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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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Top Trends To Watch In Renewable Energy In 2019

This year has seen several major policy changes in renewable energy, especially in solar.  

China surprised everyone in June by announcing that it would not issue approvals for any new solar power installations in 2018 and would also cut the feed-in tariff subsidy. In February, the U.S. imposed tariffs on imported solar cells and modules, creating uncertainty in the U.S. solar market.

The solar market globally is set to adapt to those industry disruptions next year. Together with continued declines in solar and wind costs, 2019 could be a brighter year for the U.S. solar and renewable energy markets, analysts and industry professionals say.

Scott Cramer, president of solar company Go Solar Group—which operates in Reno, Nevada; Salt Lake City, Utah; and San Antonio, Texas—sees several trends that will shape and shake the U.S. solar market next year.

First, total U.S. solar installations will start rising again in 2019. Then, there has been an alarmist overreaction to the U.S. solar import tariff, with missed opportunities for investors who have postponed utility-scale projects due to the tariff. According to Cramer, many in the industry overlook the fact that the tariff is a fraction of the costs and that the levy of 30 percent will be dropping by 5 percent annually over the next four years to reach 15 percent in year four.

The U.S. tariffs on imported solar cells and modules created uncertainty in the market earlier this year, resulting in quarterly additions of utility-scale solar dropping in Q3 below 1 gigawatt for the first time since 2015, yet the project pipeline points to a strong rebound in Q4, a new report by Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA) showed earlier this month.

“We did, however, see utility PV procurement outpace installations fourfold in Q3, showing that despite the tariffs causing project delays, there is substantial growth ahead for the U.S. utility PV sector,” said Colin Smith, Senior Analyst at Wood Mackenzie.

For the U.S. residential solar market, 2019 is the last year in which the federal residential renewable energy tax credit is at 30 percent, after which the tax credit gradually drops until 2022, when only commercial installations can use a 10-percent federal tax credit.

The U.S. residential solar market has been stabilizing this year after a 15-percent decline in 2017. According to the U.S. Solar Market Insight Report, Nevada was a particular bright spot with steady installation growth in Q3, and Florida is on track to post a strong year. Related: California To Electrify All Buses By 2029

Go Solar Group’s Cramer also expects China’s surplus stock of solar modules—due to the Chinese policy to reduce support for solar—to see prices drop, which will also drive competitors’ prices down, resulting in cheaper solar costs.

Bloomberg NEF expects the Chinese policy to result in PV module prices dropping by 34 percent at the end of 2018, compared to an earlier forecast of a 27-percent drop before China’s new solar support policy. BNEF also sees module prices falling by another 10-15 percent in 2019.

Thanks to falling costs, unsubsidized onshore wind and solar have become the cheapest sources of electricity generation in nearly all major economies in the world, including India and China, according to a November report by Bloomberg NEF. The comparative costs for power generation—the levelized costs of electricity (LCOE)—showed that onshore wind and solar are the cheapest power generation sources for all major economies except for Japan.

According to the November 2018 Lazard analysis of levelized cost of energy on an unsubsidized basis, utility-scale solar PV crystalline and utility-scale solar PV thin film, as well as onshore wind, are comparable with the cheapest conventional generation technologies.

In the U.S. wind power market, the American Wind Energy Association (AWEA) has estimated that 612 megawatts (MW) of new wind capacity was installed in Q3, bringing total U.S. capacity to 90,550 MW.

Currently, construction is under way on 107 projects in 23 states, with construction activity at a record-high 20,798 MW at end-Q3. If we consider that Texas currently has just over 23,000 MW of wind capacity, the U.S. is “currently building a Texas-sized amount of wind,” AWEA says.

Additional 17,167 MW of wind capacity are in advanced development, meaning that total U.S. activity was 37,965 MW in the third quarter, up by 28 percent annually, according to AWEA.

By Tsvetana Paraskova for Oilprice.com

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