Source: http://www.flickr.com/photos/7718908@N04/5916982848/sizes/l/in/photostream/

A recent report from Deutsche Bank concludes that solar power has now reached grid parity in India and Italy, meaning that it costs the same as electricity from the power grid. The goal of the Indian government is to produce 20 GW of solar by 2022. This report also estimates that by next year many more countries will also reach grid parity. The German bank has also increased its solar demand forecast for this year by 20% because of strong demands in places like India, the U.S., China (around 7 to 10 GW), the U.K. (around 1 to 2 GW), Germany and Italy (around 2 GW). While China is already the biggest producer of solar, it is expected to become the world’s biggest solar market this year. There’s also progress with big concentrating solar farms, even though the big drop in solar PV prices has made them relatively less attractive than they used to be. The current biggest CSP plant has started operations in the UAE, and an even bigger solar CSP farm is under construction in the Mojave desert in the US. Brightsource Energy is in the process of completing its massive Ivanpah concentrating solar power (CSP) plant in the Mojave desert, making it the largest in the world. The rapid growth of solar power is promising for many more countries to be successful in reading grid parity. 

Source: Solar power has reached grid parity in India and Italy by Michael Graham Richard, April 8, 2013

While some analysts have declared Wuxi Suntech “too big to fail,” the company has already filed for bankruptcy and defaulted on a half a billion dollar bond. This bankruptcy could be the test of the national Chinese government’s willingness to continue to subsidize photovoltaic manufacturers in a market that is already flooded with an oversupply of cheap panels. Meanwhile, local government officials in Wuxi may push for a bailout, fearing the loss of 10,000 jobs and social unrest. They say they will “restructure” the company so that it can continue production.

Meanwhile, an Arizona Suntech plant that installed frames and junction boxes on modules in order to qualify Chinese panels for “Buy American” status, has closed, laying off 43 workers.

Over the past five years, Chinese subsidies for solar manufacturing have encouraged hundreds of companies to enter the market there. From 2008 to 2012, Chinese solar manufacturing capacity expanded ten-fold, pushing prices down 75 percent, to as low as 65 cents per watt ― so low that even Chinese companies cannot make a profit. Prices fell below the cost to manufacture, driving dozens of European and U.S. factories out of business. The list of politically-prominent failures includes Solyndra and Abound; General Electric delayed the opening of a large factory for its Primestar thin-film subsidiary, and is said to be investigating partnership possibilities with Chinese factories. In response to claims of illegal subsidies and dumping, the United States imposed stiff tariffs on Chinese-made solar cells and panels. Europe is considering similar penalties.

While low PV prices have been a boon for consumers and installers, the glut of PV panels, amounting to more than twice worldwide demand equivalent of 30 gigwatts this year, threatens the health of the PV industry overall. Analysts say that by preventing a  necessary correction in the market and allowing PV prices to rise, artificially low prices are stalling the incorporation of new technologies that would improve cell efficiency and further reduce costs of manufacturing.

A Suntech failure, if allowed, may be just the first of a series of Chinese solar business failures. Even business analysts in China say that two-thirds of the PV manufacturers currently operating in China may have to go out of business in order to restore the health of the industry worldwide. But China’s state capitalism system, which encourages government-owned banks to underwrite local production, may make it difficult to decide who the winners and losers will be.

Wuxi Suntech’s parent company, Suntech Power, is not going bankrupt and the company says it will stand behind the warranties on its panels. But Suntech stock, which once traded on the New York Stock Exchange for $85, has fallen to an all-time low of 30 cents.

In an indication of the jockeying that is going on over Suntech’s future in China, two executives have just been barred from leaving the country. Founder Shi Zhengrong, once China’s richest man and now an Australian citizen, has been prevented from leaving the country, as has Suntech CEO David King, while the Chinese government investigates the company’s finances.

Source: Wind power plants in Xinjiang, www.treehugger.com

At the end of 2012, wind farms generated 2 percent more energy than nuclear power plants in China, a gap that will most likely continue to widen in the next few years as wind power surges ahead. Following the Fukushima disaster in 2011, the government responded by suspending new reactor approvals and conducting a safety review of plants in operation and under construction. At that time, there were 10,200 megawatts of installed nuclear capacity and 28,000 megawatts under construction. The prediction that China will reach 40,000 megawatts of nuclear capacity by 2015 seems unlikely with the current pace of construction. However the outlook for wind power seems much more promising with 19,000 megawatts of wind power capacity connected to the grid during 2011-2012. Efforts to expand and upgrade the grid in China have been made to fully accommodate fast-multipling wind turbines in remote, wind-rich areas. China has set an official target of 100,000 megawatts of grid-connected wind capacity by 2015, however the Chinese Renewable Energy Industry Association believes that wind installations will reach 200,000 megawatts by 2015. China is taking advantage of this opportunity for a rich renewable energy source with the construction of seven massive “Wind Base” mega-complexes underway in six provinces.

Source: Wind surpasses nuclear in China by J. Matthew Roney

Photo Credit: China Daily

China has developed a unique technique where they built four villas on top of a shopping mall in Zhuzhou, Hunan Province. These villas will be used as offices for the mall, but it provides an important experiment to see how these villas function and if it is a feasible solution for increasing living space within urban areas.

Zhuzhou Jiutian Real Estate developed these villas using modern designs and suburb-like landscape designs as well. This isn’t the first time that rooftop villas have been built in China. It actually became a legal issue prior to the shopping mall villas. Because of accessibility issues and the types of plants that are on the rooftop, it can create safety hazards. The city developed rules and guidelines for building rooftop villas and an approval process before construction. By the time these four villas were built, the regulations were in place and the developer got approval to build.

Source: China Daily Rooftop villas are legal, Officials say

Reuters reports that while imports of Chinese modules fell sharply in May, the major Chinese factories are finding Taiwanese and other sources for their cells to evade tariff-driven price increases, and accelerating their acquisition of manufacturing plants closer to their end markets. As a result, the steady multi-year price drop continues, albeit at a slower pace. Pressure on Western-owned factories has not abated.

Meanwhile, China has opened its own inquiry into whether polysilicon ingots made in the United States and Korea have been exported to China at prices that damage Chinese polysilicon factories.

A group of European module manufacturers, led by SolarWorld in Germany, on Tuesday filed a new anti-dumping complaint against Chinese factories through the European Union.

The Coalition for Affordable Solar Energy fired back, with a statement beginning “Today Germany-based SolarWorld has once again demonstrated that it is willing to undermine the world’s solar industry in a desperate effort to avoid competition in the marketplace.”

Nonetheless, SolarWorld stock, which had lost 60 percent of its value over the past year, appeared for now to have reversed the slide.

Meanwhile, China reaffirmed its determination to build 21 gigawatts of PV generation by 2015, and announced a new goal of 50 gigawatts by 2020. And in India, sources predicted that the country might install up to 40 gW by 2020. While that rapid expansion may help to work through the global oversupply of PV modules, it raises the likelihood of very rapid investment in inverter and BOS manufacturing in China. Because aluminum extrusions are a commodity worldwide, racking manufacturers can probably feel safe about their local markets. But Western inverter manufacturers may soon face the same fate as module factories, with a flood of low-priced Chinese inverters entering global markets.

And Ben Santarris, head of corporate communications at SolarWorld’s U.S. subsidiary, held a conference during InterSolar to explain the mechanics of the new tariffs on Chinese modules and cells. “The 31-percent rate is just an initial rate, based on the difference between the selling price and the calculated cost to manufacture,” he said. “As prices and manufacturing costs change, the tariff rate will change, too.”

PV production line. Photo courtesy of TIANWEI

Retroactive charges may force smaller companies out of the market

(UPDATE) The U.S. Department of Commerce today posted anti-dumping duties of just over 31 percent on solar cells and modules from the Chinese factories Suntech, Trina and about 60 other companies that provided data in cooperation with investigors. Chinese companies that declined to respond to the DoC investigation will pay 249.96 percent.

These duties apply retroactively, back 90 days to mid-February. Importers must post bonds for these duties on all product shipped in since then.

“It’s too soon to tell how the market will respond to the new tariffs,” said Ben Santarris, head of corporate communications for SolarWorld USA, the lead complainant in the case. “What we can say is that the government has found the Chinese industry guilty of criminal trade practices.”

SolarWorld, and the loose trade group it organized as the Coalition for American Solar Manufacturing (CASM), filed an anti-dumping complaint with the Federal Trade Commission and Department of Commerce on Oct. 19, 2011. The FTC in March imposed anti-subsidy duties of 2.9 to 4.73 percent. Net tariff on some cells and modules may therefore total nearly 255 percent.

Further duties may be announced later this month to offset other forms of subsidies.

Mike Grunow, vice president of marketing at Trina Solar, noted that the most immediate impact would come from the 90-day retroactive charge. Smaller importers, with little cash available, may not be able to pay what amounts to a fine, and will have to withdraw from the market.

“Tier 3 players will withdraw,” Grunow said. “For Tier 2 companies, the fine may amount to 20 to 50 percent of their outstanding cash. Trina has the most robust balance sheet in the category, and for us the retroactive charge is a speed bump.”

Grunow noted that the tariff decision is founded on what he considers a faulty assumption: that manufacturers can determine pricing. “We know that the market sets the price,” he said. “We’re a publicly traded company and our balance sheet shows that we operated in the black for the first time last year, for three quarters.” In the fourth quarter, Grunow said, market conditions forced Trina to cut prices just to move inventory.

Affected companies will appeal the ruling, Grunow said. “We’ll fight this with data.”

In a press release, Jigar Shah, president of the Coalition for Affordable Solar Energy (CASE), stated, “Today SolarWorld received one of its biggest subsidies yet — an average 31 percent tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250% tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity. At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry.”

The tariff decision is likely to have long-term ramifications. China may respond with its own tariffs on U.S. exports of polysilicon, and Chinese factories may expand their production capabilities in North America. In 1981, after Detroit-based auto companies filed a complaint against Japanese car companies, a “voluntary” trade agreement limited Japan to sending 1.68 million cars to the United States. annually. Toyota, Nissan and Honda responded by building large factories in non-union states, and launched luxury brands (Lexus, Infiniti, Acura) to pad the profit margin on each car exported. The unintended consequence of limiting the import of cheap cars was to create new competition in luxury cars. Chinese factories may seek to adopt analogous tactics. A report published in May by Third Way.org noted that Chinese investment in U.S. clean energy companies jumped 130 percent in 2011.

Significant tariffs are likely to slow the current installation boom, and the U.S. market may suffer a series of plateaus until prices stabilize. Long-term, the cost of fossil fuels will continue to rise while the cost of solar, driven by efficiency improvements on the installation side, should soon resume its downward trend. At the utility scale, a short-term rise in the installed cost of PV may encourage faster installation of concentrating thermal and concentrating PV systems, and provide a boost for thermal storage installations.

Meanwhile, the DoC was scheduled to announce on May 30 a parallel decision on tariffs against Chinese-made wind turbine equipment.