Soft costs of solar: The final frontier of utility LCOE reduction?

“In this op-ed for pv magazine, KiloNewton Founder and CEO John Williamson looks at both the importance of reducing soft costs and the likely paths to get there.”

 Module prices are expected to decline from $0.30/W to $0.18/W over the next 5 years through material cost reductions and efficiency gains. While this is going to further reduce the cost of solar energy, there is virtually no way that we can hit the goal of reducing solar costs by 50% by 2030 without reducing soft costs.

Photo credit: Amy Suarez

Here’s a link to the full article I wrote for PV Magazine below:

https://pv-magazine-usa.com/2018/12/13/soft-costs-of-solar-the-final-frontier-of-utility-lcoe-reduction

Viewpoints on the Tariff “Truce” and Their Effects on the Solar Industry

In a member update for SEIA, Abigail Hopper writes:

“ 

On Saturday evening over dinner in Buenos Aires, President Trump and Chinese President Xi Jinping agreed that they would suspend any further trade action for 90 days to allow for continued negotiations. In a follow-up statement, the White House indicated that the recently imposed Section 301 tariffs would remain at 10% for the next 90 days. The tariffs were originally scheduled to increase to 25% on January 1, 2019. For the solar industry, this means that the Section 301 tariff on Chinese inverters will remain at 10% for at least the next 90 days. U.S. module manufacturers who rely on Chinese inputs will also avoid higher tariffs. If at the end of 90 days the parties are unable to reach an agreement, the 10% tariffs will increase to 25%.
 
The White House further indicated that China agreed to purchase a “not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance” between the two countries. President Trump and President Xi also “agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.”
 
While this temporary truce is good news, the structural issues at the heart of the dispute will be difficult to resolve in 90 days. Indeed, to date, China has made no indication that it is prepared to adopt any of the structural changes sought by the Trump Administration. The solar industry should also recognize that any U.S.-China agreement would likely only cover the Section 301 tariffs, and not the Section 201 tariffs (cells and modules), Section 232 tariffs (steel and aluminum), or antidumping and countervailing duties.

 Sincerely,

Abigail Ross Hopper
President & CEO

“

Some additional industry and outside perspective on the temporary truce can be found in the links below:

 Utility dive: Solar industry sees short-term pluses from U.S.-China trade truce

https://www.utilitydive.com/news/solar-industry-sees-short-term-pluses-from-us-china-trade-truce/543695/

 “Trade experts on a panel at the Solar Energy Industries Association (SEIA) Policy Summit on Wednesday viewed the 90-day delay on tariff escalation favorably, while hinting that the negotiation period may be too brief. Putting off the tariff increase "actually helps" companies making new manufacturing investments "in the short term," SEIA's vice president of market strategy, John Smirnow, told Utility Dive.”

 solar power world: Chinese inverter tariffs won’t jump to 25% yet on January 1

https://www.solarpowerworldonline.com/2018/12/chinese-inverter-tariffs-wont-jump-to-25-percent-yet/

 “According to a White House statement, President Trump and Chinese President Xi Jinping agreed to suspend further trade action for 90 days to continue negotiations.”

 bbc: US-China trade war: Deal agreed to suspend new trade tariffs

https://www.bbc.com/news/world-latin-america-46413196

 “China has pretty much given up nothing in this deal because the future tariffs threatened from the Beijing side were retaliatory in nature and only to be applied if the United State escalated.”

 Generally, the consensus is that this is a short-term boon for those who have budgeted for the tariffs to escalate as previously scheduled. At this point, there is little likelihood that there will be any long-term reprieve from the tariffs for solar power, and the effects will be most substantially felt on projects with the lowest margins, i.e. utility and large commercial installations. With Trump’s twitter account stating he is a “Tariff Man” days after the supposed truce, there seems to be no end to the trade war, and the proposed “truce” seems more like a temporary cease-fire.

The KiloNewton team would like to welcome our newest employee Matthew Gagne!

Matthew Gagne has more than 10 years of experience in the renewable energy industry.  An Albuquerque native,  He has performed an assortment of tasks for more than 5000 MW of installed renewable energy projects across the United States, Canada, Mexico, and South America.  He has worked on prospecting, pre-construction energy and other environmental assessments, re-powering assessments, refinancing due diligence reports, and operational evaluations.

Previously he was an independent contractor for multiple clients working on anything from renewable energy grant proposals to bankable assessment reports.  Matthew joined KiloNewton in October 2018 to provide GIS analysis, wind energy expertise, and assist with solar assessments.

Matthew also received a Graduate Certificate in Wind Energy (Technical) from Texas Tech University and a graduate credential through Texas Tech’s National Wind Institute and DNV GL in 2016.  He also has B.A. from Western Washington University where he focused on GIS and journalism.  

With Matt’s expertise in renewables optimization, solar, product development and technical business analysis, he is a welcomed addition to the Kilonewton team.

Utility-Scale Solar Trends Project 50% Lower Costs in Just 10 Years

Matthew Gagne, GIS/Renewable Energy Analyst, and Ehtesham Tariq, Mechanical Engineer, from Kilonewton LLC write:

In the last 10 years, renewable energy has quickly become competitive with conventional generation sources that have historically dominated the energy market.  Renewables have traditionally relied on incentives at both state and federal levels in the United States to get a foothold in the market. But the levelized cost of energy (LCOE) for utility-scale photovoltaic (PV) solar and wind has dropped significantly according to the Lazard Levelized Cost of Energy Analysis released earlier this week, even without consideration of those incentives.  While subsidies remain a factor in the renewable energy economic picture, utility-scale PV solar and wind energy are competitive with conventional generation.  We expect that trend to continue as renewable technology improves, supply chains reduce costs, and market penetration increases.

 The main factor for LCOE for utility-scale PV solar and wind energy has been capital costs, or the cost of manufacturing and installation of projects.  The LCOE for solar and wind, as stated by the US Energy Information Administration earlier this year, is affected proportionally by the capital cost of generation capacity.  Capital costs for PV solar and wind have historically been high when compared to conventional generation.  However, renewables have an inherent advantage over fossil fuels generation sources in that the fuel is free from massive extraction, transportation, and storage costs, and operations and maintenance is comparatively low.  

 Subsidies have helped reduce those costs. But reliance on those subsidies has been somewhat problematic.  Wind has been especially affected, as the periodic expiration and renewal of the Production Tax Credit at the federal level has led to economic fluctuations in the industry.  However, the subsidizing of PV solar and wind and an increasing demand for renewable energy has allowed for the development of a robust competitive market, resulting in reduced supply chain costs and improved technology.

This is reflected in the Lazard report.  The report shows a steep decrease in the LCOE for PV solar, with a drop of 88 percent in the last 9 years and a compound annual growth rate (CAGR) of 21 percent.   The LCOE for wind energy has a similar trend with a decrease of 69 percent in the last 9 years and a CAGR of 12 percent. 

While incentives are still a large component of the renewable energy market, the Lazard report shows that its influence, especially with utility-scale PV solar, is waning.   Incentives have much more of an effect on residential PV and wind energy. 

When compared to conventional generation such as nuclear and coal, the Lazard report shows that utility-scale PV and wind have a much lower LCOE.  Much of this is due to increased competition in the market as well as capital cost factors, such the supply chain and improved technology.   While wind has been competitive since 2011, according to Lazard, utility-scale PV solar has only been competitive in the last couple of years.  

We expect the trends shown in the Lazard report, especially with utility-scale PV and wind, to continue in the next 10 years.  The Department of Energy’s SunShot 2030 goal is to cut the LCOE of utility-scale PV by an additional 50% by the year 2030.  Following the current trend, we expect the LCOE for PV solar will reach the goal in 2028.  The SunShot program, which began in 2011, has been instrumental in reducing the cost of LCOE for PV solar without subsidies.  The solar industry achieved the initial SunShot 2020 goal of $0.06 per kilowatt-hour for utility-scale PV 3 years ahead of schedule. 

 Our analysis is based on several factors.  Capital costs will continue to reduce, while technology will continue to improve.  Also, the implementation and advances in energy storage will be crucial to wind and solar.  The wind doesn’t always blow and the sun doesn’t always shine during peak demand, resulting in curtailed wind energy production and clipped solar production.  The SunShot 2030 goal includes integration of PV solar with storage as an integral part of reducing the LCOE by half.  The Lazard analysis cites the ability for energy storage to not only capture otherwise lost energy, but also share interconnection and inverter costs, as reasons why the LCOE of utility-scale PV solar and wind may decrease in the future.  In addition, the trend of mothballing and not replacing older conventional generation facilities will only increase demand and market penetration for renewables.  

Photo By Matt Pankuch

California regulators approve the world’s largest battery projects

CHRISTIAN ROSELUND from pv-magazine writes: CPUC has signed off on four lithium-ion battery projects in California, one of which at 300 MW is the largest battery project to date known by pv magazine.

This is really great news for renewable: “These batteries will not only connect to the substation and transmission infrastructure built for the Moss Landing Power Plant, but will replace the services provided by the plant itself. Plant owner Dynegy announced last February that it may close the plant, and according to CPUC another cogeneration plant in Gilroy has has signaled that it may go offline.” This is a really big deal, and can be an example for other Cities to follow.

https://pv-magazine-usa.com/2018/11/08/california-regulators-approve-the-worlds-largest-battery-projects/?utm_source=dlvr.it&utm_medium=twitter

Midterms are Coming: Check Your Candidate’s Record on Renewables

It’s not easy making decisions about who to vote for these days, but perhaps seeing which candidates rate greener can help you choose. Here is a piece that PV Magazine did along with Advanced Energy Economy, giving a list of states (including New Mexico) along with their endorsements for prioritization of renewable energy. You can also check your current representatives’ voting history in the League of Conservation Voters website below. Your vote counts, do your research.

PV MAGAZINE: Democrats sweep AEE clean energy scorecards

https://pv-magazine-usa.com/2018/10/16/democrats-sweep-aee-clean-energy-scorecards/

 “Trade group Advanced Energy Economy has published a scorecard which ranks candidates in nine gubernatorial races on clean energy issues, and one of the two major parties is largely missing in action.”

League of Conservation Voters

http://scorecard.lcv.org/

GTM: My Experience With Community Solar: Excessively Complicated and Frustrating

Creating successful community solar projects is a difficult proposition, virtually impossible in some areas, however it is growing at an incredible rate. From a customer perspective, this article explains some of the frustration and confusion that happens when companies inform about solar in your community. According to the writer, customers are already sold on the idea, they need to understand more of the details early on.  Read the article below to find out more:

GTM: My Experience With Community Solar: Excessively Complicated and Frustrating https://www.greentechmedia.com/articles/read/my-experience-with-community-solar?utm_medium=email&utm_source=Daily&utm_campaign=GTMDaily#gs.Z163oWY



 JOSH GARRETT of GTM writes:

“If someone is considering subscribing to a community project, chances are they’re excited about “going solar” and realizing its environmental and climate benefits. What potential subscribers are not excited about is a 20-year contract and figuring out where exactly their money is going. That’s why marketers and salespeople should cut right to the chase on the less-feel-good aspects of community solar early in the process and be prepared to explain and answer questions about them over and over, in different ways.”

SPI 2018: Great Seeing Everyone!

SPI was a whirlwind! We visited with several clients over the span of the event, spent some time with industry leaders at the Future PV Roundtable, checked out some of the new technology on display, and even tried to have some fun! The venue was huge, but the weather was great, so we took advantage of the tables outside the event for some meetings. It was well-attended, and we had a hard time getting around to see everyone we wanted. Sorry if we missed you!

Some key takeaways were that module and tracker companies are more and more focused on bi-facial technology. We expect to see more of this trend as better certainty of bifacial production can be realized. First Solar series 6 modules were everywhere as well, it seemed, through their new Ecosystem initiative.

 We also are seeing more and more interesting software out there – some of these guys had booths as big as the module companies, and about half of startup alley was filled with various technologies we can use to make fields better, faster, and cheaper! Of course, storage was a big topic, but we’re still not seeing compelling commercial/utility-scale options. The primary strategy for now is to distribute the batteries at the load side, rather than build huge battery farms at utility fields.

 We’re sharing some photos of the show and us having some fun below. Greentech Media had a nice article featuring some of the newest tech, which you can read below as well, covering car chargers, modules, inverters, and batteries. Check it out!

“The scrappy industry has found a new fantastic point of view.” JULIAN SPECTOR, EMMA FOEHRINGER MERCHANT

GTM - A Whole New World of PV: Product Launch Roundup from Solar Power International:

 https://www.greentechmedia.com/articles/read/a-whole-new-world-of-solar-gtms-magical-spi-product-launch-roundup?utm_medium=email&utm_source=Daily&utm_campaign=GTMDaily#gs.al7mYi4 

Hurricane Florence vs. Solar: Plants Fare Well in Storm-Battered North Carolina

PV MAGAZINE: Solar Slowly Comes Back Online in North Carolina

https://pv-magazine-usa.com/2018/09/20/solar-slowly-comes-back-online-in-north-carolina/

 “Failures of the electric grid have affected large solar plants after Hurricane Florence, just as they are affecting centralized generation.”

INSIDE CLIMATE NEWS: Solar Energy Largely Unscathed by Hurricane Florence’s Wind and Rain

 https://insideclimatenews.org/news/20092018/hurricane-florence-solar-panel-energy-resilience-extreme-weather-damage-wind-flooding

“In North Carolina, the #2 solar state, Florence was the first extreme weather test for much of its renewable energy.”

CBS NEWS: Hurricane Florence crippled electricity and coal -- solar and wind were back the next day https://www.cbsnews.com/news/hurricane-florence-crippled-electricity-and-coal-solar-and-wind-were-back-the-next-day/

 “Nearly two weeks after Hurricane Florence swamped North and South Carolina, thousands of residents who get power from coal-fired utilities remain without electricity. 

Yet solar installations, which provide less than 5 percent of North Carolina's energy, were up and running the day after the storm”

QUARTZ: Resiliency in the face of hurricanes makes the case for renewables even stronger

https://qz.com/1396099/solar-power-passed-the-hurricane-florence-resiliency-test/

“People of the Carolinas are picking up the pieces after Hurricane Florence, the wettest tropical cyclone on record. Among the news of dozens of deaths, overflowing pig-manure lagoons, and flooded coal-ash fields, there are some bright spots. Solar-power installations were largely able to escape without harm.”

North Carolina is home of the second largest capacity of solar in the US other then California. Find out how solar asset managers restored electricity after one of the most damaging hurricanes to ever hit the East Coast in the articles above, both giving different perspectives on the outcomes.

Solar has fared well compared to the coal ash disasters and nuclear shutdowns resulting from hurricane Florence. However, reports show flooded solar fields still down, but coming back online. Tracker projects can be particularly vulnerable to flooding if mechanical and electrical components are submerged, but are reporting good outcomes. Good job NC project engineers!

Kilonewton will be at Solar Power International next week September 25-27th!

Solar Power International (SPI) is North America's largest solar trade show. Over 18,000 attendees and 650 exhibitors travel from 110 countries. We will be there @SPIcon learning about new technology in #solar #energy to create a better future for our customers and we're definitely excited about what we can bring to NM!

LINKS -https://events.solar/

https://www.solarpowerinternational.com/

PV Magazine- Virginia approves largest solar power plant east of the Rockies

Virginia regulators have approved construction of the four part solar power plant, whose output is partially being sold to Microsoft. The 500 MW-AC facility is being developed by sPower.

Kilonewton is excited to be working with @sPower and @Array Technologies on this challenging project!

 “As the four plants are on one piece of land, this will be the largest solar project East of the Rocky Mountains when built, and one of the largest in the world.”

Read the full article here to learn more about this project:

https://pv-magazine-usa.com/2018/08/10/virginia-approves-500-mw-of-solar-power-plant/

AUGUST 10, 2018 JOHN WEAVER

We are now a part of the Solar Energy Industries Association!

We are now proud members of The Solar Energy Industries Association (SEIA®) https://www.seia.org/ We are honored to work with the SEIA community, our shared goals of protecting and expanding the U.S. Solar industry is what KiloNewton is all about.

We are now proud members of The Solar Energy Industries Association (SEIA®) https://www.seia.org/ We are honored to work with the SEIA community, our shared goals of protecting and expanding the U.S. Solar industry is what KiloNewton is all about.

Exciting news for California!→

California Assembly has passed a bill that mandates the state move to 100% zero-carbon electricity by 2045. is great news for the future of the renewable energy mandate and sets a positive example for the rest if the country.

Read PV Magazine’s editor Christian Roselund’s article here:

https://pv-magazine-usa.com/2018/08/28/100-clean-energy-passes-california-assembly/

We are starting several projects:

Just a quick update: Things are heating up here at KiloNewton! We have several projects starting up or on the horizon, from solar training classes to structural design projects. We are working to improve some of the information on the services we provide, and have created a short profile of our broad engineering services! You can find it on our services page at https://lnkd.in/gWj_8Tx. Inside you can find details on services like conceptual design, product development, manufacturing support, and technology management. Please feel free to contact us with any questions you might have about our specialties. We are pleased to announce that we have posted two new job openings on our website. You can find them via our contact page https://lnkd.in/geiPj9F. We are currently seeking a mechanical engineering intern, as well as a CAD/GIS technician to help with various projects we have underway. Please feel free to spread the word to anyone you know that may be interested!