The reason that solar panel prices are so low is because the supply of panels have exceeded the demand. The supply was projected on the historical growth of solar which had been rising at a spectacular rate, but governments around the world have fallen into a recession mode and have trimmed or eliminated the supports for the solar industry. Examples here are the elimination of the 1603 grant and the rising need to reduce solar set-asides in the renewable energy credits in many of our states. It started with Spain, then Italy and then Germany. China has cut back on the manufacturing of panels and many of their businesses as well as those around the world have seen their profit margins disappear. The spot price of polysilicon had reached a low of $13 per kilogram; way below the manufacturing cost of roughly $20. The smaller cell manufacturers and the panel makers have been failing narrowing down the supply of panels. The results are beginning to show up with the spot price of polysilicon rising to $16 on the spot market. With the rise in polysilicon prices will come an increase in the cost of cells and finally the cost of panels. So, if you can afford to buy panels, now is a good time. So, unless we increase the demand substantially, the price will remain static or rising until the scale of manufacturing expands significantly.
Archive for National
By Julia Mengewein – Jan 16, 2013 12:44 PM ET
Power for 2014 delivery in Germany and France dropped to records as rising solar output is expected to cut demand for other electricity sources.
German power, a European benchmark, fell as much as 1.5 percent, according to broker data compiled by Bloomberg. The equivalent French contract declined 0.3 percent.
Electricity for Germany next year lost 65 cents to 43.30 euros ($57.93) a megawatt-hour, it’s biggest decline since March 6, according to broker data compiled by Bloomberg. The French equivalent lost 15 cents to 46.20 euros.
As much as 18 percent of electricity demand may be replaced by solar panels not connected to Germany’s grid, reducing demand for other sources by 6 to 10 percent by 2020, Per Lekander, a Paris-based analyst at UBS AG (UBSN), said in a research note.
“The unsubsidized solar growth should drive wholesale power prices further down,” he said.
According to Richard Kauffman, Senior Advisor to Secretary of Energy Stephen Chu, making real estate investment trusts (REITs) or master limited partnerships (MLPs) available for renewable energy project financing is the key to advancing the industry.
In his DOE role he is trying to understand where market forces can be harnessed in order to unleash the flood of investment that is needed to bring about large renewable energy projects.
Kauffman explained what he sees as a disconnect between returns in renewable energy projects compared to returns in other investments. On the one hand, today, renewable energy projects are financed in what he called an “old-fashioned, archaic way” where for the most part, projects rely on private sector money that is looking for high rates of returns, typically around 12-14 percent. On the other hand, money managers, wary of the stock market and its risks, have returned to the bond markets, which offer more steady (but lower) rates of return, in the 5 or 6 percent range.
Kauffman explained that this “wall of money” that is looking for a stable rate of return, such as what can be found in the bond markets, could easily invest in renewable energy projects if only the financial vehicle existed that allowed it to. Renewable energy projects with signed power purchase agreements (PPAs) will deliver a healthy rate of return to their investors, one that will be stable for 20 years, exactly what the money managers are seeking.
According to Kauffman, REITs and MLPs, function like a bond and are currently used in more mature markets for project development. If they were available to renewable energy projects, said Kauffman, they would unlock loads of money for project development. Two separate bills have already been introduced in Congress seeking to allow renewable energy projects to be financed through REITs and MLPs but neither bill has come up for vote yet.
According to the latest energy infrastructure update report from the Federal Energy Regulatory Commission’s Office of Energy Projects, renewable energy sources — biomass, geothermal, solar, hydropower and wind — accounted for 41.14 percent of new electrical generating capacity installed in October 2012 and 46.22 percent for the first ten months of 2012.
In October, 10 new wind power projects (594 MW) came online as well as three biomass projects (69 MW), 10 solar projects (59 MW) and one hydropower project (5 MW). During the first 10 months of 2012, 92 wind projects (5,403 MW), 167 solar projects (1,032 MW), 79 biomass projects (409 MW), seven geothermal projects (123 MW), and nine hydropower projects (12 MW) have come online. Collectively, these total 6,979 MW or 46.22 percent of all new generating capacity added since the beginning of the year.
By comparison, new natural gas capacity additions since Jan. 1, 2012 totaled 67 projects (5,702 MW), or 37.8 percent, while three new coal projects added 2,276 MW (15.1 percent). Nuclear and oil represented just 0.8 percent and 0.1 percent of new capacity additions, respectively.
The new renewable energy generating capacity added in 2012 represents a 47.7 percent increase over the level recorded for the same period in 2011, according to FERC. Renewable sources now account for 14.93 percent of total installed U.S. operating generating capacity.
Congressman Bill Huizenga, a Michigan Republican, wrote on his Facebook page: “I have serious concerns over the Chinese firm Wanxiang Group Corp attempt to buy A123. I am concerned this transaction poses a threat to U.S. national security, America’s global innovation leadership and job creation.” According to Huizenga, A123′s contracts with the DOE involve power grids, advanced armor, unmanned vehicles and portable power systems.
I could not agree more. New technology that is inherent in our military applications is usually limited from export by what is know as ‘export control’ limitations imposed by the Federal Government. I know because I was an export control officer when I served at Fort Monmouth New Jersey. So limiting the technology developed in this country vital to the defense needs must be protected. I am not enough of an expert in batteries to say that A123 is the most vital battery technology available, but other experts at the Department of Energy supposedly are expert in assessing the technology of A123 as compared to what else is available here. The corporate world works on the rule of the fiduciary who acts at all times for the sole benefit and interest of the one who trusts (investors). Forget loyalty, social benefit, patriotism because all these are not the concern of the corporation who are ruled to serve the best interests of their investors, whomever they may be.
“This may be the closing chapter of A123 Systems as a U.S.-owned firm. According to news reports citing sources with knowledge of the matter, lithium-ion battery maker A123 is now owned by Wanxiang Group, China’s largest maker of auto parts and a major supplier to Ford and General Motors.
Wanxiang’s $260 million bid bested a joint offer from Johnson Controls and NEC for control of most of the assets of A123, including the automotive battery business that Johnson Controls had wanted to purchase, a representative of Lazard Freres, investment banker for A123, told Reuters. Germany’s Siemens was also a bidder, according to news reports.
Wanxiang’s apparent winning bid is sure to raise an outcry in Washington, D.C., however. A123 had received $250 million in U.S. Department of Energy grants and has spent about half of the funding to build its key battery plants in Michigan. The company is also developing battery storage technology for the U.S. military, an area that could raise national security concerns — although according to reports, A123′s government business will be sold separately to U.S.-based Navitas Systems for $2.25 million, which could assuage some concerns on that front.”
Imagine if every time you bought a car, you had to buy all the gasoline that would run the car for its lifetime. That’d be an expensive automobile. With an internal combustion engine, say, you get to amortize the total cost of the power produced over the many years that you buy fuel for that engine. It’s almost like a layaway plan for the power. Solar finds itself in an analogous situation. The cost of the energy produced over the 20 years you’ve got the system all comes at the beginning. You are prepaying, essentially, for decades of electricity production when you buy the system. That means only people with substantial cash on hand are likely to put panels on their homes. Who has an extra ten or twenty grand lying around?
And that’s where SunRun gets money from banks — hundreds of millions of dollars — and then uses that money to finance the installation of solar systems on homes. Homeowners pay on a monthly basis, not up front, at rates that are comparable to or cheaper than the grid (SunRun says). We still don’t know how much money SunRun makes on each home, but we do know that the company’s model has exploded. Most new solar is now being installed with the leasing model and other companies like SolarCity and Sungevity are trying to horn in on SunRun’s business (even if SunRun remains the largest solar leasing company).
The takeaway from SunRun is simple, though: sometimes the innovations that matter aren’t technical but financial (or even social). Of course, developing more efficient, less expensive solar cells helps, but the technology development alone cannot guarantee successful market deployments. Whole article can be found here
But why take your money and give it to a company or a bank when there is a better way that cuts out the expense of the middlemen?
Direct investment in solar by everyone. Invest affordable amounts each month with the result of lowering your energy bill. Doing so will have a long term effect on your electric bill.
That is what the Tennessee Solar Energy Association is advocating. That is why we are sponsoring the “Affordable Solar” strategic planning session on December 7th.
“You think of power and you think you’ve lost electricity in your home, refrigerator, heater, and so on. But it’s so much more than that. We lost power and cell service dropped; we were up against a gas shortage because the pipelines turn off during the storm and during loss of electricity,” Russo explains. “So you have no power, and all of a sudden you have no communication and no transportation – and you have no means of even operating generators that weren’t flooded because of the gas shortage. Its such a compounded situation, and it’s all about power.”
One part of Russo’s property that seems to have made it through the storm unscathed: her 10.4-kW rooftop solar system. Pending a full system check from Mercury Solar Solutions, her installer, Russo says it looks like her inverters are high enough to have avoided flood damage, and her panels withstood the Hurricane-force winds and remain intact.
Russo lost electricity because her system is tied to the grid; during outages most systems shut down to prevent power from feeding into power lines, which endangers workers that may be out for repairs. This got Russo thinking about storage solutions. She says she hadn’t thought about storage until Sandy, but after speaking to friends and neighbors who own top-of-the-line generators that were flooded and, ultimately, unusable, Russo thinks she should take her existing system to the next level.
“Storage is going to be my first priority in my [home] rebuild process. I need to consult with people on this because I’m not an expert, but why would I invest in a gas generator,” says Russo. “Our panels are on our roof, supposedly they are not damaged, the inverters are high enough that they are not getting damaged either, so if we had storage, that could act as our backup generator.”
The good news: Home solar arrays seemed to withstand Sandy’s furious winds. Sungevity says the company’s installations are designed to hold up to sustained winds of up to 100 miles per hour. Sandy’s gusts hit 90 mph at their peak.
Sunrun, another residential solar company, has about 6,500 customers in the Northeast, and hadn’t received any reports of damage by Wednesday afternoon, according to spokeswoman Susan Wise. John Steeves, a Sungevity customer in Woodstown, N.J., with 39 panels on his roof, says the storm flooded his basement, knocked out power, and toppled massive trees in his neighborhood—but left his solar arrays unscathed. He thinks having the panels above even helped protect the roof of his 47-year-old home. The entire article can be located here
Levy comments: So,if we had added storage to our solar systems for homes and businesses, we would have power. The missing link: the battery. They are expensive, today’s most popular batteries, lead-acid, have limited lives, some need maintenance on a constant basis, and the upcoming lithium batteries being used in autos are very expensive. There are novel chemistries that show promise, but unless you have an Angel investor willing to sink millions into a ‘maybe’ we will not realize an affordable energy store in the next ten years. There are novel chemistries out there who have sought government investments such as SBIRs, SunShot initiatives, but none can demonstrate a pathway to less than $150 per kilowatthour. That is what we need. I am personally aware of the struggles one energy storage company has gone through to find that one Angel investor or government (federal, state) that is willing to risk the money. China has had its ‘Great Leap’ and now the United States needs a similar ‘Great Leap’ in energy storage. The need is there, where are the risk takers?
The Tennessee Valley Authority’s Board of Directors has announced that William D. Johnson will become its president and chief executive officer, effective Jan. 1, 2013. Johnson most recently served as CEO of Progress Energy, where he was instrumental in brokering the merger between Progress and Duke Energy in 2011.
It was expected that Johnson would supplant Duke CEO Jim Rogers as head of the newly-formed company, but Duke — whose shareholders reportedly own 63% of the combined company — announced Rogers would maintain his position shortly before the merger was completed.
The Tennessee Valley Authority says Kilgore will continue leading the US$11 billion federal agency until Johnson’s arrival, then help in the transition period following.
TVA is a federally funded utility established in 1933 by Congress to develop systems of delivery for electricity and management of natural resources. Today, TVA maintains 29 hydroelectric projects, along with a pumped-storage facility and several externally owned dams.
The report helped drive the Department of Energy’s (DOEs) decision to use $100 million in stimulus funding for Smart Grid education. The DOE granted a total of 52 awards, which are being used to help rebuild programs targeted towards Smart Grid education. The awards have been given to support craft workers, engineers, community colleges, universities and other aspects of academia and industry. This diverse mix of stakeholders are helping to rebuild all of the elements of the educational portfolio that are of critical importance to smart grid’s success. Today, rising student interest and recent short-term infusions of research support are helping to rebuild universities’ power and energy educational programs.
As a result of these myriad efforts, we are seeing more students enter the power and energy field. The IEEE PES Scholarship Plus Initiative is helping to attract undergraduate electrical engineering students to the Smart Grid pipeline by providing three, one-year scholarships of $2,000, $2,000 and $3,000 in students’ sophomore, junior and senior years as long as they meet academic and student career experience requirements in the power and energy field.
One way to get students and others interested in Smart Grid is to attract students who are studying engineering, but remain uncertain about their specific career direction. The PES offers them a “home” and the means to connect with the industry and its professionals through actual hands-on experience and guidance.
Iberdrola Renewables, which owns wind farms in Massachusetts, New Hampshire, New York and Pennsylvania, reported few problems.
“We monitored the situation through the night and shut down sites as a precaution to protect equipment from extreme winds. Inspections today have revealed minimal damage so far. We are very satisfied with the response of our people and the performance of the sites through an exceptional event,” said Jan Johnson, Iberdrola Renewables’ communications director.
Long Island suffered some of the most severe destruction, wiping out service to most of the Long Island Power Authority’s 1.1 million customers. But the island’s 32-MW Long Island Solar Farm appears to have come through fairly well.
Nothing “catastrophic” happened at the facility, according to Matt Hartwig, spokesman for BP Alternative Energy, which operates the solar farm. “They are beginning their assessment, which initially shows damage to the fence around the facility as well as some module damage, the extent of which is not yet known.”