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For Mainstream Energy Internal Use Only.
Downstream Cost Reductions to Drive Mass Adoption of
Residential Solar
Gregg Fisher Vice President/General Manager
AEE Solar
For Mainstream Energy Internal Use Only.
• Need/Demand
• Energy is an ‘anyway’ cost.
• Simplicity
• Consumers gravitate towards things they understand.
• Access
• How many people have access to this product/technology?
Is this considered a luxury item?
• Confidence
• Is the product service reliable and consistent?
KEY MARKET DRIVERS FOR MASS ADOPTION
For Mainstream Energy Internal Use Only.
Simplification of Installation
Main Drivers • Permitting/Interconnection standardization
• Self-standing industry (no subsidies required)
• Cost reduction – 3rd party financing not required
• Integrated products
– ‘Smart module’ with simplified racking attachments and built in AC inverter
• Modularization, pre-assembly, standardization
While integrators not only need a path to installation simplification, they also need to find a sustainable path to cost reduction.
For Mainstream Energy Internal Use Only.
“Local permitting and inspection processes are the bane of the solar industry, and costs are falling at a glacial pace. Certain installers experience this cost rising, and some even refuse to sell in certain jurisdictions that have especially cumbersome processes. These costs are unnecessary and counterproductive, and streamlining will support safety through efficiency and repetition.”
Source: Thinkprogress.com July 2011
SMA America
Making Solar on Every Roof a Reality
May 17 , 2012
Jurgen Krehnke, President and General Manager, SMA America
SMA America
> $2B+ in annual revenue
> 5,300 employees worldwide
> Present in 20 markets on four
continents
> 12+ GW total manufacturing capacity
> North American production in Denver
and Toronto
> Product portfolio for any application,
any power class
> The world leader in solar inverter
technology
> More than 25 GW installed worldwide
> Estimated 35% global market share
2
SMA Solar Technology AG
SMA America
Challenge #1 – Educating Consumers
3
> End-users are motivated by:
> Return on Investment
> Return on Investment
> Return on Investment
> Simply “being green” does little to motivate a
mass market
> Installers and manufacturers should
educate consumers on:
> Understanding incentives
> Knowing the cost of electricity
> Clearly presenting ROI
> Peak shaving (or time-of-use pricing, where
applicable)
> Understanding solar adds value to a home; amazingly, end-users often see increased value in excess of 100%
of the installation cost
SMA America 4
Simplified Example Calculation (Northern/Central California)
> Tiered Rate Structure (PG&E)
> Tier 3 : 130-200% = $0.30/kWh
> Tier 4/5 : > 200% = $0.34/kWh
> Cost of 3kWac Installation
> 3 x $4,500 = $13,500
> ITC = $13,500 – 30% = $9,500
> Energy Production = 4,500 kWh/yr
> Energy cost avoided = $1,400/yr
> Total Return
> System completely paid off after < 6.8 years
> 25 year return = $35,000
> 20 yr ROI = 9.7% !!! (assuming $475 depreciation per year)
> Depending on your cost of electricity, solar might already be the greatest investment!
SMA America
> Solar technology is a “new thing”
> PV technology is decades old and mature
> PV is essentially maintenance free and very
reliable
> PV is a safe investment, often providing
better returns than the stock market
> Solar is too expensive
> Prices have fallen dramatically in recent
years
> Incentives exist in many forms
> Solar leased and PPA’s have, to a large
degree, removed the upfront cost barrier
> Solar only works when the sun is at
its brightest
> Germany is the world’s #1 PV market
5
Challenge #2 – Addressing Consumer Misconceptions & Myths
SMA America
Challenge #3 – Maintaining Policy and Utility Support
6
PV has ample benefits:
> Reduces the need for peaker plants
> Energy production is highest during
highest demand
> Transition to electrically powered
vehicle fleet will require additional
green power generation – PV is fast,
cost-effective
> Grid-management features to stabilize
grid
> Reasonable incentives and policy
support must be preserved as costs
continue to decline towards grid
parity
> Continued cooperation among
regulators and policymakers to support
solar power is needed!
SMA America
SMA is Addressing the Challenges
7
> Industry best efficiencies improve ROI
> 99% Sunny Tripower
> Introduction of higher efficiency transformerless
technology to U.S.
> Grid-management features stabilize grid
> Advanced R&D focusing on cost reduction
> Leading testing and production processes
enhance reliability, reduce replacement needs
> Unique Sunny PRO Club program provides
installers with consumer-level marketing tools
to communicate end-user benefits
SMA America
Summary
8
> “Main street” solar adoption is dependent upon
consumer education
> We need to work together to address
misconceptions and lack of information
> We need to clearly and simply explain the
financial benefits
> We need to address the “politics of solar”
> We can draw parallels to “organic food”
> By meeting these objectives, the industry will
quickly move close to the mass market tipping
point = mass adoption of PV Solar !
Confidential 2
The Universal PV Interface Alliance (UPVI) is an
industry-led initiative to develop a globally-accepted,
standard interface between PV modules and
electronics devices, available for implementation to all
member companies.
UPVI Mission
Confidential 3
UPVI Alliance – Goal
Globally-accepted, standard interface between PV modules and electronics devices.
Confidential 5
• PV module connectors (finally) became common in late 1990’s
• No attempt to develop a standardized connector
• MC-4 eventually emerged, numerous manufacturers developed mechanically-compatible products. But…
– Vendor-specific tools needed to crimp each type
– Use of incorrect tool invalidates product listing and can lead to failure
• To date – none listed for interoperability
• Potentially serious safety issue and major headache for manufacturers, installers, and AHJ’s
• A PV connector based on a standard design would
have avoided many of these problems
Background
Photon Magazine’s lab tested 39 PV connecters – not a single one received an “A “ grade (Nov 2010)
Confidential 6
“The lack of flexibility in reconfiguring PCs has been acknowledged as the Achilles’ heel to further deployment... from the end user’s point of view, the PC’s I/O interfaces, such as serial, parallel ports, keyboard/mouse ports, etc, do not allow plug-and-play.” [1996, USB 1.1 specifications, page 1]
• Development of USB began in 1994 by a group of seven companies
• Objective was to make it easier to connect external devices to PCs by replacing the multitude of connectors on PCs, addressing the usability issues of existing interfaces, and simplifying software configuration of all devices
• >2 billion USB devices now sold per year
USB Case Study
Confidential 7
• Cost-Neutral with J-box / Cable Solutions
– Base configuration is a simple interface with cable assembly (i.e. a ‘passive’ J-box)
• Cross-Device Compatibility
– Single SKU simplifies development, mfg, and supply chain
– Eliminates need for technology bets
• Cross-vendor Compatibility
• Global Scope
UPVI Requirements
Confidential 8
Current Status 2012 2013
Q2 Q3 Q4 1H
Corporation Established MRD complete
Technical Specification (PRD) underway
Specification Available Member Company Development & Qualification
Certification Testing
First Compliant Products Introduced
Currently developing the Technical Specification PRD there is now an opportunity for early Members to influence the design at a formative stage
UPVI Roadmap
Confidential 9
1. Improved Safety – products are tested and
certified for interoperability
2. Lower Costs – compatible products available
from multiple vendors
3. Increased Adoption – multiple module
companies using same interface
4. Reduced Technology Risk – no need to bet
on one winning technology
5. Simpler Supply Chain – final assembly can
occur in the distribution channel or in the field.
UPVI Benefits
Confidential 10
Membership
Get Involved!
• Membership documents available at www.upvi.org
• Technical working group meetings now underway
For More Information: • www.upvi.org
5 Confidential 5 Confidential
US Manufacturing
35 Years of American Manufacturing
Over 1,100 Americans employed
Bankability backed by decades of success
…only the sun has more experience
6 Confidential
US Locations
Hillsboro, Oregon – US Manufacturing Headquarters
Camarillo, California – Sales and Marketing Headquarters
8 Confidential 8 Confidential
Mill
ion
s o
f U
S D
olla
rs
Year
Financial Strength
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2004 2005 2006 2007 2008 2009 2010 2011
Revenue
EBITDA
10 Confidential
Environmentally sound manufacturing & technology with end-of-life product recycling
Over 35 years of American manufacturing experience
Industry leading 25 year linear warranty
Engineered for real world performance
Improving cell technology to sustainably drive down cost
Product
…quality that leads the industry
11 Confidential
Turn key system design
Authorized Installer Program
Installer training
SolarWorld Financial Solutions
Solutions
12 Confidential
Support
Industry leading customer support
Local distributors and inventory around the US
National network of sales account managers
13 Confidential
Encourage free markets to drive equipment and installed cost down
Technology advancements on BOS
Increasing installation labor efficiencies
Streamlined permitting and grid interconnection
Expanding financing options
Stable incentives
What the Industry Needs to Advance
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting WREF, May 2012
Wolfgang Schlichting
Research Director, NPD Solarbuzz
World Renewable Energy Forum, May 17, 2012
Simplify, Integrate & Standardize - How to design successful products for the
residential PV market which have mass-market potential
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Agenda
1. Introducing the panellists
2. Setting the Stage
3. Panellists’ presentation
4. Prepared Q&A
5. Open Q&A
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Speaker Introduction
Jurgen Krehnke, President & GM SMA
Jack West, Founder & CTO Zep Solar
Gregg Fisher, VP & GM AEE Solar
Prashant Panchal, Residential Segm. Mgr. SolarWorld
Greg Madianos, Product Line Dir. UPVI/SolarBridge
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Small Solar Standardization, Integration and Simplification
Open standards, integrated and easy-to-use products were the
foundation of many other industries to reach mass consumer
adoption. (PC, CE, UPS…)
The same can be achieved with small solar systems.
Multi-vendor support of interchangeable modular products
creates a competitive market that grows quickly.
This allows vendors to bring easy-to-install products at
consumer prices to market and sell them at large-box retailers.
Key is to bring stakeholders together to discuss features and
requirements, as well as to learn from best practices in other
industries.
This can bring our industry into this important new phase.
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Why Integrate?
Reduce component count
Reduce cost
Move more systems design in the manufacturing
process
Less installation labor (quality & quantity)
Better quality control
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Why Simplify
Improve out-of-the-box experience
Speed up the purchase decision time (impulse
purchase)
Easy marketing messaging
Less need for educating user and training of the
installer
Word-of-mouth marketing by satisfied users
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Why Standardize?
End-user confidence and adoption
Coopetition
Easy Licensing
Quickly growing market and declining prices
Joint branding, marketing and education
Insured interchange leads to specialization and
cost reductions
World Renewable Energy Forum Denver, May 2012
© 2012 NPD Solarbuzz, part of The NPD Group. All rights reserved.
Schlichting, WREF May 2012
Speaker Presentations
Jurgen Krehnke, President & GM SMA
Jack West, Founder & CTO Zep Solar
Gregg Fisher, VP & GM AEE Solar
Prashant Panchal, Residential Segm. Mgr. SolarWorld
Greg Madianos, Product Line Dir. UPVI/SolarBridge
This document contains confidential information related to the patented technology owned by Zep Solar, Inc. This information is not to be disclosed or distributed without express written permission from Zep Solar, Inc.
Jack West • Over 20 years in the PV industry
• Began experimenting with rail-free mounting in the 1990’s
• Filed patents in 2004
• Incorporated the company in 2009
• Has raised capital and grown Zep Solar into global industry leading organization
• Industry’s 1st installation platform
• Licenses Zep Compatible technology to 12 top module and BOS manufacturers (including 5 of the top 10 PV manufacturers)
• Delivering radical cost reductions through standards-based, rail-free, auto-grounding installation systems
Introduction
© 2012 Zep Solar, Inc. CONFIDENTIAL 3
How Zep Is Contributing to Mass Adoption of PV
© 2012 Zep Solar, Inc. CONFIDENTIAL 4
• Standardization
• Structural Optimization
• Reduced Labor
• Improved Logistics
• Improved Aesthetics
• Improved Safety
Increasing integration, standardization, & partnerships • Cost-saving integration of system components requires partnerships between
manufacturers who design and manufacture around a standard
How Zep Solar is Contributing
© 2012 Zep Solar, Inc. CONFIDENTIAL 5
Optimizing Structural Systems
How Zep Solar is Contributing
© 2012 Zep Solar, Inc. CONFIDENTIAL 6
Conventional Systems
Optimizing Structural Systems
How Zep Solar is Contributing
© 2012 Zep Solar, Inc. CONFIDENTIAL 7
Leveling
Foot Interlock
Zep System II
Optimizing Structural Systems
How Zep Solar is Contributing
© 2012 Zep Solar, Inc. CONFIDENTIAL 8
Front
Leg
Rear
Leg
Zep System III
Reducing Logistics & Labor Costs
How Zep Solar is Contributing
© 2012 Zep Solar, Inc. CONFIDENTIAL 9
Photos courtesy of Vivint Solar
2-3 residential PV systems consistently installed in one day by 3 man crews
Requirements for Mass Adoption of PV
© 2012 Zep Solar, Inc. CONFIDENTIAL 10
• Simplify technology
• Reduce cost
• Mass market aesthetic
• Consumer/installer safety
• Attractive financing packages
• Mature customer support infrastructure
• High volume manufacturing techniques
• Sales & Marketing innovations