Earnings season started this week for the solar industry, and the first two reports, from First Solar (NASDAQ: FSLR) and Tesla (NASDAQ: TSLA), gave some interesting insights into where the industry is headed. First Solar, for one, seems to be very bullish, while Tesla doesn't quite know what it's doing in solar at the moment.
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There were also some positive policy news items and some important data points from Asia's solar industry. Here are the highlights of the week.
Image source: First Solar.
First Solar sees better solar conditions
The first big solar earnings report from the first quarter came from First Solar, and it was impressive. Revenue and earnings beat expectations and management increased guidance, which I covered in more depth here.
The bigger takeaway for the solar industry as a whole is that management increased its expected sale price for solar projects. One of the drags on earnings at big solar companies like SunPower, First Solar, and Canadian Solar (NASDAQ: CSIQ) over the past year has been disappointing project sales. If prices are picking up, these companies may be able to sell projects in their backlog at attractive prices once again, which would be a big win for them.
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Tesla continues cutting solar
When Tesla bought SolarCity, the move was sold as creating a renewable energy powerhouse. But so far it looks like Tesla is slowly shutting down the business. In the first quarter of 2017, solar deployments were down 39% to 150 MW.
Management said it has shut down door-to-door sales and is moving solar into retail locations. It's a risky move that has no guarantee of a payoff, and with installations already on the decline, it'll be interesting to see how Tesla's solar installations trend for the rest of 2017.
What we do know is that Tesla is now selling more solar power systems than leasing, which is a broad industry trend as well: 31% of deployments were sales in Q1, up from 9% a year ago. And Elon Musk said the Solar Roof will launch in the second quarter, so that'll be worth keeping an eye on.
Florida opens up to solar energy
The Florida legislature passed Senate Bill 90 this week, which implements an amendment to reduce tax barriers for solar energy that voters approved by a 73% margin last August. The bill will exempt solar from property taxes on commercial buildings, a major barrier to growth in the market.
Solar has lagged in Florida because of burdensome rules like not allowing third-party ownership of residential solar and this property tax rule, but the state may finally be set up for solar growth. And that could be a big win for the industry long-term.
News and notes
Here are a few of the other notable news items for the week in solar.
- Yingli Green Energy, formerly the world's biggest solar panel manufacturer, avoided bankruptcy this week with a $46 million payment to creditors. But the company is still in dire straits and may not survive 2017 because of financial losses and crushing debt.
- China's National Energy Administration said the country installed 7.21 GW of solar in the first quarter of 2017, a small 70 MW increase from a year ago. The Asia Europe Clean Energy Advisory predicts that installations will be fairly flat in the second quarter, with unknown results in the second half because feed-in tariff rates will be put in place. Depending on where they're set, the industry could be in for a rough second half of the year.
- India's Ministry of New and Renewable Energy also released installation data for fiscal 2016-2017 and said that it installed 11.32 GW of new renewables, which is a lot but well short of the goal of 16.66 GW for the year. 5.53 GW of solar were added, less than half of the 12 GW mandated target. If India is going to hit 170 GW of renewable energy capacity by 2022, 100 GW of which is expected to be solar, it'll have to start growing renewables very quickly.
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