Q+A | by Jim Romeo
David Lincoln is the vice president of the Renewable Energy Group for Rosendin in Anaheim, Calif. Here he offers his insight into the solar market:
Q: What is your outlook for the market for solar technology installations and new solar projects?
A: Utility-scale solar has matured to a point where it is competing with traditional power plant resources. How ever, that is only happening now due to the continued availability of the ITC (Investment Tax Credit), which effectively expires by the end of 2021 for new project starts.
So while the utility-scale solar industry will be very busy over the next three years or so—driven by the expiration of the ITC—there remains tremendous pressure on the overall solar development and implementation value stack to continuously reduce costs. From a builder’s perspective, this means to be competitive and still achieve a reasonable margin return, which requires constantly looking into ways to improve supply chain costs, means and methods efficiencies, and design innovations to deliver an overall lower build cost while improving system yields over the 25-year plus life span of the plant.
The cost has come down significantly for C&I distributed generation (DG) solar projects and now presents a compelling ROI opportunity for building owners in high-power-cost markets on the West Coast and East Coast. While solar has been a good investment for public sector clients through third-party power purchase agreements for more than 10 years, it has only been in the past few years where a solar investment in the private sector can compete with alternative options for business investments. However, as with utility solar, this increase in C&I DG solar project growth is tied to the ITC, which means that there is just as much pressure on the DG solar project builders to reduce costs and improve efficiencies.
Q: What things should suppliers be aware of within this niche?
A: Given how competitive these markets have become, Rosendin has to be extremely price-conscious. But even more important is how we perceive and manage risk: All solar power plant owners depend on that installation performing as specified for 25-plus years, so it is imperative that the suppliers of these components have the requisite warranties and performance guarantees in place to ensure that, when there are problems, the support and response time is there to get the plant back online as fast as possible.
Finally, it’s important that the suppliers’ balance sheet standing behind those warranties and performance guarantees is strong enough to ensure that support over the duration of their commitments.