Solar Module Dynamics Shift to Rooftops

Includes: CSIQ, JKS, YGE
by: Robert Castellano

Yingli Green Energy (NYSE:YGE) chairman and CEO, Mr. Miao Liansheng, remarked in his earnings call of May 20 that ”As a result of policy changes, demand in Europe is shifting from ground-mounted segment toward rooftops.”

In 2010, 65% of global sales of 17 GW of solar modules were installed in Europe. The shifting of that much volume from solar farms to rooftops is going to require major technical changes, primarily because the sun’s position in the sky will change gradually over the course of a day and over the seasons throughout the year.

Anyone familiar with rooftop installations will observe that they are usually fixed to the roof, facing a particular direction. Solar farm installations utilize solar tracking systems to continually orient solar panels towards the sun. However, using tracking systems on rooftops in order to simulate the optimum efficiency of solar modules in a solar farm is hugely debated for several reasons.

  1. While a rigid, standalone solar installation is a very reliable and uncomplicated source because the panels don’t move, adding a solar tracking system means adding moving parts and gears, which will require regular maintenance of the solar system and repair or replacement of broken parts.
  2. Trackers are structurally less rigid then permanent mounts and hence can be vulnerable to storm damage.
  3. Most important for rooftop installations, there are high costs and long payback times.

A 2010 article in Solar Choice notes that a 10KW installation in Sydney, Australia has an upfront cost of AU$10,000 with a payback time of nine years. Nevertheless, looking at the shape of the output of the solar cell using a tracker versus a fixed installation, the benefits are obvious.

[Click all to enlarge]

Source: Solar Choice

Privately-held SolarPA has shown that it can use a coating of its proprietary nano-materials on top of a completed cell to obtain a similar result, as show in the graph below:

Not only is the efficiency higher by above 20% at grazing incidence of sunlight (such as dawn and dusk), but the efficiency of an uncoated cell at 90 degree incidence to the sun (such as noon) is higher by 9.4% when coated with its NanoCoat.

Most important, the cost of the coating is only about 3 cents per watt, about 3% of the production cost of a solar cell, and insignificant compared to the upfront cost of a tracker.

The enhancement in efficiency is also going to be critical to the success of non-Chinese solar cell/module manufacturers. In 2010, while 65% of solar cells were installed in Europe in 2010, only 13% of solar cells were manufactured there. Greater China manufactured nearly 60% of the worldwide solar cells in 2010 and exported more than 90%. U.S. and Taiwanese solar cell producers have reported large sequential drops in revenues in this latest quarter while foreign manufacturers Jinko Solar (NYSE:JKS), Canadian Solar (NASDAQ:CSIQ) , and Yingli expects second quarter shipments to exhibit double-digit growth.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.