Note: This blog is the second in a four-part series examining the evolution of U.S. solar companies.
Continuing on my previous blog, outlining some of the most important trends that have shaped the U.S. solar PV landscape and offer a glimpse into the post-30% investment tax credit (ITC) future, this blog looks at how U.S. companies have made inroads overseas, with a particular focus on emerging markets, microgrids, and hybrid energy solutions.
Emerging Markets: Utility Scale
Developing countries are becoming a growing opportunity for U.S. solar companies looking to leverage their expertise in regions and applications with very high electricity costs or weak grid systems. In many ways, developing countries are the next frontier, but they offer unique challenges along the way. Markets such as South Africa, India, Chile, and China have rapidly been turning into high-growth markets that could drive sales in the latter half of this decade in utility-scale installations down through remote microgrids.
Notably, SunEdison has been operating in India for a number of years, but in 2015, the company has made numerous high-profile announcements, including reportedly signing agreements for up to 15 GW of solar and wind projects in the country. The company also announced a $4 billion deal to manufacture solar panels in India. Another company in this field, First Solar, has also made significant announcements for the Indian market, including a target of 5 GW by 2020. In addition, this company has installed the largest solar PV plant in South America in Chile at 141 MW.
At the utility scale, the leading country in Africa for renewable energy deployment is South Africa, where the government’s integrated resource plan may result in nearly 10 GW of solar PV installed by 2030. With nearly 1.5 GW of solar PV and 2 GW of wind currently installed or in development, following four well-administered auctions, the country is making strong progress. SunPower has completed 33 MW of projects in South Africa in addition to being appointed as the preferred energy performance contractor (EPC) and operations and maintenance (O&M) contractor for an 86 MW project by the MULILO-TOTAL consortium. SunPower also announced at the end of 2014 that it is moving forward with at 160 MW module manufacturing plant in Cape Town, South Africa, to meet growing demand.
Emerging Markets: Microgrids/Hybrid Energy Solutions
Remote microgrids and hybrid solar-diesel or wind-diesel systems are already common with more than 600 identified in Navigant Research’s Microgrid Deployment Tracker. To put that number in perspective, SunEdison has set a target of developing 5,000 microgrids in India by 2020, with many including storage. Since 2014, First Solar has been pursuing build operate and own (BOO) fuel-replacement projects, which include the prospect of displacing diesel in mining and other heavy industrial operations. First Solar can provide a levelized cost of energy at between $0.07-$0.15/kWh, making it comparable, or cheaper, than conventional power plants – but also far less expensive than diesel, which generates electricity upwards of $.70/kWh.
In 2015, First Solar and CAT announced a strategic partnership to develop an integrated PV solar solution for microgrid applications. Under the agreement, First Solar will design and manufacture a pre-engineered turnkey package for use in remote microgrid applications, such as small communities and mine sites. The package will feature CAT-branded solar panels manufactured by First Solar and will include balance of system components. CAT will exclusively sell and support the integrated solution through its worldwide dealer network, along with its current offerings of generator sets and energy storage. Many other companies are expected to soon be offering similar solutions.
In the next installment of this four-part blog series, I’ll cover energy storage and the role of utilities in distributed solar.