The other day, I was carefully explaining why the solar power business model is upside down. There are often federal, state, local and even corporate incentives to consider when pricing a system, and why its convoluted its simple…while the subsidies for solar are “above level”, the ones for oil are “below the radar”.
So when I read that the Senate in the US blocks an end to oil subsidies, then it comes full circle that until the renewable energy industry lobbies as hard (and with as much $$$$) as the oil one does, there will be continuous feeding an industry which makes billions of dollars in profits per quarter. I guess it takes for us to have $200million in our pockets to compete.
The question of oil subsidy is very political. I don’t think that Obama thought he’d win this one, yet he wants to present a clear choice come November, between his vision and that of a Republican candidate who is being pulled to the right. With Solyndra and the Volt production stoppage being footballed for political reasons, he prefers to take a middle of the road course, while going on to show how attached to oil the Republicans really are. In many ways, he is setting up for round #2, post election, where he hopes to have more leeway to enact true reform in energy and other areas. We can only hope that renewable energy continues to grow until at some point, the power of those companies is at least closer to that of the oil ones, when it comes to affecting change in the political world.
And for that…all it takes is a bit of green…
Posted by sass | Posted in Energy, Solar Industry | Posted on 14-03-2012
Today another earthquake hit Japan. This time it was “just” a 6.8 on the richter scale and didn’t cause a tsunami. However at what risk would the Japanese or California coast be should another earthquake hit of sufficient magnitude, as is predicted to occur by most pundits, during our lifetime?
The question always comes back to what is the true subsidy of any power source. Whereas solar’s subsidies are mostly “above the line” (save for the industry subsidies to help create job employment), the ones for nuclear are never properly counted. Did anyone add the “cost per watt” of cleanup in Japan to how efficient they rate the development and distribution of nuclear power?
While its very present of mind right now, due to last year’s events, what tends to happen is that memories are short. In a few years of relative calm, we’ll get a “now you see it was a one-time event”. Really? Three Mile Island? Chernobyl? One time events?
The cost to humanity of placing nuclear in high risk areas is simply too much. Put the reactors in the desert where no human can be affected (relatively) for hundreds of miles, and you could make a case for it. Put nuclear in high risk areas, and then add in the costs of maintenance and cleanup, not to mention human lives, before you determine the final financial costs, then see if it competes with solar. I doubt it.
So while many point to the current challenges of the solar industry, under tremendous price pressures, I believe solar will continue to grow substantially in the near and long term, because the “tide” is not reversible. Its safe, clean, renewable…and now affordable. What else can you ask for?
Solar charging structures were nowhere near the radar of “eco friendly” products just a few years ago. Now that they’ve blossomed and tied themselves into the emobility initiatives across continents and car companies, they are starting to be noticed.
One company, EIGHT GmbH of Germany, has their design up for an ECOSUMMIT award. If you click on this link, you can see it and even vote for it by clicking on the LIKE button at the top right hand side.
Please take a look and vote if you can (you must have a Facebook account to do so).
Posted by sass | Posted in Solar Industry | Posted on 26-02-2012
With solar stocks at a very low valuation average, one has to wonder if they are not now set for a rebound. We have technology stocks like First Solar priced at only 10 times this year’s projected earnings. Its a sign of the concern over government reactions to solar subsidy reduction as a trend. With the costs so low, I frankly agree with the governments that the subsidies should be reduced, yet many people not involved in the industry see this as a tipping point which shows the lack of enthusiasm at government level when there are so man other things (debt reductions, government liabilities, job creation) which become the focus.
In an American election year, we can expect the Democrats to take a lower profile approach to funding of green initiatives while Republicans beat their chests about new oil drilling in Alaska to combat the questionable sourcing of oil from countries like Iran or Venezuela. Rather than produce clean, green power, they will choose the source which has about $100million spent on lobbyists on the hill each year…big oil.
So I expect that solar company values have reached near bottom yet only a few will begin to rise up again this year. The ones who have lower cost bases to start with and good balance sheets will win. The smaller players will either have to adopt nimble, niche-market strategies, or they will perish. Doesn’t leave much room for those caught in between.
And at the top end of the value chain, the installers who once could be less efficient and effective in their sales pitches…well they’d best beware too, because with falling prices, consumers will begin shopping solar systems just like they shop for everything else.
Read the beginnings of our “renewzpaper“…
Posted by sass | Posted in Solar Industry | Posted on 14-02-2012
In the bloody “sub $1″ market that 15% crystalline modules are hovering in, there is little room for 8% amorphous panels, specially those competing for rooftop business. Some are surviving in the BIPV arena, where superiod esthetics more than make up for the lack of efficiency.
However word today that ECD filed for Chapter 11 is not a big surprise. Being another Michigan solar panel maker who couldn’t make a go of it (Sunlogics isn’t making panels there either now), its becoming obvious that the market is simply not going to come back to pre-existing pricing, and simply determined that tried and true processes were more efficient than the thinfilm technologies which were trying to compete on a cost per watt basis.
The reality of any commodity market, is that it goes to the low price player. If watts are just watts, you can’t compete at $0.01 more, never mind a $1.00 more which is what ECD tried to command for its product.
You’ll notice that I haven’t blogged in about a week as I was travelling. The question becomes what is the best use of time and what I am blogging for when I have Twitter and Facebook to manage as well? Sharing information, and getting reactions to what I post, has taught me much about myself and the people who read my blog, yet I am not sure that blogging here is the path forward, as a new career restarts.
The reality is that social network sites have changed the manner in which we get our information and seek it out. A blog can remain a central repository of that information, yet the current mechanics that I have made tweeting or FB posts much easier to manage, so perhaps the secret lies in having a better mobile platform with which to blog, and that can immediately post to twitter and facebook.
The world of solar power and emobility are indeed colliding, as a series of meetings with major car companies proved to me last week. The question is only to find the manner and place in which to interject innovation and process for companies trying to figure it out on their own.
Foxconn is getting into the solar module making game.
The maker of iPhones is used to working on razor-thin margins and will change the game for the industry. While most module makers are used to making margins north of 20%, the entry of mass market players like Foxconn will drive costs down, take out inefficient module makers and encourage installation by a further reduction in market pricing.
Add into the mix recent announcements by Oerlikon, GE and Panasonic, all targeting well under $1 cost per watt for finished modules, it would seem to mean that the days of solar modules costing over $1 are over. The addition of 800MW of capacity by GE and Panasonic alone will ode badly for small to midlevel players who have taken a “commodity” approach to the business, yet it will feed an industry into deeper market penetration as the cost of solar approaches, and in some markets beats, the cost of other grid-tied utility rates.
2012 is certainly looking to be a game changer for the market. Many in 2011 had said that they expected pricing to firm up given the fact that many players have closed and more will close, however I do not think that we’ll see that happening. Despite solar wafer makers attempts to negotiate higher prices, they have not been successful so far. What we will see is a firming of pricing around the $0.75 (thin film) to $0.90 (crystalline) marks and this until further reductions in costs are brought by firms such as Foxconn. They are possibly the first contract manufacturer to get into the game in a big way, yet they won’t be the last.
Posted by sass | Posted in Solar Industry | Posted on 22-12-2011
BP Solar is going to be no more. According to this article, BP is calling it quits on solar power after decades in the game.
I visited BP’s Maryland factory about 15 years ago. I met with their President who proceeded to tell me that it was OK that they were losing hundreds of millions of dollars because it was still cheaper for BP than a big ad campaign stating they were “green”. Such “in your face” greenwashing, I had never encountered, yet it was a reality-check as to why an oil company would be involved in solar power.
Were they trying to advance implementation? Not really.
Were they trying to advance the state of the art? Not at all.
Did they ever really care? Who knows.
With this further reduction in the uncompetitive field, the continuing consolidation of “me too” players, and the introduction of mammoth capacities by companies like GE and Panasonic, the solar panel is finally becoming like the microchip…a product dominated by a few main players, a couple of niche players…and that’s about it. The recent price drops have been very instrumental in helping companies understand that a me-t00 approach only gets you so far during the good times, yet it kills you in the tough ones.
Stay tuned…I suspect we’ll see more and more announcements like this to close out the calendar year.
Posted by sass | Posted in Leadership, Solar Industry | Posted on 08-12-2011
Its rare that Apple is behind Google or Microsoft in terms of application of innovation, yet in the energy arena, the two latter names have installed far more renewable energy capacity and made investments in our industry, than has the former.
Now comes news that Apple is planning the largest solar roof array in America. Enough to power 1million Apple TVs. I guess when they play catch up, they don’t bother to stop at the “even line”. Way to go Apple!