Can the U.S. Lead the Global Solar Market?
Historically, the US has been a big player in terms of the global solar industry. From 2005-2011, the US market oscillated somewhere between 5-7 percent of global installation in any given year. Solar installations in the country doubled in 2010 and came close to doubling again in 2011. But what was really happening is that the US market was growing in tandem with the global market at basically the same pace in any given year. As a result, the US always stood in 3rd, 4th or 5th place—behind Germany or sometimes Italy, Spain, Japan or China (more recently).
The US market has been interesting from a certain perspective, but it certainly hasn't been driving the global market. We're now heading into a position where that can change relatively quickly. Although 2012 did not see the same growth as the past couple of years, there's an expectation that the European markets will be shrinking, while China, India, the US and others keep growing. So while we can expect the global market to slow down a bit, the US market, in contrast, is just getting started.
When will the US head the solar market?
“In a tariff-imposed post-1603 world, we can't expect to see monumental growth the same as we have in the past,” says Shayle Kann, Managing Director of Solar Research at GTM Research. “However, 50-75 percent growth is entirely likely—meaning the US market will grow faster than the global market, and thus, gain more shares... Our assessment [at GTM Research] is come 2015 or 2016, the US will either be in 1st or 2nd place, depending on what happens with China.”
Two years ago, many solar power companies started turning their eye towards the US for new opportunities, and started realizing the US market is a lot different than the Italian or German markets when they were booming. “The US market is a different beast,” says Kann. It's driven entirely separately in 50 different states in three different market segments in 3,000 utility territories. “The US is complicated—especially financing, because we have tax equity here which doesn't exist anywhere else. It's not easy to play here,” he says.
Last five months of ups and downs...
Additionally, the last five months in the US solar market have been the most tumultuous we've ever seen. There were six major acquisitions each year over the last three years, and that won't slow down anytime soon. Half of the developers we see today won't be around in their current form in two more years.
“We are in a new world now, and need to figure out how to deal with it,” says Kann.
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Where do we stand now?
As far as PV and CPV goes, there are just over 1 GW of projects operating in total, but over 9 GW of projects currently have PPAs signed by utilities throughout the US that have not yet been completed. The vast majority of those are expected to be completed in the next four years and about 3 GW of those projects are currently under construction. Another 6 GW are waiting to get financed. These numbers, however, exclude any other projects that will get PPAs signed over the next few years. Some 32 GW worth of projects are still seeking permits, PPAs and financing.
Nonetheless, the pipeline in the US is gigantic and that's why there is so much interest in its market. There's so much potential, considering that only 1 GW has been installed.
Though it may not seem like a lot, the US has actually come a long way. In 2009, there were only two projects in the US over 10 MW; in 2010, there were 8; and in 2011, there were 24. Although it's a crowded market, the US is successfully completing and financing projects and more are expected in the coming year.
“Basically, what we've done in the US to date is install one big solar plant worth of solar power,” says Kann. “That means that we have a long way to go before solar is a meaningful proportion of the electricity portfolio in the US—it also means that the market potential is virtually limitless by current standards.”
In the Public Eye: Solyndra as an opportunity
Without a doubt, solar is suddenly very much in the public eye and all over the media, which is both a curse and a blessing. People are interested and it's an exciting new market, which helps bring along financing. However, when a Solyndra pops up, the whole industry looks bad.
“Solyndra isn't going away and that's something we have to acknowledge,” warns Kann. Some of the first ads for the general election—on both sides of the Obama administration—have related either directly or indirectly to Solyndra, and will continue to be a contentious topic in the political sphere.
But despite the fact that Solyndra looked bad, the solar industry is booming in the US. In terms of solar installations alone, the US grew over 100 percent in 2010, around 90 percent in 2011 and is expected to grow another 50-75 percent this year, depending on what happens with the import tariff with China and 1603. “This is an opportunity for us to prove that solar will scale up over the next few years, as it's certainly a technology that's not going anywhere,” says Kann.
Expect to start seeing enormous growth in the pipeline that's been financed for utility-scale solar power. Though 50-75 percent growth is projected for overall installations, the utility market will grow by a minimum of 100 percent. That will also belie the turmoil occurring underneath in regards to developers trying to figure out how they can get these pipelines in place, build them out, deal with financing, tax equities, etc.
ScottishPower submits plans for UK's largest electrolyser
ScottishPower has submitted a planning application to deliver the UK’s largest electrolyser which will be the key component of a green hydrogen facility located close to its Whitelee windfarm.
Alongside the 20MW electrolyser, the application also includes proposals for a combined solar and battery energy storage scheme - up to 40MW and 50MW respectively - to power the electrolyser. They will be installed about 5km west of Lochgoin Reservoir and next to the existing Whitelee Extension substation.
The submission marks an important step for Green Hydrogen for Scotland, a partnership between ScottishPower, BOC and ITM Power, to create green hydrogen production facilities with clusters of refuelling stations across Scotland.
The proposed green hydrogen project will be engineered and operated by BOC, using wind and solar power produced by ScottishPower Renewables, and the electrolyser will be delivered by ITM Power. The project aims to supply hydrogen to the commercial market before 2023.
Green Hydrogen for Glasgow aims to provide carbon-free transport and clean air for communities across Glasgow as well as helping support industrial hydrogen demand in the region. The city, set to host the United Nations 26th Climate Change Conference, COP26, later this year, aims to become the first net zero city in the UK by 2030.
Barry Carruthers, ScottishPower’s Hydrogen Director, said: “With all eyes set to be on Glasgow later this year as the city hosts the UN’s 26th climate change conference, COP26, it’s fantastic to be making this next important step towards delivering green hydrogen for Glasgow.
“Whitelee keeps breaking barriers, first the UK’s largest onshore windfarm, and soon to be home to the UK’s largest electrolyser. The site has played a vital role in helping the UK to decarbonise and we look forward to delivering another vital form of zero carbon energy generation at the site to help Glasgow and Scotland achieve their net zero goals.”
He added green hydrogen has a vital role to play in Scotland and the wider UK’s journey to Net Zero emissions, providing a sustainable energy source that can provide clean, renewable energy for industries, heavy transport and companies for future decades.
Green hydrogen is a zero carbon energy source which can be used by industries and companies that cannot fully electrify their operations to help them lower their emissions, for example, heavy duty transport like buses and bin lorries.
The technology gets its name from the green power source, normally wind or solar, used to power an electrolyser to split water into its core elements; hydrogen and oxygen gas. The hydrogen can then be stored and transported for use as needed.
The green hydrogen facility at Whitelee, the UK’s largest onshore windfarm, will house a 20MW electrolyser and would be able to produce up to 8 tonnes of green hydrogen per day, roughly equivalent to fuelling over 550 buses to travel from Glasgow to Edinburgh and back again each day.
Graham Cooley, CEO ITM Power, said it marks an exciting milestone based on market development for green hydrogen for the city of Glasgow, that will see the UK’s largest electrolyser deployment to date being realised in Scotland.
Mark Griffin, Hydrogen Market Development Manager for Clean Fuels at BOC said: “The scale of this project demonstrates the growing demand for clean hydrogen and as a member of the Green Hydrogen for Scotland partnership, we’re delighted to bring our hydrogen mobility and refuelling project expertise to help deliver a ground-breaking facility in Glasgow.”
The hydrogen production facility could support Glasgow City Council as well as surrounding local authorities and industries in their ambitions to create a zero emissions vehicle fleet, using only electric and hydrogen-powered vehicles by the end of 2029.
ScottishPower expects a decision on the planning application in autumn.
The UK recently announced a £3 million investment to develop the Tees Valley hydrogen transport hub (click here).