Driving Dramatic Change in Solar Energy Through Cost Reductions and Political Will

Creating Dramatic Change while Supporting Local Jobs/Economies and America’s Dominance in Solar Energy Jigar Shah President and CEO SunEdison

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Scenarios ,[object Object],[object Object],[object Object],Evaluation of Accelerated Change Scenarios

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Challenge Scenario ,[object Object],[object Object],[object Object],Political Will for Structural Resolution Set up Scenario:

Challenge Scenario ,[object Object],[object Object],[object Object],Political Will for Local/Rural Economic Development Set up Scenario:

How Different? ,[object Object],[object Object],[object Object],Why does this accelerate change? Wild Card: Political Will

Distributed Generation Focus ,[object Object],[object Object],Renewable Energy

Why Solar Photovoltaics? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],-High First Costs -Large Intermittency Issues -NIMBY -Trans.&Dist. Capacity -Resource Locations ,[object Object],[object Object],[object Object],[object Object],Weaknesses -Proven, although not standardized -Ag development -Usually limited to using a waste stream -Reasonable Economics in certain cases -Proven Technology -Cost Competitive -Proven Technology -Siting -Higher Electricity Value (Retail) -Local Construction/O&M Jobs -Peak Power, utility friendly b/c impossible to produce at night Strengths BioMass Large Wind Solar PV

Why worry about Natural Gas? ,[object Object],[object Object],[object Object]

Why worry about Natural Gas? Electricity Share of Total Natural Gas Usage Natural Gas Prices 1995-2015 Source: GRI Baseline Center - 2000 Edition of the GRI Baseline Projection Source: US Department of Energy – Energy Information Administration, International Energy Outlook , Annual Energy Outlook 2002

Why worry about Natural Gas? Natural Gas Prices have risen sharply in last 6 months

New Mandates Renewables ,[object Object],[object Object],[object Object],[object Object]

Solar ,[object Object],[object Object],[object Object],[object Object],Why Solar?

Theory of the Possible ,[object Object]

Accelerating Change Natural Gas US Generating Capacity Source: EIA Solar PV US Generating Capacity Source: BP Solar analysis

Accelerating Change Solar PV US Generating Capacity Source: BP Solar analysis Natural Gas US Generating Capacity Source: BP Solar analysis Natural Gas Plant Consumption goes down as price effects from Natural Gas usage kicks in Solar is integrated within Fortune 500, Gov’t Buildings – federal, state, municipal

Cost Effective Markets Germany and Japan are already installing at 2007 prices due to learning curve leadership on labor and electronics costs 2005 2008 2012 2020

Cost Effective Markets There are over 50,000 GWhs being sold at prices in excess of 15 cents per kWh – a price at which solar will be able to compete cost effectively without subsidies in the next five years.

Cost Challenge ,[object Object],[object Object],[object Object],[object Object],[object Object],Biggest Challenge – Cost and Political Will

Solar PV Pathway to 2015 Goal * All advances have already been discovered to achieve above benefits, implementation and optimization through scale is required Cents per Retail kWh Total ownership cost Balance of System (BOS) Reliability 2015 goal O&M Solar Panels Balance of System/ Installation Labor Avg. Retail Electricity Price Cell Efficiency 14% to 17% Mfg. Yield 85%  95% Mfg. Scale (MWs) 30  200 Silicon Material  20% Installation Efficiency Scale/Speed Solar System Cost Reduction Impacts O&M Solar Panels BOS/ Install BOS/ Install

Solar Subsidy Justification Reduced deaths from particulate pollution and asthma related heath care costs Health Care – secondary using current cap & trade values Reliability, Loss Savings, Substation, Transmission, Peak Load Availability Electric Grid Reliability Benefits – secondary using current cap & trade values NO x , SO x , Mercury, and CO 2 Emissions – secondary using current cap & trade values Includes mfg, engineering, design, installation, and overhead jobs. Employment/Fees – income tax, sales tax, local fees Sources of Benefits from Solar Power Installations

Japanese Solar Program Historical Solar Subsidy and Benefits 10 year program – Breakeven 2003/4 (Billions Yen)

Proposed US Program Net Subsidy Required for Adoption in US 10 year program – Breakeven in 2014 (Billions $)

Public Will ,[object Object],[object Object],[object Object],What will it take to drive down these costs?

Advantaged Cost ,[object Object],[object Object],[object Object],[object Object],We can get to parity in electricity costs…

How large is the Industry Today? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Existing US Industry

Alternative Paths to a Solar Future Existing Buildings Solar Mfg. ,[object Object],[object Object],[object Object],Marketing Installation System New Construction ,[object Object],$0.15 cents/kWh Note: Federal and some state mandates are largely in place for public buildings, execution needed Solar Mfg. ,[object Object],[object Object],[object Object],Regulation Installation System ,[object Object],[object Object],[object Object],$0.12 cents/kWh

Existing Buildings ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Existing Stock

New Construction ,[object Object],[object Object],[object Object],[object Object],[object Object],New Stock

How do we sell it? ,[object Object],[object Object],[object Object],[object Object],Implications for Channel

What about other Renewables? ,[object Object],[object Object],[object Object],[object Object],[object Object],Implications for Renewables Broadly

Leveling Electricity Load Typical Electricity Load Profile Hours GW Peak loads, reduce load factor and are expensive to build around, peak PV power could shave the most expensive 2 % of peak demand in less than 10 years – reducing electricity costs by over 5% US Profile

Electric Power Business ,[object Object],[object Object],[object Object],[object Object],Implications for Power Business

Solar Suppliers ,[object Object],[object Object],Summary

Review ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Scenario Review:

Risks ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Biggest Risks to Scenario:

Likelihood of Political Will ,[object Object],[object Object],[object Object],Drivers of Political Will Add to this: Opportunities for Political and Economic Upside

Upside ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opportunities for Upside If you were a US Political Leader Trying to Inspire your Electorate…

Subsidy & Spending Examples ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The $10 Billion incentive this requires over 10 years is small relative to the size of other programs Source: Public Citizen

Barriers ,[object Object],Stated Solar PV enthusiasm ,[object Object],[object Object],Private sector does not drive to action Biggest Barrier to Political Will

Requirements ,[object Object],[object Object],[object Object],[object Object],What would it take?

Driving Dramatic Change in Solar Energy Through Cost Reductions and Political Will

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