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CASE (Coalition for Affordable Solar Energy) Responds to Department of Commerce Proposed Solar Tariff Rate Adjustment
This is for the 2012 trade tariff which now most Chinese companies will prefer to pay. Thanks CASE for fighting the good fight here. Now Taiwan cell manufacturers have been involved in round 2 of this battle which is damaging the wafer/cell supply chain globally. Have your say; please add your comments to this post.
Dear Friend of CASE:
On Friday, the Department of Commerce announced the results of its administrative review of the 2012 solar tariff case for imports of solar cells from China. The Department proposed new rates lower than those currently in effect. If these are upheld in a final determination expected in mid-2015, the cash deposit rates applied to most imports of modules containing Chinese cells will decline from the current rates of approximately 23-31% to new rates of approximately 15%. Follow these links to read the decision memorandum, AD orders and CVD orders from the Department of Commerce.
Please also see below for a press release that was distributed to the media this morning.
FOR IMMEDIATE RELEASE
January 5, 2014
CASE Responds to Department of Commerce Proposed Solar Tariff Rate Adjustment
Lower rates are a step in the right direction, but U.S. market remains unfairly penalized by tariffs
Washington, DC –The U.S. Department of Commerce recently completed an administrative review of the 2012 solar tariff case affecting imports of solar cells from China. Overall, the Department of Commerce proposed new rates lower than those currently in effect.
In response to this news, Jigar Shah, President of the Coalition for Affordable Solar Energy (CASE) released the following statement:
“The proposed lower tariff rates are a step in the right direction for the U.S. solar industry, and we applaud the Department of Commerce for reviewing competitive information and adjusting the tariffs downward.
“Lowering the tariff import tax means more American consumers will be able to afford solar power and more American solar companies will be able to expand their hiring.
“While this is positive news, it does not solve the underlying problem. The U.S. solar industry remains unfairly penalized by a trade policy that inflates the cost of solar power and has already expanded to include imports from Taiwan.
“We continue to urge the governments of the United States and China to negotiate an end to the trade war for the benefit of all countries involved.”
The pyramid below, by Pike Research, lays out its version how it differentiates the 3 tier rankings of solar panels manufacturers from one another. Although most of these metrics are true, selling and integrating PV panels within the US market gives us a different view in evaluating the ubiquitous tiered designation.
Although Pike’s research is important, there are several points we have issues with or would like to comment on:
- · We believe their Tier analysis is correct but would be surprised if only 2% of total volume being sold was in the Tier 1 category as they define it. We work with a significant amount of manufacturers that are not on purchaser’s radars that would fit their seemingly broad classification.
- · The tier system sets solid and fundamental parameters but we see many manufacturers that could be classified as a tier 2 however make wonderful product that exceed EPC as well as independent 3rd party expectations.
- · The research assumes those who are vertical integrated, invest in R&D, have advanced robotics and have been in the business for 5 + years, therefore produce solid and “bankable” product.
- · It is our belief that a successful module provider would need to be totally vertically integrated, stay ahead of the quality curve with 1000v and other necessary enhancements and use of durable cost effective high efficiency cells as another offering within their product line. Also, offering true black on black modules signifies that manufacturers understand and desire to cater to all aspects of the market.
- · A panel manufacturer should be totally robotic in meeting inventory needs and uniform production. Timely deliveries are a must. This point should also serve as a requirement for US based manufacturers that are having a difficult time delivering product on time.
- · We see some 2nd tier providers being in the picture for some time provided module prices keep at the current levels or rise by 5%. These companies can make a presence in select markets by selling or investing in a large to medium utility scale project(s). Moreover, Chinese provincial support will provide access to local and regional projects.
- · The key to Tier 2 success will be in making equity investments into projects for the short and long term. Companies that can provide this will continue to grow for sure. Creativity in attracting new customers and projects is imperative.
I started in the solar industry about 12 years ago after being trained by a company called AstroPower. Back then, technology was new and pretty simple. There weren’t many regulations to govern us and most inspectors were just starting to become aware of what we were doing.
During those formative years, some manufacturers would often ask integrators different questions such as “did you have any problems with our product” or “do you have ay suggestions for improvement” and so on. In other words, the guys in the labs, which we referred to as “the guys with the white coats,” wanted input from the guys in the field. They knew where to get ideas for new and better product development.
Recently I contacted a rep for a company that makes PV DC connectors which I was interested in using because I needed their disconnect tool to separate the – from the + of the samples I was given. I was told none were available as they felt no tools were necessary and we should simply squeeze our fingers into that tiny opening, on the – connector, and pinch the two locking tabs together to disconnect the connectors. Wanting to offer my opinion, I explained that the men I work with in the field, as well as myself, found it difficult to disconnect them the way that manufacturer recommends; probably because integrators constantly use hand tools and their fingers tend to be a little larger than those who don’t do manual labor, like the guys in the white coats back in the lab that design these things, and that the small available space provided did not make it easy or sometimes even possible. There are other manufacturers, who obviously feel differently on this issue, that offer disconnect tools to separate their respective PV DC connectors with speed and ease which, as we all know, speed and ease directly effects cost in labor.
I sent my critique to the manufacture’s rep as I thought to offer a view from the field.
The response that I got from that company rep was “In my experience, separating the DC connectors is not a common occurrence.” Well that may be so but it does happen. I have personally experienced, in the last couple of years, on two different projects where I had a run of bad cabling at a time when we did not have the correct tool to separate those particular connectors. Our only recourse was to start cutting off connectors before we could troubleshoot to find what was obviously a bad connection and then, start remaking cables.
I now, always, carry a couple of sets of the red and the blue disconnect tools, for PV DC connectors, on every job site. It’s one of those things you learn in the field…...
There have been a whole bunch of articles circulating around recently talking about upcoming consolidation in the solar industry and the woes of solar manufacturers. Since I am passionately committed to growing my company’s bottom line through solar sales, I try to pay attention to what other people are saying. There’s a pretty consistent narrative now that describes the path that manufacturers took in the industry and explains why we are at our current position. And from here everyone tries their best to predict what will happen in the future; a very important skill if this is your business!
The essential narrative goes something like this. During the financial crisis, nations tried to shore up their economies and drive growth and investment. One of China’s reactions was a play to boost exports by easing the availability of financing to manufacturers. The USA ran a similar play with the DOE loan guarantees, but at a much smaller scale. The cheap money fueled an investment bubble where manufacturers raced to increase capacity, each trying to outdo the other in scale. This was pushed along by a solar supply crunch that, at the peak, drove polysilicon prices to over $400/kg. Poly now sits at $15/kg. Clearly there were nice profit margins for some manufacturers at that time and the general sentiment was ‘just make more stuff’.
In many ways today we are feeling the consequences of those decisions, and will likely be feeling them for quite a while. In this kind of free-wheeling environment of plentiful cheap capital and oversize margins it doesn’t take a lot of imagination to see how large sums of money could have been borrowed and then spent unwisely. Now we see that global demand hasn’t kept up with supply, the US & Europe are erecting trade barriers, and large stockpiles of inventory have accumulated around the globe. Spot prices for materials may be below cost and the debt collector is knocking. In today’s environment the reckless spendthrift manufacturers from a few years ago are finding themselves in an untenable position. I ask you, what does ‘Bankable’ and ‘Tier 1’ mean now? Have we now entered a phase where the biggest and most well-known brands are equivalent to the most over-levered and most in need of life support?
One of the most common questions I get asked about the manufacturers we represent is, “are they vertically-integrated?" with the implication being that bigger capacity is always better and more vertical integration is always better. Why is this supposed to be better? Some people may mention improved quality or R&D, but really the number one reason is cost-control. The thinking is that if you make everything, the poly, wafers, cells & modules, then you can make your panels cheaper than other people and retain a larger margin. Same idea goes with scale, if you can build the biggest solar factory in the world then you have the greatest efficiencies of scale, and you win! So what did all the solar manufacturers start saying about themselves? We’ve got gigawatts of panel, cell and silicon production. At a time when demand outstripped supply and global capacity was a fraction of what we have today, I’m sure the race to be the biggest seemed like a good idea. The thing is, China is the King of Overcapacity and once someone finds a good business model, everyone tries to do the same exact thing.
Today there’s just too much silicon, cell & panel capacity around and no one can make a dollar selling the stuff. You’ve got companies with a core poly business that have ventured into modules, cell guys that are pulling ingots and panel guys that do everything. And this was all done with borrowed money. The whole vertical integration & scale idea is being flipped on its head. No one is able to run at full capacity now, and so the bigger you are, the more money-losing capacity you have sitting idle. And if you’ve vertically integrated yourself then not only are you in danger of idle capacity at all the different stages of the value-chain, but you also have to balance the contradiction between purchasing cheaper materials on the spot market against making that stuff yourself just for the sake of keeping the line running. Turns out that some of the most viable companies out there are now able to be more nimble and take advantage of the spot market where the big ‘Tier 1’ players only have bad choices to make.
I’m sure you’ve seen news about ‘bailouts’ of certain companies already. Thing is these cash infusions are in the tens of millions of dollars, while the actual debt obligations for these companies are in the billions of dollars! These aren’t real bailouts yet; these cash infusions are on the scale needed to make up the interest on the real debt obligations. This really drives home just how over-levered these companies are and you have to wonder how many zombie solar manufacturers governments will be willing or able to maintain.
This industry is incredibly strategic because solar power is obviously going to be a huge way that we power our civilization going forward. That fact that solar is so much less than 1% of our current energy budget means that there’s tremendous room to grow and no one wants to give up a piece of something this important. And yet what is the cost of maintaining companies that grew big in an unsustainable credit boom? Is being a zombie manufacturer the new sign of bankability? I’m happy taking advantage of the spot market for materials and riding out the storm with no debt burden. The long-term is very attractive and I’ll be watching closely to see how things unfold over the next year or so; this is certainly one industry that never stops changing!
I would love to hear your thoughts when you have a chance; I always enjoy talking about the industry. Have a great and profitable 2013!
In this article we will thoroughly investigate PV module Spec Sheets or known also as “cut sheets”. Since there are literally thousands of modules available on the market it is necessary to know how to use that information most efficiently. Let’s start with most obvious features of the cut sheet, the mechanical aspects of the module.
Will be given in millimeters and inches, which also determines the surface area – it gives installers an idea how the modules should be fit on the roof, ground - or pole – mount installations. After layout is determined, the space between modules has to accommodate for mid clamps and end clamps, usually one inch apart for each clamp. The area of the module is crucial to determine weight load or to calculate wind forces acting on the modules and structure they are attached to. Thickness of the module will determine type of clamps installer is going to use. Quite often mid clamps differ only with the bolt length, whereas end clamp are shorter or longer depending on module thickness. Weight is also listed on most specification, since there is always a limit it can be added to the roof structure. Point to remember: many permitting authorities will accept PV modules to be mounted on pitched roofs without professionally engineered design, so long as there is only one layer of existing roofing material present.
There are different types of solar cells: mono-crystalline, poly-crystalline or thin film. There are variable numbers of cells per module from 36 to 108 but most common are 60 and 72 cell modules. Most PV modules cells operate near 0.5V and quite often they are connected in one string in series, yielding 36V per module so called Vmpp at max imum power output. However, other connections like 2 stirings of 36 cells will yield around Vmpp = 18V per module. Surface area of the cell will determine current output, Impp.
Most if not all solar modules have a plastic back sheet that seals the cells against environment. Its material is usually white but some modules come with black back sheet to match customer esthetic needs. It has to be handled with care since it is fragile underbelly of the module. To protect crystalline cells and simultaneously provide transparent surface modules use low-iron, high-transparency
tempered glass with an antireflection surface treatment. Low iron glass has high clarity, and tempered glass shatters into small fragments, instead of sharp shards, if broken. Modules are strenuously tested for weight loading and impact resistance, and the front glazing of a module is extremely durable. Thin-film modules may use a polymer film (plastic) as the front sheet, which is designed for arrays in high-impact environments.
The module lead’s connector type is important. Often called “quick-connects,” many new products are on the market. The old standard—Multi-Contact (MC) 4—has been joined by Tyco, Radox, Amphenol, and others. The 2011 NEC mandates that these connectors be touch-safe and, for circuits greater than 30 volts, require a tool for opening. Most of these connectors are not cross-compatible, so mixing modules will require properly mating connectors. Factory-installed module leads will be listed in the spec sheet with wire size, insulation type, and length of the leads (positive and negative leads are not always the same length). Wire diameter generally ranges from 14 AWG to 10 AWG; or they may be listed in square millimeters (mm2).
Shading a small part of a PV module can have a disproportionally large effect on its output. Additionally, when a module is partially or completely shaded, the current flowing through the module can reverse direction and create hot spots, which can lead to deterioration of the cell, the internal connections, and the module back sheet. A bypass diode stops the reverse flow of current and also directs electrical flow around the shaded section of the module. Nearly all modules come with factory-installed bypass diodes, with the exception of some thin-film modules. A typical 72-cell module with all the cells in series will have three bypass diodes, each bridging a series of 24 cells that can be bypassed if any or all of those cells are shaded.
Standard test conditions (STC) are the conditions under which a manufacturer tests modules: 1,000 W per m2 irradiance, 25°C (77°F) cell temperature, and 1.5 air mass index. Real-world operating cell temperature is often 20 to 40ºC above the ambient temperature. STC (bright sun and a relatively low cell temperature) are not typical for field operation of modules, but they do provide a consistent standardized reference to compare modules. An I-V curve (current-voltage) curve is generated at STC for every cell and module manufactured. The I-V curve contains five significant data points (Pmax, Vmp, Voc, Imp, and Isc; discussed below), which are used for system design, troubleshooting, and module comparisons. I-V curves can also be diagrammed for any operating temperature and irradiance level, but the points listed on a module specification sheet and those printed on the back of the module are at STC unless otherwise stated. Peak Power (Pmax or Pmp) The specified maximum wattage of a module, the maximum power point (Pmax), sits at the “knee” of the I-V curve, and represents the product of the maximum power voltage (Vmp) and the maximum power current (Imp). This wattage is produced only under a very specific set of operating conditions, and real environmental conditions (changing irradiance and cell temperature) will alter a module’s Pmax.
At STC and tested under load, voltage at max power (Vmp) is the highest operating voltage a module will produce. Vmp, adjusted for highest operating cell temperature, is used to calculate the minimum number of modules in series.
Open-circuit voltage (Voc) occurs when the module is not connected to a load. No current can flow in an open circuit and, as a result, Voc occurs at the point on the I-V curve where current is zero, and voltage is at its highest (Note: the module produces no power under open-circuit conditions.) Voc is used to calculate the maximum number of modules in a series string. Because voltage rises as the temperature drops, calculations are performed for the coldest expected operating conditions. This ensures that NEC parameters and equipment voltage limitations are not exceeded.
At STC, and tested under load, the maximum power current (Imp) is the highest amperage a module can produce. Imp is used in voltage drop calculations when determining wire gauge for PV circuits. This is a design consideration rather than an NEC ampacity calculation, for minimizing voltage drop and maximizing array output.
Short-circuit current (Isc) is the maximum amperage that the module can produce. There is no voltage when a module is shortcircuited, and thus no power. Isc is the measurement used to size conductors and overcurrent protection, with safety factors as required by the NEC.
Frequently, nominal operating cell temperature (NOCT) specifications are also listed on a manufacturer’s sheet. These are measurements calculated at different conditions than STC, using a lower sunlight intensity (800 W per m2); an ambient (not cell) temperature of 20ºC; and a wind speed of 1 meter per second; with the module tilted at 45°. The NOCT value itself is the cell temperature—given in degrees Celsius—reached under these conditions, Compared to the STC 25ºC cell temperature, the NOCT value will always be higher, usually by about 20ºC. NOCT values are used to mathematically calculate other test condition data points without resorting to further laboratory tests. NOCT conditions tend to more closely resemble the field conditions PV arrays generally operate in, and so give a perspective on “realworld” module operation.
Power tolerance is the range within which a module manufacturer is stating the module can deviate from its STC-rated Pmax, and thus what the manufacturer warranty covers. Common values are +/-5%, -0%/+5, and up to +/-10%. A 200-watt module with a +/-5% power tolerance could produce a measured output of 190 to 210W. Finding modules with a -0% power tolerance can ensure the best value per dollar spent, and keep arrays operating at closer to predicted output. Module Efficiency & Cell Efficiency Efficiency is the measure of electrical power output divided by solar input. At STC, power in is equal to 1,000 W per m2 and power out is the rated Pmax point. Assuming a module sized at exactly 1 square meter, and rated at 150 W Pmax, module efficiency would be 150 W per m2 ÷ 1,000 W per m2, which equals 15%. The typical crystalline efficiency range spans 12% to 15%, but there are high-efficiency modules over 19%, and amorphous silicon modules on the low end with efficiencies around 6% or 7%. Cell efficiencies will be slightly higher than module efficiencies because there is usually a small amount of empty space between cells. When deciding what module to purchase, if W per square meter (known as power density) is the driving factor, then a module with high efficiency should be chosen. But in many instances, there is plenty of room for an array and price per watt will be given higher priority than module efficiency. Temperature Coefficients Modules are directly affected by both irradiance and temperature, and because of environmental fluctuations, also experience power output fluctuations. When exposed to full sun, the cells will reach temperatures above the STC temperature of 25°C. And sometimes cell temperatures are lower than 25°C, such as on cold winter days.
Temperature coefficients are used to mathematically determine the power, current, or voltage a module will produce at various temperatures deviating from the STC values. The temperature coefficient of open-circuit voltage is used to figure out the PV array’s maximum system voltage at a site’s lowest expected temperatures. The temperature coefficient of power can be used along with pyranometer-measured irradiance to calculate the power an array should be producing, which can be compared to actual output to verify proper performance.
A limited warranty for module power output based on the minimum peak power rating (STC rating minus power tolerance percentage) means that the manufacturer guarantees the module will provide at least a certain level of power for the specified period of time. Many warranties are stepped—covering a percentage of minimum peak power output within two different time frames. For example, a common warranty guarantees that the module will produce 90% of its rated power for the first 10 years and 80% for the next 10 years. A 200 W module with a power tolerance of +/-5% means that the module should produce at least 171 W (200 W × 0.95 power tolerance × 0.9) under STC for the first 10 years. For the next 10 years, the module should produce at least 152 W (100 W × 0.95 power tolerance × 0.8). Module replacements are frequently done at a prorated value according to how long the module has been in the field. More manufacturers are now offering linear power warranties, which are represented by a maximum percentage power decrease per year for a set number of years, for example, that module power output shall not decrease by more than approximately 0.7% per year after the initial year of service, for the first 25 years.
At the end module specs are designed to help customers choose the appropriate product for their installations. The most important factors when choosing solar modules should not only the price per watt but the craftsmanship, efficiency and warranties. However, no matter how appealing a module is, it’s crucial how many years the producer was has been on the market and if the company is in good economic and financial standing. Some questions to ask: what are the warranties good for (what does it cover)? Is there an insurance company to backstop the company in case they go under? Do they have a linear warranty? How many years workmanship?
While quality of solar cells is crucial, the quality of connectors (quick connects) and wiring for instance cannot be underestimated since they also have influence on safety and efficiency of the whole system.
Unnecessary repairs due to poor quality of these components might cause unexpected and frustrating delays in power production. From an installers point of view, specs provide crucial information on how to connect modules to the inverter and how to design electrical layouts. Moreover, test conditions under which solar cells were tested are quite often misunderstood. STC testing conditions, while idealistic and rarely fulfilled in the real life conditions provide common ground for testing all solar modules, so different manufacturers can be compared to the same point of reference. To conclude, understanding and getting as much useful information from the specifications will result in better design and overall success of the whole installation. The next article we will discuss the "ins and outs" of micro inverters and power optimizers.
New innovations and technologies will be necessary for solar PV-based energy to flourish and attract even more diverse implementations. Based on print and internet research, solar manufacturing is indeed entering a very important transition in its way to lower real overall costs of solar celsl and in turn the solar modules. True, module pricing has been declining rapidly but this has been based on declining revenues and over capacity in the global solar crystalline space rather than cost reducing innovations.
One of the keys to increasing competitiveness is to draw down the costs of production. The U.S. Energy Information Administration recently concluded that the ‘cost of generation’ (in US$/MWh) of solar PV will make it 2 times as expensive as wind, more than 3 times as expensive as nuclear, and slightly less than 4 times as expensive as conventional coal by 2016.
Taking into account only the solar cell itself, there are two main ways to lower the cost of energy generation: 1) make more efficient solar cells, or 2) lower the costs to produce them. As silicon is the largest cost in conventional solar cell production, (making up 50%-60% of the overall cost), it is pivotal that costs associated with its use be lowered. Currently, solar cell wafers must be thick enough to survive the direct contact metallization processes. Industry standard solar cell manufacturing processes use screen printing equipment which directly contacts the wafer and can exert enough force to cause breakage for thin wafers. If metallization could be done without touching the wafer, it would allow for silicon solar cell wafers to be much thinner than they are today, which could reduce the overall costs of the device.
Applied Nanotech is pioneer in so called non-contact print techniques, where processes like inkjet, aerosol jet, and spray coating offers several important advantages over traditional manufacturing approaches. These techniques provide a route to realize thin-sillicon wafer, which directly transforms to lower module costs. Implementation of this technology is a good 2 to 3 years away. Let’s see if it makes it into a solar cell near you….
All contemporary modules utilize silver as a conductor in manufacturing solar cells. It is less resistive than copper, which directly translates to better efficiency but unfortunately, it increases module prices significantly. In order to decrease the price of the module, researchers in Germany began investigating where copper can be an alternative to silver. If the project is successful, the affiliated companies expect to be able to cut the costs of solar cell manufacturing by around 10%.
Another improvement in increasing efficiency of solar cells comes by way of Las Vegas. No, not sin city but what is dubbed “LasVeGas”. It is a German acronym standing for:”long-term stable front – side metallization on the basis of environment-friendly galvanic layers”. Both projects are still in theoretical phase, thus it will be a few more years before practical implementation will see the day light. In first phase, researchers will study the depositing of copper on existing cell structures and secondly, interconnection of the new cells into modules. This will entail transferring the results into actual production. A grant of 1.8 million Euros was set up by German Federal Research Ministry, which will be used by joint venture of the companies Schott Solar, Rena GmbH and CiS Research Institute.
The average installed cost of a photovoltaic (PV) system has declined substantially since 1998 — by almost 30 percent. Early indications show that the rate of decline accelerated in 2010. This historical trend suggests that PV policies have achieved some success in fostering competition within the solar industry and have satisfied a key goal: encouraging cost reductions over time.
An annual report identifying trends in the installed cost of grid-connected PV systems in the United States - “Tracking the Sun III” confirms that the installed cost of PV systems declined substantially since 1998. Roughly 75 percent of this cost reduction was associated with a decline in non-module costs; these may include inverters and mounting hardware, and also labor, permitting and fees, shipping, overhead, taxes and installer profit. Starting in 2005, cost reductions began to stall, as the supply-chain and delivery infrastructure struggled to keep pace with rapidly expanding global demand.
Installed Cost Trends over Time for Customer-Sited PV
Over the past year, consumers in the United States finally started to reap the benefits of declines in module prices. Based on preliminary data, average installed costs fell dramatically in 2010. “Tracking the Sun III” presents partial-year cost data for systems installed during 2010 in California and New Jersey, the two largest markets in the United States (figure 2). For systems installed through the California Solar Initiative program during the first 10 months of 2010, average installed costs were $1 per watt below the 2009 average. Similarly, in New Jersey, average costs through June 2010 were down $1.20 per watt from 2009 levels.
The report also finds that PV systems demonstrate economies of scale. Systems smaller than 2 kilowatts (kW) that were installed in 2009 averaged $9.90 per watt, while systems larger than 1,000 kW averaged $7 per watt, or about 29 percent less. Additionally it shows that installed costs for residential systems declined significantly when the PV systems were installed on new structures. Among residential systems in the 1–kW to 3–kW range funded through two California incentive programs (the New Solar Home Partnership Program and the California Solar Initiative) and installed in 2009, PV systems installed on new residential structures cost $1.60 watt less than comparably sized residential retrofit systems (or $1.90 per watt less for rack-mounted systems).
The report also describes trends in PV incentive levels and the net installed cost paid by system owners after receipt of such incentives. The combined post-tax value of all levels of incentive — state/utility cash incentives plus state/federal income tax credits — averaged $3.90 per watt for both residential and commercial PV systems installed in 2009. This translates into an average net installed cost of $4.10 per watt for residential PV and $4.00 per watt for commercial PV. For commercial PV, this represents virtually no change from 2008, as the average incentive and pre-incentive cost remained relatively flat. However, for residential PV, the average net installed cost in 2009 represented a historic low, having declined $1.30 per watt, or 24 percent, in only one year. This trend is largely a consequence of lifting the $2,000 cap on the federal investment tax credit for residential PV systems beginning in 2009.
Trend toward declining installed costs, along with the narrowing of cost distributions, suggests that PV deployment policies have achieved some success in fostering competition within the industry. In other words, overall prices declined and improved PV delivery considerably. The fact that states with the largest PV markets have somewhat lower average costs than states with smaller markets lends credence to the premise that state and utility PV deployment policies can affect local costs. However, installed costs in Japan and Germany are significantly lower than in the United States, suggesting that deeper near-term cost reductions may be possible here. Indeed, further cost reductions will be necessary if the PV industry is to continue expanding in the customer-sited market, given some policymakers’ desire to further ratchet down the financial support offered to PV installations.
By Konrad Gornicki
Roughly two and a half ago, photovoltaic panels cost about US$3.50 a watt. Today they hover around US$2 a watt, and by sometime in 2012 they're predicted to be less than US$1 a watt.
Last July, the Chinese government stated it would subsidize 50% of investments for solar power projects. Between now and 2015, the administration plans to more than double its “environmental protection” spending to as much as $454 billion. This will result in mandates for using renewable energy generation sources, including solar. They're so low that European and Japanese suppliers can't compete with the low cost of Chinese products. Only the best equipment is used in China. The Chinese solar panel quality is as good as or better than the top brands in Europe or Japan. One of the most labor intensive elements of solar panel manufacturing is the final assembly. Despite China's greatest advantage being its low cost of labor and output, Chinese companies are beginning to do final assembly in the United States in order to sell into municipal and government projects through the ARRA (American Recovery and Reinvestment Act) requirements.
A good example of Chinese solar entrepreneurship is Yingli Green Energy. With global demand up, Yingli doubled production capacity and ran its factories 365 days a year, 24/7. The company claims that they sold everything, and Europe seems to be the largest market since they provide generous subsidies for solar-energy producers, for instance 60 percent of Yingli's revenues last year came from Germany. Yingli plans to expand production another 70 percent this year, and it isn't alone: Other Chinese solar companies, including Suntech Power Holdings and LDK Solar, plan double-digit production boosts in 2011. Suntech is expanding U.S. market; the company opened an 117,000-square-foot panel plant in Arizona last year and is doubling its U.S. head count to 150 people. "All of the major Chinese producers are engaged in massive, very aggressive capacity-expansion programs," says Paul Leming, an analyst with Soleil Securities in New York. Tellingly, Chinese-based Suntech Power Holdings will become the second-largest supplier of photovoltaic (PV) cells in the world this year behind Arizona-based First Solar, Inc. Our purchasing department has seen an increased amount of newer Chinese manufacturers looking to stock and list their modules on our website. Our decision to list modules on our website includes reviewing the Fraunhofer Institute in Germany to determine if they have experience evaluating these lesser known brands. Second, we speak to our European customer base and have them give us testimonials on certain name brands new to the North American scene. The selections are daunting, however having Aten Solar as a source for information and reviews allows installers or “do it your selfers” a level of comfort and assurance when deploying their next solar array.
The global market this year will be dramatically different than 2010. Rapid production expansion in 2010 and sluggish demand in Germany and Italy in 2011 has led to a build-up of module inventory globally. We estimate there are more than 500 companies manufacturing modules at the moment. In the global market place, Aten alone has designed and sold products from 22 different brands last year. 2011 will see many new module brands appearing on the US market as manufacturers who had focused on the European market shift towards the US. Some manufacturers will go to market based on containerized orders (over 500 modules per order) while others will sell pallet quantities of 20. Aten Solar plans on being the go-to source for sorting through this increasingly complex and volatile market.