In Central California, Solar Power Dawns as a Major New Cash Crop

[jpak]

http://sunpluggers.com/news/in-central-california-solar-power-dawning-as-major-new-cash-crop-0742

California's Tulare County produces about 26 percent of the state's milk supply and 55 percent of its oranges, and is one of the few places in the world where giant Sequoias reproduce. What it doesn’t seem to do is produce anywhere near enough electric power to meet its needs.

While the county has a few generating facilities – mostly small hydroelectric plants dating from the early 20th century – altogether they produce only about 50 megawatts of power. That compares to demand countywide of about 1,000 mw, says Doug Carter, principal with SolarGenUSA, which hopes to build a score of new solar farms in the county.

"To us it makes more sense to build relatively small 20-mw power facilities close to where the power is needed rather than seeking permits for large utility-size solar plants that need to wheel power long distance," argues Mr. Carter.

SolarGenUSA and a handful of other developers, some from around the world, are proposing several dozen solar projects from the mini to the mega scale in Tulare and Kings counties in Central California, renowned as one of the world's major producers of fruit, nuts and other agricultural products.

<more>

[babylonsister]

1. Good! Let this spread throughout the country! nt

[glitch]

2. Very smart and sensible. K & R nt

[SugarShack]

3. This is great news as this other story today had me worried-China is making the panels why not us?

Rutgers' Chinese Solar Panels Show Clean-Energy Shift
By Stuart Biggs - Jul 23, 2010 7:49 AM EDT Fri Jul 23 11:49:38 UTC 20

Solar panels manufactured by China's Yingli Green Energy Holding Co. convert sunlight into electricity on the Livingston Campus of Rutgers University in New Brunswick, New Jersey. Source: Rutgers University via Bloomberg


An array of 7,600 solar panels manufactured by China's Yingli Green Energy Holding Co. converts sunlight into electricity on the Livingston Campus of Rutgers University in New Brunswick, New Jersey. Source: Rutgers University via Bloomberg

At Rutgers University in New Jersey, 7,600 panels convert sunlight into electricity, saving some $200,000 in energy costs this year in the biggest solar-power experiment at a U.S. college.

Yingli Green Energy Holding Co., China’s second-largest solar-panel maker, supplied the $10 million project. Yingli is one of several Chinese manufacturers that have slashed costs to reduce global prices for solar modules by about 50 percent in two years. The drive made them more affordable for buyers from Rutgers to Wal-Mart Stores Inc., the biggest U.S. retailer.

“It’s all about economics,” said Chief Executive Officer Al Bucknam of SunDurance Energy, the South Plainfield, New Jersey, installer that picked Yingli over Western competitors on price and helped sell the deal to Rutgers as a money-saver.

China is slashing prices and moving to dominate solar energy in the way Japanese manufacturers ruled consumer electronics decades ago. The price declines inch the cost of solar energy toward what’s called grid parity, or renewable electricity at the same prices charged for conventional power.

“The ability of the Chinese to manufacture at scale is a very big reason why the cost of these panels has come down,” said Kathleen A. McGinty at venture capital firm Element Partners in Radnor, Pennsylvania. “They’re a big part of the reason why we can even start to talk about grid parity.”

Price Parity

Sun power may become as cheap as the retail price of grid- delivered electricity in certain markets as early as 2013, according to a June 29 report by Pike Research, a Boulder, Colorado, clean-energy consultant.

The European Photovoltaic Industry Association, a trade group, forecasts parity by 2010 in some southern parts of Italy, by 2012 in several regions of Spain, and 2015 in Germany.

Solar installations are spreading worldwide as governments from China to the U.K. and Italy offer subsidies, costs fall and cities seek to create jobs. Rutgers got a New Jersey state grant for half its solar plant costs, which included installation and an undisclosed price for the Yingli panels. Wal-Mart last month finished installing solar modules on two California stores that provide as much as 30 percent of their electricity.

China’s manufacturers grabbed 43 percent of the global photovoltaic-panel market in the last six years, pricing products as much as 20 percent cheaper than European offerings, according to Bloomberg New Energy Finance. Chinese firms shipped 3,300 megawatts of panels worth $6.6 billion last year, enough to power about 2.6 million U.S. homes.

Asia’s ‘Vast Factories’

“The vast factories of Asia will drive prices down, just as they did with consumer electronics,” said Jenny Chase, head of solar energy analysis for New Energy Finance, the London- based research firm owned by Bloomberg LP.

The downside for manufacturers is falling panel prices. That, together with Spain and Germany cutting subsidies for clean power, has sent investors away from most solar stocks.

China’s largest panel producers, Suntech Power Holdings Co., Yingli, and Trina Solar Ltd., have all dropped on the New York Stock Exchange this year. Yingli lost 25 percent, Trina 13 percent and Suntech 37 percent in the year through July 21. The MSCI World Index fell just 6.9 percent in the period.

Some foreign competitors from Germany’s Solarworld AG and Q-Cells SE to Marlboro, Massachusetts-based Evergreen Solar Inc. fared worse. Solarworld has lost 29 percent in value, Q-Cells dropped 50 percent and Evergreen plunged 56 percent.

State-controlled China Development Bank Corp. so far this year has extended $24 billion in loans to Yingli, Trina Solar, Suntech, Solarfun Power Holdings Co. and others, according to data collected by New Energy Finance. That exceeds the $18.2 billion the U.S. government disbursed in fiscal stimulus funds for clean-energy companies through May 2010.

China’s Subsidies

Skeptics argue China’s solar industry is thriving on subsidies that obscure the true costs of solar, according to Kenneth Dewoskin, senior director at Deloitte China. Suntech and Trina didn’t respond to requests for interviews.

Min Li, a Hong Kong-based energy analyst at Yuanta Securities, said Chinese solar stocks are now attractively priced. He rates Yingli and Suntech as a “buy.” Overall, analysts favor Chinese over Western manufacturers.

Fourteen of 27 analysts tracked by Bloomberg recommend buying Yingli, compared with one “sell” rating. For Trina, all 22 analysts following the stock recommend buying it, while Suntech has 11 buy ratings and 8 sell recommendations.

In contrast, three analysts covering Q-cells rate the company a buy compared with 22 a sell. Evergreen has three buy ratings and 7 sell ratings. Solarworld is almost even, with 14 buys and 12 sells.

‘Just a Start’

China’s dominance in solar panels started in cities that subsidize clean energy. Baoding, a city of 1 million a two- hour’s drive south of Beijing, has used subsidies to attract about 200 renewable-energy companies including Yingli, whose panels power 80 percent of the local street lights.

“That’s just a start,” said Lian Shujun, vice director of the city’s renewable initiative.

China Development Bank lent a combined 116 billion yuan ($17 billion) this year to Yingli, Suntech and Trina while the central government’s Golden Sun program subsidizes as much as 70 percent of the cost of 294 solar projects. Beijing plans to install $1 billion of solar panels around the capital to heat water and light offices in 2012.

“China is beginning to think about what options are out there in terms of its new energy policy,” said Lu Yeung, a Hong Kong-based China energy analyst at Bank of America Merrill Lynch. “It’s not just fossil fuels, but how to make a green economy that is also a growth driver.”

‘Inevitable Choice’

The government is just getting started pushing solar, said Jason Liu, who quit his job at McKinsey & Co. to become a vice president at Yingli last year.

“Developing renewable energy is an inevitable choice,” he said.