Navigant Research Blog

When It Comes to New US Solar Tariffs, the Sky Is Not Falling

— January 25, 2018

On January 22, 2018, President Trump announced the rates applied to solar modules and cells that resulted from the Section 201 trade case. Modules and cells have a tariff rate of 30% in 2018, to decline 5% in each of the 3 subsequent years, then stay at 15% from 2021. These are just below what the US International Trade Commission (ITC) recommended in October 2017. As I explained at that time, tariffs at this level favor the status quo, keeping the solar industry intact but slowing its growth.

No Need to Panic

At current international prices of around $0.30/W-$0.35/W, the impact of this tariff would be around $0.10/W in 2018. For utility-scale projects, costs could increase by 10%-15% compared to a tariff-free scenario. This would add $0.02/kWh-$0.04/kWh to the record solar bids, like Xcel’s disclosed earlier in January or TEP-NextEra’s announcement on May 2017. This increase would hardly make these utilities reconsider their investments.

The impact of the new tariff on the C&I and residential markets will be limited. For a commercial project, the tariff could increase the cost by about 5%; for a residential installation, only 2%-3%.

Winner and Losers

Currently, this ruling seems to have only one company as its beneficiary: First Solar. First Solar is in the middle of a technology transition as it tries to catch up with the prices offered by manufacturers of Crystalline modules. It is the only PV manufacturer with significant capacity in the US. On November 16, 2016, it made the decision to scrap its Module 5 product, which had been expected to debut next year. The new plan is to instead accelerate the production schedule of its Module 6 and introduce it in 2018, a year earlier than previously planned. The tariff bought First Solar some time to implement its new technology without risking losing significant market share in its home market.

The other two backers of the tariff, Suniva and SolarWorld, are unlikely to capitalize from its introduction. Even with the introduction of the tariff, local US prices of important modules will be below the costs that pushed both Suniva and SolarWorld into administration as the global prices of solar have dropped by more than 30% in the last 2 years. SunPower and Tesla, the other two US PV manufacturers, rely on the global value chain for their module operations and therefore will be affected by the tariffs.

If Nothing Else, Clarity for the Next Few Years

All in all, most of the players in the US solar sector should be glad that the uncertainty that plagued the sector in 2017 is now gone. They will need some time to absorb the fiscal changes and to find ways to mitigate the impact of the tariffs, but at least they will have a stable policy outlook for the next few years.

 

Even My Grandma Has a Smart Home!

— January 25, 2018

There are all kinds of barriers to smart home adoption. People ask me all the time, “what do you use your Alexa for?” Unconvinced by existing value propositions, many consumers figure they need not bother with smart technology.

Smart Home Imperfections

Admittedly, for all the promise about how smart these products are and how they will change our lives, often they are not that smart and they fail to meet expectations. The countless times I have asked my Echo device a simple question, only to have Alexa respond with “Sorry, I don’t know that,” drives even the earliest of adopters to the brink. And that’s not even going into the issues surrounding installation, troubleshooting, interoperability, and cost. It makes many wonder, why all the fuss?

Smart Features Offer Ease

Despite all the reasons people find not to adopt smart home products, I have found a convincing case for even the biggest skeptic. I recently discovered my grandma has a smart home.

My grandma is no early tech adopter—she is 80 and her favorite hobby is quilting—and yet, she has a Google Home, a Nest Cam, three Philips Hue light bulbs, several ConnectSense smart outlets, and an iPad or iPhone to control them all, which is a more robust smart home ecosystem compared to what most people have—including me. Every evening when it starts to get dark, she uses her smartphone to turn on lamps, instead of having to bend over and switch them on. When she retires for the evening, she asks Google Assistant to turn her Hue bulbs on, instead of having to fumble around in the dark for a light switch. She doesn’t even notice the Nest Cam perched on her mantel, but it gives my family members piece of mind as they can check on her using their smartphones from wherever they are.

Gifting Smart Tech

There are, of course, a few caveats. My grandma hasn’t purchased any of these products herself. They have all been gifts from family members, which is important for vendors to keep in mind when targeting consumers. When a device malfunctions, she calls upon her children and grandchildren for troubleshooting, which usually involves walking her through an app over the phone or simply restarting a device. Though this works most of the time, smart home tech vendors need to provide maintenance and support to consumers.

My grandma also hasn’t installed any of these devices herself, though they have been plug-and-play enough for younger generations in the family, and many companies are increasingly offering installation services. To top it off, her smart plugs are integrated with Apple HomeKit, but they aren’t integrated with Google Assistant, meaning she can’t control them through voice activation—which highlights a common interoperability problem for most consumers.

If Grandma Can Do It, Anybody Can

While the smart home market has its challenges, there are emerging use cases that are convincing more consumers to embrace the technology. Smart home tech should not be used only by early adopters and younger generations, it should be used by everyone. If my grandma can use smart home products and services, then anyone can, and there is hope for the smart home market yet.

 

Health and Well-Being and IoT in Buildings Provide Congruent Goals

— January 25, 2018

Last year, I attended Greenbuild International Conference and wrote about the focus on occupant health and well-being transforming the commercial buildings market. It was a theme throughout the conference, and seems one that is only now progressing in 2018.

In February, I’ll be attending Strategies in Light in Long Beach, California. While the conference has many education tracks around lighting, one that stands out to me is “Lighting for Health and Well-being.” The other areas that stand out are sessions surrounding the Internet of Things (IoT) and lighting, from creating value to data and analytics to communication protocols and interoperability issues. Navigant Research discussed these themes and the overall market for lighting and IoT in its recent report, IoT for Lighting.

Adding Value in IoT

There is a lot of buzz around IoT, but it is still not clearly defined and the value proposition is often unclear. With more connected devices more data is available, but what is being done with the data? A clear value proposition is needed.

One of the key parts of Navigant Research’s definition of IoT lighting is adding value beyond illumination. Lighting can be seen as the entry point for IoT solutions within commercial buildings due to the granularity of lighting fixtures compared with data points in other building automation systems within a building. Because of this, lighting manufacturers, technology firms, and startups alike are working to create solutions to add value beyond illumination.

The Value of Health and Well-Being

Like IoT and lighting, there are various definitions of what it means to create a healthy building. Definitions include different aspects based on building materials, sustainability, and energy use. Emerging as a theme for healthy buildings are factors like occupant health and productivity. An occupant’s health and productivity are harder to quantify than energy savings. This can be a barrier for building owners and managers and companies looking to prioritize occupant health and well-being, even though there is a growing interest in doing so. While energy savings help to justify the cost of a lighting upgrade, with the growth of LEDs that is no longer something by which companies can differentiate themselves. Some companies believe human-centric lighting—lighting that can improve occupant’s well-being and productivity—is primed to overtake energy savings as a key differentiator in lighting design for buildings.

Competing or Complementary Goals?

Although these lighting education concentrations at Strategies in Light are separate education tracks, I believe they provide more of a complementary focus for the lighting market than a competing one. Increased connected devices through IoT allow for further data collection and analytics that can be used to help quantify the value of occupant comfort and health in conjunction with increased productivity or retail revenue. Providing increased occupant health and comfort can provide additional value and help create a clear value proposition for IoT solutions in buildings.

I’m looking forward to attending sessions in both areas at Strategies in Light and hopefully solidify my views of their complementary aspects. For more information on healthy buildings and the role of lighting, keep an eye out for the upcoming Navigant Research report, Lighting for Healthy Buildings.

 

Smart City Technology Helping Low Income Residents, Too

— January 23, 2018

Particularly in the developing world, there are valid concerns that smart cities could exacerbate the digital divide and primarily benefit wealthier residents. However, a number of emerging companies and initiatives demonstrate that smart city technology can also be utilized for digital inclusion, citizen empowerment, and to increase low income residents’ access to essential city services such as transportation and healthcare.

Key Company and Project Examples

A new company called Cityblock Health was recently spun out of Alphabet’s urban innovation unit, Sidewalk Labs. Cityblock raised over $20 million from a range of investors to help low income Americans access basic health services. Through the company’s Commons platform technology, it will partner with community health centers and partner organizations across the US to reconfigure the delivery of health and social services—and make healthcare services more personalized for qualifying Medicaid or Medicare members. Specifically, the company is targeting issues with misaligned payment incentives (between payers and providers of Medicare and Medicaid), siloed medical and social service delivery, and fragmented data. Cityblock is expected to launch its first Neighborhood Health Hub in New York City in 2018. The Hub will differ from traditional siloed health clinics, using the company’s custom-built technology to merge health services with the community. Caregivers, Cityblock members, and local organizations will all engage with each other in one physical meeting space to discuss and solve local health challenges. Cityblock will be an interesting startup to follow as it aims to integrate primary care, behavioral health, and social services all under one roof.

Another significant example of the potential for smart city technology to help low income communities (and further explained in one of my previous blogs) is Columbus, Ohio’s proposal for the US Department of Transportation’s Smart City Challenge. One of the primary reasons the city won the Challenge—and beat out the better-known technology centers of San Francisco, Austin, and Denver—was due to Columbus’s ability to demonstrate that its plan would result in increasing poor residents’ access to new transportation options. Additionally, Microsoft, along with its partners G3ict and World Enabled, launched the Smart Cities for All Toolkit in spring 2017 as part of its broader city engagement program. The toolkit is designed to help city officials and urban planners make more digitally inclusive and accessible smart cities. Tools developed for cities include a guide for adopting information and communication technology (ICT) accessibility standards and a guide for ICT accessible procurement policies.

Project Design and Implementation Crucial

These examples demonstrate that smart city technology can be used to the benefit of low income residents—whether it’s increasing access to crucial services such as healthcare and transport, or helping to bridge the digital divide. Policymakers must be vigilant when designing and implementing smart city programs, ensuring that technology deployments will extend to and directly benefit low income residents and neighborhoods in their city. Specific projects designed for low income communities (e.g., providing transport between high unemployment neighborhoods and nearby job centers) should be pursued as part of a city’s broader smart city strategy whenever possible.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"2018 January","path":"\/2018\/01?page=2","date":"5\/26\/2018"}