The Big Question: What Is Your Greatest Concern for Your Industry in 2016?

Where will the industry stumble and where will it thrive? We asked executives at major renewable energy companies to talk to us about their worries, fears and concerns as we head into 2016.

We will update the responses below daily to give you insight on The Big Question: What Is Your Greatest Concern for Your Industry in 2016?

Lend your own voice to the discussion in the comment section below.

[Editor’s note: The vast majority of the responses we received mentioned how 2015 was an excellent year for clean energy. They pointed to the Paris Framework, which resulted from the COP21 meetings, and the U.S. government’s extension of tax credits for clean energy as foreshadowing a very positive 2016. In order to avoid being repetitive, we removed references to those events in the responses below.]

James P. McDougall, CEO, Younicos

renewable energyThe coming few years will open up tremendous opportunities for those working in renewable energy and associated industries. It’s fast becoming common knowledge that clean energy technologies perform, they’re ready for deployment, and costs will continue to fall as the industry scales. At the same time, the historic climate agreement signed in December emphatically shows that countries around the globe are now getting serious about reducing the effects of climate change.

Efficient use of energy storage has a big role to play in enabling clean energy growth. When combined intelligently, energy storage and renewables are not only cleaner, but also more economical than continuing to rely on fossil fuels. But although intelligent batteries can provide unmatched grid stability, flexible integration of renewables, reduced fossil fuel use, and “stacked” services that generate revenue, their adoption into our electricity grids is being held back.

Some utilities are still too reluctant to embrace a new technological paradigm. Undue risk aversion, inertia, or other factors lead them to rely on old, outdated, less effective technology. Policymakers are sometimes too slow to adapt regulations to new solutions, and project and infrastructure investors are often still too focused on the energy-only market to recognize the stacked revenue potential of multipurpose batteries as grid assets.

Conlan O’Leary, Co-founder and CEO, Sighten

renewable energyFor 2016, I’m concerned that our industry could potentially slip into complacency without those immediate pressures to innovate. I look forward to working with financers and solar companies to keep our foot on the gas to drive down costs and foster solar’s ongoing growth.”

By Jules Kortenhorst, CEO of Rocky Mountain Institute and Carbon War Room

renewable energyMy greatest concern for the renewable energy industry in 2016 is the myth of the need for a storage miracle. We still suffer from massive misinformation about the successful grid integration of high amounts of renewables in the absence of storage.

Yes, battery energy storage can and will play an important role aiding renewables’ grid integration. But we need not wait for some hypothetical storage breakthrough to move to a high-renewables electricity grid of the future. Improved forecasting for predictably variable renewables, demand-side solutions such as demand flexibility, and other techniques can enable reliable, low-carbon grids today.

In Germany, solar PV provides almost 7 percent of the country’s total electricity consumption for the year. And on some sunny days, solar meets more than 35 percent (one day in June of last year 78 percent) of the country’s electricity consumption needs. In fact, the grid in eastern Germany operated in 2015 with 46 percent wind and solar but without any storage. Despite having almost double the solar generation of the U.S., the German electric grid is 10 times more reliable than the U.S. grid. Islands around the world—such as Kodiak Alaska; King Island, Tasmania; Isle of Eigg, Scotland; and more—are also proving that a high penetration of renewables is possible with more than 50 percent and up to 100 percent renewable penetration.

So we do not need a storage miracle. There are many ways to manage the variability of wind and solar. This is the critical message to get out, so that we do not slow down the development of renewable energy.

Franco Traverso, Chairman & CEO, MegaGroup SpA

renewable energyMy greatest concern for my industry in 2016 is the inability of most of the PV investors and EPCs to switch from the kWp cost concept to the kWh one.  Most decision-makers are still ignoring the difference between these concepts and haven’t learned from the bloody experiences that have affected the current PV systems so far.  Indeed, the gold rush that occurred with solar PV investors in the last three/four years has lead to the installation of low cost components. And the results are clear: many systems, in particular ground-mounted solar farms, are underperforming and the actual lifespan of many components is turning out to be very short, and a consequence is that the system’s revenues are insufficient to pay back the equity investment.  Unfortunately there is not enough publicity on the disasters that this speculative approach is provoking.

It is a very painful path for producers who struggle to educate the PV investors and EPCs to change this mindset and take a long-term investment approach. 

LID, PID, actual Degradation Rate etc. are aspects that must be understood by the PV players nowadays if we want PV to really become a sustainable source of energy, competitive with the fossil fuels.

Francis Xavier Helgesen, CEO and Co-founder, Off Grid Electric

renewable energyMy greatest concern for off grid solar in Africa is that giveaways or poor quality imitation products threaten the industry. Following Paris, there has been tremendous enthusiasm and excitement in the international community to widely deploy solar to achieve basic energy access for all. More than ever, the international development community sees a market to be built rather than a target for aid budgets. What is critically important is that these good intentions translate into market support for Africa’s booming solar industry rather than market-destroying giveaways or widespread distribution of low-quality solar hardware. 

In my four years working in Tanzania, I have seen first-hand how poorly designed and low quality solar hardware can destroy trust in the technology. People want to believe that solar can solve their energy problems, and many times it can solve them exceptionally well, but low cost solar systems often have an operating life of 1-2 years with no after-sales support and service. 

Giveaways are an even greater market distortion — why would anyone buy a product if there is some likelihood they could be given it for free? And if someone is given something of value for free, why wouldn’t it end up right back in the marketplace to be sold to someone who will pay for it? Someone ultimately pays for the giveaway no matter what — often the taxpaying citizens of the very country whose solar industry is being damaged by the giveaway program.  

We have an opportunity to do solar right in Africa and leapfrog the grid. Let’s make sure we all work together to build the sector into an example for the world and protect it from the bad ideas of yesteryear.

Graham Smith, CEO and Co-Founder, Open Energy Group

renewable energyMy biggest concern for the U.S. solar industry in 2016 is the growth of the commercial solar market. While residential solar in the U.S. grew 51 percent and utility-scale solar grew 38 percent over 2013, the commercial sector declined. According to the Solar Energy Industries Association (SEIA), the mid-scale commercial solar market in the Northeast alone represents a $67.5 billion investment opportunity. This is largely due to the market misperceptions that exist from both developer and investor perspectives.

Developers lack a clear, direct, and efficient route to debt capital from traditional sources. The heterogeneity across commercial projects means unpredictable installation timelines, which are usually dragged out as well as volatile transaction costs — oftentimes significantly higher than originally estimated. These factors create the perception that commercial solar is not worth the effort and discourage developers and commercial property owners from obtaining loans and expanding their solar capacity. Borrowers need a straightforward debt application and financing process that reduces transaction soft costs and promotes streamlined funding.

On the investor side, the lack of homogeneity in the commercial solar market has created a perception that the sector is not an attractive asset class. For example, there is no standardized credit score in commercial solar equivalent to the residential FICO score, making it more challenging to evaluate the risk of customer default. Additionally, external factors also impact investor confidence such as the current low fossil fuel prices and uncertainty in the global markets. While some of these elements should not have an impact on the solar industry in actuality, perceptions — or misperceptions — can affect the market. Investors need a well-informed and structured approach to realize the full potential of the commercial sector.

Raymond Hudson, Global Solar Segment Director, DNV GL – Energy

renewable energyMy biggest concern for the solar industry in 2016 is that PV systems continue to be designed and installed with high quality and performance as the industry continues its rapid growth.

Overall, the industry has done a good job of meeting customer expectations and it is critical that this continue.  It is important to avoid issues that could damage the reputation and positive public perception of solar.   Across the industry, we need to focus on safety, reliability, and achieving the expected energy generation from solar power plants.  This is accomplished through selection of suitable sites, utilization of high quality components, following proven design and installation processes, and effective monitoring and maintenance.  

Maintaining expected financial returns is critical to the success of the industry.  Effective project implementation is vital to support the substantial growth rate that solar can continue to achieve.  Going forward, this will include the integration of energy storage technologies into solar systems in a reliable manner.   As the industry continues to focus on reducing the cost of energy, we must recognize that solar projects, and their system components, are not yet a commodity.  In the quest to reduce system and transaction costs we see a variety of risks.  These include but are certainly not limited to:  new and less proven components and manufacturers entering the market, the introduction of lower cost/quality raw materials, and maintenance practices that are not fully mature.  While the drive toward energy price grid parity will continue as solar becomes a larger part of the energy generation mix, as an industry, we must carefully balance lower costs with the need for high quality.

Dan Shugar, CEO, NEXTracker

renewable energyWith 25 GW deployed, solar has arrived as a mainstream power resource in the U.S.  It’s outpaced coal as a source of new generation over the last few years; it could become the world’s single source of electricity by 2050 (per IEA).  This impressive growth coincides with plummeting PV costs. It now costs 75 percent less to deploy a utility-scale PV plant than it did eight years ago; ITC extension assures continuing market growth.  

The U.S. coal industry is rapidly declining, with most planned projects canceled, and 42 GW of coal-fired operations retired over the last 5 years. There hasn’t been a single U.S. nuclear power plant commissioned in the U.S. in 25 years.   New coal and nuclear power in the U.S.  — historically mainstays of the power landscape — are over.  

However, before the solar industry takes a victory lap, we need to recognize that coal and nuclear are growing overseas at record rates.  Brazil, China, India and South Africa have committed to accelerate solar deployment; we must redouble our efforts to ensure this will occur.  In all these markets we’re in an urgent race against coal and nuclear.  

In China  — which has embraced solar — construction of new coal-fired power plants continues. Disturbingly, solar plants operations have been curtailed in some cases to enable coal-fired transmission on constrained power lines, creating uncertainty for investors.  China’s skies in the central and eastern regions are too polluted to enable productive solar, so unimpeded grid access for PV development in the northwest must be facilitated.   

India’s skies are still predominantly clear in much of the country — but we’re in a furious race against dirty fossil fuels there.  There’s great opportunity in Brazil, as vast hydropower plants are operating at a fraction of capacity due to extended droughts.  Brazil requires significant use of locally-made materials, so adding PV manufacturing capacity is a top priority.  South Africa and India instituted rolling blackouts due to lack of power.  PV can alleviate power constraints; streamlining regulatory approvals and financing is crucial. 

Suvi Sharma, CEO, Solaria Corporation

To intelligently meet the rapidly growing demand for solar and ensure a sustainable, thriving industry, it’s critical that our industry successfully confront the next set of challenges: maximizing solar power efficiencies to further bring down costs and incorporate solar power into new applications.  

We can do this by leveraging existing core PV technology to develop and deliver new and improved applications.  That includes the delivery of better, more cost-effective solar solutions – optimized for rooftop and utility PV, building-integrated photovoltaics (windows / structural facades), and greenhouses.  That’s our focus.

It’s critical for our industry to deliver breakthroughs in PV technology to increase flexibility of solar to be deployed affordably and ubiquitously in a wide range of applications:  facilitating solar everywhere. 

Dheeraj Choudhary, Business Head, Global Energy Segment, Parker Hannifin Corp

renewable energyRecent actions not only underscore the bi-partisan support that the Renewable/Clean Energy Industry enjoys globally, but also challenge the industry to make these technologies cost competitive and sustainable without the need for subsidies in the long run.

Where do we start? I believe evaluating the Levelized Cost of Energy (LCOE) may be a good place.  I especially like this metric because it includes all three major cost inputs: Capital, O&M and the Utilization of the assets.  Our challenge in the industry is to optimize the LCOE over the next few years by evaluating these inputs concurrently and not in isolation.

While capital costs on equipment continue to decline, the industry is entering a phase of ‘diminishing returns’.  Rather than focus purely on the component cost variable, perhaps reduced O&M should be included and considered in the overall equation. With advancements in Wireless technologies and connectivity in components via the industrial Internet of Things (IIoT), there is significant opportunity to reduce costs not only via supply-chain optimization but also in the O&M area. Employing technologies such as Asset Integrity Management (AIM) and IIoT will shift the paradigm from reactive to preventative… to predictive maintenance.

Lastly, utilization plays a key part in reducing LCOE.  For wind and solar power sources, unpredictability has been the greatest drawback.  However, flexible gas plants equipped with quick turn down/ramp up, complimented by Battery Energy Storage (BES) assets on the grid to take up the slack as well as manage grid frequency can drastically improve the storage and utilization of wind and solar assets. Over the next few years, BES will shift the paradigm in clean renewable energy’s favor.

Stephen Kisker, Chair, Renewable Energy and Sustainability Group, Chiesa, Shahinian and Giantomasi

renewable energyMy single greatest concern for the U.S. solar industry in 2016 is the ever-increasing number of states that are changing their energy policy in ways that jeopardize the long-term future of the industry.

2016 greets the U.S. solar industry with a raging debate over net-metering policy.  Many utilities are claiming that net-metered solar customers are unfairly subsidized by existing net-metering rules, arguing that non-solar customers shoulder a disproportionate share of the fixed costs associated with maintaining the electric grid.  As a result, many utilities have proposed changes to existing net metering policy ranging from ending net metering entirely to imposing higher costs on solar customers.

As we ring in the new year, more than twenty states have either recently enacted or are considering a change in net-metering policy, ranging from the imposition of net metering caps to the institution of fixed or variable monthly charges on solar customers to the reduction of the rate paid for solar electricity exported to the grid.  The most alarming development recently occurred in Nevada when the Nevada Public Utility Commission voted unanimously in favor of increasing the fixed service charge for net-metered solar customers and lowering the compensation for excess generation from the retail rate to the wholesale rate.  To add insult to injury, the changes will apply retroactively to all current net-metered solar customers.

We must be mindful that the changes contemplated, and in some instances those that have already been made, at the state level pose a far greater risk to the U.S. solar industry than the reduction of the ITC ever could.  

John Smirnow, General Secretary, Global Solar Council

renewable energyWe’re at a tipping point on climate change — and solar energy has a critical role to play if we’re to realize the goal of limiting average global warming to below 1.5 degrees. But for solar energy to reach its full potential, we need to find new and better ways to work together, both within the industry and with external stakeholders, and start making friends out of adversaries — we need to create a generation of solar supporters.

 Solar power is one of the cheapest forms of electricity globally and prices continue to decline fast.  It’s also one of the most versatile forms of electricity generation and can be deployed anywhere in the world for the people of developing and developed countries alike. 

Global collaboration will help us secure a safer and healthier planet, and it will result in the creation of hundreds of thousands of new, high-quality jobs as solar continues to be an engine of economic growth throughout the world.

Kris Zadlo, Senior Vice President, Invenergy

renewable energyTechnology doesn’t wait for regulatory change. In today’s “disruptive” world, no business is safe — just as the taxi and hotel industries are currently experiencing with the introduction of popular ride share and house share programs.

Technology innovators have set their eyes on the electricity sector and the pace of change is intensifying. The industry must learn from past missteps. Our regulatory framework, which is based on last century’s grid technology, has served us well but must evolve to allow for quicker adaptation of products and services while encouraging healthy and fair competition among industry participants.

Technology is creating a bidirectional, networked grid. The line historically drawn by the utility meter is blurring. The interconnectedness of assets is improving reliability — all enabled by new hardware and software. Customers are becoming increasingly active participants in electricity generation, storage and consumption.  They want their power to be sourced from clean and renewable resources. Most importantly, they want control and choice.

Artificial barriers that protect legacy business models and limit customer choice persist. As we have seen in the taxi industry, if customers aren’t provided the products and services they desire, they will seek alternatives. Utilities will continue to play a critical role in the networked grid currently taking shape, but their business models must evolve.

Regulators must act quickly to create non-biased constructs that embrace new technologies and participants. The grid is evolving; our regulatory structures need to evolve too.

Nick Blitterswyk, CEO, UGE

renewable energyOne side effect of the ITC extension will be a decline in the number of solar installations expected for 2016. With the expiring tax credit no longer imposing a sense of urgency for customers, we expect a decrease in the amount of installations from what was projected for next year. We also expect component prices to fall more quickly than projected, putting pain on suppliers.

The real story here is that 2017 and beyond will see rapidly increasing installation rates. We expect solar panel prices, and other components, to continue to decline, faster than had otherwise been projected, as suppliers can no longer hold 2016 delivery dates over developers’ heads. While 2016 may initially seem disappointing, developers who braced for the worst will be in a strong position to grow as the industry does over the next few years.

Derek Veenhof, Executive Vice President, Sustainable Solutions, Covanta

renewable energyOur greatest concern for the waste-to-energy industry in 2016 is that low natural gas and crude oil prices could detract from the growth of renewables. Despite the temptation to take advantage of cheap and easy fossil fuel sources, let’s not forget that there are economic, environmental and social benefits to recycling and renewable energy, especially for Energy-from-Waste (EfW).

EfW is also one of the more stable and reliable forms of renewable energy — and given the predominance of landfilling in North America, there is an opportunity to grow renewables in the face of a strong supply of post-recycled waste volumes.  EfW capitalizes on resources that would normally be forgotten, provides a reliable and continuous source of energy and is based on sound economic policy that delivers impressive societal benefits.

Catherine Von Burg, CEO of SimpliPhi Power

renewable energyMy greatest concern for the power storage industry going into 2016 and beyond is that the focus will continue to be on distributed assets that represent large, high-voltage and centrally controlled installations that are owned and operated by offsite interests. This model of deploying distributed assets that are centrally operated and controlled, including software platforms that create ‘virtual’ power plants, creates the same top-down, dependent model of access and reliability for the end-user that is just as vulnerable to cyber-attack and catastrophic weather conditions as the incumbent, centralized model was before distributed power storage was introduced to potentially ameliorate such vulnerability.

Unless residential or commercial end-users own or at least control their own power storage (and generation) assets that are low-voltage, safe and nontoxic, they will continue to be at the mercy of the availability of trained personnel who are required to reinstate large, high voltage, sophisticated software control and management platforms during outages and catastrophic events.  As cyber-attacks, storms and shifting weather patterns continue to undermine centrally controlled power distribution and delivery systems — the grid — on a global level, as is evidenced over the last month in particular, so too will the power security and resiliency of the end user, of communities, schools, hospitals, municipalities be undermined.

Alfredo Parres, Head of Wind Sector initiative, ABB

renewable energyThe overall market for wind energy remains promising.

After a record 2015, the global wind market should experience a small contraction in 2016.  But the overall market will still remain at very high levels.

By far, the main focus in 2016 will be on how the power sector drives its transformation to allow for a higher penetration of renewable energy. Important decisions in 2016 will shape the market in the post-2020 horizon. This will look a little different in each of the three primary markets: in the U.S. the implementation of the PTC extension will define how industry prepares for growth without subsidies; in Europe, the Energy Union negotiations will include the new Renewable Energy Directive and the Energy Market reform; and in China the power sector reform is unveiling how it will open up to power trading and unbundling.

Reduction of levelized cost of energy (LCOE) will remain one of the main priorities of the wind industry. 

Steve Sawyer, Secretary General, Global Wind Energy Council

renewable energyThere doesn’t seem to be a lot to worry about…the wind industry set a new installation record in 2014, breaking 50 GW in a single year for the first time. We’ll set a new record in 2015, with the main question being whether or not we’ll hit 60 GW in 2015 as some are suggesting. Personally I think it will be a bit less than that, in the range of 55-57 GW.

 With continued strong policy support in China and the new extension/phase-out of the PTC in the U.S., our two largest markets seem in good shape. Europe is steady, if far too dependent on Germany…the new government in Canada is an improvement, as is the new leadership in Australia. Japan, Spain, the UK and S. Korea are still weak spots in the OECD, but OK; and new markets are springing up across Africa, Asia and Latin America.

 Not all is roses of course. Political instability and economic uncertainty in Brazil and South Africa, two of our major rising stars, threaten to put a damper on further growth. Cratering fossil fuel prices are also going to change economic equation in some places, and put a dent in some countries’ budgets, although of course the converse is true for many more.

I suppose the worst that could happen in 2016 would be for the U.S. to elect a Republican president who lives up to their campaign promise, returning control of the government to the fossil fuel industry which drove U.S. climate and energy policy for most of the 2000s. However, we’re not the only ones concerned with that outcome!

Kasim Ersoy, President & CEO, Mounting Systems

renewable energyThe shift from contraction to growth will require building personnel and capacity assets. As the market retools for sustained growth, hiring people with the right skillset will become more important than ever. Trained residential and utility scale installation crews, project managers, engineers that understand solar requirements, logistics experts, technical support, knowledgeable sales people and managers will be critical for successful growth. The increased demand will put additional strains on supply chains as solar continues to take increasingly larger segments of American steel and aluminum production capacity.

 It is also imperative that serious market participants work together to ensure our market continues to develop with reliable and safe products. The industry must continue to work actively with organizations like SEIA and CALSEIA to promote the responsible growth of solar. While the ITC extension provides a long-term federal policy, there is still plenty of work to be done at the state level regarding NEM, VNEM, ANEM, inspections, local requirements, and permitting.

Sean Gallagher, Vice President of State Affairs for the Solar Energy Industries Association (SEIA)

renewable energyIn light of the job-creating momentum of solar and success in many other states, Nevada’s recent decision to penalize customers who have already gone solar with higher fixed fees and lower compensation was particularly vexing.

Other state commissions have recognized that reconfiguring rates this way is just bad public policy – discouraging both solar and energy efficiency.  Nevada has pulled the rug out from under new solar customers and the decision has already led to one of the state’s newest and fastest-growing industries to begin shuttering operations.

Arizona also has been a hotbed of activity, with unregulated utility Salt River Project (SRP) establishing an array of fees that add $50 to the average solar user’s monthly bill. Predictably, the solar market has cratered in SRP’s territory.

In contrast to some utilities’ fearful response to increased rooftop solar adoption, 2015 saw a growing acceptance of utility scale solar, as reported contract prices for solar power have plummeted to directly compete with conventional generation.   Grid-connected solar has spread beyond its origins in the desert southwest, with states such as Virginia holding a 400 MW solar procurement, and Alabama approving a 500 MW solar program.

Meanwhile, California — the nation’s leading solar market with almost half of U.S. installations — renewed its commitment to net energy metering for rooftop solar by rejecting a host of SRP-like proposals in its December 2015 draft net metering decision.

As we head into 2016, SEIA will continue to defend and seek to expand solar markets, promoting policies that enable installation of solar at both grid and rooftop scale. And we’ll continue to try to find ways to work with responsible utilities to enable rate structures that are fair to solar companies, utilities and most of all, customers.

Pascal Storck, Ph.D., Global Manager of Energy Services, Vaisala

renewable energyAgainst the backdrop of progress, my greatest concern regarding the future of renewable energy is simply a question of sustained resolve. Do we have the resolve to go on the carbon diet we just signed up for? The clear linkage of climate change with our energy intensive civilization, growing population, and continued economic development suggests that going on a carbon diet will be no easy task for the global community. Just think of how many New Year’s resolutions are abandoned to old habits and excuses, especially when the going gets tough. 

I remember very clearly the strong sense of optimism around renewables in 2007, which quickly fell victim to the economic collapse of 2008. Today, when we look at the global stage in its entirety there are no shortage of events that could boil over to cause the global community to declare, “This is more urgent. Maybe we should start our carbon diet next year.” Unfortunately, our planet can’t wait.  

While the COP21 agreement was historic – it was really just a pledge to act – not a binding commitment. The commitment to compel our societies, leaders, and industries into transformative action begins and ends with all of us working toward a greater good. While I have no doubt that we are now clearly on that transformative path – avoiding the worst effects of climate change will require us to stick to our collective pledge of a carbon diet, starting now, not next year, and to adhere to that path over the long-term.  

Keith Martin, Chadbourne and Parke

renewable energyThere are always challenges, but 2016 should be a good year for renewable energy. Wind and solar equipment prices continue to fall as these industries reach scale. Commercial and industrial companies are entering into long-term power contracts to buy renewable electricity.  The number of commercial PPAs was expected to double in 2015 from the year before.  It should increase again in 2016.   

The biggest challenge is the U.S. presidential elections.  A Republican sweep of both houses of Congress and the White House next November would be a significant setback and could lead to reversal of gains made on the policy front this year. 

The next biggest challenge is the battles at the state level over net metering.  The solar rooftop industry won a favorable proposed decision in California in December the same week Congress extended the renewable energy tax credits.  However, losses shortly before and after in Hawaii and Nevada show the challenges the rooftop companies face in preserving net metering nationwide.  Such programs in 44 states are important to the economics of rooftop solar in those states.

Vikram Aggarwal, Founder and CEO, EnergySage

renewable energyAn expected 7 to 10 million households are likely to consider a solar energy system in 2016. As these new solar shoppers begin to explore their options, solar companies are responding by ramping up their marketing and customer acquisition efforts. My greatest concern for 2016 is whether consumers will be able to access all of the information that they will need to make informed choices about their solar investment.

Currently, the residential solar industry lacks transparency, making it difficult for consumers to feel confident that they are making an informed decision. To make truly informed decisions, solar shoppers need access to transparent and objective information about options available to them: this includes pricing, the actual cost and savings associated with various solar financing options, quality of equipment offered, and quality of solar installers. For solar power to continue on the path to a successful, sustainable, and widely adopted source of renewable energy, solar companies will need to commit to information transparency for consumers.

As the industry expands, it is my hope that solar companies commit to becoming more transparent and customer service-centric, ushering solar energy into maturity and empowering solar shoppers to find the option that is best for them.

Thomas Conroy, President, Array Technologies

renewable energyMy greatest concern for 2016 is that solar’s hard earned reputation as a reliable generation resource may be harmed by immature equipment choices that often accompany spectacular growth spurts.

2015 was a boom year for the solar industry, and drew in many early stage companies and technologies. For the first time solar has become a widely deployed and credible utility-scale power generation resource. Solar power plants are now considered alongside natural gas, coal, wind, and nuclear plants as a mainstream generation option with their own set of advantages and disadvantages.

The short timeframe to volume deployments means that the industry doesn’t always know as much as it should about the parameters that affect long-term reliability and performance. The wind industry preceded solar through this paradigm, and now focuses closely on all variables impacting long-term LCOE. For example, blade soiling, line losses, and system reliability/availability are all areas of focus and optimization. The immature products deployed during wind’s boom years too often led to massive field repairs, downtime, and project financial impairments.

With the ITC extension, solar industry participants can pause and ensure that new projects meet the reliability, availability, and LCOE criteria needed to remain reputable generation resources.

Tony Clifford, CEO, Standard Solar

renewable energyMy biggest concern in 2016 is that the industry decides to rest on its policy laurels. We still face some serious policy challenges — especially at the state/utility level. We cannot afford overconfidence and a post-extension letdown; and our well-financed opponents aren’t backing down. We have major challenges including net energy metering, value of solar, interconnection issues and 3rd party ownership.

Now is not the time to relax, it is the time to push forward aggressively. If you are a SEIA member, don’t complain about the 2016 dues increase; be thankful SEIA is spending your money wisely. If you are not a SEIA member, join. If you are a solar executive, remember that effective policy efforts just gave your business a five-year runway. Effective policy can give our industry a lot more in the coming year.

Karl Gawell, Executive Director, Geothermal Energy Association

renewable energyPoliticians and regulators too often look at an energy price in terms of cents-per-kilowatt-hour and not much further. The geothermal industry needs decision-makers to consider the full bundle of attributes and not just the power purchase agreement price. There are many other factors including energy value, capacity value, integration costs, transmission and distribution costs and inherent subsidies that all need to factor into the final decision when utilities, governments, lenders and others are choosing between renewable options.

The importance of the work done by state regulators to consider the full value of the various energy options is going to be amplified as individual states work to institute strategies that meet the Environmental Protection Agency’s new Clean Power Plan (CPP) directives.

Greenhouse gas emissions, which are part of the CPP, are not simple to assess. This is partly because renewable technologies have different short-term and lifecycle profiles. By comparing apples and oranges, regulators could be promoting short-term measures that inadvertently increase the need for backup power and create a power system with overall emissions that are actually greater in the end.

In 2016, geothermal power will face the challenge of having its values recognized by state regulators and the U.S. Congress. Geothermal power can be an important contributor to the near-zero emission power systems of the future; the Geothermal Energy Association’s concern is that better-informed policies to support that result will need to advance at both the federal and states’ levels.

Julia Hamm, President and CEO, Solar Electric Power Association

renewable energy2015 was the year that it clearly became impossible to talk about the integration of solar into our energy system — and the roles that both utilities and the solar industry must play in the process — without also bringing other distributed energy resources into the conversation. Storage, advanced inverters, energy efficiency and demand response, and the smart grid in general are now all part of the fast-moving drive toward a cleaner, more reliable but still affordable energy system that will benefit all stakeholders. At the same time, what we are seeing across the country is that technology, market forces and consumer expectations are outpacing traditional utility and regulatory planning and decision-making processes.

The need to bridge this gap is one of the key challenges for the utility solar sector in 2016 and beyond, and I am concerned that this bigger picture is being missed. The focus thus far has been on the energy system and utility of the future, but we must also start talking about the regulatory models of the future and, equally important, the energy consumer of the future. What kind of training and expertise must regulators have to respond to the increasing speed and complexity of technological change? What are the multiple channels that will be needed to ensure consumers truly understand and can take advantage of the new choices in energy products and services that will be available to them? 

Jesse Grossman, CEO and Co-Founder of Soltage

renewable energyWe must now turn our attention toward needed policies on the state and regional scale implementation of solar required to realize our industry’s potential. These local-level dynamics can either enable solar deployment, or create friction — slowing down project development, threatening investment, and hindering our national decarbonization goals. We expect state-by-state fights on key policy decisions to include permitting review and approval by regulatory bodies and utilities; net metering fights seeking to limit solar valuation through demand charges, fixed fees or reduced valuation for rooftop output; lengthened and/or more costly interconnection reviews; and challenges to renewable portfolio standards in the 22 states plus Washington, D.C. that contain solar or distributed generation provisions within their targets, several of which are up for renewal or revision in 2016.

Solar developers and investors alike must keep our eyes and ears focused on the policy fights which will inevitably unfold on these issues as solar’s share of the U.S. electricity mix scales up and our industry grows in stature. If we work together with the same unity and vigor we applied to the ITC extension, we can more efficiently mature as an industry.

Scott Chabina, Director, Carl Marks Advisors

renewable energyWhile we witnessed a number of significant operational achievements this past year, with new biofuel facilities reaching key milestones ahead of ramping up to commercial volumes, the general state of the domestic advanced biofuel / cellulosic ethanol industry remains somewhat opaque.  This is, in part, due to ongoing challenges in securing attractive financing packages required to support these capital-intensive renewable energy projects amidst the low oil price environment, continued pressure from opposing industry trade groups, as well as the industry’s persistent delay in reaching previously agreed upon volumes since the Renewable Fuel Standard program (RFS) was established.

President Obama’s recent retroactive extension of both the cellulosic tax credit ($1.01/gallon) and biodiesel tax incentive ($1.00/gallon) through 2016, as well as the final volume requirements under the RFS were generally received as “positive” news within the industry, all things considered.  Despite the delay by the U.S. Environmental Protection Agency (EPA) in finalizing these volumes, this legislation should provide some comfort to advanced biofuel producers whom have already invested billions of dollars and countless man-hours developing these projects under the assumption the market will continue to develop down the road.  Had the EPA failed to provide support for these projects, it is very difficult to imagine continued investment into the sector.

However, the greatest concern for 2016 will be the industry’s ability to finally reach nameplate production and achieve the RFS targets established in the final requirements.  Specifically, the RFS now calls for 206 million gallons of cellulosic biofuel in 2016, which is more than 6 times the total volume produced in all of 2014!  Given the recent liquidity issues at Abengoa Bioenergy’s parent company, it remains unclear what impact, if any, this may have on the progress at its Hugoton, Kansas facility and its ability to contribute its respective share to industry production targets that already require an all-hands-on approach. 

Gregory Wong, General Manager, Commercial, Geodynamics

renewable energyIn recent years the renewable energy industry in Australia has been weighed down by several concerns, however, looking forward to 2016 we are optimistic about riding a wave of positive momentum.

Following a period of political uncertainty we now have bipartisan agreement on the Australian Renewable Energy target which has triggered a rally in Large Scale Renewable Generation Certificates to all time highs. Australia continues to be a global leader in residential rooftop solar PV installations, and commercial and industrial solar PV is showing positive signs of growth. Market offerings for battery storage are becoming more numerous and more competitive in price. The Emissions Reduction Fund auctions in Australia are showing promise as a mechanism to bring forward investment in abatement, in particular within the agribusiness market a significant driver of Australia’s sustainable prosperity. We are also observing institutions such as the Australian Renewable Energy Agency and the Clean Energy Finance Corporation confidently delivering on their mandates.

On the back of the global agreement reached at the Paris conference in December 2015, our greatest concern for our industry in 2016 is that we as an industry don’t make full use of this positive momentum to drive a permanent change away from fossil fuels and to renewable energy.

William V. Liuzza, CEO, EnergeiaWorks

renewable energyMy view of the clean energy industry is probably more diverse than anyone’s.  EnergeiaWorks’ customers are inverter/racking/module/turbine/BOS OEMs, EPCs, electrical utilities, project developers, chemical companies, integrators, and distributors, all supporting sustainable energy.  Our renewables-based recruiting services support research & development through construction services on four continents.  Knowing who’s hiring and when is the perfect indication of the market as a whole.  When recruiting is busy, the industry typically is healthy!  

However, as of December 2015, the industry is faced with a supply and demand issue.  There aren’t enough candidates in the market for the amount of open positions, and this is driving up salaries, competing offers, and time to hire.  It’s not too different from the tech boom in the early 2000s, and we know how that shook out.

The recruiting pipeline for the next few quarters is quite robust, so I’m optimistic for 2016, but the years following bring me concern, because it seems that much of the development, construction, manufacturing, and hiring is front-loaded because of the former deadline created with the planned ITC expiration.  Once the industry levels out (and it will), I am concerned that we will see workforce reductions. I hope that the investment in clean energy on a federal level isn’t just a trend or an extension, but, rather, a commitment to the future.

Phil Coupe, Co-founder, ReVision Energy

renewable energyAt Maine-based ReVision Energy, we have been surviving, if not thriving, despite having a staunchly anti-solar Governor for the past five years who has ensured that we continue to be the only state in New England without a state solar incentive. Although we have proven it is possible to be resilient regardless of local government policy, our greatest concern for the solar industry in 2016 is that the Paris climate agreement will sow complacency amongst common citizens who might be led to believe that they no longer have to “lead the charge” in combating greenhouse gas emissions now that governments have pledged to join the battle.

Paradoxically, government inaction has been one of the main well-springs of the sense of urgency compelling people to invest in solar energy. We find that many of our customers in the last five years have decided, “if it is to be, it is up to me.”

Over the next five years it will be incumbent on our industry to figure out how to maintain that same sense of urgency and commitment in the uncharted waters of what is supposed to be global government participation in efforts to reduce fossil fuel consumption and carbon pollution. And while we’re talking about the potential for government action or inaction being a concern, it would be irresponsible to fail to mention the threat of regulatory risk to the solar industry. While it’s true there is strong momentum from the Paris agreement and citizen concern about carbon pollution, it’s equally true that powerful forces are redoubling their efforts (e.g. Koch brothers, ALEC, Sen. Inhofe) to kill or weaken federal clean energy policy initiatives. At ReVision Energy we are cautiously optimistic that 2016 is going to be another record-breaking year for the solar industry and we find strength in the words of Abraham Lincoln: “I am a firm believer in the people. If given the truth, they can be depended upon to meet any crisis. The great point is to bring them the real facts.”

Camilo Patrignani, CEO, Greenwood Energy

renewable energySince the ITC was extended, we’re shifting focus to state-level fights over the valuation of solar electricity through net metering policy. Efforts to artificially devalue distributed solar output by reducing net metering incentives or limiting future growth by preventing net metering cap expansion made news during 2015 in states as diverse as Florida, Hawaii, Arizona, and Massachusetts — and considering solar’s projected growth, we will face renewed assaults in 2016.

Utilities and regulators are just starting to shape the future of valuing solar electricity, and unless solar owners are accurately paid the true worth of the clean (and free) power they contribute to the grid beyond their on-site demand, many projects aren’t economically viable for customers. Policymakers in states like California and New York should be applauded for their forward-looking efforts to set rate structures acceptable to utilities and customers, and resources like the annual Freeing the Grid report or the quarterly 50 States of Solar summary provide helpful lessons for regulators looking to find a middle ground which allows utilities, solar developers, and customers to all benefit from the power of solar energy. 

Deep Chakraborty, CEO, ENACT Systems

renewable energyWe are concerned about the health of the U.S. utilities and their readiness to address customer needs around distributed energy solutions. As distributed solar energy solutions achieve grid parity across multiple global markets, and global emissions control achieves new levels of stringency, we see a transformational shift to clean energy solutions ahead. This presents a massive opportunity — as well as a major challenge — to incumbent energy utilities, in every major global region. Utilities across the world will need to retool their business models quickly, as market forces driven by low cost, clean energy take over.

In the U.S., years of regulatory protection have shielded utility business models in many states. Consumers are rapidly adopting lower cost, distributed solutions like solar and electric cars, and commercial customers are looking for greater control on their long term energy costs. Utilities need to innovate quickly, to be able to satisfy consumer needs. They will need to build new service-based business models to cater to customer’s distributed energy needs, or else get ready to give up their best customers to local independent power producers.

renewable energyJohn Vernacchia, Global Segment Manager, Renewable Energy, Eaton

Today, distributed generation sources like solar can be used in microgrid applications to improve power reliability and resiliency in government, commercial and industrial applications. Traditional emergency power systems in hospitals, universities and other applications typically relied on diesel generators to supply temporary backup power. With continued reductions in the price of solar and batteries, facility managers have more options for backup power and more assets to manage; this also means that facilities are not as dependent on utility power.

Beyond supporting power resiliency, renewable energy assets and battery storage can also help reduce utility costs by offsetting or even avoiding utility peak demand charges. Solar resources combined with battery storage can provide both cleaner and faster reacting power that can be used to support power reliability and reduce electrical costs.

The evolving backup power model requires the management of multiple sources of distributed generation; they need to work in a coordinated way to optimize energy production and reduce upfront capital costs, while supporting a more reliable microgrid. The challenge is in getting solar or other energy resources to operate in accordance with other distributed generation assets and the electrical grid.

In the event of a natural disaster, local generation resources can be tapped without a utility grid connection, providing a critical line of defense against unexpected power loss. This scenario requires both synchronizing with the grid and islanding from it. Despite the technical challenges, microgrids are being used to support reliable power for government facilities, hospitals, commercial buildings, universities and even portions of the utility grid.

Lead image: Green question mark. Credit: Shuttestock.


  • Renewable Energy World's content team members help deliver the most comprehensive news coverage of the renewable energy industries. Based in the U.S., the UK, and South Africa, the team is comprised of editors from Clarion Energy's myriad of publications that cover the global energy industry.

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Renewable Energy World's content team members help deliver the most comprehensive news coverage of the renewable energy industries. Based in the U.S., the UK, and South Africa, the team is comprised of editors from Clarion Energy's myriad of publications that cover the global energy industry.

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