1 00:00:00,160 --> 00:00:03,080 Speaker 1: This is Dana Perkins and you are listening to Switched 2 00:00:03,120 --> 00:00:06,880 Speaker 1: on the BNEF podcast. The first solar panel was invented 3 00:00:06,920 --> 00:00:08,959 Speaker 1: at the end of the nineteenth century, but it took 4 00:00:09,039 --> 00:00:12,159 Speaker 1: until nineteen fifty four for Bell Labs to create the 5 00:00:12,200 --> 00:00:15,800 Speaker 1: first commercially viable solar cell. Today, many would consider it 6 00:00:15,920 --> 00:00:18,439 Speaker 1: a cornerstone of the energy transition and a part of 7 00:00:18,520 --> 00:00:22,000 Speaker 1: clean power rollout all over the world. In the twenty 8 00:00:22,000 --> 00:00:25,600 Speaker 1: first century, we've seen solar adoption reaching new highs and 9 00:00:25,680 --> 00:00:29,320 Speaker 1: module prices reaching new lows. To put things in perspective, 10 00:00:29,400 --> 00:00:33,319 Speaker 1: global installed capacity of photovoltaics in twenty twelve was at 11 00:00:33,400 --> 00:00:36,159 Speaker 1: one hundred and two gigawatts, and a decade later it 12 00:00:36,240 --> 00:00:39,879 Speaker 1: grew till one point two terawatts, which brings us up 13 00:00:39,880 --> 00:00:42,680 Speaker 1: to today. So what does the remainder of twenty twenty 14 00:00:42,680 --> 00:00:45,240 Speaker 1: three have in store for solar? Will the industry reached 15 00:00:45,280 --> 00:00:48,600 Speaker 1: new milestones and how might that differ in different parts 16 00:00:48,640 --> 00:00:51,360 Speaker 1: of the world. On today's show, we're joined by BENAF 17 00:00:51,479 --> 00:00:54,600 Speaker 1: solar specialist Jenny Chase, and she's going to talk to 18 00:00:54,680 --> 00:00:58,440 Speaker 1: us about bnef's Q four twenty twenty three solar market outlook. 19 00:00:58,720 --> 00:01:01,960 Speaker 1: She shares the current glopebal dynamics for solar, for example, 20 00:01:02,160 --> 00:01:05,680 Speaker 1: how Europe's recent buying spree of modules has affected prices 21 00:01:05,840 --> 00:01:08,960 Speaker 1: as well as the status of solar megabases in China, 22 00:01:09,040 --> 00:01:12,800 Speaker 1: and how onshoring solar manufacture in the US has impacted 23 00:01:12,840 --> 00:01:15,480 Speaker 1: module prices. I also ask Jenny what keeps her up 24 00:01:15,480 --> 00:01:18,720 Speaker 1: at night? Is it price, cannibalization or trade wars? And 25 00:01:19,000 --> 00:01:21,679 Speaker 1: just how much solar does she consider to be too 26 00:01:21,800 --> 00:01:24,480 Speaker 1: much solar. BNF subscribers are going to be able to 27 00:01:24,520 --> 00:01:27,679 Speaker 1: access BNF Solar Market Outlook for Q four twenty twenty 28 00:01:27,680 --> 00:01:31,080 Speaker 1: three on BNF dot com, at BNF on the Bloomberg terminal, 29 00:01:31,360 --> 00:01:33,720 Speaker 1: or on the BNF mobile app. Now, if you like 30 00:01:33,760 --> 00:01:37,039 Speaker 1: this podcast, if you subscribe, you'll receive an update on 31 00:01:37,080 --> 00:01:39,759 Speaker 1: your phone when a future episode is published, and if 32 00:01:39,760 --> 00:01:42,080 Speaker 1: you provide us with a review or a rating, that'll 33 00:01:42,080 --> 00:01:45,240 Speaker 1: make us more discoverable by others. But right now, let's 34 00:01:45,319 --> 00:01:49,080 Speaker 1: jump into our conversation with Jenny about what's happening in 35 00:01:49,160 --> 00:02:02,040 Speaker 1: solar any Great to have you back on the show today. 36 00:02:02,200 --> 00:02:03,240 Speaker 2: Great to be here, Dana. 37 00:02:03,480 --> 00:02:05,800 Speaker 1: So we're going to discuss solar. I mean, what else 38 00:02:05,840 --> 00:02:08,920 Speaker 1: would we discuss? The fun thing about this is we're 39 00:02:08,919 --> 00:02:11,200 Speaker 1: preparing for this show. Given that we've done this show, 40 00:02:11,200 --> 00:02:13,919 Speaker 1: and you actually you write books on the topic of solar, 41 00:02:13,960 --> 00:02:16,520 Speaker 1: you go on other people's shows, you're on TV about solar. 42 00:02:16,600 --> 00:02:19,160 Speaker 1: So let's jump into this. But let's do this flash 43 00:02:19,240 --> 00:02:22,520 Speaker 1: point of right now. We're going to talk about being 44 00:02:22,560 --> 00:02:25,000 Speaker 1: a f solar market outlook looking into the future. We're 45 00:02:25,000 --> 00:02:28,280 Speaker 1: also just going to discuss a bit of the COP goals, 46 00:02:28,280 --> 00:02:30,960 Speaker 1: so COP twenty eight, stripling renewables by twenty thirty, and 47 00:02:31,000 --> 00:02:33,280 Speaker 1: that solar element within there. But I want to know 48 00:02:33,560 --> 00:02:36,000 Speaker 1: headed into this, is this going to be an uplifting 49 00:02:36,040 --> 00:02:37,680 Speaker 1: show or do you have bad news for me? 50 00:02:38,320 --> 00:02:40,839 Speaker 2: It's not a great time to be a solar manufacturer. 51 00:02:41,000 --> 00:02:44,000 Speaker 2: On the other hand, all the installation numbers are going up. 52 00:02:44,240 --> 00:02:46,840 Speaker 2: It's very easy to look at solar with a ten 53 00:02:46,960 --> 00:02:49,400 Speaker 2: year overview and say, well, obviously solar is going to 54 00:02:49,400 --> 00:02:51,960 Speaker 2: be massive, Solar is king, Solar is going to change 55 00:02:51,960 --> 00:02:54,080 Speaker 2: the world, And I think that's probably true. The great 56 00:02:54,080 --> 00:02:56,400 Speaker 2: thing about having to write a quarterly outlook is that 57 00:02:56,440 --> 00:02:59,040 Speaker 2: you have to ground it in what's actually happening. And 58 00:02:59,200 --> 00:03:01,640 Speaker 2: to be honest, there is some big news and there 59 00:03:01,720 --> 00:03:05,080 Speaker 2: is some slightly not so exciting news. So the big 60 00:03:05,120 --> 00:03:07,800 Speaker 2: news is that China is likely to install two hundred 61 00:03:07,840 --> 00:03:11,120 Speaker 2: and forty gigawatts of solar panels this year. The reported 62 00:03:11,200 --> 00:03:13,239 Speaker 2: numbers look a little bit lower because they're inn ac 63 00:03:13,400 --> 00:03:15,639 Speaker 2: capacity from the grid, so that's the grid and a 64 00:03:15,680 --> 00:03:18,519 Speaker 2: red capacity, not the panel capacity. But it's probably going 65 00:03:18,600 --> 00:03:20,959 Speaker 2: to be about two hundred and forty gigawats of solar 66 00:03:20,960 --> 00:03:24,200 Speaker 2: panels going into China, which is like last year the 67 00:03:24,360 --> 00:03:27,000 Speaker 2: entire world installed two hundred and fifty two gigawats of 68 00:03:27,000 --> 00:03:30,480 Speaker 2: solar panels, So this is quite an acceleration. And part 69 00:03:30,520 --> 00:03:32,720 Speaker 2: of the reason for that, though, is that prices are 70 00:03:32,800 --> 00:03:36,160 Speaker 2: super low. Yesterday I was updating the price index for 71 00:03:36,200 --> 00:03:39,200 Speaker 2: solar modules, and right now your standard solar module in 72 00:03:39,240 --> 00:03:42,760 Speaker 2: a free trade market cost twelve point eight cents per watch. 73 00:03:43,080 --> 00:03:45,440 Speaker 2: That's below where anyone thought it would be. That's below 74 00:03:45,480 --> 00:03:47,480 Speaker 2: where the experience curve so as it should be. I'm 75 00:03:47,520 --> 00:03:50,400 Speaker 2: having real difficulty constructing the experienced curve in a way 76 00:03:50,440 --> 00:03:53,080 Speaker 2: that makes any sense with twelve point eight sense per 77 00:03:53,120 --> 00:03:55,360 Speaker 2: what it is if you look at the cost stack, 78 00:03:55,640 --> 00:03:58,560 Speaker 2: possibly still slightly above the cost of every step of 79 00:03:58,600 --> 00:04:01,360 Speaker 2: the value chain variable cost, but it is super low. 80 00:04:01,560 --> 00:04:03,640 Speaker 2: I mean, these are really prices that not only have 81 00:04:03,640 --> 00:04:06,160 Speaker 2: we never seen this anymore, but it also makes no sense. 82 00:04:06,520 --> 00:04:08,680 Speaker 1: So this is an industry that can still, after all 83 00:04:08,680 --> 00:04:10,640 Speaker 1: these years, surprise the hell out of you. 84 00:04:11,240 --> 00:04:13,400 Speaker 2: I am so surprised. I think it's because I've been 85 00:04:13,400 --> 00:04:16,160 Speaker 2: watching it for seventeen years eighteen years now that I 86 00:04:16,240 --> 00:04:17,360 Speaker 2: am so surprised. 87 00:04:17,839 --> 00:04:21,479 Speaker 1: And with these prices, does this therefore give it the 88 00:04:21,520 --> 00:04:25,000 Speaker 1: most competitive l COE in most parts of the world globally, 89 00:04:25,200 --> 00:04:27,320 Speaker 1: bar nine of any other technology. 90 00:04:27,400 --> 00:04:30,000 Speaker 2: Solar is super cheap. If you've got a grid connection, 91 00:04:30,080 --> 00:04:31,760 Speaker 2: then you've got land to put it on. Then if 92 00:04:31,760 --> 00:04:33,840 Speaker 2: you can get someone to buy the power, then you 93 00:04:33,839 --> 00:04:36,200 Speaker 2: can sell the power. But it's not really the price 94 00:04:36,200 --> 00:04:40,920 Speaker 2: of modules that's driving solar economics anymore. And the challenges 95 00:04:40,960 --> 00:04:44,479 Speaker 2: are something entirely different. That said, low module prices are 96 00:04:44,520 --> 00:04:46,960 Speaker 2: a big problem if you're a manufacturer selling solar modules. 97 00:04:47,120 --> 00:04:50,040 Speaker 1: Well, so let's then go into that. Let's talk about 98 00:04:50,160 --> 00:04:53,720 Speaker 1: the module manufacturers. Why is this such a hard time 99 00:04:53,760 --> 00:04:56,240 Speaker 1: Because it is so they're not getting the margins on 100 00:04:56,279 --> 00:04:58,440 Speaker 1: the things that they're selling despite the demand. Is there 101 00:04:58,480 --> 00:05:01,359 Speaker 1: a glut of supply or there too many manufacturers? 102 00:05:01,760 --> 00:05:05,400 Speaker 2: Exactly I mean, there's always too many solar manufacturers. That's 103 00:05:05,720 --> 00:05:10,080 Speaker 2: it's an industry with structural over capacity. Because everyone loves 104 00:05:10,120 --> 00:05:13,359 Speaker 2: solar manufacturers. Everyone loves solar panels, so everyone is like, 105 00:05:13,560 --> 00:05:15,640 Speaker 2: let's make solar panels, and then it turns out that 106 00:05:15,640 --> 00:05:18,080 Speaker 2: the margins and making solar panels are terrible. It's a 107 00:05:18,080 --> 00:05:22,160 Speaker 2: commodity business. The new generation of technology is always coming online, 108 00:05:22,200 --> 00:05:24,560 Speaker 2: and it's more efficient, it's cheaper to make, it uses 109 00:05:24,640 --> 00:05:28,240 Speaker 2: less materials. It's a great business to be buying solar modules. 110 00:05:28,320 --> 00:05:31,159 Speaker 2: But even there, a lot of European markets have what 111 00:05:31,200 --> 00:05:33,800 Speaker 2: they're calling a hangover. There is a huge inventory of 112 00:05:33,839 --> 00:05:36,039 Speaker 2: solar moduels in Europe because last year there was the 113 00:05:36,160 --> 00:05:39,680 Speaker 2: energy crisis, power prices went through the roof, everyone panicked, 114 00:05:39,680 --> 00:05:43,080 Speaker 2: everyone put in orders for solar modules. And this year 115 00:05:43,320 --> 00:05:46,240 Speaker 2: the pressure is off. Power prices have eased a bit. 116 00:05:46,279 --> 00:05:49,039 Speaker 2: We've realized that some of the worst case scenarios for 117 00:05:49,160 --> 00:05:51,119 Speaker 2: power prices are not going to happen. People are asking 118 00:05:51,200 --> 00:05:53,279 Speaker 2: questions like do I want to put solar modules on 119 00:05:53,360 --> 00:05:55,600 Speaker 2: my roof at any price right now? And there were 120 00:05:55,640 --> 00:05:58,800 Speaker 2: installation there were bottlenecks in labor so essentially the European 121 00:05:58,839 --> 00:06:01,680 Speaker 2: market has not grown ass as I think people buying 122 00:06:01,720 --> 00:06:04,240 Speaker 2: modules in Europe expected, and there's probably about a year 123 00:06:04,279 --> 00:06:07,400 Speaker 2: of inventory sitting around in the supply chain in Europe 124 00:06:07,640 --> 00:06:08,840 Speaker 2: of solar modules. 125 00:06:08,960 --> 00:06:12,080 Speaker 1: And it's that extra inventory that is what they're referring 126 00:06:12,120 --> 00:06:14,920 Speaker 1: to as a hangover. Because I'm sorry, but using that term, 127 00:06:14,960 --> 00:06:17,159 Speaker 1: I'm not sure I fully get why that is the 128 00:06:17,240 --> 00:06:18,120 Speaker 1: term he used. 129 00:06:18,760 --> 00:06:22,360 Speaker 2: So sellers are referring to this as a hangover because 130 00:06:22,400 --> 00:06:24,640 Speaker 2: there was a huge party in twenty twenty two, a 131 00:06:24,680 --> 00:06:27,320 Speaker 2: lot of demand. People who were going to buy solar anyway, 132 00:06:27,480 --> 00:06:31,560 Speaker 2: bought solar systems and solar modules early, and this year 133 00:06:31,600 --> 00:06:35,000 Speaker 2: they're like, no, no, thank you, no more this. We 134 00:06:35,080 --> 00:06:37,960 Speaker 2: have a warehouse. We have warehouses full of solar modules. 135 00:06:37,960 --> 00:06:40,400 Speaker 2: At this point, I love this. 136 00:06:40,920 --> 00:06:42,440 Speaker 1: It was a party in twenty twenty two. 137 00:06:42,480 --> 00:06:45,920 Speaker 2: That's amazing, and it's not like it's not a party 138 00:06:45,960 --> 00:06:49,239 Speaker 2: in twenty twenty three, but it's more like a normal year, 139 00:06:49,400 --> 00:06:51,919 Speaker 2: and normal year when you had a really big party 140 00:06:52,080 --> 00:06:54,760 Speaker 2: previously doesn't feel so good. Or to put it another way, 141 00:06:54,839 --> 00:06:57,400 Speaker 2: demand was pulled forward from twenty twenty three into twenty 142 00:06:57,440 --> 00:07:00,600 Speaker 2: twenty two, and in consequence, is not necessarily materializing. 143 00:07:00,680 --> 00:07:02,960 Speaker 1: Now, now we all have those friends that you know 144 00:07:03,000 --> 00:07:05,600 Speaker 1: go home before midnight and those ones who miraculously make 145 00:07:05,640 --> 00:07:07,839 Speaker 1: it after midnight. So let's talk about where the music's 146 00:07:07,880 --> 00:07:09,800 Speaker 1: still blaring, where the party is still going. Let's talk 147 00:07:09,800 --> 00:07:13,280 Speaker 1: about China, huge producer that we all know. Manufacturers of 148 00:07:13,320 --> 00:07:16,640 Speaker 1: solar modules are coming out of China, additionally being installed. 149 00:07:16,680 --> 00:07:19,040 Speaker 1: You had already touched upon the fact that there has 150 00:07:19,120 --> 00:07:21,560 Speaker 1: been more installed in China than in the previous year 151 00:07:21,840 --> 00:07:23,400 Speaker 1: across the world combined. 152 00:07:23,960 --> 00:07:27,040 Speaker 2: What is dry less, It's slightly less than in the 153 00:07:27,400 --> 00:07:28,960 Speaker 2: rest of the world. It's two hundred and forty in 154 00:07:29,040 --> 00:07:31,160 Speaker 2: China versus two fifty two last year worldwide. 155 00:07:31,560 --> 00:07:35,600 Speaker 1: Okay, so important clarification, but durn very very close, so 156 00:07:35,760 --> 00:07:40,600 Speaker 1: we'll approximate there. So why is China? Why is China booming? 157 00:07:40,640 --> 00:07:42,440 Speaker 1: It's such a rapid rate. 158 00:07:42,920 --> 00:07:46,480 Speaker 2: Well, China has China has two main sectors. So it's 159 00:07:46,480 --> 00:07:49,120 Speaker 2: got the rooftop sector, which is on a province by 160 00:07:49,160 --> 00:07:53,160 Speaker 2: province basis, and most of the provinces have been encouraged 161 00:07:53,440 --> 00:07:56,480 Speaker 2: to roll out government schemes to do bulk development of 162 00:07:56,520 --> 00:07:59,480 Speaker 2: solar on roofs, and many of them have quite successfully. 163 00:07:59,760 --> 00:08:02,960 Speaker 2: It's a major market. There are major markets in Shangdong, 164 00:08:03,040 --> 00:08:06,080 Speaker 2: in Guangdong, basically where the people are. And there's also 165 00:08:06,200 --> 00:08:09,600 Speaker 2: the only megabases where the government has allocated a grid 166 00:08:09,600 --> 00:08:12,000 Speaker 2: connection out to a place with lots of land, and 167 00:08:12,080 --> 00:08:14,760 Speaker 2: developers have to put up to ten gigawatts of solar 168 00:08:14,960 --> 00:08:17,560 Speaker 2: on that one grid connection and often some wind batteries 169 00:08:17,600 --> 00:08:21,480 Speaker 2: as well. And those megabases were auctioned off in the 170 00:08:21,520 --> 00:08:25,240 Speaker 2: past few years and the developers were mostly waiting until 171 00:08:25,280 --> 00:08:27,600 Speaker 2: the prices dropped to do them. There's also a deadline 172 00:08:27,640 --> 00:08:29,400 Speaker 2: at the end of the year for some of those megabases, 173 00:08:29,480 --> 00:08:33,480 Speaker 2: so the developers are now saying, Wow, finally cheap modules. 174 00:08:33,640 --> 00:08:36,000 Speaker 2: We've got a deadline coming up. Let's build it. 175 00:08:36,679 --> 00:08:44,800 Speaker 1: So's let's get it done. It's last call'st. 176 00:08:42,000 --> 00:08:45,640 Speaker 2: Orders STI, Well, that's orders for that batch of megabases. 177 00:08:45,679 --> 00:08:47,680 Speaker 2: But that will but there is another batch next year. 178 00:08:47,800 --> 00:08:51,000 Speaker 1: You're referring to the megabases in China, which this is 179 00:08:51,000 --> 00:08:54,640 Speaker 1: a term that I'm not hugely familiar with. So if 180 00:08:54,640 --> 00:08:56,920 Speaker 1: there are other people listening, can you put this in context. 181 00:08:56,960 --> 00:08:59,160 Speaker 1: Are these only found in China? Is this is it 182 00:08:59,200 --> 00:09:03,280 Speaker 1: a scale that is really not often or maybe ever, 183 00:09:03,400 --> 00:09:05,680 Speaker 1: found elsewhere in the world. And can you put the 184 00:09:05,760 --> 00:09:07,640 Speaker 1: size into context for our listeners. 185 00:09:08,080 --> 00:09:11,040 Speaker 2: So the good thing is we have an upcoming note 186 00:09:11,040 --> 00:09:15,040 Speaker 2: from Chan Yi Shao in Beijing on China's energy megabases 187 00:09:15,080 --> 00:09:18,559 Speaker 2: because they don't get talked about enough. So China's megabases 188 00:09:18,760 --> 00:09:22,359 Speaker 2: are relatively unique, although there are some similar developments in India. 189 00:09:22,400 --> 00:09:25,600 Speaker 2: It's the government finding a patch of land which can 190 00:09:25,640 --> 00:09:28,199 Speaker 2: be developed for solar and wind, running a grid connection 191 00:09:28,280 --> 00:09:30,960 Speaker 2: out there, and then just giving a stayt owned developer 192 00:09:30,960 --> 00:09:33,400 Speaker 2: the right to do it. And these can be five, ten, 193 00:09:33,640 --> 00:09:36,960 Speaker 2: twenty gigawatts. They've been auctioned off in batches, and the 194 00:09:37,040 --> 00:09:40,920 Speaker 2: most recent lot will be co located solar, wind storage 195 00:09:40,920 --> 00:09:42,960 Speaker 2: and sometimes some thermal as well, just to get the 196 00:09:42,960 --> 00:09:44,920 Speaker 2: most out of that grid connection. But this is a 197 00:09:44,960 --> 00:09:49,120 Speaker 2: really centralized planning, really low price development of a huge 198 00:09:49,120 --> 00:09:51,640 Speaker 2: amount of renewable energy. And it is similar to some 199 00:09:51,720 --> 00:09:55,040 Speaker 2: of India's twenty four to seven and big auctions in 200 00:09:55,080 --> 00:09:56,640 Speaker 2: some respects, but they are even bigger. 201 00:09:57,000 --> 00:09:59,080 Speaker 1: So let's pivot to the US for a second, because 202 00:09:59,120 --> 00:10:01,679 Speaker 1: we recently did a sh on grids and that keeps 203 00:10:01,679 --> 00:10:05,680 Speaker 1: wrapping up grid connectivity, is creating time lags for installing 204 00:10:06,240 --> 00:10:09,719 Speaker 1: renewable energy. Wind solar, you name it. The grid is 205 00:10:09,920 --> 00:10:14,600 Speaker 1: requiring additional work in order to facilitate new projects coming online. 206 00:10:14,760 --> 00:10:17,920 Speaker 1: First of all, are we seeing the same grid connectivity 207 00:10:17,960 --> 00:10:22,160 Speaker 1: issues in backlogs in China? Sounds like perhaps not. And 208 00:10:22,440 --> 00:10:25,000 Speaker 1: then well we'll go to the US in just a 209 00:10:25,000 --> 00:10:27,400 Speaker 1: second after that. But firstly, in China, is the grid 210 00:10:27,440 --> 00:10:28,480 Speaker 1: able to handle all of this? 211 00:10:29,040 --> 00:10:32,520 Speaker 2: So any renewable energy market in the world you go 212 00:10:32,600 --> 00:10:35,400 Speaker 2: to at the moment, you can say, well, the big 213 00:10:35,400 --> 00:10:37,720 Speaker 2: bottleneck right now is grid, and you will be right. 214 00:10:37,800 --> 00:10:39,840 Speaker 2: You can go to a conference in Turkey and say 215 00:10:39,960 --> 00:10:42,480 Speaker 2: here in Turkey the big bottle neck is grid, and 216 00:10:42,600 --> 00:10:44,640 Speaker 2: everyone there will think you know so much about the 217 00:10:44,679 --> 00:10:47,120 Speaker 2: Turkish show. In a market, you can do this anyway. 218 00:10:47,520 --> 00:10:49,960 Speaker 2: So yes, it is a problem in China, and in 219 00:10:50,040 --> 00:10:52,920 Speaker 2: China particularly, there's the problem that the areas with lots 220 00:10:52,920 --> 00:10:54,880 Speaker 2: of land and lots of sun and wind are not 221 00:10:54,920 --> 00:10:57,800 Speaker 2: the places where people live and use power. And China, 222 00:10:57,880 --> 00:11:00,360 Speaker 2: more than any other country, has used ultra high altage 223 00:11:00,400 --> 00:11:03,520 Speaker 2: transmission lines to take power across the country. But even 224 00:11:03,520 --> 00:11:07,320 Speaker 2: the biggest transmission line is difficult to use fully with 225 00:11:07,400 --> 00:11:10,280 Speaker 2: solar and wind, particularly with just solar, because of the 226 00:11:10,320 --> 00:11:12,840 Speaker 2: low capacity factor of solar so yes, it is even 227 00:11:12,840 --> 00:11:16,480 Speaker 2: a bottleneck in China, although China has certain structural advantages 228 00:11:16,600 --> 00:11:19,000 Speaker 2: to building enormous projects to sort it out. 229 00:11:19,559 --> 00:11:21,640 Speaker 1: So then let's do that pivot to the US as 230 00:11:22,080 --> 00:11:26,160 Speaker 1: a completely different market. Have the timelines for getting new 231 00:11:26,200 --> 00:11:30,640 Speaker 1: projects online been extensively elongated as of late, and can 232 00:11:30,679 --> 00:11:32,960 Speaker 1: you just touch upon well the current state of play 233 00:11:33,000 --> 00:11:38,000 Speaker 1: in terms of near shoring and domestic manufacturers of solar modules, 234 00:11:38,080 --> 00:11:40,360 Speaker 1: because there has been a change to the way the 235 00:11:40,520 --> 00:11:43,560 Speaker 1: US treats semiconductors over the last couple of years and 236 00:11:43,600 --> 00:11:46,800 Speaker 1: that has changed how they go about purchasing solar panels. 237 00:11:46,840 --> 00:11:48,520 Speaker 1: And what I really want to know is are they 238 00:11:48,559 --> 00:11:50,600 Speaker 1: experiencing these same ultra low prices. 239 00:11:51,080 --> 00:11:53,600 Speaker 2: Well, the US is a small solar market and difficult 240 00:11:53,640 --> 00:11:56,600 Speaker 2: to do business in. One of the reasons is that 241 00:11:56,640 --> 00:12:00,640 Speaker 2: the allocating grid is relatively difficult. It's very regional in 242 00:12:00,640 --> 00:12:03,080 Speaker 2: the US, and so it is a bottleneck there. In fact, 243 00:12:03,120 --> 00:12:05,080 Speaker 2: I don't think the problem is that the grid procedures 244 00:12:05,080 --> 00:12:07,200 Speaker 2: have got worse. I think the problem is that you've 245 00:12:07,240 --> 00:12:09,760 Speaker 2: got more projects trying to get grid connection, and so 246 00:12:09,920 --> 00:12:13,240 Speaker 2: it is the bottleneck. Whereas economics and power pursures agreements 247 00:12:13,320 --> 00:12:15,320 Speaker 2: are not the bottle neck anymore. So it's just found 248 00:12:15,360 --> 00:12:17,920 Speaker 2: a new bottle neck. So on the supply side, things 249 00:12:17,960 --> 00:12:21,120 Speaker 2: are easing up. On the US, prices for solar modules 250 00:12:21,280 --> 00:12:24,320 Speaker 2: are still over twenty five cents or what which, considering 251 00:12:24,360 --> 00:12:25,679 Speaker 2: we just said that the price is in the rest 252 00:12:25,679 --> 00:12:27,280 Speaker 2: of the world were twelve point eight cents for what 253 00:12:27,640 --> 00:12:31,040 Speaker 2: is quite difficult. But the US is used to having 254 00:12:31,080 --> 00:12:35,720 Speaker 2: expensive modules. It always has had expensive modules, and the 255 00:12:35,760 --> 00:12:38,800 Speaker 2: subsidy in the US is very generous, the Inflation Reduction 256 00:12:38,920 --> 00:12:41,640 Speaker 2: Act in the US. The effect on clean energy of 257 00:12:41,679 --> 00:12:44,920 Speaker 2: that is basically pushing down the accelerator on a market 258 00:12:44,960 --> 00:12:47,280 Speaker 2: that has the handbrake firmly on, So the US is 259 00:12:47,320 --> 00:12:50,679 Speaker 2: skidding around. Modules are cheaper, they're inventory there as well, 260 00:12:50,880 --> 00:12:53,200 Speaker 2: and there is about fifty giga what's a year of 261 00:12:53,240 --> 00:12:56,959 Speaker 2: module manufacturing capacity planned in the US to be added now? 262 00:12:57,040 --> 00:12:59,120 Speaker 2: I don't know what will happen now. Modules in the 263 00:12:59,120 --> 00:13:02,199 Speaker 2: rest of the world are so is so cheap. I suspect, 264 00:13:02,400 --> 00:13:05,320 Speaker 2: just on a personal personally, I suspect someone that capacity 265 00:13:05,320 --> 00:13:07,640 Speaker 2: will be canceled because why build a factory for something 266 00:13:07,640 --> 00:13:10,400 Speaker 2: that's almost free, Even with the trade barriers and the 267 00:13:10,440 --> 00:13:13,160 Speaker 2: trade barriers are significant. I mean, the Inflation Reduction Act 268 00:13:13,320 --> 00:13:17,160 Speaker 2: is paying First Solar, the only fully integrated supplier, seventeen 269 00:13:17,600 --> 00:13:21,040 Speaker 2: US cents per what to manufacture in the US, So 270 00:13:21,080 --> 00:13:24,360 Speaker 2: the price elsewhere is twelve point eight. First Solder is 271 00:13:24,360 --> 00:13:27,680 Speaker 2: getting seventeen just from manufacturing in the US. There's also 272 00:13:27,760 --> 00:13:30,520 Speaker 2: a four or five cent per watts premium for domestic 273 00:13:30,559 --> 00:13:34,480 Speaker 2: content in the US, so the US module industry is 274 00:13:34,520 --> 00:13:37,880 Speaker 2: going to be very heavily subsidized, probably enough that it 275 00:13:37,920 --> 00:13:41,760 Speaker 2: survives against competition from Southeast Asia and India, and increasingly 276 00:13:41,800 --> 00:13:43,760 Speaker 2: those are the companies that are selling into the US. 277 00:13:44,080 --> 00:13:46,520 Speaker 2: In the US, the economics are really good, but the 278 00:13:46,520 --> 00:13:49,400 Speaker 2: bottlenecks are still getting your projects connected to the grid, 279 00:13:49,600 --> 00:13:53,319 Speaker 2: and the independent system operators are working on making that easier, 280 00:13:53,800 --> 00:13:56,680 Speaker 2: on finding the locations where they can safely be collected 281 00:13:56,679 --> 00:13:58,560 Speaker 2: to the grid and letting those projects go ahead and 282 00:13:58,600 --> 00:14:00,880 Speaker 2: then kicking everyone else out of the because there was 283 00:14:00,960 --> 00:14:03,000 Speaker 2: no point in having a grid Q full of projects 284 00:14:03,040 --> 00:14:04,120 Speaker 2: that are never going to get built. 285 00:14:04,400 --> 00:14:06,360 Speaker 1: Now, I do want to continue our world tour, but 286 00:14:06,400 --> 00:14:10,000 Speaker 1: before we leave the US is solar creating jobs. 287 00:14:10,600 --> 00:14:13,880 Speaker 2: Yeah. The thing about having the accelerator on and the 288 00:14:13,960 --> 00:14:16,440 Speaker 2: handbrake on is that it creates double the number of 289 00:14:16,480 --> 00:14:18,240 Speaker 2: jobs because some of them work in the accelerator and 290 00:14:18,280 --> 00:14:20,160 Speaker 2: some of them work in the handbreak. It's a great 291 00:14:20,160 --> 00:14:23,440 Speaker 2: place to be a lawyer or a tax equity arranger. 292 00:14:23,600 --> 00:14:26,120 Speaker 2: And yeah, some of the people are actually making solar 293 00:14:26,160 --> 00:14:28,760 Speaker 2: modules and building solar systems as well. 294 00:14:29,280 --> 00:14:32,760 Speaker 1: Okay, let's continue around the world tour, and I'd like 295 00:14:32,840 --> 00:14:35,840 Speaker 1: to next go to Brazil. Brazil is at this point 296 00:14:35,840 --> 00:14:38,840 Speaker 1: in time vying for third maybe not quite there, depending 297 00:14:38,880 --> 00:14:41,320 Speaker 1: on when we're pulling the numbers. Is a very competitive 298 00:14:41,320 --> 00:14:44,640 Speaker 1: space in terms of demand for solar. What is driving 299 00:14:44,760 --> 00:14:48,360 Speaker 1: Brazil to become well, to be so interested in solar 300 00:14:48,400 --> 00:14:49,320 Speaker 1: at this point in time. 301 00:14:49,920 --> 00:14:52,560 Speaker 2: Subsidies. If you see a massive boom like that, it's 302 00:14:52,640 --> 00:14:56,440 Speaker 2: usually subsidies. So it's a little more complicated than that. 303 00:14:56,560 --> 00:14:59,840 Speaker 2: In Brazil, there's a net metering system where if you're 304 00:14:59,840 --> 00:15:01,760 Speaker 2: a business or a company, you can build up to 305 00:15:01,760 --> 00:15:04,800 Speaker 2: five megawatts of solar on your roofs and you can 306 00:15:04,880 --> 00:15:08,600 Speaker 2: share that solar electricity between your different sites, and that 307 00:15:08,680 --> 00:15:10,600 Speaker 2: solar when you feed it into the grid, it also 308 00:15:10,680 --> 00:15:15,160 Speaker 2: runs your meta backwards. Effectively. Now, minus some grid costs, 309 00:15:15,320 --> 00:15:16,680 Speaker 2: you have to pay some grid costs on that, but 310 00:15:16,680 --> 00:15:19,560 Speaker 2: the grid costs are pretty minor considering the price of energy, 311 00:15:19,760 --> 00:15:23,960 Speaker 2: and so yeah, essentially it's net metering for large commercial 312 00:15:23,960 --> 00:15:25,120 Speaker 2: systems in Brazil. 313 00:15:25,760 --> 00:15:30,040 Speaker 1: So continuing on, let's go now to another continent entirely, 314 00:15:30,240 --> 00:15:33,520 Speaker 1: let's go to Africa. There have been grid reliability issues 315 00:15:33,800 --> 00:15:36,560 Speaker 1: that have been well documented for many years in South 316 00:15:36,600 --> 00:15:41,320 Speaker 1: Africa in Nigeria. Nigeria namely has a booming population, increasing 317 00:15:41,360 --> 00:15:45,680 Speaker 1: demand for access to electricity. So is solar helping to 318 00:15:46,200 --> 00:15:49,360 Speaker 1: alleviate this grid intermittency or is it feeding into it? 319 00:15:49,440 --> 00:15:52,160 Speaker 1: And really what does the situation look like for solar 320 00:15:52,240 --> 00:15:53,720 Speaker 1: growth in Africa right now? 321 00:15:54,080 --> 00:15:58,040 Speaker 2: So yes, in both Nigeria and South Africa, solar is 322 00:15:58,160 --> 00:16:01,760 Speaker 2: helping to solve the problems power access. I would say 323 00:16:01,880 --> 00:16:04,680 Speaker 2: that in South Africa, the latest data suggests that I 324 00:16:04,720 --> 00:16:07,280 Speaker 2: got a bit over excited. Last time I did a 325 00:16:07,280 --> 00:16:09,600 Speaker 2: forecast for South Africa, I said it would be five 326 00:16:09,640 --> 00:16:12,120 Speaker 2: gigawatts new bill this year, but it's actually slowed down 327 00:16:12,200 --> 00:16:14,960 Speaker 2: quite a lot since May and June, and it's probably 328 00:16:15,000 --> 00:16:17,560 Speaker 2: going to be more like three point five gigawatts. It's 329 00:16:17,560 --> 00:16:20,120 Speaker 2: so hard to estimate these markets, but apparently May and 330 00:16:20,240 --> 00:16:22,840 Speaker 2: June is when people have the worst blackouts, and so 331 00:16:22,960 --> 00:16:24,680 Speaker 2: there was a peak of demand there which has not 332 00:16:24,720 --> 00:16:27,520 Speaker 2: been sustained. It's quite down a bit, but three point 333 00:16:27,520 --> 00:16:30,720 Speaker 2: five gigawats are still a lot, and there are increasingly 334 00:16:30,840 --> 00:16:35,040 Speaker 2: commercial installations going in. So South Africa is booming. Nigeria 335 00:16:35,080 --> 00:16:37,560 Speaker 2: we have even less data, but the exports from China 336 00:16:37,600 --> 00:16:40,720 Speaker 2: to Nigeria are still going up. So in both these 337 00:16:40,760 --> 00:16:44,760 Speaker 2: places we think that solar is having a meaningful impact 338 00:16:44,960 --> 00:16:48,360 Speaker 2: on people's access to electricity. And of course we're watching 339 00:16:48,400 --> 00:16:50,520 Speaker 2: the rest of Africa, or we're trying to watch the 340 00:16:50,520 --> 00:16:53,840 Speaker 2: rest of Africa, because it's so important both for the 341 00:16:53,840 --> 00:16:56,920 Speaker 2: solar industry to find new markets that are untapped and 342 00:16:57,040 --> 00:17:00,840 Speaker 2: also for the people actually there that these countries can leapfrog, 343 00:17:01,280 --> 00:17:03,800 Speaker 2: not go through the whole thing of building a fossil 344 00:17:03,800 --> 00:17:06,560 Speaker 2: fuel powered grid, but go straight to something better and cheaper. 345 00:17:06,880 --> 00:17:08,560 Speaker 1: Now, you said at the beginning of the show that 346 00:17:08,840 --> 00:17:11,320 Speaker 1: these market outlooks force us to think about things in 347 00:17:11,400 --> 00:17:14,639 Speaker 1: these kind of restricted timelines, which is actually quite useful 348 00:17:14,680 --> 00:17:17,639 Speaker 1: for thinking about short, medium, long term because we do 349 00:17:17,680 --> 00:17:19,800 Speaker 1: look at all of these different aspects of the industry. 350 00:17:19,880 --> 00:17:21,720 Speaker 1: So over the course of the rest of this year 351 00:17:21,760 --> 00:17:24,280 Speaker 1: and into next year, are we going to continue to 352 00:17:24,280 --> 00:17:25,080 Speaker 1: see growth? 353 00:17:25,440 --> 00:17:28,400 Speaker 2: So we absolutely do see growth in the solar industry. 354 00:17:28,560 --> 00:17:32,280 Speaker 2: It will continue, it will be almost universal. I think 355 00:17:32,359 --> 00:17:34,959 Speaker 2: when some people are forecasting, they want to just carry 356 00:17:34,960 --> 00:17:37,280 Speaker 2: the line on the line up, and I've got to 357 00:17:37,359 --> 00:17:39,679 Speaker 2: caution as a forecaster that you cannot just do that 358 00:17:39,760 --> 00:17:44,359 Speaker 2: because exponential growth is a mathematically terrifying thing, and if 359 00:17:44,400 --> 00:17:48,000 Speaker 2: you're forecast involved covering the entire world with solar panels, 360 00:17:48,119 --> 00:17:50,760 Speaker 2: they are probably wrong. We're getting to the point as 361 00:17:50,800 --> 00:17:53,200 Speaker 2: an analysis team where you have to start asking questions 362 00:17:53,240 --> 00:17:56,560 Speaker 2: about when solar does slow down, and there are negative 363 00:17:56,560 --> 00:17:59,320 Speaker 2: feedback mechanisms in solar. Once you get a certain amount 364 00:17:59,359 --> 00:18:01,920 Speaker 2: of solar in the grid, power should cost less at 365 00:18:01,920 --> 00:18:04,640 Speaker 2: midday on a Sunday Sunday day. Given the growth rates 366 00:18:04,640 --> 00:18:06,439 Speaker 2: we're looking at, it should probably be free on a 367 00:18:06,440 --> 00:18:09,560 Speaker 2: Sunday day during sunny hours by twenty thirty and that 368 00:18:09,640 --> 00:18:12,120 Speaker 2: will affect the economics of solar and make people less 369 00:18:12,119 --> 00:18:14,480 Speaker 2: plately to build more solar. Now there are a lot 370 00:18:14,480 --> 00:18:16,639 Speaker 2: more batteries than we thought there would be as well. 371 00:18:17,119 --> 00:18:19,760 Speaker 2: Batteries are also booming, and of course batteries can shift 372 00:18:19,760 --> 00:18:22,520 Speaker 2: at least the daily generation to the evening when the 373 00:18:22,520 --> 00:18:25,159 Speaker 2: sun goes down, which helps solar by propping up the 374 00:18:25,160 --> 00:18:27,080 Speaker 2: prices in the middle of the day and meaning that 375 00:18:27,119 --> 00:18:30,359 Speaker 2: solar projects get paid more for their output. But there 376 00:18:30,400 --> 00:18:33,240 Speaker 2: are limits to integrating solar. We can work on those 377 00:18:33,240 --> 00:18:36,360 Speaker 2: limits in many ways, but there are negative feedback mechanisms 378 00:18:36,359 --> 00:18:39,399 Speaker 2: that do cause certain solar markets to slow down, and 379 00:18:39,440 --> 00:18:43,119 Speaker 2: forecasting when they will is very, very difficult, and you 380 00:18:43,240 --> 00:18:46,479 Speaker 2: can't just extrapolate an exponential line forever. 381 00:18:47,119 --> 00:18:49,720 Speaker 1: Well, So let's talk about this growth then in light 382 00:18:49,800 --> 00:18:53,280 Speaker 1: of the upcoming Climate Conference COP twenty eight, which will 383 00:18:53,320 --> 00:18:55,879 Speaker 1: be in Dubai and the United Arab Emirates. And one 384 00:18:55,920 --> 00:18:58,399 Speaker 1: of the things that the COP presidency has outlined is 385 00:18:58,560 --> 00:19:02,119 Speaker 1: this concept of triplingles by twenty thirty as being a 386 00:19:02,280 --> 00:19:04,800 Speaker 1: goal that we should be striving towards. And I know 387 00:19:04,880 --> 00:19:07,359 Speaker 1: that we are publishing a report that looks at that 388 00:19:07,480 --> 00:19:11,160 Speaker 1: specific goal and talks about various aspects of it, including 389 00:19:11,400 --> 00:19:14,280 Speaker 1: whether or not we think it's attainable. So, Jenny, what 390 00:19:14,400 --> 00:19:17,879 Speaker 1: are your views on tripling renewables by twenty thirty for solar? 391 00:19:18,200 --> 00:19:21,720 Speaker 2: So we're expecting the pledge to be negotiated at COP 392 00:19:21,720 --> 00:19:25,119 Speaker 2: twenty eight to be that the renewables capacity at the 393 00:19:25,200 --> 00:19:28,679 Speaker 2: end of twenty twenty two worldwide will be triple to 394 00:19:28,680 --> 00:19:31,600 Speaker 2: twenty thirty, which would take it to about eleven terrawatts 395 00:19:31,880 --> 00:19:35,400 Speaker 2: of renewables capacity by twenty thirty. And this won't be homogeneous. 396 00:19:35,480 --> 00:19:38,040 Speaker 2: I mean Brazil already Brazil has loads of renewables. Brazil 397 00:19:38,080 --> 00:19:40,919 Speaker 2: gets about eighty five percent of its power from renewables, 398 00:19:40,920 --> 00:19:43,720 Speaker 2: including large hydro, so it doesn't really make sense for 399 00:19:43,760 --> 00:19:46,000 Speaker 2: Brazil to triple that, Whereas there are parts of the 400 00:19:46,040 --> 00:19:49,200 Speaker 2: world like Africa, like Southeast Asia that wants to more 401 00:19:49,240 --> 00:19:51,639 Speaker 2: than triple, not just for their own economic reasons, but 402 00:19:51,680 --> 00:19:54,199 Speaker 2: also to be on a net zero pathway to twenty fifty. 403 00:19:54,400 --> 00:19:57,280 Speaker 2: We think though as a global target, it's in line 404 00:19:57,320 --> 00:19:59,600 Speaker 2: with our net zero pathway, and so that's probably a 405 00:19:59,600 --> 00:20:02,040 Speaker 2: good thing, but it will have to be implemented differently 406 00:20:02,040 --> 00:20:04,600 Speaker 2: in different countries. And the other thing is, as a 407 00:20:04,600 --> 00:20:08,240 Speaker 2: solar analyst, don't make it all bloomin solar, because if 408 00:20:08,240 --> 00:20:12,679 Speaker 2: you triple global renewables capacity with solar, solar capacity, factors 409 00:20:12,680 --> 00:20:16,399 Speaker 2: structurally are at most thirty percent, and that's in a 410 00:20:16,520 --> 00:20:21,560 Speaker 2: truly exceptionally sunny place, whereas wind capacity factors should be 411 00:20:21,680 --> 00:20:25,639 Speaker 2: higher than forty percent, and hydrocapacity factors can be highest still. 412 00:20:25,720 --> 00:20:28,000 Speaker 2: And also the wind blows at night and in the winter. 413 00:20:28,320 --> 00:20:31,520 Speaker 2: So we must not take this tripling renewables capacity and 414 00:20:31,560 --> 00:20:33,920 Speaker 2: say it'll be all solar. We should be building wind 415 00:20:33,920 --> 00:20:36,440 Speaker 2: as well. As a solar analyst, my tea takeaway is 416 00:20:36,520 --> 00:20:37,480 Speaker 2: we should be building wind. 417 00:20:37,760 --> 00:20:41,040 Speaker 1: It should be an increasingly diversified grade. We need to 418 00:20:41,119 --> 00:20:43,160 Speaker 1: lea see a lot of different things that are doing 419 00:20:43,200 --> 00:20:46,240 Speaker 1: different things for the mix in order to handle intermittency. 420 00:20:46,560 --> 00:20:49,320 Speaker 1: But as a solar analyst, then would you still say, 421 00:20:49,440 --> 00:20:52,280 Speaker 1: assuming that it's not the only but part of the mix, 422 00:20:52,320 --> 00:20:55,320 Speaker 1: should solar still be at the center and perhaps the 423 00:20:55,560 --> 00:20:57,920 Speaker 1: dominant source of energy. 424 00:20:58,480 --> 00:21:00,640 Speaker 2: Solar will get built whatever you do. 425 00:21:01,000 --> 00:21:03,800 Speaker 1: So it's going to happen. Regarding because of web solar. 426 00:21:04,160 --> 00:21:07,040 Speaker 2: You couldn't stop solar if you wanted to. What we 427 00:21:07,119 --> 00:21:09,640 Speaker 2: need to be doing, what government should be focusing on 428 00:21:09,840 --> 00:21:10,760 Speaker 2: is grids and wind. 429 00:21:12,320 --> 00:21:14,520 Speaker 1: So on the range of things that could be keeping 430 00:21:14,520 --> 00:21:16,680 Speaker 1: you up at night in the solar industry, you've already 431 00:21:16,680 --> 00:21:18,800 Speaker 1: identified that we needed to be thinking about grids. We 432 00:21:18,840 --> 00:21:21,520 Speaker 1: need to be thinking about the various sources that are 433 00:21:21,560 --> 00:21:24,440 Speaker 1: going on to the grid. But I've got two things 434 00:21:24,840 --> 00:21:28,680 Speaker 1: that I think we're often considering for the future, maybe 435 00:21:28,680 --> 00:21:32,639 Speaker 1: even right now, and they are one the semiconductor trade 436 00:21:32,680 --> 00:21:35,959 Speaker 1: wars that are taking place currently, and then also future 437 00:21:36,080 --> 00:21:39,240 Speaker 1: land use constraints, which would you say you are watching 438 00:21:39,359 --> 00:21:40,040 Speaker 1: most closely. 439 00:21:40,640 --> 00:21:43,760 Speaker 2: I'm not that worried about land use constraints, to be 440 00:21:43,840 --> 00:21:47,960 Speaker 2: absolutely honest, maybe except in city states where they literally 441 00:21:47,960 --> 00:21:51,399 Speaker 2: do not have much land. Most countries could meet a 442 00:21:51,440 --> 00:21:55,040 Speaker 2: sensible amount of their electricity supply with solar on the ground, 443 00:21:55,280 --> 00:21:57,840 Speaker 2: and they could alternatively and probably should, put solo on 444 00:21:57,840 --> 00:22:00,440 Speaker 2: the roofs instead. I think rooftop solar makes a huge 445 00:22:00,440 --> 00:22:02,560 Speaker 2: amount of sense, and you should not build solo on 446 00:22:02,640 --> 00:22:05,399 Speaker 2: land that is otherwise useful. But there does tend to 447 00:22:05,440 --> 00:22:07,399 Speaker 2: be a lot of land. The difficulty as most of 448 00:22:07,440 --> 00:22:09,520 Speaker 2: it doesn't have a grid connection, and some of it 449 00:22:09,520 --> 00:22:12,000 Speaker 2: probably doesn't have space for a grid connection. I think 450 00:22:12,080 --> 00:22:15,400 Speaker 2: there probably is. I think land use constraints are frankly 451 00:22:15,880 --> 00:22:19,600 Speaker 2: probably overblown, and sometimes they're based on official data of 452 00:22:19,640 --> 00:22:21,680 Speaker 2: what land is good for that doesn't reflect what the 453 00:22:21,760 --> 00:22:23,800 Speaker 2: land is actually good for. Like a lot of land 454 00:22:23,880 --> 00:22:26,600 Speaker 2: z owned as agricultural land kind of isn't it's not 455 00:22:26,680 --> 00:22:29,320 Speaker 2: in use, and sometimes it can't be in use. But 456 00:22:29,359 --> 00:22:31,400 Speaker 2: at the same time, like solar on roofs, is a 457 00:22:31,440 --> 00:22:34,440 Speaker 2: no regrets option, So not so worried about land use. 458 00:22:34,600 --> 00:22:39,159 Speaker 2: I am worried about trade wars making things difficult. Just 459 00:22:39,200 --> 00:22:41,680 Speaker 2: the fact that China is selling modules for less than 460 00:22:41,680 --> 00:22:45,000 Speaker 2: thirteen US censor while the US is trying to get 461 00:22:45,000 --> 00:22:47,600 Speaker 2: people to pay for twenty five cents of what modules. 462 00:22:47,960 --> 00:22:51,080 Speaker 2: It clearly is a bit of a problem. And it's 463 00:22:51,119 --> 00:22:53,840 Speaker 2: not just a price thing. It's also it's quite difficult 464 00:22:53,880 --> 00:22:57,119 Speaker 2: to get the paperwork to get modules into the US. However, 465 00:22:57,240 --> 00:22:59,959 Speaker 2: companies are very, very ingenious and they have been managing, 466 00:23:00,119 --> 00:23:01,800 Speaker 2: which is why there is now a massive inventory of 467 00:23:01,840 --> 00:23:05,000 Speaker 2: solar modus in the US. So I am worried about 468 00:23:05,119 --> 00:23:07,760 Speaker 2: trade war was because we did not want a situation 469 00:23:08,040 --> 00:23:11,760 Speaker 2: where China is happily running on renewables, whereas the US 470 00:23:12,040 --> 00:23:14,880 Speaker 2: refuses to use the latest tech and is therefore still 471 00:23:14,880 --> 00:23:16,399 Speaker 2: burning fossil fuels when it doesn't have to. 472 00:23:16,640 --> 00:23:18,960 Speaker 1: And you reference the fact that the latest tech is 473 00:23:19,000 --> 00:23:21,480 Speaker 1: always coming out, what is the latest tech as of 474 00:23:21,600 --> 00:23:22,080 Speaker 1: right now? 475 00:23:22,160 --> 00:23:25,480 Speaker 2: In solar top con which stands for and you don't 476 00:23:25,520 --> 00:23:27,600 Speaker 2: have to know this. I have trouble remembering it a 477 00:23:27,600 --> 00:23:31,160 Speaker 2: lot of the time. Tunnel oxidated, pastivated contact cell. 478 00:23:31,640 --> 00:23:33,400 Speaker 1: I promise you I'm not going to remember that. 479 00:23:34,960 --> 00:23:37,239 Speaker 2: You don't have to. They're pop con cells and they 480 00:23:37,280 --> 00:23:42,000 Speaker 2: replace the old perk cells pastivated emitter rear contact cells. 481 00:23:42,200 --> 00:23:45,840 Speaker 2: They're about a percentage point more efficient. Everyone's built factories 482 00:23:45,840 --> 00:23:49,879 Speaker 2: to make them. And all that means is what was 483 00:23:50,080 --> 00:23:52,919 Speaker 2: a five hundred what solar module? The same size module 484 00:23:53,000 --> 00:23:55,440 Speaker 2: is now sort of five hundred and twenty five? What 485 00:23:56,160 --> 00:23:58,520 Speaker 2: you get a little bit more for your materials in 486 00:23:58,600 --> 00:24:01,840 Speaker 2: your space. And this is how solar works. There is 487 00:24:01,880 --> 00:24:04,840 Speaker 2: not a visible difference between the old model and the 488 00:24:04,840 --> 00:24:07,080 Speaker 2: noon model. But if you don't have a factory for 489 00:24:07,119 --> 00:24:10,240 Speaker 2: the new model, your old factory is obsolete. And if 490 00:24:10,240 --> 00:24:12,480 Speaker 2: you're still paying debt on that, bad luck. 491 00:24:14,080 --> 00:24:15,880 Speaker 1: So one of the things that happened in this most 492 00:24:15,880 --> 00:24:20,200 Speaker 1: recent market outlook is you actually revised your numbers up. 493 00:24:21,160 --> 00:24:23,840 Speaker 1: That doesn't happen all that often. Actually it does. 494 00:24:24,000 --> 00:24:27,480 Speaker 2: Sadly, it happens all the time. Actually, see actually often 495 00:24:27,520 --> 00:24:28,720 Speaker 2: then we revise it downwards. 496 00:24:30,359 --> 00:24:33,600 Speaker 1: Well, so, but you've revised it up, and I want 497 00:24:33,600 --> 00:24:36,000 Speaker 1: to know, then, why are we not seeing that reflected 498 00:24:36,240 --> 00:24:39,520 Speaker 1: with publicly traded companies. Solar stock prices seem to be 499 00:24:39,520 --> 00:24:42,520 Speaker 1: doing poorly across the board at the moment, but would 500 00:24:42,560 --> 00:24:44,880 Speaker 1: demand so high, why is this not reflected? 501 00:24:45,440 --> 00:24:47,640 Speaker 2: So we thought we last quarter, we thought that three 502 00:24:47,720 --> 00:24:49,879 Speaker 2: hundred and ninety two gigawatts of solar models would be 503 00:24:49,920 --> 00:24:54,040 Speaker 2: installed worldwide this quarter. We think this is in twenty 504 00:24:54,080 --> 00:24:56,320 Speaker 2: twenty three, which bend mine. It's almost over, and we 505 00:24:56,359 --> 00:24:58,320 Speaker 2: still don't know what was built, but we now think 506 00:24:58,359 --> 00:25:00,440 Speaker 2: it's probably going to turn out to a B four 507 00:25:00,520 --> 00:25:03,440 Speaker 2: hundred and ten, four hundred and fifteen gigawatts of solar 508 00:25:03,480 --> 00:25:06,919 Speaker 2: modules worldwide, and that upwards revision is mostly China. But 509 00:25:06,960 --> 00:25:09,359 Speaker 2: at the same time, supply is even more than that. 510 00:25:09,480 --> 00:25:11,240 Speaker 2: We knew there's loads of supply. We know that there's 511 00:25:11,280 --> 00:25:13,800 Speaker 2: over five hundred gigawats of modules being made this year, 512 00:25:13,880 --> 00:25:16,920 Speaker 2: but suddenly it seems to have caught up with the market, 513 00:25:17,000 --> 00:25:20,160 Speaker 2: and therefore the price is right down. So demand is high, 514 00:25:20,240 --> 00:25:23,280 Speaker 2: but supply is higher, and in consequence, price is right down, 515 00:25:23,359 --> 00:25:25,000 Speaker 2: and that's why solar stocks are suffering. 516 00:25:25,480 --> 00:25:28,160 Speaker 1: So, Jenny, we came into this room with me very 517 00:25:28,240 --> 00:25:31,359 Speaker 1: much looking at this market outlook and thinking about Okay, well, 518 00:25:31,680 --> 00:25:33,639 Speaker 1: let's talk about what's in there, But I want to 519 00:25:33,680 --> 00:25:36,000 Speaker 1: know what's not in there? Jenny, what have I missed? 520 00:25:36,040 --> 00:25:39,240 Speaker 1: What question should I have asked? As the expert? What 521 00:25:39,359 --> 00:25:40,960 Speaker 1: are you concerned about? 522 00:25:41,440 --> 00:25:44,720 Speaker 2: So what you should have asked? Something about power price calonalization, 523 00:25:45,000 --> 00:25:47,960 Speaker 2: because it is my opinion that everyone is worried too 524 00:25:48,080 --> 00:25:52,439 Speaker 2: little about power price calonalization or hedging it with words 525 00:25:52,440 --> 00:25:54,879 Speaker 2: about market structure and market design. It is not a 526 00:25:54,920 --> 00:25:57,280 Speaker 2: market design thing. It is a problem that solar panels 527 00:25:57,320 --> 00:25:59,520 Speaker 2: in one place or generate at the same time, which 528 00:25:59,520 --> 00:26:02,000 Speaker 2: is when it's and that means that the power price 529 00:26:02,160 --> 00:26:05,080 Speaker 2: when it's sunny is going to If the market is 530 00:26:05,080 --> 00:26:07,600 Speaker 2: being at all rational, it should drop to zero. It 531 00:26:07,640 --> 00:26:10,320 Speaker 2: makes no sense to add more solar to generate at 532 00:26:10,359 --> 00:26:13,520 Speaker 2: sunny times when you've already covering the whole of your demand. 533 00:26:13,760 --> 00:26:16,359 Speaker 2: Obviously that also helps at times when it's not as sunny, 534 00:26:16,480 --> 00:26:18,680 Speaker 2: it's just a little bit sunny. But this is going 535 00:26:18,720 --> 00:26:21,840 Speaker 2: to be fundamentally one of the major negative feedback mechanisms 536 00:26:21,920 --> 00:26:24,320 Speaker 2: on solar build in the next ten years. And the 537 00:26:24,400 --> 00:26:27,959 Speaker 2: things that I'm interested in are ways in which flexible 538 00:26:28,040 --> 00:26:31,360 Speaker 2: demand is emerging. So demand for electricity that can usefully 539 00:26:31,440 --> 00:26:34,640 Speaker 2: be used only on sunny days. This is actually way 540 00:26:34,640 --> 00:26:37,239 Speaker 2: harder than it sounds, because most sources of demand are 541 00:26:37,240 --> 00:26:40,040 Speaker 2: capex intensive, and so they need to be using cheap 542 00:26:40,160 --> 00:26:43,679 Speaker 2: energy more often than just in sunny hours of sunny days. 543 00:26:43,960 --> 00:26:46,240 Speaker 2: Like you can't make hydrogen just on the sunny hours 544 00:26:46,240 --> 00:26:49,040 Speaker 2: of sunny days. The cost of building electricizers is too high. 545 00:26:49,160 --> 00:26:51,439 Speaker 2: You can't make steel just on sunny day hours of 546 00:26:51,440 --> 00:26:55,399 Speaker 2: sunny days. You can probably make your freezer extra cold, 547 00:26:56,000 --> 00:26:58,560 Speaker 2: or pre cool your house with aircon, or load your 548 00:26:58,560 --> 00:27:02,000 Speaker 2: electric vehicle. Those are all useful, and I'm interested in 549 00:27:02,119 --> 00:27:05,639 Speaker 2: mechanisms to encourage users to do that. Even with all 550 00:27:05,680 --> 00:27:07,840 Speaker 2: the batteries and even all the flexibility in the world. 551 00:27:07,880 --> 00:27:10,199 Speaker 2: This is going to be the big challenge in the 552 00:27:10,200 --> 00:27:14,479 Speaker 2: next ten years, integrating cheap power in the sunny hours 553 00:27:14,600 --> 00:27:16,720 Speaker 2: so that both the thirds of the power to actually 554 00:27:16,720 --> 00:27:19,040 Speaker 2: get some money for it, and also that it alleviates 555 00:27:19,080 --> 00:27:22,080 Speaker 2: the later surge of demand for electricity at night when 556 00:27:22,080 --> 00:27:22,800 Speaker 2: the sun goes down. 557 00:27:23,200 --> 00:27:25,520 Speaker 1: Jenny, it has been a pleasure having you here as 558 00:27:25,560 --> 00:27:27,800 Speaker 1: always to give us a snapshot of what's actually happening 559 00:27:27,840 --> 00:27:29,800 Speaker 1: in the solar industry. We look forward to having you 560 00:27:29,880 --> 00:27:32,639 Speaker 1: back and I look forward to reading your next book. 561 00:27:33,080 --> 00:27:42,280 Speaker 2: Have a great day everyone. 562 00:27:43,000 --> 00:27:46,040 Speaker 1: Bloomberg n EF is a service provided by Bloomberg Finance 563 00:27:46,160 --> 00:27:49,600 Speaker 1: LP in its affiliates. This recording does not constitute, nor 564 00:27:49,640 --> 00:27:53,840 Speaker 1: should it be construed, as investment advice, investment recommendations, or 565 00:27:53,880 --> 00:27:57,400 Speaker 1: a recommendation as to an investment or other strategy. Bloomberg 566 00:27:57,440 --> 00:28:00,840 Speaker 1: an EF should not be considered as information sufficient upon 567 00:28:00,840 --> 00:28:04,440 Speaker 1: which to base an investment decision. 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