Navigant Research Blog

Can Solar Make an Impact on the Transportation Market? Part 1

— August 31, 2017

People have dreamed of solar-powered vehicles for decades. The first World Solar Challenge race occurred in 1987 and the first American Solar Challenge (then called Sunrayce) was held in 1990.

Thanks to improvements in solar costs and the EV value chain, the dream is closer to reality. Two startups (Sono Motors in Munich, Germany and Lightyear in Eindhoven, the Netherlands) have projects underway. Sono Motors successfully crowdfunded more than half a million dollars in September 2016 and revealed its first car on July 27, 2017: the Sion. According to Sono, the Sion will cost between $13,200 and $17,600 depending on the battery size and will run without refueling for around 30 km with a 1 kW solar system. It will be available in 2019.

Lightyear is an unofficial spinoff from Solar Team Eindhoven. This team built the Stella and Stella Lux solar racers—both winners of the Bridgestone World Solar Challenge Cruiser Class. The cruiser class replicates traditional cars, with seating space for four people. Lightyear has been taking preorders since June 29, 2017 for €119,000 ($138,000). The car is expected to offer a range between 400 km and 800 km and travel between 10,000 km and 20,000 km per year in low irradiation areas (e.g., United Kingdom and the Netherlands)—charging only with its PV system.

Today’s Solar-Powered Vehicle Option

A solar-powered vehicle option is available on the market today. Toyota’s latest Prius Prime Plug-in Hybrid offers an option in Japan to add a 180W solar roof that charges the main battery. Toyota claims that the roof will give the car a maximum solar rage of 6 km in Japan, which is a country with medium irradiance levels. The option to add the solar roof costs $2,500, which adds 5%-10% to the vehicle price. This seems expensive given the savings it provides compared to buying electricity from the grid that costs below $70 per year, even with the high electricity prices in Japan. From a convenience point of view, the system might make more sense for people without parking at home and short daily drives. My daily commute is around 4 km, which means that if I had the Prius Prime Plug-in Hybrid with the 180W solar roof add-on, I could drive mostly electric all year without visiting a charging point. It is still an expensive feature, however, which is why most mobility analysts—like my colleague Scott Shepard, who analyzes the EV market—have been skeptical about the idea of putting solar and EVs together. Yet, other automakers are exploring the PV-EV connection, as well. Audi has just announced it will unveil a prototype EV with solar panels on the roof to extend the vehicle range.

Despite the skepticism, one successful solar-powered vehicle project exists. Part 2 of this blog series will look into Indian Railways’ newly launched solar diesel multiple unit trains.

 

Portland’s New Renewables Leadership Showcased at Historic Montgomery Park Install

— April 18, 2017

An analyst’s job is to look at trends, events, movers and shakers, and data that sometimes all collide into one amazing story. One such alignment occurred on April 14, 2017 at the ribbon cutting of Imagine Energy’s 1 MW rooftop solar PV installation at the Montgomery Park building in Northwest Portland. The layers speak for themselves:

  • Solar Install: 1 MW is the third-largest solar PV installation in Portland, and it will cover 20%-25% of the all-electric historic building’s energy needs. The press release speaks for itself, “After four Historic Reviews, six crane lifts with the largest mobile crane in Oregon, the harshest winter in 40 years, detailed engineering reviews, and a 300-ton crane mobilization to set 150′ solar trusses, the 1 MW solar project at Montgomery Park is complete.” The installation included four EV charging stations, as well.
  • 100 ENERGY STAR Rating for 100th Anniversary: The solar PV installation sits atop the roof of the Montgomery Park building, and there are also three additional structures on Portland’s second-largest office building. Montgomery Park is working toward a perfect ENERGY STAR building efficiency rating of 100 by its 100th anniversary in 2020. Despite its age, Montgomery Park is the fifth most efficient building in Portland, and a score of 100 would make it No. 1!
  • History: Montgomery Park’s owner, Bill Naito, has an amazing personal history. A Japanese American who moved to Utah in high school to avoid internment during World War II, Naito went on to become one of the most prominent developers and civic leaders in Portland’s history. Imagine Energy’s founder, Jonathan Cohen, and his wife, Jessie, are two of the cities’ most active entrepreneurs and owners of other businesses in Portland.
  • 100% Renewable Energy Target: The newly elected mayor of Portland, Ted Wheeler, recently announced that Portland and Multnomah County would target 100% renewable energy for city operations by 2035—joining 25 other US cities in taking the pledge—building upon the city’s climate action plan.
  • Top Solar Drone Video: Navigant Research has covered the use of unmanned aerial vehicles for wind power inspection and for transmission and distribution monitoring. As cool as those are, nothing beats a sweet solar PV installation promo video—and Imagine Energy’s is the best I’ve seen.

While today’s solar market is led by a shrinking number of mega companies, the solar shakeout has created opportunities for small and medium companies to carve out their niche—and work on creative, challenging projects that larger companies might overlook such as the Montgomery Park project.

 

SAP to Resell Siemens’ MDM on Its HANA Platform

— April 14, 2017

The Announcement Is a Change in Direction for SAP

SAP has historically maintained an arm’s length distance from meter data management (MDM), which is responsible for the collection, storage, and processing of smart meter data. I have always been puzzled by SAP’s approach. The company’s IS-U product set is the undisputed leader in the utility billing software market, so its lack of enthusiasm for a complementary MDM system was surprising. A SAP MDM would allow for seamless integration from the communications headend system to the bill.

SAP has historically preferred a partnership strategy with various MDM vendors, working to ensure integration between its MDM systems and IS-U via its SAP AMI Integration for Utilities module. However, at its 2017 International Conference for Utilities, SAP announced SAP Meter Data Management by Siemens. Launching in 2Q 2017, the deal effectively makes SAP a reseller of Siemens’ EnergyIP MDM system. SAP and Siemens said they will align roadmaps to ensure the product evolves with utilities’ changing requirements.

SAP’s Drive to Sell HANA Is Behind This Change in Strategy

There are numerous drivers for this strategy. First, there is a convincing commercial argument. SAP’s reticence came at a time where it had no database product in its portfolio. Fast forward 7 years and SAP is now heavily promoting its in-memory database, HANA. MDM running on HANA is a compelling proposition for SAP.

SAP and Siemens also share similar visions for their go-to-market strategies. Both companies see a future with greater IT/OT convergence, where cloud-based integration of data from multiple sources allows for access across an organization.

A Match Made in Heaven?

SAP’s dominance in IT makes it an attractive partner for Siemens. Conversely, Siemens’ strategy to expand the functional scope of its EnergyIP MDM aligns with SAP’s HANA Cloud Platform (HCP) vision. Siemens intends to develop a highly scalable platform that collects and stores time series data from multiple types of connected devices, including wind turbines, EVs, solar PV, submeters, and other Internet of Things (IoT) devices. SAP wants HCP to be the platform of choice for this type of data.

At launch, SAP Meter Data Management by Siemens will be an on-premise solution. Yet, the roadmap includes integration with SAP’s Cloud for Energy to make EnergyIP fully compatible with HANA and a cloud-based MDM solution.

The choice of Siemens as SAP’s MDM partner is a no brainer. There is enormous potential to add value by creating non-conflicting use cases for its products—and the potential to reduce costs and complexity for clients.

Jemena Plots MDM’s Inexorable Path to the Cloud

Midsize Australian utility Jemena has been working with SAP as a development partner for MDM in HCP, and it has been running a project since 2016. With limited funds and no internal data scientists, Jemena historically struggled to open up its smart meter data across its business. As a result, users exported data from its MDM system into Excel for analysis.

The company wants to become more customer-focused and needed a way to use existing company data to create new business cases. For example, Jemena lacked the tools for marketing to create customer segmentations from consumption profiles or for engineers to profile transformer loads.

Now Jemena’s advanced metering infrastructure (AMI) data is uploaded to HCP from its MDM, allowing access across its business. As a cloud-based model, it offered what Jemena called a very low cost of entry into the world of meter analytics. Eventually, Jemena wants to intake AMI data directly into HCP, where it will perform data validation.

Jemena’s use of HCP for MDM is separate from the SAP/Siemens announcement. However, it provides insight into MDM’s seemingly inexorable move to the cloud.

 

Is Quality Over Quantity the New Game in Solar?

— November 21, 2016

Rooftop SolarThe solar module manufacturing industry is facing the second abrupt collapse of module prices in a decade. Prices fell by 12%-20% between January and October 2016 (depending on the technology and location) as the industry expanded manufacturing while the Chinese government decided to reduce its targets amid a deceleration in other markets, particularly in Europe.

Manufacturers have been in planning mode for the last few months thinking how best to ride out this dry spell. The last time the market saw a significant oversupply (between 2009 and 2012), prices fell 80% in a 3-year period. The survivors of the crisis managed to do so mostly by cutting costs, hence offering better value for the same product.

New Strategies Needed

But the same strategy is unlikely to work this time around, according to the US Solar Photovoltaic System Cost Benchmark: Q1 2016 report published by the National Renewable Energy Laboratory. The report states that for a residential installation in the United States in 2015, non-equipment-related costs were $1.91/W, or 65% of the total cost, while module costs were $0.64/W (21%) and inverter and other equipment costs were only $0.42/W (14%). Therefore, a 20% reduction in the cost of a module only reduces the total installation cost by about 4%.

The impact for utility-scale projects is more important. Installation costs for these projects vary significantly depending on the size, but non-hardware costs usually make up between 45% and 55% of the final cost of a project, while the module represents between 40% and 45%. Although cheaper modules could make a difference in this market, the current auction system used in different countries to give long-term agreements has made the segment ultra-competitive, leaving only a razor-thin margin (if any) for the whole value chain.

Manufacturers Adjusting Course

After months of planning, companies are now announcing new strategies to their investors. SolarCity/Tesla announced an alliance with Panasonic for its Gigafactory, as well as a new set of building integrated PV solar tiles and shingles aimed at carving out a luxury segment from the residential market, especially for new builds and re-roofers.

First Solar also chose quality over quantity. On November 16, it took 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.

On December 9, SunPower will be the last American module manufacturers  to make an announcement of its strategy. We will see if the company follows a similar pattern, but for the time being, it seems that quality is winning over quantity.

In Navigant Research’s Next Generation Solar PV report, published before the latest collapse of module prices, we forecasted that advanced solar modules would become mainstream by 2025. The plunge in prices could slow the adoption of new technologies, but it seems that American manufacturers are willing to sacrifice market share and are doubling their bets on higher quality (and higher price) products to keep positive margins.

 

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