With the solar industry chaos of 2018 behind us, many of us are looking toward more predictable growth from 2019…at least until the Investment Tax Credit goes to zero for residential and 10% for commercial on December 31, 2021. Then again, we’re on the solar coaster, so it is unwise to be complacent about a rosy solar future — or the broader economy, for that matter. Here are my 10 predictions for 2019.
1. Inflation will hit residential solar installations hard
2. Good software and communications are the price of admission for future solar and battery systems
3. Supply chain issues with battery storage systems will persist
4. With a recession looming, financing will become even more important
5. U.S. solar manufacturing will continue its downward slide
6. PUCs will force utilities’ hands when it comes to grid reliability
7. Despite headwinds, batteries will continue their slow march toward 50% penetration
8. As pilot results roll in, uptake of VPPs will increase
9. Upgrades and maintenance will emerge as a key opportunity
10. Stubborn soft costs will impede further drops in residential solar prices
As I wrap up these 2019 comments, I am humbled by Yogi Berra’s advice: “It’s tough to make predictions, especially about the future.” Nevertheless, I am confident in two key elements of our industry: We are doing the right thing for the global environment, and the economics of solar-plus-storage remain superior to any other energy source. I remain optimistic that — regardless of the next plunge in the solar coaster — our industry will continue to thrive over the long term. Please listen up to this Week’s Energy Show for the details on these 2019 Rooftop Solar and Storage predictions.
You know what they say: “Video killed the radio star.” Well I’m going out on a limb and adding video to this week’s podcast. But since my fans say I have a perfect face for radio, I’m not worried that this video podcast will affect my Arbitron ratings. Nevertheless, my guests on this video podcast are much more telegenic, so I encourage you to click through to this video link.
A few months ago I had the pleasure of organizing and moderating a panel discussion about microgrids for the MIT Club of Northern California. Basically, a microgrid is a combination of solar, batteries, inverters, software and control electronics that allow customers — both residential and commercial — to operate independently of the grid. Interest in microgrids is skyrocketing for two reasons. First, the grid is becoming less reliable, while at the same time our society is becoming more dependent on electricity. Second, time of use electric rates now peak in late afternoons and evenings, making it much more profitable to store daytime solar generation in a battery and using that energy during peak electric periods.
There are four factors limiting the growth of the microgrid industry:
1. The first is good energy policy that makes the economics of microgrids work for customers. Bernadette Del Chiaro, Executive Director of the California Solar Storage Association, joined us on this panel. Without a doubt, Bernadette is one of the best solar and battery policy experts in the entire country.
2. Next we need functional and affordable batteries. Peter Gibson, the head of North America Energy Storage Solutions for LG Chem, is the battery expert. LG Chem is one of the biggest battery manufacturers in the world. Their residential battery storage products are in such demand that they cannot make them fast enough.
3. Inverters are the heart of a microgrid. Lior Handelsman, Co-Founder of SolarEdge, shared his insights into the future of microgrids powered by smart inverters. In the way of background, SolarEdge is the inverter market leader, and has done a terrific job with software that is critical to successful microgrids.
4.Finally, cooperation from electric utilities is key to the widespread adoption of microgrids. New Community Choice Aggregation utilities have the potential to lead the way; the CEO of Peninsula Clean Energy, Jan Pepper, joined us. And I was especially happy to include another spice in our discussions.
Listen up to this Week’s Energy show to learn about how each of these industry leaders are working today to deliver migrogrids to both residential and commercial customers. Please click through to this video link for the entire MIT Microgrids panel discussion.
Attention U.S. Department of Commerce: your well-intentioned efforts to help the U.S. solar panel manufacturing industry are not working.
Even with 30%+ tariffs on imported solar panels and cells, the remaining U.S. manufacturers are struggling to stay competitive. The good news, as one would expect, is that there is strong demand for Made in the U.S.A. solar panels – both from ordinary consumers as well as government purchases. However, structural issues with the supply chain for solar components puts the remaining U.S. manufacturers at a substantial disadvantage.
The reasons for these supply chain challenges are simple. Basically, many of the key components that go into solar modules are not manufactured in the U.S., including wafers, cells, EVA and junction boxes. And many of the components that are indeed available in the U.S. — such as glass, backsheets and aluminum frames — are significantly less expensive at comparable quality levels if purchased from overseas suppliers. To make matters even worse, these essential imported solar components are subjected to additional tariffs when imported from certain countries. Essentially, we are shooting ourselves in our foot if we expect U.S. solar manufacturers to be competitive when 30%+ tariffs are applied to most of the major solar components.
A rational plan to make the U.S. competitive in solar manufacturing does not require government support. Instead, it requires government to get out of the way and set a long-term solar manufacturing policy. U.S. manufacturers would instantly be more competitive if they did not have to pay tariffs on imported solar components — particularly cells and aluminum solar frames. Once the U.S. solar manufacturing base is re-established and consistent, U.S. manufacturers could invest in domestic wafer, cell, junction box and other component manufacturing.
How are U.S. manufacturers coping with competitive global issues of cell production and purchasing, U.S. production costs, cell and panel tariffs, local and federal regulations, and shifting national policies? The best way to answer this question is to speak with one of the most experienced U.S. solar panel manufacturers. My guest on this week’s show is Mamun Rashid, COO of Auxin Solar, based in San Jose, California. Auxin manufactures high quality poly and mono solar panels for residential and commercial customers. They also do original equipment manufacturing for tier-1 manufacturers who have “made in the USA” requirements. Please listen up to this week’s Energy Show for Mamun’s perspective on the opportunity and challenges for companies manufacturing solar panels in the U.S.
It’s depressing that lithium batteries get almost all of the focus in the energy storage industry. Lithium batteries have a number of advantages, including high energy density, good longevity, declining costs and established integration with electronics, vehicles and stationary energy storage. Although ideal for residential and commercial storage applications, lithium ion chemistries are not great for long term and high capacity energy storage — which are the characteristics that many utility storage installations require.
Flow batteries have the potential to meet these utility storage application needs. Flow batteries use two tanks of liquid electrolyte, separated by a special membrane, that flows between the anode and the cathode within the battery cell. Energy is stored in this liquid electrolyte instead of as part of the electrode material in conventional batteries. The energy storage capacity of a flow battery is related to the amount of liquid electrolyte — bigger tanks provide greater storage capacity. The power output of a flow battery depends on the size of the anode and cathode electrodes in the battery cell.
Since their storage capacity is limited mostly by the size of the electrolyte tanks, flow batteries are great for grid-scale storage. They are also finding applications when sited alongside PV systems. Since the battery can absorb power in excess of what the grid or inverter can handle, inverters can be smaller — resulting in lower equipment costs and greater efficiency.
I heard about new flow battery technology from my friends at NexTracker. I was initially hesitant to learn about flow batteries – one could say I’m in a lithium rut waiting for the commercialization of dual lithium crystalline reactor technology for interstellar travel. But when I understood the real-world benefits of Avalon’s batteries when integrated with utility-scale tracker installations, I was convinced.
So on this week’s show we’re going with the flow. Our guest is Matt Harper, Co-Founder and Chief Product Officer of Avalon. I hope you tune in to this week’s Energy Show as Matt explains the technology behind flow batteries, practical applications, availability of electrolytes, and Matt’s view of how flow batteries have the potential to meet our long duration energy storage needs.
The bad news about global warming continues unabated. This fall the United Nations Intergovernmental Panel on Climate Change (fondly referred to as the IPCC) sent up an emergency flare. According to Amjad Abdulla an IPCC board member and chief negotiator for the Alliance of Small Island States, “The report shows that we only have the slimmest of opportunities remaining to avoid unthinkable damage to the climate system that supports life, as we know it.“ Obviously, small island states are at the most immediate risk. But if the earth’s warming trend continues, many populated areas around the globe will essentially be uninhabitable.
I read the entire report. It’s complex, dense, hard to understand and full of bureaucratese. There were two conclusions in the report that were especially surprising to me. First, unless the world acts immediately and intensively, there is almost no chance that global warming will be less than 1.5 degrees Celsius. The reason is that there is a lot of inertia in the earth’s climate system — we are already on a rapid warming trend. The second conclusion is that an immediate worldwide investment of roughly $900 billion per year will be required to stay below this 1.5% threshold.
On a positive note, I learned a lot of new TLAs (Three Letter Acronyms). My personal belief is that our grandchildren will be saddled with the economic and sociological disruptions that global warming will cause. Nevertheless, there is a large portion of our population that remains skeptical about global warming and its potential impacts. One reason for this global warming divide relates to economics. Some industries — particularly those dependent on fossil fuels — will be negatively impacted (“harmed” is the non-bureaucratic term). On the other hand there will be many industries that will benefit…not only solar and wind, but also from all the jobs created from the transition away from fossil fuels: EVs, heat pumps, more extensive electrical infrastructure, control systems and as yet undeployed new energy technologies.
As an solar enthusiast, I’m obviously biased. But the consequences of global warming are so severe that even the skeptics should consider immediate action as a form of an insurance policy. In case the skeptics are wrong about global warming, an investment now can avoid a disaster later. For more about the IPCC’s recommendations to stabilize and reverse global warming, listen to this week’s Energy Show.