The solar industry is having a much better year than anyone expected in 2017, and as technology improves, the future looks brighter by the day. This week, predicted installation levels hit a huge milestone and efficiency took a big step forward.
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Solar-plus-storage also got another high-profile deal in Hawaii, which is becoming the industry's proving ground. If Hawaii is making storage work to increase solar adoption rates, why can't the rest of the world? Here's what investors should know from the week in solar energy.
Breaking the 100 GW threshold
As we get closer to the end of 2017, it's becoming clear that the solar industry will likely surpass 100 GW of solar installations for the year. For perspective, that's up from about 76 GW a year ago, and exponential growth from the 8.1 GW installed in 2009.
SolarPower Europe and Bernreuter Research have both recently predicted that we'll pass the 100 GW mark. For manufacturers, this has driven strong volumes but also better-than-expected panel prices and better profits than investors expected at the beginning of the year. Given the economic competitiveness of solar energy, there's no indication that the industry's growth will slow anytime soon.
Mono-PERC cell technology will be a game changer
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Solar technology is constantly improving, and the big steps forward in 2017 and 2018 will be driven by mono-PERC silicon technology. This week, JinkoSolar (NYSE: JKS) announced that it has built a mono-PERC solar cell that reached efficiency of 22.78%, which it says is a record.
At the same time, LONGi Solar, which is one of the largest solar manufacturers in the world, says it will make mass-produced solar cells with efficiency over 22% by the end of 2017. Before long, 20% efficient solar panels could be standard for the industry, a huge increase from the 15%-to-16%-efficient panels that drove the industry for most of the last decade.
Solar-plus-storage is going mainstream
Hawaii is getting its largest solar-plus-storage project thanks to SunPower (NASDAQ: SPWR) and AES (NYSE: AES) Distributed Energy. SunPower will provide an Oasis system and E-Series solar panels for a 28 MW solar system, which will be accompanied by a 20 MW, 100 MW-hr energy storage system.
The combination is the largest on the island of Kauai and will bring its percentage of electricity provided by solar to 40%. Kauai has been one of the fastest to adopt solar energy because of its high electricity costs and remote location. If it can generate 100% of its electricity from renewable energy by using storage effectively, it could be a case study in how to design a renewable-energy-based grid.
News and notes
Here are a few more notable items from the solar industry this week.
- Renewable-energy developer Equis Energy will be acquired by Global Infrastructure Partners in a deal worth $5 billion. The company has 1.9 GW of projects operational and a 9 GW pipeline. This is the largest deal in dollar terms in the history of renewable energy.
- Saudi Arabia announced a $500 billion investment in an industrial and business zone that will include automated manufacturing and renewable energy. The new "city" could span some 10,230 square miles and be part of the country's plan to build 9.5 GW of renewable energy by 2023. Given the ambition, I wouldn't be surprised if solar energy exceeds those targets by a wide margin given its cost-effectiveness in the country.
- Tesla (NASDAQ: TSLA) is reportedly preparing a massive $340 million securitization of solar leases, which would be its largest deal yet. Tesla has wound down a lot of SolarCity's operations, but it has enough assets to back this massive securitization deal, which probably won't be its last if the company continues to finance solar installations.
That's all for this week in renewable energy. We'll have more on the industry and earnings next week when SunPower reports, so check back to fool.com for details on that announcement.
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