ANALYSIS-Solar industry faces more supply, falling prices

[OKIsItJustMe]

http://www.reuters.com/article/basicindustries-SP-A/idUSN1619713620080116

ANALYSIS-Solar industry faces more supply, falling prices

Wed Jan 16, 2008 1:42pm EST

By Nichola Groom

LOS ANGELES, Jan 16 (Reuters) - The booming solar power sector is about to get squeezed by the age-old laws of supply and demand.

Solar energy companies are scrambling to ramp up production amid skyrocketing interest in renewable energy, but the pendulum is swinging quickly toward oversupply.

That places a few players in the sector, including Yingli Green Energy Holding Co Ltd, First Solar Inc, as well as Q-Cells and SolarWorld AG, in the best position to benefit from the changing dynamics, analysts said.

Torrid investment in 2007 fueled growth at solar companies JA Solar Holdings Co Ltd, Suntech Power Holdings Co Ltd, SunPower Corp and others thanks to global warming concerns, soaring fossil fuel prices and government subsidies in Germany, Spain and the United States.

...

[Vincardog]

1. the pendulum is swinging quickly toward oversupply? Are solar panels going to become affordable?

I hope so.

[Kolesar]

2. Renewable Energy Portfolio Standards (Laws) are going to drive demand in many states

And these companies will have business at the price that *they* want to sell at.

[DCKit]

3. I'll believe it when the $/watt breaks below $4 again.

Or the cost of thin film panels reflecting their lower efficiency or use of less than 10% of the material required for crystalline panels.

The last excuse they used for propping the prices was a shortage of SiO2, but there are several new plants on line (silicon being the most abundant element on earth).

[Massacure]

4. Silicon is not the most abundant element on Earth.

Earth is 47% Oxygen by weight. Then 28% Silicon, 8% Aluminum, and 5% Iron.

[DCKit]

5. FINE. The most abuindant element on beaches. HAPPY? : )

[jberryhill]

11. It's still 2 0's for every Si

Nonetheless, Si is more abundant than petroleum.

[OKIsItJustMe]

6. Market forces...

Lower prices ⇒ increased demand ⇒ shortages/higher prices ⇒ increased supply

(and so on)

http://www.solarbuzz.com/Moduleprices.htm

...

Lowest Prices ($/Wp)

The tracking of the lowest price band in the survey is measured against the number of prices below $4.75 per watt (previously analyzed to below $4.50 per watt). As of January 2008, there are currently 185 solar module prices below $4.75 per watt (€3.23 per watt) or 11.7% of the total sample. This compares with 215 prices below $4.75 per watt in December.

The lowest retail price for a multicrystalline solar module is $4.28 per watt (€2.91 per watt) from a US retailer. The lowest retail price for a monocrystalline module is $4.35 per watt (€2.96 per watt), also from a US retailer.

The lowest thin film module price is at $3.66 per watt (€2.49 per watt) from a European retailer. As a general rule, it is typical to expect thin film modules to be at a price discount to crystalline silicon (for like module powers). This thin film price is represented by a 60 and a 120 watt module.

Note once again, that these prices are based upon the purchase of a single solar module and prices are exclusive of sales taxes. Information on volume discounts, factory gate and PV system pricing is available as part of our consultancy services.

...

[DCKit]

8. I understand market forces, but since Big Oil began snapping up solar manufacturers...

the steady decrease in prices of the 80's and 90's became a volatile roller coaster ride. Apparently they did the same with NiMh battery companies, patents and technology. Let's hope they don't get their mitts on the new Li technologies, especially nano cathodes/anodes. The energy density and regenerative braking capture the new technology provides would make electric cars far too viable to ignore.

BTW, thanks for your posts. I stay on top of things, but you keep finding stuff I haven't seen.

[OKIsItJustMe]

9. You're welcome

As for big oil snapping up solar companies, some of the biggest strides in the solar industry were made by (moderately) big oil companies.

Check out this tidbit I just found on the Nanosolar site:

http://www.nanosolar.com/pr3.htm

...

Chris Eberspacher has been appointed Vice President of Engineering. Dr. Eberspacher was Head of all R&D of the world's largest photovoltaics company, ARCO Solar / Siemens Solar Industries (today Shell Solar) where he led a team in the development of the vacuum-deposited thin-film solar-cell technology that is now one of the leading thin-film technologies in commercial production.

...

To my knowledge, Exxon Mobil :grr: has not gotten into the game.

[NNadir]

7. Meanwhile on planet Earth...

http://www.solarbuzz.com/

Of all God's creatures, the hen is the wisest. It only cackles after it lays an egg. - Abraham Lincoln

[jpak]

10. Meanwhile on planet Earth...there are no real molten salt breeder reactors in New Jersey

Just made up ones...

[NNadir]

12. I guess your point would be that solar energy is affordable.

The existence or non existence of molten salt reactors in New Jersey - and frankly there are zero fundie mystical anti-nukes who would know about molten salt science in New Jersey, since fundies couldn't care less about science - in some alternate universe apparently changes the price of solar energy as reported on the solar promotion site, www.solarbuzz.com.

http://www.eia.doe.gov/pub/international/iealf/table27.xls

Um...look Mom! Molten Salt! Look just saying the word produced a brazillion solar roofs in hydrogen Hummer land.

Oh, by the way big boy, how are those brazillion solar roofs in California coming along? Find an exajoule yet?

No?

Don't know or care what an exajoule is?

Couldn't care less?

Um, why am I not suprised.

I guess it is if everything you own is inherited from Mom and you've never held a real job in your life.

If, on the other hand, you're one of the 6.6 billion people not living on Mom's dime, solar energy is just a toy that consumerist brats use in a talimanic way to cover up their moral vapidity.

It's amazing how many yuppie brats hang out here saying that solar energy is affordable.

There was one really, really, really, really, really mindless consumerist brat here not so long ago that announced for everyone that the Maine Solar House was "affordable" because it "only" cost $400,000 to build.

[DCKit]

13. My Mom, who has no basement for me to live in...

lives off the grid in a solar house. Had she followed my advice, her entire system would have cost less then $10K - the same as it would have cost to run the power lines so she would have the privileges of a monthly bill as well as regular outages during the winter months and the odd, but increasingly common, violent summer storm.

As it is, she uses LPG for hot water, heat and to run her ammonia cycle fridge and chest freezer. However, she also has lights (CFLs), ceiling fans, a washing machine (Staber), a laptop, stereo and is able to watch as much as 6 hours of satellite television each and every day. Suffice to say, she doesn't have all the toys those of us plugged into the grid take for granted, but she's not deprived either. Aside from the CFLs (and to my chagrin), she has done nothing voluntary to conserve energy.

No matter how much energy she uses each evening, the batteries (675 amp hours at 48v) are charged by 1:00 p.m., at the latest, on any sunny day and she has gone as long as ten cloudy winter days without depleting the battery charge below the recommended 20%. If anything, she should have double the storage capacity.

No, solar energy is NOT affordable if you are used turning something on every time you turn around. Additionally, anything that uses electricity to create heat - toasters, electric stoves, hair dryers, electric hot water heaters, space heaters, etc... - are far more less efficient than their fossil fuel counterparts. That's where solar thermal picks up some of the slack and fossil fuels, the remainder.

Anyone who can learn to live within these constraints could do so on an investment of $10K. Anyone who chooses a grid-tie system could do the same without sacrificing much of anything, as long as they are willing to live without AC and an electric stove.

The roofs of the houses at this years Solar Decathlon were literally covered with solar panels because each of these houses was, according to the rules, 100% electric. Though several of them had solar thermal for heating and hot water, each also had AC, an induction cooktop, a microwave, electric refrigeration and an electric city car. Additionally, the appliances were all "off the shelf". The addition of enough solar electric and battery storage for these things would easily quadruple the base cost of any residential system.

California's current state and utility rebate programs make going solar cost-effective. Larry Hagman received a ~$500K back on his ~$850K solar investment and his electric bill for 2006 (for the year, on a huge house with AC, conventional appliances, pool and pumps) was $13. The payback on that - barring further increases in electric rates - is about ten years, with another ten years of "free" electricity over the 20 year expected life of the system. How is that not affordable?

[hunter]

14. Well, you could live like that without the solar panels too and save $10,000.

My great grandmother was superstitious about electricity, having lived without it most of her life. When she finally did get electricity she used it to light a couple of forty watt light bulbs one light at a time, and occasionally she'd listen to her radio and record player. Her electric bill was a negligible figure in her finances. She spent more money on butter.

I'm sort of stingy that way too, my computer and network draws about sixty watts, but my wife and kids like lots of lights. All are compact fluorescents.

Residential electric use is very flexible. A very fine and comfortable household can be run on a 10 amp service connection. Our family has lived in a house with a 20 amp service and it was easy. The greater problem is the electricity that powers the economy outside of the home, the electricity used by industry and business, and in California especially, the electricity that moves water around.

A business or industry that uses solar power will not be competitive with a business that is allowed to use less expensive coal generated electricity. The price of water in California would skyrocket if it was pumped around by photovoltaic panels.

You have to think in terms of what it takes to power the places where people work, the places that keep the economy rolling. Even if we could cut residential use to zero we'd still have the same environmental problems with the electric supply we have now.

[DCKit]

15. Your point is?

I was replying to a post about the unattainably high cost of residential solar and you went all Amish (among whom I grew up) on my ass. I use a knife and cutting board instead of a food processor too and my personal carbon footprint is embarrassingly unAmurikan.

There are a million different ways to cut our dependence on all forms of energy. I was simply pointing out that solar is only unaffordable for those who insist on maintaining the "average", wasteful American lifestyle. Numbers can be used to prove or disprove anything you want them to, I chose use numbers and experience to prove that solar is compatible with a modern - albeit scaled back - lifestyle. A place for everything and everything in it's place, as it were.

You write well, but what I'm hearing is that we simply shouldn't bother because solar doesn't meet all our needs. Why is "some" not enough? Why does it have to be all or nothing?

Sorry, but I would personally like to go back to fishing in my local waterways without having to worry about the mercury levels of my catch. Widespread implementation of solar electric and solar thermal would both go a long way toward helping alleviate my concerns.

[hunter]

16. Sorry. I was hot from an argument in another thread...

:blush:

I will say I don't think solar will displace coal unless there are some very fundamental changes to our economy. Otherwise solar electricity is just a supplement to coal, most useful for shaving off the some of the mid-day peak demand.