Sunrise brief: Solar project growth to rise 30% after ‘volatile’ 2020, IHS Markit says


A rebound of renewable installations is among the key themes in the Clean Technology space this year, according to a new report on the Top Cleantech Trends to watch in 2021 by IHS Markit.

The firm said that annual solar installations are predicted to grow by more than 30% in 2021 after “volatile demand” in 2020 triggered by the Covid-19 pandemic.

It said that although global installation numbers increasingly de-link from reliance on the Chinese market, China will still account for 35% of global annual installations in 2021. There are now 18 markets globally that have +1GW cumulative solar installations, compared to six a decade ago.

This market demand comes despite an increase in production costs (up 10–15%) driving a historic surge in module prices, especially in the first quarter. However, production costs are set to drop in the second half, IHS Markit said, lowering module prices and laying the ground for record solar installations at the end of 2021.

“We will see for the first time a situation in which global demand grows over 30% despite high module prices in the first half of the year, which is unprecedented in the solar photovoltaic industry,” said Edurne Zoco, Executive Director Clean Energy Technology.

Spain, India, and the Middle East region will continue to be the markets with the lowest solar levelized cost of electricity (LCOE). IHS Markit said it projects photovoltaic (PV) system capex to continue declining in 2021 by 5% year on year, largely driven by decreasing component prices.

Meanwhile, average module efficiency records continue to increase, surpassing 22.5% in PERC monocrystalline cell commercial production and are forecast to reach 24% by 2022.

Perovskites technologies, a promising solar cell technology development with significant potential to increase cell efficiencies and reduce costs, is set to continue breaking efficiency records, the firm said. But the technology will only be mature for commercial production in the next five years.

Sunrun releases initial Q4 results

Sunrun released early financial results and operating metrics for the fourth quarter ended Dec. 31, 2020.

It said that megawatts deployed (MW) were roughly 171.6 MW, up 10% from the third quarter. This reflects deployments for around 23,500 customers during the period, resulting in total customers of more than 550,000. Cumulative megawatts deployed reached 3,885 MW.

The company said that gross earning assets were $6.9 billion. Net earning assets, which Sunrun defines as gross earning assets less project debt and pass-through financing obligations, was $2.9 billion. Adjusted project-level debt and pass-through financing was $4.0 billion.

Total debt was $5.1 billion; fourth quarter transaction costs related to the acquisition of Vivint Solar were estimated at $60 million to $70 million.

The company said it will issue fourth quarter 2020 earnings on or about February 25.

In a related move, Sunrun said it plans to offer $350 million of senior notes due 2026 in a private placement. The company said it will use a portion of the proceeds to pay the cost of capped call transactions. It will use the rest to repay outstanding debt and for other corporate purposes, including working capital, capital expenditures, and potential acquisitions and future transactions.

Borrego focuses on scale and storage

Borrego, a developer, EPC and O&M provider for large-scale renewable energy projects, announced a brand identity, a reorganized corporate structure, and a strategy focused on utility-scale solar and storage opportunities. The company’s growth plans call for each of its business units to reach gigawatt scale by 2024. It also said it hopes to increase its workforce by 25% this year.

Borrego implemented most of the organizational changes in 2020. Its three business units—development, engineering, procurement and construction (EPC), and operations and maintenance (O&M)—have already begun operating independently. The development and EPC businesses also set up utility-scale divisions last year.

As part of its strategy shift, each of the company’s businesses has a goal of operating at gigawatt scale by 2024. The O&M group is the first business to achieve this milestone; as of November 2020, the team reached 1 GW of solar and storage projects under management, the majority of which Borrego EPC did not build.

The company also shifted from single-transaction, smaller, behind-the-meter projects to supporting long-term partners. This pool of systems owners, independent power producers and utilities can be served in multiple ways across multiple businesses to power their growth over time, the company said.

The company said its development and EPC businesses have already booked “hundreds of megawatts of large-scale projects,” many of which are in the late-pipeline or active construction stages.

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