The solar industry is growing up. First there were solar modules. Then more and more manufacturers entered the market. How to distinguish? TüV certification came up as the new hype. A sign for quality, and reliability of the manufacturer. At least they had to pay a serious amount of money for certification, so this proved the company was not a opportunistic one-day-fly. But, with more than 400 brands being TüV certified a new step was necessary. Next came the ‘white list’ of Banks. Your module is not on the ‘white list’ of a bank? Then forget about obtaining financing for the PV project. By the way, can anyone provide the qualification rules and name the independent body qualifying modules for the ‘white list’? Your module can be IEC-certified by TüV, but banks aren’t so transparent about how they produce lists and financial products.
The white lists are growing. Some banks can accept more than a hundred module brands. More and more manufacturers have grown into big companies with a solid track record and balance sheet.
Modules are not rocket science
Does it make sense to focus so much on the solar modules? The modules are guaranteed for 25 years of power. Quality in most cases is more than sufficient. What other products can be found these days with so much guarantees and quality certification? Manufacturers claim that production of PV modules is ‘not rocket sience’. So why focus so much on a piece of glass with some silicon slices?
And next came insurances. Modules, projects and the companies can be insured, all for the sake of the investors and banks. Does this all make sense and what will be the end of this development?
Do banks have inverter white lists?
Solar modules are only part of a solar PV system. If modules hardly ever fail, aren’t inverters a more crucial component? Inverters are the real high-tech part of your energy production unit. Your module could be doing pretty well, if the inverter fails you won’t generate much electricity.
Still, we don’t hear banks talk to much about a white list of acceptable inverter brands.
But, thinking one step further, even certificates and white lists of inverters won’t be sufficient for customers. What counts in the end, is the reliability of all the components together: your complete PV system. Customers just want to be sure that a system will produce electricity.
What is needed is a quality guarantee for your complete PV system. And maybe even more important: the produced electricity should be of acceptable and good quality. The grid operator will have to accept your electricity input. And your appliances at home should work well on the solar electricity coming from your inverter. The electricity quality guarantee will put even more emphasis on the only high-tech component of the PV system: the inverter.
White list for PV systems
What might be helpful is a ‘white list’ of complete pv systems. Systems well designed and engineered with a perfect combination of components that have proven to work well together. The financing industry should take its focus a step further to quality control of the end product, a reliable complete system producing good quality electricity.
Did you ever complain about the certificates of the boogies in a new car? Ever asked if your tiles are on a white list? You just want all components in a car to work well together, for many years. In the near future, the brand of the solar system supplier, could become more important than the module or inverter brand. In that perspective it makes sense that module manufacturers expand their activities over the complete supply chain. From silicon to cell and module and even further downstream to complete system and project supply. The future might be system branding or branding of the end-product: electricity. Will the customer be ready to buy First Solar electricty, Trina solar energy or accept uncertified ‘Jansen solar electricity’?
maandag 22 november 2010
maandag 15 november 2010
France: the new booming market... soon...
The idea of organizing a French PV conference was warmly welcomed by some of our French contacts. "Are you sure? We have holidays coming up, an expo is taking place in the same period, we are waiting for new regulation and, if you do, you will need to do it in Paris and in the French language, otherwise forget about French speakers and participants". You can’t get more motivated to pick up the challenge, I thought. And without regret, because the Solarplaza conference last week in Marseille was well attended and a success.
Simple as the Italian market
"French like to make things complicated first, so they have a challenge to work on", I quote from a French senior executive and speaker at the conference. A foreign participant sighed and stated: "I wish the French market was as simple as the Italian market". Times have changed...as if the currently booming Italian market was a well organised paradise for investors a few years ago.
Femmes fatale and bureaucracy
Beautiful landscapes, great architecture, numerous historical places and castles, the best wines, beaches, mountains with snow, les femmes fatales and plenty of sunshine. France is one of the most beautiful countries in the world, ideally suited for solar PV. But, France is also different in many ways. A nuclear energy powered nation, and a utility monopolist closely tied with the government. EDF plays a crucial role in grid connection applications of new pv projects, currently leading to a multi GigaWatt pipeline. Sometimes, inscrutable relationships exist between the elite government officers and EDF managers. And, didn’t the French invent the word bureaucracy?
PV: looking like a normal power plant!
So far, France is a BIPV focused market. The FiT for BIPV is higher, but discussions about what BIPV is, are more complex. The government beliefs that this segment will create more domestic jobs, since solar modules in the end are just a building product. A fair conclusion. Now, let's hope that the new jobs created will not be a result of bureaucratic complexity.
Nevertheless, promising new developments are taking place. In Southern France, some bigger ground based projects have been built and others are planned. The first power shortages have occurred in this vital economic and beautiful touristic region. Although it is not easy to find a piece of land for a large PV project, it seems more easy these days than planning, permitting and building a new nuclear power plant. And,since wind energy has a bad image for some reason in this area, large scale solar will be one of the best and fastest solutions. Even EDF now seems convinced of this.
A French contrator explained: "During a pv roof project visit, the EDF people were surprised. Seeing the inverter and transformer room and recognizing the power devices, they reacted enthusiastically: "wow, this looks like a normal power plant!"
Educating the nuclear elite
As stated in a previous blog, France proves once again that it takes time to develop a market. Growing a market is not just opening up new sales offices. Government people and even more the elite MBA schooled nuclear supporters need to be educated. This will take more than serving one glass of its solar radiation based, most famous and indispensable product over lunch time...
There is reason to be optimistic. The potential for PV application in France is enormous. Like with a lot of things in France, a little more patience will be needed. And besides, Italy, has shown that a country known for bureaucratic complexity can turn into the number two market of the world.
The Sarkozy challenge
Time to work on education and a strong solar lobby. Why not start in the centre of power: a pv system for President Sarkozy. If the white house has solar panels, this world leader cannot remain without. Of course, French historical architecture ‘is something different’ and definitely ‘more complicated’ for PV application. But, isn't the French focus on BIPV and looking for challenges? Well, here is one to get started!
Simple as the Italian market
"French like to make things complicated first, so they have a challenge to work on", I quote from a French senior executive and speaker at the conference. A foreign participant sighed and stated: "I wish the French market was as simple as the Italian market". Times have changed...as if the currently booming Italian market was a well organised paradise for investors a few years ago.
Femmes fatale and bureaucracy
Beautiful landscapes, great architecture, numerous historical places and castles, the best wines, beaches, mountains with snow, les femmes fatales and plenty of sunshine. France is one of the most beautiful countries in the world, ideally suited for solar PV. But, France is also different in many ways. A nuclear energy powered nation, and a utility monopolist closely tied with the government. EDF plays a crucial role in grid connection applications of new pv projects, currently leading to a multi GigaWatt pipeline. Sometimes, inscrutable relationships exist between the elite government officers and EDF managers. And, didn’t the French invent the word bureaucracy?
PV: looking like a normal power plant!
So far, France is a BIPV focused market. The FiT for BIPV is higher, but discussions about what BIPV is, are more complex. The government beliefs that this segment will create more domestic jobs, since solar modules in the end are just a building product. A fair conclusion. Now, let's hope that the new jobs created will not be a result of bureaucratic complexity.
Nevertheless, promising new developments are taking place. In Southern France, some bigger ground based projects have been built and others are planned. The first power shortages have occurred in this vital economic and beautiful touristic region. Although it is not easy to find a piece of land for a large PV project, it seems more easy these days than planning, permitting and building a new nuclear power plant. And,since wind energy has a bad image for some reason in this area, large scale solar will be one of the best and fastest solutions. Even EDF now seems convinced of this.
A French contrator explained: "During a pv roof project visit, the EDF people were surprised. Seeing the inverter and transformer room and recognizing the power devices, they reacted enthusiastically: "wow, this looks like a normal power plant!"
Educating the nuclear elite
As stated in a previous blog, France proves once again that it takes time to develop a market. Growing a market is not just opening up new sales offices. Government people and even more the elite MBA schooled nuclear supporters need to be educated. This will take more than serving one glass of its solar radiation based, most famous and indispensable product over lunch time...
There is reason to be optimistic. The potential for PV application in France is enormous. Like with a lot of things in France, a little more patience will be needed. And besides, Italy, has shown that a country known for bureaucratic complexity can turn into the number two market of the world.
The Sarkozy challenge
Time to work on education and a strong solar lobby. Why not start in the centre of power: a pv system for President Sarkozy. If the white house has solar panels, this world leader cannot remain without. Of course, French historical architecture ‘is something different’ and definitely ‘more complicated’ for PV application. But, isn't the French focus on BIPV and looking for challenges? Well, here is one to get started!
dinsdag 2 november 2010
What will happen at “grid parity”? We need “Solar As a Service”
"Grid parity" is considered the holy grail for the pv industry: the moment in time and place where the cost of solar electricity equals the price of electricity from the grid. The long awaited moment when solar PV will be able to compete (without subsidies or other incentives) with fossil generated electricity. But, what will actually happen when this mark in time is reached?
First of all, there is no 'one' grid parity for the solar industry. It will depend on various variables, like region (local sun shine conditions), the local cost of grid electricity
and the actual price of a PV system (varying per application and country due
to different cost for permits etc.).
Solar electricity is not an Apple gadget
Grid parity will be achieved sooner in Southern Italy than Germany for residential applications (more sunshine, higher electricity rates and, sometimes, higher cost for permits) than in Germany. Actually, grid parity is close (maybe even within 2
years) for home owners in the South of Italy.
Will these lucky Italians run to their installer when grid parity is reached? I am afraid not...
There is an important hurdle to take: will these lucky Italians in 2013 have the 6000 euro on the shelf to buy their money making 3 kWp solar energy system? They probably can save a few euro’s per month, admitted, for the next 20 years. But I’m afraid that it will not convince them. Like other people, electricity is not their top-priority. Electricity is not an Apple gadget, but a commodity. A natural thing that is supposed to be available all the time. Not something to worry about. A commodity that will be available anyway, green or not. Probably the Italians will be more concerned about tickets for the next football game, which is typically not a commodity, providing more pleasure (emotion and passion). For most Italians, like others with a grid connection, having a PV system is not their dream or lifetime fulfilment. Except maybe for the green and environmental oriented people and some technology geeks. But this is (still) a minority group and won’t make the solar PV market boom.
The ‘energy utilities of tomorrow’
The critical challenge for PV market development at, or even just before, grid parity is the financing. Almost half of the modules is put up a residential roof. So, the financing of such a PV system for private households is the new business opportunity. So, how can the solar industry reach the masses to create a real market boom?
The most logic way is by offering a simple and compelling service: selling cheaper electricity for a fixed price during the next 20 years. It is time for ‘the energy utilities of tomorrow’. Where you pay less per month, still are secured for permanent electricity supply and can show off with your own green power system on your roof. Without any upfront investment. The new energy utilities will take care of all the risks and hassle: investment, system design, installation, financing, maintenance, billing, etc.
Solar As a Service
Grid parity will mean the start of a new era opening up many business opportunities for lease companies and for the financing industry, offering new types of PV mortgages and other financing products. This also means that the solar pv market development will not depend on the brand, size or price of solar modules. To reach the critical mass of customers, more companies are needed to sell the new financial services. The pv industry, for good reason, has been very focused on technology. But what is needed next to let the market really boom, are (new) players selling solar as a money saving service. Like the software industry, we switch to SAS: Solar As a Service. This means that many new companies are needed to develop the market. The industry will have to switch its focus. Electrical installers, are not born financial service companies. It will take time to develop this new business infrastructure.
Solar is all about saving money
At grid parity, customers will be able to save a few euro’s on their monthly energy bill. But, this will not offer them the high returns like in the good old times with high feed-in tariffs. Grid parity without further incentives will not inspire the many investors. In the residential sector, a new market and customer group will have to be explored. And this will take time. My forecast is that, at grid parity, the solar PV market will continue to grow substantially, every year again. But, without incentives, an enormous grid-parity market boom does not seem logic. Unless, of course, the oil price jumps to $200 in 2 years (who knows?) and solar becomes so attractive....But, even such a case, I expect the financing to be critical.
In the near future, PV systems will be sold to the mass as a smart way to save money without any hassle. Solar energy as a service. Financially attractive. The money you save, you can use to visit more often the arena supporting your favourite football team.
First of all, there is no 'one' grid parity for the solar industry. It will depend on various variables, like region (local sun shine conditions), the local cost of grid electricity
and the actual price of a PV system (varying per application and country due
to different cost for permits etc.).
Solar electricity is not an Apple gadget
Grid parity will be achieved sooner in Southern Italy than Germany for residential applications (more sunshine, higher electricity rates and, sometimes, higher cost for permits) than in Germany. Actually, grid parity is close (maybe even within 2
years) for home owners in the South of Italy.
Will these lucky Italians run to their installer when grid parity is reached? I am afraid not...
There is an important hurdle to take: will these lucky Italians in 2013 have the 6000 euro on the shelf to buy their money making 3 kWp solar energy system? They probably can save a few euro’s per month, admitted, for the next 20 years. But I’m afraid that it will not convince them. Like other people, electricity is not their top-priority. Electricity is not an Apple gadget, but a commodity. A natural thing that is supposed to be available all the time. Not something to worry about. A commodity that will be available anyway, green or not. Probably the Italians will be more concerned about tickets for the next football game, which is typically not a commodity, providing more pleasure (emotion and passion). For most Italians, like others with a grid connection, having a PV system is not their dream or lifetime fulfilment. Except maybe for the green and environmental oriented people and some technology geeks. But this is (still) a minority group and won’t make the solar PV market boom.
The ‘energy utilities of tomorrow’
The critical challenge for PV market development at, or even just before, grid parity is the financing. Almost half of the modules is put up a residential roof. So, the financing of such a PV system for private households is the new business opportunity. So, how can the solar industry reach the masses to create a real market boom?
The most logic way is by offering a simple and compelling service: selling cheaper electricity for a fixed price during the next 20 years. It is time for ‘the energy utilities of tomorrow’. Where you pay less per month, still are secured for permanent electricity supply and can show off with your own green power system on your roof. Without any upfront investment. The new energy utilities will take care of all the risks and hassle: investment, system design, installation, financing, maintenance, billing, etc.
Solar As a Service
Grid parity will mean the start of a new era opening up many business opportunities for lease companies and for the financing industry, offering new types of PV mortgages and other financing products. This also means that the solar pv market development will not depend on the brand, size or price of solar modules. To reach the critical mass of customers, more companies are needed to sell the new financial services. The pv industry, for good reason, has been very focused on technology. But what is needed next to let the market really boom, are (new) players selling solar as a money saving service. Like the software industry, we switch to SAS: Solar As a Service. This means that many new companies are needed to develop the market. The industry will have to switch its focus. Electrical installers, are not born financial service companies. It will take time to develop this new business infrastructure.
Solar is all about saving money
At grid parity, customers will be able to save a few euro’s on their monthly energy bill. But, this will not offer them the high returns like in the good old times with high feed-in tariffs. Grid parity without further incentives will not inspire the many investors. In the residential sector, a new market and customer group will have to be explored. And this will take time. My forecast is that, at grid parity, the solar PV market will continue to grow substantially, every year again. But, without incentives, an enormous grid-parity market boom does not seem logic. Unless, of course, the oil price jumps to $200 in 2 years (who knows?) and solar becomes so attractive....But, even such a case, I expect the financing to be critical.
In the near future, PV systems will be sold to the mass as a smart way to save money without any hassle. Solar energy as a service. Financially attractive. The money you save, you can use to visit more often the arena supporting your favourite football team.
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