1108 Exec Digest.IR 3b

Frost & Sullivan
 
The need for energy independence in the wake of depleting fossil fuel sources and volatile fuel prices have shifted the spotlight to renewable energy resources, which are in diverse abundance in North America. After wind power, solar is the fastest-growing renewable energy market in North America. The U.S. is the dominant market for solar installations, while Canada has just begun to register high adoption rates for solar power in nonresidential applications.

New analysis from Frost & Sullivan, “North American Non Residential Solar Power Market,” finds that the nonresidential solar power market had a cumulative installed capacity of 511 MW for concentrating solar power (CSP) and 1,514 MW for solar photovoltaic (PV) by 2010. CSP’s cumulative capacity is projected to reach 4,668 MW by 2017 and 20,728 MW for PV.

The federal government and state governments are keen to tap the potential of renewable resources to achieve energy security. They have implemented numerous renewable energy policies and offered an economic package as part of the American Recovery and Reinvestment Act.

Another stimulus for the market is the renewable portfolio standards (RPSs), which enhance the market’s predictability and attract capital investment. These incentives and mandates likely will encourage investments in high-cost solar PV systems and result in a whopping compound annual growth rate (CAGR) of 45.3 percent from 2010 to 2017.

CSPs, with their ability to deliver power during peak demand, are also an attractive alternative to conventional power sources.

“In the Southwest United States, electricity consumption during the summer is the highest from 11 a.m. to late afternoon, which directly correlates with the electricity production of CSP,” said Georgina Benedetti,Frost & Sullivan senior industry analyst. “Moreover, when backed up by thermal storage facilities and combustible fuel, CSP offers utilities electricity that can be dispatched when required, making it ideal for base, shoulder and peak loads.”

Despite the obvious market potential, the higher capital investment in solar energy and the complications in obtaining permits and grid access will deter utility owners. Grid-connected PV systems tend to have higher upfront costs than other conventional energy systems, and the same is true for CSP technology.

A large CSP plant will require an investment of $6,000 to $7,500 per kilowatt-hour while a coal-fired power plant will need only $2,400 to $3,500 per kilowatt. Local transmission infrastructure capability is also an important requirement to deploy large CSP plants. As CSP projects require vast tracts of land, the best locations are often deserts with no transmission lines for miles around.

Plant owners also will have to deal with the slow planning and permitting in gaining grid access.

“Utilities can still feel optimistic as the capital cost of a large CSP plant is expected to reduce to $4,500 per kilowatt to $5,500 per kilowatt within the next five years,” Benedetti said. “This will allow CSPs to compete against coal and natural gas power generation plants and earn higher revenues for the nonresidential solar power market.”

About Frost & Sullivan
Frost & Sullivan enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s growth team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

 
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1108 Exec Digest.IR 3b

Frost & Sullivan
 
The need for energy independence in the wake of depleting fossil fuel sources and volatile fuel prices have shifted the spotlight to renewable energy resources, which are in diverse abundance in North America. After wind power, solar is the fastest-growing renewable energy market in North America. The U.S. is the dominant market for solar installations, while Canada has just begun to register high adoption rates for solar power in nonresidential applications.

New analysis from Frost & Sullivan, “North American Non Residential Solar Power Market,” finds that the nonresidential solar power market had a cumulative installed capacity of 511 MW for concentrating solar power (CSP) and 1,514 MW for solar photovoltaic (PV) by 2010. CSP’s cumulative capacity is projected to reach 4,668 MW by 2017 and 20,728 MW for PV.

The federal government and state governments are keen to tap the potential of renewable resources to achieve energy security. They have implemented numerous renewable energy policies and offered an economic package as part of the American Recovery and Reinvestment Act.

Another stimulus for the market is the renewable portfolio standards (RPSs), which enhance the market’s predictability and attract capital investment. These incentives and mandates likely will encourage investments in high-cost solar PV systems and result in a whopping compound annual growth rate (CAGR) of 45.3 percent from 2010 to 2017.

CSPs, with their ability to deliver power during peak demand, are also an attractive alternative to conventional power sources.

“In the Southwest United States, electricity consumption during the summer is the highest from 11 a.m. to late afternoon, which directly correlates with the electricity production of CSP,” said Georgina Benedetti,Frost & Sullivan senior industry analyst. “Moreover, when backed up by thermal storage facilities and combustible fuel, CSP offers utilities electricity that can be dispatched when required, making it ideal for base, shoulder and peak loads.”

Despite the obvious market potential, the higher capital investment in solar energy and the complications in obtaining permits and grid access will deter utility owners. Grid-connected PV systems tend to have higher upfront costs than other conventional energy systems, and the same is true for CSP technology.

A large CSP plant will require an investment of $6,000 to $7,500 per kilowatt-hour while a coal-fired power plant will need only $2,400 to $3,500 per kilowatt. Local transmission infrastructure capability is also an important requirement to deploy large CSP plants. As CSP projects require vast tracts of land, the best locations are often deserts with no transmission lines for miles around.

Plant owners also will have to deal with the slow planning and permitting in gaining grid access.

“Utilities can still feel optimistic as the capital cost of a large CSP plant is expected to reduce to $4,500 per kilowatt to $5,500 per kilowatt within the next five years,” Benedetti said. “This will allow CSPs to compete against coal and natural gas power generation plants and earn higher revenues for the nonresidential solar power market.”

About Frost & Sullivan
Frost & Sullivan enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s growth team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.