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Trump presidency seen as risk to solar growth

Donald Trump is to become the first Republican President since 2009 after defeating Hillary Clinton in an election which saw the Republican Party retain control of the Senate and the House of Representatives.

Trump has questioned the cost and reliability of wind and solar energy while pledging new support measures for the coal, oil and gas industries. Wind and solar industry observers fear Trump could roll-back federal Clean Power Plan (CPP) legislation and the Production and Investment Tax Credits currently supporting wind and solar growth.

“While we don’t think he can reverse the trend of increasing renewables or the challenges for coal, he surely could slow down renewables penetration. Any slowdown in renewable(s) will likely extend the economic asset life of Independent Power Producer’s existing asset bases,” Citi analyst Praful Mehta said in a note November 7.

“As a candidate, Trump often questioned federal support for solar and wind projects, with industry observers expecting a rollback of green energy subsidies in the coming year,” S&P Global, a market intelligence agency, said.

The U.S. Supreme Court had already put on hold the CPP until litigation against the plan is resolved and the chart below shows that even without the implementation of the CPP, solar is forecast to soar. Solar projects are becoming increasingly competitive without subsidies but changes to tax credits would impact the short to medium term outlook.

    US wind, solar capacity additions 2016-40

Source: EIA's Annual Energy Outlook 2016 (September 2016)

China cuts 2020 solar target by 27%

China has lowered its 2020 solar capacity target by 27% to 110 GW, according to media reports.

China had boosted its plans to 150 GW in October 2015 and the latest announcements follows cuts to renewable energy feed in tariffs. China has also cut its target for wind power, by 16% to 210 GW, Bloomberg reported.

China's National Energy Administration is planning to cut feed in tariffs (FiTs) for ground mounted and distributed solar generation in 2017, Bloomberg reported September 30. Solar tariffs will fall by at least 23% to 0.75 yuan ($0.11) per kWh, Bloomberg said, citing information from the China Industrial Association of Power Sources.

Global investment in renewable energy and energy smart technologies in July-September fell by 43% on a year ago to $42.4 billion, due to cooling markets and falling technology costs, according to data published by Bloomberg New Energy Finance (BNEF) on October 10.

Cleantech investment in China last quarter fell 51% on a year ago to $14.4 billion, largely due to a lull in activity after last year's rush to take advantage of incentives before they expired, BNEF said.

First Solar panel sales dented by tumbling prices

Plummeting global module prices prompted First Solar to walk away from module supply opportunities in Q3 2016 which impacted near-term bookings, Mark Widmar, First Solar's Chief Executive Officer, told analysts November 2.

First solar lowered its full-year net sales forecast to between $2.8 billion and $2.9 billion, down from a range of $3.8 billion-$4.0 billion, largely due to the revised sale timing for its California flats and Moapa projects.

The forecast for 2016 operating income was revised upwards, from $205 million-$250 million to $235 million- $255 million, but the company warned challenging market conditions had prompted it to assess its short and long-term strategic response.

Fresh module supply capacity amid dwindling Chinese demand has created an increasingly aggressive module and Power Purchase Agreement (PPA) environment, Mark Widmar, Chief Executive Officer, told analysts.

"As a result of the oversupply and growing inventories, module pricing has declined at a dramatic rate in the third quarter," he said. In the fourth quarter, prices have stabilized somewhat, he noted.

Global module prices have fallen by 26% in the last year, Bloomberg said in October. Many industry experts now estimate module prices at around $0.40 per watt.

Executives chose not to discuss the 2017 outlook in the analysts' call.

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