US solar PPA industry growth will create new IT revenue opportunities
The US solar power purchase agreement (PPA) market will grow to reachan estimated $8 billion in new photovoltaic (PV) solar power generationinstallations by 2013, up from an estimated $700,000 in 2009, accordingto Gartner Inc.
The US solar PPA market is driving new revenuefor IT vendors for communications and computing equipment, includingdata mining and integration software.
Gartner analysts advisedsoftware, hardware and IT services firms to develop their go-to-marketstrategy for the renewable industry by the first quarter of 2010, witha particular focus on the independent power producer (IPP) firms thatare developing the US PV systems.
"Many of the traditional ITvalue chain vendors have yet to focus on this market," said Al Velosa,research director at Gartner. "If they are able to develop a coherentrenewable energy marketing strategy that serves both their customersand a new customer base of more nimble, flexible start-ups with a laserfocus on this market segment, then they will reap the rewards."
TheUS PV market will be driven by IPP firms using solar PPA contracts.Gartner predicts that the IPP portion of the US PV market will have acompound annual growth rate exceeding 100 percent through 2013 and thatin 2013, IPP firms will install PV systems in the US with an energygeneration capacity of 2.9 gigawatts, at a cost of $8 billion.
Whilethe market is currently led by young IPP firms, such as SunEdison,Solar Power Partners and Renewable Ventures, traditional IPP firms,such as Sempra Generation, Constellation Energy and NextEra EnergyResources are starting to make their moves into the market.
Thismove could prove to be well-timed: Gartner believes that an importanttransition point is set for the US PV market as traditional IPP firmsstart working with their utility customers on solar PPA contracts. Thisshift in the center of gravity will move the US PV solar PPA contractmarket away from its current core in 2009 of commercial and residentialend customers, toward a core focused on utility end customers.
Inparticular, the market will have a foundation on substation-scale PVprojects — specifically those between 10 megawatts and 30 megawatts."This shift in the end markets and the entrance of traditional IPPfirms will change the dynamics of the market," said James Hines,research director at Gartner.
"Although existing PPA vendorswill continue to play a major role in the industry, the recent spate ofcontract announcements from both utility and nonutility commercialenterprises with major traditional IPP firms reflects the entry of anew set of players into this market, with a focus on building a volumebusiness for PV systems."
Smart IT firms will view theopportunity presented by the PPA industry as an opportunity to helpthemselves on several levels. It will at once allow them to build theirrenewable energy credentials while also helping to drive the low carboneconomy. More importantly, though, it presents a large growth marketfor IT firms, which should, in turn, develop into a growth market withestablished clients.
Gartner believes that the biggestrequirement in this nascent market will be setting industry standardsfor everything, including how to collect data, not just as the inverterlevel but even at the panel level.
A first step has been takenby the founding members of SunSpec, which is working to establish datastandards to improve interaction and management of PV systems. Nextsteps will include ensuring data protocols and standards forintegrating with the utility firms’ generation planning software tools.
Hardwareis another good example of the potential for IT value chain firms todevelop solutions for the solar PPA customers of PV systems. Gartneradvises semiconductor and communications and computing firms to workwith inverter and panel manufacturing firms to integrate theirsemiconductor and communications solutions into field equipment.
"Thesuccessful IT services vendors will be those who adapt their existingmarket capabilities, particularly from an enterprise resource planningand energy and utilities perspective for this niche market," concludedMr. Velosa. "By adding bolt-on solutions and extensions to their workin this space, vendors will lay the foundations for futureopportunities."
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