At the core of our research methodology is the need to better understand the complex mix of factors that affect renewable energy adoption so that we can predict future demand in regions across the globe. Due to constantly shifting conditions and factors that affect the renewable energy industry, our forecasts begin with an in-depth dynamic and local understanding of each market so that we can better predict future activity and growth.
Scenario analysis is vital in order to properly quantify the range of opportunity and risk in any given market. We use historical experience and leading analytical models to apply that experience to the quantification of future risks and opportunities. Uncertainty in future conditions is accounted for by considering distinct scenarios each with their own set of assumptions.
The precise assumptions informing these scenarios differ from region to region and fall under three broad categories:
Retail electricity prices and electricity demand in the residential, commercial, and industrial sectors, natural resource (solar radiation or wind resource) and the resulting capacity factor, average installation costs, time of use electricity pricing, availability and cost of competitive electricity, and a number of other factors distinct to each region are used to inform ClearSky Advisors’ propriety Dynamic Forecasting Tool (DFT) to determine the volume of projects expected to be installed in the absence of additional policy incentives.
In addition to this fundamental demand, any policies in the region are analyzed to determine the volume of installations each program will enable. This analysis is based on the detailed nature, budget, and mandated goals of each policy in addition to the impact of similar programs in similar regions elsewhere in the world. The landscape for policy development, net metering, bureaucratic ease, political stability, presence of corruption, and other factors are considered and factored into the analysis at this stage.
Finally, our forecasts are informed by the pipeline of commercial and utility-scale projects that have been planned or announced by developers and/or government agencies. Information is gathered from primary and secondary sources to determine the likelihood that these projects will be completed and the anticipated commercial operation date for each.
In addition to scenario-based market forecasting, we provide our clients with detailed information that describes the following:
- Economic environment
- The conditions required for the renewable energy technology to compete with other sources of generation
- Electricity market, prices, and mix of electricity generating sources
- Key players active in project development (developers, investors, government agencies)
- Market activity to date
- Natural resource – solar radiation and wind resource – and resulting capacity factors
- Renewable energy and solar/wind specific policy programs and incentives
- Economic impacts of renewable energy development