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Who Wins When Bifacial, Thin-Film CdTe and Crystalline Silicon PV Face Off in the Field?

August 16, 2017

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Solar module manufacturers one-up each other on a regular basis in the quest for the world’s most efficient panel. The results usually come out of laboratories, where the modules undergo precise testing in a controlled environment under standard test conditions (STC).  

In the real world, however, the picture is more nuanced. Field conditions are often a far cry from artificially stable lab environments.

New results from a recent series of field tests highlight the variation that occurs when technologies are tested side-by-side in different regions, where array design and siting, temperature, humidity, and a variety of other factors influence performance.

Three module test labs, DNV GL, TÜV Rheinland Photovoltaic Testing Lab and Celestica, tracked the performance of 2-kilowatt systems that use one of three technologies: thin-film cadmium telluride (CdTe), n-type silicon bifacial, and crystalline-silicon (c-Si). Modules were selected at random by the labs.

Test sites in Davis, Calif., Tempe, Arizona and Toronto each assessed eight or nine systems with a mix of the different technologies. Data from the arrays were collected for at least a year.

Source: TUV Rheinland

The CdTe panels, supplied by First Solar, and the first-generation B245 bifacial panel (bifacial-1) produced by Prism Solar performed best in the two hotter environments. The results of the field study lend credibility to technologies that are gaining traction in the market beyond the c-Si, which makes up the majority of solar panels today.

In Tempe, more than 90 percent of the energy yield was produced at temperatures higher than 25 degrees Celsius, and the highest energy generation happened above 45 degrees Celsius.

Note: Array 1 Prism bifacial; Array 3 unnamed Bifacial; Array 2, 4, 5 c-Si; Array 6-9 CdTe

Source: TUV Rheinland

The two different bifacial panels show that performance varies by supplier and location, with Prism’s bifacial panel far outperforming the unnamed competitor in Tempe, while the other panel provided a slightly higher performance ratio in Toronto. Bifacial panels can produce power from both sides of the module, capturing direct and indirect sunlight.

There are various factors that drive bifacial performance, with albedo (the amount of solar energy reflected off of a surface) and row spacing being two important contributors. There is currently no industry consensus on rating methodology for bifacial modules, and manufacturers are using different methods.  

At SNEC 2017 in Shanghai in April, bifacial panels were seemingly everywhere, according to GTM Research solar analysts who attended. Editors at PV Tech commented that given the major players showing off their bifacial panels at SNEC, “a recent niche product could be set for the mainstream, very shortly.” 

However, the industry needs to solve several key issues that are limiting the product's acceptance prior to bifacial modules being adopted for large-scale usage.

The field study also backs up First Solar’s competitive advantage claims over traditional crystalline silicon technology. CdTe modules performed well at higher temperatures compared to C-Si modules in Tempe due to the better temperature coefficient of CdTe, the TÜV Rheinland study found. The CdTe modules had STC efficiencies close to those of c-Si, ranging from 13.2 to 14.7 percent. The variability between the First Solar array performance represents the improvement in efficiency and energy yield from Series 3 Black Plus through its Series 4-2.

Even in Davis, where temperatures are not quite as hot as in Tempe, most of the arrays spent at least half their time at temperatures of 25 degrees Celsius or above. Because of those high temperatures, the Davis CdTe arrays also had a performance ratio higher than the average of c-Si panels.

Note: Array 1 Prism bifacial; Array 2, 7-9 c-Si; Array 3-6 CdTe

Source: TÜV Rheinland

The picture was more muddled in the relatively cold environment of Toronto. The unnamed bifacial panel had the highest average annual DC efficiency of 17.17 percent among all the arrays, while CdTe-1 had the lowest efficiency of 12.82 percent, and another CdTe system had the second-highest efficiency of 14.45 percent. 

Note: Array 1 Prism bifacial, Array 2 unnamed bifacial, Array 3 c-Si, Array 4-7 CdTe

Source: TÜV Rheinland

The findings from the reports do not upend conventional wisdom, but they do highlight the regional variation for each technology in real-world conditions. The results also suggest the potential threats that traditional c-Si products could face as technologies continue to fall in price due to higher volumes, lower balance-of-system costs, and more widespread market recognition.

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This article was sponsored by TÜV Rheinlanda global leader in independent inspection services. TÜV Rheinland inspects technical equipment, products and services, oversees projects, and helps to shape processes and information security for companies. Since 2006, TÜV Rheinland has been a member of the United Nations Global Compact to promote sustainability and combat corruption. 

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A World Bank Group Solar Program May Unlock 1.2GW of Utility-Scale Projects in Emerging Markets

August 16, 2017

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A solar program from the World Bank Group (WBG) will lead to over 1.2 gigawatts of competitively priced utility-scale solar PV in Zambia, Senegal, Ethiopia and Madagascar in the coming years, according to new research.

Despite criticism from local developers, the program is a breakthrough risk mitigation and advisory mechanism that offers global solar developers a chance to secure a foothold in new markets with high growth potential and low rates of energy access.

GTM Research and Blue Horizon ECS are out with a new report on WBG's Scaling Solar Program, finding it could be a catalyst for emerging markets.

The Scaling Solar Initiative is designed to address utility-scale solar project development challenges in emerging markets through a transparent auction overseen by the International Finance Corporation, with prescreened project sites and standardized contracts. Its aim is to support the procurement of utility-scale solar PV projects through a one-stop shop for turnkey advisory and due diligence, as well as standardized contracts that can be used by "any government and any bidder and any bank."

The program also leverages risk reduction products from WBG to allow countries with high perceived risks and limited institutional capacity to benefit from solar PV project financing (typically LIBOR + single-digit market rates for 17- to 19-year terms).

Scaling Solar made headlines in June 2016 when a First Solar-Neoen consortium was awarded a bid of USD $0.0602 cents per kilowatt-hour (non-indexed) for the 54 megawatt-DC West Lunga project site, less than one year after signing the initial memorandum of understanding with the Zambian government.

FIGURE: Zambia’s Solar PV Bid Prices for 25-Year PPA in June 2016



Source: Evaluating the World Bank Group’s Scaling Solar Program

Addressing barriers to utility-scale solar in these markets

Development of new utility-scale projects in these markets faces a number of challenges, which have made it difficult to execute bankable and competitively priced projects in the past. These challenges include non-transparent procurement, questionable offtaker credibility, non-cost-reflective tariffs, exchange rate volatility, and overall lack of a stable institutional framework with strong regulatory support.

Organizations within WBG offer several support products to address some of these challenges and de-risk projects for developers, investors and governments.

Offtaker payment risk, for example, is a common challenge in markets where the state-owned utility sells electricity below the cost of supply and may have a conflict of interest to give preference to its generators rather than independent power producers if surplus supply exists. Similarly, the WBG insures against political risks such as government seizure of the project site or other contract breach.

FIGURE: Overview of Prepackaged Scaling Solar Support Products



Source: World Bank Group

Criticisms of the Scaling Solar Program

The program has come under criticism from some who say it hinders local developers in favor of vertically integrated global players that can offer more competitive pricing and may not have otherwise had interest in projects in Scaling Solar markets.

For example, the Zambia bid set a price benchmark expectation elsewhere in Africa that may limit developers in other markets. Developers are citing difficulties with regulators expecting similar prices or holding out on approving project licenses because of an expectation that there may be an MOU with Scaling Solar announced soon.

But while Scaling Solar may delay or threaten procurement for some share of nascent local developer pipelines, the solar industry is not a zero-sum game.

There are other market development drivers in the region, such as a the recently successful NamPower tender in Namibia, which resulted in a 45.5-megawatt contract awarded to Alten Developments Africa at NAM 0.807 per kilowatt-hour (USD $0.060) -- slightly less than the leading Zambia bid without the risk-mitigated bidding environment Scaling Solar provides. The Scaling Solar program also does not address the distributed segments of these markets.

Further, if initial projects backed by IFC demonstrate that utility-scale projects can be procured competitively and built on time, they are likely to pave the way for more utility-scale development down the road. Future refinement of the Scaling Solar program may take some of these considerations into account along with further encouragement of a sustainable local industry in each of these markets.

Future outlook of Scaling Solar in Africa and Asia

As the program continues to progress in Zambia, Senegal, Madagascar and Ethiopia, IFC is also currently in negotiations with 12 more countries to set up Scaling Solar tenders under advisory mandates, including governments in Central and Southeast Asia and elsewhere in Africa.

The recent state of emergency declared by the government in Zambia highlights the value of the Scaling Solar program’s risk mitigation offerings in keeping these projects bankable. Neither of the projects in Zambia have reached financial close yet, despite an IFC deadline six months after projects were awarded in June 2016. While the program is off to a strong start, the jury is still out on its long-term success and replicability, as well as intended and unintended market impacts on the local industry.

Future rounds of the program will also benefit from lessons learned, including adjusting the timeline of the program to be more generous in lead times for engaged governments, more concrete requirements around land ownership and land-related environmental and social issues, and more customized prequalification criteria to prevent some private-equity-backed bidders from being structurally precluded from participating.

Scaling Solar’s transparent and standardized auction approach has demonstrated its ability to attract vertically integrated global developers to frontier markets by targeting the correct barriers to utility-scale solar project development in these high-risk markets.

Despite out-competing nascent local pipelines in the short term, these IFC-backed procurements could prove to be a major market driver for unlocking gigawatts of capacity in new markets for years to come.

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This new report from GTM Research on the World Bank Group’s Scaling Solar Program explores the program offerings, engagement process, achievements to date, opportunities for developers, and future potential. For more insight, contact sales@gtmresearch.com.

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Suniva, SolarWorld Make Their Case for Import Relief: ‘We’re Not Out to Kill the Industry’

August 16, 2017

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Federal trade officials asked representatives for Suniva and SolarWorld to justify their request for tariffs on imported solar equipment on Tuesday, marking the latest step in a case that threatens to upend the U.S. solar industry.

The 10-hour hearing at the International Trade Commission in Washington, D.C. drew dozens of solar industry leaders, foreign diplomats and activists sporting t-shirts that read, "Save America's Solar Jobs, No New Solar Tariffs." 

Executives for the troubled solar manufacturers told the agency’s four commissioners that tariffs and price minimums are needed to revive their industry, which has been crushed by cheap imports from Asia.

“Quite simply, we need the commission’s help to save solar manufacturing in the United States,” said SolarWorld CEO Juergen Stein.

The companies are calling for duties of 40 cents per watt on imported cells and a floor price of 78 cents per watt on modules. If the commission approves the request, it could destroy 88,000 jobs in installation, sales and construction, according to estimates by the Solar Energy Industries Association.

“What would you recommend might help the broader solar industry?” asked Commissioner Meredith Broadbent.

“We’re not out to kill the industry,” said Matt Card, Suniva’s VP of commercial operations. “We are very open to a solution that works for all parties.”

As the ITC hearing took place in Washington, President Trump held a press conference in New York City to discuss his $1 trillion infrastructure plan. “We want products made in the country," he said at the presser. “I want manufacturing to be back into the United States so that American workers can benefit.”

Solar trade case watchers will be paying close attention to Trump's comments on jobs and the broader economy, as the final decision on whether to provide import relief, and the amount of relief, could end up being his.

Lawmakers say tariffs will cause their states to suffer

Suniva and SolarWorld have refuted the SEIA’s job predictions, pointing to an economic analysis by the law firm Mayer Brown that found new tariffs on solar products would result in a net increase of at least 114,800 jobs across all segments of the U.S. solar industry.

“There’s no way that math works,” said Tom Werner, the CEO of California-based SunPower, during a break in the hearing. “It’s ridiculous.”

Werner was among half a dozen solar company executives who testified that Suniva and SolarWorld brought their recent financial collapses upon themselves. Presidents and CEOs took turns describing their dealings with the two companies, recounting late deliveries, subpar panel efficiency and recalls on faulty panels.

“Not only are these arguments factually false, they are offensive,” said Suniva’s lawyer, Matthew McConkey, of the allegations. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities.”

More than 25 witnesses testified against the proposed tariffs, including state lawmakers from Minnesota, North Carolina and Maryland. 

“Minnesotans benefit enormously from the solar trade with Canada,” said Sen. David Tomassoni, noting an Ontario-based solar producer, Heliene Inc., that employs workers in the state’s Iron Range.

“Operations like Heliene’s…will no longer have access to vital components, and Minnesotans will suffer the consequences,” he said.

North Carolina Rep. Jason Saine said solar growth played a key role in helping his state attract $9 billion in investment over the past 10 years, which has especially benefited poorer counties.

A bipartisan group of 16 senators and 53 members of the House of Representatives sent open letters to Commission Chairman Rhonda Schmidtlein urging the commission to reject the petition. “We respectfully request that the commission carefully consider the potential negative impact that the high tariffs and minimum prices requested would have on the tens of thousands of solar workers in our states and on the hundreds of companies that employ them,” the letters state.

Several conservative free-market groups have also joined with SEIA to fight against protectionist trade measures.

Petitioners say previous trade cases didn't do enough

Representatives from the Embassy of Canada and the Embassy of Mexico testified against the petition, saying the two countries should be excluded from duties because they don’t supply a significant percentage of solar imports. 

Georgia-based Suniva filed the original petition under Section 201 of the 1974 Trade Act, which is an obscure part of U.S. trade law that could allow the president to implement tariffs, minimum prices or quotas on solar products from anywhere in the world if the ITC finds "serious injury." SolarWorld, a German company with U.S. manufacturing operations in Oregon, joined the petition in May.

“What inspired Suniva and then SolarWorld to revive the use of the dormant Section 201 global safeguard law?” asked Vice Chairman David S. Johanson, noting it had not been used in a case since 2001.

SolarWorld lawyer Timothy Brightbill responded that anti-dumping laws implemented against China and Taiwan in 2015 had failed to address the industry’s downturn, and Chinese producers were “openly boasting” about how easy it was to set up solar manufacturing operations in other countries to circumvent the duty orders.

Todd Baylson, 41, who traveled from Philadelphia to attend the hearing, says the petition has “introduced uncertainty” at Solar States, an installation company where he works in business development.

“We have a really big project that we’re involved in, and it’s tied to a [power-purchase agreement] price,” said Baylson. “If panel prices double…it’s a problem.”

The ITC is expected to issue a decision in September. If trade officials decide that imports have caused "serious injury" to domestic solar manufacturers, they will recommend remedies to President Trump, who has spoken extensively about protecting U.S. manufacturing jobs. The final decision to accept, change or reject the ITC’s recommendation will be up to him.

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The Messy Politics Surrounding the Solar Trade Case

August 15, 2017

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As the U.S. International Trade Commission holds its first public hearing on the Suniva and SolarWorld trade case today, many solar stakeholders are already thinking ahead to the fall -- and about President Trump.

To be sure, the ITC holds a lot of sway in this case. The commission is expected to complete its investigation of the Section 201 trade petition by September 22, and if the trade body determines foreign imports have caused no injury to the domestic solar industry, the case will be thrown out. However, there's a good chance the final determination rests out of the ITC’s hands.

The ITC’s prehearing report states that numerous U.S. producers of crystalline silicon photovoltaic (CSPV) products reported adverse impacts on their operations due to import competition. In one query, nine U.S. producers ranked imports as an extremely important cause of injury, and one firm ranked it as an important factor. 

During testimony today, Matthew McConkey, partner at law firm Mayer Brown representing Suniva, insisted this case isn’t only about the two petitioners. “The United States is literally strewn with the carcasses of shuttered solar manufacturing facilities,” he said.

If the ITC does find injury, the case will very quickly become political. The commission will hold a hearing to discuss a trade remedy on October 3. That recommendation will then go to President Trump, who has the authority to accept, reject, soften or toughen the ITC’s proposed sanctions.

It’s the Trump card that has some solar industry insiders concerned. The Solar Energy Industries Association (SEIA) is making the case that foreign-owned solar product manufacturers Suniva and SolarWorld brought their recent financial collapses upon themselves, even as the broader U.S. solar industry continues to thrive. SEIA calculated that 88,000 U.S. jobs would be lost if the requested tariffs are approved.

The trade group has garnered support from a bipartisan group of 16 senators and 53 members of the House of Representatives, who sent open letters to PTC Chairman Rhonda Schmidtlein urging the commission to reject the petition. “Increasing costs will stop solar growth dead in its tracks, threatening tens of thousands of American workers in the solar industry and jeopardizing billions of dollars in investment in communities across the country,” the Senate letter states. Several conservative free-market groups have also joined with SEIA to fight against protectionist trade measures.

Despite these efforts, some opponents of the case say they’re worried SEIA’s approach is flawed and that the trade group’s arguments will be ignored by a president who’s disconnected from Congress, from the traditional lobbying process, and from the rest of the Republican Party.

Stockpiling and price spikes

Opponents of the trade petition were unwilling to publicly acknowledge that tariffs could be approved, due to the sensitivity of the pending case. But it’s safe to say there’s a strong sense of unease -- and companies are planning for it. Solar developers have been stockpiling solar panels in anticipation of a price hike. And prices are said to have already increased 20 percent to 30 percent, just on the threat of new tariffs.

"The Trump administration has given a very clear indication that [trade remedies are] are their preferred mechanism for protecting existing manufacturers and attracting investment into new U.S. manufacturing -- and we’re not the only ones,” said one solar industry expert, referencing the administration’s recent investigations into aluminum and steel under Section 232 of the Trade Expansion Act of 1962. “It’s not like this trade case is magically popping up because solar is in trouble; it’s because the administration gave a signal that this is something they would support.”

In a speech delivered last summer, then-candidate Donald Trump specifically said he would use “every lawful presidential power to remedy trade disputes, including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974, and Section 232 of the Trade Expansion Act of 1962.”

One source with ties to the investment community said that letters from lawmakers don’t mean much in this context, and added that SEIA should be doing more. People close to Trump or those hailing from Wall Street need to be opposed the tariffs in order for the president to oppose them. 

Can traditional conservatives win over the White House?

SunPower CEO Tom Werner, a registered Republican, acknowledged the philosophical divide among conservative political leaders on trade, but felt confident the jobs numbers would compel the Trump administration to reject the trade remedies.

“Traditional conservatives, which are largely not in the White House, are free-market-driven,” Werner said. “I think the common thread between the White House protectionist comments and the traditional conservatives is the desire [to create] American jobs.”

“That’s the irony of this case -- it’s trying to protect [fewer] than 1,000 jobs of the solar industry’s 260,000 jobs,” he added, referring to Suniva's and SolarWorld’s current employee numbers. “We’re hopeful the intersection of these things will bring the White House together with traditional conservatives.”

Senator David Perdue of Georgia -- Suniva’s home state -- is considered a top Trump ally in Congress, and has come out against the Suniva and SolarWorld requested trade protection, which is giving opponents hope. In addition, Georgia Public Service Commissioner Lauren “Bubba” McDonald, Jr. was among the state officials who testified against the petition today. “The expansion of the solar market benefits the entire U.S. solar industry, including producers of cells, modules, panels and installers, as well as many downstream industries,” he said. “But more importantly, the growth in solar energy benefits electricity consumers.”

Debbie Dooley, president of Conservatives for Energy Freedom and founder of the Green Tea Coalition, said she couldn’t see a successful businessman like Trump supporting the “bad business practices” that SolarWorld and Suniva had engaged in. She pointed to Florida-based PV manufacturer SolarTech Universal as an example of a company that’s thriving despite market competition.

“I’m a big Trump supporter. I supported him from almost the beginning,” Dooley said. “[The trade case] is something I plan on fighting, and I think a lot of conservatives will fight, because it’s wrong and will be devastating. […] There will be many more jobs lost than jobs saved by giving these solar companies a bailout and adding the tariff these manufacturing companies are asking for.”

On the jobs front, opponents will have to counter employment numbers put forward by Suniva and SolarWorld. They’ll also have to get beyond Congress, to Trump’s inner circle of energy and trade advisers, whose professional backgrounds show they’re not big fans of imports and are in favor of heavy remedies.

The Trump team of trade advisers

A closer look at President Trump’s advisers indicates that trade case opponents have their work cut out for them.

Robert Lighthizer, confirmed in May as Trump’s trade czar, failed to win the votes of GOP Senators John McCain of Arizona and Ben Sasse of Nebraska, because they feared he does not understand the positive economic benefits of the North American Free Trade Agreement (NAFTA) and “would not negotiate trade deals that would protect the American consumer and expand economic growth,” according to a joint statement.

Lighthizer, who served as a deputy trade representative during the Reagan administration, wrote in a 2011 Washington Times piece that the "recent blind faith some Republicans have shown toward free trade actually represents more of an aberration than a hallmark of true American conservatism."

U.S. Commerce Secretary Wilbur Ross, who’s expected to play an outsized role in trade deliberations, has called China “protectionist” and characterized NAFTA as “obsolete.”

NAFTA is relevant to the Section 201 trade case because Suniva and SolarWorld are urging the ITC to apply the tariffs broadly, including to America’s free trade partners such as Canada, Mexico and South Korea.

“As long as the remedy is comprehensive, we think it will be a significant positive for U.S. manufacturing and U.S. jobs,” said SolarWorld lawyer Timothy Brightbill. “The worst thing that could happen would be to omit or leave out certain countries from relief. That’s why Section 201 is so powerful, because it covers all countries and import sources.”

SunPower’s Werner, whose company manufacturers solar products in Mexico, said that the law states free trade partners are exempted from trade tariffs. But while it’s true that free trade agreements are designed to give certain countries preferential treatment, the Trump administration could seek to undermine those protections as a first step in rolling back NAFTA.

White House trade adviser Peter Navarro, a staunch NAFTA opponent with hardline views on the threat that China poses to the U.S., is another potential presidential influencer on this issue. In a related personnel matter, Nova Daly, who led Trump's trade office transition team, currently works as senior public policy adviser on international trade at law firm Wiley Rein, which is representing SolarWorld in the Section 201 case.

Department of Energy Chief of Staff Brian McCormack, who previously served as vice president of political and external affairs at the Edison Electric Institute, could be tapped to advise the president as an energy and technology expert on the trade case. During McCormack’s tenure, the utility trade group sought to help its members roll back favorable residential solar policies, and he is now overseeing a DOE study on how subsidies and tax policies for intermittent renewable energy resources are forcing the premature retirement of baseload energy resources. However, McCormack will also be aware of how higher solar prices could negatively impact utility procurement decisions. So it is unclear what, if any, position he will take on the trade case.

"Reject the government favoritism that plagues Washington"

Tori Whiting, research associate at the Heritage Foundation, acknowledged that the Trump administration’s protectionist position on steel and other industries would suggest a pro-tariff stance in the Section 201 case. But she underscored that the administration has not yet come out for or against this particular solar-related measure, and so it would be premature to make that assumption.  

The Heritage Foundation has not met with the administration on this issue, she added, but is waging a strong communications effort, along with allies in the newly formed Energy Trade Action Coalition. The National Electrical Contractors Association, the National Retail Federation and the Electric Reliability Coordinating Council, whose members include Ameren, DTE Energy, Duke and Southern Company, have also come out against the trade petition.

“The U.S. International Trade Commission will have the opportunity to reject the type of government favoritism that plagues Washington,” Whiting and her colleague Katie Tubb wrote in an article published today. “Acquiescing to Suniva and SolarWorld Americas’ petition for more tariffs would do deep damage to the rest of the U.S. solar industry and add yet another layer of federal subsidies to one of the most heavily subsidized energy technologies in America today.”

What happens next depends on what stakeholders hear about the trade investigation following today’s ITC hearing. The ITC has stated that the case is a very complicated, “so I think they’re seeing this is something that takes a lot of time to examine,” Whiting said.

Sources in the ITC hearing room in Washington, D.C. today said it was very difficult to tell which way the commissioners are leaning.

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Are Court Victories for Nuclear Credits a Win for Renewables? Maybe Not

August 15, 2017

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On July 31, 2017, Greentech Media published an article entitled “Court Victories for New York, Illinois Nuclear Subsidies Are a Big Win for Renewables,” and declared that the court proceedings represented “a significant win for the nation’s largest nuclear fleet owner Exelon.” While recent developments are certainly good for Exelon shareholders, they are bad for consumers and the environment. 

First, no matter how you slice it, these nuclear bailouts are bad public policy. Rather than supporting renewables, they starve green policy initiatives of cash and instead funnel billions of hard-earned consumer dollars to Exelon Corporation’s bottom line. This is no win for renewables. 

Second, both the New York and Illinois judges ruled that private parties, including other power generators and ratepayer advocates, lacked “standing” to challenge these handouts in federal court. Depriving private parties of the right to sue in federal court is a breathtaking limit on the right of ratepayers -- on whose backs these nuclear bailouts will be paid -- to challenge these decisions. In other words, these judicial decisions have every electric consumer in Illinois and New York paying for nuclear power rather than renewable energy, while denying those citizens any say in the process.

Third, the impact of nuclear “zero-emissions credits,” or ZECs, on the market is simply too big for federal regulators to ignore. The Federal Energy Regulatory Commission, the consumer protection agency charged with ensuring that wholesale electricity prices are “just and reasonable,” has generally taken a hands-off approach to state programs that incent renewables development. But if nuclear subsidies are identical to state renewables programs, then FERC may have to regulate both.

On ZECs, it is important to note that the American Wind Energy Association joined the competitive generators in describing how renewable and nuclear bailout programs are vastly different. ZEC may rhyme with REC, but under the ZEC programs, only specific nuclear facilities qualify for the subsidy -- wind and solar operators need not apply. Why should ratepayers be forced to “rent” obsolete and uneconomic nuclear plants that they’ve already paid for, rather than build new, modern generation? 

Finally, while the New York federal judge dismissed the complaint, this case is far from over. The two District Court decisions represent only the first skirmish in a war that could easily end up at the Supreme Court. In fact, the Illinois appeals court has already set an aggressive schedule for filings and hearings, with the first brief due from the plaintiffs -- including consumer advocates -- at the end of August.

Hopefully, the judges will carefully reflect on the dangers of supporting these nuclear bailout programs by asserting that they’re the same as renewables programs. This false equivalence directly and significantly harms consumers by burdening them with billions of unnecessary costs and actually hurts the efforts of the states and sustainably focused generators and consumers to build new renewables.

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Abe Silverman is vice president and deputy general counsel of regulatory affairs at NRG.

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Rural Co-Ops and Public Utilities Have Voluntarily Built Nearly 100MW of Community Solar. Here’s Why

August 14, 2017

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In 2015, a farmer walked into the office of a customer-owned electric cooperative in Wisconsin. He pulled out his checkbook and wrote a check to the cooperative for $60,000.

That day, two other cooperative members followed suit, and the three of them bought up 10 percent of the brand new community solar garden on the first day of subscription sales.

CEO Joe McDonald admitted that he was “absolutely floored.”

Two and half weeks later, the entire community solar program had sold out -- all 1,000 panels had been claimed by 113 cooperative members. McDonald said the cooperative threw its community solar marketing plan in the trash. The program sold itself.

Over 130 rural electric cooperatives in over 30 states are now offering community solar programs at an estimated capacity of 63 megawatts. Municipal and public power utilities have built an additional 29 megawatts of community solar in 22 programs, according to the Smart Electric Power Alliance.

This means that many of the community solar subscribers across the nation are not city dwellers in high-rise apartments -- they are people and businesses in the most rural parts of the country. The trend is likely to continue since community solar programs are much more effective in areas with cheap, readily available land and creditworthy subscribers who don’t move often. 

Simply put: Rural America beats out Manhattan for community solar.

Why have we seen this large, voluntary, non-mandated growth of community solar in co-ops and public power utilities? There are several factors that go into this, but here are two crucial factors to understand.

1. An increasing number of customers are demanding access to renewable energy and expecting an answer. These customers are ones that utilities do not want to lose to areas with more renewable access, or even to grid defection. Many co-ops and utilities are tired of shrugging their shoulders when solar comes up -- they want to provide it, and they want to be the expert on it.

Community solar programs allow co-ops and utilities to give their customers the option to actively choose where their energy comes from. For customers, it’s a win-win. They get solar access, don’t have to take the time to build solar themselves, and can capture the cost savings from joining a large-scale solar array. For a smaller-scale utility, this is also a win-win -- it can keep grid defection low while pleasing customers and generating positive PR.

2. Solar is increasingly becoming the cheapest form of new electricity generation for these rural and municipal utilities. Commonly, a utility will build a 1- to 10-megawatt utility-scale solar array and then turn it into a community solar program post-construction. Utilities are finding that many of their customers are willing to pay a premium price for a kilowatt-hour of solar energy vs. a kilowatt-hour generated by fossil fuel. Thus, a community solar program allows a utility to capture the full value of their solar investment.

A community solar garden also keeps energy production local, can reduce peak demand costs in some areas, attracts new businesses, provides local jobs, and benefits the environment. For smaller utilities looking to expand or replace aging generation, a utility-scale solar array with a simple community solar program is becoming the most logical choice. That’s why we have seen 150+ programs come on-line -- with many more in the works.

Based on these factors, community solar programs can be effective at providing customers with clean energy, while increasing returns for utilities and providing additional community benefits. Each program does, however, need to be crafted in a way that is both easy for customers to understand and able to work economically. Many different community solar programs have arisen -- some good, some bad. This has led to confusion for utilities that want to build a community solar garden. At Sol Systems, we've analyzed the various programs around the country and compiled them into three base models that have proven most successful.

The premium-rate model

In this model, customers sign up for community solar and then pay a small amount extra per month based on how much of their usage they want to offset. That’s it. Simple and straightforward.

Most programs offer a fixed cent increase per kilowatt-hour charged, and others allow customers to purchase a kilowatt-hour “block” to offset their usage. Additionally, these programs can provide fixed solar costs that offer a hedge against rising electricity costs.

Simply put: if you could offset your fossil-fuel electricity usage with clean solar energy by paying a few dollars extra a month, would you? Many residential customers and businesses are responding to their local utility with a resounding 'Yes.'

Examples of this structure: 

The pay-upfront model (aka the block model)

This model allows customers to pay a certain amount upfront for a portion of the community solar garden. Let’s say a community solar garden has 10,000 panels. A local business could “purchase” 100 panels for $50,000.

All the energy that those panels produce over 20 to 30 years will be subtracted from the owner's energy bill. With the drop in the cost of solar, these programs can offer customers a hedge against rising utility costs. Customers like this model because they can buy into a large-scale solar array instead of building a smaller one themselves, meaning they can capture the economic benefits of scale.

Imagine if you and all your neighbors could build a large solar array and all use the energy from it -- and save money over time. That’s how this model works.

Many municipal utilities and electric co-ops use this model; some specific examples are: 

The bill-credit model

We generally see this model at larger investor-owned utilities, but it is worth mentioning. In this program, a third-party solar developer builds a solar garden (at no cost to the utility) and finds subscribers who sign up for free. These subscribers then receive a bill credit from the utility for the portion of their electric usage they offset from the community solar garden. They then pay a portion of that credit to the third-party developer.

Many of these programs are set up in a way that ends up saving customers money on their electricity bill from year one (around 3 percent to 10 percent).

With no upfront cost, these programs are highly popular. But often they are the result of state regulations requiring utilities to put more solar on the grid. This is ideal for a utility that wants to please its customers, but the utility won’t see much of an economic gain.

Examples: 

***

Thomas Gulley is a project acquisition intern at Sol Systems, a national solar finance and development firm. This piece was originally published at Sol Systems and was reprinted with permission.

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Energy Jobs: National Labs Shed Hundreds of Workers. Plus, Enphase, GE, FERC and Grid4C

August 14, 2017

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Here's an accounting of some top personnel moves from around the energy industry.

As many as 525 people could lose their jobs at the Oak Ridge and Brookhaven National Laboratories. Officials say the cuts are not due to the Trump administration's proposed budget; rather, they are part of normal cost-cutting measures. 

Scientists and other career staffers worried about their jobs may yet be safe. Lawmakers are pushing back hard hard against Trump's massive decrease in funding for the Department of Energy.

Looking to the business world, we start with one biggest pieces of recent news: Paul Nahi is resigning as CEO of Enphase Energy after 10 years at the helm. 

GTM's Jeff St. John reports that Enphase has created an office of the CEO, consisting of CFO Bert Garcia and COO Badri Kothandaraman, “to oversee and provide leadership for the company’s day-to-day activities" while the board looks for a replacement for Nahi.

The former president and CEO of GE’s power business, Stephen R. Bolze, is now a senior managing director and head of portfolio operations and asset management at Blackstone’s new dedicated infrastructure program. The new business unit anticipates more than $40 billion in total equity over time and is launching with a $20 billion commitment by the Public Investment Fund of Saudi Arabia.

David Bartlett has moved from chief technology officer at GE Current to the same position with Panasonic Avionics Corporation. GE’s Current is still figuring out exactly what business it’s in. At the beginning of the year, Current underwent restructuring to focus more on lighting and analytics driven by GE’s Predix platform, and less on the everything-under-the-sun approach it developed when it first launched two years ago.

After six months, the Federal Energy Regulatory Commission (FERC) has a quorum. The U.S. Senate confirmed Robert Powelson, commissioner on the Pennsylvania Public Utility Commission and current president of the National Association of Regulatory Utility Commissioners, and Neil Chatterjee, energy adviser to Senate Majority Leader Mitch McConnell, to FERC. The two commissioners join Acting Chair Cheryl LaFleur. They'll have a lot on the docket, from evaluating how DERs affect regional electricity markets to pipeline approvals. Two other nominees, Kevin McIntyre and Richard Glick, await confirmation hearings on September 7.

The Senate also confirmed Dan Brouillette to return to the Department of Energy as deputy secretary. During the George W. Bush administration, he spent two years as the assistant secretary for congressional and intergovernmental affairs, according to The Hill. This is only the second DOE official the Senate has confirmed during the Trump administration.

ChargePoint brought on Mark Kerstens as senior VP of business development. Kerstens spent just a year as CEO of Beamreach Solar, formerly Solexel, before jumping over to ChargePoint. ChargePoint has been in fundraising mode this year, raising more than $100 million in 2017, bringing its total to nearly $300 million.

***



Enertech Search Partners, an executive search firm with a dedicated cleantech practice, is the sponsor of the GTM jobs column.

Enertech Search Partners has placed Shane Fay as SVP of sales at Grid4C.

Grid4C’s predictive analytics solution is currently deployed on four continents and was rated No. 1 in predictive analytics by GTM Research in its 2016 Predictive Analytics for Utility Load and DER Forecasting report.

Grid4C’s platform analyzes massive amounts of data collected from millions of smart meters. It then delivers accurate, granular predictions to maximize the efficiency of energy operations, increase customer engagement and drive profit.

Fay, an industry veteran, joins Grid4C from Comverge, where he built and managed the sales team driving significant revenue, resulting in the acquisition by Itron in May. Fay sees Grid4C’s advanced machine-learning capabilities as a highly differentiated product, perfectly positioned to take advantage of market conditions. Enertech Search Partners is thrilled to partner with Grid4C in continuing to develop a talented leadership team across North America.

***

Sigora Solar has named Ron Hisel as the company’s new COO. Sigora is Virginia’s largest residential and commercial solar provider. Hisel is expected to “sharpen” Sigora’s project cycle efficiencies and scale up all aspects of its business, from residential through utility-scale. Hisel comes to Sigora from PosiGen Solar Solutions, where he was VP of operations.

Sam Ori has left his position as the executive director at the Energy Policy Institute at the University of Chicago to join the university’s Becker Friedman Institute for research in economics. His previous position at EPIC was open as of the beginning of August, as is a role for a communications coordinator at EPIC.

Jason Allen joined Leeward Renewable Energy as COO. He will be responsible for operating Leeward’s 1.5 gigawatts of existing wind fleet. He was most recently at AltaGas as VP of operations and before that had been at Duke Energy Corporation for more than 20 years. Leeward Renewable Energy is an affiliate of ArcLight Capital Partners, a Boston-based private equity firm with about $18 billion invested in across the energy industry.

John May is now managing director of Hamilton Clark Sustainable Capital. Previously he was managing director, founder and co-head of the alternative energy finance group at Stern Brothers.

Diane Fellman left NRG Energy, where she was VP of West government affairs, to join the California Public Utilities Commission as senior policy analyst. She is returning to CPUC after decades in the private sector. Fellman was previously with the CPUC in the 1980s, when she served as an attorney.

Also at CPUC, Heather Sanders has been appointed special advisor. She is also the principal manager of electric system planning strategy and engagement at Southern California Edison. Before joining SCE two years ago, Sanders was the director of regulatory affairs for distributed energy resources at California ISO.

After nearly two decades, John Saintcross has retired from public service. He was most recently the acting director of NY Prize and managed the grid modernization R&D programs for the New York State Energy Research & Development Authority. Dave Crudele will take over management of those two programs.

Eric Wesoff has left GTM after a decade of service. For those who sent tips to Eric about career changes and other industry happenings, please continue to let us know at tips@greentechmedia.com or tweed@greentechmedia.com.

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SolarReserve Inks Deal With South Australia to Supply Solar Thermal Power With Storage for 6 Cents

August 14, 2017

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SolarReserve, the California-based developer that bundles concentrating solar power towers, PV and molten-salt storage, won a contract to supply the South Australian government with dispatchable solar for between AUS 7.5 and 7.8 cents per kilowatt-hour.

That amounts to USD 6 cents per kilowatt-hour -- a price lower than SolarReserve's planned project in Copiapó, Chile, which was bid at USD 6.3 cents per kilowatt-hour earlier this year.

The Aurora project in South Australia features 8 hours of molten-salt storage; the Copiapó project in Chile features 13 hours of storage.

In the years since photovoltaics became the cheapest solar technology, concentrating solar power (CSP) developers have realized their projects probably can't compete without complementary storage.

As a result, they've moved to markets around the world with a very specific set of dispatchability needs: Australia, Chile, China and South Africa.

SolarReserve is targeting each of those markets. In Chile, for example, the company is looking to supply round-the-clock electricity to remote mining operations that are paying high prices for electricity.

South Australia, a state with large amounts of renewable energy and a fragile grid prone to blackouts, is also a prime candidate for CSP-plus-storage.

Reeling from a series of grid failures, South Australia is looking to increase its share of firm renewable energy supply. The government recently opened up bids to power its own operations, in an effort to procure 25 percent of its electricity from dispatchable renewables. 

SolarReserve won the 20-year supply contract, according to a release from Premier Jay Weatherill's office.

The government has a peak load of 125 megawatts; the Aurora project's peak capacity is 150 megawatts. The project is expected to generate 495 gigawatt-hours of electricity per year, and supply 1,100 megawatt-hours of storage. 

"The offer from SolarReserve was the lowest-cost option of the shortlisted bids, with the government paying no more than $78/MWh," wrote Weatherill's office in a release

If SolarReserve can live up to the terms of the contract, the delivered price will be competitive with a new combined-cycle natural-gas plant in South Australia. GTM Research and Wood Mackenzie recently modeled out the economics of battery storage and renewables compared to natural gas, finding that gas is still the cheaper option today.

If operating in 2020 as planned and selling electricity to the government at USD 6 cents per kilowatt-hour, the Aurora plant would easily beat out battery storage -- as well as rival new and existing gas plants.

In 2025, SolarReserve's plant would handily beat combined-cycle gas plants. And it wouldn't be alone. By the middle of the next decade, renewables will likely be cheaper across the board for a variety of dispatchability needs in South Australia.

Despite grid management challenges, renewables are growing fast in South Australia. The state currently gets 46 percent of its electricity from renewables. According to Wood Mackenzie and GTM Research, the share of renewables on South Australia's grid could grow to 67 percent by 2025. Meanwhile fossil fuel plants there continue to shut down.

Consequently, there is a distinct need for storage in order to shift renewable generation to cover evening peaks, while also providing backup and black-start capabilities.

Tesla says it has both needs covered. The company recently won a contract for a 100-megawatt/129-megawatt-hour battery that will be paired with the 315-megawatt Hornsdale wind farm. When finished, it will be the largest lithium-ion battery in the world. (Although it should be noted that some are questioning the business case for the project.)

Tesla is pitching the project as an all-in-one solution for grid balancing: "Working in close collaboration with the South Australian government and Neoen, this grid-scale energy storage project is not only sustainable, but will help solve power shortages, reduce intermittencies, and manage summertime peak load to improve the reliability of South Australia's electrical infrastructure."

SolarReserve CEO Kevin Smith described his company's project similarly: "Aurora will provide much-needed capacity and firm energy delivery into the South Australian market to reduce price volatility."

The unique set of market conditions in South Australia -- a fragile grid, a strong desire to keep building wind and solar, and a new demand to meet peak load with dispatchable renewables -- makes the state very attractive for developers with some kind of storage solution.

If the Aurora project is executed as planned by SolarReserve, it will be one of the most economically competitive options.

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Business Strategies for Managing the Section 201 Solar Trade Battle

August 14, 2017

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If the remedies sought by Suniva in its Section 201 trade petition are implemented, the U.S. solar industry could lose up to 88,000 jobs, according to the Solar Energy Industries Association. As an industry, we should do everything we can to fight it, but the truth of the matter is that the 201 is here, and we are already feeling its effects. 

Module prices have increased by more than 20 percent since the opening of the case, and module availability is extremely limited in Q4 of 2017. Companies are taking aggressive measures to prepare for the downturn, from stockpiling modules to selling off assets. Developers and contractors large and small need to plan for how they will do business under a restricted trade regime that could last for the next four years -- or longer. It’s critical that companies refine their business strategies today to manage potential outcomes of the 201 case.

Possible outcomes from a 201 petition

Most people in our industry believe the 201 petition will result in a minimum import price of 78 cents per watt for imported solar panel, as requested by Suniva. Others suggest that it will be closer to 55 cents per watt as a compromise to both support Suniva and avoid killing the market entirely. But while these are both rational assumptions, they are not steeped in the reality of the 201.

The truth is that the U.S. International Trade Commission has never established a minimum import price for a product in a 201 case. Instead, the ITC issues decisions based on tariffs, quotas and tariff-rate-quotas. So, as you are evaluating the best strategies for your company, it is important to understand all of the possible scenarios and develop strategies to minimize your exposure to rapidly rising panel prices.

Tariffs are a tax imposed on the import of all solar panels or cells. The tariff is paid by the importer of record and is absorbed through higher prices passed on to the consumer or lower profit margin.

Developer strategy: 

  • Ensure that your purchase orders clearly state that the panel manufacturer or affiliated sales arm is the importer of record, otherwise your company could be liable for the tariff. 
  • Establish business relationships with the approximately 10 crystalline silicon photovoltaic companies that manufacture in the U.S. (as long as they use U.S. cells) and thin film companies around the world, all of which will be exempt from any tariffs applied in this case.

Quotas are government-imposed trade restrictions that limit the number, or monetary value, of solar panels or cells that can be imported over a specific period. In our case, this means that the ITC could issue a restriction on the volume (either by megawatts or by value) of panels imported from any one country. For example, the ITC could issue a decision that limits annual imports from any one country to 1 gigawatt or $350 million. If applied uniformly across all import countries, we would experience a shortage of panels in the U.S., resulting in a rise in prices and a contraction of the solar market. 

Developer strategy: 

  • Establish relationships with a diverse set of suppliers from different countries to help ensure you have an adequate supply of panels under a quota scenario.

Tariff-rate-quotas (TRQs) combine two policy instruments designed to restrict imports -- quotas and tariffs -- into a complex equation where quotas limit the amount of imports that come in from each country and tariffs are applied to all imports above and beyond the quota levels. For illustrative purposes, a TRQ could be applied that limits “tariff-free” imports to 500 megawatts. All imports beyond the quota would be subject to a tariff (for example, 25 cents per watt). The ITC could make this a fixed tariff or one that increases as further import levels are achieved. This is a common remedy at the ITC, and the most likely outcome from the Suniva petition.

Developer strategy: 

  • Purchase your modules early in the year to avoid rising tariff rates.
  • Negotiate fixed price contracts that are not subject to increases from tariffs. 
  • Understand how the tariff structures change based on import levels.
  • Monitor actual imports from countries that manufacture solar modules over the course of the year. 
  • Shift your purchases to a different country/manufacturer when each country reaches its quota and higher tariff levels are set to secure the best prices.

All countries are not treated the same

A 201 petition is designed to protect the domestic manufacturing industry and applies a penalty to all countries (yes, all) that import a product into the U.S. However, not all countries are treated the same. Any country can seek to negotiate special treatment (higher quota levels and lower tariffs), with special regard going those countries that have an existing trade agreement with the U.S. (there are 20). For our industry, this includes imports from Korea, Singapore, Mexico and Canada. The only real advantage, however, goes to NAFTA countries that will receive separate assessments.

Developer strategy: 

  • Foster business relationship with companies that manufacturer cells in Canada and Mexico, and as a second priority, Korea and Singapore.

Next steps

There are several milestones that the industry needs to look out for when tracking the 201 case. Here's a brief rundown:

  • August 15: The ITC will hold a hearing to allow the petitioners and the respondents to voice their positions on the petition. While no decision will come from the hearing, the Q&A may give us some insights into areas of concern for the ITC.
  • September 22: ITC decision on whether the domestic CSPV industry has suffered serious harm due to imports. This is a major milestone and will either end the case or begin the remedy process -- circle the date on your calendars.
  • October 3: If the ITC determines that the industry has suffered harm, then an additional hearing on the remedy will be hosted by the ITC. 
  • November 13: The ITC will issue recommendations for action to President Trump.
  • January 12, 2018: The president issues his decision on the remedy. He can either accept the ITC recommendations, throw them out completely, or adjust the remedy as he sees fit (more or less strict).
  • January 27: This will be the effective date of the remedy if the president’s decision is consistent with the ITC’s recommendation and there are no special agreements with foreign countries.
  • If the president makes a recommendation that is different from the ITC or if there are separate agreements with individual countries, then the effective date will be pushed out until April.

While we all hope that the ITC will reject the 201 petition, you must plan now for doing business under a restricted trade regime. The three best things that your company can do right now is to make sure you are not the importer of record; work with a diverse set of module suppliers in different geographical locations; and have a team on board that can monitor the situation and modify your strategy depending on industry developments. With solid planning, you will be prepared for any decision rendered in the case.

***

Rhone Resch served as the president and CEO of the Solar Energy Industries Association for 12 years.  He is now a managing partner for VIMAC Ventures and founder of Advanced Energy Advisors where he helps solar companies develop growth strategies in an uncertain political and business environment.

Continue reading...

Business Strategies for Managing the Section 201 Solar Trade Battle

August 14, 2017

Comments Off

If the remedies sought by Suniva in its Section 201 trade petition are implemented, the U.S. solar industry could lose up to 88,000 jobs, according to the Solar Energy Industries Association. As an industry, we should do everything we can to fight it, but the truth of the matter is that the 201 is here, and we are already feeling its effects. 

Module prices have increased by more than 20 percent since the opening of the case, and module availability is extremely limited in Q4 of 2017. Companies are taking aggressive measures to prepare for the downturn, from stockpiling modules to selling off assets. Developers and contractors large and small need to plan for how they will do business under a restricted trade regime that could last for the next four years -- or longer. It’s critical that companies refine their business strategies today to manage potential outcomes of the 201 case.

Possible outcomes from a 201 petition

Most people in our industry believe the 201 petition will result in a minimum import price of 78 cents per watt for imported solar panel, as requested by Suniva. Others suggest that it will be closer to 55 cents per watt as a compromise to both support Suniva and avoid killing the market entirely. But while these are both rational assumptions, they are not steeped in the reality of the 201.

The truth is that the U.S. International Trade Commission has never established a minimum import price for a product in a 201 case. Instead, the ITC issues decisions based on tariffs, quotas and tariff-rate-quotas. So, as you are evaluating the best strategies for your company, it is important to understand all of the possible scenarios and develop strategies to minimize your exposure to rapidly rising panel prices.

Tariffs are a tax imposed on the import of all solar panels or cells. The tariff is paid by the importer of record and is absorbed through higher prices passed on to the consumer or lower profit margin.

Developer strategy: 

  • Ensure that your purchase orders clearly state that the panel manufacturer or affiliated sales arm is the importer of record, otherwise your company could be liable for the tariff. 
  • Establish business relationships with the approximately 10 crystalline silicon photovoltaic companies that manufacture in the U.S. (as long as they use U.S. cells) and thin film companies around the world, all of which will be exempt from any tariffs applied in this case.

Quotas are government-imposed trade restrictions that limit the number, or monetary value, of solar panels or cells that can be imported over a specific period. In our case, this means that the ITC could issue a restriction on the volume (either by megawatts or by value) of panels imported from any one country. For example, the ITC could issue a decision that limits annual imports from any one country to 1 gigawatt or $350 million. If applied uniformly across all import countries, we would experience a shortage of panels in the U.S., resulting in a rise in prices and a contraction of the solar market. 

Developer strategy: 

  • Establish relationships with a diverse set of suppliers from different countries to help ensure you have an adequate supply of panels under a quota scenario.

Tariff-rate-quotas (TRQs) combine two policy instruments designed to restrict imports -- quotas and tariffs -- into a complex equation where quotas limit the amount of imports that come in from each country and tariffs are applied to all imports above and beyond the quota levels. For illustrative purposes, a TRQ could be applied that limits “tariff-free” imports to 500 megawatts. All imports beyond the quota would be subject to a tariff (for example, 25 cents per watt). The ITC could make this a fixed tariff or one that increases as further import levels are achieved. This is a common remedy at the ITC, and the most likely outcome from the Suniva petition.

Developer strategy: 

  • Purchase your modules early in the year to avoid rising tariff rates.
  • Negotiate fixed price contracts that are not subject to increases from tariffs. 
  • Understand how the tariff structures change based on import levels.
  • Monitor actual imports from countries that manufacture solar modules over the course of the year. 
  • Shift your purchases to a different country/manufacturer when each country reaches its quota and higher tariff levels are set to secure the best prices.

All countries are not treated the same

A 201 petition is designed to protect the domestic manufacturing industry and applies a penalty to all countries (yes, all) that import a product into the U.S. However, not all countries are treated the same. Any country can seek to negotiate special treatment (higher quota levels and lower tariffs), with special regard going those countries that have an existing trade agreement with the U.S. (there are 20). For our industry, this includes imports from Korea, Singapore, Mexico and Canada. The only real advantage, however, goes to NAFTA countries that will receive separate assessments.

Developer strategy: 

  • Foster business relationship with companies that manufacturer cells in Canada and Mexico, and as a second priority, Korea and Singapore.

Next steps

There are several milestones that the industry needs to look out for when tracking the 201 case. Here's a brief rundown:

  • August 15: The ITC will hold a hearing to allow the petitioners and the respondents to voice their positions on the petition. While no decision will come from the hearing, the Q&A may give us some insights into areas of concern for the ITC.
  • September 22: ITC decision on whether the domestic CSPV industry has suffered serious harm due to imports. This is a major milestone and will either end the case or begin the remedy process -- circle the date on your calendars.
  • October 3: If the ITC determines that the industry has suffered harm, then an additional hearing on the remedy will be hosted by the ITC. 
  • November 13: The ITC will issue recommendations for action to President Trump.
  • January 12, 2018: The president issues his decision on the remedy. He can either accept the ITC recommendations, throw them out completely, or adjust the remedy as he sees fit (more or less strict).
  • January 27: This will be the effective date of the remedy if the president’s decision is consistent with the ITC’s recommendation and there are no special agreements with foreign countries.
  • If the president makes a recommendation that is different from the ITC or if there are separate agreements with individual countries, then the effective date will be pushed out until April.

While we all hope that the ITC will reject the 201 petition, you must plan now for doing business under a restricted trade regime. The three best things that your company can do right now is to make sure you are not the importer of record; work with a diverse set of module suppliers in different geographical locations; and have a team on board that can monitor the situation and modify your strategy depending on industry developments. With solid planning, you will be prepared for any decision rendered in the case.

***

Rhone Resch served as the president and CEO of the Solar Energy Industries Association for 12 years.  He is now a managing partner for VIMAC Ventures and founder of Advanced Energy Advisors where he helps solar companies develop growth strategies in an uncertain political and business environment.

Continue reading...