It was another wild week for the solar industry. There appears to be more growth than anticipated, next-generation products are starting to take off, and projects due two years from now are starting to enter the pipeline.
Here are the notable highlights from the week in solar.
2017 will be a surprisingly strong year for solar energy
Coming into 2017, there were a lot of questions about how big the global solar market would be. The U.S. was expected to see a down year in the aftermath of the investment tax credit extension, and China and India were relative unknowns due to potential policy changes. Early estimates had the industry growing from 78 GW in 2016 to 85 GW in 2017, which was a major slowdown from 50% growth the year before.
As the year has worn on, it's become apparent that solar installations will be a lot higher than anyone expected. China alone may install over 45 GW, and EnergyTrend is now expecting over 100 GW of solar capacity to be installed globally. That's great news for every solar manufacturer in the world, because it's a rising tide that lifts all boats and could mean a better second half of the year financially than investors are expecting.
BYD is coming to America
For years, BYD has had ambitions in the booming solar industry, and it seems the company is making good on them. The China-based company signed a 170 MW supply agreement with NextEra Energy (NYSE:NEE) this week and is expecting to launch an energy storage product in the U.S. later this year.
A powerful player in the tech industry, BYD will be an important player to watch because it could offer customers everything from EVs to energy storage to solar panels. And that could be a powerful combination.
Solar loans are becoming big business
Residential solar installation financing used to be almost entirely backed by leases, which allowed an installer to aggregate risk and sell off different cash flows to investors. But long term, it's likely that loans will play a much larger part in solar financing, as they do in home and auto sales.
That's why this week's deal by Mosaic to sell $300 million of loans to Goldman Sachs (NYSE:GS) provided a blueprint for how it may finance future projects. If big banks become consistent buyers of solar-power systems, it could lower financing costs and make solar affordable in more parts of the country, driving a new phase of growth.
Panasonic is failing in Japan, moving to Gigafactory 2
In a strange announcement, Panasonic is halting all solar manufacturing at its plant near Kyoto, Japan, shortly after announcing the shutdown of a silicon plant in Salem, Oregon. These solar manufacturing shutdowns are happening as the company ramps up production at Tesla's (NASDAQ:TSLA) Gigafactory 2 in Buffalo, New York.
It's not clear if the equipment is being moved from Japan to New York (which seems plausible), but it's strange to be shutting down a factory like this just to open another one. A factor that could play into the decision is the $750 million in subsidies Tesla and Panasonic have gotten from the State of New York, which include buying manufacturing equipment. Those subsidies could make the plant more economically viable than manufacturing in Japan.
News and notes
Here are some other notable items from the week in solar:
- Canadian Solar's (NASDAQ:CSIQ) subsidiary, Recurrent Energy, announced that it has signed a power purchase agreement for a power plant to be located in Kings County, California. The project will sell energy to community choice utility Peninsula Clean Energy and is expected to be completed in 2019.
- Residential energy storage leader Sonnen said it has sold 1,000 home storage units in August in a sign of how viable the product has become. Look for solar-plus-storage to be a growing portion of every residential solar company's product offering in 2018, particularly those with international exposure, where countries like Australia and Italy are driving demand.
- The World Bank announced that it will assist Vietnam with a solar auction, which will replace a $0.091-per-kWh feed-in tariff rate in the country. The generous subsidy currently in place may drive solar growth the country isn't ready to handle, and an auction could make for more predictable installations. But the fact that Vietnam could be a growing solar market is a positive development.
- Speaking of new solar markets, Sweden had its first solar power purchase agreement executed in Jarfalla Municipality. The PPA will back a 745 kW rooftop solar project, which isn't big by international standards but shows that solar can be effectively built nearly anywhere.
That's all for this week in solar. Check back to fool.com next week for more solar coverage.