Solar energy may finally get its day in the sun. The high costs that for years made it impractical as a mainstream source of energy are plummeting. Real-estate companies are racing to install solar panels on office buildings, utilities are erecting large solar panel “farms” near big cities and in desolate deserts and creative financing plans are making solar more realistic than ever for homes.
Solar power installations doubled in the US last year and are expected to double again this year. More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind.
“We are at the beginning of a turning point,” says Andrew Beebe, who runs global sales for Suntech Power Holdings Co (尚德), a manufacturer of solar panels.
Photo: Reuters
Solar’s share of the power business remains tiny, but its promise is great. The sun splashes more clean energy on the planet in one hour than humans use in a year, and daytime is when power is needed most. Moreover, solar panels can be installed near where people use power, reducing or eliminating the costs of moving power through a grid.
Solar power has been held back by costs. It’s still about three times more expensive than electricity produced by natural gas, according to estimates by the US Energy Information Administration.
However, the financial barriers are falling fast. Solar panel prices have plunged by two-thirds since 2008, making it easier for installers to market solar’s financial benefits and not simply its environmental ones. Homeowners who want to go solar can do so for free and pay the same or less for their power.
Last month, two of the nation’s biggest utilities, Exelon Corp and NextEra Energy Inc, each acquired a large California solar power farm in the early stages of development. Another utility, NRG Energy Inc, has announced a plan with Bank of America and the real estate firm Prologis Inc to spend US$1.4 billion to install solar systems on 750 commercial rooftops.
Nationwide, solar power installations grew by 102 percent from 2009 to last year, by far the fastest rate in the past five years.
Making solar affordable still requires large tax breaks and other subsidies from federal and state governments. The main federal subsidy pays for 30 percent of the cost of a residential system. When state and other subsidies are added, as much as 75 percent of the cost can be covered.
However, prices of solar panels, the squares of crystalline silicon or thin layers of metal films that turn the sun’s rays into electricity, are falling so fast that its advocates now credibly claim that solar will be able to compete with fossil fuels even when the federal solar subsidy shrinks by two-thirds in 2016.
The falling prices have made it easier for solar installers to raise the money needed to grow. And they’ve made solar power systems so affordable they can appeal to homeowners who want to save on their electric bill, not just reduce their environmental impact.
Some installers are teaming up with big hardware chains Home Depot and Lowe’s in an effort to expose solar to customers who might not otherwise consider it.
Solar panel prices have been declining for years because of lower costs for polycrystalline silicon, the main raw material for most solar panels, and larger-scale manufacturing, especially in Asia. In the last six months, demand has dropped sharply in Germany, the world’s biggest solar market, in response to shrinking subsidies. This has created a global glut of solar panels and accelerated the decline in prices.
Solar panels, which are priced based on the amount of power they can produce during full sunshine, sold for US$1.34 per watt in the middle of last month, according to data from Bloomberg New Energy Finance. That’s down from US$1.90 at the beginning of last year. In 2008, they sold for US$4 a watt.
The glut has been gut-wrenching for companies that make solar panels. Many of them remain profitable and are growing, but three US panel makers have filed for bankruptcy in two months, including Solyndra, a solar panel maker that received a US$528 million federal loan.
Falling profit margins are scaring investors. The stock price of First Solar Inc has fallen from US$170 in April to US$53.77. Suntech has fallen from US$11 to US$2.07 over the same period.
The Solyndra bankruptcy has sparked a political uproar. Republicans have accused US President Barack Obama’s administration of pushing for Solyndra’s loan for political reasons and have used the bankruptcy to question Obama’s plan to help boost the economy by subsidizing clean energy projects.
The market will not get any easier for small solar panel makers. General Electric Co, Samsung Electronics Co and other big companies are entering the market.
However, what has been treacherous for solar panel makers has been a boon for companies that market and install solar systems, for companies that make electronics and other parts for solar systems, and for solar customers.
To be sure, solar is growing from a very small base. All of the panels now installed across the nation produce enough electricity to power 600,000 homes, or about as much electricity as one large coal-fired power plant.
There are 30,000 megawatts worth of solar projects awaiting approval in the US, according to the American Public Power Association. Not all of them will be built, either because of regulatory or financial hurdles. However, even if only half that is ultimately built, it would be five times what is already installed.
China’s chip industry is growing faster than anywhere else in the world, after US sanctions on local champions — from Huawei Technologies Co (華為) to Hikvision Digital Technology Co (海康威視) — spurred appetite for homegrown components. Nineteen of the world’s 20 fastest-growing chip industry firms over the past four quarters, on average, hail from the world’s No. 2 economy, data compiled by Bloomberg showed. That compared with just eight firms at the same point last year. Revenue at China-based suppliers of design software, processors and gear vital to chipmaking is increasing at several times the pace of global leaders Taiwan Semiconductor Manufacturing Co
Had Audrey Hepburn and Gregory Peck hopped on an electric scooter rather than a Vespa in the classic film Roman Holiday, their spin around the Eternal City might have ended in tears. The number of crashes and near-misses involving the two-wheelers has prompted Rome authorities to impose some order on a booming rental market that began two years ago. The havoc came to a head earlier this month when two US tourists attempted a night-time drive down the Spanish Steps, causing more than 25,000 euros (US$26,392) worth of damage to the 18th-century monument. Caught on security footage, the couple in their late 20s
POSITIVE SIGNS: GlobalWafers has continued to sign long-term supply agreements, most of which exceed 2028, and aside from one factory, it is running at full capacity GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer maker, yesterday said that Samsung Electronics Co and most of its customers have not scaled back on orders, or delayed shipments, even though consumer spending has shifted away from smartphones and notebook computers due to mounting inflation pressures. Rising inflation has altered consumers’ spending habits, dampening sales of consumer electronics, the Hsinchu-based company said. However, customers all honored their supply agreements by adjusting their product mix and shifting to applications that are still reporting robust growth, it said. Aside from one 6-inch factory, GlobalWafers’ 15 factories around the world are running at 100 percent
Nearly a quarter of European companies in China are considering shifting their investments out of the country as COVID-19 outbreaks and lockdowns dim the outlook for the world’s second-largest economy, a survey showed. About 23 percent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China, a report released yesterday by the EU Chamber of Commerce in China said. The survey was conducted at the end of April, when Shanghai was still in shut down and restrictions in places like Jilin Province disrupted business activity. The number of European firms reassessing
RSS