Renewable Energy and Related Services: Recent Developments

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Renewable Energy and Related Services: Recent Developments ( renewable-energy-and-related-services-recent-developments )

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(e.g., Sempra); 57 (4) other independent power producers (IPPs) 58 (e.g., Cogentrix, Constellation Energy, and NRG Energy); (5) utilities (e.g., Portland General Electric); and (6) other firms (e.g., a subsidiary of Alexander and Baldwin, a Hawaii real estate company).59 The largest share of the market, through 2011, was accounted for by firms that also produce PV equipment, including SunEdison,60 SunPower, and First Solar.61 For these companies, low prices for equipment and related inputs have led to a significant change in how they view project development. While many of them expanded into project development, at least in part, to provide a path to the market for their equipment, they increasingly view project development as an area of profit; in one case, a firm now views the equipment side of its business as supporting project development.62 Utility project development is more highly concentrated among a smaller number of firms than is the case for residential or nonresidential installations, with the top 5 utility project developers accounting for 59 percent of U.S. projects completed in 2012 (figure 3.9). The top two project developers in 2012 were likely U.S.-based firms First Solar and Sempra, followed by three firms based outside of the United States—SunPower (France), EDF (France), and GCL Solar Energy (China), and then U.S-based SunEdison.63 However, project development data can be highly influenced by the timing of project completion, so firms’ positions in annual rankings can fluctuate significantly. In 2007–11, the leading large project developers, in descending order, were likely SunEdison, SunPower, First Solar, and Sempra, which accounted for a combined 28 percent of large projects completed.64 More than 60 firms completed U.S. solar PV utility projects in 2012, but this only captures a portion of the industry, as there are other firms actively developing projects in the United States.65 The utility PV market has only recently emerged as a large market segment, and as firms have entered this market segment, they have employed a number of different approaches. The services provided may vary by company or even by project. Project developers may perform EPC services on projects they develop themselves, but also on projects developed by other firms. The developers offering in-house EPC services tend to be PV- specific companies (whether manufacturers/developers or solely developers), while IPPs and unregulated entities related to utilities rarely provide EPC. Most of the project developers that do provide EPC services subcontract some or all of the actual 57 Firms that have operations that are regulated as utilities often also have businesses that develop projects and/or act as independent power producers and are not regulated as utilities. 58 An IPP is an entity that primarily produces electricity for sale on the wholesale market. It is not a utility, does not own electricity transmission, and does not have a designated service area. EIA, “Electric Industry Overview 2007” (accessed July 1, 2013). 59 Based on a review of firms completing projects in 2012. 60 SunEdison is included in this calculation for the entire time period, though it was not acquired by equipment manufacturer MEMC until 2009. MEMC, “MEMC Completes Acquisition of SunEdison,” November 23, 2009. 61 Bloomberg New Energy Finance (BNEF) data were used for the calculations of installations from 2007 to 2011. This database does not separate information on large installations by sector, so these data may also include some large commercial projects. Data for 2012 were compiled by USITC and only include utility projects. BNEF database, http://www.bnef.com (accessed January 22, 2013); data compiled by USITC. 62 First Solar, “Form 10-K,” February 29, 2012, 3, 124; First Solar, “Form 10-Q,” November 2, 2012, 42–43; MEMC, “Form 10-K,” February 29, 2012. 63 Based on data compiled by USITC staff. 64 Market share of these firms includes those where more than one developer was listed. BNEF database (accessed January 22, 2013). 65 Data compiled by USITC; BNEF database, http://www.bnef.com (accessed January 22, 2013). 3-15

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