March 22 and April 10. The participants represented 34,000 jobs, around 15% of the solar workforce.

          Impact of COVID-19 on US solar jobs

                                 (Click image to enlarge)

Source: Solar Energy Industry Association (SEIA)

Late last month, SEIA said 40% of solar companies had reduced their staff numbers and warned the situation was worsening.

Since the outbreak of the virus, Wood Mackenzie Power & Renewables has reduced its US solar market outlook for 2020 by 18%, from 19.6 GW to 16.0 GW.

Before the crisis, US solar employment was forecast to rise by 7.8% this year to 269,500 jobs as new installations soared to record levels, the Solar Foundation said in its National Solar Jobs Census in February.

Employment in solar installation, the largest job sector, was expected to grow by 9.5% this year, adding around 15,000 jobs to the US economy, the Census showed. Employment in operations and maintenance (O&M) was expected to rise by 4%, equivalent to 463 new jobs nationwide, it said.

"This once again is testing our industry’s resilience, but we believe, over the long run, we are well positioned to outcompete incumbent generators...and to continue growing our market share,” SEIA said last month.

UK solar output hits new record as lockdowns cut pollution

Reductions in pollution due to the COVID-19 lockdown helped UK solar production hit record levels on April 20, the UK Solar Trade Association (STA) said.

Solar supply peaked at 9.68 GW at 12:30 local time, surpassing the previous record of 9.55 GW set on May 14, 2019.

“Ideal weather conditions and lower levels of pollution than normal mean solar is providing record levels of cheap, clean power to the grid," STA said.

Across Europe, COVID-19 lockdowns have sliced power demand, increased the share of renewable energy, and depressed prices.

                Impact of COVID-19 on UK power demand (April 14)

                                                         (Click image to enlarge)

Source: UK National Grid ESO

At its peak, solar power supplied almost a third of UK electricity and had helped keep coal-fired power stations offline for 11.5 consecutive days, STA said. This could increase further in the coming days.

"As the lockdown and good weather continues, it is expected that more solar generation records will be broken," it said.

New Energy Update

The COVID-19 crisis has created both supply and demand problems for PV component suppliers.

Lockdowns and travel restrictions have severely disrupted supply chains and delayed new projects, slicing demand outlooks.

Analysis group IHS Markit now predicts annual global PV installations will fall 16% this year to 105 GW, the research group said March 31.

Europe could see a much larger drop, IHS Markit said. Previously, the group had predicted installations in Europe would rise by 5% in 2020 to 24 GW.

       Global annual PV installations by region

                                (Click image to enlarge)

Source: IHS Markit, March 2020

Leading inverter suppliers like Germany’s SMA Solar and Spain’s Power Electronics are adapting their businesses to meet the short and long-term challenges of the COVID-19 crisis.

SMA's inverter orders were strong before the crisis and the company is maintaining full output capacity. SMA still expects to sell 14 to 15 GW of inverters this year, compared with 11.4 GW in 2019, Ulrich Hadding, the group's Chief Financial Officer, told New Energy Update.

The pandemic will "certainly have an impact on demand over the next three to four months, after which we expect a strong recovery," Hadding said.

Power Electronics, the largest supplier of inverters to US utility-scale projects, is also maintaining its 2020 US outlook, at 12 GW, a similar level to 2019 when early safe harbour orders to meet tax credit deadlines boosted order numbers.

"It’s hard to say how packed Q3 and Q4 will become, or how compacted Q4 will be if we see too many push outs into that quarter...this is uncharted territory for all of us," Ron Puryear, Vice President and General Manager of Power Electronics, said.

"The secret sauce will be whether or not the panels can catch up to the project time lines," Puryear said.

IHS Markit expects a ”limited overspill” of US utility-scale projects to shift from H2 2020 to H1 2021, Cormac Gilligan, an associate director at IHS Markit, said.

Developers and EPCs are likely to safe harbour key components in a similar way to 2019 to fulfil end of year tax credit deadlines, he said.

Securing parts

Component supply remains a challenge for inverter groups and SMA has activated "second source" suppliers in countries and regions that are less affected by COVID-19 restrictions, Hadding said.

Transport capacity limitations have increased costs, he warned.

Grounded passenger flights have severely curbed air freight options while sea freight container capacity is also limited, Hadding said.

The company is working closely with suppliers to find solutions, he said.

"Typically, air freight costs negatively impact gross margins in the low single digits in gross margins terms," Miguel De Jesus, a solar market analyst at IHS Markit, told New Energy Update.

Power Electronics sources components from Europe, where most countries have been locked down for weeks.

For now, Power Electronics is running its US factory in Arizona at full capacity, Puryear said.

The US division holds a large inventory of components and is well-placed "to weather the storm, but not if things remain locked down for another month or two," he said.

Spain and Italy have seen the greatest number of factory closures and most European countries are starting to ease restrictions as death tolls soften. On April 13, the Spanish government allowed manufacturing and construction to restart after a two-week ban of all non-essential work.

"We seem to be in good shape with our current suppliers keeping up," Puryear said.

Full output

Along with common measures such as face masks, SMA has adapted production processes to protect employees and maintain 100% production capacity.

Using flexible working arrangements, SMA is able to adjust production at short notice and fulfil customer orders, Hadding said.

"Our production has been highly flexible even before the crisis...we are working with temporary workers, etc," he said.

"Even in Europe...many PV inverter manufacturers have been able to maintain manufacturing levels with limited to no disruption due to their businesses being associated with critical businesses such as energy," De Jesus said.

To minimize the financial impact, SMA has taken advantage of liquidity protection measures introduced by various countries, including measures that delay tax and social security payments, Hadding said.

"Those measures will be upheld as long as legally feasible," he said.

Price impact

Experts predict the ongoing COVID-19 crisis will lead to slower falls in inverter prices than seen in previous years.

"As PV inverter prices are already at low levels, IHS Markit forecasts price declines of 10% year on year...in some years historically, price reductions have exceeded 20%," Gilligan said.

"The planned decline of our sales prices might soften a bit, for specific products in certain countries we might even see price increases," Hadding said.

The inverter market has seen significant consolidation in recent years. Suppliers such as Advanced Energy, Satcon, Bonfiglioli and Bosch have exited the market while Siemens and Fimer have both acquired inverter businesses.

Hadding predicts further consolidation in the inverter supply chain in the coming years.

"It will become more difficult to keep up a smooth supply chain. Supply security will get a higher priority compared to low prices," he noted.

"Given the rapid reduction of demand in certain markets globally, it is expected that some consolidation will occur and suppliers will consider numerous options such as divestment, mergers or full exit," Gilligan said.

Survival strategy

For the wider PV sector, the swamping effect of the COVID-19 pandemic risks demoting the importance of the global climate challenge.

The increasing competitiveness of solar power plants will help companies tackle the long-term challenges and green deals between governments and the private sector could help accelerate the wider recovery.

Despite the current challenges, SMA is maintaining its 2020 financial outlook of a sales increase of 1.0 to 1.1 billion euros ($1.1-$1.2 billion) and EBITDA increase of 50 to 80 million euros. Going forward, the company is implementing additional measures to improve the flexibility and cost effectiveness of its operations, Hadding said.

As the renewable energy market grows, diversification will be key to ensure business stability.

"We see good growth potential over the coming years for SMA in the field of digital energy solutions, but also storage system technology, and services such as operations and maintenance (O&M) for utility-scale PV power plants," he said.

For Power Electronics, key growth markets include energy storage and electric vehicles.

"Our move into the electric vehicle business has been a good one, we have big long term plans here," Puryear said.

Robin Sayles

PV price drop set to continue as cells improve

PV prices will continue to fall based on historic learning rates of over 23% in the coming years, due to improvements in wafer and cell performance, advances in bifacial cells and improved layouts, according to the latest annual Photovoltaic Roadmap (ITRPV), published by German engineering industry group VDMA.

This implies selling prices will fall by over 23% for every doubling in cumulative PV shipments.

The ITRPV summarizes over 100 parameters along the crystalline silicon (c-Si) PV value chain, using insights from 57 leading international PV component suppliers.

Monocrystalline silicon (mono-Si) wafers will represent 75% of the market in 2020 and this share will grow in the coming years, the report said.

By 2030, multi-crystalline silicon (mc-Si) wafers will represent only 5% of the market, it said.

Wafer sizes will continue to rise and efficiencies of PERC p-type mono-Si modules are forecast to rise from 203 W/m² in 2020 to 225 W/m² in 2030, the report said. N-type cell concepts could be 5 W/m² higher, it said.

Heterojunction technology (HJT) modules will achieve area efficiencies of 210 W/m² in 2020 and will outperform other c-Si module types to reach close to 240 W/m² within 10 years, it said.

Trina Solar's new large module certified at 516 W

Trina Solar's new 500 W module has been certified by German independent testing group TUV Rheinland at a power output of 516 W and 600 W models are on the horizon, the Chinese group announced April 24.

Trina started commercial production of its new "Vertex" large module on March 18 and shipped its first order on March 27, the company said.

“With the development and improvement of the industry chain, especially the improvement in glass supply capacity, adding another column of cells to the existing five-column layout design can increase the Vertex module’s power output to more than 600W," Yin Rongfang, Vice General Manager and EVP at Trina Solar said in a statement.

Rising PERC+ cell conversion efficiency combined with optimized module design and installation will drive further increases in power output, Rongfang said.

"This provides the direction and path for the iterative development of PV modules, which will further drive the continuous decrease in the balance of system (BoS) and levelized cost of energy (LCOE) of PV systems,” he said.

Global inverter shipments rise 18% in 2019

Global PV inverter shipments grew by 18% in 2019 as US developers safe-harbored inverters to meet tax credit deadlines and replacement activity climbed, Wood Mackenzie said in a new report.

The top five inverter vendors-- Huawei, Sungrow, SMA, Power Electronics and Fimer-- retained around 56% of the global inverter market, Wood Mackenzie said. The top 10 suppliers retained a market share of around 76%, it said.

                                   Global inverter shipments in 2019

                                                               (Click image to enlarge)

Source: Wood Mackenzie

The COVID-19 outbreak has severely disrupted solar supply chains and delayed new projects. Analysis group IHS Markit now predicts annual global PV installations will fall 16% this year to 105 GW, the research group said March 31.

Amid COVID-19 lockdowns, inverter suppliers have been working hard to maximize output.

SMA's inverter orders were strong before the crisis and is maintaining full output capacity, Ulrich Hadding, CFO of SMA, told New Energy Update last month.

The company still expects to sell 14 to 15 GW of inverters this year, compared with 11.4 GW in 2019, Hadding said.

The pandemic will "certainly have an impact on demand over the next three to four months, after which we expect a strong recovery," Hadding said.

Power Electronics, the largest supplier of inverters to US utility-scale projects, is also maintaining its 2020 US outlook, at 12 GW, a similar level to 2019 when early safe-harbor orders to meet tax credit deadlines boosted order numbers.

Reduced transport and supply chain options are increasing inverter costs and this will lead to slower falls in prices than seen in previous years, suppliers warn.

"As PV inverter prices are already at low levels, IHS Markit forecasts price declines of 10% year on year...in some years historically, price reductions have exceeded 20%," Cormac Gilligan, an associate director at IHS Markit, said.

"The planned decline of our sales prices might soften a bit, for specific products in certain countries we might even see price increases," Hadding said.

New Energy Update

COVID-19 restrictions are impacting short and long-term strategies of wind and solar developers.

In Europe and US, factory closures have cut demand and short-term power prices. Supply chain disruptions have delayed project schedules and increased costs.

The pandemic is also delaying the signing of long-term power purchase agreements [PPAs] critical for most large-scale renewable energy projects.

PPA demand was surging before the crisis but business closures and the looming global downturn is impacting credit ratings and lower power demand has created uncertainty over future wholesale prices.

      UK spot power prices in 2020 versus historic

                                (Click image to enlarge)

Source: NordPool

Amid the uncertainty, companies are postponing PPA decisions or negotiating for better terms, Paolo Ghezzo, Head of Renewables Independent Engineering at consultants RINA, told New Energy Update.

Prices must be high enough to mitigate offtaker risks and many developers may wait for prices to recover more towards pre-COVID-19 levels, Martin Scharrer, Head of Legal (Energy & Investments) at German solar and wind power investor Encavis, said.

“Projects are not as attractive as they need to be for investors, especially purely financial investors,” Scharrer said.

"It might take some time until we are back to the prices before Corona," he warned.

Group effort

The economic fallout of COVID-19 will impact the creditworthiness of offtakers large and small. Risks will differ between country and sector.

Large corporates with strong balance sheets led early growth in renewable energy PPAs, but falling wind and solar costs have enticed a wider range of smaller, riskier offtakers into the market.

In 2018, 75 companies entered into corporate renewable energy PPAs in the US, compared with 31 in 2017, according to the Rocky Mountain Institute's Business Renewables Center (BRC).

Increasing use of layered PPA structures which aggregate demand from a number of offtakers could help mitigate risks, Daria Nochevnik, Principal Advisor at ECS Consulting, said.

Layered PPA structures allow smaller firms to buy power from larger projects, or spread risk across a range of different renewable assets, Nochevnik, also a communication lead at the European Federation of Energy Traders (EFET), said.

Many smaller firms seek shorter PPA contracts and this has spurred the layering of multiple contract tenors, requiring an in-depth understanding of regional power trends. The spread between PPA and wholesale prices varies between country, depending on market-specific factors such as liquidity and national regulation.

Utility squeeze

The credit risk of utilities—major buyers of renewable energy-- is also under pressure, Uday Varadarajan, Principal, Electricity at Rocky Mountain Institute (RMI), told New Energy Update.

The impact on the utility depends on the regulatory regime it operates in and its exposure to COVID-hit companies, Varadarajan said.

“If the regulatory regime includes measures to decouple the volume of consumption from total collections in a timely fashion, then the utility’s revenues are likely to be resilient to this crisis in the near term - and the counterparty risk is likely to be minimal”, he said.

If a prolonged downturn prevents customers from paying their bills, liquidity becomes an issue, Varadarajan said.

“This could be a concern for utilities like Pacific Gas & Electric (PG&E), already reeling from recent events”, he said.

PG&E filed for Chapter 11 bankruptcy protection in January 2019 after several deadly wildfires left it with billions of dollars of potential liabilities.

The Californian utility is offtaker for Berkshire Hathaway's 550 MW Topaz PV plant in San Luis Obispo County. On April 22, Fitch Ratings affirmed senior notes for the facility at "C," a very high level of credit risk, due to its exposure to PG&E.

"Material changes in revenue and cost profile are occurring across the power sector in the U.S. and likely to worsen in the coming weeks and months as economic activity suffers and government restrictions are maintained or expanded," Fitch warned.

Tighter contracts

The COVID-19 crisis will bring greater scrutiny of PPA contracts, particularly in the negotiation of force majeure clauses, Scharrer said.

Companies may look to extend the period for which counterparties under force majeure are unable to terminate the contract, typically set at around 180 days, Scharrer said. Contracts may also include greater detail on risks from health and safety issues, he said.

Legal mechanisms of force majeure claims will become more prominent, while pandemic insurance options may also be introduced, Nochevnik said.

More standardization of contract terms across the industry should help mitigate risks and speed up negotiations.

Last year, EFET launched a new standard corporate power purchase agreement (CPPA) which includes terms on force majeure, change of law and termination due to non-delivery or insolvency.

Long view

The long-term impact of COVID-19 on PPA demand and prices will depend on the length and breadth of the economic fallout.

Forward power markets in Europe indicate prices could return to levels seen before the pandemic in two to three years, Guy Brindley, Senior Analyst at industry group WindEurope, told New Energy Update.

If short-term prices remain low, some developers may still sign PPA contracts, confident they will still make long-term savings, Brindley said. Other project owners with adequate equity financing may take on merchant risk for two or three years then negotiate PPA contracts, he said.

Countries keen to stimulate new build activity could reintroduce short-term support measures such as feed in tariffs, Scharrer said.

"It could be useful in my opinion to get the economy bouncing back quicker...plus the countries still have to fulfil their targets for renewable energies in [their] climate action plans,” he said.

Green engine

Despite the wider economic crisis, the fundamentals behind long-term PPA growth remain strong, experts said.

Falling technology costs and sustained low cost of finance have propelled renewable energy growth and these trends will continue going forward, Oyvind Breivik, head of energy communications at aluminium group Norsk Hydro, a major buyer of renewable power, said.

“Now, we are seeing even lower interest rates, and many believe this will last for a long time,” he noted.

Based on cost, PPA activity could swing in favour of solar in the coming years, Wood Mackenzie Power and Renewables said in a report published in 2019.

Falling solar costs, battery storage synergies, and favorable solar resource profiles could see U.S. corporate demand for solar soar past wind from 2021, the research group said.

                   US corporate demand for wind, solar (aggressive forecast)

                                                          (Click image to enlarge)

Wood Mackenzie report 'Analysis of commercial and industrial [C&I] wind energy demand in the U.S,' August 2019.

Rising renewable energy targets at both a national and corporate level will continue to spur activity.

Amid the pandemic, the European Commission and European Council have reaffirmed their commitment to carbon neutrality by 2050 and pending EU-level Green Deal legislation will help support growth, Nochevnik said.

“PPAs and corporate PPAs in particular will remain a key instrument for facilitating the uptake of renewable energy in Europe in a cost-effective way," she said.

Reporting by Neil Ford

Editing by Robin Sayles

COVID-19 cuts 65,000 US solar jobs, cancels 50,000 new roles

The US solar industry has cut 65,000 jobs due to COVID-19 and cancelled the creation of around 50,000 positions, the US Solar Energy Industry Association (SEIA) said in a statement May 18.

By June, the solar workforce is expected to fall to 188,000 personnel, dragging the industry back to 2014 levels, SEIA said.

Before the crisis, US solar employment was forecast to rise to 302,000 jobs this year as new installations soared to record levels, SEIA said. The Solar Foundation was less bullish, predicting job numbers would rise by 7.8% this year to 269,500 in a pre-COVID-19 census.

Since the outbreak, worker restrictions and supply chain issues have delayed solar construction and slowed new investments.

Some 3 GW of US solar capacity is now expected to be installed in Q2, 37% lower than forecast before the pandemic, SEIA said May 18.

Since COVID-19, Wood Mackenzie Power & Renewables has reduced its 2020 US solar market outlook by 18%, from 19.6 GW to 16.0 GW.

Solar, wind and hydro industry groups have called on Congress to extend tax credit deadlines for renewable energy projects to prevent further job losses.

“Thousands of solar workers are being laid off each week, but with swift action from Congress, we know that solar can be a crucial part of our economic recovery,” Abigail Ross Hopper, president and CEO of SEIA, said in a statement.

Private equity group buys SunPower O&M business

Canadian private equity group Clairvest has acquired SunPower's solar operations and maintenance (O&M) business, Clairvest said May 14.

The new O&M company has been renamed NovaSource and Clairvest will support the O&M team in a management buyout, the company said.

NovaSource provides O&M services to 3 GW of commercial and utility-scale assets across nine countries.

“NovaSource can capitalize on our industry’s tail winds and the expected growth of installed solar assets over the next ten to fifteen years," Jack Bennett, CEO of NovaSource, said in a statement.

Pre-COVID-19, annual global solar O&M spending was forecast to double to $9.4 billion by 2024, as installed capacity grows, Wood Mackenzie Power and Renewables said in a report published in October 2019.

Annual solar installations were forecast to rise to 120 GW-125 GW in the early 2020s, driven by growth in emerging markets, WoodMac said in July 2019.

By 2022, some 19 countries were forecast to install between 1 and 5 GW of solar power per year, compared with just seven countries in 2018, WoodMac said. New growth markets include Saudi Arabia, France and Taiwan, it said.

            Forecast solar markets by annual installations (Pre-COVID-19)

Source: Wood Mackenzie Power and Renewables, July 2019.

In 2018, SunPower sold 4.7 GW of utility-scale solar projects to Clearway Energy Group, a subsidiary of Global Infrastructure Partners (GIP).

Last November, SunPower announced it would split its business into a SunPower services company and a separate panel manufacturer, renamed Maxeon Solar. On May 15, China's Tianjin Zhonghuan Semiconductor Co. received Chinese regulatory approval to invest $298 million in Maxeon Solar.

"Today's [Maxeon] announcement puts us one step closer toward creating two independent, pure play, publicly-traded companies," Tom Werner, president and CEO of SunPower said.

"Our planned transaction will allow for each company to focus on their core strengths in their respective markets around the world," he said.

Giant Nevada solar-storage project wins federal approval

Quinbrook Infrastructure Partners has received full federal approval for its groundbreaking 690 MW Gemini solar plus storage project in Nevada, the company announced May 11.

The U.S. Department of Interior has approved the $1.1 billion project, following a favorable Final Environmental Impact Statement (FEIS) in December, Quinbrook said.

“This final decision officially clears the pathway for Quinbrook, and our development partners at Arevia, to accelerate completion of detailed project designs and procurement plans for one of the world’s largest renewables projects," David Scaysbrook, Co-Founder and Managing Partner of Quinbrook, said.

Following the approval, Quinbrook launched a new company called Primergy to manage the Gemini project and develop or acquire further PV and storage projects across North America.

Located 33 miles north east of Las Vegas, the Gemini plant will include a 380 MW AC battery storage system, providing 2,125 MWh of storage capacity, proposal documents show.

Nevada utility NV Energy has agreed to purchase the entire capacity of the project under a 25-year power purchase agreement (PPA). The storage will be used to supply power in the early evening peak demand period.

NV Energy has also agreed to purchase power from the Arrow Canyon and Southern Bighorn solar plus storage projects, currently being developed by EDF Renewables North America and 8minute Energy, respectively.

US to double renewables plus storage plants by 2023

The number of US solar and wind assets co-located with batteries will double from 53 in 2019 to 109 by 2023, according to the US Energy Information Administration's latest inventory of power plants.

The number of renewables plus storage plants has tripled since 2016. Texas currently hosts almost half of this capacity and Nevada will soon rival Texas as giant projects such as Quinbrook's Gemini solar plant come online.

                          Top 10 US states for renewables plus storage 

                                                               (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA), Preliminary Monthly Electric Generator Inventory

Renewables developers are building larger projects to benefit from economies of scale. The average renewable capacity at new coupled facilities is forecast to hike from 34 MW in 2019 to 75 MW by 2023 while average battery capacity will soar from 5 MW to 36 MW, EIA said.

The storage of excess energy is the most common application for co-located batteries but the majority of facilities serve more than one function, EIA noted. Frequency regulation, system peak shaving and backup power are also common applications.

New Energy Update

As solar and wind operators battle through COVID-19 restrictions, lower wholesale prices have raised concerns over future revenue streams.

In Europe and US, factory closures have cut power demand, lowered prices and increased the share of renewable energy. The signing of long-term power purchase agreements (PPAs) has slowed as the looming downturn creates uncertainty over future demand.

Higher renewable energy shares during COVID-19 have raised fresh concerns over future "price cannibalization." Wholesale power prices were already soft as growing solar and wind capacity lowers marginal generation costs. As renewables penetration grows and subsidies expire, this will impact all solar and wind projects.

   Spot power prices in Central Western Europe in Q4 2019

                                 (Click image to enlarge)

Source: European Commission's Quarterly Electricity Market Report. Data source: S&P Global Platts

On Easter Sunday, strong UK solar and wind output combined with a nationwide lockdown to push daytime intraday prices between 11:00 a.m. and 6:30 p.m. below night-time prices, Tim Dixon, Wholesale Team Leader at Cornwall Insight, said in a research note. Across Europe, negative prices and curtailments have become more frequent during the lockdowns.

"The trends observed over the weekend are perhaps a sign of things to come as we move into a world with greater levels of embedded and intermittent sources of generation," Dixon said.

"It is likely that many of these trends will be exacerbated...causing greater cannibalization and volatility in wholesale power prices," he said.

Many operators are now preparing for these risks by developing storage solutions or offering a wider range of grid services. As solar and wind capacity continues to grow, new support mechanisms may also be required.

Contract cover

Despite the current challenges, many developers remain bullish on solar and wind growth as technology gains and economies of scale bring further cost reductions. Large-scale projects are now being developed subsidy-free, typically combining PPAs with some merchant market exposure.

In Europe, the spread between PPA and wholesale prices varies between country, depending on market-specific factors such as liquidity and national regulation. As PPA liquidity grows, prices should converge towards wholesale market levels.

                                        Levelized cost of wind, solar

                                                             (Click image to enlarge)

Source: Lazard consultancy's Levelized Cost of Energy Analysis, Version 13.0 (November 2019)

Lightsource BP's solar construction pipeline remains "very strong" and the group continues to receive interest from financial investors, Adele Ara, Director of Asset Management at the UK-based developer, told New Energy Update.

Lightsource develops solar assets in Europe, North America and Asia. In Europe, the group has developed over 1.3 GW of capacity and invested $3.4 billion since 2011. The company also provides O&M services to over 2 GW of projects.

Lightsource's assets have remained "resilient" during the COVID-19 price slump due to a mix of PPAs and subsidies, Ara said.

The group’s portfolio consists of grid-connected projects supported by feed in tariffs or PPAs, and long-term behind-the-meter contracts with industrial or commercial users.

The PPAs for the grid-connected projects vary in length and are as short as 12 months for some older subsidized solar projects, Zosia Riesner, Director of Power Markets, Europe at Lightsource BP, told New Energy Update.

Smaller offtakers typically seek shorter PPA contracts and many developers of larger projects are aggregating multiple offtakers or layering multiple contract tenors to secure sales.

Lightsource's long-term behind-the-meter PPAs have some volume exposure to industrial or commercial demand, Riesner said.

"Among our customers we have factories and large energy intensive sites. During COVID-19, for some sites there has been a shutdown period where demand has reduced and that has had a volume impact, meaning either more electricity has been exported to grid or that solar farm’s output has been curtailed," she said.

The COVID-19 crisis will bring greater scrutiny of new PPA contracts, particularly in the negotiation of force majeure clauses which allow termination of contract. More standardization of contract terms across the industry should help mitigate risks and speed up negotiations.

Stacking revenues

The current demand crunch has increased the prevalence of negative prices during times of high solar and wind output, highlighting the renewables disruption underway.

As battery costs fall, operators see energy storage as a key way of reducing these price risks.

          European installed utility-scale battery capacity by country

                                                          (Click image to enlarge)

Source: European Commission's Quarterly Electricity Market Report (Q4 2019).

An increasing number of wind and solar developers are co-locating storage technologies. The number of US solar and wind assets co-located with batteries will double from 53 in 2019 to 109 by 2023, according to the US Energy Information Administration's latest inventory of power plants.

Solar developers are increasingly looking to shift peak supply to times of higher prices. Wind operators like ScottishPower are also building energy storage facilities to mitigate wind intermittency.

"Increased volatility and greater price differentials between periods of low and high demand will produce arbitrage opportunities, something that will be welcomed by storage operators and flexible generation," Dixon said in his note.

Grid services such as reactive power and frequency response offer additional revenues, provided appropriate regulation is implemented.

Reactive power maintains grid voltage levels to allow greater energy transport along existing networks, while fast frequency response helps maintain grid active power requirements.

In solar plants, operators can use inverters to adjust voltage to provide reactive power services.

In November, Lightsource became the first UK solar operator to provide reactive power services at night.

The trial was performed at Lightsource's 4 MW St Francis solar plant in East Sussex and forms part of the 'Power Potential' reactive power initiative led by National Grid ESO and UK Power Networks. The network operators plan to create a reactive power market for distributed energy that will increase capacity in the south-east by 4 GW.

"This innovative trial, which forms part of our Power Potential project, is an exciting first step," Biljana Stojkovska, project lead at National Grid ESO, said in a statement.

"We look forward to seeing it progress over the coming months as we explore new reactive power markets for distributed energy resources," Stojkovska said.

Green future

Over the long term, the overarching need to reduce carbon emissions will drive growth in solar and wind.

Amid the pandemic, the European Commission and European Council have reaffirmed their commitment to carbon neutrality by 2050 and pending EU-level Green Deal legislation will support renewables growth. Over the long term, the electrification of transport and heating sectors will apply upward pressure to power prices.

Commercial PPAs will continue to underpin solar and wind investments but if prices fall too low across crucial production hours, governments may need to re-impose support mechanisms.

EU members will likely require "revenue stabilization" measures like the UK's contract for difference (CFD) model to meet carbon reduction targets, Alessandro Boschi, Head of Renewable Energy at the European Investment Bank (EIB), told S&P Global Market Intelligence April 23.

The COVID-19 crisis could accelerate moves towards such measures as EU states look to avoid project defaults, Boschi said.

A surge of defaults would "deter investment...you don't want that to happen," he said.

Reporting by Beatrice Bedeschi

Editing by Robin Sayles

Global PV costs fall by 13% as module pressure continues

The global average levelized cost of energy (LCOE) of new solar plants fell by 13% in 2019 to $68/MWh, the International Renewable Energy Agency (IRENA) said in its latest annual Renewable Power Generation Cost report.

The average installed cost of utility-scale PV fell by 18% last year to $995/kW, the agency said.

The cost of mainstream module technology fell by 14% in 2019 to $0.27/W. Prices in December 2019 ranged from $0.21/W for low-cost modules to $0.38/W for all-black modules, it said.

PV prices will continue to fall at learning rates of over 23% in the coming years, due to improvements in wafer and cell performance, advances in bifacial cells and improved layouts, according to the latest annual Photovoltaic Roadmap (ITRPV), published by German engineering industry group VDMA last month. This implies selling prices will fall by over 23% for every doubling in cumulative PV shipments.

Data for bifacial modules has become available as more developers opt for this technology, IRENA said.

Bifacial module costs were 56% higher than mainstream mono facial modules in 2019 and 18% higher than the most expensive options, it said.

  PV module prices by technology, supplier country

                                (Click image to enlarge)

Source: IRENA's 'Renewable Power Generation Costs 2019' report.

In recent months, bifacial module costs per Watt have been "within a close range of the higher performing monofacial options," IRENA said.

"This may support expectations of increased bifacial technology adoption in the market, given its potential for increased yield per Watt, compared to monofacial technologies," it said.

Bifacial systems are lowest cost option at over 93% of sites: study

Single-axis tracker bifacial plants are the lowest-cost option for 93.1% of global solar sites on a levelized basis, according to a new study by the Solar Energy Research Institute of Singapore (SERIS), published in the journal 'Joule.'

The researchers estimated the irradiance on both side of modules for different system designs. Performance calculations were validated against actual field data and extrapolated over a 25-year lifetime.

Single-axis tracker bifacial systems can increase energy yield by 35% and reduce the levelized cost of energy (LCOE) by 16% compared with conventional monofacial systems, the study said.

"Although dual-axis tracker installations achieved the highest energy production, due to their current high costs, they only reached the lowest LCOE values for locations very close to the poles," it said.

A regional sensitivity analysis showed that factors such as weather and local cost parameters can favor non-bifacial single-axis designs, the researchers noted.

For example, land cost and shading risks were not covered in the study.

US PV life expectancy rises to 32.5 years

The average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, according to a survey of project developers and consultants by the Lawrence Berkeley National Laboratory (Berkeley Lab).

Module manufacturers now typically offer warranties of 25 or 30 years. Many plant owners expect lifespans over 35 years, while very few anticipate lifespans below 30 years, the survey showed.

Life expectations also outstrip long-term power purchase agreements (PPAs), extending the "merchant tail" period exposed to power price risks, Berkeley Lab noted.

                                       Current life expectation of US PV plants

Source: Survey by Berkeley Lab, December 2019

Estimated lifetime operational expenditure (opex) was $17,000/MW/year in 2019, compared with $35,000/MW/yr in 2007, the survey showed. The latest opex estimates range between $13,000 and $25,000/MW/yr.

Operations and maintenance (O&M) costs have fallen significantly in recent years and were estimated at between $5,000 and $8,000/MW/yr in 2019, the laboratory said.

India's Adani wins world's largest solar build program

India has awarded Adani Green Energy Limited (AGEL) 8 GW of new solar projects, the world's largest ever solar development award, AGEL said in a statement June 9.

The projects will require $6 billion of investments and will be built over a period of five years. AGEL has also committed to build 2 GW of new solar cell and module manufacturing capacity in India by 2022, the company said.

The Adani group has launched a major clean energy investment drive and the new projects will double AGEL's renewable energy capacity. The group aims to install 25 GW of renewable power capacity by 2025 and become the world's largest solar power company.

In February, French oil major Total acquired a 50% stake in AGEL's solar business for around $500 million.

Total and Adani Green Energy Limited (AGEL) would create a 50/50 joint venture into which AGEL will transfer its solar assets, consisting of 2.1 GW of operational capacity and 475 MW of capacity under development, the French group said.

India aims to increase its installed renewable energy capacity from 81 GW in 2019 to 225 GW by 2022, which includes 50 GW of large-scale hydroelectric capacity.

New Energy Update 

A flurry of new desert solar projects is set to accelerate learnings in bifacial module technology.

In April, Saudi Arabia's ACWA Power signed an eye-wateringly low tariff of $17.0/MWh for a 900 MW solar plant in Dubai and said it would use bifacial panels and trackers. The $570 million project will increase the capacity of the Mohammed bin Rashid Al Maktoum Solar Park to 2.9 GW.

The 800 MW Al Kharsaah project in Qatar, the kingdom's first large-scale solar plant, will feature 2 million bifacial panels with trackers. The $500 million project is 60% owned by Qatar group Siraj and 40% owned by French oil group total and Japanese conglomerate Marubeni. The technology for Abu Dhabi's 2 GW Al Dhafra Solar PV project, signed at a record-low tariff of $13.5/MWh, is yet to be confirmed. The development consortium reportedly includes Jinko Solar, a manufacturer of bifacial and monofacial technology.

In the US, Nevada’s ground-breaking 690 MW Gemini solar-plus-storage project will also reportedly use bifacial modules. Last month, project owner Quinbrook Infrastructure Partners received full federal approval for the project.

Early performance data shows that bifacial modules can offer double-digit performance gains over monofacial designs, depending on site conditions and plant layout.

In desert environments, bifacial panels can increase power output by as much as 35% when using special ground treatments that improve ground reflectance (albedo), Rajit Nanda, Chief Investment Officer at ACWA Power, told New Energy Update. ACWA Power develops projects across the Middle East, North Africa, Southern Africa and Southeast Asia.

Normal ground albedo in desert condition ranges between 30% and 45% and ground treatment using materials such as white sand, limestone or man-made materials, can increase this to 75%-80%, Nanda said.

Until now, investor confidence in bifacial modules has been curbed by a lack of operational data. This should soon change, as the large projects built in the Middle East and US provide a swathe of technology and modeling insights.

No downside

Ground reflectance is a crucial driver of bifacial performance, making the US and the Middle East key growth markets.

The US installed its first wave of large-scale bifacial projects last year. By 2025, around 30% of new U.S. utility-scale projects will use bifacial systems, according to the US National Renewable Energy Laboratory (NREL). By 2028, bifacial cells could represent 40% of the global solar market, according to the International Technology Roadmap for Photovoltaic (ITRPV).

Cedric Andre Broussillou, Research Director at the Qatar Environment and Energy Research Institute (QEERI), is more bullish.

“I estimate bifacial technology will go well above 50% of the global utility-scale market in the next few years,” he said.

                          Forecast bifacial solar installations by region

                                                              (Click image to enlarge)

This chart was updated June 15 to show Wood Mackenzie's 'high adoption' forecast for bifacial panels (September 2019). Strong growth since the forecast means this is a "better representation of the market" than the base case, Wood Mackenzie said.

Source: Wood Mackenzie, September 2019

Early investments by European banks, including those by the European Bank for Reconstruction and Development in Egypt's Benban solar park, have helped to "de-risk the technology,” Broussillou said.

“They limited the risk by using conservative assumptions for the bifacial gain and accepted some additional cost to demonstrate that the technology can be trusted at large scale," he said.

From a construction and operation perspective, there is no downside to using bifacial panels, Nanda said.

“This is the same module with a back side which produces gain in generation...These modules are abundantly available and have the same level of redundancy in spares," he said.

Material gains

Proven long-term reliability of bifacial panels will be key to reducing investment risk.

While there is currently a limited track record for bifacial performance, the materials used, such as the glass used to replace plastic back sheets, are intrinsically as reliable as those on operational monofacial plants, Broussillou said.

Advances in PV cell design are also creating a wider range of bifacial supply options.

"All new cell technologies which are being developed (PERC+, PERT, TOPCon, HJT) can include a bifacial design with the grid pattern on the front and back thus making those cells compatible with a bifacial module packaging," he said.

Bifacial forecasts

Improvements in bifacial modelling accuracy will also help to increase investor confidence, Veronica Bermudez Benito, Senior Research Director, Energy at QEERI, said.

QEERI is developing solar forecasting models based on multi-variate machine learning methods.

“The next step is to integrate this solar forecast capability into PV production forecasting integrating the specificities of the different PV technologies,” Bermudez said.

Forecasting is particularly important for the latest giant projects that have signed record low tariffs.

“You really need to optimize your predictions to keep the estimation errors low, as a way to optimize your return on investment,” Bermudez said.

Reporting by Ed Pearcey

Editing by Robin Sayles

PV installs to bounce back in 2021 as economic aid kicks in 

Global solar installations are set to recover sharply in 2021, climbing 33.8% year-on-year to 149.9 GW following a boost from COVID-19 stimulus packages, industry group SolarPower Europe said in its latest annual Global Market Outlook (GMO).

Following COVID-19 lockdowns, SolarPower Europe has cut its forecast for 2020 from 144 GW, to 112 GW. Rooftop PV installations have been particularly affected, due to a lack of access to buildings and revised spending plans of households and business owners in the economic downturn, it noted.

Economic aid will help solar installations rebound in 2021 and reach a parity with pre-COVID estimates by 2022, when 168.5 GW of new capacity is forecast, the report said.

             Forecast global solar installations

                                  (Click image to enlarge)

Source: SolarPower Europe's 2020 Global Market Outlook (GMO).

State support packages include the European Union's 750 billion-euro ($847.3 billion) Next Generation EU plan, which will supplement a new European Green Deal, and Japan's $1 billion support package for corporate renewable power purchase agreements (PPAs).

"Now, governments have the opportunity to accelerate the energy transition and realize the structural benefits renewables can bring regarding economic development and job creation," SolarPower Europe said.

"With the right policies they can enable low-cost solar to reach its full potential and lead the energy transition," it said.

US solar installs set to rise by a third despite COVID

US solar installations are forecast to rise 33% in 2020 to 18 GW as strong demand for utility-scale projects outweighs the impact of COVID-19 lockdowns, according to the latest quarterly market report by the Solar Energy Industry Association (SEIA) and Wood Mackenzie. Prior to the crisis, the groups had forecast almost 20 GW of installations this year.

Some 14.4 GW of utility-scale projects are now forecast to be installed in 2020, the report said.

"Record utility-scale procurement totals in 2019 and Q1 2020 positioned the segment for a record year, even as large-scale projects face some construction delays and challenges in financing and developing early-stage projects," it said.

Installations of distributed solar projects are expected to drop by 31% in 2020 due to lockdown restrictions and lower investment appetite during the recession. By 2021, distributed solar activity will recover close to 2019 levels, the report said.

The US solar market is now forecast to install 113 GW of capacity in the period 2020-2025, down by 3.6 GW compared with pre-COVID predictions, it said.

                             Forecast US solar installations by segment

                                                                (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

Wood Mackenzie clips long-term O&M growth forecast 

Annual global spending on solar operations and maintenance (O&M) is forecast to hit $9.4 billion by 2025, a year later than forecast in October 2019, Wood Mackenzie said in a new report. Despite short-term COVID-19 challenges, total O&M spending will continue to rise as installed capacity grows and ageing plants require component replacement or repowering.

Some $4.1 billion of the spending will be in the Asia-Pacific (APAC) region, while $3.5 billion will be spent on projects in Europe Middle East and Africa (EMEA) and $1.8 billion in the Americas, the report said.

In Europe, inverter repowering will be a key driver of spending, Wood Mackenzie said. Inverters are typically replaced after around 10 years, sometimes earlier.

"More than 16 GW of systems are currently over ten years old. By 2025, that number will grow to 100 GW," it said.

Intense competition between O&M suppliers prompted further market consolidation in 2019. The top 15 O&M suppliers increased their global market share from 51% to 54%, Wood Mackenzie said. Of the 12 markets examined in the report, only Germany, the UK, the US and France showed no consolidation last year.

In Spain, the share of the O&M market held by the top five players soared from 9% in 2018 to 71% last year, it said.

New Energy Update

A recent survey by the Lawrence Berkeley National Laboratory (Berkeley Lab) showed that the average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, compared with 21.5 years in 2007.

Module manufacturers now typically offer warranties of 25 or 30 years. Many plant owners expect lifespans over 35 years, while very few anticipate lifespans below 30 years, the survey showed.

The longer estimates come despite little operational data on long-term performance of PV plant components, particularly on newer models.

“The utility-scale solar market is really only ten years old," Joachim Seel, Senior Scientific Engineering Associate at Berkeley Lab, told New Energy Update.

"While cutting-edge module technology is stress-tested to estimate design life we don't have empirical data on how they actually perform after 30 years in the field,” he said.

Sharp falls in component and maintenance costs in recent years could impact these lifespan estimates, experts told New Energy Update. To manage these risks, operators are opting for shorter component warranties and taking greater control over maintenance and product testing.

Cost erosion

PV costs are continuing to fall as suppliers improve cell performance and plant layouts. The global average cost of mainstream module technology fell by 14% in 2019 to $0.27/W, the International Renewable Energy Agency (IRENA) said in its latest annual Renewable Power Generation Cost report. In the US, solar power purchase agreement (PPA) prices fell by 4.7% last year to an average of $27.40/MWh in Q4 2019, market platform provider LevelTen said. Operations and maintenance (O&M) costs have also fallen significantly in recent years and were estimated at between $5,000 and $8,000/MW/yr in 2019, the Berkeley Lab found.

                     PV module prices by technology, supplier country

                                                           (Click image to enlarge)

Source: IRENA's 'Renewable Power Generation Costs 2019' report.

PV components such as cells could last for as much as 50 years, but the drive for lower costs and lightweight designs could significantly shorten lifespans, Robin Hirschl, Technical Director at Danish renewable energy investor Obton, told New Energy Update.

Module suppliers have reduced the thickness of glass on the backsheet, which could affect robustness. Thinner module frames are also used, reducing mechanical stability, while connection boxes "use less material and hence possibly less protection," Hirschl said.

Glass and frame thickness are now fairly standardized and sometimes offer insufficient support for larger module profiles, Bryan Banke, Director of Asset Management at Adapture Renewables, said.

"They twist and undulate in high winds creating micro-cracks and stress fractures in the thin conductor busses and solder," he said.

Many operators will opt for major component overhauls as panel efficiency advances and other components succumb to weather conditions and electrical loads, Banke said.

“The models will be reworked and projects refinanced to pay for repowering and to reflect contemporary energy rates,” he said. "Most likely, future repowering will include storage to fundamentally change the way these systems deliver energy."

Factory faith

General improvements in manufacturing processes have driven longer lifespan assumptions, more than specific component gains, Jenya Meydbray, CEO at PV Evolution Labs (PVEL), told New Energy Update.

Increased automation in high-volume manufacturing has helped control quality, he said.

Growing learnings on joint degradation have also increased testing capabilities, Meydbray said.

"Over the past twenty years, the industry has amassed a large body of data about the reliability of solder joints and encapsulants in the field and how to accelerate this in a controlled laboratory environment," he said.

Pile corrosion must be managed to achieve longer lifespans. Piles typically only last around 20 to 25 years, depending on factors such as the corrosivity of the soil, the thickness of the pile and physical loading, Meydbray said.

Operators can extend lifespans by assessing corrosion levels and adding new piles to provide further strength. Another solution is using cathodic protection to pass electricity through the piles and reduce corrosivity.

"That’s thought to be more expensive at this time,” Meydbray noted.

Inverter swaps

Inverters typically represent 5 to 10% of project costs and are expected to be replaced at least once over the lifetime of the plant.

                              US solar O&M costs by category (2018)

Source: National Renewable Energy Laboratory (NREL).

On PV plants with 40 year term financial models, Adapture has inverter replacement reserves that "start funding in year 10 with expected use in year 20," Banke said.

Despite strong price pressure, inverter reliability has improved. New inverter designs can boost performance and provide additional reliability and maintenance benefits. In some cases, operators may choose to switch from large central inverters to string inverter systems.

“In reality, for central inverters, we will replace parts for each individual inverter until we no longer can,” Banke said.

Warranty risk

Panel and inverter suppliers have extended warranty lifespans but many operators are choosing shorter terms.

Warranties are useful for detecting manufacturing defects in the first few years of operations, but longer wear and tear issues may not be covered, Banke said.

“It’s more cost efficient to replace modules on your own dime than to jump through warranty hoops," he said.

Fears over supplier longevity also deter some operators from signing long-term warranties, particularly for inverters. Stockpiling of major components helps reduce spare parts risks if the supplier exits the market.

“That’s why we put such importance on accelerated lifetime testing," Jon Previtali, Director of Technology & Technical Service at Wells Fargo Renewable Energy & Environmental Finance (REEF), said.

"And other quality assurance/quality control methods like factory inspection and production oversight.”

Reporting by Neil Ford

Editing by Robin Sayles

Sunrun to buy rooftop competitor Vivint for $1.5 billion

US residential solar installer Sunrun is to buy competitor Vivint Solar for around $1.5 billion, the companies announced July 6. The new company will have a combined enterprise value of $9.2 billion.

"This transaction will increase our scale and grow our energy services network," Lynn Jurich, CEO of Sunrun said.

"Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernization," David Bywater, Vivint CEO, said.

Sunrun shareholders will hold around 64% of the combined company, with the remainder held by Vivint stockholders. Together, the companies have around 500,000 customers, representing 3 GW of capacity.

    Forecast US solar installations by segment

                                 (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

The acquisition will create around $90 million of annual savings, the companies said.

"We see opportunities across the entire cost base, including consolidating and optimizing our branch footprint, reducing redundant spending on technology systems, scaling our proprietary racking technology, as well as improving sourcing capabilities within our supply chains," they said.

Battery products will expand revenue opportunities.

"A larger footprint of solar and battery assets...increases the value of what we bring to our grid services partnerships and strengthens our ability to deliver considerable value in that business," the groups said.

US House committee backs solar, wind in new climate plan

A U.S. House select committee has called on Congress to enact a range of long-term measures to reduce emissions and improve the health of US citizens.

The U.S. House Select Committee on the Climate Crisis called for the US to achieve net zero carbon dioxide emissions by 2050 and to establish interim targets to assess progress. Greenhouse gas emissions must fall to 37% below 2010 levels by 2030 and 88% below 2010 levels by 2050, it said.

Congress must support the "rapid deployment" of solar, wind, energy efficiency and other low carbon measures, as well as new transmission infrastructure, the committee said.

Measures that incentivize domestic manufacturing of clean technology must be implemented, including clean vehicles, it said.

New laws must also be put in place by 2030 to protect at least 30% of all US land and ocean areas, prioritizing areas with high ecological and carbon sequestration value, the committee said.

Limits on fossil fuel extraction must be implemented on onshore and offshore areas, it said.

The committee also called for the launch of new economic sectors such as direct air capture and low carbon building materials.

Further measures are required to protect US citizens from high pollution areas and the effects of climate change, it said.

Macquarie, Enso to build 1 GW of UK solar plus storage

Macquarie’s Green Investment Group (GIG) and renewable energy developer Enso Energy have formed a joint venture to develop 1 GW of unsubsidized solar plus storage capacity in the UK, the companies announced June 29.

"Initial projects are grid secured and are being submitted for planning approval," the partners said. "This includes projects across England and Wales, where the team are currently conducting virtual community consultations."

The coupling of solar and batteries will allow the plants to supply peak demand periods as well as grid services that help mitigate rising solar and wind capacity.

Many of the projects will use the latest bifacial and tracking technology, which should increase efficiency and lower average costs.

GIG and Enso plan to sign corporate power purchase agreements (PPAs) for the projects.

GIG was initially launched by the UK government in 2012 as the Green Investment Bank. Bought by McQuarrie in 2017, GIG has financed 7.5 GW of renewable projects in the UK and has a global development pipeline of 25 GW.

Enso has developed over 1.5 GW of renewable energy projects in the UK.

EDF partners with Octo Energy to develop UK solar plus storage

French electricity giant EDF has partnered with UK renewable energy developer Octo Energy to build 200 MW of solar plus storage capacity in England and Wales, EDF announced June 29.

Octo will seek out opportunities on dual-use sites, such as farmland, the companies said.

EDF is one of the "Big Six" energy suppliers in the UK. The group currently owns 1 GW of UK solar capacity and 1 GW of wind. The group also operates a 49 MW battery, the largest in the UK, at its West Burton gas-fired power station.

EDF's partnership with Octo forms part of the group's plan to build 10 GW of storage capacity in Europe by 2035 and double its renewable energy capacity to 50 GW by 2030.

Last November, EDF bought Pivot Power, a UK-based developer of storage and infrastructure for electric vehicle charging. Pivot plans to install 2 GW of battery capacity directly to the high-voltage transmission system. The first projects are expected online in south-east England in 2020.

Reuters Events

Increasing lifespans for PV plants are placing greater pressure on long-term operations and maintenance (O&M) efficiency.

Longer lifespans allow operators to spread costs over a longer operating period and compete for lower-priced power purchase agreements (PPAs). The average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, compared with 21.5 years in 2007, according to a recent survey by the Lawrence Berkeley National Laboratory (Berkeley Lab).

Longer lifespans increase project exposure to merchant wholesale prices that are typically lower than PPA contracts.

Average O&M costs have fallen, but costs rise as components age during the merchant tail period. This makes long-term O&M assumptions, including major component replacement, critical to project risk.

Accelerated lifetime testing helps to inform financial models and growing operational data will spur new learnings on replacement costs.

Lenders are particularly keen to minimize uncertainty during the lower price merchant tail period, Bjarne Sonderskov, Head of Technical Operations at Danish renewable energy investor Obton, told Reuters Events.

“Cost of capital is crucial to the investment and that’s also why we look to improve the O&M by predicting failure to any component," he said.

Data grab

Growing O&M learnings and competition between suppliers have reduced prices.

US O&M costs were estimated at between $5,000 and $8,000/MW/yr in 2019, the Berkeley Lab found. In 2018, the National Renewable Energy Laboratory (NREL) pegged O&M costs without inverter replacement at around $9,000-10,000/MW/yr and prices including inverters at $13,000-14,000/MW/yr.

Global O&M spending is set to soar in the coming years as more capacity comes online. Annual global spending on solar operations and maintenance (O&M) is forecast to double to $9.4 billion by 2025, Wood Mackenzie Power and Renewables said in a recent report.

                                       US solar opex estimates in 2019

                                                                 (Click image to enlarge)

Source: Berkeley Lab's 'Benchmarking Utility-Scale PV Operational Expenses and Project Lifetimes' report (June 2020).

Wind O&M has advanced faster than in the solar sector, spurred by higher maintenance costs. Many large wind operators have deployed predictive and preventative maintenance strategies to avoid major equipment failure and minimize downtime. Wind turbine suppliers have expanded O&M services and digital products to gain a share of the growing O&M market.

Larger solar operators are also implementing plant monitoring and data analytics technologies, looking to maximize economies of scale. Renewables developer Invenergy is developing in-house analytics to support rapid growth in the services sector. Solar operators like Invenergy, Duke Energy and Enel Green Power are deploying drones while some groups are testing automated cleaning technology. Gains from these technologies will increase as data pools grow.

Preventative maintenance will be key to reducing labour costs and gaining a competitive edge, Sonderskov said.

It could be "three or four years" before PV faults can be accurately predicted, he warned.

Many solar operators are still not spending enough on O&M, Hugh Kuhn, Principal at Solar Advisory Services in California, told Reuters Events.

"Assets are simply not being cared for as they should be for a long life,” Kuhn said.

Relatively minor issues such as misalignment of trackers, suboptimal inverter function or faulty module connectors, can add up to unravel the financial model, he said.

Repowering risk

Replacement of major components such as inverters are a critical factor in lifespan modelling.

Rapid technology advances have prompted repowering with higher performance products far earlier than many expected.

“The most challenging aspects of greenfield project development reside in permitting, zoning, interconnection, and land acquisition, so repowering with new equipment can be a shrewder financial choice than developing an entirely new project," Tara Doyle, Chief Commercial Officer at PV Evolution Labs (PVEL), said.

Operators must take into account compatibility of components in repowering cost assumptions. For example, central inverters are now wired to 1,500V, compared with 600V ten years ago.

"15 years from now the inverters will not be anywhere close to being electrically compatible with inverters installed today," Kuhn said.

“The inverter manufacturers need to up their game by offering future-proofing solutions. Certain areas of industry standardization would be super helpful," he said.

As more PV and wind capacity comes online, repowering models must factor in additional technologies, such as energy storage, Kuhn said. PV plus storage facilities can access higher prices in wholesale markets and revenues from grid services.

Storage functionality significantly changes the revenue model, but operators can include this option in contract terms from the outset, he said.

Reporting by Neil Ford

Editing by Robin Sayles
 

Joe Biden pledges to spend $2 trillion on clean energy in first term

US presidential hopeful Joe Biden has set out a $2 trillion spending plan for clean energy and sustainable infrastructure, pledging to install 500 million solar panels and achieve net zero carbon emissions in the power sector by 2035.

The Democratic nominee has pledged to spend the $2 trillion in his first term, far faster than previously proposed.

Biden proposes to reform and extend tax incentives that support clean energy and implement a technology-neutral "Energy Efficiency and Clean Electricity Standard (EECES)" for utilities and grid operators.

Biden's team plans to "dramatically expand" solar and wind energy deployment through community-based and utility-scale systems, including 8 million solar roofs and community solar systems and 60,000 onshore and offshore wind turbines.

Investments will also be channeled into battery storage technology to accelerate deployment in the power sector and for electric vehicles, it said.

    Forecast US solar installations by segment

                                  (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

Biden's clean energy initiative incorporates recommendations from a joint task force created by Biden and former contender Bernie Sanders, published on July 8.

The US presidential election is scheduled for November 3.

US court upholds FERC order in win for energy storage

In a major victory for the energy storage sector, a US Court of Appeal has upheld legislation by the Federal Energy Regulatory Commission (FERC) that allows distributed energy storage assets to participate in wholesale markets.

On July 10, the Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) upheld FERC’s Order No. 841, following appeals from the National Association of Regulatory Utility Commissioners and the American Public Power Association, amongst others, to opt out.

Issued in 2018, FERC Order 841 requires market operators to implement regulation that allows energy storage to participate in wholesale power markets, including real-time and reserve markets.

“This is an enormous step for energy storage, with the affirmation that energy storage connected at the distribution level must have the option to access wholesale markets, allowing homes and businesses to contribute to the resiliency, efficiency, sustainability, and affordability of the grid,” Kelly Speakes-Backman, CEO of the Energy Storage Association (ESA), said in a statement.

“This latest affirmation of Order 841 is especially important as it ensures energy storage can contribute all its values to the grid, regardless of its connection point," Speakes-Backman said. "As our electric system becomes more modernized and distributed, we are seeing the regulatory frameworks at both the wholesale and retail levels adjust to that reality."

The Solar Energy Industry Association (SEIA) also commended the ruling.

"Energy storage is a critical part of our clean energy transformation and will be a key part of solar’s goal to provide 20% of U.S. electricity generation by 2030," Katherine Gensler, vice president of regulatory affairs at the SEIA, said in a statement.

“...Still, we have a long way to go in terms of creating fair and open markets for all generators. We urge FERC to publish a final rule on wholesale market participation for distributed energy resources,” Gensler said.

UK accelerates energy storage permit process

UK government has relaxed planning rules for large-scale battery storage projects in order to accelerate deployment, it said July 14.

The government carved out electricity storage from Nationally Significant Infrastructure Projects (NSIP) regime in England and Wales, allowing developers to apply through faster local planning regimes. The new rules apply for projects of capacity over 50 MW in England and over 350 MW in Wales and exclude pumped hydro projects.

"Removing barriers for energy storage projects, which are discouraging bolder investment decisions in larger battery facilities, could treble the number of batteries serving the electricity grid," the government said in a statement.

“We welcome the decision to make it easier to deploy flexible large-scale energy storage technologies in the UK, which will help to further decarbonize and improve the resilience of our energy system,” Chris Hewett, chief executive of the UK Solar Trade Association (STA) said.

“The next steps in unlocking the potential of energy storage, and maximizing the crucial role it can play in managing growing solar and wind output, are to provide greater access to flexibility markets, including the capacity market, and applying fairer network charging rules,” he said.

The government's move comes amid growing activity in solar plus storage and a rapid expansion in UK offshore wind capacity.

The UK has committed to achieving net zero carbon emissions by 2050 and increasing UK offshore wind capacity from around 10 GW, to 40 GW by 2030.

Capital Dynamics, Tenaska agree 4.8 GW solar deal

Capital Dynamics has entered into a new strategic agreement with developer Tenaska to develop 4.8 GW of solar projects in the Midcontinent Independent System Operator (MISO) and Southeast Reliability Council (SERC) markets, the company announced July 8.

The deal includes 24 solar projects and follows a partnership between the groups in November 2018 for 2 GW of capacity in the MISO market, situated in the states of Michigan, Missouri, Illinois, Wisconsin, Indiana and Minnesota.

The latest deal "represents a large share of solar projects currently in the MISO and SERC interconnection pipelines and further diversifies Capital Dynamics’ growing utility-scale solar power portfolio across seven new states," Capital Dynamics said.

“We are pleased to enter into a new relationship with Tenaska in MISO and SERC, less than two years after our first MISO transaction,” Benoit Allehaut, Managing Director in Capital Dynamics’ Clean Energy Infrastructure business, said.

“The Tenaska team has done an excellent job overseeing a large portfolio of solar projects in attractive markets, and has worked well with our team in the past. We believe it is important to deliver competitive solar projects in regions where customers are switching to renewables,” he said.

Tenaska has developed 10.5 GW of gas and renewable power projects, including two solar projects in Southern California in which Capital Dynamics is an investor.

In October, Spanish group Acciona acquired 3 GW of U.S. PV projects and 1 GW of energy storage capacity being developed by Tenaska.

Acciona will work with Tenaska to complete the projects and plans to bring online eight of the plants, representing 1.5 GW of peak power capacity, by 2023, the company said.

Reuters Events

As solar technology costs fall and land becomes scarce, interest in floating solar plants is growing.

Last month, DNV GL launched a joint industry project (JIP) with 14 companies to develop the first ever best practice guidelines for inland floating solar projects. The consortium includes major energy groups such as France's EDF, Portugal's EDP and Norway's Equinor, as well as specialist floating solar developers from Europe and the US.

Global installed floating solar capacity has hiked from 10 MW in 2015, to 3 GW at the end of 2019, with early activity mainly concentrated in Asia. Growth is spreading and annual installations could rise to over 3 GW by 2022, according to forecasts from Wood Mackenzie.

Floating solar on human-made water bodies could eventually supply 10% of US power generation, the US National Renewable Energy Laboratory (NREL) said in a report last year. The study excluded water bodies used for recreation, fishing, navigation and wildlife conservation.

    US potential floating solar capacity, utility rates

                                (Click image to enlarge)

Source: NREL report 'Floating Photovoltaic Systems: Assessing the Technical Potential' (2019)

Floating solar is most attractive in markets with high renewable energy targets and limited land availability or high land prices, experts told Reuters Events.

“There is also a strong interest by individual utility reservoir owners that wish to generate additional electricity and revenue from an otherwise unused space,” Robert Spencer, software researcher at NREL and co-author of the US floating solar report, said.

Reservoirs are often owned and maintained by public entities, reducing land acquisition costs, while water treatment plants, quarries, mines and agricultural ponds can also be suitable. Hydroelectric facilities can offer grid connections and PV electricity can be stored on pumped storage schemes.

Floating solar presents structural design challenges, but also offers evaporative panel cooling which can increase energy efficiency.

Projects in Asia have shown there is little price difference between floating and land-based solar projects for capacities over 50 MW, Michele Tagliapietra, project manager for DNV GL's JIP, said.

Most projects in Europe and the US have been below 5 MW and the cost of projects of this size in Asia can be up to 15 to 20% higher than land-based projects, he said.

Installed floating capacity remains a fraction of land-based capacity. As a result, developers face investor concerns over cost and reliability, but this should change in the coming years as learnings are rolled out across the industry.

"Floating PV is already in use and also being vetted by technological consultants," Terje Pilskog, EVP Project Development & Project Finance at Scatec Solar, told Reuters Events.

"We believe such concerns can be overcome.”

Local needs

Asia is currently the most active region for floating solar projects, driven by government tenders and supportive feed in tariffs.

China is developing some 700 to 900 MW of capacity per year and other active markets include Japan and South Korea.

Demand is also growing in Europe. Growth will be led by the Netherlands, where large areas of shallow water offer plentiful project opportunities. Netherlands floating solar capacity could reach 1.4 GW by 2024, Wood Mackenzie forecasts.

Earlier this year, BayWa r.e. built Europe's largest floating solar city on 18-hectare lake that covers a sandpit site at Zwolle in central Netherlands. The 27 MW Bomhofsplas plant was installed in just seven weeks and the electricity is being sold directly to local residents via a cooperative. Over the last year, BayWa r.e. has built and sold eight floating solar parks in the Netherlands.

Last year, French group Akuo Energy completed a large floating solar facility on a lake in a former quarry in southern France. The 17 MW O'Mega1 project includes 47,000 solar modules and floating systems developed by Ciel & Terre.

The plant was partly financed through crowdfunding and investment from the local municipality, alongside investment from French bank Natixis.

Strong growth is also expected in the Americas.

Last October, New Jersey developers J&J Solar Power and Solar Renewable Energy and engineering group RETTEW completed the US' largest floating solar project.

The 4 MW project uses Ciel & Terre technology and is located on a pre-treatment water storage pond in Sayreville. The town issued a public RFP in late 2015, offering a power purchase agreement (PPA) to offset power use at the water treatment facility and related facilities.

“We entered into this project knowing that we had limited land available for a solar installation near the water treatment plant," Dan Frankel, Business Administrator of the Town of Sayreville, said in a statement.

“It’s an ideal approach that makes better use of our pre-treatment pond while dramatically reducing energy costs and offsetting the town’s carbon footprint,” he said.

“As North American developers, financiers and insurance entities strengthen their comfort with the advantages of floating solar, we expect to see significant rapid growth in the region that parallels the rest of the world,” Chris Bartle, Business Development Manager at Ciel & Terre USA, said.

Water forces

The best practice guidelines developed by DNV GL and partners will be technology-agnostic and focus on five key areas: site assessment, energy yield, mooring and anchoring, floating structures, and environmental impact and permitting.

As a nascent concept, operational learnings in floating solar remain limited. Developers are continuing to adapt their designs and introduce new concepts, Pilskog said. In one example, floating solar group Ocean Sun incorporated learnings from fish farming in its design.

Developers are focusing on reducing the cost of materials, improving reliability and gaining a greater understanding of the cooling effect, Pilskog said.

Specific challenges for floating solar developers include physical stresses from water and weather conditions and fluctuating cooling effects, he said. This requires design solutions for anchoring and mooring systems, corrosion, dynamic loading and shifting cooling effects.

“Mooring systems to anchor the system in place may range in complexity depending on the level of water level variability and underlying bathymetry [water depth],” Spencer noted.

The module mounting heights for floating solar plants are more restricted than land-based projects and special consideration is required for inverters and medium voltage equipment.

A robust industry-standard racking design is required to accommodate fluctuating water mechanics which puts added load and heat stresses on the system, Spencer said.

As designs evolve, greater focus will be placed on operations and maintenance (O&M) efficiency.

Currently, many floating systems are not optimized for inspection and maintenance and close-up inspections can be difficult, Tagliapietra said.

Floats, PV modules and DC cables are the most commonly replaced components. "In general all components are more challenging to replace than in ground-mounted systems," he said.

These issues will grow in importance as solar owners seek longer plant lifespans to maximize returns.

Reporting by Neil Ford

Editing by Robin Sayles

New US clean energy jobs drop to 3,200 in July

New clean energy jobs fell to 3,200 in July, from 106,000 in June, showing support is needed from Congress to stimulate job recovery, renewable industry groups said in a statement August 12.

Clean energy includes renewable energy, energy efficiency, grid modernization, clean vehicles and fuels. In May, the US Solar Energy Industry Association (SEIA) warned COVID-19 had cut 65,000 solar jobs and cancelled the creation of around 50,000 expected new roles.

Research by BW Research for E2, E4TheFuture, and the American Council on Renewable Energy (ACORE) showed that just one out of every six clean energy jobs lost since March has been recovered.

More than half a million clean energy workers remain jobless, representing 15% of the workforce, the report said. Between 2015 and 2019, clean energy jobs grew 70% faster than the overall economy.

     Forecast US solar installations by segment

                                   (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

"As federal Paycheck Protection Program (PPP) funds are exhausted and businesses are forced to close or scale back due to COVID-19’s resurgence, more layoffs could be imminent without congressional action," the industry groups said.

"What is needed most right now is temporary refundability of renewable tax credits so projects can continue to move forward despite an increasingly constrained tax equity market, and a delay in the scheduled phasedown of existing tax credits," Gregory Wetstone, President and CEO of ACORE, said.

First Solar sells O&M division to growing NovaSource group

US module manufacturer First Solar is to sell its North American operations and maintenance (O&M) business to NovaSource, the new O&M subsidiary of Toronto-based private equity firm Clairvest Group, as it shifts to a third-party project development model, First Solar announced in its Q2 results on August 6.

NovaSource was created in May, when Clairvest acquired SunPower's 3 GW O&M business through a management buyout. 

Competition in O&M is intensifying as project owners seek lower costs.

"Further business optimisation would require increased scale, product offerings, capital," First Solar said in its Q2 earnings presentation.

In October, First Solar said it would close its engineering procurement construction (EPC) business to concentrate on its core businesses of module manufacturing and project development.

Under a third-party EPC model, First Solar will "leverage a much broader external ecosystem of knowledge and expertise," Mark Widmar, CEO of First Solar, said.

First Solar's EPC shift comes as intense price competition impacts margins across the sector. Solar projects are also becoming more complex, using innovative layouts and new technologies like energy storage to increase market value.

First Solar recorded net sales of $642 million in the second quarter, some $110 million higher than in Q1, primarily due to the sale of its 128 MW American Kings project in California.

The group maintained its 2020 module production outlook at 5.9 GW and capital spending forecast at $450 to $550 million.

“We remain pleased with our operational performance with strong metrics across the board,” Widmar said.

While First Solar's financial results have not been "materially impacted" by COVID-19, the group will continue to provide limited guidance due to significant uncertainty over the severity and duration of the pandemic, it said.

Vistra gains permit for potential 1.5 GW battery in California

Texan energy group Vistra has been granted a permit to expand its Moss Landing energy storage facility in Monterey, California, to 1.5 GW/6 GWh, S&P Global reported.

Vistra is already building 300 MW of battery capacity at the Moss Landing power plant site and intends to add a further 100 MW by 2021. An expansion to 1.5 GW would make it the largest battery facility in the US.

The Moss Landing site hosts a 1.0 GW operational gas-fired plant and several decommissioned fossil fuel units and offers extensive space for battery development.

Vistra would expand the storage project “should market and economic conditions support it,” Curtis Morgan, CEO of Vistra reportedly told S&P Global.

“With this new permit in place, Vistra is working on the related infrastructure upgrades so that we will be able to move quickly when opportunities to add additional storage capacity arise,” he said.

A spate of large US battery storage projects is due online in the coming years.

In 2019, the number of US solar plus storage projects, either announced or online, rose from 16 to 38, the Lawrence Berkeley National Laboratory (Berkeley Lab) said in a report.

By 2023, the number of US solar and wind assets co-located with batteries will double to 109, the US Energy Information Administration (EIA) said in May.

                          Top 10 US states for renewables plus storage

                                                                (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA), Preliminary Monthly Electric Generator Inventory 

In May, Quinbrook Infrastructure Partners received full federal approval for its groundbreaking 690 MW Gemini solar plus storage project in Nevada.

Located 33 miles north east of Las Vegas, the Gemini plant will include a 380 MW AC battery storage system, providing 2,125 MWh of storage capacity, proposal documents show.

Reuters Events

Competition over land resources and global climate challenges are driving growing interest in agri-PV, the co-development of land for both solar power and agriculture.

Early movers in agri-PV are developing pilot projects and new technologies that will deepen industry expertise.

GroenLeven, a Dutch subsidiary of solar developer BayWa r.e., is building five pilot agri-PV projects in the Netherlands.

Key challenges for farmers include assessing the impact of the agri-PV project on crop yield and the best crops for the shared environment, Willem de Vries, Project Manager, Large Projects at GroenLeven, told Reuters Events.

GroenLeven will test five different types of crops at the pilot projects that are tolerant to shade: blueberries, red currants, raspberries, strawberries and blackberries.

The projects will use specialised monocrystalline solar panels that offer the plants more light than standard models and more protection from direct sunlight, rain, hail and frost, increasing the crop yield.

The Netherlands has set ambitious carbon reduction objectives and the country holds significant agri-PV potential, de Vries said.

"We have approximately 20,000 hectares of fruit cultivation,” he said. “...if only 50% of that were used in combination with agri-PV, we would be able to realize 8GW of solar power.” This would exceed the 7 GW of total PV capacity installed in the Netherlands to date.

UK rebirth

UK farmers have been key supporters of solar power and agri-PV projects could benefit from revamped support measures. In March, the UK government reopened subsidies for solar and onshore wind projects after a four-year moratorium which has favoured less mature technologies like offshore wind.

From next year, PV and onshore wind projects will once again be able to bid for UK contracts for difference (CfDs), the government said. The move will help the UK achieve its target of net zero carbon by 2050, it said.

                                UK annual solar installations by sector

                                                              (Click image to enlarge)

Source: UK Solar Trade Association (STA), November 2019

Around 70% of UK solar capacity is either owned by farmers or hosted on agricultural land, Jonathan Scurlock, Chief Adviser, Renewable Energy and Climate Change, the UK’s National Farmers' Union (NFU), said.

As farmers generally own or lease land under long-term arrangements, they are well positioned to make long-term investments. Many farmers are yet to install solar projects, offering strong growth potential.

"When we survey our members we find over 30% are using solar," Scurlock said.

Higher yield

Agri-PV systems can protect crops against the extreme weather events becoming more frequent due to climate change, Andreas Steinhueser, systems testing lead at Fraunhofer Institute for Solar Energy Systems ISE, said.

“Through active shading and rainwater harvesting techniques, agri-PV offers additional resilience to food supply chains," Steinhueser said. "Take the current heatwave in Europe – in such conditions it's realistic, even in a country such as Germany, for crop yields to actually increase thanks to agri-PV module shading.”

A 194 kW pilot solar field at a 1 hectare agricultural site in Heggelbach, southern Germany, highlighted the complimentary qualities of solar and agriculture.

Based on potato yield, the project increased land-use efficiency by 160% in 2017 and by 186% in 2018, when temperatures were hotter, according to calculations made by Fraunhofer ISE.

Small footprint

In system design, Agri-PV developers must take into account ecological factors as well as farmers' access needs, Steinhueser said.

“The system needs to be designed using materials that will not impact soil fertility (for example, concrete or treated wood), and support pillars need to be spaced so as not to slow down planting and harvesting operations,” he said.

Agri-PV projects could take advantage of rapid advancements in bifacial modules. Agri-PV panels are usually placed one to two meters off the ground, which means bifacial technology can offer efficiency gains, but this will depend on the type of crop, Steinhueser said.

“For example, it’s arguable that bifacial modules wouldn't profit much from diffuse irradiation when used in orchards, so although we think that bifacial modules hold huge promise in agri-PV, the way forward is likely an intelligent mixture of both bifacial and monofacial," he said.

Cost challenge

The gradual phasing out of solar subsidies creates a challenge for agri-PV developers.

Dutch projects can still benefit from incentives of 88 to 99 euros/MWh, depending on the size of the installation, but agri-PV projects do not currently receive any special support beyond that offered to solar farms.

“At this moment, this is a danger for agri-PV installations, as the capex investments are still higher compared with conventional ground-mounted solar installations," de Vries said. The equipment is more specialised and installation methods, such as the driving of piles, can require greater resources.

Longer term, agri-PV costs should fall as supply chains adapt to growing requests for specialised equipment, de Vries noted.

Growth-hungry developers must establish business models that can be repeated in different markets.

While the Heggelbach plant was small in scale and received research funding, it demonstrated the application of community-based financing.

This type of business model, incorporating funding from local cooperations, authorities or businesses, could be one solution to overcoming the barrier of high upfront costs, Steinhueser said.

Reporting by Ed Pearcey

Editing by Robin Sayles