The myth of PV module manufacturers’ bankability in project financing

By Felix Holz, Vice President / Head of Industry Expert Team Greentech, Deutsche Bank AG

A typical financial structure for a utility-scale (i.e. larger than a few MW) PV project is the so-called ‘non-recourse project financing’. Experience shows that lenders may occasionally refuse financing because they dislike a technology or even a certain supplier. This past behaviour has created the ‘myth of bankability’ and the perceived necessity of manufacturers to get onto the banks’ ‘bankability lists’. But there is no strictly defined process for doing this, and many of the experienced banks do not even work with such lists for good reason. Moreover, ‘bankability’ is not a feature that a manufacturer or a product can achieve or maintain forever.

Reduced solar capital costs in India

By Mohit Anand, Senior Consultant, BRIDGE TO INDIA

India is a unique market. As part of an India-specific strategy on the part of the players, solar capital costs in India have significantly fallen in relation to the global average. This paper describes the trend for lower cost modules and services to be offered by module suppliers and EPC companies in order to capture the greatest share of the Indian market. In this context, more importance is being given to gaining a greater market share than earning a higher return.

Weighing the merits of solar power plants using concentration photovoltaics

By Geoffrey S. Kinsey, Senior Director of Research and Development, Amonix

In trying to introduce its relatively new technology to traditional utility customers, the photovoltaic industry often finds itself in the awkward position of trying to sell a product to a customer who may not want to buy. The up-front capital costs of new solar plants (that deliver power only intermittently) can be less than appealing. Large-scale grid integration will therefore be accelerated by PV technologies that best fit the profile of traditional power sources. In addition to low cost, this includes high capacity factors and the ability to better match demand during daylight hours. Concentrator photovoltaic (CPV) power plants are now being integrated into the grid at megawatt scales. By performing light collection using acrylic, silicone, or glass optics instead of semiconductors, the material cost balance of PV is fundamentally shifted. The world’s most efficient solar cells can then be employed, and maintaining tracking of the sun becomes economically favorable across vast sunny locales worldwide. With AC system efficiencies in excess of 25%, the resulting CPV power plants produce high energy yields throughout the year and deliver the high capacity factors demanded by utility customers. Since semiconductors are a minority component cost, manufacturing capital costs are lower than for any other PV technology, allowing for rapid scale-up and field deployment. This article will describe the state of the art of CPV technology, field performance results, and the outlook for near-term deployments.

The road to PV competitiveness - PV generation cost in Europe

By Pieterjan Vanbuggenhout, Business Analyst, European Photovoltaic Industry Association (EPIA); Gaëtan Masson, Head of Business Intelligence, European Photovoltaic Industry Association (EPIA)

In recent years solar photovoltaic electricity has shown a steady decrease in cost, thanks to technological improvements and economies of scale. Over the last 20 years the price of PV modules has dropped by more than 20% each time the cumulative volume of PV modules sold has doubled. System prices have fallen accordingly: during the last 5 years a price decrease of 50% has been seen in Europe. This trend will continue in the foreseeable future. System prices are expected to fall in the next 10 years by 36–51%, depending on the segment. Importantly, there is a huge potential for further reductions in generation costs: around 50% by 2020. The cost of PV electricity generation in Europe could decrease from 0.16–0.35€/kWh in 2010 to 0.08–0.18€/kWh in 2020, depending on system size and irradiance level. That decline in cost will continue in the coming years as the PV industry progresses towards becoming competitive with conventional energy sources. Under the right policy and market conditions, PV competitiveness can be achieved in some markets as early as 2013, and then spread across the Continent in the different market segments by 2020. This paper summarizes the first part of a newly published EPIA report about PV competing in the energy sector. The report illustrates why PV can become a mainstream player in the energy field before 2020. The study, carried out with the support of the strategic consulting firm A.T. Kearney, shines new light on the evolution of Europe’s future energy mix and PV’s role in it.

The next eight years in building-integrated photovoltaics (BIPV)

By Lawrence Gasman, Principal Analyst, NanoMarkets LC

The solar industry suddenly finds itself in an altered business climate in which construction markets seem permanently damaged and government subsidies are under challenge. This paper outlines how BIPV provides a strategy for expanding the market for PV and creating value-added products in a radically changed political, economic and financial environment.

Utility-scale PV power plants - investment costs and electricity price

By Denis Lenardič, PV resources, Jesenice, Slovenia

It is essential to understand the investment and operating costs of photovoltaic power plants in terms of economic parameter calculations such as levelized cost of electricity (LCoE). The dynamic behaviour of national and international markets requires a precise and detailed estimation of costs, and this knowledge is especially important to investors and policymakers. Only if the investment and operating costs of PV power plants are known can the price of electricity and the more detailed levelized cost of electricity be precisely calculated. High investment costs also require reliable investment policies and close cooperation between financial institutions (such as banks and investment funds) and power plant owners. Investment in large-scale PV power plants requires a detailed evaluation of solar radiation potential and grid availability, as well as a load analysis and a precise economic evaluation. When the investment cost based on the above-mentioned parameters is known, an estimation of the operating costs should be the next step. When all the costs of a PV power plant have been estimated, the price of electricity, or even a more detailed LCoE, can be calculated. This paper presents the trend of investment costs and some typical maintenance costs, and calculations of electricity price based on recent real data for large-scale PV power plants.

Grid connection requirements and tests: Experiences in the certification process of PV inverters

By Dominik Geibel, Member of the Electricity Distribution Networks Group, Fraunhofer Institute for Wind Energy and Energy Systems Technology (IWES), Kassel, Germany; Gunter Arnold, Member of the Electricity Distribution Networks Group, Fraunhofer Institute for Wind Energy and Energy Systems Technology (IWES), Kassel, Germany; Thomas Degner, Senior Researcher,

The new German BDEW MV guideline demands static and dynamic functionalities from distributed energy resource (DER) units in order to support network operation and stability. Initial indications show that, in general, photovoltaic (PV) inverters are able to fulfil both the static and the dynamic requirements. Besides the new requirements of the guideline, an extensive certification process for DER units and plants has also been introduced. During initial certification processes, a significant need for PV-specific test procedures and test equipment has been determined. This article describes the developments within this area from the perspective of a measurement institute.

PV inverter industry - boom to bust?

By Tom Haddon, Research Analyst, IMS Research

Exceptional demand characterized the PV industry in 2010. Uncertainty regarding incentive schemes in a number of key markets drove global installations, and inverter shipments grew by over 160% as investors and developers rushed to complete projects, fearing that incentives would be reduced or removed altogether. IMS Research estimates that inverter shipments exceeded 20GW in 2010 and sales of small three-phase inverters, rated between 10-20kW, grew by around 200% in 2010. Inverters rated at over 500kW are estimated to have grown at a similar rate, but continue to represent a smaller share of revenues.

How building integration can save PV: the business case

By Lawrence D. Gasman, Principal Analyst, NanoMarkets LC

Recent industry analysis from NanoMarkets has suggested that although current business cases for PV are running out of steam, the building-integrated PV (BIPV) sector may be able to revive PV’s fortunes. The arrival of ‘true’ BIPV – not just flush-mounted BIPV panels, but PV-enabled glass, tiles, siding, etc. – renders possible new business cases that would otherwise simply not be an option with conventional PV. This paper puts forth a business analysis of the BIPV industry, providing case studies and data on the burgeoning sector.

New challenges for photovoltaic grid-connected inverters

By Dr. Vicente Salas, Associate Professor, Universidad Carlos III de Madrid

As PV power generation adoption becomes more widely adopted globally, the grid-connected inverter market looks set to take its rightful role as a critically important element of solar installations. The grid-connected inverter market will deliver power quality and the stability of the electricity networks in order to ensure a stable and reliable grid operation. In order to keep up with these developments, network operators will release new grid codes to monitor the increased uptake, to which manufacturers must adhere. An additional obstacle for the inverter manufacturers is the wide range of requirements and norms that vary from country to country and, in many cases, even from utility to utility. This article presents a review of the new challenges facing grid-connected PV inverters in the light of these new developments.

Harmonized procedures for longterm energy yield measurements and performance evaluation of PV modules in outdoor conditions

By Vincent Helmbrecht, European Distributed Energy Resources Laboratories (DERlab) e.V.; Diana Craciun, Research Coordinator, European Distributed Energy Resources Laboratories (DERlab) e.V.; Abraham Ellis, Technicalhead of Renewables Grid Integration, Sandia National Laboratories; Jennifer Granata, Leader of PV Reliability Team, Sandia National Laboratories; Stathis Tselepis, Head of the Photovoltaic Systems and Distributed Generation Department, Centre for Renewable Energy Sources and Saving (CRES),; Anastasios Kyritsis, PV System and DER Department, Centre for Renewable Energy Sources and Saving (CRES),; Nikos Hatziargyriou, CEO, Institute of Communication and Computer Systems - National Technical University of Athens (ICCS-NTUA)

As yet, procedures for long-term tests of photovoltaic modules in outdoor conditions have not been considered by international standardization committees. Although many laboratories perform long-term PV outdoor tests, a commonly agreed and standardized procedure has so far not been adopted. The European Distributed Energy Resources Laboratories’ (DERlab) approach to filling the gap of international standardization has led to the development of a basic protocol that complies with European and international standards, while providing specific common guidelines and procedures for measuring the energy yield of PV modules for at least one year in outdoor conditions. The DERlab procedures for long-term PV module testing are described in this paper, and the range of analyses that can be derived from the data, such as module degradation, are discussed. The paper also presents the DERlab approach to measuring module performance in outdoor conditions, which can be used to complement energy-rating methods suggested in international standards. DERlab has created consistent measuring procedures that allow the direct comparison of the energy yield of solar modules taking into account the site-specific factors of different locations and varying climatic conditions, as well as a maintenance guideline.

Comprehensive and advanced quality assurance measures for optimal yields from PV power plants

By Klaus Kiefer, Grid-connected Energy Systems Group Leader, Fraunhofer ISE; Daniela Dirnberger, Grid-connected Energy Systems Group, Fraunhofer ISE

As it makes its way towards a non-subsidised market, the photovoltaic sector has to deal with decreasing margins. To ensure investment goals are met in spite of this, it is imperative that PV power plants generate optimal yields. Comprehensive quality assurance for PV power plants covers all phases of the completion process from the planning to system operation. This article explains the extent of standard quality assurance measures that include yield assessments, module measurements, system testing and yield monitoring. It outlines the potential of linking these quality assurance measures and stresses the importance of the measures themselves being of high quality. Up-to-date scientific findings from Fraunhofer ISE are presented in order to further optimise quality assurance measures.

Pre-construction, engineering and installation cost of utility-scale module installations - part 2

By Angiolo Laviziano, CEO, REC Solar; Josh Price, Vice President and General Manager, Residential and Light Commercial, REC Solar; Ethan Miller, Vice President of Operations, REC Solar

PV industry module and component manufacturers have brought down costs significantly over the last four years. This trend is clearly evident as most publicly traded companies continue to grow revenue despite falling module and component prices. However, it is far less clear how downstream system integrators are handling the drop in system prices and contributing to value creation. System prices are generally higher in the U.S. than in Europe despite lower module prices in the U.S. This disparity often raises questions on the part of European PV professionals where these costs come from, and secondly, what have U.S. system integrators done to reduce costs. This article is the second of a two-part series shedding light on how U.S. integrators contribute to a decreasing installed-PV-system cost roadmap by championing value creation in the downstream segment. Focusing on the residential market segment, Part I delved into activity cost savings through innovation in engineering and construction [1]. Part II illustrates how changes in marketing and sales, rebates, interconnection, supply chain management and customer support have evolved considerably over the last several years to result in reduced costs.

Pre-construction, engineering and design costs of large-scale residential installations - part 1

By Angiolo Laviziano, CEO, REC Solar; Ethan Miller, Vice President of Construction Engineering and Design, REC Solar

PV industry module and component manufacturers have brought down costs significantly over the last four years. This trend is clearly evident as most publicly traded companies continue to grow revenue despite falling module and component prices. However, it is far less clear how downstream system integrators are handling the drop in system prices and contributing to value creation. System prices are generally higher in the U.S. than in Europe, despite lower module prices in the U.S. This disparity often raises questions on the part of European PV professionals where these costs come from, and secondly, what have U.S. system integrators done to reduce costs. This two-part series will shed light on how U.S. system integrators have undertaken tremendous efforts to decrease cost and add value through innovation by focussing on labour-intensive value creation in the downstream segment. Part I will focus on the residential market segment by delving into activity cost savings through innovation in engineering and construction, while Part II will illustrate how changes in sales, rebates, interconnection, and the supply-chain management over the last five years have reduced costs.

Large-scale PV power plants - new markets and challenges

By Denis Lenardič, PV Resources, Jesenice, Slovenia

Despite the collapsed Spanish market and the general state of the world’s economy, the past year was not a bad year at all from the perspective of installed power capacity of large-scale PV power plants. Installed power capacity surpassed expectations while also bringing new markets into the spotlight, which means that the traditional market leaders of Spain, Germany and the U.S. are no longer the only ‘key’ markets. With the exception of Germany, the past year’s most noteworthy market boost was seen in the Czech Republic and Italy, with similar shake-ups seen in the Asian tiger countries of China and India. With many large-scale PV power plants recently brought into commission in these countries, China and India are brimming with potential for the near future.