These are complex times for solar power. After a couple of heady years in which capital poured in, stock prices soared and pretty much everyone got to build new factories, a capacity glut and the Great Recession have combined to knock the bottom out of industry earnings. And now the European countries that had used subsidies to jump start solar demand are scaling back:
BERLIN, Jan 20 (Reuters) – Germany on Wednesday slashed subsidies for solar power in a move to ease the world’s largest solar market towards free competition, drawing howls of protest from panel manufacturers.
Environment Minister Norbert Roettgen set out a 15 percent cut in so-called feed-in tariffs for new roof-mounted solar power from April, confirming figures reported earlier by Reuters.
Frank Asbeck, head of Germany’s biggest solar company by revenue, SolarWorld said the cuts were unacceptable. “The drastic short-term reduction of the tariffs in the German renewable Act will have significantly negative consequences on the German solar industry,” said Marko Schulz, board member at Q-Cells, one of the world’s largest makers of solar cells, told Reuters.
Cuts in public support will weigh on companies like Q-Cells, Phoenix Solar, and SolarWorld, which depend on demand from Germany, the world’s biggest market for solar energy as measured by installed capacity.
This has impacted solar stocks:
First Solar: The German Tariff Fall-Out
TEMPE, Ariz. – First Solar was among the biggest losers in the solar sector on Wednesday morning, as an official proposal from Germany’s environment minister to slash solar feed-in tariffs was finally reported. In recent days, as rumors of a big cut to solar tariffs in Germany hit the market, it has been the Chinese solar firms that have suffered the brunt of share price declines.
Some of the biggest Chinese solar stocks, most notably Trina Solar, were still showing larger losses than First Solar on Wednesday morning. First Solar, though, down more than 4%, was much closer to the Chinese solar losses than it had been in the previous few days of the solar selloff. First Solar shares had reached their average daily trading volume by midday Wednesday.
But the real story is continued technological progress
In the slightly longer run, capacity fluctuations and national incentive plans are just noise, the ebb and flow of supply and demand in a growing market. The real story with solar is, as always, rapid technological progress. Both photovoltaic and concentrating solar are getting cheaper and more efficient, and will keep it up for years, giving both branches of the solar family nice long growth arcs. A few recent examples:
Start-Up Claims 24/7 solar power breakthrough
A U.S. and Australian partnership has introduced a new solar thermal storage approach it believes could be disruptive to the fledgling solar storage industry. Unveiling it for the first time at the World Future Summit in Abu Dhabi, Solar Fusion Power Director Wayne Bliesner described the system as having ten times the density of conventional molten salt solar storage.
“Twenty-four hour solar storage becomes easy with this technology,” he told the Cleantech Group. “We could do thirty to forty hours.” The company’s approach uses calcium hydride, a simple, non-toxic salt. Under Solar Fusion’s plan, solar heat is collected by an array of heliostats directed to a central down mirror, eliminating the requirement for a power tower.
The heat, focused on a power head immersed in liquid calcium, chemically separates the calcium and hydrogen during the day. At night, the hydrogen, having been collected in a separate tank, is pumped back and reacts with the calcium to reform as calcium hydride.
The reaction runs at approximately 1,000 degrees, and powers a dual shell Stirling engine of Bliesner’s design to create power after dark. “We can generate electricity continuously unlike other solar technologies,” said Bleisner, inventor of the technology and a former Boeing engineer.
Tessera Solar and Stirling Energy Systems unveil world’s first commercial-scale SunCatcher plant
Only four months after breaking ground, Tessera Solar and Stirling Energy Systems (SES) showcased the highly anticipated Maricopa Solar power plant at a special event for key partners, stakeholders and media. Maricopa Solar is the first commercial project for the SunCatcher™ concentrating solar power (CSP) technology designed and manufactured by SES. “Maricopa Solar represents a genuine breakthrough in solar energy and demonstrates that Dish Stirling solar power is now ready for commercial deployment in the US and around the world. With this milestone now behind us we look forward to breaking ground on our initial 1,500 megawatts of projects in California and Texas later this year.”
The innovative and highly-efficient SES SunCatcher is a 25-kilowatt solar power system which uses a 38-foot, mirrored parabolic dish combined with an automatic tracking system to collect and focus the sun’s energy onto a Stirling engine to convert the solar thermal energy into grid-quality electricity.
Researchers Make Breakthrough in Transparent Spray-On Solar
New Energy Technologies–who introduced us to harvesting energy from roadways–has developed transparent solar cells which can be sprayed onto any glass surface. How? They successfully removed all metals from the solar cell, a huge challenge as the metal component in the cells act as a negative ‘polar contact.’“The ability to spray solar coatings directly onto glass follows on the heels of our recent breakthrough which replaced visibility-blocking metal with environmentally-friendly see-thru compounds, and marks an important advance in the development of our see-thru glass windows capable of generating electricity,” announced Meetesh V. Patel, president and CEO of New Energy Technologies.
Oerlikon Promises 30% Lower Solar Module Production Costs in 2010
Oerlikon Solar this week at the World Future Energy Summit in Abu Dhabi said that it plans to reach production costs at grid parity by the end of this year, meaning the company is on track to offer its customers an advanced fab design capable of producing modules for $0.70/W by that time.
In the past 12 months, Oerlikon Solar said that it has driven down module costs by around 25 percent, raising efficiency and improving the productivity of its lines from 60 MW in 2008 to 100 MW in 2009 without additional equipment. The company also said that it is on track to deliver another 30% cost reduction by end of 2010 enabling customers to offer solar electricity at grid-competitive prices in many parts of the world.
This combination of a tough current market and continued improvement in solar power economics means a couple of things: First, the stocks of leaders like First Solar and SunPower might not be too attractive at the moment, since the next year is looking tough. So the right entry point is crucial, and might be visible after the next round of disappointing earnings.
Second, there appears to be a new generation of technologies that might challenge the incumbents. This adds yet another element of risk to the established solar players but might produce some new high-growth stocks in the next few years.
