If the Peru and Mexico auctions are any indication, Latin American markets are establishing a new, and very low, normal for solar prices. Peru recently awarded a solar power purchase agreement (PPA) at $47.98/MWh to Enel Green Power (EGP), making headlines as the lowest PPA on record. But just weeks later, EGP beat its own a record in Mexico’s auction with a PPA price of $35.44/MWh for solar PV, and an average price for all awardees of $50.77/MWh for wind and solar.
What’s pushing these prices down, and how long will it last? Developers are likely making a few key assumptions:
1) Commodity prices are falling — 80 per cent since 2008, according to data from IRENA — and are expected to continue dropping, so modules will be cheaper;
2) Energy Performance Certificate costs are likely to fall as renewable energy penetration increases throughout the region; and
3) The quality of resources is very good in these markets, increasing the effectiveness of solar technologies so developers can get more bang for their buck.
While solar costs are indeed falling, it’s the jaw-droppingly low price bids by EGP that are making headlines. They are building massive installations, much larger than in the past, and economies of scale are helping to push down the prices. Access to funds at highly competitive rates from organisations such as the European Investment Bank has also enabled EGP to bid aggressively.
“Our prices were the most competitive but in line with those submitted by other international operators taking part in the auction,” said Carlo Zorzoli, EGP’s head of Latin America.
EGP has won 1,172 megawatts of solar PV in Latin America in 2016 alone. That, in itself, is noteworthy; perhaps more noteworthy is that they believe they can build profitable projects across a portfolio of tightly priced PPAs.
It’s hard, and perhaps not even desirable, for other developers to compete with EGP’s low bids, but there are other players in these markets bidding at or very near to Enel’s winning prices. Companies eager to make a footprint in the market are coming in at or below cost, according to industry analysts, potentially with internal rates of return in the single digits – a reality they are willing to face to gain a strong foothold in these young markets with enormous potential.
A favourable regulatory environment will continue to be vital in attracting serious developers and maintaining low prices. Peru’s regulator, Osinergmin, required very high bid bonds for their RFP — $50,000/MW — and tied the PPA price to the US dollar, which could prevent results similar to the frenzied bids and current situation in Brazil.
Mexico also allowed developers to bid in pesos indexed to the US dollar, which offered more economic certainty.
Peru’s next request for proposal is couple of years off, but Mexico has one coming up in August, and many expect to see even lower prices.
However, when it comes to other Latin American markets, while prices may be relatively low, they aren’t expected to break records, particularly in Argentina where many unknown factors loom. Broadly, however, the theme is clear: Latin America is opening up, competition is fierce and — at least as far as pricing is concerned — it’s a race to the bottom.
KINGSTON, Jamaica – Customers of Jamaica Public Service (JPS) will again be able to apply for licences to sell their excess electricity generated from renewable energy sources to the grid as of April 11, 2016.
Minister of Science Energy & Technology (MSET) Dr Andrew Wheatley today announced that the Office of Utilities Regulation (OUR) will resume accepting applications on behalf of the ministry for net billing under similar terms as the previously-concluded net billing pilot project until the details of a permanent programme are finalised.
According to a release from the ministry, the decision to continue the programme came out of an agreement reached on April 7 with the OUR and JPS.
All parties agreed that it was in the best interest of all concerned that the net billing programme be resumed so as to strengthen the development of the renewable energy sector in accordance with the National Energy Policy, the release said.
The two-year pilot programme was extended to May 2015, as the system peak demand threshold for net billing was not met. As at March 2015, 351 applications were received, 311 of which were granted licences, the ministry said.
PARIS, France (AFP) — Investment in renewable energy hit a record US$286 billion (256 billion euros) in 2015, more than half of which came from developing countries for the first time, according to a UN report released Thursday.
All told, new money put into solar, wind, biofuels and other cleaner energy technologies has exceeded US$2.3 trillion since 2004, when total investment was less than US$50 billion, it said.
“Renewables are becoming ever more central to our low-carbon lifestyles,” said Achim Steiner, executive director of the UN Environment Programme, which co-wrote the report.
“Importantly, for the first time in 2015, renewables investments were higher in developing countries than developed.”
That shift was led by China and India, both of which have invested heavily in clean energy even as their juggernaut economies continue to be mainly powered by carbon-intensive fossil fuels.
Renewables added more to global energy generation capacity in 2015 than all other technologies combined, including nuclear, coal, gas and mega-hydro projects of more than 50 megawatts.
Despite rock-bottom fossil fuel prices, new clean energy capacity — even excluding nuclear—- outstripped new coal and gas by more than 100 per cent, said the report, Global Trends in Renewable Energy Investment 2016.
The rapid transition to renewables, especially in developing and emerging economies, is “helped by sharply reduced costs, and by the benefits of local power production over reliance on imported commodities”, said Michael Liebreich, chairman of the advisory board of Bloomberg New Energy Finance, which co-launched the report.
As in previous years, the growth in clean energy in 2015 was dominated by solar photovoltaics and wind, which together added 118 gigawatts in generating capacity, nearly a quarter more than the year before.
Wind contributed 62GW and photovoltaics 56 GW, with more modest inputs coming from biomass, geothermal, solar thermal and ‘waste-to-power’, in which waste products are recycled.
The fact that renewables far exceeded conventional energy for new capacity in 2015 shows that a “structural change is underway”, the report said.
But the ultimate goal of a “carbon neutral” global economy enshrined by the world’s nations at UN climate talks in Paris in December is still a distant prospect.
Excluding major hydro projects, renewables still only account for 16 per cent of the world’s total power capacity, even if that figure has consistently climbed by double digits in recent years.
Actual electricity generated is even less — barely 10 per cent.
“Despite the ambitious signals from COP21 and the growing capacity of new, installed renewable energy, there is still a long way to go,” said Udo Steffens, president of the Frankfurt School of Finance and Management.
The Paris Agreement inked at the 195-nation ‘COP21’ talks vowed to cap global warming at below two degrees Celsius (3.6 degrees Fahrenheit), a goal that scientists say will require a wholesale shift away from fossil fuels.
Much of the record-breaking investment in clean energy last year came from China, which spent nearly US$103 billion (92 billion euros), 17 per cent more than in 2014 and 36 per cent of the world total.
India was a distant second, spending US$10.2 billion, followed by South Africa (US$4.5 billion), Mexico (US$4 billion) and Chile (US$3.4 billion).
Morocco, Turkey and Uruguay filled out the list of nations, investing at least US$1 billion.
Overall, developing countries poured 17 times more money into clean energy last year than in 2004.
SINCE its inception in 2014, the Caribbean Climate Innovation Centre (CCIC) programme has been leading the way in developing a regionally integrated approach to solving the Caribbean’s climate, energy, and resource challenges.
The CCIC programme aims to assist Caribbean island states to adapt to and mitigate the impact of climate change by empowering each territory to create clean technologies and businesses, and strengthening several critical areas.
Chief Executive Officer (CEO) Everton Hanson says that the centre is taking an entrepreneurship approach to addressing the issues.
“The purpose of this project is to build an entrepreneurial ecosystem that will foster growth-oriented entrepreneurs and profitable businesses that address climate change mitigation and adaptation,” he explains.
The CCIC, which was established as a Consortium, is jointly managed by two of the Caribbean’s foremost scientific institutions — the Scientific Research Council (SRC), based in Jamaica, and the Caribbean Industrial Research Institute (CARIRI) situated in Trinidad and Tobago.
Both islands have active CCIC programmes and function as the project’s primary ‘country hubs’. These hubs are responsible for administering financing, management, and support service delivery regionally.
Locally, the CCIC project is housed at the offices of the SRC located at Hope Gardens in Kingston.
The programme, which emphasises the need for a unified response to developing climate change solutions, has 12 established country hubs in several other Caribbean Community (Caricom) states: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Montserrat, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and Suriname.
The CCIC model was developed in collaboration with local stakeholders and addresses the gaps across five priority areas: solar energy, water management, sustainable agribusiness, resource use and efficiency, and energy efficiency.
The CCIC also offers services that assist entrepreneurs in developing business models for their products and services. Among these are technology commercialisation; market development; mentoring and training; networking, as well as business incubation support, and identifying and developing local, regional and international market opportunities.
A key feature of the programme is that it facilitates the testing and prototyping of proposed innovations, and provides technical support and information on contemporary green technology.
So far the bold initiative has met with success, instituting innovative activities in its goal of supporting companies from the nascent stage to an advanced stage of development. This has been accomplished through the staging of boot camps and accelerator programmes, among other activities.
One of its more notable programmes, the Proof of Concept (PoC) competition held in 2015, invites innovators to present designs and concepts for products which can be transformed into viable businesses.
Over 300 innovators from 13 Caribbean countries applied for grant funding through the competition, with 11 winners selected from the pool of applicants.
The successful participants, who were awarded grants ranging from US$10,000 to $50,000, came from Jamaica, Antigua and Barbuda, St Kitts and Nevis, Dominica, St Lucia, and Belize.
Additionally, the PoC winners benefited from several capacity-building exercises facilitated by CCIC and CARIRI, including mentorship, training and technical assistance in business incubator activities.
The CCIC in Jamaica recently hosted the Caribbean Green Tech Start up Boot Camp, which ran from February 26 to 28. Over 70 innovators and entrepreneurs from across the Caribbean participated in the interactive three-day workshop, which challenged them to refine their concepts, transforming them into viable, sustainable businesses.
Executive Director of the SRC, Dr Cliff Riley, points out that with the project is an important initiative as it directly addresses problems associated with climate change while stimulating economic development.
“It is a project for the entire region to build capacity and to ensure that innovative ideas and products can be translated into viable businesses,” he notes.
The programme was developed under the World Bank’s global partnership development programme, InfoDev, and is being implemented under its Climate Technology Programme.
The Caribbean component of the Climate Innovation Centre (CIC) is one of seven CICs established across the world. Other countries with CICs are Kenya, Ethiopia, South Africa, Vietnam, Morocco, and Ghana.
The CCIP programme is one of three components of the World Bank/InfoDev Entrepreneurship Programme for Innovation in the Caribbean and is funded by the Canadian International Development Agency.
Jamaica is to reduce greenhouse gas emissions by the equivalent of 1.1 million metric tons of carbon dioxide per year by 2030 as part of its global commitment to take climate change mitigation action.
To bring this about, the island – as reflected in its nine-page Intended Nationally Determined Contributions (INDCs) document to the United Nations Framework Convention on Climate Change – has undertaken to implement energy policies that ensure that the island uses energy wisely and aggressively to pursue opportunities for conservation and efficiency has a modernised and expanded energy infrastructure that enhances energy-generation capacity and ensures that energy supplies are safely, reliably, and affordably transported to homes, communities, and the productive sectors on a sustainable basis, and achieves its energy resource potential through the development of renewable energy sources by increasing their share in its primary energy mix of 20 per cent by 2030.
Such policies are also to ensure that government agencies and ministries are models and leaders in energy conservation and environmental stewardship and that the island has a well-defined and established governance, institutional, legal, and regulatory framework.
Fully implemented energy polices need, too, to ensure that private industry embraces “efficiency and ecological stewardship to advance international competitiveness and to move towards a green economy”, the document said.
Realising Nationally Determined Contributions is essential if the target of the climate deal, brokered in Paris in December, is to be reached.
That agreement – to which Jamaica is a party – looks to hold “the increase in the global average temperatures to well below two degrees above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels”.
It is against this background that Jamaica is continuing its own mitigation efforts.
“Certain new activities have started up again under the memorandum of understanding we had with the Americans, for example, particularly around natural gas, that will allow us to have much more efficient plants …” a source from the Ministry of Water, Land, Environment, and Climate Change told The Gleaner at the start of the year.
“Natural gas generation, generally speaking, can be made to respond very well to changes in demand … . For example, if you have a solar plant and production dips, it is relatively easy for you to ramp up the production of electricity from a natural gas plant,” the source added.
There are also other efforts afoot.
“Recognising that energy is not just electricity, it is also transport, some of the work we will be doing in respect of sector planning will involve a closer look at transportation and transportation efficiency and how we can reduce the amount of oil consumed there,” the source noted.
Further, to achieve 20 per cent renewables in the island’s energy mix, the source said, “You can increase the amount of renewables or decrease the amount of other fuels in the mix. There, you are talking efficiency measures and the Government is looking at efficiency in a number of respects.”
In yet another record-breaking year, the solar industry in the United States installed 7,286 megawatts of solar PV in 2015. GTM Research and the Solar Energy Industries Association announced the historic figures today ahead of the March 9 release of the U.S. Solar Market Insight report.
FIGURE: U.S. Solar PV Installations, 2000-2015
For the first time ever, solar beat out natural-gas capacity additions, with solar supplying 29.5 percent of all new electric generating capacity in the U.S. in 2015.
Led by California, North Carolina, Nevada, Massachusetts and New York, the U.S. solar market experienced a year-over-year growth rate of 17 percent. Geographically, the market continues to diversify with 13 states installing more than 100 megawatts each in 2015. States that made major solar strides include Utah, which jumped in the rankings from 23rd to 7th place, and Georgia, which moved from 16th to 8th in the nation.
FIGURE: Ranking States by Annual PV Installations
The residential solar market grew 66 percent year-over-year and, for the first time in history, eclipsed the 2-gigawatt mark. The residential solar segment now represents 29 percent of the entire U.S. solar market — its largest share since 2009.
FIGURE: Share of U.S. PV Installations by Segment, 2000-2015
“Without a doubt, 2015 was a monumental year for the U.S. solar industry, and perhaps what’s most amazing is that we’re only getting started,” said SEIA president and CEO Rhone Resch. “Over the next few years, we’re going to see solar continue to reach unprecedented heights as our nation makes a shift toward a carbon-free source of energy that also serves as an economic job-creating engine.”
“The U.S. solar market remains concentrated in key states, with the top 10 states accounting for 87 percent of installed capacity in 2015,” said Shayle Kann, senior vice president of GTM Research. “But growth has been widespread, and 24 of the 35 states that we track saw market growth in 2015.”
On March 9, GTM Research and SEIA will release the complete U.S. Solar Market Insight2015 Year in Review with detailed market analysis and updated forecasts.
The more efficient the solar panel, the less space used.
Solar giant SunPower announced on Monday that it can now make a solar panel that can convert 22.8% of the sunlight that hits it into electricity. According to SunPower, that’s a new world record.
The efficiency of solar panels is an important metric to both solar companies and to its customers. When panels are more efficient it mean that rooftops can be covered in fewer efficient panels, which use less materials, but that can generate the same amount of energy as more less-efficient panels.
SunPower says its highly efficient panels can generate 70% more energy in the same space over the first 25 years, compared to less efficient panels. Many solar panels are somewhere between 15% and 18% efficient. SunPower and others have been working to boost the efficiency of panels using material science and optics tech innovations.
Solar companies are in a battle to boost the efficiency of their panels and tout new records. SunPower SPWR -5.85% says its 22.8% solar panel was verified by the federal National Renewable Energy Laboratory.
Last year, SolarCity claimed that it had started making its own highly efficient panels, with an efficiency that “exceeded 22%,” verified by the Renewable Energy Test Center (which isn’t one of the more commonly used verification labs). But SolarCity’s SCTY -5.92% solar panels were also planned to be made in small volumes on a pilot solar panel manufacturing line in Fremont, Calif.
Creating solar panel efficiency breakthroughs in the lab or on a small scale, is far easier than making those efficient panels in very large volumes. But SunPower says the average efficiency of its solar cells (which make up panels) at the end of last year was close to 23%.
SunPower’s stock was up over 3% in morning trading to $21.84. Oil giant Total owns 66% of the Richmond, Calif.-based SunPower.
Last week SunPower announced fourth quarter and year 2015 earnings. SunPower says it generated $1.58 billion in revenue in 2015, with an annual loss of $299.44 million. The company was profitable on an annual basis in 2014 and 2013.
Check out Fortune’s recent interview with SunPower CEO Tom Werner.
Now that solar power is reaching prime time, the fossil fuel industry is doing all that it can to stop its growth.
For many years solar was on the periphery, installed by early adopters and helped along by government subsidy. But over the last several years, solar has emphatically become mainstream. It is still growing from a low base, but it is now one of the most preferred sources of new electricity generation. The cost of residential solar have been cut in half since 2010, and utility-scale solar has achieved even greater cost declines.
In 2015, the U.S. saw 16 gigawatts of new renewable energy capacity installed, which accounted for two-thirds of the total. Solar alone accounted for about one-third of new capacity last year. Natural gas only captured 25 percent of the newly installed capacity despite several years of incredibly low prices. The banner year for clean energy occurred while 11 gigawatts of coal-fired electricity came offline as old plants were retired amid rising costs and stricter environmental regulation. The clean energy transition is very much underway.