Module Prices: Finding Stability Amid Uncertainty

Posted on December 19, 2017January 25, 2023 by The Sol Systems Team

Module Prices: Finding Stability Amid Uncertainty

2017 | 19 Dec 2017

By The Sol Systems Team

This is an excerpt from the December 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To receive future editions of the journal, please subscribe.

With the solar trade case looming, modules have been the talk of the town in solar. In less than a year’s span, the industry saw average module prices drop from $0.59/W in Q2 2016 to $0.37/W in Q1 of 2017. Utility-scale solar in particular became even more competitive with other energy resources, reaching the Sunshot goal of $1/W solar energy in 2017, 3 years before the 2020 goal DOE’s SunShot Initiative had set.

However, when Suniva filed its section 201 trade case against imported panels, uncertainty ran rampant, particularly in reaction to the petitioners’ request of $0.78/W price floor. The behaviors that followed were reminiscent of how worries about a hurricane causes long lines at the gas stations, or how in our hometown of Washington, D.C., warning of potential flurries cause people to flock to the nearest grocery store to raid the shelves of all remaining milk or bread: developers began racing to buy as many modules as they could before the potential tariffs took place. Quickly, demand for modules shot up, and module manufacturers were all too happy to oblige by charging above market rates to meet this Suniva-driven demand.

Utility-scale Solar & Tariffs

The price hikes caused by the current climate threaten utility-scale solar more than any other sector of the industry given the scale of the projects, price sensitivity, and the fact that utility-scale must compete at wholesale power rates instead of retail. With the trade case, much of the industry was making large volume purchases pre-tariff in this sector. This has led to a boon for some module manufacturers. First Solar, an American manufacturer of thin-film modules, a technology not impacted by the 201 case, has capitalized on the situation and is expected to produce far above previous projections the next few years. They are also due to release a new series of modules, Series 6, that they hope better addresses the cost challenges currently facing the utility-scale market by adding more yield per module at a lower installation cost.

Ultimately, demand for modules in 2018 is either being satiated now or pushed back another year. Large developers and IPPs likely purchased large quantities of modules in 2017, which should decrease the need for modules next year. In addition, many large-scale projects that haven't secured modules were stalled and pushed a year or two back. Much of this could change if tariffs aren't implemented, or are implemented at minimum damage, so we're still in the dark until that decision.

Where Do We Stand Now?

Today, pricing is beginning to level out amid a still-uncertain future. Once recommendations were released by the ITC, module prices began to level out around an average of $0.47/W, as the industry seems to be assuming a 30% tariff. However, there is speculation among our team that module pricing may drop lower than mid-40 cents-per-watt if demand drops, as manufacturers may be forced to drop prices to secure throughput of volume.

What Happens Next?

While some stability has arrived for the module market, there are many questions still to be answered for investors and solar customers alike as we await President Trump’s January 26 deadline for a decision. And, assuming a tariff close to 30 percent could give reason to believe that newer technologies like bi-facial and Mono-PERC modules may start to see some more play in the market; this is because higher yield will be more important than ever on imported panels in a tariff scenario. Still, until the administration acts (or does not act) on the recommendations, forecasting remains challenging.

ABOUT SOL SYSTEMS

Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.

Over the last eight years, Sol Systems has delivered 650MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

The Sol SOURCE: November 2017

Posted on November 20, 2017January 25, 2023 by The Sol Systems Team

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The Sol SOURCE: November 2017

2017 | 20 Nov 2017

By The Sol Systems Team

The Sol SOURCE is a monthly journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains energy statistics from current real-life renewables projects, trends, and observations gained through monthly interviews with our team, and it incorporates news from a variety of industry resources.

Below, we have included excerpts from the November 2017 edition. To receive future Journals, please subscribe or email pr@solsystems.com.

PROJECT FINANCE STATISTICS

The following statistics represent some high-quality solar projects and portfolios that we are actively reviewing for investment.

STATE MARKETS

New Jersey – As expected, Democratic gubernatorial candidate Phil Murphy won the Governor’s race in New Jersey this month. The vote was no surprise given his predecessor’s how-low-can-you-go approval ratings, but what will an administration change mean for the solar industry? Efforts to “pull forward” New Jersey’s solar carve-out from 4.1% by 2028 to 4.1% by 2021 were stalled last year, largely due to uncertainty that Governor Christie would sign the legislation. Since then, even more aggressive RPS legislation has been substituted for the pull forward, proposing an ambitious 5.3% solar carve-out by energy year 2021 ] Given that Phil Murphy will become Governor early next year, the odds for a more ambitious RPS package and net metering cap lift are all the more likely [if not early next year, then after an Energy Master Plan is crafted]. Murphy campaigned on a 100% RPS, something that would benefit all renewables, and not just solar.

New York – There is a growing sentiment that New York not only needs to, but will, revise its commercial and industrial (C&I) Megawatt Block program for rooftop solar. There are no details to be had yet, but one thing that is important is that people with a project reservation that will not go forward should facilitate the market by pulling their reservation out of the queue. This will help program administrators to realistically gauge the success of the program, and also better understand the budget available to provide a fix. Meanwhile, the value of distributed energy resources (VDER) continues to confuse not only developers, but proves increasingly challenging to message to customers.

Pennsylvania – It’s official. After years of advocacy from Pennsylvania SEIA and its allies, Pennsylvania has officially closed its borders to out of state solar renewable energy credits (SRECs). What does that mean?

As context, Pennsylvania was the only remaining SREC state that allowed generators from anywhere in the PJM region to sell into its market. As a result, solar projects built in PJM in utility-scale markets such as Virginia or North Carolina, or even rooftop homeowners in Ohio, could sell every 1000 kilowatt hours – which is one SREC–into the state’s solar carve-out program as allowed previously by PA’s Alternative Energy Portfolio Standard (AEPS). This abundance of RECs meant that complying with the state’s very modest .5% by 2021 (yes, one half of one percent, as compared to the 5.3% being discussed in New Jersey) solar carve-out has been easy, and the market has been perpetually oversupplied. As of November 1, RECs in Pennsylvania were valued at $4/SREC. Low SREC prices have led to very little in-state build; SEIA estimates that only 38.8MW of solar were installed in 2016. For comparison, SRECs in neighboring New Jersey are valued at $196/REC, and last year, New Jersey installed nearly ten times the solar as PA at a whopping 361.4MW. New Jersey is also home to over 6,000 solar jobs, while PA employs only half that amount.

Does this mean that the solar market will rebound? Not necessarily, largely due to the already abundant oversupply combined with a modest renewables target. The legislation also grandfathers certifications (as it should to avoid lawsuits) granted by the effective date of the law, October 30^th, as well as solar generators already under contract. The latter language is especially murky, and as compliance entities typically contract under a REC volume, not an individual system, which may create challenges with enforcement. As a result, the law’s actual effects are to be determined, and the contracts language in particular will be subject to Public Utilities Commission interpretation.

In sum, the PA closed borders bill is a great, first step, and even more importantly, it shows that solar has bipartisan support in the PA legislature. With other states looking at 25%, 40%, or even 50% renewable energy targets, an AEPS increase in the coming years would be even better for stimulating development in PA – and seems possible after solar gained new allies with this bill.

SOLAR CHATTER

Community solar in Illinois is this season’s “it” market, and at Solar Power Midwest, it was clear that developers with pipeline in New York, Minnesota, and even Massachusetts are now shifting their focus to Illinois. Need a refresher on the Land of Lincoln’s emerging solar market? We’ve got you covered.
Updates to Michigan’s PURPA rules, something that we have been following for quite some time, could become a reality by as soon of the end of this month (pending Michigan Public Service Commission final orders). By updating its avoided cost methodology, creating 20-year contract terms, and standardizing avoided cost rates for small qualifying facilities (QFs) sized under 2MW, Michigan could become a new hot market for small utility-scale development. For more information, check out this summary from our friends at the Environmental Law & Policy Center.
With the Suniva trade case looming, it has been an interesting year on the solar coaster for many in this industry. In our opinion, operations and maintenance (O&M) companies are some of the most resilient in the solar industry right now due to the recurring nature of their revenue streams and a quickly growing market for their services.
We were expecting the initial procurement for SMART, the new Massachusetts solar program, to take place the last week of October. Unfortunately, the procurement was delayed, and as a result, pricing uncertainty remains. This is because the initial SMART procurement will set prices for subsequent blocks. The Massachusetts Department of Energy Resources has now updated the schedule, and November 27 will be the opening date for bid applications, with mid-January as the date to release the results. Meanwhile, hearings took place last month to increase the state’s net metering cap, a constant legislative issue in Massachusetts.
JEA, located in Jacksonville, Florida, has announced plans to procure nearly 300MW of solar. As we get closer to a federal investment tax credit (ITC) stepdown, expect more similar announcements from municipal utilities, coops, and investor owned utilities in 2018.
An additional 1.2 gigawatts of solar projects were added to the PJM interconnection queue in Virginia, likely in response to Dominion's RFP announcement to procure 300MW (probably for Facebook).
Our engineering team has been researching the wild, wild world of weather file selection, which is an important input for modeling the expected energy production of a solar project. There are a number of different public and private sources for this data, and the difference in solar radiation between different weather file sources for a single site can be up to 5%, no small margin. There are many factors to consider when choosing a weather file, and more nuanced research into the most appropriate weather file for a specific site may improve the value of projects.

ABOUT SOL SYSTEMS

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

Section 201: A Look at Key Markets. As Tariff-ying as You Think?

Posted on November 20, 2017January 25, 2023 by The Sol Systems Team

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Section 201: A Look at Key Markets. As Tariff-ying as You Think?

2017 | 20 Nov 2017

By The Sol Systems Team

This article was co-authored by Lauren Miller and Stephanie Sienkowski.

This is an excerpt from the November 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To receive future editions of the journal, please subscribe.

On October 31, the International Trade Commission (ITC) released their much anticipated remedy recommendations. Though the recommendations’ impacts are by no means benign, they certainly could have been far worse if Suniva and SolarWorld had their way.

The ITC has suggested three possible remedies:

Chairman Schmidtlein has suggested a 10% ad valorem tariff on the first 0.5GW of Crystalline Silicon Photovoltaic Cells (CSPV) cells increasing to 30% ad valorem after the initial quota and a 35% ad valorem tariff on CSPV modules. Each of these tariffs will incrementally decrease over 4 years and the quota will incrementally increase.
Vice Chairman Johanson alongside Commissioner Williamson has suggested a similar four-year, tariff-rate quota on CSPV cells of 30% ad valorem for imports after the first gigawatt with percentage points for the tariff decreasing by five each year and the quota increasing by 0.2GW. For CSPV modules there will also be a 30% ad valorem tariff without a quota limitation, decreasing by the same percentage points over the four years.
Commissioner Broadbent in her recommendation took a slightly different approach, most similar to SEIA’s recommendation, and recommended 8.9GW quotas each on CSPV cells and modules that would increase by 1.4GW annually. She then recommended that these quantitative restrictions be implemented by selling import licenses at public auction at a minimum price of one cent per watt with the revenue from these auctions to be used in a fund to assist the domestic CSPV industry.

In looking at these recommendations, the first two and their potential 30% or more tariff rate are the most impactful for future solar development; however, they are not likely to be deadly. To give us a better sense of these findings’ impact on the industry, we assumed the 30% tariff rate and analyzed what it might to do to PPA rates in three key markets: New Jersey, Massachusetts, and Illinois.

New Jersey

The first key solar market we will look at is New Jersey. The effects of a 30% tariff in New Jersey are harder to predict because of the state's solar renewable energy credits (SRECs) are a market-based incentive with market values that are subject to change. To keep things simple and to set a baseline for the comparisons we will draw in Massachusetts and Illinois, we looked at a 30% tariff impact on New Jersey keeping SREC prices constant. A sample pre-tariff project with a PPA rate of around $.05-.06/kWh would see a projected 10% increase.

The New Jersey solar market has other drivers, however. The recent election of Phil Murphy as governor on November 8 bodes well forpro-solar legislation. Governor-Elect Murphy has announced that he plans to complete New Jersey's Energy Master Plan by the end of 2018, and hopes to raise the state’s renewable portfolio standard to a 100% clean energy by 2050. There is also pending legislation to increase the state’s solar carve-out, which could help SREC prices rise and soften any potential tariff’s impact. Governor Murphy would be much more likely to sign this than Governor Christie has been.

Massachusetts

In Massachusetts we compared a sample pre-tariff PPA project in the managed growth market sector that qualified for a .45 SREC II factor, with a sample post-tariff PPA project receiving $60/MWh in SMART program incentives for 20 years. The $60/MWh incentive value was calculated by assuming a $.17/kWh starting SMART rate and adding in a $.01/kWh ground mount subtractor and $.10/kWh value of energy subtractor. Keeping all other factors equal, the PPA rate increased by almost 40% form around $.04-.05/kWh in the pre-tariff scenario to $.06-.07/kWh in the post-tariff, SMART scenario.*

In Massachusetts, the potential increase from the tariff may be mitigated by the changes to Massachusetts’s incentive program. Additionally, to help ease the impacts of the tariffs in Massachusetts, it's imperative that once Massachusetts opens the initial competitive bid to help set the initial block 1 rates later this month, developers don't underbid. Pricing in a post-tariff world will be very sensitive to the clearing price of SMART and therefore honest bids will be key.

Illinois

The Illinois Power Agency released its Long-Term Renewable Resources Plan on September 29, 2017, setting up Illinois as one of the most exciting state markets to emerge in years. The plan outlines renewable energy credit (REC) procurement programs for Ameren and ComEd utilities. REC prices have been estimated based on NREL’s CREST model, but these REC prices may be refined before approval with the IL Commerce Commission (ICC). (For a refresher on the Illinois solar program, review our summary of the Long-Term Renewable Resources Procurement plan from the October SOURCE)

With this in mind, in Illinois we compared a sample 2MW, pre-tariff PPA project, assuming a spring 2017 Distributed Generation (DG) Procurement REC value of $68.56/MWh for 5 years, with a sample 2MW, post-tariff PPA project, assuming an estimate of 2018 incentives. The 2018 incentives include a $250/kW distributed generation rebate and $25/MWh incentives for 15 years, calculated as an average of Ameren and ComEd’s 2000 kW block 1 estimates found in table D-7 here.

With these numbers in mind, a project with a $.07-.08/kWh PPA rate under the spring 2017 DG procurement would actually have a 10% lower PPA rate, closer to $.07/kWh, under the proposed 2018 Adjustable Block and DG rebate, even in a 30% post-tariff world, demonstrating the potential strength of Illinois’s new renewable energy procurement program in both its REC contracting strength and because of the DG rebate.*

One point of clarification on these rates is that the REC values are not yet final. They are likely to change in final iteration. In its plan, the Illinois Power Agency wrote that it is aware of the pending tariff case, and in addition to feedback collected during the initial comment period, it may need to make further changes depending on the final ruling by the Trump Administration. It should also be noted that while fixed price RECs are set for projects under 2000kW via the Adjustable block, anything sized over 2000kW must bid for a 15-year REC contract. As always, honestly priced bids will be key to this market flourishing

Conclusion

While the potential for a 30% tariff is tarrif-ying to some, the actual impacts of this Section 201 may not be as scary as the industry feared back in June, at least for Illinois, New Jersey, and Massachusetts. However, in tighter markets state policies will certainly play a role in helping projects continue to pencil. For example, emerging solar markets in places where solar is just beginning to become cost competitive, or markets with low electricity rates, no strong state energy policy, and low solar irradiance, will be harder hit by the trade case. Pending policy and regulatory changes in places like Maryland, Connecticut, and Virginia will be important to pay attention to in the 2018 legislative session, and strong state legislation could help soften the blow.

While 30% is most likely a worst-case scenario, the President still has the final say in what remedy will be. The recommendations landed on President Trump’s desk on November 13, and from there he has 60 days to make his decision. The industry will be watching to see which of the three solutions, combination of solutions, completely new remedy, or no remedy at all that the President will end up implementing, while keeping in mind that the ITC's recommendation has typically been a ceiling for recommended tariffs.

*Please note that all PPA rates mentioned in this article are sample rates and should not be used as indicative or average rates for specific projects or markets. If you would like indicative pricing for your project, please email finance@solsystems.com.

ABOUT SOL SYSTEMS

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

Navigating Choppy Waters: Federal Regulatory Risk

Posted on October 26, 2017January 25, 2023 by The Sol Systems Team

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Navigating Choppy Waters: Federal Regulatory Risk

2017 | 26 Oct 2017

By The Sol Systems Team

This article was co-written by Ben Margolis and Lauren Miller

This is an excerpt from the October 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To receive future editions of the journal, please subscribe.

For anyone following solar industry news recently, there seems to be a few dark clouds forming out on the horizon. We've seen Suniva and Solar World's Section 201 filing, Environmental Protection Agency Administrator Scott Pruitt propose repealing the Clean Power Plan, and Energy Secretary Rick Perry file a Notice of Proposed Rulemaking (NOPR) aimed at compensating coal and nuclear plants.

None of these storms have fully hit quite yet, some have certainly started raining on the industry. Will they become full-fledged storms and if so, what will the aftermath be?

Section 201

Perhaps the fiercest of the storms on the horizon is Suniva and Solar World's Section 201 filing. In September, the International Trade Commission (ITC) unanimously ruled in favor of the petitioners and found injury from imports. This ruling was not an unexpected outcome, especially considering that any commissioners that voted against injury would not have a say in remedy proceedings.

The question now is: what will the remedy be? Initially, the petitioners asked for a $0.40 per watt tariff on imported cells and a price floor of $0.78 per watt on imported modules. The remedy sought has since become more nuanced. They are now requesting declining tariffs starting at $0.25 per watt for cells and $0.32 per watt for modules that decline to $0.235 per watt and $0.29 per watt respectively over four years. They are also incorporating quotas per Solar World's recommendation and sticking with Suniva's price floor concept, though slightly less at $0.74 per watt.

Despite the slightly eased, yet still aggressive remedy proposals from the petitioners, the rest of the solar industry has high hopes that the ITC will be milder in its remedy recommendation and has recommended such through the Solar Energy Industry Association (SEIA) filings with the ITC. As such, the solar industry is powering on (metaphor intended), with the hope of clearer skies.

The ITC is set to vote on remedy on October 31 with the remedy report sent to President Trump on November 13. The President then has 60 days to make a decision. Perhaps, the solar industry's newest advocates like the American Legislative Exchange Council, the Heritage Foundation, and Sean Hannity may help the president in his decision.

The Clean Power Plan

Another hit to the clean energy industry as a whole is Administrator Pruitt's recent announcement on repealing President Obama's 2015 Clean Power Plan (CPP). Under the CPP, each state is required to craft individualized plans to reduce carbon dioxide emissions with an overarching, national reduction goal of 32 percent by 2030.

Under these goals, renewable energy was expected to flourish, and a cornerstone of the plan was working to phase out coal-burning plants and transition to generation units with less emissions. Now with a potential repeal, what will the impact be? In a recent study from the Rhodium group, they found that even without the CPP market factors and continuously declining renewable costs will still cause renewables to grow, with a commensurate 27-35 percent reduction in carbon dioxide emission in the power sector by 2030. Generally speaking, the CPP may have pushed more non-traditional states towards cleaner forms of power production, whereas without the CPP, you will have states already leading the clean energy charge like California, New Jersey, Massachusetts etc. carrying the nation towards overall reductions and renewable energy adoption. However, there are examples of non-traditional states taking lead like Ohio AEP’s recent 400MW solar request for proposal.

Overall, a repeal of the CPP will be far from the end of the solar industry. Even when the CPP was stayed by judicial review in 2016, solar experienced its strongest year yet, more than doubling 2015's installations with more than 14.7GW installed. So, a repeal of the CPP will certainly be a hit to the U.S.'s climate goals, but the solar industry will certainly weather on, and a repeal will not be swift. The Administrator will still have to follow the traditional rulemaking steps to repeal the CPP, and with the Supreme Court's 2007 finding in Massachusetts v. EPA, some form of protections from greenhouse gases will likely still need to be put in place. This has several states –Minnesota, New York, and New Mexico- moving forward with reduction plans.

DOE's Grid Resiliency Pricing Rule

In yet another attempt to prop up the coal industry against other fuel sources, the Trump Administration's Department of Energy Secretary, Rick Perry, has issued a Notice of Proposed Rulemaking (NOPR) that attempts to strengthen the "resiliency" of the grid. The rule directs FERC to subsidize power plants that have "Fuel-Secure Power", defined as plants that can maintain a fuel supply of 90 days – basically just coal & nuclear.

This NOPR was unusual in many ways. First, the DOE rarely utilizes its authority to create a NOPR on behalf of FERC and instead typically lets FERC stand on its own. Secondly, the timeline for comments that was proposed by DOE is dramatically shorter than the traditional FERC process. Many stakeholders have complained about the haste this process seems to be going through. DOE requested a response in 60 days, whereas typical FERC stakeholder process lasts from 90-180 days. FERC General Counsel James Danly has recently said that FERC will stand by the timing.

Furthermore, the rule itself has many flaws including: no definition for the word "resiliency", no justification for the 90-day fuel supply requirement, no estimates of cost impacts that a new rule would have. In fact, when asked about it, Rick Perry said, "I think you take costs into account, but what's the cost of freedom?" We think he captured this himself 43 seconds into this clip.

Bottom line, this rule is unlikely to move forward as originally proposed, and is unlikely to withstand legal challenge. If implemented as originally proposed, a collection of former FERC heads say that the rule would fundamentally distort markets. We will find out mid-November whether or not any action will be ultimately taken by FERC.

It’s difficult to say what the impact of this proposed rule will be since we don’t know what the rule will look like or, perhaps more importantly, how it will get implemented by each RTO. Once that is clear, then we will understand the impact it will have. If FERC acts on this, it will increase electricity rates which wouldn't be such a bad thing for project developers – it just may require some additional attention and focus on long-term storage or other technical solutions.

Other storms on the horizon

In addition to the federal government and the Trump administration’s obvious attempts to move the country away from renewables and toward fossil fuels, there are other storms potentially brewing out at sea that could impact solar. Tax reform is kicking up in Congress now. SEIA has been assured through multiple parties that the investment tax credit will not be reduced (or removed), tax reform itself will likely impact the solar industry.

Our understanding is that we’ll likely see a stepped down tax rate for corporations from 35 percent to something more like 25-30 percent. This will have two impacts on the solar industry, neither of them catastrophic. First, reducing the tax rate for corporations will reduce the overall pool of taxable income for corporations. This will mean a smaller pool of tax equity for the industry because corporations will have less taxable income to offset, and fewer corporations will invest. Second, a lower tax rate reduces the value of depreciation for investors because depreciation directly offsets taxable income - not taxes. As a tax asset, depreciation will be worth less.

For the most part, all these attempts to hinder the development of renewables likely won't have a tremendous long-term impact on the industry and likely won't increase coal generation (at least according to a recent analysis by The Brattle Group). So, even with all these storms brewing, there is room to navigate through choppy waters for the solar industry.

ABOUT SOL SYSTEMS

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

Break on Through to the Other Side: Would Bifacial Panels Become More Popular in a Post-Tariff Solar Industry?

Posted on August 24, 2017January 25, 2023 by The Sol Systems Team

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Break on Through to the Other Side: Would Bifacial Panels Become More Popular in a Post-Tariff Solar Industry?

2017 | 24 Aug 2017

By The Sol Systems Team

Bifacial modules have long played the role of being one of the cooler exhibits at solar conferences, but in our experience to date, have failed to enter the market in a serious way. The panels capture energy on both sides of the module by capturing sunlight on the backside that was reflected off the surface the array is built on. The technology has shown promising data in laboratories, but has yet to justify itself to developers as being worth the extra yield for its high price tag, However, with the prospect of high tariffs on imports that may result from an injury finding in the Section 201 trade case, forced higher prices may have developers looking more closely at the extra yield these can provide. If tariffs are imposed, will it be bifacial modules’ time to shine?

Bifacial Modules Today: It’s Complicated

In controlled environments and in certain orientations, bifacial panels have been shown to increase panel production by as much as 50 percent. In the field, however, the added production has ranged from 5-30 percent, and is highly dependent on system design and site conditions. This variability is just one of many factors that have kept bifacial panels from making a serious dent in market share, which currently is less than 5 percent.

To put it simply, it’s hard to predict the energy the modules will produce. The factors that affect bifacial module energy production can seem endless. In addition to all of the environmental and system design factors that affect standard monofacial modules, things only get more complicated when you generate energy from the backside of the module as well.

We sat down with Kevin Mayer from our engineering team to get his perspective. According to Kevin, “for all of the factors we currently take into account in proving estimated energy production for standard monofacial modules to investors and customers, bifacial modules add even more to consider, and are highly sensitive to factors that have only a small effect on monofacial systems.”

What exactly are these factors? For one, the surface; new white roofs should reflect more than older dark roofs. Other variable may include weather (more snow will help reflect more irradiance), row spacing and module height (various layouts attempt to maximize reflected sunlight being captured), and racking (standard racking structures block some sunlight from hitting the backside of the modules). Together, these variables create several scenarios that make it hard to model accurate energy yield predictions.

Investors are comfortable with standardized and streamlined energy modeling practices for monofacial modules, so there will need be a new education process from engineers to financiers to communicate the risks and benefits of going bifacial while still maintaining the same low cost of capital available for monofacial projects.

To make matters more confusing, there is still no standardized method for rating nameplates of bifacial modules, making them more difficult to price. With much of the research into the technology staying proprietary, the required data is hard to find. These factors have led to bifacials becoming more of a niche product, typically at a higher price than monofacial modules. Yingli Green, Sunpreme and LG have all made efforts in the market, but have never manufactured bifacial modules on a large scale, another limit to the technology. For the high price, it just isn’t worth it yet for the larger market to cede cost for uncertain results. However, this could change with the trade case.

Bifacial Modules and Suniva’s Section 201 Case

Sure, bifacial modules carry a higher price tag than standard monofacial modules. However, if the price floors being requested in the trade petition are enacted on imports at 78 cent/Watt, all imported modules will essentially be sold above their current market value. The question may turn into “how much yield can I get for 78 cents?” Given that the nameplate rating of bifacial modules currently only considers the frontside power of the module, the extra energy production provided by the backside of the module gives bifacial modules a large value advantage in a high price floor world.

Bifacial modules, along with other high-efficiency crystalline-silicone modules that generally carry a high price tag, may face a more level playing field with their previously lower-priced counterparts if tariffs are enacted. The commercial and industrial (C&I) space, in general, has some economic breathing room (utility-scale solar, for instance, has tighter margins competing against the broader electricity market), and being that bifacial modules are largely C&I products, a 201 outcome that imposes tariffs should support momentum for bifacial modules. If upfront capital costs for a project increase or are partially fixed by a price floor, increasing the total energy provided by the project would be an effective way to lower the levelized cost of energy (LCOE). However, manufacturers of bifacial modules would certainly need to scale up to capture more of the market, something that has not yet begun.

“Section 201 tariffs by themselves will not cure bifacial technological and financial challenges,” suggests Joe Song, Director of Engineering at Sol Systems. “If enacted, the tariffs may add motivation and creativity within the industry, and give the industry more credence to take more risks in the name of enabling more projects under challenging economics.”

In any scenario, bifacial modules will continue to fascinate engineering geeks across the industry, including the ones that work for Sol Systems. Regardless of what happens with the trade case, increasing data will only aid the development of this technology as a more common market option.

This is an excerpt from the August 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To view the full Journal, please subscribe or e-mail pr@solsystems.com.

ABOUT SOL SYSTEMS

Over the last eight years, Sol Systems has delivered more than 600MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.

Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.

Three Actions You Can Take to Oppose the 201 Proceeding

Posted on July 19, 2017January 25, 2023 by Avery Sellers

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Three Actions You Can Take to Oppose the 201 Proceeding

2017 | 19 Jul 2017

By Avery Sellers

This article was co-written by Sara Rafalson and Avery Sellers

Suniva. A word that incites concern for most in the solar industry right now, and with good reason. The national Solar Energy Industries Association (SEIA) estimates that the requested tariff level of $0.40/W and minimum price of $0.78/W would, if instituted, result in the loss of 88,000 jobs in the solar industry. SEIA and GTM estimate that residential state markets at grid parity would fall from 43 markets to only 26 if the President grants Suniva’s request with no changes. Utility-scale projects are most exposed to module price risk, given that they need to be cost competitive with natural gas and compete on the wholesale market.

Even more frightening, the International Trade Commission’s (ITC) role is to make a recommendation, and the ultimate decision lies with the Trump administration. For a President that ran a campaign on restoring American manufacturing jobs—and specifically identified section 201 as a remedy—many in the solar industry are concerned.

The Suniva case could be a big “nothing burger”, or it could mark a major turning point for the U.S. solar industry. Regardless, the uncertainty in the market is being felt today and will remain until final decisions are made. The International Trade Commission hearing on the trade case is Tuesday, August 15, the ITC’s determination of injury will not occur until September 22^nd, and the recommendation for action will be delivered by November 13^th.

This waiting period has many feeling powerless and unsure what to do, but it doesn’t have to. Here are three things that you can do today to help the fight against the Suniva trade case.

First, start with this suggestion from SEIA. Write a letter on behalf of your company to your Members of Congress, explaining your opposition to the 201 proceeding and how it will harm your business. SEIA set up a simple online system to facilitate this process. It’s easy, so please take a moment.
While letters and emails are a helpful first step, in-person meetings are even better. You don’t have to travel to D.C. to have your voice heard (though you certainly can). Set-up an in-district meeting with your senator or congressman’s staff and share your local economic development story, and why the trade case will hurt business in their district and beyond.Outreach doesn’t have to be limited to your senator or congressman. Use your solar projects in various congressional districts as a platform to discuss the trade case with different reps. Provide them a tour of the solar array or invite them to a ribbon cutting. Educate them on the benefits of solar, show them the local, in-district economic development, snap a picture, and use this as an opportunity to discuss your opposition to the 201 proceeding.
[caption id="attachment_4862" align="alignright" width="300"] In the lead-up to the ITC extension, Sol Systems toured a solar array with members of Representative Devin Nunes' staff[/caption]

Are you a member of a local business coalition or trade association? Contact them, create a sign-on letter that other business members can sign onto, and send a joint letter to your state’s Congressional delegation.
If you are a solar company, the easiest first step is to plug into your local SEIAaffiliate chapter. If you don’t, contact Heather Whitpan, Senior Manager of Government Affairs at SEIA at hwhitpan@seia.org to plug into existing efforts.

You don’t have to be a lobbyist to make a difference. Opposition to the trade case starts with you.

This is an excerpt from the July 2017 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar financing space. To view the full Journal, please subscribe or e-mail pr@solsystems.com.

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Tag: Suniva