Economic and Technical Factors Create Winners and Losers in the Solar Cell Market 12 comments
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Several factors have converged over the past several months that will impact the solar cell market, according to a report Opportunities in The Solar Market For Crystalline and Thin Film Solar Cells, recently published by The Information Network.
We pointed out in a SeekingAlpha article on November 18, 2008 that there were troubling signs that were making the solar energy market cloudy. These included macroeconomic issues such as dropping oil prices, stronger dollar, and reduced foreign incentives and microeconomic factors such as lower silicon prices and excess capacity polysilicon and solar panels.
In the past four months, several additional macroeconomic factors are converging to create a unique opportunity in this market, but at the same time microeconomic factors are creating potentially big losers.
On the macro side:
- The U.S. stimulus package will create incentives for solar implementation. However we pointed out in a March 18 release that the stimulus package must be used to create jobs in the U.S., not just supply money to U.S. residents to purchase solar cells made in China.
- China’s stimulus package announced recently is to pay $3 per watt for solar installations, which equated to about 60% of the cost of a solar panel, with priority given for building integrated photovoltaic panels (BIPV).
On the micro side:
- An oversupply of polysilicon is pushing prices of crystalline wafers below $5 Polysilicon that sold for $450/kilo one year ago has dropped to about $100 by year end and is continuing to drop to $50/kilo in the next 12 months.
- Capacity utilization (amount of solar panels produced versus capacity is close to 50%).
- Creative programs have been established to minimize up-front costs to homeowners. Companies such as SolarCity offer leasing programs to mitigate high initial solar rooftop purchases.
On the technical side:
- Not only are polysilicon wafers getting cheaper, new advancements in ingot sawing from companies like privately held NanoSteel offer the ability to make wafers thinner with less sawing losses (more wafers per ingot).
The winners:
- Consumers because of lower prices – we may see prices drop from $1.85 per watt this year to less that $0.50 in two years.
- Chinese solar manufacturers because of subsidies.
- Suppliers of BIPV because installation costs are lower.
The losers:
- Polysilicon manufacturers because of excess inventory.
- Thin film a-Si solar cell manufacturers on rigid substrates because of excess capacity, credit issues, and low efficiency.
Stock position: None.
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This article has 12 comments:
kWh, not peak, may be a more appropriate measure?
We're a bit suspicious that PNM claim that laws of thermodynamics do not apply to solar electricity generation.
NO, kWh is not more appropriate...that is production--the author is referring to capacity...DC nameplate ratings are in watts.
On Mar 31 08:47 AM billp37 wrote:
> " [w]e may see prices drop from $1.85 per watt ..."
>
> kWh, not peak, may be a more appropriate measure?
>
> We're a bit suspicious that PNM claim that laws of thermodynamics
> do not apply to solar electricity generation.
>
> See "N/A" in Heat Rate column in FOILs 6 and 7.
> home.comcast.net/~bpayne37/pnmelectric...
>
> So we're going to try to do some invesigation.
>
> home.comcast.net/~bpayne37/whitman59/w...
>
Lastly, true BIPV is an O&M nightmare in the making--Uni-Solar's product is the exception.
" * China’s stimulus package announced recently is to pay $3 per watt for solar installations, which equated to about 60% of the cost of a solar panel, with priority given for building integrated photovoltaic panels (BIPV)."
"we may see prices drop from $1.85 per watt this year to less that $0.50 in two years."
Did he accidentially divide those figures by 2? or is he talking about something other than solar panels/power?
I don't see solar prices getting under $1 per watt...for the simple reason that manufacturers won't be able to keep up with the wall of demand (that would exist at that price).
" We're a bit suspicious that PNM claim that laws of thermodynamics do not apply to solar electricity generation."
Is this related to your idea that there isn't enough solar energy available for solar and wind to provide enough power to displace fossil fuels?
You might want to start your research at the National Renewable Energy Lab.
Here's what they say about solar's potential just in California deserts (using concentrating solar).
"The total generation
capacity as of 2004 for the state was roughly 58,000 MW"
DNI for high insolation (low cloud cover) areas of California ranges from
6.75 kWh/m2/day to 8.25 kWh/m2/day.
CSP Potential in California on comparably flat land outside of environmentally sensitive areas,
with and without heat storage, during summer months.
Parabolic Trough, no storage < 1 % slope
Capacity Potential, MW 661,000 Generation Potential, GWh 1,614,000
Parabolic Trough, six hours storage < 1 % slope
Capacity Potential, MW 471,000
Generation Potential, GWh 1,640,000
Power Tower, six hours storage < 1 % slope
Capacity Potential, MW 342,000
Generation Potential, GWh 1,233,000
Slopes of up to 3% are considered usable.
Now granted, these are probably somewhat high if they are counting every square meter, which in practice won't happen, but obviously the potential is huge.
The scientists at NREL must not know of that pesky law of thermodynamics. Give them a call.
Incidently, they say that heat storage will not add substantially to electricity costs.
" the trough plant with 6 hours of storage and
without storage have roughly the same cost of energy ($157/MWh vs. $154/MWh)"
These numbers will be lower down the road as the next paragraph illustrates.
"As shown in Table ES-2, CSP
plants installed in 2015 are projected to exhibit a delivered LCOE of $115/MWh,2
compared with $168/MWh for the simple cycle combustion turbine and $104/MWh for
combined cycle plants. At a natural gas price of about $8 per MMBtu, the LCOE of CSP
and the combined cycle plants at 40 percent capacity factor are equal."
[40% capacity factor is for plants with 6 hour heat storage, up to 70% capactity factor is possible with more storage, according to Desertrec]
It's also good for the economy.
"Each dollar spent on CSP contributes approximately $1.40 to California’s Gross State Product; each dollar spent on natural gas
plants contributes about $0.90 - $1.00 to Gross State Product."
"Operations period expenditures on operations and maintenance for CSP
create more permanent jobs than alternative natural gas fueled generation.
For each 100 MW of generating capacity, CSP was estimated to generate
94 permanent jobs compared to 56 jobs and 13 jobs for combined cycle
and simple cycle plants, respectively."
It's also likely that some of this area will be used for PV solar, either in arrays or as concentrating PV.
One Israeli company has shown that concentrating PV can provide electricity and hot water at the same time, substantially raising the solar conversion efficiency. Zenith Solar is just now ramping up for commercial production
www.haaretz.com/hasen/...
This idea could give a boost to companies like EMKR eventually.
rooferguy
"As an installer I can tell you that BIPV is the most expensive approach when installation labor is considered."
Interesting observation, could you elaborate?
Are you referring to installations on older houses or new houses? It would seem that a new house getting roofing for the first time would be more cost effective.
Suntech has made moves to branch out into BIPV products, with deals with Open Energy and Eagle Roofing.
Hope so, need to leverage off of the fullest possible EM spectrum.
Yes, it is entirely possible. Solar cells overheat when the sunshine is concentrated and intensified 1000 fold by mirrors or lenses. They lose efficiency and can be damaged by the heat. They need to be cooled anyway, so it makes sense to capture the heat in the cooling water. Zenith claims a 70% solar conversion efficiency this way.
CSP can also be combined heat and power, or alternatively can desalinize water. Some CSP installations are just for the heat alone, for industrial or agricultural processes.
For what it's worth, there is a patented design for heat storage that claims to be even better than molten salt, as it allows CSP plants to operate at much higher temperatures.
The designer says he has much experience in industrial design, and his plan uses existing proven technologies that don't need any additional R&D. He just repackages them for his heat storage application. Uses alumina pebbles, with CO2 as heat transfer medium.
www.trec-uk.org.uk/res...
One of his ideas is a large solar trough type CSP plant, which then uses a smaller power tower CSP plant to raise the temperature of the storage medium, using his method for storage, and boost efficiency. Power tower CSP plants operate at higher temperatures than solar troughs.