The adaptability of solar PV as a technology is going to be a key theme driving development in 2017 and beyond and we see a trend developing which we term “PV+” - by this we mean a system or solution that delivers more than just AC or DC electricity on a standalone basis. We have already seen solar PV being utilised or integrated with other technologies in varying and innovative ways around the world.
Combining Solar PV with battery storage is one of the more obvious examples of this approach and is hardly an innovative solution. Many companies have already come out with products which provide different solutions for industry and remote communities, while large scale solar PV projects are being developed with associated batteries which have the advantage of allowing solar PV owners to shape generation profile to meet demand, reduce peak network demand and increase voltage control. However, integrating solar PV and storage creates the inevitable regulatory challenges. Regulations and (the lack of) market rules create uncertainty, which places additional burden on the early projects. For example, in the US the Federal Energy Regulatory Commission may consider a storage project to be a generator, but at state level they may classify that same project as transmission or distribution. In the UK, it remains unclear whether the generator still owns the power once transferred to a third party storage provider and continues to qualify for the associated subsidies, particularly if the power if being transferred directly to the grid by such third party storage operator. It is regulatory dilemmas like this that we will continue to encounter as we grapple with integrating battery storage into a regulatory regime where network operators have not yet developed the technical standards to address the issues of connecting batteries to the system. It should also be noted that the costs of batteries aren’t falling at the same rate as solar PV. However, the overall system costs continue to fall and we believe this is helping to make the battery storage option increasingly viable. An increased appetite among the lender and investor community to finance these technologies may see their deployment accelerate with leveraged models making solutions more workable.
Solar PV is also providing affordable and quickly deployed generation solution to various industrial processes, particularly in areas where grid connection is a problem or absent altogether. The mining sector is good example of this, where energy intensive processes usually powered by fossil fuel base load plants are turning to solar solutions. Large manufacturing and industrial companies across the globe are now realising the benefits of utilising their real estate and developing onsite solar generation solutions. Structured correctly, these solutions reduce year on year energy bills and in some circumstances generate a spill that can be sold into the market, thus further reducing the overall cost of energy. That is before one accounts for the ESG and branding benefits that such a strategy brings.
Desalination is another energy intensive process that is increasingly looking to solar as an alternative to fossil fuel baseload plants. Some countries are requiring desalination plants to incorporate renewable inputs in order to make the process more sustainable and solar powered water desalination has the potential to dramatically increase access to fresh water in arid locations. While solar PV as a technology is not always aligned to the load requirement of desalination plants, with it becoming one of the cheapest options on an LCOE basis in many places, it has to make sense where there is a limited supply of potable water, high irradiation and a non-arable land mass.
Remaining with the theme of water, floating solar is witnessing increasing deployment around the globe. Replacing the costs of frames and foundations with the cheaper alternatives of tethers and anchors, the technology has the potential to see exponential growth. Reservoirs in particular are ideal locations for floating solar, as the panels bring added benefits to the reservoirs in the shape of improving evaporation rates and reducing the risk of algae and weed.
In the agriculture sector, solar PV is offering an integrated energy solution to agricultural environments, without creating a food versus fuel debate like we have seen with biofuels. Solar greenhouses are already deployed at scale in a number of countries, while solar PV projects don’t need to be developed in a way which sterilises farmland (as has sometimes been the case in Europe). Farmers can increasingly look to maximise the use of fence lines, driveways, barns and other non-arable land. There are other options we have seen which include elevated solar where farm animals can graze under panels.
Deploying solar in and around other solutions is likely to see increased application in 2017. Telecom towers, pylons, wind farms, CSP facilities and hydro plants all have tracts of land in and around their processes and this land is usually not utilised in any way. There is inherent sense in deploying solar PV, taking advantage of the infrastructure and connection that exists at those sites, particularly where the host process has its own energy consumption needs. This logic is beginning to prevail in many emerging markets and we anticipate a continuation of this trend.