Published on November 9th, 2013 | by Zachary Shahan


ABB’s Huge Solar Push — Shifting Solar Into The Next Gear?

November 9th, 2013 by  

ABB today gave a very powerful presentation regarding its strong and long-term push into the solar industry. I’m here in Vegas for the presentation and filmed the presentation and part of the Q&A for you*. Following the initial summary of the ABB solar story presented by Maxine Ghavi, the global head of ABB’s Solar Industry Segment Initiative, I’ll include some follow-up articles that go into some of these matters in a little more depth. As a part of that, I’ve got several videos from a couple of one-on-one interviews with Maxine that I think you’ll love. Check back in for all of that.

To start with, it’s worth noting that ABB isn’t new to the solar space. It is one of the world’s leading power and automation companies, and it has been providing underlying technologies for solar power systems for awhile. However, these various technologies have been developed or housed underneath a number of ABB’s 26 or so business divisions. And, actually, this ABB solar initiative is already about 2½ years old. However, with ABB’s new CEO, there is a strong push to go much further. Also, it seems that ABB recently arrived at the point where it made sense to show the world what it has been doing to integrate its various solar-related solutions.

So, with that long intro out of the way, here’s the presentation given by Maxine earlier today:

In the first question following the presentation, one of the other journalists asked whether or not shale gas threatened solar power growth in North America and the business case for solar here. ABB’s North America Solar Director, Bob Stojanovic, stepped in to answer that question. Following the initial answers, I threw in a few related questions. Bob and Maxine had some interesting responses. Here’s the video:

*Full disclosure: my trip to Las Vegas was supported by ABB.

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • Matt

    I found it interesting they are still stuck on the “grid parity” instead of “socket parity” he states that socket (DG) is where he thinks the growth is but the graphic ignore that. Yes to set to power plant you need grid, but to a corporation or person that plans to install it on site plug is the key.

    • Bob_Wallace

      Jigar Shah just posted “First Solar bid $1.56/Wp all in on a 10 MW project in the USA to be installed this year.” on GTM.

      I stuck that in a LCOE calculator, used the NREL preset 20 year, 3% discount rate, and the EIA 1c/kWh O&M.

      In the NE US with 17.5% capacity it would mean electricity for 7.8 cents/kWh.
      In the SW US with 20.0% capacity it would mean electricity for 7.0 cents /kWh.

      Considering the wholesale cost of electricity during the sunny hours when demand is high, I suspect grid parity has been achieved.

      • mds

        Bob, Where did Jigar make this comment?

  • mds

    Weakly argued answers to reasonable question about NG.

    They should know the answer and it should not be: “We’re not the NG experts, we don’t really know.” If you are a large company investing heavily in solar power then you better have some idea what the competition from other energy sources is going to do to your market. I’m sure they do.

    This answer is also not good: “Oh we’re guaranteed a good income until 2020 because of USA state level RPSs.” That could all change by 2020, look at Australia, and it’s not a good long-term investment outlook. Also, as a USA tax payer I don’t like that view. It better be saving us money as some point soon, or else.

    Unfortunately, to-date, economics has ruled over concerns about GW. Leadership in the USA can’t even agree that AGW is real. The good news is Solar, Wind, and (Soon) Storage are already the most economical in some areas, and their costs are all still falling at a significant rate. Solar, Wind, and (Soon) Storage are the most economical in many areas, particularly from a global perspective, because electricity in the USA is still relatively cheap compared to other countries. This is shown here: – September 2013
    “What’s The Average Price Of Electricity In…”
    This means Solar already has a large global market driven by cost, not incentives. (Can you spell exports right-wingers?)

    NG is NOT the most cost effective in areas do NOT have low cost NG, like Europe (Germany, Spain, France) where the cost of NG is 3 to 4 times what it is in the USA.

    Solar can generate electricity at the end-of-grid. Grid costs are a significant part of NG generated electricity costs. As a result, the cost of Distributed Generation (DG) Solar (i.e. end-of-grid Solar) has a huge competitive advantage over other sources of electricity. The cost of DG Solar is less than NG in Australia, Hawaii (and many other islands areas), Spain, Japan, Chile, and even some areas of California with tiered electricity rates, to name some specific examples. (You can generate NG electricity at the end-of-grid, but most of these places do not have the NG pipelines and those are not cheap to build. Same problem as using the grid to deliver electricity.) DG Solar is less than half the end-of-grid cost of electricity in Australia, Hawaii, and many MENA (Middle East and North Africa) countries right now. …and the cost of Solar is still falling. This will be true in California and other areas in the continental USA before 2016. Most of our residential DG Solar cost in the USA right now is in Customer Acquisition, Permitting, Installation, and BOS costs (including the inverters ABB is talking about). There is no question the current cost of residential DG Solar is going to drop by from $4/W to $2/W as it becomes more widely used. We know this because $2/W is what it costs right now in Germany and Australia.

    If that isn’t enough consider that a plethora of low-cost energy storage technologies are now coming to the market. IF even one, or a few, of these are successful,l then this will blow the lid right off of Solar and Wind. Suddenly they will be very low cost for 24/7 power, especially in the areas already mentioned with high costs of electricity from other sources.

    Please forward my comments to Bob Stojanovic and Maxine Ghavi. I would like to suggest Maxine integrate an answer to the NG question into her presentation. Other information and graphs available from your site should be helpful to them. The article below was a neat summary showing a linear drop in the cost of Solar and accompanying exponential growth in demand/production (same for storage batteries): “Four Charts That Prove the Future of Clean Energy Is Arriving” – September 2013
    This one shows that Solar is catching up to Wind: – September 2013
    “Cost Of Solar Getting Competitive With Wind”

    I still regard this as the most important article I’ve read on solar: – November 2011
    “100GW of demand, and the coming inflection point in the US solar market”

    Both Bob and Maxine should read and understand it.

    • mds

      2009 was the last over-demand cycle for Solar PV. The production of Purified Silicon could not keep up. We’ve just passed through 18 months of over-supply and the next over-demand is already being predicted by the end of next year, 2014. No question, this the boom/bust cycle of a disruptively growing market. We are also transitioning from a subsidy driven market to an increasing pure cost driven market.

      The article below illustrates this: – October 2013
      “US Solar Company To Build Unsubsidized 70 MW Solar Farm In Chile”
      A GRID SCALE Solar PV plant being built with NO SUBSIDIES and NO INITIAL PPA. A purely market profit potential driven investment in Solar!

      Coal competition:

      1. We are already at peak coal. We are not running out, but coal production cannot keep up with the rising world demand for energy. If the world continues to depend on coal for most of it’s electricity, then the price is going to go up …a lot. Coal use must decrease and will because of the economics.

      2. The steam plants used to generate electricity from coal require water for evaporative cooling. Global water resources are more constrained and threatened than energy resources. China has already dramatically scaled back their plans for coal power expansion because of this. This will be the case in an increasing number of areas, even in the USA, as human population numbers continue to increase.

      3. CO2 from coal is cooking the planet, i.e. AGW.

      Even if you don’t believe #3, you still have to consider #1 and # 2 above. Coal use will be a decreasing part of our electricity production going forward.

      Natural Gas competition:

      NG is going to be with us for a longer time.

      1. NG is also going to be getting more expensive in the USA, a lot more expensive. As stated in my other comment here NG is 3 to 4 times the cost in Europe compared to the USA. There’s a lot of profit potential if you can export that cheap USA NG. Those wonderful corporations that are helping run the USA government …and telling us NG is our best low-cost energy option …are going to find a way to export our NG. Money talks, especially right now in the USA.

      2. A lot of areas, especially globally, do not have access to cheap NG (e.g. Europe). Many have no access to NG unless it is imported by ship which adds cost (e.g. Hawaii, Chile). In these areas Distributed Generation (DG) Solar (i.e. end-of-grid Solar) and/or Wind is going to be the lower cost solution. To put it simply NG, Solar, and Wind are going to be sharing the market for electricity generation. In some areas NG will dominate, in others Solar and Wind will dominate. Solar will become the most dominant because of the DG (end-of-grid) cost advantage and because most of human population on the earth is in areas with a lot of sun available.
      I’m not going there. I’m tired of the Nuclear debate. Nuclear fan-boys, you can fill in.
      We’re running out and it’s now too expensive. Oil is a dead-man walking. Coal will be the same by the end of this decade.

  • Michael Berndtson

    Neat stuff. ABB is such a diversified company that they don’t have to do the hard sell on solar. The division or group head would just move over to another ABB division if solar doesn’t pan out. They can sell power electrical equipment, instrumentation and controls to nuclear plants, refineries, gas turbines, wind, coal, etc. The questions about natural gas as competition would have been more appropriate if ABB was exclusively a power generating manufacturer or a utility. GE, Honeywell, Siemens, etc. are sort of in the same situation as ABB, they sell EI&C to whoever needs it.

    • JamesWimberley

      ABB was the first of the big diversified power equipment companies to quit the nuclear business, in 2000. They made the right choice.

    • mds

      A better answer from them would be that NG and Solar PV will both be growing. NG is not equally available everywhere. Solar will out-compete NG in some markets. They don’t need to hard sell, but they should know why the company is investing money and effort into Solar PV.

  • Steeple

    Zachary, is it possible to post a link to this slide deck? Thanks

    • Sorry for the delay. A lot of catch up from this still. And am about to post several interview clips. I did receive the presentation and will share many if not all the slides, but can check with ABB about sharing the full slide deck somewhere.

  • Marion Meads

    This would have been a good answer: Fracking and shale gas will lose favor before the public when solar with energy storage reaches critical mass. Fracking and drilling for gas have many bad environmental impacts and high price volatility while solar will have no pollution and will continue to provide highly predictable electricity and has no price volatility because the fuel source is practically free: fusion energy from the sun, aka, sunlight. As soon as the American public have been freed from the brainwashing of their congress leaders by the Koch brothers, climate change deniers and the fossil fuel tycoons, they will be able to select the most logical answer that would require no brain power.

    • Michael Berndtson

      An interesting take on gas from Art Berman:

      He’s giving the presentation to Houston Geological Society.

      An interesting take away is gas pricing. For gas to become a sustaining business (i.e. making money based on gas sales rather than land deals and early investment capital) it needs to go up in price. A price good for gas producers is higher than what generators and utilities have to pay for coal and probably wind and solar.

      Something else that kind of freaks me out and was briefly mentioned in Berman’s talk is plugging and abandonment (P&A) cost. This cost is typically blown off in many rosy economic evaluations. This would be the future price for P&A of a horizontal shale well being greater than bonding requirements. If shale wells have a shorter operating life than assumed, this future cost is borne quicker, becoming more costly when calculating the net present value. P&A of a horizontal shale well is more costly than a conventional vertical well.

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