solar market update and testimony -- ethan zindler handout

7/28/2019 Solar Market Update and testimony -- Ethan Zindler Handout

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MINNESOTA STATE LEGISLATURE, 2 APRIL 2013 1/ / / /

/ / / / / / / / / / / / / / / / / / / / / / / / / / / /

SOLAR MARKETUPDATE

MINNESOTA LEGISLATURE TESTIMONY

2 APRIL 2013, ST. PAUL, MN

ETHAN ZINDLER, HEAD OF POLICY ANALYSIS


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North America(39)

South America

(5)

Europe

(88)

Asia Pacific

(24)

Africa

(29)

San Francisco

Sao Paulo

Washington

New York

Cape Town Sydney

London Beijing

New Delhi

Hong Kong

BLOOMBERG NEW ENERGY FINANCE:200 STAFF IN 13 OFFICES WORLDWIDE

Tokyo

Singapore

Zurich

Objective: Be the definitive source of insight, data and news on the transformationof the energy sector.


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Clean energy investment overview

Global solar trends

US solar trends


4/36


$54bn

$80bn

$114bn

$164bn

$191bn $187bn

$251bn

$302bn

$269bn

48%

43%

45%

16%

-2%

34%

20% -11%

2004 2005 2006 2007 2008 2009 2010 2011 2012

GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY200412 ($BN)

Source: Bloomberg New Energy Finance

Note: Includes corporate and government R&D, and small distributed capacity. Adjusted

for re-invested equity. Does not include proceeds from acquisition transactions


5/36


84%77% 74% 73%

68% 66% 68% 67%

57%

14%17% 20% 22%

25% 27% 26% 27%

35%

3%7% 5% 6% 7% 6% 6% 6% 9%

2004 2005 2006 2007 2008 2009 2010 2011 2012

ROW

BASIC

OECD

NEW INVESTMENT IN CLEAN ENERGY BY TRADE BLOCK200412 ($BN)

Source: Bloomberg New Energy FinanceNote: Excludes corporate and government R&D


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NEW INVESTMENT IN CLEAN ENERGY BY SECTOR IN 2012AND % CHANGE ON 2011 ($BN)

Source: Bloomberg New Energy FinanceNote: Excludes corporate and government R&D

0.06

0.19

1.58

2.81

3.24

7.35

9.03

76.56

137.68

84%

52%

-41%

-50%

-33%

18%

-28%

-13%

-9%

Other

Marine

Geothermal

Biofuels

Energy smart technologies

Small hydro

Biomass & Waste

Wind

Solar


7/36MINNESOTA STATE LEGISLATURE, 2 APRIL 2013 7/ / / /


Global solar market trends

US solar market trends



DYNAMICS OF THE GLOBAL SOLAR SECTOR

Massive supply-demand imbalance with far more capacity available thancurrently being demanded.

Plummeting equipment prices due to technology advancements and thesupply-demand imbalance.

Major demand coming from the EU in recent years with strong growth in

Japan (post-Fukushima) and China. Commoditization of solar equipment with China now playing a dominant role

in manufacturing.

Consolidation, bankruptcies, and value destruction well underway.

Trade skirmishes!



DEMAND VS. HISTORICAL AND PROJECTED MODULEPRODUCTION (GW)

Source: Bloomberg New Energy FinanceNote: Supply scenarios based on continued 2012 utilisation rates.

-

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Supply - crystalline silicon Supply - thin-film silicon

Supply - thin film non-silicon Demand - conservative

Demand - optimistic

Historical Future

Current cell manufacturing capacity


10/36


PV INSTALLATION BY YEAR, HISTORICAL AND CENTRALFORECAST, 2007-2015 (MW)

Source: Grid operators, incentive programme

administrators, industry associations, Bloomberg New

Energy Finance

Note: Few countries have yet finalised their 2012 data, hence the spread here. Table

with all major countries in Appendix. The conservative forecast is the sum of the first

quartiles of the spread between conservative and optimistic for each country.

2.8GW6.6GW 7.7GW

18.2GW

28.7GW 30.2GW

36.7GW

45.6GW

52.1GW

2007 2008 2009 2010 2011 2012 2013 2014 2015Western Europe Eastern Europe Japan USA

China India Rest of World

Historical Forecast


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INSTALLED PV PER CAPITA, END OF 2012, CONSERVATIVESCENARIO (W/PERSON)

Source: World Bank, Bloomberg New Energy FinanceNote: GDP per capita adjusted for purchasing power, in 2011 $

Germany

Italy

BelgiumCzech Republic

GreeceAustraliaSpain

Bulgaria

France

JapanIsrael

UK DenmarkPortugal

CanadaUSASouth Korea

Netherlands

China

RomaniaIndia

0

50

100

150

200

250

300

350

400

450

0 10,000 20,000 30,000 40,000 50,000

GDP per capita


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ANNUAL COSTS OF TARIFFS AS SHARE OF GDP VS PV ELECTRICITYPRODUCTION AS SHARE OF CONSUMPTION, END OF 2011

Source: Bloomberg New Energy Finance, Eurostat, Canadian Statistics

Germany

Czech Republic Italy

Spain

France

Greece

Ontario

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%0.45%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

Annual costs as share of GDP

Share of PV electricity production of overall electricity consumption

Bubble size representing 5GW cumulative PV capacity at end of 2011


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0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2008 2009 2010 2011 2012

CRYSTALLINE SILICON MODULE SPOT PRICE, 200812($/W)

Source: Bloomberg New Energy Finance Solar Spot Price

Index

Note: Prior to 11 July 2011 the index collated module prices without differentiating

between mono and multi crystalline

-75%Four years


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SPOT PRICE OF C-SI MODULES, 2 JANUARY 2012 4MARCH 2013 ($/W)


Module Spot Index

Note: Dates represent first day of the week for which the price has been averaged, ie 8 August

represents quote for the week 8-14 August. Data available here.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0

2Jan

1

6Jan

3

0Jan

1

3Feb

2

7Feb

1

2Mar

2

6Mar

0

9Apr

2

3Apr

07May

21May

0

4Jun

1

8Jun

02Jul

16Jul

30Jul

13Aug

27Aug

10Sep

24Sep

0

8Oct

2

2Oct

05Nov

19Nov

03Dec

17Dec

31Dec

1

4Jan

2

8Jan

1

1Feb

2

5Feb

2012 2013

Multicrystalline silicon module (c-Si) Monocrystalline silicon module (c-Si)
http://bnef.com/SolarIndexes/spotAnalyticshttp://bnef.com/SolarIndexes/spotAnalytics


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CHINESE MULTICRYSTALLINE SILICON MODULE PRICEBUILD-UP, MARCH 2013


Note: Assumes 5.6g of silicon per watt of wafer. Processing cost based on SEC filings of

quoted companies, publically available reports, various discussions and analyst estimates.

SG&A represents sales, general, administration and R&D.

0.0

9

0.14

0.13

0.25

0.005

0.010

0.050

0.094

0.03

0.06

0.03

$16.6/kg

$0.91/piece

$0.40/W

$0.68/W

Polysilicon

Ingot &Wafer

Cell

Module

Processing cost per W SG&A per W

Depreciation per W Best-in-class margin per W

Spot price

-0.03

-0.08

0.003

-0.04

-0.07


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FORECAST COSTS FOR GROUND MOUNTED PVPROJECTS, 2010-2020 (2012 $/W)


Note: Based on experience curves for each component. Methodology here

http://bnef.com/Insight/1954though charts updated January 2013

1.85

1.35

0.73 0.72 0.72 0.70 0.65 0.61 0.57 0.54 0.52

0.30

0.21

0.12 0.11 0.10 0.10 0.09 0.09 0.08 0.08 0.08

0.50

0.50

0.27 0.26 0.25 0.25 0.24 0.23 0.23 0.22 0.22

0.41

0.41

0.32 0.31 0.30 0.29 0.28 0.28 0.27 0.26 0.26

0.18

0.18

0.15 0.15 0.14 0.14 0.13 0.13 0.13 0.12 0.12

3.24

2.65

1.59 1.55 1.52 1.47 1.40 1.34 1.28 1.23 1.19

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Module Inverter Balance of plant EPC Other
http://bnef.com/Insight/1954http://bnef.com/Insight/1954http://bnef.com/Insight/1954


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FORECAST COSTS FOR RESIDENTIAL PV PROJECTS,2010-2020 (2012 $/W)


Note: Based on experience curves for each component. Methodology here

http://bnef.com/Insight/1954though charts updated January 2013

2.41

1.76

0.91 0.87 0.84 0.79 0.720.66 0.61 0.57 0.54

0.41

0.28

0.26 0.24 0.23 0.21 0.20 0.19 0.18 0.17 0.17

0.67

0.68

0.65 0.63 0.61 0.59 0.57 0.56 0.55 0.54 0.53

0.64

0.63

0.60 0.58 0.56 0.54 0.53 0.52 0.51 0.49 0.49

0.52

0.81

0.520.43

0.36 0.31 0.26 0.22 0.20 0.18 0.16

4.64

4.16

2.952.75 2.59

2.442.28

2.15 2.04 1.95 1.88

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Module Inverter BOP EPC Other
http://bnef.com/Insight/1954http://bnef.com/Insight/1954http://bnef.com/Insight/1954


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SMALL PV SYSTEM COST IN JAPAN, GERMANY ANDCALIFORNIA, $/W

Source: BSW-Solar, California Solar Initiative filings, JPEA,

Bloomberg New Energy Finance

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Average sub-10kW German system cost Average California residential system cost

Japanese residential system cost average Chinese multicrystalline silicon module price


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GLOBAL CRYSTALLINE SILICON CELL MANUFACTURINGCAPACITY (MW/YEAR)


2,1935,036 7,300

16,944

36,253

42,303

438952

1,6322,057

4,205

7,147

7,747

3636

116466

856

1,476

1,666

1,2922,095

3,290

4,936

6,953

8,294

9,344

2.4GW

5.3GW

10.1GW

14.8GW

29GW

53.2GW

61.1GW

2006 2007 2008 2009 2010 2011 2012

China Taiwan Korea Rest of world


20/36


PV MODULE PRODUCTION BY COUNTRY, 2010-12 (%, GW)

Source: Company reports, Bloomberg New Energy Finance estimates and enquiries

Note: Geography calculated by company headquarters, not

manufacturing capacity location

54.7%

64.3%71.1%

12.9%

11.2%

10.9%12.7%

9.1%

7.4%12.0%9.4%

6.3%2.7%2.4%

2.6%

1.3%2.1% 0.7% 0.1%1.4% 0.6% 0.3%1.3% 1.0% 1.2%

18.1 29.7 30.1

2010 2011 2012

Taiwan

Spain

India

United Kingdom

South Korea

Norway

Germany

Japan

USA

China


21/36


c-Si CELL PRODUCTION BY COUNTRY, 2010-12 (%, GW)

Source: Company reports, Bloomberg New Energy Finance estimates and enquiries

Note: Geography calculated by company headquarters, not

manufacturing capacity location

54.3% 57.8%

67.8%

18.1%

17.9%

15.3%10.8% 7.5%

2.6%9.5% 8.6%

7.6%

4.3% 3.2%4.0%

2.4% 3.0%2.7%

1.7%0.4%0.4%0.3%

20.7 23.0 27.4

2010 2011 2012

India

South Korea

Norway

USA

Japan

Germany

Taiwan

China


22/36

INVERTER PRODUCTION BY GEOGRAPHY 2010 12 (% GW


23/36


INVERTER PRODUCTION BY GEOGRAPHY, 2010-12 (%, GWAC)

Source: Company reports, Bloomberg New Energy

Finance estimates and enquiries

Note: here DC-DC optimiser production has been converted into AC, which is estimated to be 85% of

DC, Geography calculated by company headquarters, not manufacturing capacity location

47.2%43.4%

21.4%21.5%

17.6%

13.7%

10.0%17.0%

3.7% 4.3%

23.0 25.6

2011 2012

Rest of the worldChina

Other Europe

USA

Germany

Q4 2012 LEVELIZED COST OF ENERGY FOR SELECT


24/36


Q4 2012 LEVELIZED COST OF ENERGY FOR SELECTTECHNOLOGIES

Source: Bloomberg New Energy Finance, EIA

0 50 100 150 200 250 300 350 400 450 500

Natural gas CCGT w/CHP

Coal fired

Natural gas CCGT

Nuclear

Small hydro

Large hydro

Geothermal - f lash plant

Municipal solid waste

Landfill gas

Wind - onshore

Biomass - incineration

Geothermal - binary plant

PV - thin film

Biomass - gasification

PV - c-Si tracking

Biomass - anaerobic digestion

PV - c-Si

CSP - tower & heliostat w/storage

Fuel cells

CSP - parabolic trough

Wind - of fshore

CSP - parabolic trough + storage

CSP - tower & heliostat

LCOE Range Current Mid


25/36



Global solar market trends

US solar market trends

TOTAL NEW US INVESTMENT IN CLEAN ENERGY 2004 12


26/36


TOTAL NEW US INVESTMENT IN CLEAN ENERGY, 2004-12($BN)


10.6

17.1

32.1

43.3 43.0

32.8

43.5

65.4

44.2

0

10

2030

40

50

60

70

2004

2005

2006

2007

2008

2009

2010

2011

2012

Note: Shows total clean investment in the US across all asset classes (asset finance, public markets,

venture capital/private equity), as well as corporate and government R&D and small distributed capacity.

Values include estimates for undisclosed deals and are adjusted to account for re-invested equity.


27/36


US CUMULATIVE RENEWABLE CAPACITY (GW)

Source: Bloomberg New Energy Finance, EIA

25.335.6 40.1

46.659.8

1.6

2.02.9

4.9

8.0

13.9

14.3 14.4

14.5

14.7

2.82.9

2.93.0

3.1

43.5

54.860.4

68.9

85.7

10

20

30

4050

60

70

8090

100

2008 2009 2010 2011 2012

Geothermal

Biomass & waste

Solar

Wind


28/36


US ELECTRICITY GENERATION BY FUEL TYPE, 2007-12 (%)

Source: Bloomberg New

Energy Finance, EIA

Note: Contribution from Other is minimal and consists of miscellaneous technologies including hydrogen

and waste. Values for 2012 are projected, accounting for seasonality, based on latest monthly values from

EIA (actual data available through October 2012).

0%

20%

40%

60%

80%

100%

2007

2008

2009

2010

2011

2012

Other

Renewables(including hydro)

Natural gas

Nuclear

Oil

Coal


29/36


PRIMARY ENERGY CONSUMPTION VS. GDP, 1990-2012

Source: Bloomberg New Energy Finance, Bureau of

Economic Analysis, US EIA

Note: Values for 2012 are projected, accounting for seasonality, based on latest monthly

values from EIA (actual data available through September 2012). GDP is real and changed;

2012 value is based on economic forecasts from Bloomberg Terminal.

Quadrillion Btu GDP ($bn)

0

2

4

6

8

10

1214

0

15

30

45

60

75

90105

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Other

Hydro

Natural gas

Nuclear

Petroleum

Coal

GDP

SHALE GAS EXTRACTION BREAK EVEN PRICE BY US


30/36


SHALE GAS EXTRACTION BREAK-EVEN PRICE, BY USPLAY ($/MMBTU)

Source: Bloomberg New Energy Finance; Various

Note: Assumes 15% equity IRR. UK assumes $8m Drilling & Completion cost; 2000-4250 mcfd

dry production (per Marcellus and Eagle Ford); 20% royalty rate; usual tax treatment

1 April 2013Henry Hub

$4.03/MMBTU

AVERAGE WIND PPA PRICE RELATIVE TO WHOLESALE


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AVERAGE WIND PPA PRICE RELATIVE TO WHOLESALEREGIONAL PRICES, 2004SEPT 2012 ($/MWH)

Source: Bloomberg New Energy Finance, FERC

Note: Price indices are calculated by averaging the hourly price at ISO hubs throughout

a 24-hour day. Quarterly rolling averages are used to eliminate outliers. Small sample

size accounts for some variation in PPA prices in 2011 and 2012.

0

10

20

3040

50

60

70

80

90

100

2004 2005 2006 2007 2008 2009 2010 2011 2012

PJM West ERCOT West MISO (Illinois Hub)

Southwest Power Pool California PPA price (signing date)


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MIDWEST RPS SUPPLY-DEMAND (TWH)

Source: Bloomberg

New Energy Finance

Notes: Demand is split into regions in the Midwest with binding RPS programmes (Iowa, Minnesota, Missouri) and

regions with non-binding programmes (North and South Dakota, Oklahoma). Supply is based purely on wind

capacity in these states, comprised of capacity commissioned (or having secured financing) as of July 2012.

0

5

10

15

20

25

30

35

40

45

2010 2012 2014 2016 2018 2020

Non-bindingprogrammes

Bindingprogrammes

Wind generation inregion (commissionedor financed)

AVERAGE PURCHASING PRICE BY OFFTAKER ALL


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AVERAGE PURCHASING PRICE BY OFFTAKER, ALLPROJECTS 2011H1 2012 ($/MWH)

Source: Bloomberg New

Energy Finance, FERC

Note: Includes wind, biomass and geothermal PPAs. Does not include solar PPAs.

Only includes offtakers purchasing energy from two or more projects

26

353535

383839414243444647

51525454555757

616466

727376

76100

107

23

3032

34

37

0 5 10 15 20 25

0 25 50 75 100 125

MISOSouthwestern Pub Servic e Co

SPPNYISO

PJMPublic Service Co of Oklahoma

Minnesota PowerBasin Elec tric Power Coop

NEPOOLOklahoma Gas and Electric

Great River EnergyAmerican Electric Power

North ern States PowerNorth Western Energy

Public Servi ce Coof ColoradoS.California Pub Power Authority

Nebraska Public Power DistrictExelon

San Diego Gas & ElectricBonneville Power Admin

Idaho Power CompanyOmaha Public Power District

PacifiCorpFirst Energy Solutions Corp

Associated Electric CoopCA Dept of Water Resources

Tenn essee Valley AuthorityAppalachian Power

Arizona Public ServiceNV Energy

Pacific Gas & Electric

Snohomish County PUDSouthern Cal ifornia Edison

New England Power

Merchant rates PPAs Reporting projects

SOLAR PPA PRICES BY SIGNING DATE H2 2008 2011


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SOLAR PPA PRICES BY SIGNING DATE, H2 20082011($/MWH)

Source: Bloomberg New Energy

Finance, FERC

Note: Does not include PPAs under 5MW. Banded PPA prices are pegged at the average price over

the period of project operation. The California RFP resulted in 7.5TWh of shortlisted generation, of

which about half was PV. California RFP price estimates are sourced from developers. Topaz PPA

price estimate based on first-year total PPA revenues ($198.8m).

0

50

100

150

200

250

Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12

AZ

CACO

NM

NV

NY

PR

250MW

50MW

First SolarAgua Caliente

SempraMesquite Solar I

Eurus Energy Avenal Park,Sand Drag, & Sun City Plants

NextEra Hatch

Iberdrola San Luis Valley

CogentrixAlamosa

SempraCopper Mountain Fotowatio

Apex

Solar ReserveCrescent Dunes

First Solar SilverState North

AESIlumina

BP Long Island

FotowatioSpectrum

Estimated2011 CA RFPshortlist (2016 delivery $7090)

NRGRoadrunner

11 solar PPAsexecutedvia CA RAM

EnelStillwater

First SolarTopaz


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COPYRIGHT AND DISCLAIMER

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photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any

way without prior consent of Bloomberg New Energy Finance.

The information contained in this publication is derived from carefully selected sources we believe are

reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be

construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment ofthe author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New

Energy Finance, Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates ("Bloomberg"). The opinions

presented are subject to change without notice. Bloomberg accepts no responsibility for any liability arising

from use of this document or its contents. Nothing herein shall constitute or be construed as an offering of

financial instruments, or as investment advice or recommendations by Bloomberg of an investment strategy orwhether or not to "buy," "sell" or "hold" an investment.

THANKS!


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ETHAN ZINDLER, [email protected]

TWITTERS: @ETHANALL
mailto:[email protected]:[email protected]

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