Archive for the ‘Solar’ Category
Thursday, August 26th, 2010
In mid-August, the Ontario Power Authority (OPA) announced a new feed-in-tariff (FIT) rate for certain projects installed under the microFIT program. The program, launched in October 2009 (see the October 15, 2009 LRSJ*), offered a tariff rate of C$0.802/kWh for any approved installation less than 10 kW.
The new rate, begun on July 2, lowered the tariff by 20% to C$0.642/kWh, specifically for ground-mounted projects. Moreover, commercial entities that lease land or rooftops for PV installations are no longer eligible for the microFIT program at all. Ground-mounted projects have inherently lower installed costs per watt than roof-mounted projects. Therefore, customers, mostly in rural areas, could generate extremely high returns by opting to install small ground-mounted projects.
We had previously said that the OPA would cut solar subsidies under political pressure as early as 2011 (see the April 8, 2010 LRSJ*), and Lux Research clients should expect this announcement to foreshadow further cuts before the end of the year. While this cut corrects flagrant abuse of an overly generous rate, many of the 11,000 pending applicants that submitted proposals after July 2 are already expressing discontent at the changes. Meanwhile, members of the provincial parliament representing rural constituents lobbied for these tariff reductions and will step up their efforts as Ontario’s citizens grow weary of funding extensive solar subsidies. While Ontario may remain a solid solar market at more reasonable FIT rates, the gold rush there could be drawing to a close.
* Client registration required.
Posted in Solar |
Friday, July 16th, 2010
Last month, we released the Q1 2010 version of the Lux Research Solar Supply Tracker (see Solar Supply Tracker, Q1 2010 – client registration required). It includes figures on production and capacity data throughout the value chain through 2013.
Notably, the Tracker revealed that total module production for 2010 will be 12.6 GW, an increase of about 4.7 GW from 2009 production. We’ve also updated the Lux Research demand forecast, which predicts 12.1 GW of market demand in 2010, signifying a slight oversupply this year.
Crystalline silicon (x-Si) will account for 76% of total new module production in 2010. Most of the remaining share will be split between inorganic thin-film PV – particularly thin-film silicon (TF-Si) fueled by a slew of entrants – and cadmium telluride (CdTe), overwhelmingly provided by First Solar. Each will each account for 11% of 2010 module production. Companies like Avancis, Würth Solar, and Solibro will each produce a handful of Copper indium gallium diselenide (CIGS) modules in 2010, to round out the balance of new module production.
In terms of geography, Asia continues to dominate the manufacturing scene, accounting for 45% of polysilicon production, 78% of wafer production, and 71% of module production in 2010. Though Asia dominates in absolute production, several companies are adding capacity in North America, hoping to capitalize on promising demand in the U.S. and Canada, including Canadian Solar, SunPower, and Yingli.
A number of companies made notable changes to production and plans in Q1. Upgraded metallurgical silicon (UMG-Si) producers Dow Corning and Timminco stopped production at their Brazilian and Canadian facilities, respectively. Both companies cited decreased market demand, and will leave capacity idle with plans to reevaluate demand in a few years.
While UMG-Si players are hurting, top-tier polysilicon suppliers are thriving. The top six polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – will supply 75% of the total polysilicon to the market in 2010. Further downstream, several companies beat expectations and are accelerating ramp schedules. Taiwanese wafer player Green Energy Technology, cellmaker Neo Solar Power, and Chinese module manufacturer Solarfun all increased or accelerated capacity addition plans, citing increasing customer demand. Although Solarfun garnered more market share with its increasing capacity, it could not crack the top five module manufacturers. First Solar remained in the top spot, followed by Suntech Power, Sharp, Canadian Solar, and Trina Solar.
Looking out several years, supply remains slightly above demand throughout the value chain – except at polysilicon, where a significant supply overhang remains. As we witnessed this quarter, this supply overhang forced more expensive producers to shut down production lines, as their processes are no longer economically viable. Expect more consolidation and additional polysilicon players shutting down production facilities, as well as significant shuffling of market share as new technologies gain traction, the vertical integration trend continues, and delayed subsidy cuts in Europe keep demand high.
Tags: Avancis, Canadian Solar, Dow Corning, GCL Silicon, Green Energy Technology, Hemlock, MEMC, Neo Solar Power, OCI, REC Group, Sharp, Solarfun, Solibro, SunPower, Suntech Power, Timminco, Trina Solar, Wacker Polisilicon, Wurth Solar, Yingli
Posted in Solar |
Friday, June 25th, 2010
Since 2000, solar technology has attracted enthusiastic support from venture capitalists (VCs), who have cumulatively invested over $7.5 billion. However, 2009 was a harrowing year for the solar industry and for its VC backers. In a recent Lux report, we observed that VC funding for solar firms had dropped 55% in 2009 to $1.52 billion. Deal sizes were down across the spectrum of products and technologies. The exception was late-stage deals (Series D and later).
For solar firms of every size, 2009 was not just a difficult year, it was an outright fight for survival. As we outlined in recent reports (e.g. Finding the Solar Market’s Nadir and Solar’s Impending Shakeout: Europe Loses Leadership as China Rises – client registration required) solar companies looking to “break out” in 2009 saw their plans delayed or squashed, while early start-ups unable to raise cash were forced to hunker down to wait out the storm. In reviewing VC funding by stage, M&A activity, and IPO data, we found that the overall deal value of early-stage deals fell more than 65% across Series A, B, and C investments. However, a select few companies – including Amonix, Solyndra, Siliken, and Innovalight – pulled in large sums during D series and subsequent rounds. Just as in 2008, select investors in these firms built on earlier investments, racing time and start-up costs en route to fully scaled production.
Consequently, late-stage rounds ballooned in 2009 as investors “doubled down” on their investments. In 2009, Series D or later investments garnered 43% of the total deal value, up from just 11% in 2008. Moving forward, the largest solar VC deals will be directed at late-stage rounds for cell and module companies as investors concentrate on their existing portfolios.
Source: Lux Research report “2009 Solar Financing: Double or Nothing.”
Tags: Amonix, Innovalight, Siliken, Solyndra
Posted in Solar |
Friday, June 25th, 2010
We presented at the recent RadTech 2010 conference, a showcase for UV-curable coatings, inks, and adhesives. All technologies involved offer lower energy needs, faster throughput, lower volatile organic compound (VOC) releases, and/or lower-temperature operation by avoiding the need for heat-curing or long drying times. Many RadTech attendees were seeking new market opportunities for their technologies; and for many, solar headed their lists.
The photovoltaics section of the event featured a talk from Joshua Oliver of Sartomer, a division of oil giant Total, and a leading supplier of monomers, oligomers, and other raw materials for UV-curable products, including some used in solar applications. Joshua discussed the potential of UV-curable materials as encapsulant and barrier films, but explained that most UV-curable polymers can’t provide the barrier properties needed for solar applications. He added, however, that Sartomer found mixing UV-curable elements into a polymer similar to ethylene vinyl acetate (EVA) leads to a material that compares favorably to EVA in performance and durability after curing. Even so, UV-curable materials will have uphill battle to get into solar, however, unless they can eliminate the need for lamination altogether, as module manufacturers will be loath to add an additional curing tool to their lines.
Also on hand was transparent conductive film producer, Cambrios, which uses a UV-curable polymer as an overcoat to protect the silver nanowires that form its conductive layers. Teresa Ramos presented results showing that Cambrios could achieve sheet resistance as low as 50 ohm/sq with 96.6% light transmission, or 15 ohm/sq at 93.5% transmission, which signifies a performance improvement over incumbent transparent conductor indium tin oxide (ITO). Teresa noted that 10 ohm/sq to 20 ohm/sq is needed for inorganic thin-film PV users. However, when she discussed how Cambrios had achieved uniform properties over large areas – scaling up to large areas is one of the key challenges for non-active solar materials (see the report “Driving Down Solar Costs: Non-active Material Opportunities)” – the data were from films with 225 ohm/sq and 91% transmission. While Teresa was cagey in response to questions about its cost metrics (another critical factor for adoption) and commercialization plans, it appears that Cambrios still has some way to go before being able to address solar applications. That said, it remains a strong contender for transparent conductive films in display applications (see the March 22, 2010 LRNJ).
Tags: Cambrios, Sartomer
Posted in Nanomaterials, Solar |
Thursday, May 13th, 2010
Amidst an uncertain economic climate, top corporate executives, entrepreneurs, investors, and academic luminaries traveled to Boston last month to share the ideas, insights and innovations that helped establish them as today’s business and technology leaders.
The event was the fifth annual Lux Executive Summit, where leading innovators – from IBM to Mitsui to DSM – meet, discuss and learn about the technologies that will drive growth and profits for years to come. This week, Lux Populi highlights some of the insights and observations from the Lux Executive Summit by analysts from each of Lux Research’s Intelligence services.
Biosciences: Pulp/paper producers protest penetration into biofuels
Amidst a lively debate about ethanol’s potential to displace petroleum in the U.S., Samhitha Udupa pointed out to Robert Gelman, a researcher at Ashland, that several of the technology developers that Lux has briefed were struggling with pretreatment processes to breakdown and separate components of lignocellulosic biomass (comprising lignin, hemicellulose, and cellulose). Pretreatment is widely recognized as the most expensive step in cellulosic fermentation, and enzyme giants like Novozymes spent many years designing cheaper enzymes. Interestingly, Gelman vehemently asserted that firms, like Ashland, with experience in pulp and paper have long been experts at separating components of wood, an abundant lignocellulosic feedstock.
So why aren’t more pulp and paper players stepping up to take advantage of a huge unmet need in a soon-to-be high-volume industry?
According to Robert, he had the same thought years ago, and pursued the idea with “many” (emphatically) of his higher-ups, but was met with great skepticism. He asserted that pulp and paper producers are “dinosaurs more interested in reliving ‘Blazing Saddles’ than in exploring adjacent applications for their valuable technologies.” While the cellulosic ethanol industry continues reinventing the wheel – or parts of the wheel – in an effort to bring down costs, pulp and paper producers continue to… produce paper and pulp.
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Green Buildings: Dow says many buildings are actually getting less efficient
Mike Kontranowski, Strategic Marketing Manager of Dow Building Solution’ Thermax brand of rigid insulating board, presented a sobering analysis of the direction of building efficiency during the Summit. Although buildings of all types have become more energy efficient on a per square foot basis for the past 50 years, many buildings constructed over the past decade have bucked the trend and have begun regressing on energy efficiency. This reversal comes despite newfound interest in “green building” among governments, occupants, and the building owners themselves, and despite the plethora of insulation, window, equipment, and other devices that yield far greater efficiencies. More surprisingly, many of the buildings are LEED (Leadership in Energy & Environmental Design) certified, because energy efficiency is only one of many metrics that accrue points needed for certification.
The proximate cause of the backslide in efficiency is a switch to less expensive aluminum wall studs in place of wood or block in recent years. Because aluminum is such a good conductor of heat, walls that are otherwise well-insulated – with insulation batts installed between the studs – see an overall insulating R-value of the wall drop in half, from 11 or more to 5. Thermal images of walls are particularly poignant, showing relatively small amounts of heat escaping from between the studs, while the studs themselves were lit up like Christmas trees.
Fortunately solutions exist even for this problem, including new insulating sheathing technologies from Dow and Owens Corning that cover the exterior of the studs. In addition, aerogel companies, such as Aspen Aerogels and American Aerogel, are developing insulating tapes designed specifically to envelop the studs themselves and lend substantial insulating value. Although, adoption of these technologies isn’t likely to surge in the near term, expect renewed regulatory efforts and impending financial programs like the PACE bonds may accelerate their roll-out further on (see the May 3, 2010 LRGJ – client registration required), and may reverse the unfortunate regression in thermal insulation in modern structures.
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Nanomaterials: Best practices for building a business around nanotechnology
During a panel discussion at the Summit, CTO Seth Coe-Sullivan of QD Vision, President Donald Cho of Finetex EnE, and President Adrian Burden of Bilcare Technologies discussed best practices for building a business around nanotechnology. Common tips included:
- Secure funding early
- Protect intellectual property
- Integrate environmental, health, and safety (EHS) plans with business strategy
- Develop a strong team top-to-bottom
- Developing nanointermediates instead of just nanomaterials, and
- Focus on a small number of target markets
While the trio hit most of the best practices that we’ve touted before, one of the most critical steps for a start-up is forming partnerships early with large corporations (see “Open Innovation and Its Discontents: Solving the Emerging Technology Funding Problem”). With these tips in mind, clients should check each box when engaging start-ups and benchmark the potentials against strong players like QD Vision, Bilcare, and Finetex.
With regard to Finetex, its VP Donald Cho told Lux analyst Jurron Bradley that it supplies nanofiber filters to GE for its turbines to filter the incoming air. While gas turbines may not represent a large opportunity for filter companies, the partnership is a strong vote of confidence for the product and pushes Finetex further in front of its competition. Finetex’s revenues from nanofiber sales are still a modest $1.5 million, but it sports an extensive partner and customer list, which speaks well for its future. Clients looking for a nanofiber supplier, especially for textile and filtration applications, should engage Finetex, but those considering running their own production lines should look to Elmarco for equipment.
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Power: Toyota, Compact Power, and BYD offer contrasting views on the future of Li-ion
Three panel speakers in energy storage provided three very different visions for the future of lithium-ion (Li-ion) batteries and electric vehicles. The panel included Bill Reinert, National Manager for Toyota Motor Sales’ Advanced Technology Group, Prabhakar Patil, CEO of Compact Power (a subsidiary of LG Chem, and battery supplier for the Chevy Volt), and Micheal Austin, VP of BYD America.
Reinert, the most conservative of the three, lamented that at today’s Li-ion battery prices, even a plug-in hybrid vehicle (PHEV) with as little as a 10-mile all-electric range (AER) is still too expensive. While Patil agreed that Li-ion batteries were very expensive today, he felt that costs would drop by a factor of two to four in the next five years to 10 years. Austin, by far the most bullish of the three, claimed that BYD is already producing Li-ion batteries at $500/kWh, as well as the electric vehicles (both all-electric vehicles – EVs – and PHEVs) and grid-storage systems that use them.
Our view aligns most with that of Toyota’s Reinert. Our cost estimates for automotive Li-ion packs to the automaker range between $700/kWh and $900/kWh, which is too expensive for any PHEV to compete with a NiMH-powered standard hybrid without serious subsidies. While we agree with the low end of Patil’s estimates – namely the claim that large-format Li-ion prices will drop by a factor of two over the next decade (see the report ”Unplugging the Hype around Electric Vehicles” - client registration required.) – we don’t ever see them dropping by a factor of four, due to high materials costs. Moreover, while BYD might indeed have a very cheap Li-ion cell in China, it is unclear whether such a cell could satisfy Western safety standards, and it seems like its batteries are still too expensive for a tough Chinese auto market, as BYD’s electric vehicle sales in China have been disappointing so far (see the April 28, 2010 LRPJ – client registration required). While BYD and Nissan (with its Leaf EV) have taken Toyota’s mantle as the environmental visionaries of the large automakers, the hybrid stalwart has a firmer grasp of the relevant battery economics.
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Solar: Summit panelists dish on solar industry outlook
Conference invitees attending the Summit’s solar track caught perspective from the industry’s leading lights at two separate panel discussions. First up was the “Top Dogs” panel, wherein Satcon CEO Steve Rhoads and Enphase Energy Founder Raghu Belur discussed the relative merits of centralized inverters versus panel-level microinverters. In addition, Yingli Solar Managing Director Rob Petrina discussed Yingli’s market entry strategy for the U.S.
Overall, all three were incredibly positive about the prospects for the U.S. market in 2010 and 2011 as it begins to soak up demand from Germany. Further, Rhoads and Petrina stressed that the Chinese market is not to be overlooked, especially given the quick pace at which plants can be installed. For example, Satcon cited a total development, engineering and construction time of only a few months for its 38 MW of projects with GCL in China, compared to the 12 to 36 months more typical of U.S. installations
Later that day, Craig Cornelius, Managing Director at Hudson Clean Energy Partners, moderated a panel of “Solar’s Emerging Leaders.” The panel included Dave Pearce, CEO of CIGS start-up NuvoSun; Kurt Barth, founder of CdTe up-and-comer Abound Solar; and Cynthia Christensen, Director of Marketing for Stirling Energy Systems (SES), a developer of a unique variation on solar thermal. The three discussed some of the challenges of overcoming the “bankability” and “warrantability” concerns for new technologies. They suggested the use of third-party insurers and funding initial installations off the company’s own balance sheet were generally accepted best practices in the market downturn. Indeed, SES noted how it spun off a separate project development subsidiary, funded by the same investors, to allow it to focus on technology developments. Clients should watch Abound and SES carefully for their first installations this year, while NuvoSun’s progress with its partner Dow Chemical will determine that company’s future success.
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Water: Top dogs and rising stars discuss opportunities and challenges in the hydrocosm
Two separate panel discussions at the Summit generated insightful commentary on topics ranging from regulation in the hydrocosm, the need for innovation in the field, new market growth opportunities, and the impact of the current low cost of water.
The first panel provided perspective from “top dogs” representing every part of the membrane water treatment system, beginning with David Moll from Dow Water & Process Solutions (the membrane), Bill Musiak from Norit X-Flow North America (the modules), and Jeff Fulgham from GE Water Process & Technologies (system development and other facets).
The panel discussed markets for residential treatment systems, food and beverage processing, wastewater, and two areas of particular excitement: the produced water market and wastewater reuse, all of which we agree are significant growth areas.
We were glad to see the panel unanimously confirm the importance of the wastewater treatment market, which we recently covered in Technologies Turn Waste into Profit (client registration required). The panel also shared our interest in ultrafiltration membranes and the produced water market. Lux Research discussed membranes in a recent report Filtering Out Growth Prospects in the $1.5 Billion Membrane Market (client registration required), and will discuss specifics of the produced water market in an upcoming Water State of the Market Report (SMR) later this year.
The Summit also brought together “rising stars” in the water market, namely Amir Peleg from TakaDu Ltd, Emily Landsburg from Blackgold Biofuels, G.G. Pique from Energy Recovery Inc. (ERI), and Marc Bracken from Echologics Engineering Inc.
The current low cost of water was of particular focus for panelists who discussed how to grow a business given this fundamental truth in the water market. The low cost of water effectively reduces the drive for innovation and new products, since customers are not motivated to alter current water treatments and use patterns.
G.G. and Amir both noted that there is a need for national water policy to push the agenda of innovation, among other benefits. Marc from Echologics noted that repairing the aging water infrastructure is often a pain point for customers because, irrespective of the cost of water, it must still be transported efficiently. Emily noted that Blackgold Biofuels’ business actually helps water utilities stretch their revenue by providing a cash stream from the waste buildup in the pipe infrastructure. In addition to the cost/revenue discussion, the panelists emphasized the need to collaborate, and for solutions that form a “treatment train” instead of claiming to be silver bullet.
Tags: Abound Solar, American Aerogel, Ashland, Aspen Aerogels, Bilcare Technologies, Blackgold Biofuels, BYD America, Compact Power, Dow, DSM, Echologics Engineering, Elmarco, Energy Recovery Inc. (ERI), Enphase Energy, Finetex EnE, General Electric, IBM, Mitsui, Nissan, Norit X-Flow, NuvoSun, Owens Corning, QD Vision, Satcon, Stirling Energy Systems, TaKaDu, Toyota Motor Co., Yingli Solar
Posted in Alternative Power, Biosciences, Green Buildings, Nanomaterials, Solar, Water |
Friday, April 23rd, 2010
Analysts have taken a more critical look at Applied Materials’ (AMAT) success with its SunFab line of turnkey module production facilities. New orders for the company’s production line have plummeted, and existing deals have been scaled back as clients moderate expansion plans in the face of massive module oversupply. As a result, rumors began circulating earlier this month that the company was contemplating an exit from its thin-film silicon (TF-Si) business – though the company has only made veiled comments to date about its plans.
The market had been quite optimistic about the AMAT solution when silicon was scarce but, as increasing polysilicon supplies have pushed contract prices to $75/kg, AMAT’s x-Si module prices have fallen to $1.95/W. If average polysilicon prices to device manufacturers reach $45/kg, modules prices could drop to $1.50/W or lower, which could enable cost of goods sold (COGS) as low as $1.05/W. Despite the obvious and significant threat to thin-film silicon’s viability, the current desire to bury the technology is as much of an overreaction as the initial hype was. There is significant room for TF-Si in the long-term technology mix − maybe just not AMAT’s variant.
Our outlook has been more measured. In the report Solar State of the Market Q1 2008: The End of the Beginning (client registration required), we projected that TF-Si would lose market share as polysilicon prices collapsed in 2009, and then rebound considerably in the future as economies of scale kicked in. Indeed, TF-Si stalwarts Sharp and efficiency leader Kaneka see this reality and are continuing to invest strongly in the technology, with Sharp supporting a 1 GW facility in Sakai, which has on-site silane and glass manufacturing. The facility recently started production with 180 MW of initial capacity using equipment from Tokyo Electron – with the status of the remaining 820 MW to be determined. Further, AMAT’s arch-nemesis Oerlikon has achieved commercial efficiencies over 10% on modules from its TF-Si tool − giving it a significant cost edge over AMAT, which has been consistently unable to break 9.5%, though it is currently struggling with its own financial issues.
Since we estimate SunFab’s TF-Si panel manufacturing costs at $1.40/W, including depreciation, $45/kg polysilicon would wipe out smaller-scale AMAT clients. In fact, Sunfilm, one of AMAT’s first SunFab customers recently fell by the wayside. We have heard of similar troubles with other AMAT clients and expect announcements of bankruptcy or production shutdowns soon. A few have quietly happened already. AMAT’s SunFab, with its lower efficiencies, unwieldy and damage-prone large module size, and expensive capex, is among the most vulnerable, but TF-Si will still grow on the backs of Sharp, Kaneka, and others to a 2.4 GW market in 2015.+
Even so, don’t count AMAT out: The company has a strong technical pedigree. Plus, while it’s overreached with SunFab, it has room to correct the flaws with its approach, as equipment upgrades will be a continual need for TF-Si, even as many module makers fail (see section 4.2 of the report Solar State of the Market Q3 2008 - client registration required). What’s more, with its experience riding out up-and-down cycles in the display industry, it’s not likely to get spooked by the current thin-film silicon panic. And even if its TF-Si business does fail or gets radically scaled back, it still wields considerable weight in the x-Si value chain and is likely working quietly on CIGS, OPV, and other technologies in the background. It has lost a battle, but certainly not the war.
Tags: Applied Materials, Kaneka, Oerlikon, Sharp, Sunfilm
Posted in Solar |
Friday, March 26th, 2010
 Click on image to open larger version As 2010 dawns, it reveals a global solar market significantly changed by 2009’s stormy shakeout. The market will begun to recover in 2010, according to a new report from Lux Research, and should grow from 9.3 GW for $39 billion in revenue this year to 26.4 GW for $77 billion in 2015.
However the report, entitled “Solar’s Impending Shakeout: Europe Loses Leadership as China rises,” also warns this growth will arrive only after supply and demand return to parity through a mix of company failures, low utilization rates, and renewed demand sparked by subsidies in export-oriented countries like China.
The report – from which this graphic came – extends earlier market size and demand forecasts through 2015, and adds three new geographies: the Czech Republic, New Jersey, and Ontario – all of which signal high levels of subsidies and rapidly developing markets. As its title suggests, the epicenter of the solar market is shifting from west to east.
European solar markets performed admirably well in 2009, and are likely to remain strong through this year, but market saturation and aggressive subsidy cuts could dim prospects going into 2011. This is the year that the U.S. and China take center stage.
North America is forecast to jump from 620 MW to 1.3 GW, led by California. However, newcomer New Jersey is also expected to be an emerging bright spot, putting an expected 92 MW on the board this year alone. The upside surprise in North America will be Ontario, where generous feed-in tariffs should generate over 200 new megawatts over the next year.
Asia-Pacific economies – home to 75% of the world’s solar module manufacturing capacity – generally increased demand-side subsidies to prop up domestic industry. This trend was evident in Japan, South Korea and particularly China, where the state not only introduced demand-side subsidies for the first time, but also took direct investments in solar manufacturers.
In the long run, the Asian solar market will edge out those in Europe and North America. By 2015, it will account for 9.6 GW, or 36% of the total market. Europe will represent 8.9 GW, or 34% of the market. And North America will trail at 5.6 GW, or 21% of the total market. In the out years, the Rest of World segment will show surprising growth as solar becomes more economically viable, growing to 2.3 GW for 9% of the total market in 2015.
Posted in Solar |
Wednesday, March 24th, 2010
Over the past year, Google has expanded its influence in the electricity sector through an accelerating number of new business ventures, lobbying actions, and product announcements. Between 2008 and last year, Google tripled the number of energy issues it lobbied the U.S. Congress about, putting its energy appeals on par with its telecommunications lobbying. Google also released the PowerMeter last year, a free home electricity monitoring, web-based tool that displays information from a smart meter on a consumer portal. It has partnered with a number of utilities to offer this data to their customers.
This year, the U.S. Federal Energy Regulatory Commission (FERC) approved Google’s application to become an electricity marketer, which allows the company to buy and sell wholesale electricity like a utility in order to feed its power-hungry datacenters. The move follows the same strategy of other major power users, like grocer Safeway or consumer products maker Kimberly-Clark. But it also gives Google the option to sell or trade power down the road, and recent moves by the Internet behemoth suggest it plans to do just that.
But the company isn’t limiting its sights on energy opportunities in the smart grid. Google’s “green energy czar,” Bill Weihl, announced this month that the firm has developed a prototype mirror for solar thermal, concentrating solar power (CSP). Google has already invested $10 million in solar thermal plant developers BrightSource and eSolar. Now it may be moving to supply them – either directly or through licensing - with cheaper mirrors.
That said, claims that Google’s prototype mirrors reduce system cost by half are unquestionably overhyped. For one, mirror costs account for 5% to 15% of a heliostat thermal plant. Plus, Google’s technology is at least three years away from commercialization. So, it’s unlikely the company has outpaced more experienced mirror and glass manufacturers that are quietly pursuing similar technologies. Even so, if its mirror technology proves viable, expect Google to license it out – perhaps under terms that it can receives discounted access to the electricity generated.
Google’s collective moves invite further consideration about its energy plans. For now, it’s likely that the company’s primary interest will be leveraging data and computing power for energy trading. Expediting the addition of low-cost renewables to the mix only improves the viability of that market.
Tags: BrightSource Energy, eSolar, Google
Posted in Alternative Power, Carbon, Solar |
Thursday, February 25th, 2010
Early February saw 2010’s first concentration of M&A activity in the solar market. First, French nuclear power giant Areva acquired Ausra, a linear Fresnel lens solar thermal plant equipment supplier. Ausra struggled in early 2009 as investment in solar thermal installations all but halted (see the February 5, 2009 LRSJ – client registration required), and changed focus from a power plant developer to an equipment provider. The company was rumored to be up for sale since mid-2009. The Areva-Ausra match-up could breathe life into Ausra’s low-cost solar plant technology, and use the experience and reach of Areva’s power plant equipment business to push forward solar thermal installations.
Meanwhile, dish Stirling solar thermal technology developer Infinia raised $11.5 million in an equity financing round. This follows a $50 million capital raise mid-2009, and a $58 million raise in April 2008. Infinia competes directly with Stirling Energy Systems, which received $100 million in financing from NTR in May 2008.
The hoard of cash flowing into solar thermal component developers follows the acquisition of leading parabolic trough technology provider Solel by Siemens for $418 million in October 2009. But two questions remain.
First, who’s next to buy? Large component firms, including energy and defense firms, may see a strong fit between their competencies and the large-scale, highly regulated processes required for solar thermal plant execution. As for targets, we’ll keep our eyes on three firms:
- Heliostat and power tower developer BrightSource Energy, which continues to execute in plant development
- Linear Fresnel lens and parabolic trough developer SkyFuel, which offers a lower-cost technology option and potentially lower price tag, and
- Power tower technology developer eSolar, which recently signed a licensing agreement for a 2 GW facility in China
The second question is tougher to answer. Where is all that solar thermal set to go? While 50 MW plant installations continue in Spain, regulatory issues continue to dog the U.S. market (see also the January 7, 2010 LRSJ – client registration required). Clients should expect large-scale wrangling among new solar thermal owners as they push through complex solar thermal projects and offer the reliability, and balance sheet, needed to get the huge projects off the ground.
All of this stands in sharp contrast to IPO activity among photovoltaic technology firms. In Q4 2009, Trony Solar indefinitely postponed its IPO followed by Daqo, a Chinese polysilicon producer, which filed (see the January 21, 2010 LRSJ – client registration required), then lowered, and then in January postponed its IPO. Then, earlier this month, Jinko Solar – a vertically integrated ingot, wafer, and cell producer, joined the list and withdrew its IPO due to “poor market conditions.”
Even the completed IPO of U.S.-based STR Holdings in Q4 2009 yielded lackluster results after repricing twice in the days ahead (see the November 5, 2009 LRSJ – client registration required).
While the general market slump since the first of the year will put investors off, their greater concern likely lies in the volatility of the subsidy-driven solar market – and with good reason. A fresh storm of price cuts and continued margin pressure is brewing for late 2010.
Tags: BrightSource Energy, Daqo, eSolar, Infinia, Jinko Solar, SkyFuel, Stirling Energy Systems, STR Holdings, Trony Solar
Posted in Solar |
Friday, January 29th, 2010
Panasonic finally inked its purchase of Sanyo last month. After plans for the takeover became public more than a year ago (see the November 5, 2008 LRPJ – client registration required), the deal was stalled by anti-monopoly regulatory concerns, which forced the pair to sell some nickel-metal hydride (NiMH) battery assets. With those concerns behind it, Panasonic will now be the dominant player in many markets, including large-format NiMH batteries (see the July 1, 2009 LRPJ – client registration required), battery packs for hybrid- and all-electric vehicles (via Panasonic’s JV with Toyota), and Li-ion batteries, where Sanyo and Panasonic were the largest and sixth largest manufacturers, respectively.
The deal means that automotive companies will have fewer options for mass-produced lithium-ion cells for electric vehicles, driving current customers of Panasonic and Sanyo to seek out other qualified battery suppliers – such as LG Chemical’s Compact Power, or Johnson Controls-Saft (JCS) – to maintain multiple sources.
At the same time, however, the acquisition bodes well for Panasonic’s ability to reduce cost in its Li-ion cells, as it can now greatly increase volume. Because of this, the merger of Panasonic and Sanyo will encourage other lithium-ion battery manufacturers to consolidate in order to share similar economies of scale. Clients should expect to see other major tie-ups in the near future as the lithium-ion shakeout comes to fruition (see the December 16, 2009 LRPJ – client registration required).
Further, the acquisition gives Panasonic a strong position in the solar industry, since it now controls Sanyo’s efficiency-leading “heterojunction with intrinsic thin layer” (HIT) cell technology. Sanyo ranks #15 in cell manufacturers by capacity as of Q3 2009 (see the Lux Solar Supply Tracker- client registration required), and its cells top even those of U.S.-based SunPower in the high efficiency segment. Further, Sanyo already has plans in place to aggressively ramp cell capacity to a total of 345 MW by the end of 2010, and to boost ingot and wafer capacity in Oregon, which will total 70 MW when fully ramped in April 2010. All told, the company plans to boost module capacity to a total of 600 MW by the end of this year.
Overall, that puts Panasonic in a very strong position to capitalize on the U.S. residential rooftop market, as well as the high-efficiency panel market in Japan, which is expected to grow in 2010 due to new subsidies. However, a number of competitors, such as Suntech and JA Solar, are making a push into the high-efficiency segment with competing technologies. Although these will likely prove more cost-competitive than Sanyo’s, they’re unlikely to top 20% efficiency. Further, we have recently heard of a Silicon Valley start-up targeting silicon inks for this “selective emitter” technology that is up for sale after exhausting funding; interested clients should contact lr.inquiry@luxresearchinc.com for more details.
Tags: Panasonic, Sanyo
Posted in Alternative Power, Solar |
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