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Solar semantics

Recent events illustrate the ups and downs of global solar competition. Giles Crosse casts an eye over events.

Growth is ongoing in the global solar marketplace, but certain countries are beginning to review how they do business, perhaps in a bid to help pick up internal markets and make capital from solar, in addition to the wider environmental and technological benefits.

Perhaps evidence of this can be seen in recent US moves. On 19 October, The Solar Energy Industries Association (SEIA) and the New York Solar Energy Industries Association (NYSEIA) announced a formalised partnership to coordinate the resources of both organisations and promote the growth of New York’s solar energy market.

“NYSEIA is excited to collaborate with SEIA on important items such as the Solar Jobs bill. We need this bill for three reasons. It will enable New York State to become a leader in the use of solar electric and solar thermal applications in the country.

Secondly, by creating strong demand, a fast-growing solar industry will serve as the engine for much needed job growth in New York. And most importantly, all New Yorkers will benefit from a cleaner environment and a more robust economy.

“With a growing population and high electricity prices, New York has a golden opportunity to be one of the leading solar markets in the US,” said Rhone Resch, president and CEO of SEIA.

“The combination of SEIA’s national resources and NYSEIA’s on the ground efforts will give New York a big boost in meeting its solar market potential. I look forward to working closely with NYSEIA to help create new jobs and opportunities for people in New York and across the country.”

SEIA findings
Three out of four (74%) Americans agree that “the growth of the solar water heating industry will produce jobs and help the American economy.”Most Americans (63%) believe that solar energy can be used to heat water and buildings as well as provide electricity.Positive perceptions of “solar water heating systems” exceed negative perceptions by more than 10 to 1 (48% to 4%).More broadly, solar energy is now considered to be the energy source most deserving of US government support, outdistancing natural gas, oil, nuclear, coal and even wind energy.Support for solar extends to Americans of all partisan affiliations (Independents, Republicans and Democrats). When it comes to installing solar water heating systems in their own homes, Americans express the most concern about the potential cost of the system – its purchase price (72%) as well as maintenance expenses (56%). Americans also have concerns about the reliability of the systems (50%), and feel they do not know enough about how the systems work (45%) or where to buy them (42%).

Foreign competition concerns

But it may be there are deeper reasons. Indeed the truth may be that moves like these, and other like them which may well follow across the US, may simply be down to fears that foreign technologies are likely to steal a march in terms of jobs, profit and market share.

On the same day as the SEIA moves, SolarWorld brought action in the US against cheap imports from China. “SolarWorld Group, SolarWorld Industries America, supported by a group of additional US manufacturers of solar power technology, started a petition before the government in Washington, DC, against the growing flood of cheap imports from China,” explained the firm.

It said that in doing so, they are challenging the state-subsidised Chinese solar industry that for some time has been inundating the US market with solar cells and panels at dumped prices to systematically secure a higher market share. This action against unfair trade practices is one of the largest against China in the United States, and it is the first in the field of renewable energy worldwide.

As such, there is a real danger it could spark a vicious trade stand-off that, given its economic might, China is unlikely to cave in to. Moreover, whilst industry may be subsidised in the East, this is the economic reality and one that is again unlikely to change in the short- to medium term. Firms in the US may have to swallow a bitter pill and redesign their strategies for growth, or alternatively seek new tech or new directions to make their operations profitable.

Frank Asbeck, chairman and CEO of SolarWorld AG, said: “Our German and US factories are fully competitive internationally, but China’s unfair trade practices must be addressed.”

In the four-volume petition submitted to the US Department of Commerce and the US International Trade Commission, the companies challenge the Chinese industry’s dumped pricing and illegal subsidies, thus protesting against the destruction of domestic jobs.

With a large number of subsidies and preferential treatments, the Chinese government and its state authorities have enabled its solar industry to make price cuts well beyond their own efficiency and to massively expand the export of its goods. Many documented cases of violations of social, quality and environmental standards that regulate production sites in the US and Germany have also been discovered, said the documents.

Gordon Brinser, president of the US subsidiary SolarWorld Industries America, suggested, “China has no cost advantages, not even through very low wages. In the case of high tech products like solar power modules and solar cells, the share of labour costs is very low. In our case, for example, it is below 10%.”

China’s alleged wage cost advantages would be compensated for by higher overhead and transport costs. “The Chinese industry’s ability to offer dumping prices is solely attributable to massive subsidies by the Chinese State Banks and the Chinese government,” he went on.

Evidence of these illegal trade practices is apparently provided by US companies united in the Coalition for American Solar Manufacturing in their several hundred-page, four-volume documents to support the petition.

Of course, new and alternative tech might alleviate the commercial risks. Back in September, SolarWorld revealed the SunCarport, its vision for a combined garage and solar charger.

The SunCarport is equipped with alternatively nine, 10 or 12 solar power modules made from blue polycrystalline or black monocrystalline solar cells. On a frame of anodised aluminium and powder-coated stainless steel, the modules form the roof of the SunCarport.

It thus offers not only weather protection for one or two vehicles but also provides electricity and can be used simultaneously as a filling station for electric and plug-in hybrid vehicles. Alternatively, the self-generated electricity can be fed into the public grid.

Both the generation of electricity for self-consumption and the feed into the public grid are funded according to the German Renewable Energy Sources Act (EEG). Together with a clever energy management system and SunPac, the SolarWorld battery solution for the family home, the electricity can also be stored thus increasing self-consumption.
This is surely just the kind of thing that might offer competitive advantage in spite of worldwide differentiations in labour costs or production scenarios. Then again, it may be there is actually little for US firms to grumble about.

According to GTM Research and SEIA’s latest quarterly US Solar Market Insight report, the US solar energy industry continued its rapid growth through the second quarter of this year, gaining a greater share of the total global market.

US Solar Market Insight 2Q2011 – key findings
Photovoltaics (PV)
• Grid-connected PV installations in Q2 2011 grew 69% over 2Q2010 and 17% over 1Q2011 to reach 314MW, enough electricity to power nearly 63,000 homes.
• Cumulative grid-connected PV in the US has now reached 2.7GW, enough to power 540,000 homes.
• For the first time, New Jersey’s commercial market exceeded California’s, making it the largest commercial market in the country.
• Six states installed more than 10MW each in 2Q2011 compared to only three states in all of 2007.
• A slowdown in global demand led US module production to fall 11% in Q2 from Q1, to 333MW.
• Weaker-than-expected global demand conditions also led to a price decline in Q2, with wafer and cell prices each dropping 25% and module prices falling 12% on the quarter.
Concentrating Solar (CSP & CPV)
• In August, it was announced that Phase I of the 484MW Blythe trough plant would be switching from CSP to PV.
• Construction on the 30MW Alamosa CPV plant began in the first half of 2011 with expected completion before the end of the year.
• There is a concentrating solar (combined CSP and CPV) pipeline of over 7GW in the US, enough to power 1.4m homes. More than 4GW have signed power purchase agreements (PPA).
• In total, over 600MW of CSP and CPV are now under construction in the US that will produce enough electricity to power 120,000 homes.

This seems to pour slightly damp water on the concept that the US industry requires help from its own government. The paper, released by GTM and SEIA on 20 September, said, “Leading the way was the US solar photovoltaics (PV) market, which installed 314MW in the second quarter, 69% more than the same period last year and 17% more than the first quarter of 2011. The US remains poised to install 1750MW of PV in 2011, double last year’s total and enough to power 350,000 homes.

“The second quarter data illustrates that the US solar industry continues to be one of the fastest growing in America,” said Rhone Resch, president and CEO of SEIA. “More than 100,000 Americans are employed in solar, twice as many as in 2009. They work at more than 5000 companies – the vast majority being small businesses – across all 50 states.”
The utility and commercial market segments grew 37% and 22%, respectively in the second quarter. The residential PV segment, however, stuttered for the second consecutive quarter, installing 60MW, a 5.7% drop over last quarter. The US Solar Market Insight report predicts greater traction for the residential market, however, in the second half of 2011 and into 2012, as residential solar-leasing business models expand nationwide.

In the concentrating solar market, including both concentrating solar power (CSP) and concentrating PV technologies, over 600MW are now under construction in the US. The US concentrating solar pipeline now holds more than 7000MW (enough to power 1.4m homes), of which more than 4000MW of projects have signed power purchase agreements with utilities.
While US solar is on track for a banner year overall, the market does face a number of potential challenges in 2012 and beyond that could stunt the type of growth seen over the past year and a half.

“The potential expiration of the 1603 Treasury program, along with current malaise in major markets such as New Jersey and Pennsylvania, threatens to slow growth in 2012,” said Shayle Kann, managing director of solar at GTM Research. “Still, with increasing market diversity and the continued emergence of the utility-scale solar market, we anticipate that the US market share of global installations will triple over the next four years.”

The overall solar story remains very positive. “The dynamic second quarter growth is a result of increased competition in the solar market, competition that drove down the price of solar panels by 30% since the beginning of 2010,” added Resch. “This is good news for residential and business customers as solar becomes more affordable every day.”

Another SEIA survey, “Public Perceptions of Solar Water Heating Systems,” was released on 17 October. Its findings, says SEIA, confirm that Americans have strong positive associations with solar energy, demonstrate the widespread perception that solar water heating systems present an appealing offering with a significant economic upside for the country, and establish that more consumer education is needed about the affordability and reliability of solar water heating systems.

So the truth appears to be that whilst international competition with the East does represent a challenge to burgeoning growth in the US, there are plenty of positive for US firms to take into the fight.

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