Commercial Solar Power

Of course WE know that solar is fantastic, but it is nice when the media agrees with us from time to time. This article talks about “big solar” – the Solar Flagship projects.

From John Grimes, article in Australian Financial Review
(see full article here)

The government’s decision to recast its Solar Flagships program has put the spotlight on the future of solar here and overseas. Some may argue the solar dream has turned sour, but the global reality is very different; solar’s time has arrived.

The solar game has changed with two significant developments. The price of solar photovoltaics (PV) has plummeted, and China has risen as the solar superpower.

Last year was a critical year for solar as the cost of PV fell by nearly half, in Australia and around the world. It was also the year that a number of countries, including Australia, broke through the 1 gigawatt mark, installing more than a gigawatt of solar PV generation, and the year the first solar plant produced electricity over 24 hours. The plant stores excess heat in molten salt during the day, and draws it down during the night to power steam turbines. New global investment in clean energy reached a record $260 billion last year, with more than half of that going into solar, according to Bloomberg New Energy Finance. Investment in rooftop solar surged to $74 billion.

That is more than was invested in fossil-fuelled generation last year.

The Chinese solar industry now believes the cost of solar will fall below that of coal-fired power within the next decade. That would be a game-changer for the world’s second-largest economy, with flow-on effects for Australia. China has made a strategic decision to be the solar superpower. Seven of the world’s top 10 solar manufacturers are now Chinese companies, and Beijing has set a target of 100 gigawatts of installed solar capacity by 2017.

Some will argue that big solar is unproven technology, but again the global reality is very different, with an 80 megawatt plant in Germany, a 200 megawatt plant in China and a 100 megawatt plant in Ukraine just some of the most recent examples.

The Solar Flagships program is an important first step in building big solar plants in Australia. The Clean Energy Finance Corporation has the potential to really drive investment in big solar and must be legislated as soon as possible.

Bloomberg New Energy Finance has estimated the corporation, backed by a price on carbon pollution, could help deliver 5 gigawatts of large-scale solar photovoltaics and 2 gigawatts of large-scale solar thermal by 2020, on top of many gigawatts of residential and commercial solar.

It is difficult to build any large infrastructure project in Australia, and big solar is certainly a large infrastructure project. There are challenges aplenty, but there are also reasons for optimism.

China, the United States and India are making strategic investments in solar, and smart investors like Warren Buffett are on board.

Australia needs its own solar strategic plan. After all, we have the world’s best sunshine and a public that backs solar.

John Grimes is chief executive of the Australian Solar Energy Society

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There are numerous reasons to look at solar including the environmental benefit.

In many cases, it is good old fashioned self interest that wins the day.

And solar certainly ticks the box for being a sound return on investment, often with a payback period of just 5 to 6 years for households or business.

Here’s a great report from Mike Kapsch of Investment U Research
(see original article here)

“It almost doesn’t make sense…

Last year, Germany, the United States, Italy and the U.K. all installed a record number of solar panels in their respective countries.

In fact, Germany installed more solar panels in December than the United States did in all of 2009.
Yet solar stocks were blindsided by investors in 2011. Top firms like First Solar (Nasdaq: FSLR) fell as much as 80% during the year. Many others fell more than 50%.

What happened?

As our own energy guru David Fessler explained last week:
“Polysilicon prices have collapsed 90% in the last five years. By the end of 2011, they were halved to $0.90 per watt.”

This epic price collapse, coupled with the fact that manufacturers had ramped up production, sent most solar manufacturers plummeting.

Today, most investors see the huge sell-off as a reason to steer clear of solar stocks. But these crash-level prices have also created a number of opportunities to scoop up great companies at deep discounts.
A Solar Comeback

In addition to being undervalued, there are three more reasons 2012 is set to be a banner year for solar stocks…
Record low prices boosting global demand: Some analysts worry a supply glut will continue suppressing solar stocks in 2012. Yet solar’s new low prices are sending demand for solar products much higher. Demand is expected to jump in the United States, Europe and Asia this year. China is poised to double its solar capacity for the second year in a row, 4 to 5 GW. Not to mention, solar is also quickly becoming a viable solution for the 1.3 billion people around the world with no access to grid energy.

Solar is more efficient than Ever: On top of record low polysilicon prices, solar efficiency is also making leaps and bounds. According to MIT’s Technology Review, conventional silicon solar panels typically convert less than 15% of light. Yet a startup out of North Carolina, Semprius, just tested its solar panels and scored a 33.9% efficiency rating. This is the first time ever any solar module has been able to convert more than one-third of the sunlight that falls on it into electricity. And it makes solar energy generation look much more promising for the future.
Big investors are getting involved: Even though government subsidies are set to wind down over the next few years in Europe and the United States for solar, big investors are already picking up the slack. Berkshire Hathaway owned MidAmerican Energy Holdings announced in December it purchased a solar farm in Southern California for $2 billion. Google reported it invested over $450 million last year as well in solar projects. GE announced in 2011 that it’s going to build the largest solar plant in America, capable of powering 80,000 homes each year. Billions of dollars more is expected to flood this market over the coming months.

The Solar ETF That Covers it All

There’s no doubt, the solar industry is set to grow immensely over the coming years. But tariffs, expected consolidation, and the steady removal of government subsidies make it hard to tell who is and isn’t set to profit.
Perhaps the easiest way to invest in solar today is simply looking to an ETF like the Global Solar Index ETF (NYSE: TAN). This fund is currently comprised of 33 securities all relative to solar energy. About a third of its holdings are in the United States, a third is in China and the rest is spread out between Europe and Canada.

Good investing,

Mike Kapsch

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BP Solar have played an interesting role… for a long time they were Australia’s only manufacturer of solar panels. Then a few years ago they exited that and sold their Homebush (Sydney) operations to Silex. Silex then took over the title of Australia’s only solar manufacturer, but have since restructured and become an importer.

BP Solar still exists in the solar market as a player in large projects.
___

James Paton
December 24, 2011
SMH.com.au

Full story here

BP, EUROPE’S second-largest oil company, is sticking with a proposed $923 million solar project in Australia after deciding to leave the business globally amid a glut.

”We continue to remain part of the consortium and we continue to work to bring the project to fruition,” Jamie Jardine, a spokesman for the company, said yesterday.

While it is proceeding with the plan, the London-based company and its partners in the proposed 150 megawatt solar plant in NSW have yet to sign power-supply agreements needed to advance with the project and have failed to meet a December 15 deadline to reach a financial close, Mr Jardine said.

The companies expect to start construction in the second half of next year, later than previously estimated, he said.

BP will quit the solar business after 40 years because it has become unprofitable, Mike Petrucci, the chief executive of the solar division, told staff in an internal letter earlier this month. The industry faces oversupply and price pressures after Chinese competitors increased production.

BP, Fotowatio Renewable Ventures and Pacific Hydro won $306.5 million in Australian government funding earlier this year to build the Moree solar farm. The companies aim to build one of the world’s largest plants using photovoltaic panels to turn sunlight into power, Javier Huergo, the head of business development at Spain’s Fotowatio, said earlier this year.
The partners had expected to begin building the solar farm in the first quarter next year, Mr Huergo said at the time. BNP Paribas, Banco Santander and National Australia Bank were among eight banks that initially agreed to help finance the venture.

Australia, which has set a target of generating 20 per cent of its power from renewable energy sources by the end of the decade, also announced in June it would provide $464 million to a solar project in Queensland led by a unit of the French company Areva SA. That venture proposed a 250 megawatt solar thermal and gas hybrid power plant, the government had said.

BP, an early entrant into the solar business, quit manufacturing entirely in July. The company plans to sell stakes in projects involving more than 158 megawatts that it has developed with local partners in countries such as Italy, Spain, Germany, Britain and the US.
Bloomberg

Read more: http://www.smh.com.au/business/bp-commits-to-923m-australian-solar-project-20111223-1p8fs.html#ixzz1jZmEbTWx

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