Solar Industry's Long Term Outlook 38 comments
-
Font Size:
-
Print
- TweetThis
Investing in Solar has been a roller coaster experience. Since the beginning of the crisis, Solar stocks went down between 50% to 80% from their highs. They did that huge pullback in less than a year (Most of Solar Highs has been reach in the summer 2008).
During the great bull period of Solar (the First Half of 2008), analysts were very bullish and most of them had very high price target for almost all the companies. The weather was clear according to brokers.
Now, most analysts are bearish on the industry, they feel that it will be a very tough road for the industry and they cut (or should I say killed) their price target.
But all those analysts don't focus on the long term potential of the industry, so I'm asking the question, what is the long term outlook for the Solar Industry?
Concerning the Short term, I would like to point out to the following elements :
- Right now, Solar stocks are mostly under the pressure of Shorters (Naked or Non-Naked) and Day traders. In order to prove my point, i just need to point out the average volume on those stocks between last year and this year. To understand it, check Google for the average volume in terms of dollars exchanged for SolarFun (SOLF), Renesola (SOL), Evergreen Solar (ESLR), LDK (LDK) etc. for last year and this year. You will see a huge difference. (a fall of 50 to 80% of the avg volume)
- Right now, some solar projects are reported (there is no cancellation, based on comments of all Solar management). Companies that expected to invest in Solar in the end of 2008 and in the first half of 2009 are sometimes delaying their plan until the credit market works again. The shutdown of the demand created the oversupply.
- The freezing of the Credit Market created oversupply (mainly due to the over capacity out of small Chinese manufacturers). Q4 of 08 and Q1 of 09 have been a period of cleaning out inventory and bankruptcy for most of the small non listed Chinese solar companies. This has created big pressure on the spot market price (Cleaning Inventory means big sales...) for solar panels. It also hurts margins.
- The over-supply of Solar Panels has been reflected in the polysilicon price that fell from 500$/kg at the peak to 100$/kg now.
So I guess the short term for the Solar industry will still be cloudy. In fact, any investment in solar stock now is dead money for the next 6 months (with a roller coaster on the downside and the upside).
Now I think for this sector we should look to the long term picture :
- Most governments are betting on Renewable energy to get out of the crisis and create the economy of the 21st century : China, USA, France, Germany, Japan, Italy, Spain, Grece (List to be continued.... probably)
- In the renewable energy sector, Solar is the best placed because it can be installed everywhere (which isn't the case of Wind Energy for example). To prove that, Solar panels can be installed even in places where there isn't huge solar exposure: Germany is right now the biggest worldwide market.
- Solar Projects are profitable over the long term right on day 1. Banks knows that, companies knows that too. So as soon as the credit markets unfreeze, banks will be more then open to finance solar projects.
- All the projects that are delayed now will sooner or later be done. But at the same time, Solar projects that were planned in the next months (and years) will also be done. So we could have a huge rebound in demand as soon as the credit market works again.
- Most solar companies reduced their capacity in order to meet a slower demand. But as soon as the credit markets works again, the pick up in demand will be huge (All the delayed projects and projects that were planned will be done at the same time), but ramping up production isn't as fast as the potential growth in demand. So we could move from an oversupply situation to an undersupply situation.
- A potential undersupply situation in the next years (as soon as the demand picks up), will create a big bump in the spot price and therefore helps margins.
- Greed-parity in most markets is supposed to be at 2$/w without government subsidy. Most solar companies are targeting a cost of production in the 1.30$-1.60$ over the next 2 years. Therefore, margins could be healthy even without government subsidies when the markets stabilize. Now include subsidies and you can imagine the margin potential over the long term.
- Oil price will go up as soon as the economy rebounds. The pick up in oil price will also create new demand and fuel the potential under supply over a few months when the recovery occurs.
I do believe that if you are a long term investor (with a time target of 5 years) investing in solar companies could be a very good choice. The low price of the entire sector right now is a great opportunity for a long term holder. I think that all the listed companies will survive the downturn and will find financing to develop when needed.
Now what are my sector picks?
- First Solar Inc (FSLR): Best in Class. They produce Thin Film panel which is different then most other competitors. They have a great cost structure which allows them to keep great margins even with the price pressure. Their earnings confirm their great situation. They also have the best balance sheet in the sector. In addition to that, the CEO is planning to work on a better implementation of Solar in low carbon bills which will help his company and the entire sector.
- Evergreen Solar: The stock has been crushed lately because they haven't been able to generate profit (except one quarter a little more then a year ago). They also got hit by the Lehman Bankruptcy (created dilution on the stock) and the bankruptcy of a french polysilicon producer (Forced a non-cash provision). But in the polycrystalline panel they have the best Wafer technology that lowers the cost of production. They also are in discussion to produce their product in Asia which will also reduce the labor cost. Their String Ribbon technology already proved the impact on the margin of a solar business : Just look at the Margin of Sovello (the joint venture ESLR has with other Solar companies). In addition to their technology advantage that will allow them to be very competitive on the price side, they have more then a billion dollars of backlog contracts that they can already fulfill with their Devens facilities.
- SunPower (SPWRA), (SPWRB): This company offers the best solar panel, in terms of efficiency, in the business. They have a vertical integrate structure that puts them in a great position for big projects (that are now impacted by the credit crisis, but will have a boom as soon as credit flows again). The management has a great cost control and also is a reference in the business. SunPower is clearly a leader over the long term in the industry, especially for big projects.
- Q-cells (QCE): It's the biggest producer in the world right now. This German based company is a leader in the industry already. They also invested in thin film and nanosolar business (which is the same kind of panel that SunPower and Evergreen Solar produce) to gain from other technologies, aside from what they produce. They also have a joint venture with ESLR that has a strong upside potential (Sovello). They are at the center of the biggest market right now and are leaders in Germany. Also, their Joint Venture with LDK Solar has a great potential for a Utiliies project.
- SolarFun: They have a great cost structure (especially for Module). Their biggest advantage (if you compare to other Chinese producers) is their management. It's an occidental management that always has been cautious and prudent. They have been the first to warn about the slowdown in the business in Q3 2008. They also were the first to write down inventory in the business. The quality and prudence of the management is a major proof of the quality of the company. Also, their strong relationship with Q-cells is a very positive sign about the company's value in the sector. We can also take into account that they are one of the two biggest suppliers of Schueco (which is the leading solar installer in Germany). We also can take into account that they have been able to diversify their market (All over Europe) even when the Spanish market dropped.
- Suntech Power (STP): It is the Chinese leader, and they have a strong business in both Thin Film and polycristalline Panels. Their size and their exposure in all markets positioned themselves for great shape in the future. They have solid partnership in USA and Japa, for example, that allow them to be able to maximize on the growth of both markets. We just need to be careful of their management team, which is Chinese and therefore might be negatively received by Wall Street.
- MEMC Electronic (WFR): Leader in Wafer production. Their semi-conductor business might pressure their margins, but their solid balance sheet and great cost structure in Wafer production helps them to be a major player in Wafer business. The Semi-conductor business is also a way to keep a strong and diversified business that other solar companies might not have right now.
- LDK Solar: LDK is a special company. They are the best Wafer producer (aside from ESLR, which doesn't sell their wafers) in the market. They have the best cost structure in terms of Wafers in the business (still with ESLR as an exception). Now they have a huge backlog (More then 3 gigawatts of wafers). But they have issue with management credibility and therefore wall street is hitting hard on this stock (mainly because the CEO owns 2/3 of the company). But over the long term, LDK invested a poly plant in order to reduce their cost over the long term. This strategy is a very risky move, but if the poly plant works (it is facing some issues right now) their strategy will strongly reward the bottom line because they will have a very low poly cost which is a main component of the Wafer production cost. But also, the polysilicon spot price will have to stay above 100$ to make the big investment valuable. But we can assume that as soon as business picks up, Polysilicon will trade between 100 and 200$/kg. So LDK could be a big industry leader if they show some more credibility with their management, and more importantly, if their poly plant starts to work.
Disclosure: I hold Q-cells, ESLR and FSLR stocks and some of my customers own FSLR, ESLR, LDK, SOLF stocks.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 38 comments:
LDK sells it wafers to Q-cells. As poly-si prices drop over time as more efficient production comes on line, wafer will begin to get the upper hand on thin-film as thin-film cannot achieve the future cost reductions that wafers can.
Lower raw materials prices mean lower module prices and thus can reach a broader market. And the demand is certianly there once project finanicng comes back - and it will.
Wafers are here to stay, ESLR ribbion process is most interesting and I expect similar [non-infringing] methods to develop, such as steaming poly-si direclty onto substrates or even between substrates with clear conductive top surfaces.
Thank you.
I have printed it off for further review.
Jim Pearson
Commercial Litigation
However, parts of it might cause a reader to misunderstand without reading twice. May I suggest that you watch out for the use of singular and plural verbs, and the use of the word "than"?
The word "then" is a reference to succession in time, as in, " this happened, then that happened afterwards". You use "then" often, however, you should be using "THAN", because you are making comparisons, such as when you write "Bank will be more then open" and "different then most other competitors" and " they have more then"......
As for plural and singular verbs, when the person or entity doing the action is is plural, then the verb is not. When it's one person or entity, then the verb is plural. So, instead of "Bank will be more then open" as in the above example, the sentence should read "Banks will be more than open".
And "Banks knows that; companies knows that too", it should be written "Banks know that; companies know that too."
Oh, and one last little thing: we put the dollar signs in front of the amount.
thank you and I hope you find this helpful.
(building intergrated PV) the latter through a deal with an American company. Probably a good move.
dsassyt
Don't worry about pollution from solar silicon manufacturing. It's a red herring that is often used dishonestly to criticize solar. In fact silicon cells don't contain the toxic substances that some thin films do, like cadmium.
I agree that ENER is a very innovative company with many inventions and a broad approach to alternative energy, as well as their phase change tech for memory devices. However, they have struggled to come up with a winning business model it seems to me. Hopefully that will change, as it would be a shame to waste all that scientific knowhow.
Also, if I may make a suggestion, don't use your email address for a screen name, for your own security.
LDK sells wafer to Q-cells but also to Suntech, GE and many others it is the leading Wafer producer in the business.
On May 01 09:09 AM jbde wrote:
> nice slip - Greed parity instead of grid parity.
>
> LDK sells it wafers to Q-cells. As poly-si prices drop over time
> as more efficient production comes on line, wafer will begin to get
> the upper hand on thin-film as thin-film cannot achieve the future
> cost reductions that wafers can.
>
> Lower raw materials prices mean lower module prices and thus can
> reach a broader market. And the demand is certianly there once project
> finanicng comes back - and it will.
>
> Wafers are here to stay, ESLR ribbion process is most interesting
> and I expect similar [non-infringing] methods to develop, such as
> steaming poly-si direclty onto substrates or even between substrates
> with clear conductive top surfaces.
On May 01 09:44 AM dsassyt@aol.com wrote:
> Could you comment on silicon-based solar companies. My understanding
> is that the silicon processing causes pollution and increases the
> weight of the panels. ENER has the lightest panels and like First
> Solar does not utilize silicon. ENER has so many other inventions
> either being or waiting to be commercialized that it offers a diversification
> in alternative energy which none of the other companies can claim.
I hope you won't have too much issue with all the english mistake :)
On May 01 11:26 AM Pearsonpc wrote:
> Great Article.
>
> Thank you.
>
> I have printed it off for further review.
>
> Jim Pearson
> Commercial Litigation
i will try to apply them as much as i can on future article i will write.
My first langage is French and i teach finance in French too and most of my customer are French spoken.
I might have some problem at the beginning to apply perfectly all your advice but i will do my best.
Thanks again for those helpful advice
On May 01 11:28 AM Alfie/Alfie wrote:
> Mr. Pepin, I'm assuming your first language is either German or French,
> since I see mention of Switzerland in your bio. Considering that,
> I applaude your command of finance and the English language.
> However, parts of it might cause a reader to misunderstand without
> reading twice. May I suggest that you watch out for the use of singular
> and plural verbs, and the use of the word "than"?
> The word "then" is a reference to succession in time, as in, " this
> happened, then that happened afterwards". You use "then" often,
> however, you should be using "THAN", because you are making comparisons,
> such as when you write "Bank will be more then open" and "different
> then most other competitors" and " they have more then"......
>
> As for plural and singular verbs, when the person or entity doing
> the action is is plural, then the verb is not. When it's one person
> or entity, then the verb is plural. So, instead of "Bank will be
> more then open" as in the above example, the sentence should read
> "Banks will be more than open".
> And "Banks knows that; companies knows that too", it should be written
> "Banks know that; companies know that too."
>
> Oh, and one last little thing: we put the dollar signs in front of
> the amount.
> thank you and I hope you find this helpful.
i would love to help you for your sentence he he he but i cannot lol
On May 01 12:57 PM Perry B wrote:
> Good Article: Alfi I am going to assume you are an english major?
> that is a good thing. Could you correct this sentence for me, please.
> I think it is a good message just grammatically ineffective. " The
> oil companies and their short siding cronies know the power of the
> sun, as well; They, and their cronies are nervous at the prospect
> of leaving Dino in the cold dark ground. Ushering in a new daylight
> approach to energy needs." I appreciate reading all the comments
> and the articles even though we accused unjustly of being Kermudgins
On May 01 12:59 PM frflyer wrote:
> Suntech has only recently ventured into thin film and BIPV
> (building intergrated PV) the latter through a deal with an American
> company. Probably a good move.
>
> dsassyt
> Don't worry about pollution from solar silicon manufacturing. It's
> a red herring that is often used dishonestly to criticize solar.
> In fact silicon cells don't contain the toxic substances that some
> thin films do, like cadmium.
> I agree that ENER is a very innovative company with many inventions
> and a broad approach to alternative energy, as well as their phase
> change tech for memory devices. However, they have struggled to come
> up with a winning business model it seems to me. Hopefully that
> will change, as it would be a shame to waste all that scientific
> knowhow.
>
> Also, if I may make a suggestion, don't use your email address for
> a screen name, for your own security.
>
>
>
>
>
>
>
>
>
On May 01 09:44 AM dsassyt@aol.com wrote:
> Could you comment on silicon-based solar companies. My understanding
> is that the silicon processing causes pollution and increases the
> weight of the panels. ENER has the lightest panels and like First
> Solar does not utilize silicon. ENER has so many other inventions
> either being or waiting to be commercialized that it offers a diversification
> in alternative energy which none of the other companies can claim.
However, you have bias towards your disclosed companies and have left out some serious negatives, of which I will illustrate some with FSLR.
Their product uses Cadmium and Tellurium, both have serious issues.
Tellurium is only available in very limited amounts and only as a by-product of copper mining. In fact, FSLR will very soon come up against both rising costs for what is available as well as a complete cut-off point where no production will be possible. This limit may be somewhere near 3GW a year, which will arise soon.
Cadmium is listed as one of the 6 most toxic substances by the EU RoHS (Restrictions on Harzardous Substances). Currently, FSLR has fallen into a loop-hole, neither having been granted nor restricted in their use of cadmium. At worst, it will completely stop sales in the EU. At best, they will come in for potentially huge clean-up charges for recycling their modules at the end-of-life stage.
On May 01 02:34 PM spuddle wrote:
> I agree with much of your overall assessment of the solar market.
>
>
> However, you have bias towards your disclosed companies and have
> left out some serious negatives, of which I will illustrate some
> with FSLR.
>
> Their product uses Cadmium and Tellurium, both have serious issues.
>
>
> Tellurium is only available in very limited amounts and only as a
> by-product of copper mining. In fact, FSLR will very soon come up
> against both rising costs for what is available as well as a complete
> cut-off point where no production will be possible. This limit may
> be somewhere near 3GW a year, which will arise soon.
>
> Cadmium is listed as one of the 6 most toxic substances by the EU
> RoHS (Restrictions on Harzardous Substances). Currently, FSLR has
> fallen into a loop-hole, neither having been granted nor restricted
> in their use of cadmium. At worst, it will completely stop sales
> in the EU. At best, they will come in for potentially huge clean-up
> charges for recycling their modules at the end-of-life stage.
>
On May 01 03:24 PM wisdom.vs.information wrote:
> thin film costs an extra dollar/kW BOS (balance of system) because
> of conversion ineffiency; when/if CSi becomes less than +1$/kW more
> than thin film, then there is no reason to install thin film. that
> is why i advise to avoid FSLR long.
I had the chance to discuss with a management member of a well-known solar company and he told me that all the forecast of MW sales from All Chinese company doesn't make sense if you add all together. If you take YGE, JASO, CSUN forecast etc. you will see either there is something that doesn't make sense.
I like STP and LDK because they are highly respect all over world, and i like SOLF because they have a solid cost structure and the management is serious and solid.
I could include in fact SolarWorld, the german company as a solid pick for long term investor even if the CEO is a little bit wierd sometime (remember their offer they made to buy Opel)
On May 01 03:31 PM Amouna wrote:
> You forgot to mention JASO: Great balance sheet, good products. Got
> hit by the same Lehman event as ESLR but Return on Equity is still
> excellent compared to many in the sector. The company is now ramping
> up on vertical integration. A name to watch..
On May 02 10:02 AM Dave Shafer wrote:
> Great article. Here in Florida there are two major solar projects
> on board for 2012, one by FP & L and the other for Tampa Electric.
> We shall see how well they do for the rate payers, but for the chosen
> providers it should be a boost.
You might consider to diversify with a Thin Film leader like First Solar Inc perhaps.
On May 02 10:51 AM Jade Queen wrote:
> Gainesville, FL, has a feed-in tariff that the utility agreed to
> do on its own, without being forced by a government. This is a ground-breaking
> thing for the U.S. It seems more likely to me that this is the way
> we will go, rather than having anything designed by monopolies and
> then forced by government. Renewable Energy World has an article
> you can look up on this, with lots of interesting comments, including
> mine with my real name. I own STP and SPWRA. STP has a good website
> with interest in educating consumers, experience with joint ventures,
> and dispersed presence. SPWRA has the most efficient monocrystalline
> panels and carefully screened installers, so it appeals to the market
> that doesn't want to mess around, just wants it done and done right.
> SPWRA also has a program to get customers to recruit new customers,
> which seems wise in an advanced-adopter environment. Thanks for
> the article.
Now, solar provides the promise that growth need not slow for want of energy. But for solar to step in, it will require Trillions of dollars of investment. So it is not so much a matter of if solar will do well, as much as a matter of which solar technologies will explode.
I'm still convinced that utility-scale CPV will be the end winner. The promise of lower materials costs and large scale investment coupled with low transmission losses makes me think that ultimately companies like EMKR and BA will do very well, given that much of the value in solar is the future discounted monster earnings offset by short term cash burn and depressed margins, rather than strong margins or near term grid parity. Oil at $85 will help, but the volatility has softened the enthusiam for major investments in the short term.
While the CO2 panic may soon end, security and economic considerations will justify maintaining the tax incentives for investment until large windfall profits arrive- and I think we're 10 years away from that.
It will be interesting to see what will develop with CPV. We don't hear much about it, and as you know I often write about CSP which I think has huge potential. But CPV could end up being bigger than most imagine. One thing it has over CSP is the ability to be used in both centralized and distributed on site systems.
Good notes here. The funny thing is, I was just watching an episode of the HBO series "The Wire" (great show!) where one character lectures another on precisely the then/than issue. :)
While I am not a registered grammarian, I believe you have one little error.
You say: "when the person or entity doing the action is is plural, then the verb is not. When it's one person or entity, then the verb is plural. "
Actually, when the subject of the sentence is plural, so is the verb. It is just that in English we frequently mark the 3rd person singular with an 's' which coincidently is how we mark nouns as plural. we say:
I talk
you talk (this is both singular and plural)
he/she/it talks <<<
we talk
you talk
they talk <<<
(In Spanish, for example, there is a more complete conjugation so that each "person" - 1st-singular, 3rd-plural - has its own ending:
yo hablo
tú hablas
él, ella, Ud. habla
nosotros hablamos
vosotros habláis
ellos, ellas, Uds. hablan
This is why one does not need to say "yo" ("I") simply "hablo" = "I talk")
In any case, your examples are, of course, correct.
On May 01 11:28 AM Alfie/Alfie wrote:
> Mr. Pepin, I'm assuming your first language is either German or French,
> since I see mention of Switzerland in your bio. Considering that,
> I applaude your command of finance and the English language.
> However, parts of it might cause a reader to misunderstand without
> reading twice. May I suggest that you watch out for the use of singular
> and plural verbs, and the use of the word "than"?
> The word "then" is a reference to succession in time, as in, " this
> happened, then that happened afterwards". You use "then" often,
> however, you should be using "THAN", because you are making comparisons,
> such as when you write "Bank will be more then open" and "different
> then most other competitors" and " they have more then"......
>
> As for plural and singular verbs, when the person or entity doing
> the action is is plural, then the verb is not. When it's one person
> or entity, then the verb is plural. So, instead of "Bank will be
> more then open" as in the above example, the sentence should read
> "Banks will be more than open".
> And "Banks knows that; companies knows that too", it should be written
> "Banks know that; companies know that too."
>
> Oh, and one last little thing: we put the dollar signs in front of
> the amount.
> thank you and I hope you find this helpful.
In the author's defense - in SPOKEN English, many people say THEN when they mean than. They may even know the difference but merely not pronounce it differently - at least here in Oregon. You hear all the time something like "OH, this one costs more then that," even when the speaker knows it is "than." (They also pronounce the names Erin and Aaron identically - like a New Yorker would say EAR-in.)
Languages are difficult. It is not too hard to get to a certain level, even a conversational level of fluency. But real "native equivalency" is extraordinarily difficult. So we Americans really need to give foreigners a little slack.
Monsieur Pepin, if you think English is difficult, try Hungarian! lol
Well i speak english well enough to make myself understandable and also understand others that speaks english. Unfortunatly my grammar is pretty at best average at least when i write stuff.
Ps : i won't try Hungarian even if i believe it is tough (At least less tough then Russian or Chinese i suppose lol)
On May 03 01:53 AM jmmx wrote:
> As for the then vs than
>
> In the author's defense - in SPOKEN English, many people say THEN
> when they mean than. They may even know the difference but merely
> not pronounce it differently - at least here in Oregon. You hear
> all the time something like "OH, this one costs more then that,"
> even when the speaker knows it is "than." (They also pronounce the
> names Erin and Aaron identically - like a New Yorker would say EAR-in.)
>
>
> Languages are difficult. It is not too hard to get to a certain level,
> even a conversational level of fluency. But real "native equivalency"
> is extraordinarily difficult. So we Americans really need to give
> foreigners a little slack.
>
> Monsieur Pepin, if you think English is difficult, try Hungarian!
> lol
How does CPV reduce transmission losses?
Not a chance...CPV is simply a niche application and will only survive where CSP is not feasible.
On May 02 04:05 PM Dirk McCoy wrote:
> I read an article by Andy Revkin of the New York Times where he likened
> our use of fossil fuels over the past 100 years to a cow tipping
> teen, saying it was time to grow up. Truth is, our fossil fuel use
> the past 100 years has allowed us to pull mankind out of sustenance
> farming and widespread poverty, lengthen lifespans, and create unimaginable
> opportunities.
>
> Now, solar provides the promise that growth need not slow for want
> of energy. But for solar to step in, it will require Trillions of
> dollars of investment. So it is not so much a matter of if solar
> will do well, as much as a matter of which solar technologies will
> explode.
>
> I'm still convinced that utility-scale CPV will be the end winner.
> The promise of lower materials costs and large scale investment coupled
> with low transmission losses makes me think that ultimately companies
> like EMKR and BA will do very well, given that much of the value
> in solar is the future discounted monster earnings offset by short
> term cash burn and depressed margins, rather than strong margins
> or near term grid parity. Oil at $85 will help, but the volatility
> has softened the enthusiam for major investments in the short term.
>
>
> While the CO2 panic may soon end, security and economic considerations
> will justify maintaining the tax incentives for investment until
> large windfall profits arrive- and I think we're 10 years away from
> that.
But there will be big money spent on each of these. But by the time the trillions of dollars are being spent (since fossil fuels will take us quite a bit further), I do believe CPV will be proven to be the superior technology...
I agree. Good info here on solar. Got several of the companies he talked about also, including ESLR. Had that one for a year or so, but not worried about it. It will have it's day and I hope to be there to capitalize on it. Also own SSLR, which is doing very well right now.
I am glad you reminded the author about the use of then and than. That seems to be a fad among the younger crowd, but if you are an author I think mistakes in grammer are detrimental to your credibility and should be avoided. But you were very considerate and courteous and I appreciate it.
I posted another opinion earlier on Mr. Montgomery's article in stating that we do not need to downgrade any of these energy sources as we need them all in order to get completely off foreign oil. We are always going to be dependent on oil, but we have enough under our own feet to supply us for the rest of our lifetimes and then some. It has just been discovered we have enough under the Rocky Mountains in Montana to make the Saudi reserves look like a small pond, not to mention the hard to harvest Alaska reserves which are untouched. IMO we need to be drilling yesterday to supply us with oil for plastics, lubricants and other uses, plus what is needed to fill the needs of the future with high milage cars. Deisel made from oil can be replaced with Biodeisel from products other than food crops, whatever they may be. That alone would get us off foreign oil, if only we could take care of the jackasses in Congress and the Administration. Our main problem is political.
As for solar, I think the best market for it is rooftop for individual homeowners.
On May 01 11:28 AM Alfie/Alfie wrote:
> Mr. Pepin, I'm assuming your first language is either German or French,
> since I see mention of Switzerland in your bio. Considering that,
> I applaude your command of finance and the English language.
> However, parts of it might cause a reader to misunderstand without
> reading twice. May I suggest that you watch out for the use of singular
> and plural verbs, and the use of the word "than"?
> The word "then" is a reference to succession in time, as in, " this
> happened, then that happened afterwards". You use "then" often, however,
> you should be using "THAN", because you are making comparisons, such
> as when you write "Bank will be more then open" and "different then
> most other competitors" and " they have more then"......
>
> As for plural and singular verbs, when the person or entity doing
> the action is is plural, then the verb is not. When it's one person
> or entity, then the verb is plural. So, instead of "Bank will be
> more then open" as in the above example, the sentence should read
> "Banks will be more than open".
> And "Banks knows that; companies knows that too", it should be written
> "Banks know that; companies know that too."
>
> Oh, and one last little thing: we put the dollar signs in front of
> the amount.
> thank you and I hope you find this helpful.
Great article. There is one very important point to remember when comparing central (utility) solar and rooftop (distributed generation, or DG) solar. Central solar is cheaper on an installed basis, because of economies of scale in a large installation. However, the costs of transmitting and distributing this power are very high. One must consider land acquisition costs, transmission line costs, transformers, utility poles, meter readers, line maintenance, etc. There are almost none of these costs for DG.
One very easy way to gauge these differences is to compare the retail cost of electricity (say 15 cents/kwh here on the east coast) with the generating costs (say 7 cents/kwh). That extra 8 cents represents the costs for the utility to deliver the power to the customer. This differential is even bigger in states like California (peak rates 44 cents/kwh) and Hawaii. We are already at Grid Parity on a retail level (with the ITC) in many states. But we’re still not at Grid Parity on the utility level.
When ratepayers and Public Utilities Commissions realize that the costs TO THE CUSTOMER are higher for central solar compared to DG solar there will be renewed emphasis on installations on commercial and residential rooftops. These rooftop installations are where low cost crystalline modules will have the biggest advantages.
In the mean time, I think the silicon manufacturers are past the point of GREED parity — that happened when they raised prices ridiculously high in 2004.
I love your dad’s cookbooks, by the way ;)
"As for solar, I think the best market for it is rooftop for individual homeowners."
We need both the distributed energy of rooftop solar and the utility scale solar of CSP CPV and PV, as well as wind. It's not an either or, but all, IMO.
CPV can run factories, schools, office buildings, etc. at or near the end user. Not in all climes, but where there is good radiance. A company in Israel is producing hot water and electricity from CPV. CPV cells need cooling. They use water to cool the solar cells and thereby get hot water as well as power. They say they are getting over 70% solar conversion efficiency.
CSP (solar thermal) is unique among renewables, because with molten salt heat storage, it can provide steady dispatchable power. This can replace base load power that we now get from coal plants. In one way, it's better than baseload - dispatchability. See at this link:
www.altenergystocks.co...
And CSP w/storage can produce electricity at night or during cloudy periods. Plants are being built with 6 hours heat storage and twice that much is feasible.
Power prices from CSP are already much lower than from PV and are expected to fall quickly to under 10 cents/kWh. My bet is that this will happen in 4 years(based on NREL and other estimates and observations of current rate of CSP projects approved already, which is happening faster than the NREL predicted, although the credit crunch is holding up projects right now).
4-8 cents/kWh is projected for when the industry gets up to scale, probably in less than 10 years.
rooferguy
"When ratepayers and Public Utilities Commissions realize that the costs TO THE CUSTOMER are higher for central solar compared to DG solar there will be renewed emphasis on installations on commercial and residential rooftops."
I want to see a renewed interest in both.
There is a need for more than just distributed energy.
And CSP can be day and night. If you read the article at altenergystocks.com above, you will understand why we need CSP in the mix for balancing the grid. We can have less baseload as a percentage of the total grid, and achieve a smarter, better balanced and more efficient grid. CSP is the best tool we have to achieve that.
related article:
climateprogress.org/20.../
and check out Desertec or Trec
www.solarserver.de/sol...
www.desertec.org/
www.trec-uk.org.uk/
www.trec-uk.org.uk/ima...
Look at this map (link above) showing red blocks superimposed on North Africa, that represent how much area it would take to power Europe or the Mid East and North Africa, or the World.
The Desertrec plan would provide power to Europe, North Africa and the Mid East using CSP plants. Some of the plants would also provide hot water, and sea water desalinization. - Combined heat and power.
HVDC transmission lines would distribute the power over long distances with low line loss. I think the loss is 3% over 1000 kilometers.
i have no link with the famous Jacques Pepin (i think it s Jacques the name of the cookbook writer) but i saw some youtube video about him. He is clearly a far better cooker than me lol
On May 06 07:53 PM rooferguy wrote:
> Mr. Pepin -
>
> Great article. There is one very important point to remember when
> comparing central (utility) solar and rooftop (distributed generation,
> or DG) solar. Central solar is cheaper on an installed basis, because
> of economies of scale in a large installation. However, the costs
> of transmitting and distributing this power are very high. One must
> consider land acquisition costs, transmission line costs, transformers,
> utility poles, meter readers, line maintenance, etc. There are almost
> none of these costs for DG.
>
> One very easy way to gauge these differences is to compare the retail
> cost of electricity (say 15 cents/kwh here on the east coast) with
> the generating costs (say 7 cents/kwh). That extra 8 cents represents
> the costs for the utility to deliver the power to the customer.
> This differential is even bigger in states like California (peak
> rates 44 cents/kwh) and Hawaii. We are already at Grid Parity on
> a retail level (with the ITC) in many states. But we’re still not
> at Grid Parity on the utility level.
>
> When ratepayers and Public Utilities Commissions realize that the
> costs TO THE CUSTOMER are higher for central solar compared to DG
> solar there will be renewed emphasis on installations on commercial
> and residential rooftops. These rooftop installations are where
> low cost crystalline modules will have the biggest advantages.<br/>
>
> In the mean time, I think the silicon manufacturers are past the
> point of GREED parity — that happened when they raised prices ridiculously
> high in 2004.
>
> I love your dad’s cookbooks, by the way ;)
Oil today should be as important to our energy needs as whale blubber is for lamps. Turn on the solar lights.
Have I stolen any media sound bites for progress? Where are those guys?