Solar installs grow 43 percent in Q2 2016, but long-term questions emerge in each segment

solar installations increase

Don’t miss my Biggie Smalls reference in the copy below.

Growing 43 percent year-over-year, the U.S. saw 2,051 MW of solar photovoltaics installed in Q2 2016. According to GTM Research and the Solar Energy Industries Association’s latest U.S. Solar Market Insight report, this marks the eleventh consecutive quarter in which more than 1 GW of PV was installed, driven largely by the utility-scale sector.

This record-breaking installation total marks the beginning of an unprecedented wave of growth that will occur throughout the remainder of 2016, specifically within the utility PV segment. With more than 10 GWdc of utility PV currently under construction, the second half of this year and the first half of 2017 are on track to continue setting new records for solar capacity additions.

But as Biggie once told us, with mo’ money comes mo’ problems. During that same stretch, new storylines across each segment emerged that will not only shape the next 12 months, but which have also raised questions about the long-term drivers of continued growth. GTM lists those as:

• Utility PV: The timing of the federal ITC extension in December 2015 has complicated the development timeline for the more than 18.5 GWdc of utility PV installations that would have attempted to interconnect in 2016 had the ITC not been extended. While 7.8 GWdc are expected to come on-line in 2H 2016, 5.7 GWdc will spill over into 2017 and an additional 3 GWdc will be pushed out beyond 2017. In turn, more than 65 percent of the 2017 utility PV installation forecast is expected to stem from project spillover.

• Non-residential PV: For the non-residential PV segment, the major state markets are transitioning toward more diversity in types of project development. Self-consumption projects that avoid system-size limits set under net metering programs and new community solar programs are countering continued weakness in the non-residential rooftop solar. Most notably, community solar programs in California and the Northeast are on track to drive over 100 MWdc of community solar for the first time ever on an annual basis.

• Residential PV: The residential solar market is experiencing different storylines across major and emerging state markets. In a handful of emerging state markets, quarterly growth rates are spiking as national installers tap into new regions that have reached grid parity, where the cost of customer acquisition remains cheap given the plethora of early-mover customers. Meanwhile, major state markets are continuing to grow, but at much slower rates compared to the past few years. Conversations with some installers suggest that the cost and length of customer acquisition are increasing as fewer early mover customers remain, and this challenge is limiting growth, especially in California.

The quarterly report dives into all of this in much greater detail, and you’ll want to check it out for yourself here.

— Solar Builder magazine

Highlights from SEPA’s 2015 Solar Market Snapshot (residential rooftop up 50%)

The Smart Electric Power Alliance (SEPA) announces the release of its 2015 Solar Market Snapshot, which tracks key trends and market insights in the U.S. market for solar and other distributed energy resources.

SEPABased on SEPA’s annual Solar Market Survey of hundreds of utilities across the country, the report provides a clear picture of a market in transition, mixing record growth and ongoing price cuts with increasing technological and policy complexity.

• The amount of solar on residential rooftops across the country jumped 50 percent, from 3,612 megawatts (MW) to 5,434 MW. However, utility-procured solar projects — which range from community solar to large-scale plants — continue to deliver the most capacity, close to 3,500 MW in 2015, at prices increasingly competitive with fossil fuels.

• Meanwhile 30 state legislatures or regulatory commissions considered reforms to rate design or to compensation to solar customers for the excess power they feed into the grid. A total of 61 utilities filed applications to increase fixed service fees, but only seven of these cases were approved at the full amount requested, while 18 were approved at a lower amount and 17 were denied.

• Utilities started to test advanced technologies that will allow them to integrate ever-larger amounts of solar and other distributed resources. More than half of the utilities answering survey questions on advanced technologies — such as storage and advanced inverters — said they are interested in them, but at this point, actual deployment numbers are still low.

“What distinguishes SEPA’s survey from other market intelligence is that our data is based on numbers of solar megawatts and interconnections we get directly from utilities,” said Research Analyst Ryan Edge, who led this year’s survey. “This approach provides a more realistic assessment of trends and regional growth patterns.”

About 350 utilities provided information for this year’s survey — a 20-percent increase over 2014, he said.

“The 2015 snapshot confirms, once again, the central role utilities are playing in the energy transition — and will continue to play as we face the challenges in policy and technology still ahead,” said Julia Hamm, SEPA President and CEO. “But most important, the report clearly documents solar’s increasing cost-competitiveness with other forms of generation, the integral role of other distributed energy resources, and the need for clear, replicable road maps for change that can balance risk and innovation.”

— Solar Builder magazine

How to design rates for a distributed grid? This paper has some answers

As electric industry regulators prepare for their summer meeting in Nashville, a group of solar and tech organizations and companies, including TechNet, Sierra Club, the Solar Energy Industries Association (SEIA), Vote Solar, The Alliance for Solar Choice, CalSEIA, and SolarCity released a paper on designing electricity rates in the era of distributed energy resources.

SEIAThe paper titled, “Rate Design for a Distributed Grid,” describes a wide range of benefits for all consumers that come from distributed energy resources such as rooftop solar. These benefits include reduced need for electric generation, transmission and distribution capacity, lower energy costs and reduced price volatility.

The paper advocates for studying the costs and benefits of distributed resources, recommends a set of rate design principles to ensure fairness to all ratepayers and advocates for a series of reforms that can better integrate distributed resources into the electric grid and maximize their value. It comes in response to the Edison Electric Institute’s recent so-called primer on rate design.

RELATED: San Diego is first California city to hit solar cap — so now what? 

“Rooftop solar is of the most popular clean energy products in recent history among electricity consumers,” said Andrea Deveau, Executive Director of TechNet. “Utilities should embrace this and other reliable, clean and advanced energy technologies and integrate these resources into their procurement and grid planning in order to reduce electric system costs while lowering emissions without any compromise to system reliability.”

“Time and again, state public utility commissions and other researchers have found that the benefits of distributed solar equal or exceed the costs to electric ratepayers,” said Sean Gallagher, Vice President of State Affairs at SEIA. “Rather than using rates to slow down the solar revolution, utilities and regulators can help bring about a sustainable distributed energy future that takes advantage of the services that solar systems can provide to the grid.”

The paper’s recommendations include:

• Study the impact of distributed resources with a cost-benefit analysis.
• Design electricity rates that empower consumers to control costs and adopt new technologies that provide system-wide benefits.
• Implement technology standards to increase the functionality of distributed resources.
• Update utility business models so that utilities are incentivized to rely upon customer-sited distributed resources to meet infrastructure needs.
• If rate changes are needed, implement them gradually and incrementally, with grandfathering for customers who made long-term capital investments on the basis of previously existing rates.

Download the paper here.

— Solar Builder magazine

EnergySage Report: Consumers value solar install price transparency

EnergySageEnergySage published its second semi-annual Solar Marketplace Intel Report, providing further visibility into the residential solar market in the United States. By aggregating, analyzing, and publishing research based on millions of transaction-level data points, EnergySage looks at how the solar industry will evolve as it becomes more efficient and transparent, and as consumers are more empowered throughout their buying experience.

Everyday, thousands of consumers interact with hundreds of pre-screened solar installers and financiers in the EnergySage Solar Marketplace. In 2015 alone, EnergySage helped over 500,000 solar shoppers research and explore solar, facilitating more than $30 million in solar PV system transactions. Based on statistically valid transaction-level data, EnergySage’s recent report reveals insight into solar price trends, consumer buying behavior, market share statistics and more for the period of January 2015 through December 2015.

Key national findings from the 2015 EnergySage Solar Marketplace Intel Report include:

Consumers shopping around, seeking price transparency. Only 4% of shoppers in the EnergySage Solar Marketplace expressed an interest in receiving a site visit from solar installers before they review their solar quotes, which is counter to the model employed today by the country’s largest solar installers. Additionally, one third of solar shoppers on EnergySage signed up after receiving a quote from a solar installer – typically one of the large solar leasing companies – evidence that consumers are shopping around.

RELATED: Four steps for converting more solar sales 

Solar prices continue to decline. From the second half of 2014 to the second half of 2015, gross costs per watt dropped from $3.86 to $3.69 – nearly a 5% reduction. Payback periods for consumers were 7.8 years on average. Most common prices in the Marketplace ranged between $3.50/W and $3.75/W, and had a standard deviation of $0.54 in 2015.

High price dispersion exists nationally and state-by-state. Nationwide, solar quotes were as low as $2.00 per watt and as high as $6.50 per watt. Within states, prices differed by over $2.00 per watt – resulting in a price variance of up to $15,600 for an average 7.8kW system.

Despite high fragmentation, top five manufacturers and lenders hold large market shares. Of the over 40 panel types offered on the Marketplace in 2015, the top five made up over 60% of the quote volume. Greater consolidation existed for inverter brands, with the top five holding 90% market share. This consolidation is also apparent with solar lenders. Of the 46 financiers offered in the marketplace, the top ten comprised 90% of all solar loan offers.

“The Solar Marketplace Intel Report is representative of where the solar industry is headed,” said EnergySage CEO Vikram Aggarwal. “As the market continues to mature and become more transparent, the buying and selling of solar will naturally become easier and more efficient, for all parties involved. And as our data shows, we’re seeing this trend hold true for consumers who are increasingly seeking the benefits of online comparison-shopping through our Solar Marketplace.”

Click here to view the full report.

— Solar Builder magazine

What’s it cost to install solar in California

As residential solar continues its explosive growth in California, homeowners considering solar confront a persistent question: How much does solar actually cost?

To help homeowners navigate the confusing home solar market, Solar to the People, a solar information website, has released a study detailing the average cost of solar in regions across California.

According to this study, the average cost of installing solar in California in 2015, after incentives, is as follows:

1) Central Coast – $16,212
2) San Francisco Bay Area – $17,038
3) North Coast – $17,451
4) Los Angeles / Ventura Counties – $18,040
5) Sonoma / Napa / Solano Counties – $18,240
6) San Diego County – $18,540
7) Orange County – $18,866
8) San Bernardino / Inland Empire – $19,115
9) Sacramento – $19,302
10) Central Sierra – $19,700
11) Central Valley – $20,612
12) Redding and Shasta / Cascades – $20,698

State Average – $18,675

cost of solar california

RELATED: Another solar win: California keeps net metering rates 

Key study findings:

– The average cost of purchasing home solar in California in 2015 was $18,675, after incentives.

– This average cost equates to $3,395 / kW installed, after incentives.

– The average size of home installations across the state in 2015 was 5.5 kW.

– Despite paying the most for solar overall, the Redding and Shasta / Cascades area paid the lowest per kW installed, at $3,178 / kW, after incentives.

– Interestingly, this trend was reversed for the Central Coast – which despite being the area with the lowest average cost of going solar paid the highest cost per kW installed, at $3,712 / kW, after incentives.

This study aims to provide transparency for California homeowners who are considering making the switch, by helping shed light on the average cost of solar in their region. The study also looks at average size and cost per installed kilowatt (kW) of residential solar.

Data was obtained from the new net energy metering interconnection data set published by the California Solar Statistics website, the official reporting site for the California Solar Initiative.

— Solar Builder magazine