In a note released this morning, FBR Capital says utilities are moving forward with renewable portfolio standards (RPS) but it’s not nearly fast enough to sate the demands of solar companies. For this reason, FBR warns that solar companies are likely to miss on their Q2 and Q3 numbers.
In the run up to First Solar’s (FSLR) investor meeting in Las Vegas today, FBR spoke with a “number of key players” in the solar industry including policy makers and utilities. Their key takeaways:
- Yes, utilities are warming up to solar PV, but do not expect each utility to announce Gigawatt projects tomorrow! The fact that utilities are still struggling with modelling/analysing the performance of solar PV speaks volume. However, they have by now had enough data from over the past one to two years to be better able to analyse the performance. Yes, they are committed to fulfilling their RPS requirements, but a lack of understanding of the solar PV performance is a key legitimate reason why they could miss their RPS requirements without having to pay a material penalty. We expect solar PV penetration into utilities to continue, thus helping the adoption rate. But, again, we do not expect a step-up in improvement and see a rather gradual adoption. This explains why a rooftop “distributed” model is still preferred over 20-MW-plus projects. This could indeed change in CY10, but it is a work-in-process.
- Land is another key critical issue in implementing large, utility-scale alternative energy projects. Using private land is viewed as having a significant advantage over federal land.
- Given the low installed base of solar panels, versus wind and CSP, we expect solar panels to have the highest growth among all three alternative means of energy generation, helping the U.S. market to “potentially” reach 1.0 to 1.5GW (installed) market in 2010, up from 700 MW (ish) in 2009.
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