Data, data, data: global PV market dynamics with Paula Mints

This morning Paula Mints from Navigant Consulting shared her insights on the latest global solar PV market trends with us – a timely webinar topic given the highly publicized fallout from those very global market dynamics. Paula put a firm kibosh on assertions that the aforementioned Solyndra failure heralds the end of solar: “We have started something in this industry, and it will move forward.” Given the magnitude of what we’re undertaking, that path forward won’t be without its challenges. It’s the nature of revolutionizing the global power industry. 

Right now we’re in a time of high PV module inventory levels, particularly in Europe where generous incentive programs have been trimmed. Continued incentive reductions and abrupt changes on many major programs around the world are driving continued downward pressure on solar prices. As a result, module costs have come down. Way down. Those aggressive market dynamics are particularly painful for some – most notably for a series of high-profile recent bankruptcies: Solyndra, Evergreen and Spectawatt. For all the hubub around Solyndra’s closure, the reality is they supplied 50 MW – that’s not even a statistically relevant blip on the gigawatts-sized global PV landscape. The price dynamics that caused its failure, however, are not to be overlooked. It’s tough for many manufacturers to make a buck these days. Those challenging dynamics will settle out to more sustainable levels as solar continues to grow and policy certainty is re-established. And in the meantime, solar’s new price point has been good for consumers and market expansion here in the U.S.

 

Diving deeper into the various countries that comprise that global picture – it’s important to note just how much feed-in tariff driven European markets have dominated demand. The EU claims a whopping 80% of the global market. But with those European incentive programs on the decline, the industry needs to open new markets in order to continue to grow. That includes the U.S., still a relatively small player on the global solar stage. (Want some ideas for how to open U.S. solar markets? We’re so glad you asked.)

 

We can expect to see continued volatility on the supply side until the market comes to terms with the new reality of lower incentive levels. Paula reminds us that this is actually the old reality. For much of the solar industry’s history it has functioned without the order of magnitude of incentives its experienced over the past few years. And of course here in the U.S. we’ve continued to function without those sizable incentives. As such she asserts that U.S. companies are well-positioned for continued success. Anyone succeeding in the U.S. market has already had plenty of experience making innovative use of a relatively small incentive pool to deliver real value to customers. In short, we can’t miss what we didn’t have. Combine that know-how with what remains a huge potential solar power market, and the U.S. remains on her list of healthy markets.

So what do we need to keep driving this global PV market of tomorrow forward? We need business model and BOS innovation to keep solar costs coming down while providing healthier manufacturing margins. We need continued private and public investment in next-generation technologies. And first and foremost, we need to help utilities, investors and policymakers better understand solar power. That includes a reality check about the true costs of conventional and nuclear energy – subsidies included – so we can have a fact-based conversation about solar’s economic competitiveness.

Educate, educate, educate. Solar has strong facts to back up its claims of value, ROI and success (here’s our own set of favorite factoids). There’s no need to be anything but accurate. We hope you’ll consider it your task as solar industry participants, solar advocates and solar supporters of all shapes and sizes to spread the word: solar is ready and able to play a growing role in our nation’s energy economy.