Cost Of Solar Energy Could Be Cheaper Than Fossil Fuels By 2017

Although the US has recently clashed with China and introduced tariffs for solar panel companies such as Suntech Power and Trina Solar, the industry continues to expand at an ever increasing rate and news has emerged that the cost of energy generation from solar power is falling so quickly that it could be cheaper than power generated from traditional fossil fuels by 2017.

A new report from GlobalData called ‘Grid Parity for Wind and Solar Power – Future Outlook and Impact Analysis’ provides a detailed look at the current and future wind and solar power markets. Between 2009 and 2011, the global solar photovoltaic capacity increased by 100% and is expected to grow even further as both the US and China reach grid parity within the next few years.

In the US, some solar photovoltaic projects will reach grid parity by 2014 with most regions in the country expected to reach grid parity in alignment with average electricity prices in the residential sector by 2017. China is close behind and is set to reach grid parity for solar photovoltaic projects in most regions by 2015 or 2016.

The most important aspect of the report is the Levelized Cost Of Electricity (LCOE) which is the price at which electricity must be generated from a specific source to account for the cost of the energy generating system. Declining capital costs and the increasing capacity will cause the LCOE for solar photovoltaics to continue to decrease. This, combined with low operations and maintenance costs as well as no fuel costs, will mean that the LCOE for solar photovoltaics is expected to be lower than the average retail electricity prices by 2017.

As fossil fuel costs continue to rise, solar power is becoming increasingly important as a major source of renewable energy worldwide and it now accounts for around 14% of the global renewable capacity. Over the past five years, it has had a Compound Annual Growth Rate (CAGR) of 56.4% and is now the fastest growing renewable power source in the world. In 2008 and 2009, the installed capacity of solar power grew by 14.8 gigawatts, but this increased dramatically during 2010 and 2011 to 44.3 gigawatts.

Newly emerging markets such as China and India have announced ambitious targets for the development of solar power capacity within each country and are expected to overtake Europe as the largest market in the near future. With a CAGR of 20.2% over the next decade, the global installed capacity of solar power will reach 362,842 megawatts by 2020.

Posted in Solar Energy | Tagged , , | Leave a comment

US Announces Huge Tariffs For Chinese Solar Panel Companies

The US has announced that it will impose tariffs as high as 250% on solar panels that are made in China in order to protect domestic manufacturers from foreign competition. The news comes at a time when China, the world’s leading producer of solar panels, was helping to bring down global prices and create a booming industry worldwide.

According to Bloomberg, the decision was made after the US Commerce Department found that Chinese manufacturers were benefiting too much from government subsidies that allowed them to sell solar panels at below the cost of production. The result is that tariffs ranging from 31% to 250% will be imposed on Chinese companies such as Suntech Power, the world’s largest solar panel manufacturer, and Trina Solar.

Suntech was told to pay 31.22%, Trina’s levies were set at 31.14% and 59 other Chinese companies were told to pay duties of 31.18%. All other Chinese producers received a rate of 249.96%.

China is very concerned by the action and criticised the decision, saying that the US is not only hurting itself and the clean energy market, but also relations between the world’s two largest economies. During the last year alone, Chinese government subsidies have helped lower the price of solar panels by over 40%, and by as much as 80% over the previous five years. The huge price reductions have crippled the US solar panel manufacturers and caused four companies to file for bankruptcy in the past year including Solyndra, Evergreen Solar, SpectraWatt, and Energy Conversion Devices.

Jigar Shah, president of the Coalition for Affordable Solar Energy, said duties won’t benefit the rest of the US solar industry, including developers that buy solar panels and companies that sell the gear used to produce them.

The tariffs “will increase solar electricity prices in the US precisely at the moment solar power is becoming competitive with fossil fuel generated electricity,” Shah said in a statement. “This new artificial tax will undermine the success of the US solar industry.”

Some members of Congress have doubted whether the industry can be profitable in the US and have criticised President Obama for his support of the manufacturers of solar panels and equipment in the country. In the short term, the new tariffs will force Chinese manufacturers to raise prices in the US in order to make a profit and this will reduce demand and installation growth. The US solar industry grew by 109% in the previous year due to the falling costs of solar panels which made them more competitive with other traditional sources of energy.

Charles Yonts, an alternative energy analyst at CLSA Ltd in Hong Kong, said China is likely to retaliate by targeting US makers of polysilicon, the raw material that goes into solar cells. MEMC Electronic Materials Inc is the largest publicly traded US maker of polysilicon, according to data compiled by Bloomberg.

The lift for US manufacturers “should be short lived,” Yonts said. “They’ll still get smoked by the Chinese.”

Chinese panel makers including Suntech and Trina earn about 10% to 15% on average from sales to the US, Yonts said. They can create a “workaround” of contracting manufacturing to Taiwan to avoid US tariffs, he said.

“With a workaround, they’re still the cheapest option out there and will maintain their market shares more or less,” Yonts said.

So the decision by the US could backfire and cause a trade war as some Chinese companies will decide to move their production of solar panels to other countries in order to avoid the tariffs altogether. Maybe subsidising the domestic manufacturers in the US instead of implementing tariffs on the Chinese companies would have been a better option for the Obama administration.

Posted in Solar Energy | Tagged , , | Leave a comment

Japan Shuts Down Last Nuclear Reactor

Japan is shutting down its last working nuclear reactor at the Tomari nuclear power plant in Hokkaido. It’s the last of the nation’s 50 nuclear reactors to go offline and it has left the country without nuclear power for the first time since the 1970s.

Thousands of people took to the streets to take part in a large demonstration and celebrate what could be the end of nuclear power in Japan. The government has warned that the country faces power shortages throughout the summer, especially during peak periods when the weather is hot in the middle of the day, but have so far been reluctant to go against public opinion.

The news comes after the massive earthquake and tsunami that hit Japan in March 2011 which caused a meltdown at the Fukushima nuclear power plant and radiation leaks that forced the evacuation of thousands of people. The disaster triggered a worldwide debate about the safety of nuclear energy and resulted in new regulations being introduced in the country which imposed mandatory routine maintenance for all of the nation’s nuclear reactors.

According to the BBC, local authorities must give their consent and approval before any of the nuclear reactors can be restarted. Each reactor is being tested to prove its ability to withstand earthquakes and tsunamis, but none have been reopened since the regulations were brought in after concerns from the general public about the safety of nuclear energy.

Businesses have warned of severe consequences for manufacturing if no nuclear plants are allowed to restart.

In the meantime, Japan has increased its fossil fuel imports, with electricity companies pressing old power plants into service.

If the country can get through the steamy summer without blackouts, calls to make the nuclear shutdown permanent will get louder, our correspondent says.

Before the crisis, Japan relied on nuclear power for nearly a third of its electricity, but now the shortfall is being met with increased imports of fossil fuels. As well as rising carbon emissions as the country turns to oil and gas for energy, a possible energy crisis looms and more expensive power which will effect the manufacturing sector.

Posted in Nuclear Energy | Tagged , , | Leave a comment

Global Wind Energy Continues To Grow Rapidly In 2011

Although the global economy has been very challenging over the past year, news has emerged that the total installed capacity of global wind energy has grown by 21% with the global market increasing by just over 6%. The statistics show that over 41,200 megawatts of new clean and reliable wind power were installed in 2011, bringing the total installed capacity worldwide to more than 238,300 megawatts. There are currently 75 countries across the globe that have commercial wind power installations and 22 of them have already passed the one gigawatt milestone.

A new report from the Global Wind Energy Council (GWEC) reveals that the majority of new installations occurred outside the OECD for the second year running, with new markets in Latin America, Africa and particularly Asia driving continued market growth. China installed an estimated 18,000 megawatts of new wind power in 2011 and is still the world’s leader with a total capacity of more than 62,700 megawatts. India installed 3,000 megawatts and has now reached a total capacity of just over 16,000 megawatts, which is likely to increase to 5,000 megawatts per year by 2015.

In Europe, the new installed capacity increased by 9,600 megawatts, bringing the total capacity to just under 94,000 megawatts with Germany and Spain leading the way. The US wind power capacity grew by 31% in 2011 compared to the previous year and 6,800 megawatts were installed which increased the total to just under 47,000 megawatts. Canada enjoyed a record year in 2011 and reached the milestone of 5,000 megawatts total capacity by installing over 1,200 megawatts of new wind power.

Latin America is the new emerging market for wind power and new countries are expected to reach critical mass over the coming years. Brazil is leading the way and reached the milestone of 1,000 megawatts total capacity in 2011 with an ambitious target of more than 7,000 megawatts to be installed by 2016. Mexico is close behind and will reach the same milestone this year.

It’s amazing to see how far the wind industry has progressed over the last 10 years with the total installed capacity worldwide growing from 23,900 megawatts in 2001 to 238,300 megawatts in 2011, an increase of 897%. As well as this, the annual installed capacity worldwide has grown from 6,500 megawatts in 2001 to 41,200 megawatts in 2011, an increase of 534%. Although the growth of the wind industry has continued to increase every year over the last decade, the deterioration of the global economy could pose serious problems over the next few years.

Posted in Wind Energy | Tagged , , | Leave a comment

China Doubles 2020 Solar Power Target

News from the state media has revealed that China has doubled its target goal for solar power generation to 50 gigawatts by 2020. As the world’s largest polluter, China has now taken a huge step in the right direction to encourage the use of more clean sources of energy throughout the country.

The news follows the ongoing worldwide debate about the safety of nuclear energy which was triggered by the massive earthquake and tsunami that hit Japan in March 2011, resulting in all of the nuclear reactors being shut down in the country since the disaster occurred. China have responded by ordering safety inspections of all of the nation’s nuclear reactors and temporarily suspended approval of new and proposed projects.

According to Physorg, the current installed capacity of solar power in China is less than one gigawatt and the country has relied heavily on coal to provide 70% of its energy needs. After three decades of unrestrained growth, the resulting pollution has caused some of the world’s worst air and water quality.

China hopes its installed solar power capacity will reach 10 gigawatts by 2015 and 50 gigawatts by the end of the decade, the Shanghai Securities News said, citing Li Junfeng, deputy director of the energy research arm of the National Development and Reform Commission.

China will soon publish a five year blueprint that will outline supportive policies for the solar power industry. The plan will include investing hundreds of billions of dollars to develop clean sources of energy in order to reach its target of generating 15% of its energy from renewable sources by 2020.

Posted in Solar Energy | Tagged , , | Leave a comment