Technology Review on Solar Energy

[HenryTo]

Assembly line should be ready by sometime next year:

[rffrydr]

With the proliferation of the lease-out rooftop model here in the US and mandatory renewables in the regulatory mix I would bet that demand will do better even with the european fallout.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Solar panel prices sink to new lows.
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Solar prices drop more, pressuring panel makers

(Reuters) - Solar panels prices have kept marching lower this year, extending steep declines seen in 2011 and keeping pressure on hard-hit manufacturers who have struggled to eke out profits, industry experts said.

Average selling prices for the photovoltaic modules that turn sunlight into electricity have dropped to 80 to 85 cents per watt, a decline of more than 10 percent from levels near 95 cents recorded at the end of 2011, a year that saw prices fall by about 50 percent.

Those price drops have helped boost solar sales and made solar power less dependent on subsidies to compete against fossil fuels. But they also have virtually erased profits at the major manufacturers, such as China's Suntech Power Holdings , Yingli Green Energy Holding, Trina Solar Ltd and U.S.-based First Solar.

Shares in Suntech, the world's largest solar maker, are trading at $2.71 per share, less than a third their February 2011 level, although they have rebounded from their October low of $1.70.

Shares in Yingli and Trina, which had seen a modest rally in January and February, have come under more pressure. Both have slumped to their lowest levels of the year.

First Solar, the largest U.S. solar manufacturer and the world's lowest-cost producer, has seen its shares drop nearly 90 percent from 2011's peak to their lifetime low at $20.02 hit earlier this month.

DEMAND TO FLATTEN

Global demand for solar panels grew by about 40 percent last year, but excess manufacturing capacity has created a glut of supplies that forced companies such as Suntech, Yingli, Trina and SunPower to slash prices.

That glut has come as subsidies have declined in Germany and Italy, the two biggest markets. Analysts have forecast total market demand will be near steady with last year's levels around 27 GW.

"I think that the difficult period is apt to last for a couple more quarters at least," said Rob Stone, analyst with Cowen & Co in Boston.

Steady growth in solar panel demand over the last decade has attracted many large conglomerates to the industry, such as Japan's Kyocera and Korea's Hanwha Group, which entered the market with the purchase of Solarfun Power in 2010.

Those conglomerates have been hurt by the steep drop in panels, but have strong financial positions and are likely to hold on until the market consolidates around a smaller number of companies, unlike the Chinese players, who are carrying heavy debt loads.

"Most of the competitors, these standalone companies, they don't have any backup," Hee Cheul Kim, president of Hanwha SolarOne, told reporters on Thursday.

"I don't think they will survive with the cash-constrained environment for more than three years. That is why I'm expecting restructuring of the industry."

Earlier this month, Germany's Q-Cells, once the world's largest solar maker, filed for insolvency. That followed last year's demise of Solon AG. Several small U.S. companies have also folded, including Solyndra, whose collapse triggered sharp political criticism of U.S. government support for the industry.

Prices for solar panels, most of which use polysilicon as the key material, have resumed their downward trend after stabilizing in January and February following stronger-than-expected December demand in Germany, according to GTM Research analyst Shyam Mehta.

"It seems like there's been another inventory build-up," said Mehta, who put prevailing spot market panel prices at between 80-85 cents per watt.

Some industry watchers said panels had been offered at 75 cents or below, although that equipment was made by lower-quality "tier 3" companies in China, who are appear to be clearing out inventories to raise cash, even if they are selling products at a loss.

"Those are essentially going-out-of-business sales," said one solar company executive.

Still, the trajectory is likely to send panel prices to new lows in the coming months.

"It's fully possible that at some point in the year we get to the 70-cent a watt range," Mehta said. "The balance between supply and demand right now is very fragile. There's still a massive amount of capacity."

RACE TO CUT COSTS

The persistent pricing pressure has prompted Chinese solar companies to reverse their strategy of seeking to control production of polysilicon wafers in-house, and instead buy those wafers from lower-cost producers.

That move to "vertically integrate" their manufacturing operations and raise production of their own wafers started in 2009, but many of the companies locked in prices for polysilicon at levels well above the current levels for the key material.

Those Chinese producers can pay about 5 cents less per watt by sourcing wafers from third parties, according to Sam Wilkinson, a senior market analyst at IMS Research.

"You are looking at an about 10-15 percent saving by buying wafers. One of the reasons is that, while polysilicon prices have reduced significantly in the spot market, some companies are stuck with higher-priced long-term contracts," Wilkinson said by telephone.

Buying those cheaper wafer could help protect panel makers' gross profit margins in the first half, even with the declines in module prices.

"The big challenge for cells and module companies is to try and keep their inventories as lean as possible to prevent them from write-downs," said Thiemo Lang, a senior portfolio manager at Sustainable Asset Management AG.

Given the steep fall in the prices of polysilicon that are used to make wafers, some companies could also pressure suppliers to renegotiate long-term contracts.

"There are some very competitive prices in the market," Lang said.

[HenryTo]

WMT reaches its 100th solar installation.

http://www.retailingtoday.com/article/walmart-expands-solar-commitment-colorado

[HenryTo]

Japan to invest heavily in solar and other renewables.

http://www.technologyreview.com/energy/40110/?mod=more

[rffrydr]

This ever-more popular "lease-back" model coming on here should provide a nice tailwind. "No Money Down!":

http://www.solarworld-usa.com/ppc/solar-leasing.aspx?gclid=CO-078jOza4CFQcFRQodNxzPkQ
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Germany cuts solar subsidies by a further 30%.

http://www.guardian.co.uk/world/2012/mar/02/germany-cuts-solar-power-subsidies

[rffrydr]

...in ways you would have least expected it.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Solar panel efficiency continues to improve.

http://news.cnet.com/8301-11386_3-57371835-76/solar-startups-set-new-power-records/

[rffrydr]

For an industry obsessed with reducing costs, plunging raw material prices ought to be great news for manufacturers of solar panels. It is anything but.

Refined from silicon, the most abundant element in the earth’s crust, polysilicon got very pricey a few years ago, reaching $500 per kilogramme. That was annoying for microchip manufacturers, but a serious problem for makers of photovoltaic panels. The pricing crunch led to a wave of investment in polysilicon capacity that came on stream just as some governments trimmed subsidies. With even the most efficient photovoltaic energy still 40 per cent pricier than it needs to be without such assistance, the
90 per cent plus drop in polysilicon prices is fuelling a glut in panels. But it is not making them quite cheap enough to spur incremental demand. This year IMS Research estimated that about 10 gigawatts of unsold panels had piled up, equivalent to a quarter of all installations in the industry’s history. Oversupply of panels from China has pushed some manufacturers into bankruptcy.

Even as US and European polysilicon producers such as Hemlock Semiconductor and Wacker Chemie are fighting to adapt, manufacturers from China are behaving as recklessly as their panel makers. LDK Solar, a vertically-integrated Chinese producer that just lowered profit guidance and took a charge to write down inventory, plans to triple its polysilicon capacity in the next three years. Daqo New Energy reported a halving of profits this week, but said it would carry on with expansion plans. GCL-Poly Energy, China’s largest polysilicon manufacturer, also said this week that it would borrow money to grow further.

Water eventually finds its level. So will polysilicon. But throwing more capacity into a market enduring a glut means it may take quite a while. Raw materials that are cheap, but not cheap enough to stimulate fresh demand, will leave

--LEX
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

State of the U.S. solar market:
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Solar power is beginning to go mainstream
The biggest cloud hanging over the solar industry, the high cost of panels, is finally lifting

NEW YORK (AP) -- Solar energy may finally get its day in the sun.

The high costs that for years made it impractical as a mainstream source of energy are plummeting. Real estate companies are racing to install solar panels on office buildings. Utilities are erecting large solar panel "farms" near big cities and in desolate deserts. And creative financing plans are making solar more realistic than ever for homes.

Solar power installations doubled in the United States last year and are expected to double again this year. More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind.

"We are at the beginning of a turning point," says Andrew Beebe, who runs global sales for Suntech Power, a manufacturer of solar panels.

Solar's share of the power business remains tiny. But its promise is great. The sun splashes more clean energy on the planet in one hour than humans use in a year, and daytime is when power is needed most. And solar panels can be installed near where people use power, reducing or eliminating the costs of moving power through a grid.

Solar power has been held back by costs. It's still about three times more expensive than electricity produced by natural gas, according to estimates by the Energy Information Administration.

But the financial barriers are falling fast. Solar panel prices have plunged by two-thirds since 2008, making it easier for installers to market solar's financial benefits, and not simply its environmental ones. Homeowners who want to go solar can do so for free and pay the same or less for their power.

Last month two of the nation's biggest utilities, Exelon and NextEra Energy, each acquired a large California solar power farm in the early stages of development. Another utility, NRG Energy, has announced a plan with Bank of America and the real estate firm Prologis to spend $1.4 billion to install solar systems on 750 commercial rooftops.

Nationwide, solar power installations grew by 102 percent from 2009 to 2010, by far the fastest rate in the past five years.

"Every manufacturer globally is looking around for the next major growth market, and the U.S. is the first one everyone points to," says Shayle Kann, managing director for solar research at GTM Research.

Making solar affordable still requires large tax breaks and other subsidies from federal and state governments. The main federal subsidy pays for 30 percent of the cost of a residential system. When state and other subsidies are added, as much as 75 percent of the cost can be covered.

But prices of solar panels, the squares of crystalline silicon or thin layers of metal films that turn the sun's rays into electricity, are falling so fast that its advocates now credibly claim that solar will be able to compete with fossil fuels even when the federal solar subsidy shrinks by two-thirds in 2016.

"Over the past 10 years the industry has made the case that we needed to increase scale so we could reduce prices," says Arno Harris, CEO of solar developer Recurrent Energy, a subsidiary of Sharp Corp. "We're seeing it happen."

The falling prices have made it easier for solar installers to raise the money needed to grow. And they've made solar power systems so affordable they can appeal to homeowners who want to save on their electric bill, not just reduce their environmental impact.

Tim Johnson, a high school math teacher in Philadelphia, had wanted to put solar panels on his roof for years. Like many people concerned about the environment, the thought of powering his home without burning fossil fuels had a strong appeal. But with two kids in college, he couldn't justify spending $15,000, after subsidies, to do it.

But since March, he has generated 50 percent to 75 percent of his electricity with a set of solar panels on his roof, saving 20 percent on his electricity bills. His upfront cost for the system: $0.

Instead of buying and installing the panels himself, he signed up with SunRun, one of a handful of companies that build, own and maintain solar systems on homes. These companies earn money by charging customers for the power the panels produce.

Johnson pays SunRun $52 a month, and he pays his traditional utility for whatever extra power he needs from the grid. In all, he pays $60 to $100 a month for power; he used to pay $90 to $120.

SunRun can charge Johnson a competitive rate because federal and state subsidies pay for a portion of the installation. Also, the arrangement allows SunRun to take advantage of one of solar's big advantages. Because it is generated near where it is needed, it doesn't have to pass through hundreds of miles of wires, transformers and other equipment. The power price SunRun has to beat in order to entice customers like Johnson is an expensive retail rate, bloated with transmission and distribution charges that home solar doesn't incur.

It would be cheaper over the long run for a homeowner to buy and install a solar system because he would not have to pay a company like SunRun for financing, service and maintenance. But these plans have growing appeal because they don't require homeowners to lay out thousands of dollars up front.

In California, which leads the nation in solar power installations, 51 percent of the residential solar systems installed through the first three quarters of this year were sold with these plans, up from 12 percent in 2009.

SunRun and competitors such as SolarCity and Sungevity are expanding into more states, including Arizona, Colorado, Delaware, Maryland, Massachusetts, New Jersey and Pennsylvania. Last month, Google announced it would create a fund that local installers in every state can tap so they too can offer no-money-down plans.

Some installers are teaming up with big hardware chains Home Depot and Lowe's in an effort to expose solar to customers who might not otherwise consider it.

"Awareness is still one of our biggest problems," says Lynn Jurich, co-founder and president of SunRun, which has a partnership with Home Depot.

Solar panel prices have been declining for years because of lower costs for polycrystalline silicon, the main raw material for most solar panels, and larger-scale manufacturing, especially in Asia. In the last six months, demand has dropped sharply in Germany, the world's biggest solar market, in response to shrinking subsidies. This has created a global glut of solar panels and accelerated the decline in prices.

Solar panels, which are priced based on the amount of power they can produce during full sunshine, sold for $1.34 per watt in mid-September, according to data from Bloomberg New Energy Finance. That's down from $1.90 at the beginning of 2010. In 2008, they sold for $4 a watt.

The glut has been gut-wrenching for companies that make solar panels. Many of them remain profitable and are growing. But three U.S. panel makers have filed for bankruptcy in two months, including Solyndra, a solar panel maker that received a $528 million federal loan.

Falling profit margins are scaring investors. The stock price of First Solar Inc. has fallen from $170 in April to $53.77. Suntech Power Holdings Co. Ltd. has fallen from $11 to $2.07 over the same period.

The Solyndra bankruptcy has sparked a political uproar. Republicans have accused the Obama administration of pushing for Solyndra's loan for political reasons and have used the bankruptcy to question Obama's plan to help boost the economy by subsidizing clean energy projects.

The market will not get any easier for small solar panel makers. General Electric Co., Samsung and other big companies are entering the market. This should increase supply and bring down costs even further. GE announced this month that it would build the largest panel factory in the U.S., near Denver.

But what has been treacherous for solar panel makers has been a boon for companies that market and install solar systems, for companies that make electronics and other parts for solar systems, and for solar customers.

To be sure, solar is growing from a very small base. All of the panels now installed across the nation produce enough electricity to power 600,000 homes, or about as much electricity as one large coal-fired power plant.

There are 30,000 megawatts' worth of solar projects awaiting approval in the U.S., according to the American Public Power Association. Not all of them will be built, either because of regulatory or financial hurdles. But even if only half that is ultimately built, it would be five times what is already installed.

"We're going in the direction the planet and the industry needs to go," says Harris.

[HenryTo]

WMT's stores in California bulk up on solar panels:

http://www.dailytech.com/article.aspx?newsid=22809

[HenryTo]

Morningstar's latest comments on First Solar:

[rffrydr]

The back of the back story is the big bust of roll-out subsidies in europe combined with the manufacturing subsidies of china--irony almost demands this be the critical mass.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

The back story on solar growth in light of the Solyndra bankruptcy:

http://www.baycitizen.org/energy/story/partisan-solyndra-obscures-growth-solar/

[HenryTo]

Morningstar on the near-term outlook for solar stocks:

http://news.morningstar.com/articlenet/article.aspx?id=384748&pgid=stockarticle