How Low Can They

07 | 2018 07 |2018 78538 How low can Module In-depth price fall: coverage of

China’s shift, whatand unexpected it more and more solar projects, the means for PVindustry. global the

question of side to which locate As storage grows to accompany a battery is an important one. they go? AC vs. DC

Page 68 Page 18

/ Perfect Welding / Solar Energy / Perfect Charging

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1400 Shoals Way, Portland, TN 37148 | 615.451.1400 | [email protected] | www.shoals.com editorial imprint Publisher The wild ride to ubiquity pv magazine group GmbH & Co. KG Kurfürstendamm 64, 10707 Berlin, Germany Photo: pv magazine/Julia Malcher Editors pv magazine group Becky Beetz – Head of Content – [email protected] s the solar industry stands again Jonathan Gifford – Managing Editor – on the edge of another sharp drop [email protected] A Mark Hutchins – [email protected] in module prices it’s worth considering Christian Roselund – [email protected] what it is staring back at us: an abyss for Emiliano Bellini – [email protected] some, a new opportunity for others. Michael Fuhs, Editor in chief pv magazine Deutschland [email protected] Sandra Enkhardt – [email protected] The first repercussions of Chinese pol- Marian Willuhn – [email protected] Authors: Josefin Berg, Marija Djordjevic, Uma Gupta, Frank icymakers’ 31/5 radical solar incentive Haugwitz, Corrine Lin, Tom Lindberg, Jesse Pichel, Laura Sar- changes are beginning to flow through tore, Martin Schachinger, Vincent Shaw, John Weaver Proofreader: Paul Zubrinich the industry. Much conjecture is being Translators: Tim Hanes/ Veritas Traducción y Comunicación raised as to the intentions and drivers of Photo editor: Therese Aufschlager the change in any event (pp. 18 – 23, 24 Graphics: Harald Schütt Cover illustration: Roman Hrncar – 25).

Sales & Marketing Director Andrea Jeremias On one hand, crystalline silicon pro- Tel.: +49-30-213 00 50 23 | [email protected] ducers at the lower end of the efficiency Sales Fabienne Cuisinier scale and with limited access to markets Tel.: +49 -30-213 00 50 39 | [email protected] Nicolaus J. Yuan outside of China look to face a tough six Tel.: +49 -30-213 00 50 28 | [email protected] months ahead (pp. 26 – 28). Insolvency Greater China & Korea, Hong Kong Office, Calvin Chong Tel.: +852-9732 8266 | [email protected] and industry consolidation is expected. denced in California today (pp. 34 – 40). Japan, Sakura International, Justin August On the other, falling prices at the increas- California, along with its considerably Tel.: +81-3-56 46-11 60 Mobile: +81-90-5165-9545 | [email protected] ingly commodified market segment will smaller cousin Germany’s Tübingen, have North America, Matt Gallinger likely deliver fresh momentum to technol- this month introduced solar mandates – Tel.: +1-518-560-0179 | [email protected] ogy upgrades aimed at higher efficiencies requiring rooftop PV to be added to new Marketing Manager Marina Ramain such as PERC, selective emitter, and half- buildings, by 2020 in California and effec- Tel: +49-30-213 00 50 29 | [email protected] cut cells (pp. 14 – 15). tive immediately in Tübingen. Such initia- Advertising Administration Anika Wedemeyer tives point the way to a solar future where Tel.: +49-30-213 00 50 22 | [email protected] Taking a broader more long-term view, our technology is approaching ubiq- Subscriptions/individual issues Contact [email protected] or visit the pv magazine the market conditions in H2 2018 will uity: a part of the very fabric of our built web shop at https://shop.pv-magazine.com to buy a subscription or purchase single issues. likely form another episode in solar’s environment.

Number of issues growing pains – from highly dependent Twelve per year on incentives, to a major energy player in A world in which PV is ubiquitous would Purchase prices its own right. And lower module prices make solar one of the ‘big three’ energy Annual subscription for 12 issues: €199 print/€99 digital, including shipping and VAT, where appropriate. Single issue: will undoubtably drive adoption. In short: sources, alongside wind and hydro, €19 print/€9.50 digital, including shipping and VAT where appropriate. Purchase prices are applicable at the time an cheaper modules, unfortunately awesome (pp. 62 – 66). It will require large amounts order is received. (pp. 12 – 13). of energy storage (pp. 68 – 72) but also Terms Orders can be made in our online shop (shop.pv-magazine. technologies that facilitate wide-scale com), with our reader service or in bookshops in Germany But price isn’t the only thing when it adoption such as BIPV (pp. 50 – 53). It and abroad. Should it not be possible to ship the magazine for reasons that lie outside the responsibility of the publisher, comes to an essential utility like electric- will also require the fortitude, innovation, the subscriber has no right to claim subsequent shipments, replacement issues, or a refund. Full terms & conditions: ity. Integrating large amounts of renew- and wherewithal to ride out the challeng- http://shop.pv-magazine.com/terms-and-conditions/. The venue for the settlement of all disputes with full merchants is able energy into established markets and ing times. Berlin, which is also the venue for all disputes pertaining to payment reminders. grids presents a major challenge, as is evi- Jonathan Gifford

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Copyright China is fast becoming the It is not enough to The magazine and all of the texts and images contained therein are protected by copyright. When a manuscript is approved “ leading protagonist in “simply add wind and for publication, the right to publish, translate, reprint, elec- tronically store in databases, print special editions, photocop- ies, and microcopies is transferred to the publisher. The pub- electricity markets solar to a grid designed lisher requires the author to be the holder of copyrights and commercialization rights for all submissions. Any commercial in various regions for conventional use outside the limits specified by copyright is inadmissible without the publisher’s consent. of the world power ISSN 1865-3138 pv magazine was founded in 1996 by China’s global power” play California’s integration” challenge Solarpraxis AG, Karl-Heinz Remmers. Page 30 Page 34

www.pv-magazine.com | 07 / 2018 1 contents

Darkness before dawn: pv magazine’s in-depth coverage of China’s 31/5 announcement opens with a look at how the industry is reacting to the recently dropped policy bomb.

China’s global power play: An examination of what is at stake politically in 30 the global electricity market, and China’s efforts to expand its international influence.

California’s integration challenge: Curtailment and negative pricing are signs of flawed market rules, but there are plenty of solutions for California to get more wind and solar onto its grid. 42

34 Cryptos & watts – good bedfellows: Blockchain technology is already making quite an impact on the energy industry.

“We need an 80% transition 54 in 12 years”: Mark Jacobson of Stanford University discusses his 100% renewable energy vision. 62

Module stability: The top 10 crystalline module manufacturers of 2017, based on IHS 68 Markit production data.

AC, or DC? That is the question: Storage systems are taking over, but on which side of the inverter to place them is still in dispute.

2 07 / 2018 | www.pv-magazine.com LBHUW1611005P_210x297_�志稿EN_P 20180630.pdf 1 2018/6/30 17:54:34

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@ Huawei FusionSolar contents

6 News 58 Growing demand for three-phase applications & solutions: Alex Pan of inverter manufacturer SolaX Power talks markets & trends ≥ installations ≥ markets and technology.

10 Stock Index: Significant drops 34 California’s integration challenge: in stock prices all along the Curtailment and negative pricing financial & legal ≥ value chain after China’s big are signs of flawed market rules, announcement. but there are plenty of solutions for 60 Securing income through guar- California to get more wind and antees of origin: How can energy 12 pvXchange Module Price Index: solar onto its grid. providers gain extra income Falling module prices are ‘unfortu- through guarantees of origin. nately awesome.’ 42 Cryptos & watts – good bedfellows: Blockchain technology 62 “We need an 80% transition in 14 Tech upgrades on the back of the has made quite an impact on the 12 years”: Mark Jacobson of Stan- downturn: Corrine Lin explores energy industry. ford University discusses his 100% how module makers will cope with renewable energy vision. China’s big announcement. 44 Immunizing Latin American PV: A look at quality issues in Latin 16 Floating PV reaches the surface: America ahead of pv magazine’s storage & Waterborne PV systems to see Quality Roundtable in São Paulo. growth, says IHS Markit analyst smart grids ≥ Josefin Berg. industry & suppliers ≥ 68 AC, or DC: That is the question: 18 Darkness before dawn: How is the Storage systems are taking over, industry reacting to the recently 48 Floating PV creates ripples in but on which side of the inverter to dropped policy bomb? China and Southeast Asia: place them is still in dispute. Sungrow’s Daniel Li talks about the 24 The signs were there: growing prospects for floating PV. 74 Storage news: Panasonic and Wärt- It was all foreseeable, but nobody silä have shown activity in EV stor- paid attention. AECEA’s Frank 50 CIGS is back, back again: Thin age systems, with probable effect on Haugwitz looks back at warning film won’t throw in the towel stationary storage markets. signs of the 31/5 announcement. just yet – instead it’s making a comeback. 26 Survival of the biggest: details ≥ There will be winners and losers 54 Module stability: The top 10 crys- among China’s manufacturers as talline module manufacturers of 76 On the road with pv magazine module prices plummet. 2017, based on IHS Markit produc- 78 Quality Roundtables tion data. 80 Final thought 30 China’s global power play: What is at stake politically in the global electricity market?

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LG to open 500 MW France makes module fab in Alabama room for solar

G Electronics has announced plans scheduled for early 2019. Alabama Gover- new package of measures from L for a 500 MW module manufactur- nor Kay Ivey praised the announcement, A the French government was ing facility in Huntsville, Alabama. The stating that this is “a major milestone both announced at the presentation of the facility will assemble the manufacturer’s for Alabama and the company.” French Ministry of Ecological and Sol- 19.8% efficient NeON 2 panels (pictured) The factory will assemble LG’s NeON 2 idary Transition’s #PlaceAuSoleil ini- for residential applications. 60 cell module, a 340 Watt n-type mono- tiative. The package includes a dou- The company is investing $28 million to silicon module, which boasts 19.8% effi- bling of the volume of tenders for establish two new module production ciency. The degree to which this factory PV projects on agricultural land and lines on its 48 acre campus in Hunts- can be attributed solely to the Section 201 increasing the volume of tenders for ville, where the company has had oper- tariffs is unclear. All of the large manufac- rooftop PV by 50%. ations for four decades. The new facility turers pv magazine has spoken with have In response, the CEO of French energy is expected to create about 160 new full- cited both the reduction in the corporate giant Total, Patrick Jean Pouyanné time jobs and the beginning tax rate through last fall’s tax reform pro- announced via Twitter on June 28 that of operations is cess, and the tariffs as critical factors in “it is essential that the state promotes enabling them to establish U.S. manufac- the development of solar in France. turing.

It is essential that “the state promotes

Photo: LG the development of solar in France. Total wants to contribute significantly because we are ready to invest [in] 10 GW of capacity within 10 years ”

Total wants to contribute significantly because we are ready to invest [in] 10 GW of capacity within 10 years.” Several other announcements were made during the event. EDF CEO, Jean-Bernard Lévy reiterated its 30 GW plan to “help France reduce its gap in terms of PV development.” French retail groups Auchan and Car- refour have promised to install 60 and 20 hectares of solar panels respectively More than at their facilities in the country, while two more retailers, Magasins U and Les Mousquetaires, have committed to 50 hectares each. Another big announcement came 4 GW from the French Ministry of Defence, of new U.S. module capacity has which said it will make around 2,000 been announced since January hectares of surfaces available for solar projects that will have to be realized by 2025.

6 07 / 2018 | www.pv-magazine.com news

Photo: Yingli Yingli to transfer to OTC Pink after NYSE delisting

nce the world’s largest PV module the NYSE Listed Company Manual due to O manufacturer, Yingli has suffered its failure to maintain an average global a number of setbacks over the past few market capitalization over a consecutive years, with bad news of repayment and 30 trading-day period of at least $50 mil- arbitration requests escalating over the lion and its stockholders’ equity was less past few months. than $50,000,000.” In the latest blow, the NYSE informed The Chinese manufacturer says it will not Yingli on June 28 that it will be delisted appeal the decision. As such, it is expected legal rights of the holders of its American from the stock exchange, “as it was not to begin trading on the OTC Pink on July Depositary Shares (ADS), or its normal in compliance with the continued listing 2 under the symbol, YGEHY. While Yingli business operations, it did say it will cease standards set forth in Section 802.01B of does not expect the transition to affect the to issue regular quarterly earnings.

ABB boosts Consolidation underway in India North American ndia’s renewable energy market is park projects by the end of FY 2019-20 had presence with I evolving and becoming concentrated, been awarded by December 2017. Chal- acquisition according to a joint study by the Coun- lenges such as land acquisition continue to cil on Energy, Environment and Water plague the pace of solar park development. (CEEW) and the International Energy “India’s young and dynamic renewable BB has finalized its acquisition of Agency (IEA). The top 10 developers in energy market continues to offer oppor- A General Electric Industrial Solu- both solar PV and wind accounted for tunities for big gains to both domestic tions (GEIS). The move marks the finan- over 60% of sanctioned projects each year and international developers,” says Kan- cial closing of a deal first announced in between 2014 and 2017. However, these ika Chawla, Senior Programme Lead at September 2017. players were not the same each year. CEEW. “With the cost of finance account- Both GEIS and ABB state that the cost The share of solar park projects rose from ing for over 60% of solar and wind tar- of acquisition was $2.6 billion, a figure over 40% in 2015 to around 55% of total iffs, the eventual winners are likely to be approaching GEIS’s annual revenues in solar PV capacity tendered in 2017. How- the ones with the best access to affordable 2016. ever, only 16% of the 40 GW target of solar finance.” ABB itself says that it seeks to establish access to the North American mar- India’s 10 largest developers accounted for ket. Thereby, the company will benefit from what it describes as deep customer Adani Photo relationships, a large installed base, and GEIS’s distribution networks. With the acquisition, ABB has acquired the long- term usage of the GE Industrial Solu- 60% of projects each year between 2014 and 2017 tions brand. “We are committed to servicing the GEIS installed base and will now be able to provide a more technologically advanced and digitally-connected offer- ing to our customers around the world,” said ABB’s Tarak Mehta in a statement. “Together we will strengthen ABB’s number two position in electrification globally and expand our access to the attractive North American market.”

ABB has invested $2.6 billion in the acquisition of General Electric Industrial Solutions

www.pv-magazine.com | 07 / 2018 7

markets & trends Solar stocks slipping

China’s unexpected policy change sent solar stocks spiralling downward in June. Falling prices and uncertainty have created negativity among investors. Upcoming quarterly reports should shed some light on future strategy.

Guggenheim Solar ETF (TAN) Holdings olar stocks significantly underper- S formed the broader market in June. 12% 12% The Guggenheim Solar ETF (TAN) 10% S&P 500 10% decreased 8.2% versus the S&P 500 and Russell 2000 Dow, which were down 0.6% and 1.5% 8% 8% Guggenheim Solar ETF respectively. 6% Source: Roth Capital 6% The general investor sentiment around the solar industry is currently very neg- 4% 4% ative due to the shocking policy change 2% 2% in China. Pricing is on the decline. Poly- silicon pricing appears to have hit $12/kg 0% 0% which represents a drop of >40% YTD. – 2% – 2% Correspondingly, GCL-Poly, Daqo, and – 4% – 4% Wacker Chemie stocks dropped 15%, 22%, and 33% in June respectively. – 6% – 6% Wafer pricing fell to CNY 3.3/wafer – 8% – 8% ($0.50) from CNY 4.2/wafer ($0.63) at SNEC in late May. JinkoSolar, First Solar, – 10% – 10% Canadian Solar, and Longi dropped 9%, – 12% – 12% 20%, 22%, and 25% in June respectively. 12.29.17 February 2018 March 2018 April 2018 May 2018 June 29. 2018 On the inverter side, Enphase increased 16% thanks to its acquisition of Sun- Month close price % change % change Power’s microinverter business, while Company Ticker June 29, 2018 June 04–June 29 year to date SolarEdge and SMA stocks dropped 13% Vivint Solar, Inc. NYSE:VSLR 4.95 USD + 25.3% + 22.2% and 32% respectively. PVA TePla AG XTRA:TPE 17.00 EUR + 18.1% + 41.7% Enphase Energy, Inc. NasdaqGM:ENPH 6.73 USD + 16.4% + 179.3% US manufacturing growth E-Ton Solar Tech Co., Ltd. GTSM:3452 5.10 TWD + 7.6% – 39.4% We have seen several announcements Hannon Armstrong, Inc. NYSE:HASI 19.75 USD + 7.5% – 17.9% from Heliene, Itek Energy, Mission Solar, Sunrun Inc. NasdaqGS:RUN 13.15 USD + 7.2% + 122.9% Seraphim, Solaria, SolarTech Universal, Atlantica Yield plc NasdaqGS:AY 20.18 USD + 6.4% – 4.9% SunPower, Suniva, SunSpark, and Tesla/ TerraForm Power, Inc. NasdaqGS:TERP 11.70 USD + 6.4% – 2.2% Panasonic regarding U.S. manufacturing Intevac, Inc. NasdaqGS:IVAC 4.85 USD + 3.2% – 29.2% expansions. ReneSola Ltd NYSE:SOL 2.55 USD + 0.8% – 4.1% JinkoSolar (JKS) was the first mover SolarWorld AG XTRA:SWVK 0.55 EUR 0.0% 0.0% among Asian solar manufacturers to Manz AG XTRA:M5Z 35.15 EUR 0.0% + 11.5% announce a new USA plant. Most recently, AU Optronics Corp. TSEC:2409 12.90 TWD – 2.6% + 4.0% Hanwha Q Cells Korea Corporation Sunworks, Inc. NasdaqCM:SUNW 1.12 USD – 3.4% + 6.7% announced that it will build a solar PV Azure Power Global Ltd NYSE:AZRE 14.46 USD – 4.7% + 1.8% module manufacturing facility in Whit- Sky Solar Holdings, Ltd. NasdaqCM:SKYS 1.17 USD – 4.9% – 22.0% field County, Georgia. Construction will JA Solar Holdings Co., Ltd. NasdaqGS:JASO 6.81 USD – 4.9% – 8.7% commence in 2018, and the facility is Danen Technology Corp. TSEC:3686 5.92 TWD – 5.9% – 13.3% scheduled to be completed in 2019. centrotherm international AG DB:CTNK 2.32 EUR – 7.9% + 16.6% However, given the steep price decline Hanwha Q CELLS Co., Ltd. NasdaqGS:HQCL 6.46 USD – 8.1% – 8.0% of polysilicon and wafer in China, it may JinkoSolar Holding Co., Ltd. NYSE:JKS 13.77 USD – 9.0% – 42.7% be cheaper to pay the tariff than to build SunPower Corporation NasdaqGS:SPWR 7.67 USD – 9.1% – 9.0% the manufacturing in the USA. With the Sino-American Silicon Products Inc. GTSM:5483 123.00 TWD – 10.2% + 61.2% JunQ earnings season coming, we expect Applied Materials, Inc. NasdaqGS:AMAT 46.19 USD – 11.6% – 9.6% more company announcements on how Green Energy Technology Inc. TSEC:3519 12.45 TWD – 11.7% – 29.3% strategy will alter with the policy change Information upon which this material has been compiled by pv magazine and is based was obtained from sources believed in China. to be reliable but has not been verified. Additional information is available upon request. Jesse Pichel, ROTH Capital Partners

10 07 / 2018 | www.pv-magazine.com markets & trends

Bad for the industry – but unfortunately, awesome

aken from a song by German group costs of the enormous build-out in recent T Deichkind, the phrase “leider geil,” years, as well as problems with grids and roughly translated as “unfortunately awe- connection of new plants. Pressure on some,” applies quite nicely, in my view manufacturers is mounting due to the at least, to the current downward spiral overcapacity already present. of module and cell prices. Of course, it Delays and uncertainty have led to It is clear that some is clear that some companies, especially large-scale cancellations by a number of module producers, will again fall by the major manufacturers in recent weeks. “ wayside. Wholesalers will have to contend Some in the industry simply no longer companies, especially with the uncertainty of potential custom- feel bound by their perhaps too loosely ers who cannot decide whether to buy worded purchase agreements. In times of module producers, now, or in a few weeks or months. But, oversupply the customer is suddenly king if we are serious about restructuring the – and takes revenge for having been left in will again fall by the global energy system, falling prices are, the lurch too often in the past. Gone are unfortunately, awesome. the days when manufacturers could pull What is behind the continuing down- out of agreements with flimsy arguments wayside ward trend? First and foremost, it is the to earn a few cents more in another mar- ” announcement made by the Chinese gov- ket. Now the tables have turned! Bad for ernment in May, making major cuts to companies, good for market prices, good incentive programs for renewables. Rea- for customers – unfortunately, awesome. sons given for the cap include the high Following a shortage of inexpensive modules caused by market regulations EU spot market module prices by technology in the U.S. and Europe, and the resulting stagnation in prices, we are now fac- 0.80 €/Wp €/Wp 0.80 ing a glut of modules which will inevitably cause prices to fall. What seemed cheap 0.70 0.70 yesterday is already too expensive for today. Of course, this causes buyers to hes- itate, and stocks which currently have to 2.60 0.60 be devalued almost weekly, are growing. The old hands of the PV industry have long since come to terms with this. New- 0.50 0.50 comers, on the other hand, are wide-eyed and wonder why their business models, 0.40 0.40 which have proven so successful in other sectors, do not seem to gain traction. At best, they can quickly adapt to the vola- 0.30 0.30 tile markets. In most cases, however, this ends in bankruptcy or withdrawal – and not without serious financial losses. 0.20 0.20 Does survival in the solar industry or Jun ’17 Jul ’17 Aug ’17 Sep ’17 Oct ’17 Nov ’17 Dec ’17 Jan ’18 Feb ’18 Mar ’18 Apr ’18 May ’18 Jun ’18* in the entire energy sector really have to High efficiency: Crystalline modules 280 Wp and above with PERC, be so unpleasant and unpredictable and, Crystalline modules HIT, n-type or back-contact cells, or combinations thereof if so, why? As long as the solar business (mono-/poly-Si) average net prices (€/Wp) All black: Module types with black back sheet, black frame and a continues to be at the mercy of policies High efficiency rated power between 200 Wp and 275 Wp All black Mainstream: Modules typically with 60 cells, standard aluminum driven by the purely economic interests of frame, white backsheet and 250 to 270 Wp, represents the majority Mainstream the old and large industrial sectors, we will of the modules on the market Low cost Low cost: Low-output modules, factory seconds, insolvency goods, remain a pawn for forces that cannot be * Data up to June 13, 2018 used modules (crystalline), products with limited or no warranty influenced by the environment-conscious More information: www.pvXchange.com citizens and voters of supposedly demo-

12 07 / 2018 | www.pv-magazine.com markets & trends

Overview of the price points broken down by technology in June 2018 with changes compared to the previous month Module class Price Change over Description (€/Wp) previous month High efficiency 0.42 - 2.3 % Crystalline modules 285 Wp and above with Cello, PERC, HIT, n-type, back contact cells, or combinations thereof All black 0.44 - 4.3 % Module types with black backsheets, black frames, and rated outputs of between 200 and 320 Wp Mainstream 0.33 - 2.9 % Modules with usually 60 cells, standard aluminum frames, white backing and 260 to 280 Wp – the majority of modules on the market Low cost 0.24 0.0 % Reduced-capacity modules, factory seconds, insolvency goods, used modules (crystalline), and products with limited or no guarantee The prices shown reflect the average asking prices for goods cleared through customs on the European spot market, as of 13 June 2018. cratic governments. At the banquet of strong as on politics at the national level. high politics, the renewable energy indus- Following the complaint I raised in my try does not even have a seat at the kid’s last commentary about pollution in cit- table. At best they are permitted to lurk ies, targets have now been formulated for at the back door for a few leftovers to be the Europe-wide expansion of renewables tossed their way once dinner is finished. – not to 35%, as requested by parliament, In his recently published outlook for but to 32% by 2030. Germany has shown the next 10 years, Karl-Heinz Remmers itself to be an obstacle to meeting the tar- expects (for Germany) little political will to gets, according to informed sources. Soon implement projects that serve the devel- the requirements will come from Brussels opment of society. However, ever more and must be transposed into law by EU rays of hope are coming from Brussels, member states within 18 months. Omis- where the influence of the heavy industry sion can be brought before EU courts. lobby on EU policy is perhaps not quite as Martin Schachinger, pvXchange.com

Advertisement markets & trends

Tech upgrades on the back of the downturn

The May 31 announcement by the National Development and Reform Commission, Ministry of Finance, and National Energy Administration of China states there will be temporarily suspended arrangements for utility-scale PV plants in the 2018 target. There will also be a 10 GW cap on distributed generation for the year. The notice also reduces the PV FIT by CNY 0.05 starting May 31. The sudden notification has severely impacted China’s PV demand.

t appears that utility-scale and dis- decrease in late June as a result of weak- I tributed generation (DG) projects are ening demand. among the most impacted categories With demand shrinking within China, under the May 31 policy changes. Fur- the immense module capacity is being Photo: Photo: Tacon Dave ther, the residential market, which has redirected overseas, leading to price been rapidly growing since last year, lead- decreases in the highly sensitive Indian ing the cumulative 10 GW of DG projects market. In late June, Intersolar Europe was from the first five months of this year, but high time for Chinese module makers to demand for the second half of the year has secure and explore their overseas markets. fallen almost to zero following the notifi- During the exhibition, prices in Europe cation. Subsequently, the originally esti- apparently went down, despite there still mated 40-45 GW of installations in 2018 being no conclusion as to whether the for China has plummeted to 28-35 GW. minimum import price (MIP) will be can- Global annual installations have in turn celled or not. Even the European market, fallen to 80-85 GW, a 20% decrease com- formerly one of the markets with the high- pared to just over 100 GW in 2017. est prices in the module sector, witnessed Corrine Lin is an independent analyst based low prices, showing that overseas module in Taiwan. She works on market conditions, Intersolar Europe as a price prices have also taken a hit. spot market prices, capacity expansions, and production technology across the supply indicator chain. The Chinese multi c-Si supply chain pan- Strategies and future plans icked following the notification. Multi Despite a significant lull in this year’s mar- wafers especially are facing oversupply – ket, and the fact that China can only strug- despite changing from slurry saws to dia- gle to remain stable in terms of domestic mond wire slicing, prices still fell below demand next year, demand in 2019 is still costs. Even polysilicon prices, which likely to surpass 100 GW. This will come were at a prolonged high, have plum- thanks to the rebound of developed mar- meted, along with cells and modules. The kets and support from numerous emerg- mono c-Si supply chain also started to ing markets. Demand will bounce back in the beginning of 2019, when the low season ends in Cell capacity forecast bt technology Source: pv magazine analyst data the second half of this year. In the second half the entire supply chain will stay low 2020 42 22 3 80 16 6 in utilization rates, causing cell and module expansion projects to be postponed or 2019 57 16 6 66 13 7 stopped. Current production lines should acclerate in technical upgrades in order to increase orders by making high-efficiency 2018 67 9 13 48 9 5 products during the low season. According to data collected following the notification, a capacity upgrade of 2017 71 8 16 27 7 4 22 GW in the PERC sector will still hap- GW 20 40 60 80 100 120 140 160 180 pen this year, 20 GW of which will be Multi Multi PERC P-type Mono P-type Mono PERC N-type Mono Thin film installed in China. Also, in each of the

14 07 / 2018 | www.pv-magazine.com markets & trends

next two years we can still witness at least Market share forecast Multi-Si Mono-Si others 20 GW of new PERC upgrades, as manufacturers plan to convert conventional 2020 31 65 4 2020 lines to PERC during this time. Further, selective emitter (SE) technol- 2019 39 57 4 2019 ogy was revived this year. Due to newly established SE production, average cell 2018 48 47 5 2018 production efficiency quickly increased by 0.2-0.25%. As a result, Chinese PERC lines 2017 68 28 4 2017 are in desperate need of SE upgrades in order to catch up with the high efficiency 2016 75 19 5 2016 of 310 W for the Top Runner mono PERC 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 60 cell modules. There will be a capacity Source: pv magazine analyst data of more than 20 GW equipped with SE. Mono c-Si products continue to increase in market share thanks to capac- the pace of new expansion projects in the ity expansions in the PERC sector and near future. Instead, they are focusing on the room for price decrease for mono- upgrades for current production lines. Si wafers in the future. According to the For cells, upgrades to PERC and SE will new estimation following the reduction both happen. For modules, half-cut mod- of annual global installations, mono c-Si ules will increase in shipments in the sec- products will achieve a market share of ond half. Also bifacial modules will be almost 50% this year, higher than previ- promoted more actively by manufactur- ous expectations. ers. The new policy has cooled down the Looking at future trends, the global PV vigorous trend toward capacity expan- market appears promising in 2019, fol- sions, but the market will continue to lowing the harsh situation later this year. head towards a promising future when Chinese manufacturers plan to slow down the storm is settled. Corrine Lin

Advertisement markets & trends Floating PV reaches the surface

Until recently, the market for floating solar systems has been limited to smaller installations in just a few countries, writes Josefin Berg, Senior Analyst Solar Energy and Storage at IHS Markit. In 2017, this changed, as 390 MW of new floating PV systems were installed worldwide, mainly as part of the Top Runner Program in China.

n 2018, IHS Markit projects that annual of 100 to 150 MW. As the latest Top Run- I floating PV installations will surpass ner auction did not award much floating 1 GW, mainly driven by China. After 2018, PV, it is likely that few new installations India is rising as the lack of near-term pipeline in China will be built in China in 2019. In the com- will lead to market adjustments, through ing years there is still great potential on “ which India, South Korea, Taiwan, and coal mines and hydro dams, and we proj- a strong potential others fill a large portion of the gap left ect that China will remain one of the lead- by China. India is rising as a particularly ing markets for floating PV. market on the back strong potential market on the back of a India has accelerated floating PV 10 GW target for floating PV. Over the plans to reach its 10 GW target. The first of a 10 GW target next five years, we project 13 GW of new 1 GW tender was awarded in spring 2018, floating PV additions globally. and a string of new tenders have been China has installed more than 1 GW announced since. In India, floating PV is for floating PV of floating PV systems to date, and more a way for developers to overcome land- ” than 600 MW so far in 2018. This growth use challenges. Land ownership and usage stems from the Top Runner program. have become major barriers to new PV in Many of these projects take advantage of this highly populated country. Floating flooded or collapsed disused coal mines. PV is a way to make use of hydro dams, Chinese projects have been in the range which already have transmission infra- Photo: Huawei Photo:

IHS Markit expects to see annual floating PV installations grow beyond 1 GW in 2018, with demand driven by China’s Top Runner Program.

16 07 / 2018 | www.pv-magazine.com Floating PVreachesthe surface surface upward trajectory. In U.S., the studies, poor ineffective pilot countries likely will follow. ments. floating Once PV further project showtheir worth, other few countries, regulators are actively supporting develop these - and developing floatsthat easily fit different bodies. Ina water remain, including understanding environmental the impacts, evolvelandscape will rapidly over coming the years. Challenges withinfrastructure hydro plants. The andtechnology competitive and evaporation from dams, and an opportunity to share grid- grow, are ramping up production. supplierstracks 34 of floats.Some, includinglarge like firms Sun- entrants are preparing to compete for market share. IHSMarkit supplied more MWof its than 250 floats worldwide, but new or under construction. Floating solar pioneer Ciel etTerre has GCL New represent Energy of capacity 50% the that is installed Trina Solar, Xinyi Solar, ThreeGorges China Energy,New and of China’s Top Runner Program, developers Sungrow Power, ing years as market opportunities grow and diversify. As a result ofhalf 2020s. the These regions are likely moresee to floatingsecond the PVin U.K.,the and Netherlands the has announced a2GWtarget. potential. In Europe, pilot projects have built been inFrance and way, with potential to extend MW. to 50 recent success inAsia. Angeles Los has a10 MWproject under ing PVon reservoirs is finally getting recognition, as a result of MW of floating date.to installed been PV has The ideafloat of - tations, have to led some projects abandoned. being than Less 1 installations, and lack of funding, alongside- unrealistic expec uptake of floating PV. Pacific, governments continue announcingpolicies to spurthe voir, inearly is which still stages of development. Across Asia announced MWfloating a200 PV project the Cirataon reser ing PV, as land is difficult toaccess. Thenin Indonesia,Masdar PV markets. In Vietnam, developers are looking into also float- there. South Korea and Taiwan are nextthe growing floating accessLand is main the driver for continued floatinggrowth PV segment,the with first the floating PVsystem dating 2007. from located inAsia be Pacific. will which Japanalready is a pioneer in of floating PVsystemsbe to builtthe in next fiveyears, 78% of two giantthese PVmarkets, IHSMarkit forecasts atotal of 5GW on development and completion in India and Outside China. kW project on Banasura the Sagar hydro plant inKerala. structure far, inplace. So largest the project is a500 installed www.pv-magazine.com Floating PVis surfacing as asolution to land-use challenges Across Americas, vast the of use hydropower opens up great In terms of competition, a lot see of we will shifts overthe com - In other regions, floating PV is not yet following such an 61% ofOverall, projected floating PVinstallations depend will | 07 /2018

Josefin Berg Josefin - -

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Y T . markets & trends

The darkest hour before the dawn

China’s May 31 solar policy changes sent reverberations through the global PV industry. Vincent Shaw reports from Shanghai on the 31/5 policy, its forecast impact, drivers, and the 11th hour efforts to avert what some describe as a “car crash” of a policy shift.

n June 1, only one day after the PV finished and connected to grid by the O world’s largest solar exhibition, the end of May. This means for the remaining SNEC Expo 2018 in Shanghai, a great hit seven months of 2018, there is not much was delivered to China’s PV industry. The work to do. Everyone has to wait until the impact was triggered by an official noti- coming of 2019 for a new quota. fication jointly issued by the National These quota changes were treated as two Development and Reform Commission big bombs, placed right at the foundations (NDRC), the Ministry of Finance (MOF), of China’s PV industry. Compared with and the National Energy Administration the 53 GW of PV installed in the country (NEA). The notification, which was actu- last year, industry experts and analysts all ally a series of new policies with immedi- decreased their installation estimation of ate effect as of May 31 (therefore referred 2018 from previous optimistic figures. The to also as the “31/5 policy”), surprised the China Photovoltaic Industry Association entire industry by its extreme adjustment (CPIA) revised its prediction to as low as to China’s PV target of 2018. 32 GW, with a reduction of over 30% com- This 31/5 policy has essentially three ele- pared to 2017. GTM Research also forecast Nothing can stop ments: The first one is that China has abol- a dramatic drop from a previous 2018 esti- “ ished this year’s 13.9 GW target for utility- mate of 48 GW to just 28.8 GW, a drop of us anymore, soon scale PV projects, which means there will 40%. Energy consultants Wood Macken- be no more ground-mounted PV allowed zie put the 2018 volume at 30 GW, a year- Unnamed China PV insider” for the remainder of 2018. on-year (YOY) decrease of over 40%. The second is China reduced the quota for distributed PV to 10 GW in total for Industry pushback 2018. As NEA clarified after the June 1 “That’s not a brake, but a man-made car notification, the 31/5 policy includes res- crash,” said an unnamed official of CPIA. idential rooftop PV within the scope of Many participants at SNEC Expo were distributed PV. Market participants had still on the way home when the policy hoped for residential PV to be spared was released and most likely they never from the 31/5 policy cutbacks. expected that the record-breaking exhibi- And the third element is lowering the tion of 2018 may represent the peak of the national PV feed-in tariffs (FITs) again industry for a number of years. by CNY 0.05/kWh for almost all PV proj- The reaction from financial markets has ects, except county-level poverty allevia- been loud and clear. On the Friday of June tion projects, which will remain funded 1, shares in Longi and Sungrow, which are at the previous FIT level. The reduction listed on China’s stock market, dropped of FITs was expected by the industry, by around 8% in one day, and then over and the cuts were generally perceived as 30% in the following week. NYSE-listed being reasonable. But the quota changes JinkoSolar and CSI dropped by 35% and are a wholly different matter. According 32% respectively in two weeks. A simple to statistics from the NEA about new PV back-of-the-envelope calculation shows installations completed in 2018, there were that just in the past month, over $40 bil- already more than 10 GW of distributed lion of the market value of major listed

18 07 / 2018 | www.pv-magazine.com markets & trends

The darkest hour before the dawn

Chinese PV companies was wiped out in global stock markets. This loss is far bigger than all the profits of these companies made during the past five years. Chinese industry participants didn’t sit idly by, but instead took action imme-

diately to rectify the situation. Wang Tacon magazine/Dave pv Photo: Sicheng, Vice Director of the China Renewable Energy Industry Association submitted a written statement to Chinese government officials the day after the policy’s release and strongly criticized that the new policy violated previous national energy strategies and commitments, and even jeopardized the nation’s standing with international investors. “This will greatly influence an industry with CNY value in the trillions, threatening more than 2.5 million jobs,” his statement read. On June 3, the day following Wang’s statement, 11 leaders of major PV manufacturers including Tongwei, CSI, and Straight after the biggest ever SNEC trade show closed Sungrow jointly sent an emergency open its doors in Shanghai, China’s government delivered an announcement that has slashed its 2018 demand. letter, with the signatures of over 190 PV ited the NEA in Beijing and met with companies, to Xinhua News Agency, and officials. This was a rare instance in Chi- through Xinhua News Agency to cen- na’s history of high-level industry lobby- tral government authorities to express ing against a government policy that had their objections and adjustment sugges- already been published. tions to the 31/5 policy. In the letter, they However, Beijing seems to be resolute expressed their understanding of govern- in maintaining and executing these poli- mental reductions to the national FIT pro- cies and thus far there have been no signif- gram, but they also strongly requested the cant changes announced – only additional government to listen to professional opin- explanations and minor adjustments that ions from the Chinese PV industry and appear aimed at pacifying the PV sector. provide a sufficient transition period to The clarifications to the 31/5 poli- protect the industry from chaotic decline. cies explained that distributed PV proj- The efforts to push back against the pol- ects registered in 2017 and connected to icy changes did not stop there. On June the grid before June 30 would be granted 6, in an initiative organized by CPIA, top with previous FITs. Effectively, this pro- leaders and representatives of major PV vided only one additional month to adjust players including Trina Solar, Sungrow, to the new policies, but left in place the Tongwei, Longi, JinkoSolar, and CSI, vis- core issue: the quota management.

www.pv-magazine.com | 07 / 2018 19 markets & trends

Despite weeks of secret meetings among ment. But the question remains: Why did high level officials, few clues as to the 31/5 the Chinese government take this dras- policies leaked in advance of the official tic step? announcement. Given that it was carried out in such a sudden manner, and on a Drivers of 31/5 weekend, and that it was jointly pushed by Subsidy costs may be one big driver of three strong central government author- such a fundamental policy shift. Due ities (NDRC, MOF, and NEA), indicates to the rapid growth of PV installations, that the policy was a long time in the China has found itself in serious subsidy making. That it has been maintained with arrears since 2016. On the one hand, the such a firm position in the face of objec- collection of Renewable Energy Surcharge tions from the entire PV industry, points (RES) attached to the electricity price, Trina Solar production line in China. As Chinese to it having emanated directly from the which is the only source financing solar companies have come to dominate every sector of the top echelons of China’s central govern- subsidies, was not collected effectively, PV supply chain, oversupply is a serious concern.

20 07 / 2018 | www.pv-magazine.com markets & trends

and caused insufficient funds to be avail- Given the level of PV deployment this was able for subsidies. On the other hand, seri- expected to balloon to $6 billion in each ous subsidy arrears occurred due to the following year before 2020 – in the case complicated application process involving that the pre-31/5 status quo had contin- government authorities and confirmation ued. This begged the question: Is such a from State Grid, China’s major grid opera- financial burden too heavy for China? tor. Many projects finished in 2016 are still waiting for the approval of subsidy qual- Manufacturing equations ification and they may have to wait until On the other hand, another rapidly emerg- next year to receive payment. ing factor is the concern of PV manufac- As calculated by different experts but turing overcapacity. China already occu- with outcomes pretty much in-line, the pies the majority part of production of cumulated PV subsidy shortfall amounted every key step in the PV industrial chain, to around $15 billion at the end of 2017. including silicon ingots, wafers, cells, and modules. At the end of 2017, the production capacity figures from CPIA stood at: silicon ingots – 242,000 metric tons output compared with 442,000 metric tons worldwide; wafers – 91.7 GW compared

Photo: Trina Trina Solar Photo: with 105 GW worldwide; cells – 72 GW compared with 104.3 GW worldwide; and modules – 75 GW compared to 105.5 GW globally. And even the Chinese output of inverters reached 55 GW, amounting to a global market share of over 57%. 2.5 million jobs threatened – China Photovoltaic Industry Association

On top of this hefty established production base, very extensive expansion plans among domestic manufacturers may have alarmed China’s central government. Based on incomplete statistics of announced or even partially executed expansion plans, China was on track to increase silicon ingot production capacity by 302,000 metric tons by the end of 2018, which is a 109% YOY increase. On the wafer side, one mono giant is going to expand its mono wafer production capacity by 13 GW this year and another 22 GW in the following two years. Similar expansion plans exist for other mono or multi players. The same pattern of rapid expansion also applied to Chinese cell and module manufacturers. Even taking into consideration that the expansion is partially aimed at achieving cost reductions due to rapid technical upgrading, this type of expansion was viewed as being likely to con-

www.pv-magazine.com | 07 / 2018 21 markets & trends

Photo: Trina Trina Solar Photo: to being at least partially controlled by the state-owned sector? This explanation seems like a conspiracy theory more than a logical explanation of recent developments. But we can judge by observation if more and more SOEs get involved in the Chinese PV industry. Speculation aside, China’s PV industry in H2 2018 is doubtless going to look very different than it did in H1. Since a great reduction of PV installations in the country will inevitably happen, overcapacity will become the central issue and increasingly serious. Manufac- turing capacity utilization rates will drop quickly in the third quarter and maybe recover slightly in the fourth quarter in anticipation of a new quota for 2019. In Extensive expansion plans from several fact, some key PV manufacturers already manufacturers may have alarmed China’s central lowered their utilization rate in June. government. sume too many financial and material Production expansion plans already resources, especially when China is fac- in the execution stage may not be halted ing a possible trade war with the United because they also relate to cost-saving States, the largest overseas market for and technology improvements, but new Chinese products and the largest source expansion plans may be cancelled. of technology imports into China. China Price reductions will become univer- may need to limit such production expan- sal in each link of the industrial chain. In sions and instead prepare for potentially a June, Longi was a first mover and reduced period of lower economic growth. prices of its mono wafer by 14% on June 14 Coincidentally, on June 6, so shortly and another 8.22% on June 25, resulting in after the 31/5 policy release, there was a a mono wafer price of CNY 3.35/piece at noteworthy development in the Chinese the end of June. The Longi move triggered PV industry that might provide another other PV manufacturers to follow suit. reason for the policy shift – which might Data from EnergyTrend show that the even be beyond many people’s imagina- average silicon price dropped by 11% in tion. This development involved the sale June compared to the end of May. Wafer by GCL Group of a 51% stake in its best prices dropped by 8% in the same time This will greatly asset, Jiangsu Zhongneng – which is the period and cell prices by 10%. And in silicon manufacturing unit and the real early July a major racking manufacturer “ core asset for GCL – to Shanghai Electric, joined the fray, announcing a bracket influence an industry a state-owned enterprise (SOE), for a price price reduction of 15% to further lower of only CNY 12.7 billion ($1.92 billion). the LCOE. with a CNY value The company of Jiangsu Zhongneng was And this is just the beginning. Many rumored in 2017 to be spun-off from GCL module makers are still going over their in the trillions Poly and listed as an independent entity price reduction plans. But analysts have on the Shanghai Stock Exchange with an already provided an assessment. GTM ” assessed value at the time of CNY 60 bil- Research said that module prices will drop lion ($9.1 billion). The sale to Shanghai by 32-36% by the end of 2018, and BNEF Electric at such a surprisingly low price has the same estimation of around 34%, may be telling us something. Could it due to market pressures. mean a new round of nationalization in Many companies will hurriedly push China’s PV industry? out into overseas markets for survival, and Being a young and newly developed sec- while solar landscapes such as the Euro- tor, China’s PV industry is rather unique pean market appear to be recovering, how in its private economy status. It may be local authorities and administrators in the the largest industry with the least involve- EU react to a possible price war remains ment of SOEs. Is this going to change back uncertain? Whether a fresh round of anti-

22 07 / 2018 | www.pv-magazine.com markets & trends

dumping and anti-subsidy measures will ten tired of this. Now it may be another be launched, or the current Minimum hard time, but I believe very soon the Import Price (MIP) regime maintained LCOE of PV will be as low as or even lower will be closely watched. than coal power and at that time PV can What is clear is that bankruptcies will compete with other energy sources fairly. occur, potentially in H1 2019 or even earlier. Not only those small distributors, who went all-in to serve the booming distributed PV sector, most notably the residential rooftop segment, but also big players. During the last big downturn Suntech Power and LDK were the victims. The $15 billion next big name to fall has been the subject Renewable Energy Surcharge (RES) shortfall of much speculation. Large-scale industrial integration and M&A activity is expected. Those with lower costs and higher efficiency will win Nothing can stop us anymore, soon.” This the market and those without will lose. is the perspective of a Chinese PV profes- The 31/5 policy accelerates this process sional with more than 15 years of experi- and will make the solar PV industry more ence, who has witnessed the entire history competitive against other energy sources. of China’s PV industry. His statement is “We always relied on government pol- full of confidence and provides hope that icies, especially the subsidies. Sometimes 2018 may represent the darkest hour, right we were supported and sometimes we before the dawn of China’s PV sector. were hurt – like this time. We’ve really got- Vincent Shaw

Advertisement markets & trends

The signs were there

China’s recent solar notice resulted in considerable consequences for the world’s largest solar PV market. While the news seemed sudden, the signs were there although no one paid them enough attention. On the back of the changes, Asia Europe Clean Energy (Solar) Advisory not only lowered its annual demand forecasts, but also those for the remaining years of the 13th Five-Year Plan period.

ust over a month ago, on May 31 a trio Since the release of the notice, the Min- J of Chinese government bodies jointly istry of Finance (MOF) has announced released the official “2018 Solar PV Power that the so-called “7th RE Batch” is under Generation Notice.” The notice addresses preparation, and that approximately multiple issues, with considerable conse- 20.5 GW of solar PV shall be included. quences for both utility-scale and distributed generated (DG) solar PV demand in The signs were there 2018 and beyond. Prior to its release, and taking into account For instance, it indicates a shift of finan- forecasts, which ranged from 30-70 GW, cial responsibility from the central to the it can be argued that nobody had a good local government, meaning if local gov- handle on how high or low demand was ernments want to continue supporting going to be in China throughout 2018. the local deployment of solar PV, they Consequently, within hours of the notice must shoulder the financial obligation being released, around 10-30 GW were themselves. slashed from previous forecasts for the In this context, Asia Europe Clean year. Energy (Solar) Advisory (AECEA) antic- The notice appeared to many to have ipates that several provinces – in partic- come out of the blue, particularly con- ular those on the coast, like Shandong, sidering that the SNEC exhibition – the Jiangsu, Zhejiang, and Guangdong, but world’s biggest event of its kind – was held also some inland too, like Hebei and in Shanghai the very same week, and no Anhui – will come forward with tailored indications of its existence were made by policies, designed to facilitate local solar representatives of the government and/or deployment. associations. Furthermore, the notice prevents gov- The signs were there. They just didn’t ernments at all levels from approving receive the attention they should have. For any new utility-scale projects until fur- instance, in late April, the NEA released a ther notice, thus effectively abolishing, or draft version of proposed amendments to at the very least putting on hold, the 13.9 its DG policy. GW target which was set last July. Among the changes, the association This decision might have been influ- said projects that had received approval in enced by the recent results of the third 2018, but were unable to start construction, Top Runner project auction. In Qin- would be cancelled, and not rolled over to ghai province, the lowest bid was just 2019; stricter enforcement of annual guid- CNY 0.31/kWh ($0.05). ing targets would be introduced; projects This is not only around 45% lower that were unapproved, non-registered, or than the national FIT of CNY 0.55/kWh initiated construction without prior gov- (before the reduction), but is also lower ernment consultation would no longer be than the regular on-grid electricity tariff. accepted; and DG projects with a capac- In this context, it is no surprise that basi- ity between 6 and 20 MW would only be cally from now on all types of projects will eligible for feed-in tariffs (FITs) provided be subject to competitive bidding – a mar- they achieved 100% self-consumption. ket mechanism that has long been favored In light of the 19.44 GW of DG capacity by the government. installed in 2017, these proposed changes

24 07 / 2018 | www.pv-magazine.com markets & trends

If local governments want to continue supporting the “local deployment of solar PV, they must shoulder the financial obligation themselves” implied far-reaching implications and curtailment reduction consequently back then, AECEA estimated that this results in even more FIT payments, due would possibly result in a 15-30% reduced to the increase in kilowatt hours being fed demand year on year (YOY). into the grid. Another possibly unnoticed sign also These factors – 53 GW of new instal- emerged in late April, in the form of pub- lations in 2017, massive capacity expan- lic comments made by the Secretary Gen- sion plans, outstanding FIT payments, eral of China’s PV Industry Association. and the drop in grid curtailment – com- He not only spoke of potentially lower bined to create a future scenario in which demand in 2018, but also commented on China has a supply-driven deployment the unrealistic production capacity expan- environment and a domestic solar indus- sion plans being pursued by numerous try that is positioned to move from a manufacturers across the crystalline sil- 50 GW annual market to a possible icon (c-Si) value chain. 100 GW, at a time when FIT payments are The latter is very likely a result of the already subject to significant constraints. 53 GW installed in 2017. Indeed, last year saw dozens of announcements by Chinese Lowered forecasts manufacturers, aiming to ramp up capac- In light of all of the above, AECEA has ities from 1 to 5 GW, 5 to 10 GW, and 10 not only lowered its forecast for 2018 to 20 GW. According to industry observ- from 40-45 GW to 30-35 GW (which is ers, these expansion plans amounted to a still optimistic), but it has also lowered mind-blowing 71 GW. its forecast for the remaining years of the In this context, the recent SNEC event 13th Five-Year Plan period (2016-2020) to in Shanghai, which hosted roughly 1,800+ 20-25 GW annually. companies, is definitely proof that the pol- Accordingly, at the end of 2020, China icy pursued by the Ministry of Industry could be home to around 200 to 215 GW and Information Technology (MIIT) may of total installed solar PV power genera- require more fine-tuning in the years to tion capacity, which would be in line with come to achieve its stated goal of driving a 200 GW target, which although not offi- industry consolidation – is that right? Or cially confirmed, has been proposed by is it to boost the domestic solar market? China National Renewable Energy Cen- ter (CNREC) in the context of China’s Financial constraints Renewable Energy Roadmap published Against this background, the notice, and in November 2017. Frank Haugwitz the main motivation for these fundamental and far reaching regulatory changes, are the prevailing financial constraints. About the author Estimates suggest that by the end of 2017, Frank Haugwitz is an independent solar energy consultant based in the outstanding FIT payments amounted Beijing since 2002. Haugwitz worked as a seconded long-term expert on to around €15 billion ($17.6 billion). At the photovoltaic and renewable energy projects in China supported by Ger- same time, the national average grid cur- many and the European Union from 2002-2009. In October 2012 he founded tailment for solar PV dropped by around his company, Asia Europe Clean Energy (Solar) Advisory Co. Ltd. (AECEA). His services include working with individual clients to apply his extensive 50% YOY, to 6-7% (at the time of going China photovoltaic energy-focused insights to their specific needs. to print). That means the significant grid

www.pv-magazine.com | 07 / 2018 25 markets & trends Survival of the biggest

After a strong year in 2017, many of China’s PV manufacturers announced investments into major capacity expansions, expecting future demand to keep growing. China’s May 31 announcement, however, is set to slash demand for 2018.

t the beginning of the year, no one A expected Chinese demand to go anywhere but up. For the previous two years, demand had surpassed all expectations and grown to unprecedented levels. At the start of 2018, it seemed that the industry had got the message – do not underes- timate China’s module manufacturers, or the nation’s ability to quickly install huge amounts of new solar. Leading analysts had forecast global PV demand for 2018 at between 105 and 120 GW, with China once again set to be responsible for around 50%. For China’s solar manufacturers – from polysilicon producers all the way down to module makers, everything was in place. Invest- ments were made, and capacity expansions planned in order to meet projected increases in demand. Of course, this all changed with Chi- na’s May 31 announcement: “Because of the changed regulations on May 31, 2018, the second half of 2018 will see the lowest demand in China since the first half of 2015,” says Karl Melkonyan, Senior Analyst, Solar Demand at IHS Markit. “IHS Markit expects China will account for only 35% of global demand in 2018, down from 53% in 2017. This will impact the financial situation of entire PV supply chain, since prices are expected to decline further, due to overcapacity and oversupply during Q3 2018.” The immediate effect of the announcement, which we are already seeing, will be falling module prices and oversupply. For the manufacturers, this will likely mean the cancellation of many plans for capacity expansions in China, and further consolidation as smaller manufacturers strug- gle to take the hit. “China’s module demand will fall by 15-20 GW compared with last year. China has already expanded manufac- Cell interconnection on a JinkoSolar production line. The company downplayed turing capacities across the supply chain the effect of China’s May 31 announcement, stating that it remains confident in too quickly, so we will see huge oversup- the long-term prospects of the solar industry.

Photo: JinkoSolar Photo: ply for the rest of this year,” explains independent analyst Corrine Lin. “Most of the

26 07 / 2018 | www.pv-magazine.com markets & trends

Utilization rates of PV supply chain sectors as of June 2018 Sector Location Tier-1 Tier-2 Polysilicon China 71% 94% Outside China 86% 61% Multi c-Si wafer China vertically integrated 87% – China 42% 30% Taiwan 22% 10% Mono c-Si wafer China vertically integrated 100% – China 73% 56% Outside China 85% – tier-1 companies will still be okay, since they have overseas orders, but tier-2 and Multi c-Si cell China vertically integrated 72% – companies that mainly rely on the Chi- China 96% 40% nese market to sell their modules will have Taiwan 35% 30% a much harder time.” Mono c-Si cell China vertically integrated 99% – China 100% 50% Falling utilization rates Taiwan 80% 60% According to figures collated by Lin, capacity utilization rates have already Module China 94% 40% begun to decline since the announce- Outside China 65% 60% ment (see table above right). Polysilicon Source: pv magazine analyst data producers are said to be bringing forward their planned maintenance in anticipation of upcoming low utilization, while Tai- Quick recovery? wanese producers and the multi c-Si seg- While China’s policy change will likely set ment are the first to show negative effects off another round of oversupply, low prof- on their production. itability, and consolidation in the industry, “Multi c-Si wafer makers have imme- analyst groups including IHS Markit and diately lowered the utilization rate to PV Market Alliance expect to see light at 30-40%. Vertically integrated manufac- the end of the tunnel as soon as the fourth turers have continually lowered the uti- quarter of 2018. lization rate of multi c-Si wafer pro- “We expect to see recovery signs in the duction lines. Some even suspended all fourth quarter, which will continue to production. Taiwanese multi c-Si wafers recover quarter by quarter, since global with higher costs almost closed facto- demand remains on its growing path, in ries entirely,” continues Lin. “Top mono particular in many Asian markets,” says c-Si wafer makers did not show signifi- Karl Melkonyan of IHS Markit. “Although cant change in the utilization rate in early fourth quarter demand is estimated to be Analyst groups June, as the June 30 rush for utility-scale much stronger, and will stop that price project installations kept them busy. How- drop to some degree, margins will have “ ever, the utilization rate has begun to fall reached critically low levels. Some play- expect to see light at as of late June.” ers will probably cease their business, file Similarly, the cell and module segments for insolvency. – not only tier-2 and small the end of the tunnel have already seen falling utilization rates, manufacturers, but some of the leading beginning with the multi c-Si segment. manufacturers could be affected too.” as soon as the fourth “Multi c-Si cells are the first to reduce uti- Several of the major Chinese manu- lization rates, especially Taiwanese makers facturers pv magazine has heard from and tier-2 Chinese makers. Starting from are downplaying the significance of the quarter of 2018 late June, as China’s utility-scale projects announcement and the negative effects ” have come online, the same has happened it could have on their business. Report- to conventional mono c-Si cells,” says Lin. ing its financial results for the first quar- “Second and third-tier manufacturers that ter of 2018, JinkoSolar – the largest man- mainly relied on the Chinese market and ufacturer of crystalline modules for two the OEM orders placed by top-tier man- years running, according to IHS Markit ufacturers have lowered utilization rates production data – appeared upbeat about to 40-70%. Top-tier manufacturers are the immediate future, and pointed out expected to have substantial adjustments that its order books for 2018 are already in response to the low demand in the sec- 80% full. “Our production capacity is fully ond half of 2018.” utilized now and is expected to remain so

www.pv-magazine.com | 07 / 2018 27 markets & trends

Photo: Tongwei Tongwei cell factory in China. Tongwei tells pv magazine that it is proceeding with plans to double its cell capacity, despite falling demand and low utilization rates in 2018.

a 5 GW module facility in Anhui Prov- ince, Eastern China. Zhen Guo Li, Gen- eral Manager and Director at Longi, con- firms the plans are going ahead, adding that he expects Longi’s overseas sales to increase from 10% to 30% by 2020, and that he believes module prices will stabi- lize by the end of the year, at around 10% lower than at the start of the year. IHS Markit estimates that only around 600 MW of capacity has been put on hold for 2018, as expansions are already under- during the second half of the year,” states way with investments made, but it points JinkoSolar CEO Kangping Chen. “We to falling output, and future expansions believe the Chinese government’s new put on hold in 2019 and 2020. “For 2018 policies [will] have relatively limited the major impact will be production num- impact on our operations over the short bers,” says Karl Melkonyan. “We expect term, and we remain confident in our Chinese manufacturers to reduce utiliza- future business prospects and the long- tion rates in the second half of 2018, with term growth of the industry overall.” production around 10.8 GW lower than At Intersolar Europe last month, cell estimated before the announcement.” Manufacturers maker Tongwei also confirmed that it plans to proceed with its plans to double Long-term optimism “ who are the its cell manufacturing capacity from 6 to Melkonyan also points to potential 12 GW by the end of 2018, and to reach 20 upsides, which for PV manufacturers GW by the end of 2019. These new manu- could include the elimination of weaker technology and cost facturing facilities will be located in Hefei, companies, and fast technology develop- Eastern China, where Tongwei already has ment driven by severe competition. “In leaders will continue 1 GW of module capacity, and in Chengdu, general, if we look back at the past decade, Southwestern China. Tony Liu, Interna- PV has always experienced ups and downs to dominate the tional Marketing Manager at Tongwei, caused by changes in markets (including says that the company would be focusing political and trade obstacles), turbulence on India, the Middle East, South Amer- in supply and demand balance, instabil- market ica, and South Korea as targets for its ity of prices, as well as extreme compe- ” cells, while confirming that China would tition, which supports continuing tech- remain its primary market. The company nology improvements and its further has no current plans for production facili- development,” he sums up. “We expect ties anywhere else. Tongwei also has plans all of these factors and shake-outs to con- to increase its polysilicon capacity from tinue for several years yet. In the longer 70,000 to 120,000 metric tons. term, the number of PV manufacturers Leading mono c-Si producer Longi will come down as a result of consolida- Green Energy Technology, meanwhile, is tion, but major manufacturers who are the in the process of tripling its wafer capac- technology and cost leaders will continue ity to 45 GW by 2020 and constructing to dominate the market.” Mark Hutchins

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18.05.18_pv_magazine_Global_Nr7_3Prod_HiPace2300_A1804H_ASM 340_210x297mm_EN.indd 1 18.05.18 17:01 markets & trends

China’s global Chong/Pixabay Anthony Photo: power play

With all the uproar in China about the impact of the May 31 “2018 Solar PV Power Generation Notice” issued by China’s National Development and Reform Commission, National Energy Administration, and Ministry of Finance, one could think that China’s government has lost faith in solar PV’s potential to contribute to the country’s historic shift from coal-fired power to clean renewable energy sources. But nothing could be further from the truth.

Thanks to local as well as central government initiatives, Beijing saw 226 blue sky days in 2017 compared to only 176 such days in 2013.

30 07 / 2018 | www.pv-magazine.com markets & trends

hina is still pushing solar PV and “Blue Sky” days in Beijing C renewables at home, and also taking While most China-watchers and indeed the renewable energy, power generation, the global PV community are focused on and transmission technology and exper- China’s central government, local authori- tise it has gained to a wide range of foreign ties are doing their part to hasten this shift markets. It is another great export oppor- from dirty to clean power. Liebheit points tunity for China and armed with mas- to Beijing, which within a span of just sive funding from its development banks, four years closed down the five coal-fired China is fast becoming the leading pro- power plants in its region and successfully tagonist in electricity markets in various shifted from coal-fired power generation regions of the world. to gas-fired plants. This includes Africa, where a stagger- While coal supplied almost 40% of Bei- ing 70% of the population south of the jing’s electricity in 2012, this is now well Sahara Desert lacks access to electricity. below 10%. Of course, gas is not really But it also includes Europe, where China clean, but as Liebheit remarks later in his is keen to tap Europe’s expertise in inte- presentation, the construction of ultra grating solar PV and wind resources into high voltage (UHV) DC transmission its electricity grid. lines from Western China to Beijing will bring clean PV and wind electricity from China is fast Liebheit’s insights into China remote western regions of China (where China’s dominant position in a wide range such renewable energy is plentiful and becoming“ the leading of electricity markets around the world cheap) to China’s demand centers along was one key message delivered by Andreas the eastern seaboard. The UHV DC line Liebheit, President of Heraeus Photovol- in question has a capacity of 200 kilovolts protagonist in taics, to a packed audience at Conexio and runs for 6,000 km from China’s west- GmbH’s Business Breakfast at Intersolar ern regions to the Beijing metro area. electricity markets Europe 2018 on June 21. Heraeus is a lead- For the people in Beijing, who in 2014 ing photovoltaic materials supplier to Chi- formed a “Blue Sky” initiative to com- in various regions nese PV manufacturers, so the company bat the rampant air pollution in the city, has a very good sense of what is happen- the outcome has been 226 blue sky days ing in the Chinese PV industry and the in 2017 compared to only 176 such days of the world Chinese economy in general. So while in 2013. The annual average concentra- ” the notice from the National Develop- tion of fine particles (PM 2.5 in micro- ment and Reform Commission (NDRC), grams per cubic meter) has been reduced National Energy Administration (NEA), by 35% from 89.5 micrograms/m³ in 2013 and Ministry of Finance (MOF) will put a to 58 micrograms/m³ in 2017. Local ini- severe dampener on Chinese PV demand tiatives also play a very important part in in 2018, the medium and long-term out- boosting e-mobility in China, which is look remains very strong for renewables, by far the world’s largest EV market with including solar PV. approximately one million electric vehi- Liebheit opened his presentation with a cles. Cities like Beijing and Shanghai have look at China’s electricity generation. Just basically banned new combustion engine six years ago in 2012, annual power gen- vehicle registrations, so that EVs are the eration amounted to about 5,000 TWh. only viable option for people looking to With China’s continued double-digit eco- get a new car. nomic growth, this figure is currently in the range of 6,600 TWh per year and is Massive export opportunity expected to increase by 10% in the next But back to the world stage and the mas- two years. By 2040 power generation in sive export opportunity these domestic China should reach 10,400 TWh. initiatives engender, as Liebheit puts it, Looking at where this power is coming “China would not be China if they did from, the picture is changing rapidly: In not export these accomplishments in a 2012, roughly 80% of China’s electricity big way. Already today the Chinese have came from fossil fuel sources, with coal- acquired a leading technology position in fired power plants providing the bulk of various sectors. China is investing mas- the nation’s power. By 2040 renewables sively in renewable energy worldwide. The will have secured up to 60% of China’s sum of $360 billion by 2020 is the key fig- electricity mix, a truly amazing turn- ure. In 2017 alone China invested $44 bil- around given the amount of power that’s lion in the renewable energy sector out- involved. side China.”

www.pv-magazine.com | 07 / 2018 31 markets & trends

While Liebheit focuses on China’s Belt from Western China to demand centers in and Road Initiative (BRI) as the main Russia in exchange for oil and gas deliver- platform to put these funds to work in ies. Or to take hydro power from a massive countries outside China, there is also the dam in Africa, where clean energy can be Global Energy Interconnection (GEI) harvested and transported to major pop- initiative championed by Liu Zhenya, the ulation centers far from the dam (Liebheit former head of State Grid, China’s larg- highlights the 3 GW Mambilla hydroelec- est transmission utility and the world’s tric plant in Nigeria being built by a trio second-largest company after Walmart of Chinese companies for what is expected in the 2017 Fortune 500 list. In its June to amount to a $5.8 billion investment). 7 “The Big Read” piece entitled “China eyes role as world’s power supplier,” the Opportunities in Africa and Europe Financial Times (FT) provides details on China is by far the biggest investor in GEI. According to the FT, “Designated a Africa’s electricity grids and as Liebheit ‘national strategy’ and championed by Xi observes to the amusement of the audi- Jinping, China’s President, the [GEI] ini- ence at the June 21 breakfast event, “Africa tiative feeds into China’s most ambitious is now fully part of the Silk Road,” which international plans – to create the world’s in its modern incarnation carries the ini- first global electricity grid.” tials “BRI” and is chiefly Beijing-backed. Then again, Africa requires $93 billion The killer app UHV annually (according to Africa Infrastruc- UHV technology plays an important part ture Country Diagnostic) to upgrade its in this plan and has been “dubbed the infrastructure to cope with a population ‘intercontinental ballistic missile’ of the that is growing at a rate of 25 to 30 million power industry by Liu Zhenya,” according people annually. If China is the only coun- By gaining a to the June 7 FT article. Calling UHV tech- try ready to mobilize massive resources to “ nology the ICBM of the power industry meet this challenge, then other countries substantial footprint also highlights the economic and security outside Africa should not criticize China dimensions of this international “power for taking the initiative, even if the out- play,” be it on the back of BRI or on the come could be an electricity grid in Africa in these markets, back of GEI. As Liebheit pointed out at the largely controlled by Chinese institutions. Conexio event, China’s current Five-Year Europe is also on the BRI and GEI map, China can gain Plan (2016-2020) puts other Asian coun- but at least within the European Union tries in first place when it comes to China’s there is not a huge gap between electric- influence, both infrastructure investments overseas (with ity demand on the one hand and the sup- a 30% share), followed by Africa (with a ply of electricity generation, transmis- share of about 25%), Latin America, and sion, and distribution on the other. In politically and Europe (including Russia). such a situation of relative luxury, Euro- According to the FT article, “Chinese pean countries have been sensitive to Chi- economically companies have announced investments nese power companies seeking to acquire ” of $102 billion in building or acquiring stakes in strategically important electric- power transmission infrastructure across ity players in Europe. Liebheit highlights 83 projects in Latin America, Africa, the Chinese attempt to acquire an indirect Europe, and beyond over the past five stake of 20% in the German transmission years, according to RWR Advisory [a system operator (TSO) 50Hertz Transmis- Washington, D.C.-based consultancy]. sion GmbH, an acquisition that is not seen Adding in loans from Chinese institu- favorably by Germany’s government. tions for overseas power grid investments For Liebheit, the Chinese interest in brings the total to $123 billion. Throw in 50Hertz also points to another motivation all power-related Chinese deals overseas, driving Chinese energy players. They can including investments and loans to power see their country moving to solar PV and plants as well as grids, and the number other renewables and are keen to learn almost quadruples.” from a country like Germany, where wind And if UHV technology is the ICBM and solar PV already form almost 50% in all of this, then one key objective is to of the country’s power generation fleet. utilize UHV technology to transport PV 50Hertz has been at the vanguard of this and wind electricity from regions such as renewable energy integration in Germany Western China to cross-border demand and possesses valuable know-how, which centers further afield. For example, as could prove helpful in China’s transition Liebheit points out, to take clean power to an energy system built on renewables

32 07 / 2018 | www.pv-magazine.com markets & trends Photo: Maoneng Photo:

The 13 MW (AC) Mugga Lane Solar Park in the Australian Capital Territory, developed by Chinese/ Australian Maoneng. In his presentation at Intersolar (and in other regions of the world as well, influence, especially in the Asia-Pacific Europe 2018, Andreas Liebheit of Heraeus highlighted particularly BRI countries). region, but also in emerging markets like the investments coming from China into large-scale Africa and Latin America. By gaining a PV in Australia, as well as other regions. Technology leadership substantial footprint in these markets’ China is tapping into renewable energy power grids (and in some cases like Bra- expertise and technology around the zil and the Philippines even outright con- world and its focus is not only on solar trol), China can gain influence, both polit- PV and wind power. Nuclear power and ically and economically. hydropower are of strategic interest to As Andreas Liebheit pointed out at China as well and the transition to a low Intersolar Europe, Chinese PV companies carbon electricity system also means tap- are already active in over 50 Belt and Road ping into other important areas, be it dig- countries. As more Belt and Road power italization, smart grids, energy storage, grids have Chinese owners, this grid own- e-mobility, and other sectors undergoing ership can act as a platform, not only to electrification. China regards all of these cobble together a regional or eventual sectors as strategically important, also to Global Energy Interconnection, but also tackle the “middle income trap” that has to bring in Chinese PV and other technol- prevented many rising economies from ogy suppliers to realize low carbon energy becoming more than just a low-cost work- networks. The stakes are high and in this bench for run-of-the-mill products. All of broader context, the recent NDRC, NEA, the above sectors are there for the taking, and MOF notice is probably just a blip on so to speak, and China wants to secure the radar, with a range of powerful driv- technology leadership in as many of these ers ensuring a bright future for the Chi- areas as possible. nese PV industry and the Chinese energy Finally, there is the geopolitical aspect industry in general. and China’s push to expand its sphere of Eckhart K. Gouras

www.pv-magazine.com | 07 / 2018 33 applications & installations Photo: David Monniaux David Photo:

California’s solar and wind integration challenge

As a leader in the global energy transition, California is putting some of the highest levels of solar and wind on its grid in the world to date. And while the state’s grid operator has made some progress, the integration of these resources is currently limited not by physics, but by market rules and operational practices.

Moss Landing Power Plant, a natural gas-fired power station in Monterey Bay, California. The state’s fleet of natural gas plants is particularly critical for the evening ramp when net power demand is at its highest.

34 07 / 2018 | www.pv-magazine.com applications & installations

ay 26 was a big day for renew- Flexibility M able energy in California. Utility- It is not enough to simply add wind and scale solar output on the California Inde- solar to a grid with physical and market It is not enough to pendent System Operator (CAISO) grid structures designed for the characteristics “ peaked at just under 10 GW, and this was of conventional power. In order to inte- simply add wind and buoyed by nearly 4 GW of wind. This led grate wind and solar with minimal cur- to large-scale wind and solar peaking at tailment, changes must be made. 64.6% of demand shortly after 2 p.m., a Researchers have been working on this solar to a grid with new record. issue for decades, and there is a signifi- During the middle of the day, the state’s cant body of technical literature describ- structures designed gas plants ramped down significantly, falling how this can be done. There are many ing to around 1 GW of total output. Even ways to skin this cat, including deploying for conventional with this, as much as 1 GW of solar and energy storage, more rapid trading of elec- wind was curtailed, for a total of 7 giga- tricity, and enhanced forecasting – all of watt hours (GWh) of wind and solar which have been the subject of reports by power. In order to power wasted over the course of the day. the U.S. Department of Energy’s National It is likely that prices also dipped into the Renewable Energy Laboratory (NREL) integrate wind and negative, as during the month of May neg- that look at California and the Western ative prices were experienced during 9.5% United States. solar with minimal of five minute intervals, the highest por- And while deploying massive vol- tion in 2018 so far. umes of batteries and building hundreds As all this was happening, the CAISO of miles of transmission is an expensive curtailment, changes grid was still showing a net import of elec- undertaking, many of the other measures tricity, even during the hours of maximum to enable this transition are not. must be made solar and wind output. This point was underlined in a 2017 ” A similar dynamic was seen a month report by the Climate Policy Initiative: earlier, when large-scale wind and solar Flexibility, the key to low cost, low car- set their previous record of 63.8% of all bon grids. The report found that grids power. These were exceptional days, as with “near-total” renewable energy could weekend days in the spring bring a com- operate at a lower overall system cost, as bination of low overall power demand and long as activities and resources were opti- high solar generation. But they were not mized towards the goal of maximum flex- the days of highest solar output, as large- ibility in the rest of the system. This flex- scale solar now peaks at over 10 GW regu- ibility is needed not only in the region larly. And this does not count the multiple where renewables are added, but also in gigawatts of rooftop and other “behind- the import and export of electricity from the-meter” solar, into which CAISO has neighboring grids. no visibility. Unfortunately, there can be a lot of dis- Recurring negative power prices and tance between these academic discus- curtailment of wind and solar are both sions of flexibility and the actual practice realities on the California grid. And while of how grids are operated, particularly in negative power prices can be a healthy California. market signal, curtailment is wasted power, and increasing rates of both show Local flexibility, or lack thereof the difficulty that California is having In looking at the situation of curtailment integrating large amounts of renewable and negative prices, writers including energy. This challenge will only get more Vox’s David Roberts have concluded that significant as the state moves to meet its California has “too much solar power.” 50% by 2030 renewable energy mandate. This is an intellectually lazy take on a com-

www.pv-magazine.com | 07 / 2018 35 applications & installations

plex problem, as it fails to consider the role California’s hydroelectric fleet is also of other resources on California’s grid. showing limited flexibility in practice. CAISO has been working to make the Even on days of the highest solar and wind operation of in-state resources more flex- penetrations, the fleet is ramping only by ible, with a mixed degree of success. In about one third, rising from 2.4 GW dur- some cases, there are limitations with spe- ing mid-day to 3.9 GW during the evening cific resources. Least flexible is California’s peak on May 26. last remaining nuclear power plant, Dia- This is counter-intuitive given the expe- blo Canyon. Diablo Canyon runs at its rience of other nations and regions such full output of around 2.3 GW 24/7 until as Scandinavia, Uruguay, and Costa Rica, it shuts down for maintenance, refueling, where the flexibility inherent in hydro- or emergencies, and does not respond to electric dams has enabled some of the price signals including negative power world’s highest penetrations of wind and prices. of renewable energy overall. Photo: Sarah Swenty/USFWS Sarah Photo:

The 550 MW Topaz Solar Farm on Carrizo Plain in Southern California. On May 26, 2018, large-scale wind and solar set a new record, peaking at 64.6% of demand shortly after 2 p.m. Diablo Canyon is hardly unique. However, the majority of California’s pv magazine has written about why fleet is not comprised of large hydro dams, nuclear plants are not flexible in practice, but of smaller dams and run-of-the-river even when they have the technical ability hydro plants. CAISO notes that the latter to ramp. The high capex/low opex nature has a “fixed generation profile,” and is not of nuclear power provides a powerful dis- dispatchable. incentive to produce at less than 100% out- Given the relative inflexibility of these put, and ramping puts wear on the sys- other two resources, California’s fleet of tems of these plants. At best this leads to fossil fuel power plants, which consists increased maintenance costs and down- almost exclusively of natural gas gener- time. Diablo Canyon is scheduled to close ation, helps to fill in the gaps. These gas in 2025, which will remove this problem. plants are particularly critical for the eve-

36 07 / 2018 | www.pv-magazine.com applications & installations

ning ramp when net power demand is at was borne out on May 26, when imports its highest. went from only around 200 MW during Over time California has dramatically the mid-day solar peak to nearly 10 GW increased the flexible operation of its gas from 9-11 p.m. fleet. On May 26 fossil fuel output on the Imports and exports of power have CAISO grid fell to only 800 MW from been an area of significant work by 1 to 3 p.m., to rise again to 4.2 GW from CAISO, which created a new multi-state 8 to 9 p.m. marketplace – the Energy Imbalance Mar- CAISO has created a system of pay- ket (EIM) – to allow for more rapid trad- ments for flexible generation. However ing of electricity with other grids. Since There is ample policy research firm Energy Innova- its founding in 2014, five other regional tion argues that this system is not work- utilities have joined EIM, and CAISO esti- flexible“ capacity to ing as designed, noting that many of the mates that EIM had provided $330 million units that receive payments actually don’t in economic benefits for customers of par- end up being committed, as they require ticipating utilities to date as of Q1 2018, accommodate current too much advance warning to be useful as well as enabling the use of 66 GWh of in quickly meeting larger than expected electricity from wind and solar that would ramping needs – evening ramps. Instead, Energy Innova- otherwise have been curtailed during the tion Senior Fellow Eric Gimon alleges that first quarter alone. the problem is this system has become a form of subsidy Along with this, CAISO says that EIM for gas generation, including older, inflex- has reduced the need for ramping of in- ible units. state resources, lifting some of the burden market rules from California’s gas fleet. ” Imports: problems and solutions But while EIM continues to expand According to Gimon, it is not the state’s geographically, there are limitations to gas plants which are doing the heavi- the benefits that it can provide. EIM oper- est lifting in terms of providing flexibil- ates in the real-time dispatch and fifteen ity, but instead its imports of power. This minute markets, and is thus limited to

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of inflexible bilateral contracts between the state’s “big three” investor-owned Turbines at the 1,547 MW Alta Wind Energy Center in Kern County, Photo: Z22Photo: utilities – Pacific Gas and Electric Com- California. Increasing levels of wind and solar curtailment demonstrate pany, Southern California Edison, and the difficulties California is experiencing integrating high levels of intermittent renewable energy. San Diego Gas & Electric Company – and out-of-state generators. Even CAISO alluded to this problem, noting that “there are some contractual-based imports that do schedule and do not provide the ability to reduce them.” Unfortunately, it has been impossible to find out who these contracts are signed by, under what terms, or for what resources, as the contracts are deemed proprietary business information. Advocates further note that the California Public Utilities Commission, which approves these contracts, has declined to provide meaning- ful aggregate data. The closest that pv magazine was able to get is an estimate in a 2017 report by Energy Innovation which suggests that “roughly half of CAISO’s power imports are on fixed schedules and do not participate in economic dispatch” – which in turn cites a CAISO report from 2010.

Market issues The most immediate problems that Cal- addressing the difference between day- ifornia is facing in terms of its ability to ahead forecasts and actual load. make its electricity system more flexible, This means that EIM has no bearing in order to make use of more wind and on the much larger volume of electricity solar, are not due to physics or the char- that is traded via the day-ahead market. acteristics of these resources. And here is where the problems lie. Even There is ample flexible capacity, both with EIM, California still shows a net vol- inside and outside of California, to ume of imported electricity during hours accommodate current and near-term of peak solar generation, while it curtails future ramping needs. The problem is solar and wind. market rules. Every expert stated that the optimal If California’s big three utilities are function of California’s import-export interfering with the ability to integrate balance is being hindered by a number more renewables by signing inflexible

Electricity sources on the California ISO grid, May 26 Utility-scale solar Wind Large hydro Nuclear Fossil Other Imports 10,000 MW 10,000 MW 9,000 MW 9,000 MW 8,000 MW 8,000 MW 7,000 MW 7,000 MW 6,000 MW 6,000 MW 5,000 MW 5,000 MW 4,000 MW 4,000 MW 3,000 MW 3,000 MW 2,000 MW 2,000 MW 1,000 MW 1,000 MW 0 MW 0 MW

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time of day Source: CAISO

38 07 / 2018 | www.pv-magazine.com applications & installations

contracts, it is because they are allowed tricity from renewable energy resources to. The same report by Energy Innova- in other Western states may have to cross tion notes that New York’s grid operator several grid boundaries to get to CAISO requires all units to submit offer curves. or other markets, resulting in the “pancak- The firm has issued a clear recommen- ing” of transmission charges. dation: “To address the flexibility and This is to assume that such a resource grid operation challenges created by self- has access to transmission at all, given that scheduling, grid managers should require transmission access is often limited by all resources, including variable gener- resources with a mandate to run – includ- ators and imports, to participate in eco- ing the same inflexible contracts that are nomic dispatch unless the resource has a already a problem. verifiable physical incapability of adjust- ing output.” Regionalization This is far from the only area where cur- There is one solution which advocates say rent structures are leading to inflexibility. would address the limitations of the EIM, According to Utility Dive author Herman transmission access, and pancaked trans- Trabish, current market rules prevent mission charges, as well as inflexible bilat- out-of-state hydro resources from pro- eral contracts: the creation of a regional viding flexibility, but this could be solved grid operator in the Western United by requiring these resources to bid into States, to balance supply and demand the day-ahead market. This would give across multiple states through a whole- them time to adjust flows so as to mini- sale market. mize impacts to wildlife. NRDC’s Carl Zichella argues that Another area that has been identified there are “world-class renewable energy as a problem is transmission access and resources around the West,” that can- costs. Carl Zichella, the Director of West- not currently be utilized due to the “Bal- ern Transmission for Natural Resources kanized system.” He further states that Defense Council (NRDC), notes that elec- the long-term contracts which are caus-

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ing problems would likely be phased out storage, a resource that California is under such a system. “Whenever you already beginning to deploy on a mass have a regional transmission organization scale. (RTO), long-term contracts get phased The capacities needed here are not insig- out as quickly as possible.” nificant. CAISO estimates that the state This concept has been endorsed not currently has 140 MW of energy storage, only by NRDC and the majority of other but would need “hundreds to thousands clean energy advocates but by also CAISO, of megawatts” for this to be an effective even though a regional grid would mean alternative to other measures. Batteries are that the organization would be dissolved. also a more expensive option than creat- However, not everyone agrees. Clean ing a new regional grid operator or chang- Coalition and Sierra Club both oppose ing market rules, but Energy Innovation’s the creation of a regional grid, with Clean Eric Gimon says such deployment would Coalition arguing that California’s flexibil- not be prohibitively expensive. ity needs can be better served with better There is also the potential here for the utilization of local resources. mass rollout of electric vehicles to address grid needs. As has been explored in a pre- Energy storage and EVs vious article (pv magazine 03/2018, p. 76) Even with the current limitations in Cal- if the proper market signals were provided ifornia’s market, all of the advocates spo- to EV charging networks, they could be ken to for this article have noted that flex- incentivized to operate during the day, ibility issues could also be solved with the soaking up solar generation and lessening deployment of large volumes of energy ramping needs. Additionally, fast-charg-

Parker Dam, on the border of California and Arizona, hosts a 120 MW hydro power station. Though the technology is inherently flexible,

California’s hydroelectric fleet has so far shown limited ability to ramp on days of high wind and solar penetration. Santiago Tony Photo:

40 07 / 2018 | www.pv-magazine.com applications & installations

ing stations that include stationary energy But these are incremental and piece- storage could provide both EV charging, meal measures, and may not be enough ramping, and ancillary services. as penetrations of solar and wind increase. As this article was being written, a bill was A solvable problem making its way through the California There are plenty of actions that could be Assembly to clear the way for the state to taken to allow California to integrate more participate in a regional wholesale market. solar and wind into its grid. This will not This has the potential to not only aid in necessarily involve any great cost, as the making better use of solar and wind on the There are solutions most direct, actionable, and inexpensive CAISO grid, but also better use of renew- way to integrate higher levels of renewable energy including hydro throughout “to California’s inte- ables will be to reform the market to the Western United States. Furthermore, allow for the more optimal participation proponents note that this would bring a of resources, both inside and outside the level of transparency to grid operations gration challenges, state. that is currently missing, particularly And while there appears to be strong regarding bilateral contracts. and much higher lev- potential for CAISO to make better use As demonstrated by multiple studies, of in-state resources, this does not address there are solutions to California’s integra- els of solar and wind issues with inflexible imports. tion challenges, and much higher levels of CAISO is currently taking steps towards solar and wind can be deployed and uti- addressing issues with imports and lized effectively. But whether it is through can be deployed exports through an expanded EIM, and the creation of a regional grid in the West ” perhaps more centrally by moving the or other measures, California and the day-ahead market to 15 minute intervals West will need strong, decisive actions to and introducing a new flexibility product reform their electricity markets if they are for this market. to make this a reality. Christian Roselund

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Cryptos and watts – good bedfellows

Last year, blockchain stole the show in the digital assets ecosystem as it showcased myriad ways to revolutionize legacy infrastructure. In 2018, SolarCoin and several peer-to-peer energy trading platforms launched with the help of initial coin offerings are some of the blockchain applications to keep a close eye on.

t is shaping into an exciting year for (US$25 million) from more than 15,000 I blockchain in the energy space. Though investors. The capital injection comprised it has mainly found small-scale applica- roughly AU$5 million in cash and AU$29 tions, the distributed ledger technology million across the Ethereum, Bitcoin, and has demonstrated that it could work as a Litecoin cryptocurrency networks. catalyst for the energy transition. In its token generation paper, the com- Blockchain can be useful in any decen- pany says 30% of the proceeds from tralized structure. In energy, this includes the token sale will be used for purchas- P2P energy trading models, but also trans- ing renewable assets. “These will be pur- actions of incentives and rewards, such as chased as part of our Asset Germination SolarCoin. Events (AGEs) – Power Ledger and plat- The rise of peer-to-peer trading mod- form ‘Application Hosts’ will begin con- A growing els comes on the back of an increasing ducting AGEs, where token holders will number of distributed energy installa- receive priority to become co-owners and “number of tions in a wide range of markets, and ini- beneficiaries of renewable assets,” says tial coin offerings (ICOs) as an important Cameron Drummond of Power Ledger, fundraising method. According to GTM adding that details on the AGEs will be utilities have Research’s report Blockchain for Energy released later this year with the first such 2018, ICOs currently make up 75% of event scheduled for Q3. invested in venture funding in the industry. In addi- This means that holders of digital tion, a growing number of utilities, such tokens will get a stake in real-world assets blockchain as Japan’s Tokyo Electric Power Company that generate income and do not quickly (TEPCO), Germany’s Innogy, and Brit- depreciate in value – a novel mechanism ain’s Centrica, have invested in block- to drive the intrinsic value of a token. startups chain startups. According to GTM Research, P2P ” remains in the focus of most pilots in 2018, Intangible tokens, tangible assets accounting for 59% of planned and com- Australia’s pioneer in P2P energy trading, pleted projects, including those of BTL Power Ledger garnered much attention as Group, Ponton, and LO3, that are looking it entered the Japanese market in partner- to apply blockchain to wholesale energy ship with KEPCO (Kansai Electric Power trading. Company), and the U.S. market with two projects: to enable energy trading between Alternative subsidy buildings at the Northwestern University Things are also shaping up for SolarCoin campus in Evanston, and to manage a (SLR), a blockchain-based digital cur- digital record of carbon credits generated rency designed to incentivize solar energy by use of solar energy in EV charging, in production. partnership with Chicago-based startup In January, Saudi Arabia’s ACWA Power Clean Energy Blockchain Network and in announced that it would be the first util- collaboration with municipal utility Sili- ity-scale generator to join the SolarCoin con Valley Power. ecosystem. In June, power electronics In its token generation event last Octo- giant SMA announced a trial with the ber, which was Australia’s first, Power cryptocurrency, exploring how to inte- Ledger managed to raise AU$34 million grate it into its platform Sunny Portal.

42 07 / 2018 | www.pv-magazine.com applications & installations Photo: Tesla Photo:

Australian energy trading specialist Power Ledger has embarked on several energy blockchain projects, including managing a record of carbon credits “We are working on automating the Unlike the much hyped digital currency generated from charging electric vehicles with solar granting process completely, so the cur- Bitcoin, which in its ‘mining’ process con- electricity. rent number of installations is quite small sumes the same amount of electricity in a and only internal,” says Raimund Thiel, year as a country like Switzerland, Solar- Senior Expert Engineer at SMA, noting Coin is more environmentally friendly. that in the test phase, there will only be PV It is based on a far less energy intensive installations up to 20 kWh. The company proof-of-stake algorithm, designed to use says that further project development will less than 0.001% of the power of Bitcoin depend on various factors. when compared on a similar scale. “Once automation, including a know- Right now, it is difficult to imagine your-customer process (required to verify that SolarCoin will make anyone rich. SolarCoin customers) to be provided by Its value hovered around $0.16 a coin at Hong Kong-based Solarlux, is completed, the end of June. This will, however, rise as we plan to increase the number of instal- the network expands. “In the next 12-18 lations to about 100 or more. This is sup- months, we expect a significant ramp- posed to happen this year,” Thiel says. up. SMA grows our network 20-50 times Designed as a reward system, digi- depending on conversion, and we hope to tal coins are distributed at a rate of one help SMA grow their platform of users,“ SLR per megawatt hour of solar electric- Gogerty says. ity produced. SolarCoin can be exchanged But ambitions are much bigger. In the for other digital assets or currencies. Since next 12-24 months, SolarCoin’s goal is, its introduction in 2014, however, the cur- through partnerships, to put its reward rency’s growth has been slow. “It has taken program in front of more than 1 million longer than we thought,” comments Nick solar installations. Gogerty, cofounder of SolarCoin. “We are confidentially speaking with Overall, SolarCoin foresees issuing 98 some of the world’s largest traditional billion tokens over the next 40 years – energy companies, governments, minis- enough to reward 97,500 TWh of solar tries, solar producers, monitoring plat- generation. “It takes time to explain such a forms, and inverter manufacturers,” says novel concept to organizations, but we are Gogerty, adding that in the longer term of nearing a huge inflection point. We think four to six years, the network’s target is 100% the value of our network will grow way of solar energy installations globally to be over 10 times,” Gogerty tells pv magazine. receiving SolarCoin. Marija Djordjevic

www.pv-magazine.com | 07 / 2018 43 applications & installations Immunizing Latin American PV

While Latin America’s PV markets are not immune from the most common quality issues related to PV products and projects, extensive track records or statistics on cases of poor quality are difficult to come by. A few international and local entities operating from Chile to Mexico are currently dealing with product certification, international standards, and research on specific cases. This, however, is not enough to improve conditions for more quality in all markets.

o help Latin American solar mar- Product certification T kets to reduce the import or manu- In Mexico, a certification scheme for pan- facturing of poor quality products, build- els and inverters has been put in place ing awareness and disseminating accurate by the government-run agency Electric information on quality among investors, Energy Savings Trust Fund (FIDE). This developers, installers, and product distrib- grants a quality certificate to multi c-Si utors will be key in the years to come. modules with an efficiency of at least 14.5% and monocrystalline panels with an effi- The illusion of compulsory quality ciency equal to or exceeding 15.5%, which Since its inception at the end of the past must be verified under standard test con- decade, the Latin American solar market ditions. The front of the modules must be as a whole was, in theory, compelled to made of tempered glass with low iron con- offer more guarantees in terms of qual- tent, while the rear must be multi-layer ity of PV components and projects, since polymer with high mechanical resistance, no generous incentive scheme similar to according to FIDE’s rules. Futhermore, a All of the Latin those seen in Europe, Asia, and North panel’s frame must be manufactured with America has ever been granted any- anodized aluminum and have protection “ where in the region. With no high FITs, diodes. As for inverters, these must have a American PV rebates, or conspicuous fiscal breaks, auc- minimum efficiency of 90%, a power fac- tions characterized by fierce competition, tor exceeding 90%, and harmonic distor- markets have had and challenging financing conditions, tion lower than 5%. Despite good inten- PV projects of all types theoretically had tions, it is clear that a similar scheme is to go through the to be well designed, and to rely on high able to provide only a minimum level of performing components in order to be quality, and that more strict parameters bankable. should be adopted, at least by those who learning process All of the Latin American PV markets buy modules and inverters. ” have had to go through the learning pro- In Brazil, the National Institute of cess typical of emerging technologies, Metrology, Standardization and Indus- which is inevitably a source of techni- trial Quality (INMETRO) is currently the cal mistakes, financial miscalculations, only entity releasing quality certificates for and issues with the quality of products. solar modules and inverters, but to a very Despite the experience of the Spanish, limited extent. In 2016, it also authorized Italian, and U.S. developers that brought several laboratories of TÜV Rheinland in solar to Chile, Mexico, and Brazil, which Europe, Asia, and North America to test were the first markets to emerge, it is likely modules and inverters manufactured or that mistakes were made and modules imported to Brazil in 2016. and inverters that are not up to the task Another quality scheme in Brazil is the installed in many distributed generation Selo Solar, which was developed by local (DG) and utility-scale projects from the research center Instituto para o Desen- Tierra del Fuego in southern Argentina to volvimento de Energias Alternativas para the U.S.-Mexico border. a América Latina (Ideal) and the Cham-

44 07 / 2018 | www.pv-magazine.com applications & installations

Photo: Samuca Melo/PR

ber of Electric Energy Commercialization (CCEE) in cooperation with the German Corporation for International Cooper- ation (GIZ) and German Development Bank KfW. The scheme, however, is not aimed at ensuring the quality of the project’s components, but it is limited to cer- tifying that enterprises, public and private PV installation on the rooftop of Brazil’s Ministry institutions, and owners of buildings con- of Mines and Energy in the capital Brasilia. Several experts have pointed out that Latin America’s sume a minimum annual value of solar humid, and sub-humid climates in the distributed generation segment is particularly in need electricity from DG solar systems. south-southeast, and cold or temperate of quality assurance processes. In both countries, there is still a lot climates in mountainous regions. The more to do to reach international qual- biggest risks for quality come from desert ity standards in terms of product certifi- areas, due to high UV radiation, or very cation. But even if these standards were humid regions, which represent both a achieved, a good certification scheme by danger for potential-induced degradation itself is not enough to ensure quality. (PID), as well as delamination and bub- bling of the EVA, Santiago adds. Certification is not enough Quality standards and a more skilled According to Nesly Santiago, who is labor force may improve the frame for responsible for TÜV Rheinland’s solar quality in all Latin American markets, business development in Mexico, buy- especially in the DG segment. According ing certified PV components may not be to Santiago, the construction of big solar enough to guarantee quality. Choosing parks offers more guarantees, as their suppliers capable of making good esti- project finance scheme requires banks to mates and good calculations with experi- conduct technical due diligence (TDD), enced installers may be much more deci- which helps investors ensure the bankabil- sive. “In a new market there are risks, ity of their projects. on the one hand, associated with the import of products since it depends on More complex tests required import control schemes and, on the other Gilberto Figueiredo is a solar researcher at hand, on companies with little experi- the University of São Paulo, which along ence in engineering and installation,” she with the University of Santa Catarina is explains. Although Mexican public enti- one of the most important Brazilian aca- ties have developed their own certifica- demic entities developing initiatives for tion schemes in compliance with interna- more quality in the Brazilian PV sector. tional IEC standards, these rules should He claims that, regarding the construction be complemented with verification units of big solar parks, it is the way energy is tasked to check if the installations are being commercialized which causes major really deploying certified products, San- concerns for investors. tiago adds. Performance issues, according to “From the perspective of components, Figueiredo, are mostly related to the qual- data show that modules represent 19% of ity of installations and products, espe- the problems and inverters 13%, while cially in DG. “International standards bad engineering has an average impact of demand cycled and extreme conditions 25%,” she clarifies. testing to assess the capacity of the prod- Mexico offers a wide variety of climate uct to withstand the effects of tempera- conditions for PV installations: warm, ture changes and humidity,” he states.

www.pv-magazine.com | 07 / 2018 45 applications & installations

ditions may affect a project,” Martínez stresses. “It is a slow and expensive process, but it works out pretty well.” Auctions based on the sale of kilowatt Photo: Solarpack Photo: hours instead of installed capacity, such as those held by the Chilean government, are also a good incentive for quality, Mar- tínez adds. “What is offered is the purchase of energy at the lowest price, with which the issue of the quality of components, installation, and operation in the first instance become a topic of the future service operator.” It is when a plant begins commercial operation, however, that quality issues start to pop up. This phase, according to Martínez, requires provision of Utility-scale project in Chile’s Atacama desert. The “major infrastructure” in terms of main- harsh conditions in desert regions such as this have tenance and cleaning specialists, appro- raised several issues of component quality and durability for Latin American PV markets. “This long-term ‘simulation’ has bound- priate SCADA systems and supervision, ary conditions which were tested several and operational management. “I believe times until it reaches an actual mean- that this is where the quality of the PV ing to correlate its results with findings plants will show the problems of lack of from field measurements,” Figueiredo planning and quality of technologies. In explains. The researcher has conducted, the Atacama Desert of Northern Chile or among others, a study on the early deg- other remote areas of Latin America, as an radation of PV panels mounted at a 165 example, water, which is not even avail- kW array located at the Institute of Energy able for local populations, has very high and Environment (IEE) of the University costs.” of São Paulo. According to him, periodic The CEO of Brazilian developer Órigo measurement in the first years of opera- Energia, Surya Mendonça, points out one tion such as visual inspection, IR images, more issue relating to the construction and I-V curves on field, along with the of big solar parks in Brazil: topography. necessary warranty conditions, should be According to him, without proper under- taken into account in all projects. standing of the soil and the type of land, it is possible that fixed structures used Auctions as an antidote in solar parks sink into the ground, and Xavier Martínez, a project manager who the whole project must be rebuilt. “Each has been active for several developers 5 MW solar park takes an average of three in Chile and Bolivia, has described the months to complete, so an error in a proj- kind of precautions that should be taken ect of this size would cause significant It is when a plant to ensure quality in the development of negative impacts to its owner,” he asserts. big solar plants across Latin America. “ According to Martínez, a pre-develop- Issues with distributed generation begins commercial ment phase is key to prevent issues that That residential and C&I projects may be commonly arise during the construction a breeding ground for more quality issues operation that phase. A government auction recently has been put forth by Ignacio Rodriguez held in Bolivia, for example, included a Landeta, a Chilean expert in clean ener- quality issues pre-design phase (PreProyecto), in which gies and Vice President of local solar asso- possible quality issues are taken into ciation Acesol. Landeta says that DG is account, a final design phase (Proyecto growing exponentially in Chile, especially start to pop up final), and tendering and construction because of financing schemes such as ” phase. PPA contracts, which depend on annual “This kind of structure, of course, raises energy yields. As a result, quality issues the project costs for the government, but have an important role during installa- on the other hand it also ensures that tion and operation. He also believes that, projects are developed in a way to pre- although the DG sector takes common vent future failure or degradation of PV quality issues into consideration, it still components, or bad assessments on how lacks more sophisticated processes and different climate and environmental con- standardized quality certificates which

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can ensure high levels of performance scale segments. He also stresses the lack of over a long period of time. “This includes a proven track record for quality cases in topics such as handling during installa- Brazil, while underlying the right dimen- tion, rooftop mounting systems, string sioning of the installation as a main source optimization and dimensions, as well as of quality issues. strong cost reductions because of highly competitive pricing,” elaborates Rodri- Preparing the ground guez Landeta. Despite its size and the diversification of He also identifies misconfiguration of its climates and markets, across all Latin inverters, incorrect string dimension- America there is an acute need to improve ing, and fuse failure as common issues, as the quality of PV components and proj- well as a low percentage of inverter faults. ects. Building awareness and disseminat- Although some companies in Chile are ing accurate information among investors, currently opting for internal quality cer- developers, installers, and product distrib- tification, Acesol is now preparing a sec- utors is the main task of all interested par- tor-wide standard, and also national reg- ties for the years to come. This may be bet- ulation for mandatory quality standards. ter achieved if transnational initiatives are Currently, the only liable track record in implemented, big databases are created, Chile is a guide prepared by the Minis- and cooperation among local and inter- try of Energy which takes into account national organizations is strengthened. experiences from the Public Solar Roof- Although it may take years to happen, top Program, an initiative that has so far and changes may be seen at the national produced only a limited level of growth. level only, the quality of PV under the That distributed generation is more conditions of the Latin American mar- prone to failures is also confirmed by kets can only improve. The extent of this, Marcio Takata, CEO of Brazilian consul- however, will be determined only by how tancy Greener, which specializes in mar- much all market players feel involved in ket analysis in both the DG and large- the quality battle. Emiliano Bellini

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Floating PV creates ripples in Southeast Asia

Floating PV systems have emerged in Southeast Asia and China in particular. Densely populated regions with high land prices and a comparatively high availability of unused water bodies made this solution an attractive option for many PV developers in both regions. At Intersolar Europe in Munich pv magazine met with a big fish in floating PV to talk about this new market.

How much floating PV has Sungrow achieved or installed to date? Our biggest market so far is in China. We have already installed 400 MW of floating PV there.

Photo: pv magazine pv Photo: And internationally? Recently, we focused on the Southeast Asian markets, with several installed gigawatts in some countries. Additionally, we are also running test phases in both Japan and South Korea.

Does that make Sungrow one of the world’s biggest suppliers of floating PV systems? Yes, we certainly are among the worlds biggest suppliers of floating PV systems.

Who is number one at the moment then? Nobody can say. The market is constantly changing – especially the PV market. Each quarter this company is number one, the other month it is a different one.

Why has Sungrow, as a power electronics supplier, made the decision to explore the possibilities of floating PV? The motivation is that many PV projects in China have one problem: Land to build on is very expensive. With the constant expansion of ground-mounted PV systems, land resources are becoming more and more limited. At the same time, we see that there are idle water bodies from, for example, discontinued coal mining operations, which have not yet been developed. Sungrow has more than 20 years of experience in the PV industry giving us the capability of developing new technologies. Floating PV is an effective extension to ground PV. As a result, developing floating PV systems is not only the general trend, but also the inevitable choice.

That is in Eastern China in particular? Yes. In Western China, the grid capacity is limited, even though they have lots of available land. In Eastern China, power supply is in shortage and ground to build on is very expensive – in Shanghai and Jiangsu, for example, you can only have rooftop systems because of that. So in coastal areas there is a lot of water – but we can’t do anything with that, just fish- ing. It is a waste. Therefore, we do floating PV. And we have many state-owned enterprises that want to invest in floating PV, so we supply floating products.

What are the types of bodies of water that can be used for floating PV installations? Daniel Li, Overseas Sales Director Floating PV at Our floating bodies are environmentally friendly and non-polluting in terms of water Sungrow quality. Floating systems can be applied in diverse situations, such as rehabilitation areas [flooded open-cut mines], lakes, small-scale idle waters, culture ponds, reservoirs, acti- vated sludge tanks, offshore areas, and others.

48 07 / 2018 | www.pv-magazine.com industry & suppliers

For hydroelectric dams it is perfect, because you already have the grid there, right? Yes, that is right. By building floating PV systems on catchment lakes of hydroelectric dams, investment costs can be reduced, as well as a quick and easy grid-connection achieved.

I understand Sungrow has a unique warranty for its floating PV system. How does it work? It’s essentially 25 years. But we also have a production guarantee of five years. However, we intend to extend that, but extension does incur some costs.

Does floating PV need special components like connectors and cables because of the water exposure? The connectors we are using have a protection level IP67 certificate, so all cables we use are waterproof.

Are the inverters floating as well? We can choose to put the inverter above the water or on the ground, depending on the site layout. If the inverter is going to float on the water, we have designed a special inverter which is placed on a bateau. I believe Are there any advantages regarding evaporation – for example, water reservoirs? “ Certainly, yes. Floating PV systems can effectively reduce water evaporation and restrain Southeast Asia is the growth of phycophyta. highly conducive Where do you think are the biggest markets for this technology? So far, I believe Southeast Asia is highly conducive for this type of application, mainly for this because there is an abundance of water. ” Will the technology meet its limits when being confronted with saltwater? No, we can do that. The material we use is saltwater corrosion resistant. The material is a compound which comprises of, among other things, an HMW weather resistant additive, that makes the plastic seawater resistant. We improve the material’s ability to deal with environmental stress through an alloy type blending modification, which aims to guarantee the long-term use of floating bodies in the seat water. We have performed a lot of testing on this. Also, we have a TÜV certificate. R&D drives all of this development. Per year we spend 3% of our revenues on R&D. Interview by Marian Willuhn

Sungrow floating PV farm located in China Photo: Sungrow Photo:

www.pv-magazine.com | 07 / 2018 49 industry & suppliers CIGS is back, back again

Stability and reliability, partial transparency, monolithic deposition onto flexible substrates, aesthetically pleasing appearance, applicability in roll-to-roll production, superior temperature coefficient, potential in tandem applications, and suitability for BIPV: The list of advantages that CIGS technology offers is well established and lengthy.

s the global production capacity and Solar Frontier’s latest ‘champion’ mod- A output of crystalline silicon (c-Si) ule, rolling off its production lines at its PV manufacturers has skyrocketed, CIGS 900 MW Kunitomi facility in Miyazaki, manufacturing has crept up only slowly. has achieved an efficiency of 16.8% – with Concurrently, the list of failed companies an output of 193 W. The company’s goal attempting to commercialize the technol- is a 20% module at an output of 220 W ogy has grown. by 2020. This reality was certainly not news to Speaking at IW-CIGSTech 9, Hannes The 20% and the attendees of the IW-CIGSTech 9 con- Schneider, the Technical Director at ference, hosted at the Center for Solar Solar Frontier Europe noted that the com- “ Energy and Hydrogen Research Baden- pany is “very active” in developing BIPV 220 W target is Württemberg (ZSW) last month in Stutt- applications, including flexible modules gart. The attendees themselves turned out – expected to be introduced outside of common to a number at the 2018 CIGSTech forum in record Japan at the end of this year. numbers, around 150, reflecting that all is The 20% and 220 W target is com- of CIGS veterans far from lost when it comes to CIGS tech- mon to a number of CIGS veterans. At nology itself. the June forum, Solibro set out its path- ” way “towards a 20% module.” The Swed- Pioneer at scale ish CIGS pioneer has legacy production Copper indium gallium selenide (CIGS) in Germany and 1.2 GW of manufac- solar cells and modules have a long his- turing under development in China – tory. Indeed, the world’s largest CIGS through its parent Hanergy. Olle Lun- producer Solar Frontier, through its par- dberg, VP Research & Development at ent Showa Shell, has been working on Solibro Research, pointed to the compa- CIGS since the 1970s. The Japanese com- ny’s 18.7% module efficiency, which cur- pany has since shipped 5.5 GW of CIGS rently tops that of thin film giant First modules and currently claims to hold a Solar – at 18.6%. Lundberg noted a num- swag of world records for CIGS cell, aper- ber of “production scalable” innovations ture, mini-module, and module efficiency. that led to the 18.7% module record, and Photo: ZSW/Claudia Brusdeylins 22.2% cell efficiency milestones – the latter on a 1 cm2 cell.

CdTe and CIGS head-to-head The comparison with cadmium telluride (CdTe) thin film producer First Solar is a striking one. In June, First Solar broke ground at a massive new factory at Lake Township Ohio, where it will produce 1.2 GW of its large-format Series 6 thin film modules. This fab alone, which will sit alongside its 600 MW Perrysburg, Ohio fab that was itself the first to commence upgrade to the larger Series 6 format. Including its U.S. manufacturing, the expansion of which has been aided by solar import duties imposed by the Trump The presentation from MiaSolé’s Dmitry Poplavskyy spurred discussion on sodium-poor, copper-rich Administration, First Solar is currently crystal grains – an inhibitor to efficiency gains as crystal size increases. targeting a manufacturing capacity of

50 07 / 2018 | www.pv-magazine.com industry & suppliers Photo: ZSW/Claudia Brusdeylins Photo:

A new investment cycle in Chinese production capacity has brought increased interest in CIGS technology – as was demonstrated at IW-CIGSTech 9. 7.6 GW of by the end of 2020 – although mann, who has also been co-chair of IW- due to its upgrade activities has a 2018 out- CIGSTech since 2009. “It’s true that you put of 2.6 GW. It is instructive that on its can only see it if you reap the economies- new Series 6 module platform, First Solar of-scale benefits. This is the challenge targets expansion intervals of 600 MW and the fundamental reason why CIGS – with the proposed new facilities in the could be successful if demonstrated at the U.S., Vietnam, and Malaysia all sized at gigawatt-level.” 1.2 GW – or 2 × 600 MW. CNBM is also not alone in its gigawatt The company reports that 90% of its 2 plans for CIGS in China. After bringing m × 1.23 m Series 6 modules that are cur- Shanghai Electric onboard as a major rently rolling off production lines – at least investor in 2016, Manz attracted a major those that have completed the upgrade to Chinese player in coal-generation giant the larger format – have a power output Shenhua Group as a purchaser of its beyond 400 W. In its Q2 2018 earnings CIGSfab. A tri-party joint venture struc- call, the company reported: “Over the next ture was agreed to by the three parties, to 90 days, we see a clear path to an average pursue equipment production in China, production band of 415 W and a top band R&D efforts both in China and Germany, of 425 W. Furthermore, the early module and an initial 306 MW production in wattage gives us confidence in our long- Chongqing. Manz’s update last month was term road map which takes us beyond that “everything is progressing according 425 W per module.” to plan,” according to Hannes Reinhardt, Vice President of the Solar Business unit Manufacturing plans for CIGS at Manz. He goes on: “3,500 tons of high- This manufacturing output and capac- tech equipment are making their way to ity plan far exceed anything on the CIGS the Yangtze – an amount equal to about horizon. Although the much-heralded 300 containers.” Chinese expansion of CIGS manufacturing points to that potentially changing – if, that is, the plans are realized. In First Solar >7 GW CdTe manufacturing roadmap Source: First Solar December 2017, Avancis announced that Malaysia S4 Factory 1: 1 GW nameplate the first module had been produced from its 300 MW line at its production facility Malaysia S4 Factory 2: 1 GW nameplate Malaysia S6 Factory 2 in Bengbu, Anhui Province, China. Avan- cis was acquired by state-owned Chinese Ohio S4 Factory: 600 MW nameplate building materials giant CNBM in 2014. Malaysia S6 Factory 1: 1.2 GW nameplate CNBM has announced its intention to expand the Bengbu plant to 1.5 GW over Vietnam S6 Factory 1: 1.2 GW nameplate time, part of an ambitious plan to realize Vietnam S6 Factory 2: 1.2 GW nameplate 5 GW of CIGS production in China. “There are intrinsic advantages of thin Ohio S6 Factory 2: 1.2 GW nameplate film, that is: less material and energy Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 usage in production,” explains Helmoltz- 2017 2018 2019 2020 Zentrum Berlin’s (HZB’s) Rutger Schlat-

www.pv-magazine.com | 07 / 2018 51 industry & suppliers

“If you look at the new mother companies of Manz and Avancis ventures [Shanghai Electric, Shenhua, and CNBM respectively], they are really big compa- Technological nies,” observes HZB’s Schlatmann. “If these advantages can be reaped, in terms

“ of efficiency and in production – bill of ZSW/Claudia Brusdeylins Photo: development of CIGS materials, the equipment uptime – as with c-Si and CdTe, then the question is, why has continued as its should it not be possible for CIGS to be a success?” rivals have enjoyed Technological progress There is no doubt technological develop- the benefits of GW- ment of CIGS has continued as its c-Si and CdTe rivals have enjoyed the benefits “The intrinsic potential is there,” says HZB’s scale production of gigawatt-scale production. Indeed, the Rutger Schlatmann ” continuing progress from both research institutes, the companies that have building understanding as to how the dif- received the large Chinese orders, and ferent module color variants impact mod- those that have seen truncated develop- ule power output, and also the long-term ment, as a result of ownership by Hanergy stability of the color itself – an important has been notable. consideration for architects and building Trading of Hanergy shares on the Hong designers. Kong Stock Exchange has been halted A comprehensive list of technological since its dramatic loss of market capital- innovations global CIGS researchers are ization in 2016. It appears that even in the investigating and deploying was presented face of adversity innovation continues in at IW-CIGSTech 9. CIGS production and related technology. These include: alkali post-deposition Both Avancis and Manz representatives treatment, potentially increasing carrier presented at IW-CIGSTech9, demonstrat- lifetime; cadmium-free CIGS production, ing growing mastery of CIGS technology for an eco-friendly PV module and a key on both the module design and produc- differentiator to CdTe; metal grid con- tion equipment levels, and in new areas tacting, delivering increased cell current; such as colored modules for BIPV applica- sulfurization as a pre-treatment, which tions. “Aesthetic quality is becoming more is showing promise yet is not fully opti- and more important,” noted Thomas Dal- mized; and progress in reducing second- ibor, Senior Manager Process Develop- ary phase crystal formation in the CIGS ment at Avancis. semiconductor, which has been shown to The company’s PowerMax Skala mod- reduce cell open circuit voltage. ules certainly make for a striking addition One of the potentially disruptive tech- to the PV landscape, and Dalibor elabo- nologies, being developed by CIGS rated on the company’s ongoing work in researchers in a number of labs globally, is CIGS deposition on polymer substrates – potentially opening the way for low-cost, First Solar’s large format Series 6 module could flexible module production. demonstrate both the effectiveness and “The technology is developing both for profitability of thin film at scale. [crystalline] silicon PV and CIGS,” notes Photo: First Solar First Photo: HZB’s Schlatmann. “Whether we will see if these really big companies, Shenhua and CNBM, can really get production geared up and at a reasonable cost level through vertical integration is an open question. As a research institution, it is difficult to quantify the bill of materials and the investment cost [in large scale production]. What is in our sights is up to 17-20% on a module level.” Jonathan Gifford

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With production and capacity figures provided by industry analyst IHS Markit, pv magazine gives a rundown of the top 10 crystalline silicon module manufacturers based on 2017 production data, followed by a look at the market forces and technology trends that have shaped the supply landscape.

ecord-breaking years seem to have The driving force R become business as usual in the China, of course, is the leading player here PV industry, and 2017 was no excep- both in terms of supply and demand. “In tion with global installations for the 2017 China reached its peak in global mar- Demand for year brushing the 100 GW mark. ket share accounting for around 53%,” Demand for new installations surpassed explains Karl Melkonyan, Senior Ana- “ the expectations of most analysts, mean- lyst, Solar Demand at IHS Markit. “Mod- new installations ing supply conditions were tight across ule manufacturers continued expansions the supply chain, with prices even rising in the country, bringing online nearly surpassed the at some points during the year. 10 GW of additional capacity during 2017.” These conditions played into the hands The 2017 installation boom in China led expectations of most of the biggest silicon module manufac- to supply shortages further up the supply turers, who after being rocked by over- chain, which in turn kept prices stable and supply conditions in 2016, were able to capacities expanding. “In 2017, demand analysts, meaning take advantage of stable prices and strong in China was much higher than module demand to improve their position, and manufacturers anticipated, so there were a supply conditions plan major capacity expansions. lot of capacity additions announced across “The module market in 2017 worked the entire supply chain,” explains indepen- were tight to suppliers’ advantage,” comments Jade dent analyst Corrine Lin. “Chinese manu- Jones, Senior Analyst, Solar Markets at facturers were not ready for this boom. In ” GTM Research. “Strong demand in the Q2 and Q3 there were shortages further China region, as well as Southeast Asian up the supply chain in polysilicon, wafer, supply tightness due to the Section 201 and other module materials.” threat [from the U.S.], allowed suppliers Chinese installations were led by a rush to capture healthy margins.” to meet the June 30 cut-off date to receive the 2017 FIT rates. Unlike the previous year, when the same cut-off date caused a drop off in demand, and a major oversupply situation, 2017 installations continued into the second half of the year.

Photo: Trina Trina Solar Photo: China’s distributed generation segment also received a major kick-start in 2017, growing 255% over the previous year to install around 15 GW in the first three quarters alone, according to figures from Asia Europe Clean Energy Associates (AECEA). Despite the tight supply conditions, China’s manufacturers were able to keep pace with this increase in demand, “Dur- ing Q1 to Q3 2017, China achieved excep- tionally high growth rates in terms of production output along its upstream supply chain. “According to the China PV Industry Association, module output increased 43%,” states AECEA’s Septem- ber 2017 briefing paper. “[This suggests] Trina Solar maintained its spot as the second largest module producer behind JinkoSolar. The that approximately 80% of domestic mod- company produced just under 6.5 GW of modules in 2017. ule output stays within China.”

54 07 / 2018 | www.pv-magazine.com industry & suppliers

Top 10 solar module manufacturers in 2017

Manufacturer Year Megawatts 2,000 4,000 6,000 8,000 10,000 2018 10,500 2017 6,555 1. JinkoSolar 7,680 5,276 2016 6,500

2018 7,900 2017 6,405 2. Trina Solar 6,700 5,188 2016 6,200

USA 2018 9,910 6,031 Though demand from China is the biggest 3. Canadian 2017 8,110 Solar factor in global module supply-demand 4,282 2016 stability, major events in other markets 6,170 still played a significant role. The threat 2018 8,400 of tariffs served to shape demand in the 5,603 4. Hanwha 2017 6,400 U.S. over the year. Q CELLS 4,211 Since January 2018, a 30% tariff has been 2016 5,800 placed on crystalline silicon PV imports 2018 7,000 to the U.S., with a 2.5 GW exemption for 2017 5,407 cell imports. Anticipating this announce- 5. JA Solar 7,000 4,509 ment, project developers began hoarding 2016 5,650 modules in the second half of 2017, fur- 2018 7,500 ther compounding the already tight sup- 6. LONGi Green 2017 4,801 ply conditions. Energy 6,500 This exemption for cell imports has Technology 1,853 2016 2,500 already spurred the announcement of several new module facilities in the U.S., and 2018 5,500 4,605 still leaves room for more. “The current 7. GCLSI 2017 5,300 (incl. Chaori) 2.5 GW quota in place is enough for the 3,483 2016 current domestic suppliers without inter- 3,750 nal cell capacity,” explains Jade Jones. “It 2018 3,429 also leaves room for U.S. producers to 3,429 2017 4,200 expand module capacity or for foreign 8. Risen Energy 1,607 firms to build small module fabs in the 2016 2,200 next four years, with imported cells typi- 2018 4,000 cally around 500 MW per year.” 3,428 9. Yingli Green 2017 4,000 The ranking positions are based on Hanwha Q Cells recently announced Energy 2,078 2017 production data. plans for a 1.6 GW module facility in 2016 4,000 Estimated capacity at year’s end Georgia, to open in 2019 – which would Capacity be the largest such facility in the U.S. Ear- 2018 2,800 Production 2,301 Capacity and production data based lier in the year, JinkoSolar announced that 10. Talesun 2017 2,800 Solar on company announcements and IHS it would be opening a new 400 MW fac- 1,486 estimation. Source: IHS Markit 2016 2,500 tory in Jacksonville, Florida; LG Electron- ics has plans for a 500 MW high efficiency line in Alabama; and several expansions Jones also points out that the recent have been announced by domestic U.S. acquisition of SolarWorld USA by Sun- producers including Mission Solar and Power likely would not have happened SolarTech Universal. pv magazine esti- without the tariff announcement, and mates that around 4 GW of new module that, although module prices in 2018 are capacity has been announced for the U.S. tumbling in the wake of China’s May 31 since January. announcement, trade tariffs will prevent “The 201 tariffs have had a couple of the U.S. seeing such low prices. “The Sec- main effects: There has been more invest- tion 201 tariffs have given a lifeline to ment in U.S. manufacturing, mostly by SolarWorld USA, one of the Section 201 foreign companies. Most of this invest- petitioners. The company was acquired by ment wouldn’t have been possible with- SunPower, conveniently after SolarWorld out the threat or the imposition of tariffs,” backed SunPower’s IBC product exemp- says Jones. tion from 201 tariffs. They also place a fun-

www.pv-magazine.com | 07 / 2018 55 industry & suppliers

Photo: Winaico

Taiwan’s module manufacturing industry has struggled to keep pace with price reductions in mainland China. Now, most manufacturers on the island are looking to serve local demand, which damental floor on how low module prices up over the coming years. This will most though strong is marred by a lack of suitable land. can fall in the U.S. Module prices will fall likely be led by the established Chinese in response to industry oversupply, but manufacturers spreading their activities prices in the U.S. will continue to be the further afield. highest in the world.” “India’s domestic production capacity is not enough, and the market has had prob- India lems with trade war,” says Corrine Lin. “I Though now firmly established as a solar think building a module manufacturing world leader, and set to overtake the U.S. group is important. Chinese manufactur- to become the world’s second-largest mar- ers will want to open factories, or start fur- ket in the near future – IHS Markit fore- ther cooperation with local producers.” casts India to be responsible for 11% of Indian manufacturer Adani announced solar demand by 2021, from its current plans to increase its capacity from 1.2 to level of 8% – India has remained well 2 GW earlier this year, and leading mono behind the East Asia region in terms of c-Si producer Longi announced plans in manufacturing. early 2018 for 2 GW of new manufactur- “There was some capacity growth in ing capacity in India. India, from small additions (e.g. BHEL’s “Longi is making modest capacity 200 MW cell and module ramp) to larger investments in select markets to hedge gigawatt expansions like that of Adani,” against the risks of trade protectionism, continues Jade Jones. “While many while remaining focused on the Chi- major Chinese suppliers have previously nese domestic market,” stated Wenxue Li, expressed interest in expanding manufac- President of Longi Solar, announcing the turing in the region, most held off in 2017.” plan for production in India. “According Given its huge appetite for solar, and to preliminary estimates, the new expan- the recent trade issues that have slowed its sion will support $380 million in annual growth somewhat, most analysts expect sales and roughly $19 million in net profit Indian module manufacturing to ramp every year.”

56 07 / 2018 | www.pv-magazine.com industry & suppliers

Taiwan for the time being, Yingli’s 2017 finan- Though they still have some advantages in cial reporting came with a notice stating, terms of their reputation for quality, Tai- “Given the Company’s financial position, wan’s cell and module makers have strug- substantial doubt exists as to the Compa- gled to keep up with the price reductions ny’s ability to continue as a going concern.” achieved over in mainland China. Previously a major exporter of high effi- Technology trends ciency cells, Taiwanese companies have Having entered the ranking in ninth place had to change strategy in order to survive. last year, Longi Solar was able to climb all Economies of scale This change is evidenced in the upcoming the way to fifth. As the company only pro- merger between three of Taiwan’s largest duces mono c-Si products, this could be “ PV manufacturers, Neo Solar Power, Gin- seen as a sign of market preference for have allowed mono tech, and Solartech, to form a new com- the technology, which has quickly gained pany under the name United Renewable market share in recent years. Mono c-Si is c-Si manufacturers to Energy Company (UREC). strongly preferred in China’s Top Runner This new company, along with other Program, and economies of scale achieved close the price gap Taiwanese manufacturers, is expected to through this have allowed mono manu- focus on its own domestic market, where facturers to close the price gap. ” significant solar ambitions combined with “Mono’s market share will approach a lack of suitable land for project develop- 50% this year,” says Corrine Lin. “But ment likely mean high efficiency modules since the price gap between multi and can be sold at higher prices. “The estab- mono is still too large, some non-Chinese lishment of UREC will allow Taiwan’s demand has returned to mono c-Si mod- solar cell industry to get rid of its role ules recently.” as foundries and further urge the green Also on the technology front in 2017, energy industry to root and grow strongly manufacturers focused on reducing cell- in Taiwan,” reads an October press release to-module losses. This meant that half-cut announcing the planned merger. cell technology achieved a particularly fast ramp-up. And other module level inno- The top 10 vations are still waiting in the wings, such JinkoSolar maintained its place as the as bifacial; five, six, or multi-busbar mod- largest module manufacturer in 2017, pro- ules; as well as shingled modules. ducing just over 6.5 GW, an increase of “Although most of these technologies more than 1 GW on the previous year. In have been known for years, it has not spite of this increase, the company’s gross been until recently that they have started profit fell 22.7%, from CNY 3.87 billion to become mainstream and evolve into ($583 million) to CNY 2.99 billion mass production,” says Karl Melkonyan. ($451 million). JinkoSolar cited lower “In the next three years, both bifacial and module prices and higher material costs half-cell modules have a chance to gain a as the main reasons for this. “Our gross significant share of the total module mar- margin was 11.3% for the year, compared ket, combined with new cell technolo- to 18.1% in 2016, partially as a result of gies, like passivated emitter rear contact increased collaboration with OEM part- (PERC) or n-type technologies including ners to meet surging market demand, heterojunction (HJT) and interdigitated especially in the first half of 2017, and back contact (IBC). higher raw material costs,” states JinkoSo- And there is no sign of PV manufactur- lar CEO, Kangping Chen, commenting on ers’ push for higher efficiency solar mod- the company’s 2017 financial results. ules ending any time soon. “Demand for For the most part, 2017 was a stable year higher efficiency products keeps increas- for the largest five manufacturers. While ing year-over-year despite the relatively Jinko and other top-tier manufacturers higher manufacturing costs and prices of were able to absorb these lower margins high efficiency modules,” continues Melk- without too much trouble, there were onyan. “In addition to policy drivers, such casualties at the other end of the table. as the Chinese Top Runner Program, high Yingli Green Energy hung on in ninth efficiency products are also required for place, managing to ship more than 3 GW most of the residential and small commer- in full year 2017. In spite of this, the com- cial segments in premium markets such as pany posted a net loss of $510 million, and Japan, the United States, as well as many total liabilities of $3.2 billion. While it has European countries.” persuaded many of these creditors to wait Mark Hutchins.

www.pv-magazine.com | 07 / 2018 57 industry & suppliers

Growing demand for three phase solutions

pv magazine caught up with Alex Pan, Europe General Manager at SolaX Power to discuss the storage inverter supplier’s shift from single to three phase inverters, alongside its latest innovations and market position.

Could you begin by describing the company’s range in chronological order. Which came first and how has SolaX grown its portfolio? Let’s start at the beginning: our single phase hybrid battery inverter. It is a 48 volt system able to charge and discharge with 1,300 watts of power. There was more demand coming from the market, so we made a new generation system: still a 48 volt single-phase device, but able to charge and discharge with 2,500 and 5,000 watts of power. Then demand kept growing, especially for three-phase inverters, and we developed the X3 (three-phase) hybrid inverter, with high-voltage batteries. We needed this high voltage to enable us to charge and discharge more. So, if we talk about three-phase, we can charge and discharge, depending on the system size and design, a maximum of 10,000 watts.

How has the AC-coupled retrofit charger performed on the market since its launch? And in which markets is it proving most popular, and why? This product is performing well in several markets. When you have already installed a PV system, and you are not planning to buy a totally new inverter, the AC retrofit is a very good solution. It can also be used if you want to add remote control. In this way, Photo: SolaX Power Photo: you can store energy and use it later. The AC retrofit solution is working very well in Australia and the U.K., which are currently our largest markets. We also expect a lot from Belgium, where power is very expensive at night.

Bidirectional inverters such as the AC-coupled X-Hybrid offer another layer of func- tionality for the user. Can you describe what these layers are, and how the consumer can benefit? These devices can charge and recharge now with 10,000 watts. This means four times the Alex Pan is Europe General Manager at Chinese capacity we had before. Furthermore, it is a bit more silent and it is IP65, this means it inverter manufacturer SolaX Power. has reached a technological level that is currently difficult to improve on. It is also more suitable for remote control. The consumer benefit consists of faster charging, even if the device has a larger capacity now. And then there is the chance now of also having a three-phase device, which was impossible in the past.

How is the third generation X-Hybrid inverter an improvement on the second generation? And how vital is it for SolaX that such products are compatible with all types of high-voltage batteries on the market? I’ll make it simple: the IP65 instead of the IP20, and the bigger loading and unloading capacities. It is clearly more efficient, especially because we charge now with almost 400 volts into the battery. In the past we could do this only with the 48 volt batteries. So everything is an improvement in this three-phase device. Actually we work with a lot of high-voltage battery suppliers and we are very interested in cooperating with others. But they have to deliver some quality. If quality is not there SolaX will not be willing to cooperate.

The SolaX Portal V2 can allow consumers to better manage and view their energy use. But how does SolaX ensure that its customers are educated enough to know how to use this software platform? We made a plan for this. We are holding webinars, and have created videos for YouTube. But the idea is not that consumers will be able to charge and discharge freely. There will be fixed pre-settings.

58 07 / 2018 | www.pv-magazine.com industry & suppliers

Growing demand for three phase solutions

The SolaX Battery completes the portfolio. Given that you have partnered with LG Chem on the battery, what would you say is its unique selling proposition? In other words, what differentiates this from other batteries on the market that are already compatible with SolaX inverters? I want to make it clear that we don’t produce the battery or any battery at all. We cooperate with big suppliers such as LG, BYD, and other corporations. We are selling the battery with the SolaX brand, but they are all the result of partner- It will depend on ships with these big groups. We use our own brand because we want to be close to our customers, in the case that our devices have issues. This makes things a bit easier for “what you pay for our customers and installers.

What other partnerships does SolaX Power have? night-time power. On the inverter side, I don’t think that partnerships such as those we have with the battery suppliers will be needed. On the battery side, we are not planning to expand If this price is high further our cooperation with more providers – it will depend on what kind of products will be available, and which technology innovations we see in the future. enough, residential The expected cost reductions for home battery solutions has been slow, and in many markets there is an argument that residential storage options do not – and may storage is viable never – make financial sense. What is your view on that? ” It will depend on the country. Mostly it will depend on what you have to pay for night- time power. If this price is high enough, residential storage is viable. It is worthwhile in Germany – it will be worthwhile in Belgium, the U.K., and Australia. It is all about the pricing of electricity. Even in the Netherlands, if net metering is elim- inated, residential storage may have some chance. Many markets in Europe may offer good opportunities for this segment, and it is not only about money, but also peak shav- ing and frequency control.

Of course, SolaX’s X1 range of inverters handle the solar side of things. In which markets are you strongest with your X1 range of inverters? There are markets in which single-phase inverters are more important than three-phase devices. The U.K., for example, is a single phase market. In the Netherlands instead, we started with single-phase inverters, and are now selling more three-phase devices. Most European markets, however, offer good chances for both kinds of inverters.

SolaX has three-phase inverters for commercial-scale solar installations, so are your batteries and hybrid inverters also compatible for such larger arrays, or do you have plans to introduce larger batteries and hybrid battery inverters? Yes, they are also suitable for commercial PV installations. We are still not able to provide inverters for megawatt-sized projects, but this is something that we are planning to offer.

Does SolaX have any products in the pipeline specifically geared towards the rise in e-mobility? We are observing this market closely, and we are ready because it is the same kind of technology. Interview by pv magazine staff.

www.pv-magazine.com | 07 / 2018 59 financial & legal Securing income through guarantees of origin

Tom Lindberg of renewable energy consultancy ECOHZ explains how energy providers can secure an additional income through various schemes governing guarantees of origin.

y using renewable energy, companies deadline. The global initiative is working B can act on new business opportuni- to massively increase demand for and ties, meet expectations from investors, delivery of renewable energy. consumers, and authorities, and improve their sustainability ratings. Companies Energy attribute certificates across various industries take charge of Companies can document and report the their destiny – defining a clear sustainabil- origin of their energy consumption glob- ity agenda as critical to their future com- ally with the following widely accepted petitiveness. There are numerous initia- energy attribute certificates (EACs): tives in all corners of the world – many Guarantees of Origin (GOs) in Europe, with similar goals of securing access to Renewable Energy Certificates (RECs) in renewables to power all operations. North America, and International RECs The most far-reaching initiatives are We (I-RECs) in a growing number of coun- Mean Business and the RE100. The RE100 tries in Asia, Africa, and Latin America. initiative was established by The Climate EACs can give power producers an Group and CDP and now has 137 corpo- extra income source, making it more rate members, all having pledged pub- appealing to build more renewable energy licly to consume 100% renewable energy – production. The Greenhouse Gas Protocol with a large majority committed to a 2020 (GHG-P) Scope 2 Guidance and CDP rec-

Global standards for origin documentation

The global initiative“ is working to massively increase

demand for and Guarantees of 0rigin (GOs) Renewable Energy Certificates (RECs) delivery of renewable International Renewable Energy Certificates (I-RECs)

Notes: energy The UK and Russia are not members of AIB (EECS), but are grid connected to countries in the Guarantees of ” Origin system. Regions in the lighter blue are not themselves approved for I-REC, but are grid connected to regions which are (darker blue). Australia and Japan have their own national systems for renewable certificates (yellow).

Source: ECOHZ

60 07 / 2018 | www.pv-magazine.com financial & legal

ognize EACs as the preferred tool to docu- The new Renewable Energy Directive ment renewable electricity consumption. (REDII) represents a major step forward It is an effective and recognized tool to in strengthening the system of Guarantees reduce a company’s greenhouse gas emis- of Origin – making Guarantees of Origin sions and improve its sustainability rating. mandatory and the sole tool for making renewable claims and disclosure. It still How does it work? needs to be approved formally by both In Europe, one electronic Guarantee of the Parliament and the Council. Origin is issued per megawatt hour of renewable electricity produced and car- What can solar producers do to get ries a unique identification number. this extra income? When a company buys Guarantees of Ori- Solar producers delivering electricity to gin as documentation for the source of the grid can register their power plant the electricity delivered, the correspond- in any of the three major EAC systems – ing identification numbers are cancelled depending on their geographical location. in an electronic certificate registry. This This is a very effective way of document- makes it easy to track ownership, verify ing the origin and has the potential to cre- claims, and ensure that there is no dou- ate significant additional value for small ble counting. and large solar generators. Tom Lindberg If you do not buy Guarantees of Origin for the electricity you consume, the electricity will come from any source, includ- About the author ing nuclear or fossil fuels. The EU Renew- Tom Lindberg is Managing Director at ECOHZ. The company offers global able Energy Directive (2009/28/EC) came renewable energy solutions to businesses and electricity providers – pro- into force in June 2009 as part of the EU viding renewable electricity from a wide range of sources and regions. ECOHZ also provides an innovative additional solution – GO² – combin- climate and energy package. The Directive ing renewable energy purchases with the financing and building of new states that Guarantees of Origin prove to renewable power generation. Companies choosing documented renew- the final customer that a given quantity able energy can reduce their carbon footprint and improve their sustain- of energy was produced from renewable ability ratings. ECOHZ is among the leading independent suppliers in energy sources. Europe, and has offices in Norway and Switzerland.

Global standards for origin documentation

Guarantees of 0rigin (GOs) Renewable Energy Certificates (RECs) International Renewable Energy Certificates (I-RECs)

Notes: The UK and Russia are not members of AIB (EECS), but are grid connected to countries in the Guarantees of Origin system. Regions in the lighter blue are not themselves approved for I-REC, but are grid connected to regions which are (darker blue). Australia and Japan have their own national systems for renewable certificates (yellow).

Source: ECOHZ

www.pv-magazine.com | 07 / 2018 61 financial & legal

Photo: Mark Jacobson Photo: “We need an 80% transition in 12 years”

Mark Jacobson (born 1965) is a professor of civil and environmental engineering at Stanford University and Director of its Atmosphere/Energy Program. He completed his PhD in Atmospheric Sciences at UCLA, and has published over 150 peer-reviewed papers and two textbooks. He has testified before the U.S. Congress four times.

62 07 / 2018 | www.pv-magazine.com financial & legal

Having worked on modeling a 100% renewable energy world for almost a decade, Mark Jacobson is well aware that many view such a clean energy system as a pipe dream. In 2017 Jacobson, a Professor of Civil and Environmental Engineering at Stanford University, took on his critics, suing both the academics who had heavily criticized his paper outlining a road map for 100% renewable energy, as well as the publishing journal in a $10 million law suit for defamation – pv magazine met with Professor Jacobson last month to discuss the energy transition and his vision for a 100% renewable powered world by 2050.

It’s been nine years since you released your first 100% wind, water, sunlight (WWS) study. How has the vision changed over time? Overall, I’m very pleasantly surprised. We’re still on track in that we are still proposing the same vision. There are some slight modifications. The original vision is that we 70 cities in North America have committed to looked worldwide, not at individual countries, states, or cities at that time – just look- 100% renewable energy ing at the global energy landscape. The conclusion is that we think we can transform the entire energy infrastructure of the world to wind, water, and solar power (WWS). And we concluded that it might be technically and economically feasible by 2030, but for practical social and political reasons, a better target date is 2050. So, at the end of the paper that is our proposal: 100% by 2050. While it is technically and economically possible by 2030, it is unlikely to occur by then. We’ve developed an interim target of 80% by 2030. That is still what we think is technically and economically possible, and socially and politically possible. So, it hasn’t changed. Since then we have published multiple papers with over 85 authors, and over 35 peer reviewers, to look at individual states in the United States. We started with New York, California, and Washington state, and there are now 50 states, and then we did 139 countries of the world. And we’ve just completed 53 towns and cities across North America, and we are working on about 100 more right now.

“ We can transform the entire energy infrastructure of the world to wind, water, and solar power” How do you think that this study has changed the global conversation around renewable energy? Our original study is the progenitor of the entire 100% renewable movement, which has gained significant traction, not only in the public view, but also in terms of the policies that have been proposed or put in place, and in the decisions of businesses too. In the United States there are now five proposed laws to go to 100% clean renewable energy. All three Democratic presidential candidates in the last election cycle supported 100% renewable energy for the United States. There are multiple states that have proposed more aggressive renewable portfolio standards, Hawaii being the most aggressive so far at 100%. New York and California have 50% on the books for the electric power sector. Massa- chusetts is proposing 100% in all energy sectors, and Washington State is going to full decarbonization. And New Jersey is proposing significant growth in its RPS. And we now have around 70 cities in North America that have committed to 100%

www.pv-magazine.com | 07 / 2018 63 financial & legal

renewable energy, including some cities big cities like Atlanta, Georgia; Madison, Wis- consin; and Portland, Oregon. There are 12 towns and cities in North Carolina alone. There are 130 companies internationally, including some of the largest companies in the world, that are committed to 100% renewable energy. And on top of that there is public opinion polling that has come out: There was public 82% opinion polling last November of 116,000 people in 13 countries. The poll results showed of the world wants 100% about 82% of the world wants 100% clean renewable energy. clean renewable energy In terms of having no time to waste, I recall the initial study in 2009 calling for a World War II level of societal mobilization to get us to the targets set. Do you still think that this is necessary? Yes. Because even though there are rapid changes occurring compared to two or three years ago, it is still an order of magnitude lower than what we need to transition. We need an 80% transition in 12 years. That is not just electricity, it is all energy sectors. Transportation, industry, power, buildings, and home heating and cooling need to be transformed into clean renewable energy. This takes a massive effort if we are to solve this problem in a timely manner, would need a larger than World War II scale effort.

Do you think this will be primarily achieved through policy, or through the action of the market? Or is it both? There are actually three prongs: There is policy, there is action of the market for the costs to come down, and then there is individuals making their own efforts. Individuals can do a lot on their own, in their own homes, or if you live in an apart- ment. When you own a home, you can transform it at a similar cost to current energy. Let’s say your new water heater breaks down, if you buy a heat pump water heater, you will save energy costs. The capital cost is pretty similar to a normal water heater. People can change to induction cooktop stoves, more energy efficient light bulbs, LED light bulbs throughout their house, weather stripping their homes, heat pumps for heating and cooling, and electric cars instead of gasoline. People can look through their own lives and look at whatever they do that uses fossil fuels and try to replace that. That’s one strategy, one step. And another part is that the costs of energy are dropping. In terms of renewable energy they have dropped significantly, and that’s resulting in a national speed-up. The point of policy is that if something costs the same as something else, half the time they will do dirtier fuel. That’s what we need - not just a path to transition, but a full transition. Policies need to be put in place to incentivize a more rapid transition.

Though there are rapid changes occurring compared to “ two or three years ago, it is still an order of magnitude lower than what we need to transition”

I’ve noted that you estimated, in the most recent version of the study, 0.8 U.S. cents per kilowatt hour of WWS electricity for peaking and storage. Do you think you might be underestimating the cost of matching supply and demand, given variable renewable energy output? There is a more recent paper about renewable energy in 20 world regions. Even this number there is a range. This number actually goes out to 1.5. There is not just one number, but a range of numbers. This number doesn’t include the additional concentrated solar power (CSP), for example, that is already included under the remaining cost of the study. It’s not a complete number – that number is beyond the additional concentrated solar power, and the additional solar thermal – so there’s some additional costs that are there.

64 07 / 2018 | www.pv-magazine.com financial & legal “ Our original study is the progenitor of the entire 100% renewable movement” I would say if you add those in, it is closer to 1-1.2 cents per kilowatt hour. I think that’s a reasonable number. When we did the 20 regions, we literally did this study in 20 different places under different scenarios. I don’t know the exact number, but I think on the order of 1.2 cents per kilowatt hour. There’s a big range. We went down to 0.5 cents per kilowatt hour to 1.5 cents per kilowatt hour, for example. So that is the result, accounting for the cost of energy, under three different storage scenarios. It’s not all batteries, keep in mind. Batteries are only a portion of this. There is CSP, and the storage part of CSP was $3.00/kWh of storage.

On that subject of matching supply and demand, the Clack et. al paper accused your project of failing to adequately model supply and demand. This is obviously a highly technical charge. How would a layperson understand the technical dimension of this controversy? Their claims were based on factually false information. People can argue about some of our assumptions. What they did was not to argue with our assumptions. The main conclusion that they made, if you look at their conclusion section, is that we made two particular modeling errors. And those two claims of modeling errors are factually false and have easily been proven false. I’ll tell you what they are. One is that they claimed that our table contained maximum values. But in fact, all of our numbers in this table were average values. There’s not a single maximum value in this table. They claimed that, because our table has maximum values, several of our figures didn’t make any sense, because they are inconsistent with their idea that the table would have maximum values. 100% in 139 countries One of their conclusions was that because our table 1, in their mind, was inconsis- Transition to 100% wind, water, and solar (WWS) for all purposes tent with their figures, we made a model- (electricity transportation heating/cooling, industry ing error that invalidated our entire study. But they made the error, because table 1 has average values, not maximum values. Residential rooftop Commercial/govt solar 14,89% rooftop solar 11,58% It is easily provable that our table had Projected average values, because the numbers Solar plant energy mix Wave energy come exactly from this other paper that 21.36% 0,58% they cited. And, it says right there in the Concentrated Geothermal energy other paper that it contains average values. 9.72% 0,67% There’s no excuse for what’s happened. Onshore wind Hydroelectric The second claim was that we had a table 23.52% 4% of installed hydroelectric power capac- Offshore wind Tidal turbine Jobs created: 52 Million ity, and then we had figures that had 13,62% 0.06% peak discharge rates of hydro that were Jobs lost: 27.7 Million greater than the installed capacities of hydroelectric power in the paper. They Using WWS electricity for everything, instead of burning fuel, and improving energy efficiency means you need much less energy. were well aware, because I had a conversation with their lead author Dr. Clack a 2050 Demand with BAU 2050 Wind, water, solar year before they published their paper. And he brought this question up to me and I explained exactly what we did. We 42.5% kept the annual average discharge rate for installed capacity of hydro constant, but increased the peak discharge rate, which was the nameplate capacity as well. And so even though we increased the peak dis- Source: The solutions project charge rate, we kept the annual discharge

www.pv-magazine.com | 07 / 2018 65 financial & legal

Project power supply and demand, 139 countries 2050 (20.604 TW) Net power demand reduction from improved energy output by electricity over combustion: – 23.00% (4.739 TW) End-use efficiency beyond B.A.U. scenarios: – 6.98% (1.420 TW) B.A.U. projected end-use power demand* Avoided fossil fuel extraction, processing, 2012 and distribution: – 12.65% (2.606 TW) (12.105 TW) 100% WWS (11.840 TW) Wave + Tidal: 0.64% (0.076 TW) rate constant – and that’s why both the Onshore wind: 23.52% (2.785 TW) Wind TOTAL: 37.14% (4.397 TW) tables and the figures were consistent, to Fossil fuels, Biofuels Offshore wind: 13.62% (1.612 TW) conserve water mass and energy. and nuclear Utility PV solar: 21.36% (2.529 TW) They claimed that we made a model Utility CSP: 9.72% (1.151 TW) Solar TOTAL: 57.55% (6.814 TW) error, because of this discrepancy and Residential PV: 14.89% (1.763 TW) claimed that the model error invalidated Commercial/Govt PV: 11.58% (1.371 TW) Hydropower: 4.00% (0.474 TW) the study and its conclusion. Those two End-user power supply (139 countrys) End-user power Geothermal: 0.67% (0.079 TW) 2012 2015 2020 2025 2030 2040 2050 factually inaccurate statements that they 4%± 5.6% 20%± 50%± 80%± 95%± 100% made were the basis for their claims that * Energy for all uses including electricity, heating, transportation, industry Source: The solutions project our study was invalid and this is the crux of the problem.

I think that explains pretty well why you would file a defamation lawsuit. Can you talk about why you ultimately chose to drop the suit? We went through the proceedings and it was a pretty draining process. But during that period, a lot of things happened, between when we filed it and dropped it, a lot of things happened that pretty much made the lawsuit moot, for the most part. For example, we published 139 country road maps, and then we did new a grid integration study, looking at the grid integration in 20 world regions and finding that the grid can stay stable, not only with the increase in the peak discharge rate of hydro, but also in two separate cases, where we did not do that at all. We had batteries in one case and heat pumps in another case. This is an issue that they had also brought up: that we were depending too much on thermal energy storage. So we did a case where we had no thermal energy storage, and just used heat pumps for electricity. The conclusions from the PNS paper were robust, not only in North America, under several different scenarios including those without any hydro, but also worldwide. And that mooted a lot of the issues. The issue that the lawsuit brought is that they had I learn from all the written this paper, but also done some press releases that resulted in many news articles that repeated their claim that was very negative. It was this widespread damage to “ our publication that we were trying to address. But in the meantime, there were other criticisms articles, and authors and blogs, that saw exactly what they did, and wrote independent ” articles that diminished what they were saying. But the bottom line was that we achieved a lot of what we wanted from the lawsuit, so it became moot for the most part. We did not get the retraction that we wanted, but at least, in the public’s eye, a lot of the information was clarified and the facts were clarified. And that’s really the key to what we wanted.

In terms of the criticism that you have received overall, what is the main thing that you think your critics got wrong, and conversely do you feel that you have learned from criticisms of your studies? I learn from all the criticisms. Some I can brush aside because I’ve seen them before, or I have already addressed them, or I don’t think they are important. But there are a lot of valid criticisms out there. Every paper that I have written on this subject – and I have been going on since 2009 on this same topic – every one improves itself on the previous one. So, I learned different things. For example, in the first New York energy paper I’ve seen concentrating solar power in New York. And I learned from that it’s pretty unlikely that we are going to get concentrated solar power in New York. So, when I did our 50 state plan, there’s no concentrating solar power in New York. That’s an example where I’ve learned from other people’s experience… This is such a broad field, and there is so much information. Interview by Christian Roselund

66 07 / 2018 | www.pv-magazine.com storage & smart grids

AC, or DC: That is the question

Energy storage is here to stay – there is no doubt about that. We know how to store excess energy from a solar installation, but where in a system should the battery be placed? On the AC side, where the stored power is ready to flow into the grid at a moment’s notice, or on the DC side, where current from solar panels can flow directly into the battery?

istorically, solar power salespeople H have had to contend with the question, ‘What happens when the sun goes down?’ In those darker times, the answer was a song and dance that ended with ‘batteries are expensive.’ Today, they get to deliver a solid answer about semi-dispatchable solar power. This energy storage opportunity allows solar power to take its proper place in modernizing our grid. Energy storage is here, and we’re all rejoicing. Now that we have this new tool – we’re going to have to learn how to use it. And we’re just now starting to see energy storage coupled with solar power blossom, on the residential level right through to the largest utility-scale projects – in the real world, not just on spreadsheets. One of the first questions we need to Now that we answer though, is where in the system are we going to place our batteries? On “ the DC or the AC side of our solar invert- have this new tool – ers? Research put out by the United States’ National Renewable Energy Laboratory we’re going to have (NREL), paints a complex picture (see graph at the bottom of p. 70). to learn how All on its own, co-locating solar and storage – either AC or DC-coupled – brings multiple benefits. For investment to use it projects, when finding a site you possibly ” negotiate with one land owner versus two. And during development having to send in one set of interconnection or per- mit documents is worth its weight in lithium-ion batteries. For homeowners, the benefits are similar – one contractor, one set of paperwork and incentives, and one bill.

Money talks When utilities decide to go AC rather than DC, it’s because they’re trying to figure out how to manage their local grid in the most economical manner. When project developers make the decision it’s all about how

68 07 / 2018 | www.pv-magazine.com storage & smart grids

AC, or DC: That is the question

This battery unit at the Citrus Solar Energy Center is a 123 MW solar installation coupled with 4 MW/16 MWh of energy storage. The project from electric utility Florida Power & Light Company is the first utility-scale solar plus DC energy storage plant in the U.S. Photo: Florida Power & Light Company & Light Power Florida Photo:

www.pv-magazine.com | 07 / 2018 69 storage & smart grids

Solar plus storage system operation example behind-the-meter microgrid if the power PV generation on site Power delivered from site grid goes down. The system can work 1,000 kW 1,000 kW with or without local solar power – but it’s much sweeter with, of course. 800 kW 800 kW One example of an AC-coupled energy storage system being used by a utility 600 kW 600 kW was shown in a recent presentation at the 2018 EIA Energy Conference in Washing- 400 kW 400 kW ton DC, by North Carolina’s Duke Energy engineer Sherif Abdelrazek. 200 kW 200 kW The graph to the left shows two benefits of solar+storage. First, we see that 0 kW 0 kW the amount of power delivered from the site, the blue line, is within a much tighter –200 kW –200 kW range than the solar power, the orange 6 8 10 12 14 16 18 20 line, on its own. The energy storage sys- Source: Duke Energy Time (hours) tem is absorbing excesses and covering up lower output. The solar capacity has been ‘fi r m e d .’ much money they can make from the site Note that there is also a 4:30 to 7:00 p.m. investment. When homeowners make time shift of solar electricity – delivered the decision – it tends to be based upon in the middle of early evening peaking their contractor’s access to well-priced period, increasing the quickly diminish- hardware. ing solar power output. It is an evolving situation though – and One very specific difference between the NREL graph is based upon 2016 solar an AC-coupled energy storage system and energy storage pricing. Today, battery and a DC-coupled storage system has pricing is falling, new technology is being to do with the available capacity of the deployed, and policy is evolving. All of inverters being used. Your DC-coupled this is driving new techniques fostering a solar+storage system is behind the same greater variety of energy storage projects inverter, and this inverter has a fixed size. and models. If your solar power plant is pumping out electricity at high noon – even clipping The grid-connected battery: some production as your panels reach AC-coupling peak wattage – there will be no inverter Technically, energy storage coupled with bandwidth for the energy storage system’s solar power on the AC side of the inverter power grid services to slip through. is really just two separate pieces of hard- This ability to offer very specific ware connected to the power grid right amounts of power also matters when cus- next to each other. The solar installation tomers want to manage their demand has its own inverter, and the energy stor- charges with energy storage. For Sharp’s age system has another one. If at any point SmartStorage system and their 10 year either one of them needs to undergo sig- demand charge performance guaran- nificant change, it is easily switched out. tee, meeting those numbers is a financial Sonnen’s AC-coupled residential bat- requirement. teries have offered the ability to act as a Speaking with a potential Sharp customer in Yorba Linda, California, whose Cost benefit ratio for solar in the U.S. Source: NREL primary goal is to move their electric utility Southern California Edison’s GS-2 PV only tariff, with a healthy demand charge rate Ind. PV + storage Decrease due to the high cost of storage relative to beneﬁts and monthly account fee of $229, to the GS-1 tariff with no demand charges and a AC-Coupled PV + storage Increase due to reduction of BOS cost monthly fee of $29. Increase due to further reduction in BOS and elimination of The customer’s new 57 kW solar sys- DC-Coupled PV + storage second inverter – very small change due to lost arbitrage and avoided clipping tem offers significant but less predictable Tight DC-Coupled PV + storage (no ITC) Decrease due to lost arbitrage revenue demand charge benefits. The electric utilities require those who wish to stay in the Increase due to 30% ITC Tight DC-Coupled PV + storage applied to storage GS-1 tariff to not break a demand charge of 20 kW more than twice a year. These Benefit/cost ratio: 1.1 1.2 1.3 1.4 1.5 requirements demand something smarter

70 07 / 2018 | www.pv-magazine.com oversized ratios of 2.0and up. And PVinverter manufacturers storage inMassachusetts for upcoming the SMART program – DC/AC even further. “We’re lots seeing of DC-coupled energy that project developers inMassachusetts are their taking in Florida. rienced power more consistent during many the rainy afternoons- expe premium priced solar product, or it to make used could solar be loweringdemand periods, broader stresses grid and selling a builtcould be around it. designed to cifically overproduceso muchthat a business plan ping production. during peak However, power this plant- was spe money. more bit a just panels same the behind switchgear and solar inverters –saving and storage energy gives an opportunity to more install solar standardindustry of about An increase DC/AC inthe 1.25. ratio ranties on standard inverters of a1.5DC/AC ratio, and U.S. the ratio (DC/AC ratio) is 1.65a powerful – far beyond war best the tured on pp. 68-69). installation, coupled with 4MW/16 MWh ofstorage energy (pic - FPLthe “Citrus Center,” Energy Solar comprises MWsolar a123 ture ‘clipped’ and electricity deliver it later. to grid the This plant, plus storage DC-coupled energy plant that to was designed cap- mentsolar first the power to –what be believed utility-scale they Florida Power &Light Company (FPL) noted an accomplish- fewer machines breaking. operations and maintenance costs as fewer machines means equationthe today, reverberates out decades form inthe of lower Removinglion DC). connections ($0.04/W and machines from ing to DC-coupled removed tens of machines –saving- $1.2mil about same the amount by of U.S. used 90 electricity homes. in its presentation, 3%represents kWh/year at – least 900,000 rates to leads a3%greater loss of electricity. conversions –and injecting two more efficiency conversion 99% again you’re to DC going to move through two more transformer requirements. If you’re going to move from AC and to back DC, broaderto be system efficiencies gained, and lower hardware financial motivationsDC-coupled driving installations weresaid is backed being up by alot of financial motivations. is amere technicality. Nowadays moment feel though, this good panels is pouring straight into your batteries, eventhough this It feels to know good that pure the current DC leaving solar the dispatchable solarpower energyDC-coupled storage andtheriseofsemi- you’ve got AC-coupled. to be 24/7/365 for 10 years or more, from abattery with aguarantee, solution. coupled of Sharp the aspect storage system is only the possible inverter on hot the days that demand charges on, AC- the peak Andvides. with solar power most likely maxing out its own – more and exact reactive inits actions –than solar power pro- www.pv-magazine.com In conversations with Dynapower, has learned pv magazine be delivered couldThis electricity later theday in peak during Most solar power plants due some lose electricity to clip will - And it when comes to hardware at solar the plant site, switch- In MWAC/28.7 that model 20 the Dynapower MWDC uses In apresentation recently given by Dynapower, two the main it would thatSo seem ifyou want services grid certain to sell The DC solar DC panel peak outputThe to AC inverter peak output In apress release issued utility on February 9,2018, electric | 07 /2018 -

Advertisement storage & smart grids

Solar photovoltaic inverter loading ratio* by plant size and installation year Source: EIA as well as the capacity firming capabilities noted in the Duke Energy presentation. 1.40 1.40 It may have been functions like this, 1.30 1.30 coupled with increasingly better econom- ics, that pushed Duke Energy to give DC- 1.20 1.20 coupled solar+storage a ‘semi-dispatch- 1.10 1.10 able’ notation on installations that tightly couple the solar power and energy storage 1.00 1.00 in a symbiotic relationship – lower price 0.90 0.90 per watt for solar, increased conversion ≤ 1 1–10 10–50 50–100 > 100 2001–09 2010 2011 2012 2013 2014 2015 2016 efficiency with less conversion hardware, Plant size (MW) Installation year and captured clipped electricity. *AC capacity to DC capacity 75th percentile 25th percentile Median Capacity weighted average And when coupling gets tighter between solar+storage, all the electric utility is going to see is a single power plant. are scrambling to support a ratio this high – large oversized arrays and large capac- Where to next? ity factors.” The answer becomes more obvious Some of these Massachusetts facilities every single day. When Tesla dropped its are using the Dynapower DPS-250. It is 100 MW/129 MWh bomb in the middle one of the first DC-coupled pieces of hard- of Australia within the 100 days dictated ware to help manage the energy storage by Elon Musk’s now infamous Twitter bet, aspect of your solar project. This allows for the whole world got a front seat chance to both scheduling output into peak periods, see a racecar energy storage system do its job. And across the world, energy storage development is starting to ramp up. China is building the world’s largest chemical battery – a 200 MW/800 MWh vanadium flow battery. India just announced that its first battery cell factory is being planned. Warren Buffett just Photo: Dynapower Photo: signed a deal in Nevada, USA for 1 GWh worth of energy storage spread across multiple projects. Electric utilities are saying that gas peaker plants won’t be built after 2020 in certain countries because of energy storage. And market entrants wanting to compete with Elon Musk’s Gigafactory are springing up globally – from power- houses like BYD, CATL, and Panasonic to car companies that want to keep up with Tesla’s Model S, and more importantly, the Model 3. In the short term, we should expect to see more exploration of various configu- rations from leading edge developers and utilities. In the medium term as we move toward 2030, we will see electricity utilities like Colorado’s Xcel Energy continue to suggest they close coal plants early, so they can take advantage of the ‘unprecedented pricing’ offered by solar+storage. In the more distant future, when countries like the United States could get 80% of their electricity from solar+wind energy with 12 hours of backup energy storage, expect the imagination of the people to One of two DC-coupled utility-scale solar+storage installations in the USA, developed by continue to push this juggernaut. Duke Energy at Mount Holly, North Carolina. John Weaver

72 07 / 2018 | www.pv-magazine.com A4_3mmbleedOriginal 2018-07-06T10:50:59+10:00

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Panasonic mulls further investment in Tesla battery Gigafactory

Panasonic has already invested Panasonic executive VP, who heads in the wake of an uptick in Tesla Model A the company’s automotive busi- 3 production. Ito has reported “occa- ness has told reporters that the company sional battery (cell) shortages,” follow- $1.6 billion “would of course consider additional ing the increase in output. Tesla has con- in the Tesla battery factory in Nevada investment” in the Tesla/Panasonic bat- firmed the production increase, stating tery gigafactory “if [they] are requested that it produced more than 5,000 Model to do so,” as reported by Reuters. 3 vehicles in the last seven days of Q2, and This would come on top of the $1.6 expects to reach 6,000 per week by late billion that Panasonic is already putting July. Photo: Tesla Photo: into the Nevada Gigafactory, which plans It is as yet unknown what impact, if to not only be the world’s largest factory, any, these supply and investment dynam- but its largest building by square foot- ics will have on Tesla’s stationary lithium- age. However, Panasonic Executive VP ion battery business. Yoshio Ito says that the company has not The company’s Q1 energy storage made any formal decision regarding fur- deployments grew 161% quarter-over- ther funding. quarter to 373 megawatt hours, but those Such an investment may be needed, numbers are tiny compared to what is to given the reports of battery cell shortages come.

Wärtsilä and Hyundai ink agreement on second-life EV batteries for grid storage

yundai and Wärtsilä are creating a According to the announcement, in H supply chain with the goal of repur- 2025, there will be 29 GWh of second- posing EV batteries. life EV batteries available. Today’s storage The principal partner in this is Green- market is around 10 GWh. smith Energy Management Systems, For the first couple of years, however, which was acquired by Wärtsilä last year. Jung tells pv magazine the market will not The company provides grid storage solu- allow for the shipping of too many sec- tions and energy management software ond-life EV batteries. The reason for this to utilities and industrial customers on a is that the EV market is not big enough or According to Wärtsilä, there will be global scale. mature enough yet. In the future, however, John Jung, President and CEO of the CEO is optimistic that the growing Greensmith Energy tells pv magazine market, as well as the necessity to replace that he expects the shipment of batteries older batteries from models currently on 29 GWh from Hyundai to commence with imme- the road, will serve to ramp up shipments of “second-life” EV batteries by 2025 diate effect. Furthermore, Jung states that significantly. orders have been filed, through Wärtsilä, Jung explains that Greensmith is aspir- adding to its existing generation capac- ing to produce on a multi-megawatt scale ity, and other customers in the industrial using second-life EV batteries. He also sectors. iterates that the company is already sup- Wärtsilä refers to future oversupply of plying storage systems on a multi-mega- second-life EV batteries as a reason for watt scale to a global portfolio of custom- capitalizing on this market. ers, touting expertise in the market.

74 07 / 2018 | www.pv-magazine.com SOLAR POWER INTERNATIONAL September 24-27, 2018 Anaheim Convention Center | Anaheim, CA

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Where we’re going: Renewable Energy India Expo, Greater Noida, September 18-20

At the 2018 REI Expo, pv magazine will the challenges and advantages of bifacial be hosting lively discussions of the lat- modules, and the future of this technology. est developments in India’s solar indus- The 12th REI show is sure to be as intense try at the Quality Roundtable on Septem- and exciting as ever. After hosting around ber 18, and the Future PV Roundtable on 30,000 visitors in 2017, organizers UBM September 19, both to be held in the con- expect significant growth this year.

ference area alongside the trade show at In 2018, REI will aim at attracting interna- magazine/Ian Clover pv Photo: India Expo Center in Greater Noida, on tional investors to India’s PV market, and the outskirts of New Delhi. push for more domestic manufacturing, The Quality Roundtable will address key to position the country as a solar technol- issues both in production and the field, ogy hub. Also, for the first time in 2018, the with real world case studies up for dis- show’s focus will be extended to include cussion. Future PV at REI will focus on storage and electric vehicles.

Where we’ve been: Johan Cruijff Arena, Amsterdam

Keen to see firsthand the largest energy A return on investment is expected within storage system installed at a commercial 10 years, although this is said to be a con- building in Europe using a combination servative estimate. Photo: Nissan Photo: of second-life and new electric vehicle The project is the result of a cooperation batteries, pv magazine journeyed to the between Eaton, Japanese auto manufac- Johan Cruijff Arena in Amsterdam at the turer Nissan, German storage special- end of June. ist The Mobility House, and the Nether- The 2.8 MWh storage system combines lands project developer BAM Bouw en power conversion units provided by U.S.- Techniek. based power management company Eaton The team is also currently in the process of and the equivalent of 148 Nissan Leaf bat- installing 18 EV chargers at the stadium’s teries. These complement the 3 MW roof- car park. Another 200 will be added over top PV system, which was installed on the the next two years. They will be equipped cover of the stadium in 2014. with bidirectional inverters, meaning cars Two thirds of the project was funded via can charge and discharge to help with the a loan from the Amsterdam Climate and stadium’s peak power demands. In return, Energy Fund (AKEF), while the remain- the EV owners will receive parking dis- ing third came from private funds. counts.

76 07 / 2018 | www.pv-magazine.com 13th (2019) International Photovoltaic Power Generation and Smart Energy Exhibition & Conference

June 4-6, 2019

◎Asian Photovoltaic Industry Association / Shanghai New Energy Industry Association ◎Show Management: Follow Me Int'l Exhibition (Shanghai), Inc. Add：Room 902, Building No. 1, 2020 West Zhongshan Road, Shanghai 200235, China Tel：+86-21-33561099 / 33561095 / 33561096 Fax：+86-21-33561089 ◎For exhibition: [email protected] For conference: [email protected] details

Quality Roundtable at Initiative Partner Intersolar South America pv magazine will hold its first Quality Roundtable in Latin America at Interso- lar South America in São Paulo, Brazil, on Gold Sponsors August 29 at 2:00 p.m. International and Latin American experts will join the roundtable and present specific cases of poor quality, while discuss- ing all topics related to quality that can affect the performance of both large-scale and DG solar projects across all LatAm markets.

When: August 29, 2018 from 2 p.m. to 4 p.m. Where: Expo Center Norte, Room Cantareira 4

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Quality Roundtable at Initiative Partner Solar Power International

Now in its third year, pv magazine’s Qual- formats, as well as an expanded scope of ity Roundtable at SPI will build on themes inquiry. The Quality Roundtable will con- explored in our global roundtables and in tinue to explore issues of quality and reli- Gold Sponsors previous years with new, more interactive ability in existing PV installations, again this year starting with specific anony- mous cases of problematic projects. How- ever, while in the past we mostly looked at Upcoming pv magazine issues that came up at the cell and module levels, this year we will be exploring other Roundtables in 2018 issues, including those involving tracking, racking, and even monitoring systems. Quality Roundtables Intersolar South America When: September 26, 2018 São Paulo, August 29, Expo Center Norte Where: Anaheim, Hilton Hotel Renewable Energy India Expo Greater Noida, September 18, Conference area Sage Hall Energy Taiwan Forum Taipei, September 20, Nangang Exhibition Center

Solar Power International magazine pv Photo: Anaheim, September 26, Hilton Hotel All Energy Australia Melbourne, October 3, Venue TBA

Future PV Roundtables Renewable Energy India Expo Greater Noida, September 19, Conference area Seafoam Hall Solar Power International Anaheim, September 26, Hilton Hotel

78 07 / 2018 | www.pv-magazine.com details Photo: Ecoprogetti Photo: Flexible production solutions

ur story begins on the day Domenico O Sartore, founder of Italian company Ecoprogetti, realized there was a need to change from being a PV module man- Ecoprogetti Managing Director Laura ufacturer, to drive the evolution of the Sartore. In 2018, the Italian PV equipment supplier is celebrating 20 years in the solar While some industry by moving to the production of industry. machines and automation. This was at a markets“ have scaled time when PV markets in Europe were gaining momentum and production whole evolution to arrive at today’s pro- needed to transform from completely duction solutions for PERC, bifacial, 12BB up rapidly, others manual to more automated processes for wire, glass-glass, and so on. Ecoprogetti the various steps in the value chain. continues to drive uncompromised and have required smaller With solar’s rapid expansion, Ecopro- advanced research, and always provides getti took an important decision to focus competitive and efficient turnkey pro- lines and more on growth and at the same time retain the duction solutions from 10 MW to 1 GW. medium-sized character of the company In a short period, a remarkable number that had made it so successful until then. of new clients in new geographies started flexible solutions While some markets have scaled up in PV, successfully competing in their ” rapidly with huge volume production, markets. Ecoprogetti today is providing others have required smaller lines and not only efficient and reliable technology more flexible solutions, always focusing at competitive costs, but ensuring that on efficiency (minutes/module/man). customers benefit from ongoing research Ecoprogetti took its strategic position and development, from new raw materi- in this market and created unique turn- als to management systems and process key solutions of great efficiency even with flows. We make sure customers are always small production lines. The company has getting the best solution for a sustainable driven the development of the PV indus- and successful operation. Our customer’s try, from thick round cells through the success is our success. Laura Sartore

Preview of issue 08/2018

Photo montage: Petra Plociennik Photo: Huawei Photo: YD Projects

In Conversation special Power electronics meets bifacial Upside of the downturn Future solar thought leaders in their own A detailed investigation of the challenges Falling prices in H2 will likely cause tur- words. pv magazine’s annual special will facing bifacial module integration from a moil across the supply chain. But for bring together the views from experts and power electronics perspective. The case project developers and end customers, leaders across the PV supply chain. for a specialized MPPT solution. cheaper modules present a sizable upside.

80 07 / 2018 | www.pv-magazine.com

07 | 2018