By Frank Andorka, Senior Correspondent
By Frank Andorka, Senior Correspondent
At Intersolar North America two weeks ago, I sat down with Martin Hermann, founder and CEO of 8minutenergy on the heels of their announcement of their Eagle Shadow Mountain project, which was signed at a flat rate of $23.76 per megawatt-hour throughout its 25-year PPA term, or 2.3 cents per kilowatt-hour. In Part 1 of our discussions, Martin Hermann and I talked about just how low he thinks module prices can go. In Part II, which will be posted later this week, Martin Hermann discussed the tariffs and their overall effect on the U.S. solar industry. Here is what he had to say in Part II of our discussions. Frank Andorka, Senior Correspondent: (FA): Storage is another big topic of conversation in the industry. Where do you see energy storage right now and how does it help the market mature? Martin Hermann (MH): The headline is that the future of dispatchable solar is here. The value is here right now for dispatchable utility-scale solar to replace gas peaker plants and even combined cycle plants in the sunnier parts of the country. I am optimistic about where we are as an industry and where we are going with batteries, although I’m not as strong an advocate for distributed generation as some others in the industry. We calculated how much it would cost to run the California grid on only distributed renewables plus storage, and we discovered costs would be six times higher than they are now. So while solar-plus-storage is the future of electricity generation, I think it will be primarily on the utility-scale side of the ledger. You need to put the technology where it will work at its strength. FA:So what is going on with the tariff situation? What kind of impact do you think they will have on the MH: I think the good news is that our technology at this point is bigger than tariffs and it will continue to grow. At 8minutenergy, we are completely focused on the U.S. market, and are seeing some remarkable projects come to fruition, including our Eagle Shadow Mountain plant in Nevada that is leading the nation as the lowest-cost solar project. Now, the U.S. market overall might grow more slowly in the short-term than countries that are not putting tariffs on solar. India, for example, continues to move forward and they are the second-largest market behind China, so little blips here and there in other markets aren’t going to derail the global solar industry. Besides India, there are other markets that are starting to install massive amounts of solar, which I believe is just a testimony to the overwhelmingly strong fundamentals of the industry. FA:Do you think China's decision to stop building new projects in the second half of the year is going to have the effect of flooding the market with inexpensive modules and, if so, do you think it could end up having a positive effect on the U.S. market? MH: It is too early to tell. I’d be a little cautious about saying that a major policy change in China is going to have a significant effect on the U.S. market. It’s certainly true that there will be an oversupply of modules, but I see those going to markets much closer to China, like India, instead. There will be other countries that will benefit, too. I’m just not sure the U.S. market will be affected significantly by the recent decisions in China.By Frank Andorka, Senior Correspondent
By Frank Andorka, Senior Correspondent
It's a stretch to say these scientists sound shrill, but the Union of Concerned Scientists aren't pulling any punches when it comes to how they feel about energy-storage research in the United States. The Union of Concerns Scientists are begging the U.S. government to get its act together (haha) and fund energy storage research, not only for the good of the planet but for the good of the country. They say that only through adequate use of battery storage can the United States achieve true energy independence. They also argue in their blog post that America is falling behind in the technological race, leaving the door open to our competitors like Korea and China to fill the void - something that could threaten national security in the long-run.This technology was developed right here in the good ole’ US of A, but unfortunately, the US is now falling behind other countries in this increasingly lucrative global market, and our outdated electric grid is growing more vulnerable to increasing threats like cyber-attacks and extreme weather. So how do we regain our leadership in this critical technology, and how can we increase the development and deployment of energy storage here at home? The answer is innovation.How we get the innovation is clearly the main concern for the scientists. While they welcome a $10 billion increase in the budget for the Department of Energy's Energy Storage Program at the Office of Electricity, they point out (correctly) that such a small budget ($51 million with the increase) is not enough to compete with other countries, who are taking the technology we created here and making it even more effective. The also write:
We all want the US to be the country selling batteries instead of buying batteries in the 21st century. Increasing federal funding for energy storage research development and demonstration will pay big dividends for our economy and national security, while helping to make the US electricity grid cleaner, more reliable, and more affordable. We’re not doing enough; we’ve got to do more. Let’s hope congress seizes the opportunity in the FY19 budget.Indeed. More: Energy Storage Should Be an Urgent National Priority
The Results Case For Politicians. Jobs, economic growth, and local investments. Those are the pillars of political talking points in an economic stump speech. That’s what solar delivers and we have to work harder inside campaigns to push for our data to get into those speeches. I’d love to hear both sides arguing who is more pro-solar, which is happening a bit in a State representative race I am watching in Florida. Try to get involved in a race and add some talking points to the candidate's speech about consumer choice, job growth and putting money into the local community.
The $10Billion Deal. Last week I asked how you would invest $10billion in renewables and none of you had any ideas. And you missed your chance to make the pitch, instead, BP is putting it into shale gas. The point I am trying to make is that someone like Sunrun, First Solar or anyone else in the rundown today, would love to do $10billion in deals but can’t get that kind of scale on a single deal. The best thing for renewables is for this deal to be a bust, resulting in the investment lost which would cause the shareholders to demand another way.
We All Need To Stand With Resi. Anti-solar demand charges must be stopped by legislatures across the Country if the regulators won’t stand up for consumers. I’ve been thinking about a parallel to the solar industry. Why don’t utilities push back on LED lights, better AC’s or gas powered dryers/stoves and water heaters? The logic is exactly the same, consumers use less electricity. On the other hand, why wouldn’t consumers get a demand credit if they buy an electric car? The residential solar market is the lifeblood to the solar industry, no matter what segment you are in, you won’t see a growing market if consumers aren’t benefitting as well.
NV Energy Choice. This is an interesting twist to the ballot question on allowing corporations to go directly to generators. The Sierra Club and NRDC came out against the ballot question and sided with NV Energy. Apparently, some sort of side deal was made.
Quarterly Headaches. I’m not a stock analyst and seldomly play the markets, but one thing is certain. Running a company like First Solar that is deep in manufacturing, supply, and development with quarterly targets. A single project slipping by a few weeks could cause massive issues for the public company. How is the company supposed to work on 30-year projects if they have to think at 3-month time horizons? Same goes true for most other solar companies that are public, quarterly targets that adjust your cost of capital can’t be the best way to run a business.
Save On Labor, A Word From Quick Mount PV. You will start to see the innovative QRail from QMPV on the ‘shelves’ at your closest distributor. Gone are the days of splicing rails together on the roof using countless metal screws. With the bonded internal splice, QRail will save you time and money when you’re on the roof. Matched with the QClick clamps, you’ll love the way your installs get done in no time. quickmountpv.com
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By Frank Andorka, Senior Correspondent
By Frank Andorka, Senior Correspondent
At Intersolar North America two weeks ago, I sat down with Martin Hermann, founder and CEO of 8minutenergy Renewables on the heels of their announcement of their Eagle Shadow Mountain project, which was signed at a flat rate of $23.76 per megawatt-hour throughout its 25-year PPA term, or 2.3 cents per kilowatt-hour. In Part 1 of our discussions, Martin Hermann and I talked about just how low he thinks module prices can go. In Part II, which will be posted later this week, Martin Hermann discussed the tariffs and their overall effect on the U.S. solar industry. Here is what he had to say in Part I of our discussions. Frank Andorka, Senior Correspondent: (FA): Module costs just seem to keep coming down. Is there a place where they stop? I heard someone say that it's all well and good that prices keep coming down, but you have to be worried that at some point, you have to be able to make money making modules. Where do you see prices going from here? Martin Hermann (MH): I don't worry about that issue. After all, if prices go so low, we've solved one of humanity's great problems, right? And I liken it to WiFi. In so many places, WiFi is free, and yet companies have still figured out how to make a business out of it. The way you capture value just changes. So I don't worry about module prices going too low. I come from the semiconductor industry, and you're not seeing the same steep decline that you see in Moore's Law. I've said this for years: The technology still has a long way to go. We are where the semiconductor industry was in the mid-90s. There's a long way to go - which is why we're so bullish on the U.S. industry. FA: You said there's a long way to go technologically. What's the next big breakthrough? MH: I don't see breakthroughs. I see evolutionary progress. And it's not as if we don't know what will happen in the next five years. It's just a matter of what will happen first and in what sequence they will happen. Before 2015, you had two technologies: cyrstalline and cadium telluride. Now you have five to seven technologies maturing at the same time, and they can mature because the market is big enough for them to do so simultaneously. And we'll see more diversification as the market continues to grow. It puts more responsibility on the developers to make informed decisions because each of these technologies has its pros and cons. We're going to see developers be forced to become more sophisticated in the way they do business because there will be a lot more ways we can drive down costs - and it's going to be incumbent on us to do it.It puts more responsibility on the developers to make informed decisions because each of these technologies has its pros and cons. We're going to see developers be forced to become more sophisticated in the way they do business because there will be a lot more ways we can drive down costs - and it's going to be incumbent on us to do it.FA: How do you manage that risk? After all, we've seen plenty of developers take risks, and a lot of them end up going belly up. MH: You have to look at the technology much earlier so that you can determine what is worth taking a risk on and what is not. If you can understand the ingredients and everything that goes into the technology, then you can make judgments about whether it's a risk worth taking or not."