PHOTON’s 1^st TECAF Conference

To put it politely: Most executives, regulators and investors from the traditional electricity sector do not have a good understanding of the PV sector’s current growth trajectory:

• In terms of scale: PV is on a path to expand from 4 GW of cell/module production in 2007 to 7 GW in 2008, 29 GW in 2010, and more than 50 GW by 2012. In total, this amounts to more than 137 GW of new PV installations from 2008 to 2012.
  
  
• In terms of cost: PV’s fully loaded cost (i.e. not the price, but cost excluding profit at each step of the value chain) continues to fall rapidly. The levelized cost of solar electricity is less than $0.30/kWh in many of today’s markets (in some cases, it’s lower than $0.20/kWh), and will drop to less than $0.15/kWh in much of the OECD by 2012 (in some cases less than $0.10/kWh).
  
  
• In terms of geography: although market growth will not be uniform across all geographic markets, solar will almost certainly expand far beyond the traditional markets of the past and seek out new territories with high solar irradiation, retail electric prices, and/or incentives.

As a whole, few people working with traditional electricity have an appreciation for how quickly large-scale distributed PV could make inroads in their regions by 2012.

Traditional electricity companies are not prepared today for the challenges that PV may create in the next five years as penetration rates rise. Some of those challenges include:

• Economic challenges from displaced revenue, profits and possibly negative network effects;
  
  
• Operational challenges as penetration rates rise; and
  
  
• Financial challenges resulting from higher uncertainty, less predictability

Most traditional electricity companies simply have not considered the pace and scale of the challenges raised by PV. Whereas challenges in other areas – e.g., rising fuel costs, significant infrastructure investments, and regulatory changes – may attract more attention today, the rapid expansion of PV may turn out to be the most important challenge for many traditional electricity companies.

To put it less politely: If the above scenario plays out through 2012, one-third of annual global generating capacity additions will come from solar. The traditional electricity industry is simply unprepared for this scenario, and if it proves true, many Traditional Electricity Companies Are F*&$#d (TECAF).

PHOTON´s 1^st TECAF Conference will provide:

• An overview: PV sector growth, costs, penetration rates through 2012, and implications for traditional electricity players
  
  
• PV’s growth and its challenges for utility companies
  
  
• Perspectives from the customer side of the meter
  
  
• Perspectives from the utility side of the meter
  
  
• Panel discussion

It is not our intention to shock our readers by using such extreme language, rather to draw attention to the potential problems PV’s growth may cause. With all respect, PHOTON´s 1^st TECAF Conference is conceived as a platform for discussion by all players involved in the convergence of PV and the traditional electric power sector – including utilities, regulators, PV companies, other distributed electricity technology companies, and investors.

Our hope is that PHOTON´s 1^st TECAF Conference will be a catalyst for deeper discussions, analysis, and action.