PV in the USA: Technology Evolution,

Expanding Markets, Advancing Technology

Scott Stephens
U.S. Department of Energy
Solar Energy Technologies Program
Energy Efficiency and Renewable Energy
http://www.eere.energy.gov/solar
Email: scott.stephens@ee.doe.gov
Tel: 202-586-0565
Agenda

U.S. Department of Energy (DOE) Background and

DOE Solar Program Evolution
Expanding Industry – APEC Opportunity
Solar America Initiative
Preparing for
Unsubsidized Grid Parity

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Organizational Structure:

U.S. Department of Energy

Formed: August 4, 1977
Annual Budget: $23.4 Billion Energy Efficiency,
(2006)
Renewable Energy (EERE)
Annual Budget: $1.255 Billion
(FY09 Request)
10 Programs (5 EE, 5 RE)

Solar Energy Technologies

Program (SETP)
Annual Budget: $168 Million
(FY08)
~20 Staff (incld contractors)

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The mission of DOE’s Solar Program:

Distributed Generation, on-

site or near point of use

Photovoltaics (PV)

Market Transformation

Grid Integration

Concentrating Solar Power (CSP)

Centralized Generation,
large users or utilities

To accelerate the wide-spread adoption of solar electric technologies across the

United States through a program of applied research and development,
demonstration, and market transformation activities.
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 Historical record efficiencies - 30 years of R&D success

Historical Role of DOE:

• Focus on narrow and quantifiable metrics: $/W, cell efficiency, g/W, etc.
• Fund risky technologies (private Sector wouldn’t invest in PV)
• Provide long term support for struggling yet promising companies 5
 History of Photovoltaics
Figure 1
Cumulative installed grid-connected and off-grid PV power in the reporting countries ? Years 1992-2006

6000

Grid-connected
5000
Off-grid
Installed PV Power (MW)

4000

3000

2000

1000

0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Predictions of centralized power production (GW solar

farms) or rural electrification were mistimed or misguided
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PV funding focuses on Levelized Cost of Electricity

Technology Pathway
Partnerships
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Three very different technologies all have viable
strategies to reach grid parity by 2015

Binning technologies allows an “apples to apples” comparison.

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Approach ensures best-in-breed funding across all promising technologies.
Agenda

U.S. Department of Energy (DOE) Background and

DOE Solar Program Evolution
Expanding Industry and the APEC Oppertunity
Solar America Initiative
Preparing for
Unsubsidized Grid Parity

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Trend #1 – Manufacturing shifts: US
EU
Asia

Preliminary Data –
- European manufacturing growth was stimulated by Feed-in-Tariffs
PV News, March 2008

- Initial Asian growth was based upon labor, manufacturing support, tax incentives
- Projected continued Asian growth due to aggressive business strategies
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Trend #2 – Modules flow from Asia to Europe

- Germany remains the only significant, heavily subsidized, uncapped market

- Asian advantages may diminish as EU manufactures automate, ramp production
- This export trend is unsustainable particularly as world PV production takes off
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 In a rapidly growing market with demand reliant on
government incentive programs, oversupply is a risk…

Policy and market risks in an oversupply situation

Policy risks
Germany may revisit accelerated EEG cuts in 2009 - currently uncapped – could assign carbon conditions
Spain may stick to lower caps - recently a 500MW/yr cap has been enacted
EU Nations grow increasingly concerned about uncapped programs
Korea could slash post 2009 subsidy program
Market risks
Excessive profits at >35% margins could erode public support
Global recession / inflation could halt expensive programs
German utilities may have difficulty integrating >15GW of PV on grid
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APEC Opportunity – Domestic Demand Growth

APEC advantages
High Electricity Rates
Solar Resource
Low Labor Costs
Lower Indirect
Local Installation (no shipping)
Manufacturing incentives (SEZ)
Progressive Policy Action
Interconnection, Smart Grid
Commitment to infrastructure
PHEV, Centralized Storage
Climate change sensitivity

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Agenda

U.S. Department of Energy (DOE) Background and

DOE Solar Program Evolution
Expanding Industry and the APEC Oppertunity
Solar America Initiative
Preparing for
Unsubsidized Grid Parity

R. Margolis NREL 14
 DOE can have a unique leadership in the growth of the
solar industry
The PV New Markets Technology
and Innovation
industry has and Policy
Applications
the potential
to enter a Federal
Policy
“virtuous
Makers and
cycle” of Other
lower cost, Agencies
State
new Universities
Legislators
and National
technology Labs
and
and Regulators
expanded
markets.
DOE
EERE
SETP Solar and To reach it’s
Utilities
Other full potential,
and End
Industry
Manufactur- Customers
Groups the PV
ing Scale-Up Cost industry
Reduction requires
close
Building
Financial
coordination
Industry and
Workforce Industry between a
Dev Groups number of
public and
private
entities.
Private
Investment

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October 3rd 2008 – U.S. Congress passes 8-year 30%
investment tax credit (ITC) for photovoltaics.

ITC provides a tax credit for 30% of fully installed system price until January 1st 2017.
Also, the ITC removes the tax credit cap for residential installations and opens up the
credit to electrical utilities for centralized and distributed solar installations.
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Local and regional photovoltaic support programs

The 8-year ITC is a major addition to a collection of other small scale sustainable support programs
including renewable portfolio standards, renewable energy credits, low interest bonds, efficiency
standards on new building construction, and installations on government buildings/land.
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Innovative business models take advantage of solar’s
unique modular advantage

Power Purchase Agreements (PPAs), installation aggregation, “solar options” on

new home constructions, are all business strategies which streamline
installations and accelerate adoption curves.
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Market penetration begins - 2007 residential PV and
electricity price differences with existing incentives

Currently PV is
financially
competitive where
there is some
combination of
high electricity
prices, excellent
irradiance and/or
state/local
incentives.

Employing DOE resources including detailed solar maps, utility rate information, and
financial modeling software (SAM), along with state solar subsidy reporting, SETP plans
to provide “parity maps” which are updated frequently.
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Conservative forecast: 2015 residential without
incentives and (1.5% PA) increase in electricity prices

PV is less expensive
in 250 of 1,000
largest utilities, which
provide ~37% of U.S.
residential electricity
sales

85% of sales (in

nearly 870 utilities)
are projected to have
a price difference of
less than 5 ¢/kWh
between PV and grid
electricity

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Realistic forecast: 2015 residential installations without
incentives and (2.5% PA) increases in electricity prices

PV is less expensive
in 450 of the 1,000
largest utilities, which
provide ~50% of U.S.
residential electricity
sales

91% of sales (in

nearly 950 utilities)
have a price
difference of less than
5 ¢/kWh between PV
and grid electricity

DOE also publishes reports highlighting secondary benefits such as carbon reduction,
price stability, domestic security, technology development
www.nrel.gov/analysis/pvclearinghouse/
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Longer lead efforts Grid Integration / Energy Storage

Inverter/controller markets
are segmented in
automotive, telecom,
mobile, & retail end-uses
Solar energy market
quickly becoming the
biggest contributor to
inverter markets; 2007
~$2Bn sales, 2010 ~$10Bn
High Penetration PV Interface Module sales

SETP is working to develop smart grid standards and eliminate barriers

Coordination with 1000+ utilities, 10+ smart grid and demand response companies, other
government regulatory offices.
Conducting Studies to establish photovoltaic installation thresholds:
www.eere.energy.gov/solar/solar_america/rsi.html
Example: SolarCity (Residential PPAs) + Fat Spaniel (Monitoring) + GridPoint (DR)

Major drivers that will propel accelerated growth

Increasing time-of-use pricing offerings – pressure to expand net metering caps
Growing demand response program practices
Increasing use of intermittent renewable generation and continued power quality / grid reliability
requirements
Integration with smart grid, microgrid, and PHEV 22
Preparation for a solar future:

Expect lower costs

Acknowledge the need for domestic PV demand growth
Push for long-term and sustainable subsidy programs
Leverage domestic strengths: low labor costs, strong
policy support, aggressive business investments, IC
workforce, SEZ
Quantify secondary benefits including energy security
and carbon reduction
Anticipate, foster, and coordinate local support
programs
Bypass “dumb grid” investments by promoting
synergistic technology solutions (PHEV, TOU, DR,
Storage)

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 For More Information:
DOE Solar Program/Analysis: http://www.eere.energy.gov/solar/solar_america/
PV Value Clearinghouse: www.nrel.gov/analysis/pvclearinghouse/
SNL PV Systems R&D: www.sandia.gov/pv
NREL Solar Research: www.nrel.gov/solar

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Questions on this Presentation:

Scott Stephens
Scott.Stephens@ee.doe.gov
O: 202.586.0565
M: 612-720-5446

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