SolarPlaza

Compared with 2008, do you expect growth in the global market volume of newly installed PV power in 2009?
Based on economic and incentive conditions, I think the global market will be down slightly from 2008. Moreover, since module prices will decline substantially, I think global value of shipments will be down even more significantly. Here in the U.S. expected demand seems to be weighted to the second half of the year, and if that demand doesn’t materialize then there will be a lot of disappointments in 2009.

What will your company be able to achieve in 2009?
Most crystal ball projections for 2009 are very blurry — because of economic conditions we all have limited visibility. Nevertheless, for Akeena our residential sales continue at a good pace, although commercial sales are down. Most importantly, our introduction of highly differentiated Andalay AC solar panels to solar installers throughout the U.S. represents a very big growth opportunity. While other module companies compete based solely on price, Andalay AC panels compete based on providing superior value to installers, industry-leading aesthetics, and safer AC operation.

What module price development do you expect for this and next year?
We expect average module prices to decline 30% from 2008 to 2009, with another reduction of 25% from 2009 to 2010. Keep in mind that the 30% decline from 2008 to 2009 just brings us to the price range we were paying in early 2004. With the vast increase in scale and efficient new producers there’s no doubt that prices in the $1.50/watt range for quality crystalline modules are on the near term horizon.

It’s just as important to look at installation costs and BOS. We see at least a 50% reduction in these costs as installation technology improves (modules with built-in racking, wiring and grounding have no distinct “BOS”) and we make the transition from complicated DC systems to plug and play AC systems. Integrated racking and microinverters make it possible for almost any roofer or electrician to get into the solar installation business — and these new distribution channels will have a very big impact on reductions in total installed costs.

Where and when do you expect to see grid parity first?
It’s important to make a distinction between utility grid parity and retail grid parity. We’re a residential and commercial installer, so in many of the markets we serve we are already substantially below retail grid costs. Current $7/watt costs with the 30% ITC works out to about $0.11/kwh — about the average in the U.S. When installed costs get down to $3.50 in about a year ($2.50/watt for modules and inverters, $1/watt for everything else), solar costs will be less than $0.06/kwh. When solar electricity is half the price of grid electricity demand will skyrocket. Applying local incentives to offset these costs will accelerate the market even further. Being more specific, markets in the U.S. where electricity is expensive (California, Hawaii, northeast states), and places where there is a lot of sun (Arizona, New Mexico, Texas) will achieve grid parity first.
- There will be an initial burst of enthusiasm for utility grid parity as large solar farms are built, but I expect that when ratepayers realize that — because of transmission and distribution costs — this centralized solar power is no cheaper than fossil fuels, there will be renewed enthusiasm for distributed generation solar.

What are the major threats to the solar industry at the moment?
The ghosts of presidents past.

What do you see as the most important market segments for thin-film products in the near future?
Until efficiencies get closer to the 15% of crystalline, the best market segments are ground mount installations. Higher efficiency crystalline has a clear advantage on space-constrained sunny rooftops.

Do you foresee thin-film module prices dropping to $ 1/Wp in two years, and, if so, won’t the major markets be China, USA and India?
I’ve seen studies that indicate that BOS and installation costs are $0.50/watt higher for thin film. Therefore, thin film prices will have to drop this low otherwise they cannot compete with crystalline modules at $1.50.

What will become the dominating PV technology in the next 5 years?
Five years from now, glass, aluminum, copper and labor will be the major cost components of PV systems — not crystalline cells or thin film or some new magic nano-dust that the scientists cook up. Our industry has to look at all of the non-cell opportunities to figure out how to reduce costs more.

How can solar PV compete with thermal solar energy plants in utility-scale PV projects in potential markets such as the USA, India, Spain, China, and elsewhere?
Easy: do an accurate life cycle calculation of ongoing operations and maintenance costs. Then PV static ground mount PV installations are much cheaper than anything with moving parts and fluids.

Isn’t the solar industry likely to follow the wind-energy industry soon with more than 90% of the market shared by only 10 major manufacturers?
Why ten? I think there will be only five major manufacturers. In most commoditized markets there are one or two market leaders who make money, a few followers who are slightly better than breakeven, and a bunch of new entrants trying to leverage their technology to get into the top five. The only reason we have so many manufacturers now is that there has been no price competition over the past five years.

What do you expect to learn at The Solar Future conference?
I’m curious to learn about new business models for the solar industry. The computer industry went through a major transition from the 1970s (mainframes, minicomputers) to the 1980s (personal computers) when costs came down quickly. I expect that the solar industry will move towards more specialization (as in semiconductors) and more contract manufacturing (as in personal computers and cell phones). I’m very curious to find out who will be the leaders as our industry makes this inevitable transition. I’m also curious to find a beer as good as Sierra Nevada Pale Ale.

How will the solar industry look in 5 years from now? And your company?
We will all be very busy installing solar on rooftops with no incentives needed. The industry will have standardized on AC solar panels with integrated wiring, racking and grounding. And Akeena Solar will be happily providing these panels to installers around the world.

Thank you for the interview!

Barry Cinamon will be one of the speakers at the More information and registration for The Solar Future Conferenc: http://events.solarplaza.com/thesolarfuture/

The Thin-film Challenger:
The feasible objective for next year: module selling price at $1/Wp
QS Solar is a new amorphous silicon manufacturer. The company will challenge the industry and market with a record low module price.
Lynn Sha; General Manager, QS Solar

USA to become the world’s largest solar energy market

“In 2010, PV will be by far the most cost-effective way of generating electricity. The solar PV market in California will explode once people discover that they can generate their own rooftop power for less than it costs from their utility,” says Barry Cinnamon, long-term expert, CEO and founder of solar system integrator Akeena Solar in California. In 2008 the US PV market grew by over 60% to more than 350 MW of newly installed solar power. The majority of this new power was built in California. Barry Cinnamon is one of several CEOs to speak on 26 May in Munich at the international conference entitled “The Solar Future; count-down to grid parity”.

Energy utility companies like PG&E in California are developing a large-scale solar PV power plant program. David Rubin is a director at PG&E, and he will be discussing the details of PG&E’s proposed program. David is also chairman of the board of SEPA (the Solar Electric Power Association), representing 500 US electric utilities, solar companies and other industry stakeholders in the USA. He sees a significant number of energy utilities proceeding with various solar business models, including large-scale PV power plant initiatives. “SEPA has tracked 1500 MW in solar PV initiatives in the USA, and this number is growing”.

In 2009, the USA is on the way to becoming the second largest photovoltaic solar energy market in the world after Germany. The Obama administration has introduced a new Renewable Energy stimulus package and financial incentives are guaranteed for the next 8 years. “The US market has the potential to grow by more than 50% a year, which could lead to a market close to 4000 MW within 5 years,” according to Edwin Koot, CEO of SolarPlaza. “The USA is likely to become the world’s largest PV market within a decade. The solar industry is counting down towards the moment government aid is no longer needed. The moment when this fledgling industry will have grown up and is standing on its own feet is closer than many people think,” says Koot. “It will mark the start of the Solar Future and will offer unprecedented market and growth potential”.

Apart from David Rubin, CEOs from the world’s leading PV companies (such as Q-Cells, Suntech Power, Applied Materials and Centrotherm) will be speaking at “The Solar Future” conference organized by SolarPlaza.

www.thesolarfuture.com

World’s largest solar manufacturers speak at ‘The Solar Future’ conference

Rotterdam, Munich - 12 February 2009

In a few years, photovoltaic solar energy will have become a competitive energy source in major markets in the world. Without the need for subsidies. This will be the start of a revolution in the world’s energy supply and usage. Are we prepared for this? The CEOs of the world’s largest manufacturers of solar cells and modules, Mr Anton Milner of Q-Cells in Germany, and Mr Zhengrong Shi of Suntech Power from China, will share their view on the future of solar energy at a conference in Munich on 26 May. “Most people think that solar energy is something for the future, when prices have come down and cell efficiencies have further improved,” says Edwin Koot, CEO of organizer SolarPlaza. “Well, this is your wake up call, because this future is closer than you could imagine.”

Given that electric cars seem unavoidable,  wouldn’t it be great to charge them with green solar electricity from your own roof? Why use polluting fossil fuels, and be dependent on other countries, if solar energy is cheaper? The words “electric car” are now buzzing around the automotive industry as the natural route to take. At the same time, solar PV will become a competitive energy source in countries like Spain, Southern Italy, California in less than five years. If we power our homes with green solar electricity, and drive on this cheaper energy as well, the solar industry will face glorious times. One important question is, where will the solar revolution start first? When, and in which major markets, do experts expect to see grid parity happen first?

Last year was a record year for the international PV industry, with more than 70% growth. This year, the market faces challenges due to a decreased subsidy budget in Spain and an economic and financial crisis in the world. The supply side is outpacing demand in 2009, leading to oversupply and thus module price reductions. Bad for the industry, but good for the market, and the result is that ‘grid parity’ will be reached sooner. “This ‘grid-parity’ is the holy grail for the solar industry. When the cost of solar energy equals the cost of electricity from the grid, customers will favor solar PV. At that time, market potential will become unlimited,” according to Edwin Koot. Can we reach this Walhalla in three years? What will be the impact of this all on the solar industry? Who will survive the current phase and be ready when the solar revolution really starts? Who do independent industry and the Wall Street experts see as the winners? Is there one technology that will beat the rest?

‘The Solar Future’ conference, organized by SolarPlaza, will offer the leading platform for high-level networking and anyone interested in learning about the next big global industry. An industry that will create more than 50 billion dollars of annual revenues in 2012. The event will take place at the Kempinsky ‘Four seasons’ hotel in Munich, just before the start of the world’s largest PV exhibition, Intersolar, also in Munich.

Solarplaza is the provider of the leading global PV industry portal www.solarplaza.com, and has previously organized international PV trade missions and PV expert conferences in Spain, Germany, California, China, Germany, Italy, Greece, India and Taiwan.

For more information, please contact: J. Trip (j.trip@solarplaza.com; +31 10 2809198)

Winfried Hoffman; CTO, Solar Business Group Applied Materials will speak at The Solar Future conference.

Will Applied Materials GigaWatt customers blow the competition away with the lowest cost PV modules?

Please find more information about solarplaza, video reports of its business tours and the full video footage of the Second Global Demand Conference in Valencia online at youtube.com.

By: Edwin Koot (CEO SolarPlaza)

21 January 2009

The Spanish PV market grew by more than 2661 Megawatts of new installed power in 2008. As a result, the global PV market has grown by around 5600 Megawatts. This enormous 100% increase compared with the 2007 figure explains part of the scarcity and high module prices in 2008. But, with a cap of 500 MW in 2009, it also means that the Spanish market will decrease in size by at least 80% (or more than 2100 MW) this year. And that is bad news for the global PV industry as it faces an oversupply situation and bad economic times. However, this turns into good news for the customer, as prices along the supply chain have decreased by at least 20-40%. Solar modules are now cheaper than ever before. Record growth could be even higher.

The figures for the Spanish PV market were published by the Spanish magazine Energias Renovables, which quoted sources from CNE (Comisión Nacional de la Energía). CNE pays out to the energy utilities that in turn give the feed-in tariff to customers with a PV installation. The more than 300% increase compared to 2007 could be even higher. CNE estimates that the 2008 market could well be above 3500 Megawatts. This would mean that the Spanish market in 2008 alone was bigger than the global market figure for 2007.

Even the figure of 2661 MW is astonishing, and comes as a surprise to most people in the solar energy business. It not only made Spain the world’s biggest PV market in 2008, but clearly demonstrates that the new regulation will have a major impact on the global PV market. Although other PV markets in the world will continue to grow, the impact is such that the global PV market in 2009 is likely to decrease by around 10% compared to 2008 according to calculations by SolarPlaza.

Lessons from Spain

In 2007, and during the first half of 2008, all the sign for PV were positive. There was a very attractive feed-in tariff in Spain, credit lines were easy to get, oil prices were rising and economies growing rapidly. Now, the industry faces a strong head wind with oil prices very low, economies in recession, finance hard to obtain and the world’s largest market regulated by a cap with a 30% lower feed-in tariff. The consequence will be felt throughout the entire industry. Several major international companies recently announced cut backs in staff. As many Spanish companies were focused on the domestic market, jobs, and a part of the solar energy business infrastructure, will be lost. What happened in Spain clearly shows that the global PV market is still strongly dependent on government support programs and decisions by politicians. What is needed for continuous market development is not the highest feed-in tariff, but a stable and long-term policy and program. What works is a feed-in tariff that is decreased by clear steps over time. It provides the industry with targets for cost reduction, working towards a situation where incentives are no longer needed. It is no coincidence that Germany, not the country with the best solar resources, is the world’s leading PV market.
Germans set to take the lead again

The German government decreased the feed-in tariff by almost 10% at the start of 2009. Nevertheless, this market is likely to continue to grow steadily. Module prices in the world markets have fallen by more than 20% over the last months. Germany will therefore resume the lead from Spain to again be the world’s largest PV market in 2009. The stable solar policy pays off…

Strong long-term outlook for USA

Many people expect that Obama’s renewable energy plans will lead to a further push for solar energy in the USA. The eight year guaranteed Tax Credit regulation, approved under President Bush, offers an excellent starting point for stable growth. Experts predicted a market growth of around 50% before Obama was elected. Much will now depend on recovery of the economy and details of Obama’s plans. But even if the Californian and whole US-market were to grow by 100% in 2009, the US market will be comparable with that of Spain (about 500 MWp). The longer-term prospects are even better. Several energy utilities in the USA have discovered PV as a serious and viable option for power supply. Many large scale PV projects, like the 800 MWp project by PG&E in California, are being prepared and developed. The push for renewable and solar, and an economic recovery, could make the USA one of the major PV markets from 2010 onwards.

What will happen in China?

The Chinese PV industry grew explosively in 2008 with soaring demand from Spain and Germany in particular. Declining global demand, which started at the end of 2008, means the Chinese PV industry will face hard times in 2009. Sources indicate that many of the hundreds of PV module manufacturers have already gone out of business. Will the Chinese government support its industry with incentives for development of the domestic market in 2009? Rumors indicate that the government is working on this. Reliable figures are hard to obtain, but experts estimate that the market size was less than 50 MW in 2008. If a feed-in tariff were introduced in 2009, it would be unlikely to have a major impact on demand for 2009.

Italy is the place to be

The most attractive feed-in tariffs can now be found in Italy. The market is growing rapidly as investors have discovered the opportunities, certainly with currently decreasing module prices. In terms of size, Italy will still be smaller than Spain in 2009, but with many projects under development, Italy could become the second largest market in the world in 2010.

Global market consequences

What are the consequences of this all for the global PV market? The promising growth in other markets will not be able to compensate for the 2100 MWp loss in Spain in 2009. Promising markets are France, Czech Republic, Belgium, Korea, Greece and India. All were still below 50 MW in size in 2008. As in Spain, even under the most attractive circumstances, it takes at least three years to achieve a market size in the hundreds of MW. As a result, and based on its global market demand model, SolarPlaza expects the global PV market to decline instead of grow in 2009.

Long-term perspective still very good

The long-term perspectives for the global solar energy market remain great, however. Module prices are declining and industry members expect prices to fall further during 2009. It will bring solar energy closer at the stage where government support is no longer needed. And, above all, the long-term market drivers that push solar energy will remain in place:
+ oil prices are expected to increase when economic recovery returns due to supply limitation
+ an increasing number of countries have started CO2 reduction plans including Renewable Energy support programs
+ continuously growing electric power demand, pushed by economic growth in Western countries and Asian rising stars such as India and China
+ continuously decreasing cost of solar modules makes solar energy attractive as a reliable energy source in a growing number of market segments
+ growing interest for electrified transportation (automotive industry opting for electric cars) which will stimulate decentralized electricity production

The big question for the near-term is which of the solar PV manufacturers will be able to survive the global decrease in demand and economic crisis in 2009, and maybe 2010. Those who can will have a bright future and infinite market potential ahead. When the cost of solar energy for customers reaches the cost of energy from the grid, the market potential for a reliable, predictable and 25 year fixed cost energy source will be infinite. This ‘grid parity’ will be reached in the next three to five years in major markets in the world. The future for solar energy is still very bright. But, as in Spain, while it’s very sunny most of the time, it still sometimes rains.

The current market and industry dynamics and solar future perspectives will be the topic of an international CEO and expert conference called: “The Solar Future - count down to grid parity” in Munich on 26 May.

As one of the promising markets, SolarPlaza is organizing an international PV trade mission to India from 16-20 February (www.pvtourindia.com).

Travis Bradford; President, Prometheus Institute, Professor RE at Chicago University will speak at The Solar Future conference about supply trends in thin-film versus crystalline technology for 2009-2012

• Anton Milner the CEO of Q-Cells will speak at The Solar Future, 26 May 2009 in Munich.
• Anton Milner; CEO, Q-Cells

The Q-Cells roadmap: how to reach grid parity before 2012