Gorbachev Pushes for Solar Energy in San Antonio

Associated Press/March 30, 2009

Former Soviet president Mikhail Gorbachev is in Texas pushing solar power as the "best hope" of delivering electricity to the poor and helping the environment.

Gorbachev appeared in San Antonio on Monday for the International Petrochemical Conference. He called the oil industry a key stake holder in turning the tide against greenhouse gases.

Gorbachev is founder of Green Cross International, an environmental organization that also released a global report card Monday on solar energy and development. Germany led all countries with an A-minus, while the U.S. was given a C-plus.

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China Announces Generous Subsidy for Solar Power

Reuters/March 26, 2009

Shares of solar companies rallied sharply on Thursday after the Chinese government said it would launch a generous new subsidy for the clean power systems.

Chinese-based companies were the biggest gainers, with Trina Solar Ltd (TSL.N) up 40 percent at $12.14 per share, Suntech Power Holdings (STP.N), up 40 percent at $10.96, LDK Solar Co (LDK.N), up 36 percent at $8.00, Yingli Green Energy (YGE.N) up 39 percent at $5.75, Solarfun Power Holdings (SOLF.O) up 26 percent at $4.48 and Canadian Solar (CSIQ.O), up 23 percent at $5.95.

Those shares had been hard hit so far this year as financing for new solar projects dried up, but the news that China would move to support the industry spurred hopes that the government could open up a potentially huge market for the industry.

"This is a pleasant bit of news out in what has been a quite bleak time for the solar industry. The numbers are quite substantive," said Edward Guinness, co-manager of the Guinness-Atkinson Alternative Energy Fund which owns shares in several solar companies.

According to a statement on a Chinese government website, solar projects larger than 50 kilowatts of output will be eligible for a subsidy of about $2.90 per watt.

"We believe meaningful upside potential exists if government support for domestic solar sector continues," a Barclays analyst wrote in a research note, adding the move could boost Chinese demand by about 200 megawatts starting in the second half of 2009, a nearly four-fold increase from Barclays' projection for this year.

China is home to several solar power companies, but most of the sales are to Germany and Spain, the two largest markets in the world. The United States is the third largest market.

The crisis in financial markets has shut off much of the funding for new projects since late last year, while weakness in the euro versus the dollar has eroded profit margins for companies that sell into the European market.

One analyst said while the news was clearly positive for the solar sector, many details had yet to emerge.

"Although the subsidy may cover about 60 percent-plus of the cost of installation, it is unclear how much the energy generated from the system will be valued," Piper Jaffray analyst Jesse Pichel said in a note to investors.

The news also boosted shares of U.S. companies First Solar Inc (FSLR.O) by 14 percent to $152.96 per share and SunPower Corp (SPWRA.O) by 15 percent to $27.66, while Germany's Q-Cells (QCEG.DE) rose 21 percent to 18 euros and Norway's Renewable Energy Corp (REC) (REC.OL) gained 18 percent to 58.40 crowns.

(Reporting by Matt Daily and Wanfeng Zhou in New York and Nichola Groom in Los Angeles, editing by Matthew Lewis)

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Italy's Ambitious Plans for Solar Energy...

MILAN - While economic gloom engulfs much of the world's solar energy industry, government incentives in sunny Italy are encouraging start-ups such as February's launch of photovoltaic panel maker V-energy.

Investors, ranging from families to Italy's biggest bank Intesa Sanpaolo, have piled into the photovoltaic market due to some of Europe's most generous incentives.

Privately-owned V-energy is betting on those to fuel solar energy demand and has not been put off by frozen credit markets.

The Italian maker of photovoltaic (PV) panels -- which turn sunlight into power -- is being funded by shareholders and regional development programmes.

"It was a strategic choice of the shareholders that alternative energy is a good business, the business of the future," Miriam Dase, a V-energy consultant, told Reuters at a renewable energy fair in Genoa this month.

"The market is good, despite the crisis. The main problem for the sector operators and clients is to get bank financing. But the incentives are so appealing that people go for it," Dase said, echoing comments from other sector operators at the fair.

Italy, Europe's third-biggest solar power producer after Germany and Spain, gets less than one percent of its power from PV installations at present.

But industry body GIFI has estimated that PV capacity will see exponential growth to 16,000 megawatts (MW) in 2020 from about 280 MW in 2008, fueled by the government incentives and Europe's renewable energy targets.

"I would say (Italy's) plans are ambitious, but they are also realistic," said Thomas Gregory, senior analyst at Emerging Energy Research (EER), an advisory and consulting firm.

BANKABLE PROJECTS

Italy's feed-in tariff -- the main element of the incentive scheme approved in 2007, which guarantees operators up to 0.49 euros per kilowatt hour of produced power for 20 years -- has made the PV sector something of a safe haven investment.

"It is like investing in government bonds, but it yields more," said Gianluca Bertolino, board member of GIFI, which represents about 70 percent of the PV business in Italy.

Thanks to the feed-in tariff, investment in the Italian PV sector yields from 4.5 percent in the country's north up to 10 percent in the south, according to estimates of internal rate of return (IRR) in the sector by GIFI and Intesa Sanpaolo.

That compares with a 5.38 percent gross yield for a 20-year fixed-rate government bond sold by Italy's Treasury at the latest auction in February.

Sunshine and hefty incentives allow Italian PV market operators to repay investments in 8-10 years on average, faster than in many other European countries, industry experts said.

"On the annual income (from PV installations) basis, Italy has the best combination of solar resources and a feed-in tariff in Europe," EER's Gregory said.

Government incentives which guarantee a steady cash inflow over 20 years also help would-be investors open the doors of banks that have tightened project financing during the crisis.

"The feed-in tariff is a bankable contract that you can take to any solvent financial institution ... A banker will look at it and say: 'Yes, it's a very good deal'," Gregory said.

As the credit crunch deepened in Italy, about 41 percent of companies reported last December that it had become harder to get access to bank financing, Emma Marcegaglia, the head of Italy's industrialists' body Confindustria, said in January.

But lending to the low-risk PV projects has powered ahead, said Carlo Buonfrate, energy desk coordinator at bank Mediocredito Italiano, part of Intesa Sanpaolo group.

GRID PARITY

Once Italy reaches grid parity -- the price at which solar power becomes competitive with traditionally produced electricity -- the PV sector would be able to stand on its own feet even if the government scraps incentives, experts said.

"I think the incentives are necessary for at least one more year. The point of the feed-in tariff was to encourage manufacturers to enter the sector. And they've succeeded in doing that," EER's Gregory said.

Abundant sunshine, the highest electricity prices in Europe and a sharp fall in PV module prices expected in the next few years due to oversupply, should push Italy to reach grid parity in 2010, ahead of major rivals, Gregory said.

Spain and Germany are expected to have competitive PV power generation in 2011 and 2012 respectively, he said.

Other industry experts forecast Italy reaching grid parity in 2012-2014, still ahead of many other European countries.

(Editing by Anthony Barker)

National Semiconductor Buys Santa Clara Solar Company

Mercury News/Matt Nauman/March, 19, 2009

National Semiconductor, the Santa Clara chip-maker that sees growth potential in quality-of-life products that improve health care and encourage greener energy, said Thursday it had acquired Act Solar.

National Semi has a technology it calls Solar Magic. It improves the efficiency of solar panels that lose power when they're shaded, covered with debris or get old. It goes into production later this year.

Act Solar, also based in Santa Clara, sells something called PowerString, which also improves solar efficiency by six to 11 percent by re-circulating small amounts of energy. Cumulatively, the company said, its technology will result in solar panels that produce 40 to 80 percent more energy over their 20 to 40 year lifespan.

In February, Act Solar announced a deal to sell 8 megawatts worth of PowerString to Pacific Power Management, a solar company that engineers and installs solar arrays.

"With Act Solar we can further improve the performance and efficiency of solar systems, at the same time providing monitoring capabilities not available before," Mike Polacek, National Semi's senior VP of key market segments, said in a statement.

No financial terms of the deal were announced. Act Solar is privately held. National Semiconductor had sales of $1.9 billion in its most recent fiscal year.

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Is the U.N. Planning a Global 'Green New Deal'?

By Alister Doyle, Environment Correspondent

OSLO (Reuters) - Investments of $750 billion could create a "Green New Deal" to revive the world economy and protect the environment, perhaps aided by a tax on oil, the head of the U.N. environment agency said Thursday.

Achim Steiner said spending should focus on five environmental sectors including improved energy efficiency for buildings and solar or wind power to create jobs, curb poverty and fight climate change.

"The opportunity must not be lost," Steiner, head of the U.N. Environment Program (UNEP), told Reuters of a UNEP study that will be put to world leaders meeting in London on April 2 to work out how to spur the ailing economy.

The UNEP report said investments of one percent of global gross domestic product, or about $750 billion, could bankroll a "Global Green New Deal" inspired by the "New Deal" of U.S. President Franklin D. Roosevelt that helped end the depression of the 1930s.

Investments should be split between more energy efficient buildings, renewable energies, better transport, improved agriculture and measures to safeguard nature -- such as fresh water, forests or coral reefs, it said.

Thursday's study adds details of spending after UNEP called for a Green New Deal late last year.

Steiner also said that the world urgently needed funds to jump start a U.N. deal to fight global warming, due to be agreed in Copenhagen in December to succeed the U.N.'s Kyoto Protocol beyond 2012.

He floated the possibility of taxing oil in rich nations of the Organization for Economic Cooperation and Development (OECD) to help a new pact become the cornerstone of a greener economy.

"If, for argument's sake, you were to put a five-year levy in OECD countries of $5 a barrel, you would generate $100 billion per annum. It translates into roughly 0.3 cent per liter," he said.

UNNOTICED

"It would be almost, if not totally, unnoticed by the consumer," he said, especially since oil prices have fallen from more than $140 a barrel at mid-2008 peaks to about $40.

A barrel of oil contains 158 liters and OECD consumption is about 20 billion barrels a year, he said. "This is just one example, there may be many others," of funding, he said.

"I am concerned about the prospect of a meaningful deal in Copenhagen if there is not a significant financial package on the table," he said. Cash would encourage poor nations to step up actions to curb rising greenhouse gas emissions.

"The argument that we cannot afford this does not, on any serious analysis, hold much water -- especially given the cost to the global economy of failure to act on climate change," he said.

Carbon markets, which could also be a source of funds to help fight climate change, were unlikely to contribute enough cash in early years of a new climate deal, he said.

Steiner said there were promising signs that economic stimulus packages by many nations, ranging from the United States to China, were being tailored to help a shift toward greener growth and away from dependence on fossil fuels.

The U.N. Climate Panel says that greenhouse gases from burning fossil fuels are a prime cause of warming that will cause more heatwaves, droughts, rising sea levels and more powerful storms.

DuPont Expects Photovoltaic Sales to Triple by 2012

Chemical maker DuPont Co. said Tuesday it expects to nearly triple its solar photovoltaic sales to more than $1 billion in 2012, based on solid growth in the solar energy market and the company's ability to deliver new technologies to the industry.

DuPont said it expects the photovoltaic market to grow by double digits over the next several years, driving demand for existing and new materials that are more cost effective. The market size today is about $30 billion, and according to industry estimates, will increase to $70 billion by 2013, DuPont said.

The company's shares added 6 cents to $20.31 in afternoon trading.

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GreenVolts Licenses NREL Solar Cell Design

GreenVolts has signed a licensing deal with the National Renewable Energy Laboratory (NREL) to bring a solar cell technology into commercial production.

GreenVolts said Monday it plans to use the $500,000 from the U.S. Department of Energy, which oversees NREL, to figure out how to make the solar cells at low costs. GreenVolts plans to use the solar cells for developing its concentrating solar power systems, which use lenses to concentrate the sunlight and then direct it at solar cells for generating electricity. The San Francisco-based company plans to match the DOE fund for the 2-year project.

The NREL technology is called inverted metamorphic multijunction (IMM) Solar cell, which has three layers of active materials for converting sunlight into electricity. Last summer, NREL researchers reported that they were able to improve the performance of their IMM solar cell so that it can convert 40.8 percent of the concentrated sunlight (by 326 times) that hits it into electricity. The IMM solar cell is made up of two layers of gallium indium arsenide and one layer of gallium indium phosphide (see this graphic).

NREL researcher Mark Wanlass invented the original IMM solar cell design, which won a R&D Magazine award last year. Emcore, a maker of multijunction solar cells in Albuquerque, N.M., co-developed the winning solar cell design with NREL and the U.S. Air Force Research Laboratory, the company said. Emcore counts concentrating solar power developer SolFocus among its customers.

GreenVolts wants to use the IMM solar cells for building systems that make use of trackers that sit low on the ground, a design that the company says minimize wind resistance and makes the system easy and less costly to install. The deal with NREL will allow GreenVolts to develop solar cells tailored to its own systems rather than relying on solar cells developed by other companies.

Unlike some other solar companies, GreenVolts was founded not by researchers in the solar energy field but a dotcom entrepreneur, Bob Cart. The company is developing a 2-megawatt system in order to sell electricity to the Pacific Gas and Electric, a deal that PG&E signed in 2007.

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SOLASYS Project: Lasers Improving PV Efficiency

Photonics/Germany/March 9, 2009

The total installed solar energy output in Germany will increase tenfold by the year 2017, according to the European Photovoltaic Industry Association (EPIA). However, to do so, the cost of manufacturing solar cells must be reduced and the cells must be made more efficiently.

In hopes of reaching these goals, 10 companies and institutes are collaborating on a $7.5 million EU project called the Next Generation Solar Cell and Module Laser Processing Systems (SOLASYS). Funded by the Fraunhofer Institute for Laser Technology, this project will demonstrate the feasibility of an efficient laser manufacturing process in making solar cells.

The SOLASYS project will use a laser-based materials processing tool, which has many advantages, such as noncontact machining, controlled energy input, high speed and precision. The 36-month project launched Sept. 1, 2008.

Five specific processes are involved: high-speed drilling of microscopically small holes, ablation of thin layers without damage to the substrate, laser soldering for cell interconnection, laser isolation of the front and rear sides as well as laser-based selective doping.

Laser drilling is just one example of how SOLASYS will lower costs for the manufacturing of silicon solar cells. The metal wrap through (MWT) concept involves transferring the metal contacts from the front of the cell to the back using drilled holes with the diameter of a human hair. This requires drilling 100 holes in less than a second. The aim of this method is to increase cell efficiency by reducing shading from contacts on the front side of the panel, and to simplify cell contacting, since both electrical terminals are on the rear side.

In the future, the connection of several cells to form a single module will also be performed using lasers. Laser soldering permits precise control of the soldering temperatures and hence specific process optimization. If the temperature at the solar cell deviates from the set value, the laser output can be adjusted accordingly, which enables a high-quality solder joint and low thermal stress.

According to SOLASYS, a throughput of one cell per second will be attained even for modern, complex cell concepts thanks to this project. Production lines will be set up to demonstrate the industrial feasibility of this laser machining approach.

The SOLASYS project includes, developers of laser systems, Trumpf Laser and Laserline, both of Germany; German-based machine manufacturer, Manz Automation; research institutes CNRS-LP3 from France and IMEC from Belgium; solar cell manufacturers, BP Solar from Spain, Solland Solar from The Netherlands, and Energy Solutions form Bulgaria; manufacturer of beam guiding systems, Scanlab AG from Germany; and head of the project, the Fraunhofer Institute for Laser Technology in Germany.

The project's initial results will be presented at the coming international trade fair LASER 2009 - World of Photonics, which will be held in Munich from June 15-18, 2009.

For more information, visit: www.solasys.eu

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Artificial Photosynthesis: Turning Sunlight Into Liquid Fuel Moves A Step Closer

Science Daily/March 12, 2009

For millions of years, green plants have employed photosynthesis to capture energy from sunlight and convert it into electrochemical energy. A goal of scientists has been to develop an artificial version of photosynthesis that can be used to produce liquid fuels from carbon dioxide and water.

Researchers with the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) have now taken a critical step towards this goal with the discovery that nano-sized crystals of cobalt oxide can effectively carry out the critical photosynthetic reaction of splitting water molecules.

Illustration by Flavio Robles, Berkeley Lab Public Affairs

“Photooxidation of water molecules into oxygen, electrons and protons (hydrogen ions) is one of the two essential half reactions of an artifical photosynthesis system - it provides the electrons needed to reduce carbon dioxide to a fuel,” said Heinz Frei, a chemist with Berkeley Lab’s Physical Biosciences Division, who conducted this research with his postdoctoral fellow Feng Jiao. “Effective photooxidation requires a catalyst that is both efficient in its use of solar photons and fast enough to keep up with solar flux in order to avoid wasting those photons. Clusters of cobalt oxide nanocrystals are sufficiently efficient and fast, and are also robust (last a long time) and abundant. They perfectly fit the bill.”

Frei and Jiao have reported the results of their study in the journal Angewandte Chemie. This research was performed through the Helios Solar Energy Research Center (Helios SERC), a scientific program at Berkeley Lab under the direction of Paul Alivisatos, which is aimed at developing fuels from sunlight. Frei serves as deputy director of Helios SERC.

Artificial photosynthesis for the production of liquid fuels offers the promise of a renewable and carbon-neutral source of transportation energy, meaning it would not contribute to the global warming that results from the burning of oil and coal. The idea is to improve upon the process that has long-served green plants and certain bacteria by integrating into a single platform light-harvesting systems that can capture solar photons and catalytic systems that can oxidize water - in other words, an artificial leaf.

“To take advantage of the flexibility and precision by which light absorption, charge transport and catalytic properties can be controlled by discrete inorganic molecular structures, we have been working with polynuclear metal oxide nanoclusters in silica,” Frei said. “In earlier work, we found that iridium oxide was efficient and fast enough to do the job, but iridium is the least abundant metal on earth and not suitable for use on a very large scale. We needed a metal that was equally effective but far more abundant.”

Green plants perform the photooxidation of water molecules within a complex of proteins called Photosystem II, in which manganese-containing enzymes serve as the catalyst. Manganese-based organometallic complexes modeled off Photosystem II have shown some promise as photocatalysts for water oxidation but some suffer from being water insoluble and none are very robust.

In looking for purely inorganic catalysts that would dissolve in water and would be far more robust than biomimetic materials, Frei and Jiao turned to cobalt oxide, a highly abundant material that is an an important industrial catalyst. When Frei and Jiao tested micron-sized particles of cobalt oxide, they found the particles were inefficient and not nearly fast enough to serve as photocatalysts. However, when they nano-sized the particles it was another story.

“The yield for clusters of cobalt oxide (Co₃O₄) nano-sized crystals was about 1,600 times higher than for micron-sized particles,” said Frei, “and the turnover frequency (speed) was about 1,140 oxygen molecules per second per cluster, which is commensurate with solar flux at ground level (approximately 1,000 Watts per square meter).”

Frei and Jiao used mesoporous silica as their scaffold, growing their cobalt nanocrystals within the naturally parallel nanoscale channels of the silica via a technique known as “wet impregnation.” The best performers were rod-shaped crystals measuring 8 nanometers in diameter and 50 nanometers in length, which were interconnected by short bridges to form bundled clusters. The bundles were shaped like a sphere with a diameter of 35 nanometers. While the catalytic efficiency of the cobalt metal itself was important, Frei said the major factor behind the enhanced efficiency and speed of the bundles was their size.

“We suspect that the comparatively very large internal area of these 35 nanometer bundles (where catalysis takes place) was the main factor behind their increased efficiency,” he said, “because when we produced larger bundles (65 nanometer diameters), the internal area was reduced and the bundles lost much of that efficiency gain.”

Frei and Jiao will be conducting further studies to gain a better understanding of why their cobalt oxide nanocrystal clusters are such efficient and high-speed photocatalysts and also looking into other metal oxide catalysts. The next big step, however, will be to integrate the water oxidation half reaction with the carbon dioxide reduction step in an artificial leaf type system.

“The efficiency, speed and size of our cobalt oxide nanocrystal clusters are comparable to Photosystem II,” said Frei. “When you factor in the abundance of cobalt oxide, the stability of the nanoclusters under use, the modest overpotential and mild pH and temperature conditions, we believe we have a promising catalytic component for developing a viable integrated solar fuel conversion system. This is the next important challenge in the field of artificial photosynthesis for fuel production.”

The Helios Solar Energy Research Center is supported by the Director, Office of Science, Office of Basic Energy Sciences of the U.S. Department of Energy.

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Q-Cells & LDK Solar Announce Collaboration in European PV Stations

XINYU, Mar 12, 2009 - Jiangxi LDK Solar Hi-Tech Co., Ltd. (NYSE: LDK), a polycrystalline silicon wafer giant in China, plans to march into the European photovoltaic (PV) station realm, and the world's top solar cells maker Q-Cells SE will be selected as its partner.

Presently, the global silicon wafer and polysilicon prices are on the slump, so the company decides to adjust its development strategy, and this move is expected to be a new profit-making resource. It never built a presence in the PV station sector in the past.

The win-win cooperation will help LDK Solar and Q-Cells win more orders, once the silicon market warms up, estimated a securities researcher, adding that they can save more construction costs, after the joint-venture PV station takes shape.

With a total registered capital of USD 110.95 million, LDK Solar started running in the southern Chinese city of Xinyu, Jiangxi Province, in April 2006, and three months later, its monthly production capacity footed up to 100MW.

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Plasmonic Technology to Increase Cell Efficiencies 30%

Deriving plentiful electricity from sunlight at a modest cost is a challenge with immense implications for energy, technology, and climate policy. A paper in a special energy issue of Optics Express, the Optical Society's (OSA) open-access journal, describes a relatively new approach to solar cells: lacing them with nanoscopic metal particles. As the authors describe in the article, this approach has the potential to greatly improve the ability of solar cells to harvest light efficiently.

Like plants, solar cells turn light into energy. Plants do this inside vegetable matter, while solar cells do it in a semiconductor crystal doped with extra atoms. Current solar cells cannot convert all the incoming light into usable energy because some of the light can escape back out of the cell into the air. Additionally, sunlight comes in a variety of colors and the cell might be more efficient at converting bluish light while being less efficient at converting reddish light.

The nanoparticle approach seeks to remedy these problems. The key to this new research is the creation of a tiny electrical disturbance called a "surface plasmon." When light strikes a piece of metal it can set up waves in the surface of the metal. These waves of electrons then move about like ripples on the surface of a pond. If the metal is in the form of a tiny particle, the incoming light can make the particle vibrate, thus effectively scattering the light. If, furthermore, the light is at certain "resonant" colors, the scattering process is particularly strong.

In the Optics Express paper, Kylie Catchpole and Albert Polman show what happens when a thin coating of nanoscopic (a billionth of a meter in size) metal particles are placed onto a solar cell. First of all, the use of nanoparticles causes the incoming sunlight to scatter more fully, keeping more of the light inside the solar cell. Second, varying the size and material of the particles allows researchers to improve light capture at otherwise poorly-performing colors.

In their work, carried out at the FOM Institute for Atomic and Molecular Physics in The Netherlands, Catchpole and Polman showed that light capture for long-wavelength (reddish) light could be improved by a factor of more than ten. Previously Catchpole and co-workers at the University of New South Wales showed that overall light-gathering efficiency for solar cells using metallic nanoparticles can be improved by 30 percent.

"I think we are about three years from seeing plasmons in photovoltaic generation," says Catchpole, who has now started a new group studying surface plasmons at the Australian National University. "An important point about plasmonic solar cells is that they are applicable to any kind of solar cell." This includes the standard silicon or newer thin-film types.

Paper: "Plasmonic Solar Cells," K.R. Catchpole and A. Polman, Optics Express, Vol. 16, Issue 6, December 22, 2008, Focus Issue on Solar Energy edited by Alan Kost, University of Arizona.

Uniting more than 70,000 professionals from 134 countries, the Optical Society (OSA) brings together the global optics community through its programs and initiatives. Since 1916 OSA has worked to advance the common interests of the field, providing educational resources to the scientists, engineers and business leaders who work in the field by promoting the science of light and the advanced technologies made possible by optics and photonics. OSA publications, events, technical groups and programs foster optics knowledge and scientific collaboration among all those with an interest in optics and photonics.

http://www.osa.org/

Polysilicon Shipments Reach 43,901 MT in 2008

Despite a slowdown in semiconductor activity late 2008, polysilicon shipments for Q4 still grew about 7 percent versus previous quarter

SAN JOSE, USA: Worldwide shipments for polysilicon consumed in the manufacture of both semiconductor and solar cell wafers reached 43,901 metric tons for the year, according to the SEMI. Total polysilicon shipments increased quarterly throughout 2008 as new capacity came online.

"Despite the slowdown in semiconductor activity late last year, polysilicon shipments for the 4th quarter still grew about 7 percent versus the previous quarter," said Dan P. Tracy, senior director of Industry Research and Statistics at SEMI. "This reflected the continued strong demand across the other major consuming sector, the photovoltaic industry. With the onset of new capacities coming on-line this year, solar should be free of its perennial bottleneck. Combined with friendly policies now in place, the industry can be in an enviable position of driving economic recovery."

Polysilicon is the fundamental building material for both semiconductor and solar cell wafers. Data is collected quarterly by SEMI as part of a data collection program that includes participation by DC Chemical, Hemlock Semiconductor Corp., MEMC Electronic Materials Inc., REC Silicon, Tokuyama Corp., and Wacker Chemie.

All data cited in this release are net shipments (gross shipments minus all returns) of polysilicon, including CZ Prime, CZ Offgrade, Float Zone (FZ) and Solar.

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PI Berlin AG Expands to Meet Demands of U.S. Photovoltaic Market

BUSINESS WIRE/March 10, 2009

Independent Testing Lab Announces ISO/IEC Accreditation; Solaria as First U.S. Customer

Photovoltaik Institut Berlin AG (PI Berlin) today announced that it has received accreditation as an official ISO/IEC testing laboratory for the photovoltaics (PV) industry. Widely recognized in Europe for its reliability testing and engineering analysis, the independent firm is expanding to meet the growing demand of the U.S. market and confirmed U.S. module manufacturer, Solaria Corporation, as its first customer in North America.

Founded in 2006 by some of the best-known names in the PV industry, including Dr. Paul Grunow, co-founder of Q-Cells SE and Solon SE, and Prof. Dr. Stefan Krauter, co- founder of Solon SE, PI Berlin has become a valued resource for the global solar market, offering testing analysis, consulting services and original research. The move to become an accredited ISO/IEC lab evolved as a result of the mounting demand for quality engineering and points to the founding team’s core strengths.

“We created PI Berlin because we saw a great need for expertise in module design and performance testing as a new generation of solar technologies began to enter the global marketplace,” said Dr. Grunow. “For trusted partners like Solaria, our role is to accelerate time-to-market while ensuring a high level of quality assurance and precision testing.”

“Since 2007 we have worked closely with PI Berlin to audit our manufacturing processes and create modules of the highest quality,” said Suvi Sharma, CEO of Solaria. “The expertise there and the willingness to form a long-term collaborative relationship with us has undoubtedly influenced our commitment to high quality products and processes, while providing us with a distinct competitive edge.”

About Photovoltaik Institut Berlin

Photovoltaik Institut (PI) Berlin was founded by Dr. Paul Grunow, co-founder of Solon SE and Q-Cells SE, Prof. Dr. Stefan Krauter co-founder of Solon SE, Dr. Jürgen Arp and Sven Lehmann in October 2006 on the campus of the Berlin Institute of Technology (TUB). PI Berlin specializes in testing, consulting and R&D for photovoltaic modules. See: http://www.pi-berlin.com

True Cost Of Solar Energy ‘Remarkably Low’

Photon Consulting/March 6, 2009

Three segments of the solar value chain — c-Si modules, thin film modules and BOS — are racing toward cost structures of $1/W. However, macro-economic challenges are driving many solar executives, investors and industry observers to worry about the breakdown of specific companies.

But where are these breaking points? Where will the sector break-even bar be set? And what will it take to break away from the pack? The answer to all these questions begins with cost. This report, The True Cost of Solar Power: Race to $1/W, provides a detailed roadmap of the benchmarks and cost structures that matter most for the solar sector and its companies through 2012.

At the sector level, our most important take-away from three years of cost benchmarking research is that the “true cost “of solar power is remarkably low even now. Today, the average cost of a c-Si module is well below $2/W, with the fully-loaded cost of a system below $4/W. This equates to a levelized electricity cost, without incentives, of less than $0.20/kWh in sunnier environments. Best practice is already far below this level, and the emergence in the next three years of cost structures of $1/W at the module plus $1/W at the BOS levels will enable the levelized cost of solar electricity below $0.10/kWh.

At the corporate level, our most important finding is that a select group of companies – including First Solar, LDK Solar, Q-Cells, REC, SolarWorld, SunPower, Suntech, Yingli and others – have emerged as low-cost leaders in the race. This report provides detailed cost analysis for hundreds of solar companies in-depth coverage of more than 20 cost leaders and potential cost leaders.

As the solar sector enters 2009, facing both heightened risk and great opportunity, we hope The True Cost of Solar Power: Race to $1/W will serve as a useful reference for solar decision-makers.

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Italy Expects Exponential Growth of Solar Capacity

Svetlana Kovalyova/Genoa, Italy/ March 5, 2009

Sunny Italy may see an exponential growth of solar power capacity to 16,000 megawatt (MW) in 2020, spurred by government incentives and European renewable energy targets, a senior industry official said. But the global financial crisis, which has dried up funds for industrial projects, may slow down the expected growth, Valerio Natalizia, board member of Italy's photovoltaic body GIFI, told Reuters on Thursday.

Capacity of photovoltaic installations, which turn sunlight into power, is expected to rise to 600-650 MW in Italy this year from about 280 MW in 2008, and shoot up to 1,200 MW in 2010, making Italy one of Europe's solar energy leaders, he said. "We will see a continuous growth," Natalizia said in an interview at the photovoltaic energy conference in the north Italian port of Genoa.

"But the financial crisis may have an impact on our sector, first of all on big projects of 1 MW and bigger because they definitely require external financing," Natalizia said.

GIFI unites 67 companies representing about 70 percent of in the photovoltaic business in Italy, from making of solar panels to developers of project and utilities. Investors piled into the Italian photovoltaic market after the government approved generous incentives for the sector in 2007. It got an additional boost after the European Union set a goal to make 20 percent of all energy from renewable sources in 2020.

Incentives, especially the "feed-in tariff" which guarantees operators about 0.49 euros per kilowatt hour of produced power for 20 years, remained a strong magnet for investors despite the economic downturn, the conference delegates said.

"The photovoltaic sector is a safe investment ... Risks are lower there than with other renewable energy sources, but returms are lower too," said Carlo Buonfrate, energy desk coordinator at bank Mediocredito Italiano, part of Intesa Sanpaolo group.

GIFI's Natalizia said there was a risk of oversupply of photovoltaic projects in Italy, especially in the southern region of Puglia and "some of them will not see the light." However, Italy is unlikely to follow the path of Spain where the photovoltaic market has practically frozen this year after the government slashed incentives to the sector which caused a spike in new installations last year, Natalizia said.

"I don't think we will see such an explosive growth like in Spain which has destroyed the market ... We have such a lengthy authorisation process in Italy, we have a different pace here" he said.

Italian government is expected to set a new incentive scheme for the photovoltaic sector after the current limit for incentives set at 1,200 MW is reached as expected in 2010.

See the original article here

SolarCity’s New Promotion Makes Solar More Affordable

Offer combines discount, government incentives and utility rebates to provide solar system installations at net cost up to 50 percent below 2008 retail value

SolarCity®, a national leader in solar power system design, financing, installation, monitoring and related services, is offering a promotion that, when combined with government incentives and utility rebates, can allow homeowners to pay a net cost for a solar system installation up to fifty percent less* than the typical full retail price in 2008. SolarCity’s “Think Half” promotion incorporates an introductory discount for sleek, recyclable thin-film solar modules from First Solar in SolarCity’s service areas in California and Arizona. The promotion lasts until March 31, 2009, and marks the first time First Solar’s advanced thin-film technology, known for delivering the lowest manufacturing cost in the industry, is widely available for the residential market.

First Solar modules deliver superior performance in variable light and high temperature, and achieve the lowest environmental footprint of any photovoltaic technology on a lifecycle basis. Residential customers prize the slender, frameless black modules for their striking, reflective-glass aesthetic. First Solar also provides a comprehensive collection and recycling program for its modules at the end of their useful lives.

“Increasing solar’s return-on-investment, and improving solar system aesthetics are consistently the two greatest priorities for our customers, and this promotion addresses both,” said Lyndon Rive, SolarCity’s CEO. “Solar power systems continue to be among the safest, most predictable investments homeowners can make in the current economic climate.”

Homeowners interested in “Think Half” can contact SolarCity 1-888-SOL-CITY or www.solarcity.com to arrange a free, no-obligation solar consultation. Interested Arizona homeowners can learn more about the promotion and rebates at: http://www.solarcity.com/campaigns/2009/ads/halfoff/arizona.aspx. California homeowners can view additional information on the promotion here: http://www.solarcity.com/campaigns/2009/ads/halfoff/default.aspx.

* Actual discount will vary based on homeowner’s system size, design, configuration, local rebates and ability to take advantage of federal tax credits. A solar power system is customized for each home based on each family’s energy use and home architecture, government rebates and local utility rates. ‘Think Half’ promotion expires March 31, 2009. Not valid with any other promotions or group discount programs.

See the press release here

The Anatomy of a Shakeout I : PV Through 2012

Shyam Mehta, Greentech Media,Travis Bradford, the Prometheus Institute/January 27, 2009

Fueled by aggressive policies and generous subsidies in key markets, global PV demand has grown from a mere 125 MW in 1999 to 4.5 GW in 2008. But over the last six months, the PV market has witnessed a perfect storm emerge, with a looming global recession and severe tightening of credit markets. Amid news of slowing demand, idling lines and cancellations of capacity additions, concerns over modest oversupply have escalated into fears of a full-blown shakeout and a dramatic decline in market size. To comprehensively lay out the causes and implications of recent dynamic shifts within the PV industry over the next few years, GTM Research and the Prometheus Institute are releasing PV Technology, Production and Cost, 2009 Forecast: The Anatomy of a Shakeout.

Featured in This Report

• Production and capacity forecasts from 2008–2012 for PV cells, modules and wafers
• Market share analysis by company, technology and region
• Quantitative analysis of manufacturing cost structure for PV modules and the evolution of costs for different technologies over time
• First ever global PV module supply curves from 2008–2012 utilizing the most robust supply and cost models in the industry
• Detailed profiles for 118 crystalline silicon and thin-film companies, for cells, wafers and modules

Report Findings

• Global module capacity will grow to 27.5 GW by 2012 from 5.7 GW in 2007, sufficient to produce 23 GW of PV modules. Thin-film modules will have a market share of 34 percent in 2012 from 13 percent in 2007, and rapid uptake of thin film will create new market leaders.
• Module costs for crystalline silicon will halve by 2015 to $1.40 per watt; costs for CIGS thin films will be down to 75 cents per watt. Falling costs are quickly setting the stage for "grid parity" in major markets, which will fuel demand for long-term growth.
• Dramatically falling prices in 2009 will impact major players; high-efficiency monocrystalline and low-cost thin-film technologies will have a 30 percent efficiency-adjusted cost advantage over traditional multicrystalline producers, leaving them well-positioned to survive the impending shakeout.
• Asia will constitute 82 percent of global crystalline silicon cells by 2012. The dramatic ramp in production will drive costs down for Asian producers, giving them a significant edge over established European players who will lag behind in expanding manufacturing capacity.

Author Bio

Shyam Mehta is a Senior Analyst at Greentech Media, focusing on global solar markets. Before joining Greentech Media, Shyam was a Financial Analyst at Goldman Sachs Global Investment Research where he covered equities in the alternative energy sector, primarily solar companies. Prior to Goldman, Shyam was a Research Analyst at the Brattle Group, an economic consulting firm, where his work focused on problems within the electricity industry. Shyam received his Bachelor's in Mathematics from UC Berkeley.

See the original article here

The Anatomy of a Shakeout II : 2009 Global PV Demand Analysis and Forecast

Daniel Englander, Shyam Mehta, Travis Bradford, The Prometheus Institute/March 02, 2009

Demand is the new name of the game in the PV market, and project developers are calling the shots. How project developers react to the economic forces impacting the PV industry will determine the market's near-term future. Understanding the constraints facing project developers is the only way for companies across the PV supply chain to weather the impending shakeout. Faced with limited access to costly capital and waning incentives in major markets, project developers are demanding higher returns from fewer projects. They are passing these pressures on to manufacturers, forcing them to bring down module prices by 25% in 2009. Fewer projects lead to slackening demand -- projected to increase by only 13% in 2009 -- and, ultimately, to an industry-wide 15% revenue collapse this year alone.

Drawing on nearly 30 years of experience analyzing PV market dynamics, GTM Research and the Prometheus Institute for Sustainable Development are releasing 2009 Global PV Demand Analysis and Forecast to help guide PV industry players through this challenging period. Building on the results of PV Technology, Production and Cost, 2009 Forecast, we have created the industry's first fully integrated model of supply and demand. This bottom-up analysis of the PV supply chain has produced critical insights about the near-term prospects and long-term potential for every region, market segment, company, and technology in the PV industry.

Key Insights:

• Access to projects and financing has replaced access to polysilicon and modules as the market's key gating factor. With this dynamic unfolding, we forecast module average selling prices to fall below $2.50 per Watt in 2009 and $2.00 per Watt in 2010 as demand-side financing pressures force manufacturers to cut prices.
• The industry's market size will contract 15% to $12 billion in 2009, and will remain relatively flat through 2012. Low cost and high performance module manufacturers able to retain margins and sell products generating high internal rates of return for project developers will gain an increasingly large share of this shrinking pool of capital.
• Even with rapidly falling prices, market problems in Germany and Spain and the global recession's impact on lending, project finance, and government budgets will grow demand by only 13% to 5 GW in 2009. This will be the industry's weakest growth year since 1994.
• The module oversupply is widely misunderstood. In 2009, we forecast a 65% overcapacity and a 55% surplus in producible supply. The actual number of modules shipped and installed will be far less, leading to sub-35% mid-year capacity utilization for many American, European, and Asian multicrystalline manufacturers.
• The true source of module pricing pressure is project developers seeking the minimum price that can be paid to maximize internal rate of return. Forcing manufacturers to compete on price and performance will lead to wholesale margin compression, precipitating a shakeout of high-cost, undifferentiated suppliers.
• An industry dominated by Asian multicrystalline and CIGS -- with solid market share for CdTe and Super monocrystalline -- will emerge in the near-term. Significantly, by 2012 we forecast thin film modules will comprise 50% of incremental demand.
• The emergence of grid parity in some price-sensitive markets as early as 2009 will place a new emphasis on levelized cost of energy and delivered $/kWh as the guiding metric of a manufacturer's competitiveness.

Featured In This Report:

• Quantitative analysis of project economics in Germany, Spain, the United States and Japan for c-Si and thin film-based residential, commercial, and utility scale systems.
• First-ever country-level and global PV demand curves from 2009 through 2012 and first-ever reconciliation of independently constructed global PV supply and demand curves, leading to an accurate forecast of market-clearing module average selling prices and equilibrium demand volumes.
• Quantitative analysis of the shakeout's impact on manufacturer profit margins, c-Si and thin film market share, grid parity, project economics, and module pricing.
• In-depth profiles of PV support policies and programs, electricity sector composition, and PV market development in the United States, Germany, Spain, Italy, France, Greece, Portugal, The Netherlands, Czech Republic, Japan, South Korea, Australia, India, China, and the United Arab Emirates.

Author Bio

Daniel Englander's research focuses on finance and investment in renewable energy technologies with a specific emphasis on the utility and power generation sector. Before joining Greentech Media, Daniel worked for the Supreme Court & Appellate Practice Group at Mayer Brown LLP in Washington, D.C. Daniel received his Bachelor's in International and Comparative Policy Studies from Reed College in 2005. He is currently writing his master's thesis in Environmental Management at Harvard University on the hedging value of renewable energy in the power sector. Daniel is also the Assistant Editor of PVNews.

See the original article here

First Solar to Buy OptiSolar's Project Pipeline

PV Tech/Tom Cheney/March 2,2009

In a strategic move that greatly enhances its penetration into the U.S. utility solar power market, First Solar said it will buy the solar project pipeline assets of OptiSolar. The deal, a $400 million all-stock transaction, will give the thin-film PV leader nearly 21 GW of current and potential projects as well as integrate OptiSolar's 30-person core development group with First Solar's existing team. The transaction is scheduled to close in the second quarter of this year.

The acquired projects include the 550-MW Topaz site in San Luis Obispo county in central California, which is under a power purchase agreement with Pacific Gas & Electric; a group of another 1.3 GW of development deals in the pipeline, which are in negotiation with Western U.S. (mostly California) utilities; and strategic land rights to some 136,000 acres of land with the potential to deploy as much as 19 GW of utility-scale solar power stations.

The deal does not include the purchase of any of OptiSolar's amorphous-silicon thin-film PV manufacturing assets.

First Solar says that it expects to build solar power plants developed under the acquired solar power project pipeline over the next several years and sell them to a combination of regulated utilities, diversified energy companies, and other independent power producers. Project development could start as early as 2010.

"OptiSolar has created an impressive and well-designed development pipeline," said Mike Ahearn, First Solar's chairman/CEO. "Adding these resources, along with their development team, to First Solar is our next logical step to delivering multi-GW of solar power to U.S. utilities over the next several years. As First Solar continues to drive down its manufacturing and EPC costs, OptiSolar's project pipeline and the ability of our team to continually expand our existing pipeline, will enable us to bring solar energy on-line quickly and further reduce greenhouse gas emissions from the grid."

"We are particularly excited to deploy utility-scale solar installations in California," Ahearn continued. "The state of California has been a leader in solar technology, and the Topaz project will be an important aspect of meeting the state's renewable goals."

During the conference call to discuss the deal, Ahearn characterized it as a "watershed acquisition for First Solar, and one that will change our trajectory and catapult us to a whole new league when it comes to the U.S. utility market."

The agreement provides "an opportunity to get large projects under way relatively quickly." He said that more than 6 GW of projects are "already in the interconnection queues in advanced approval positions. This package in total would be very hard to replicate."

Although the company did not announce any factory expansion plans during the call, Ahearn did acknowledge that First Solar "will want to build more factories....But we don't want to be premature" in making those decisions before the project development timelines are established.

In terms of the first project on tap--the 550-MW Topaz site--he said that the company has the installation "modeled now over roughly three years" to complete.

When asked about how the company intends to handle system integration for the projects, Ahearn said that "the way that we're thinking about construction and deployment is similar to our factory-build model with copy smart, where we lock down standard designs, the procurement, and methodologies for installations at a pretty granular level.

"Once you create a program like that, you have something than can be replicated and it can be leveraged with other contractors, subcontractors, and installers. That's really the only way practically to get to gigawatts per year with the deployment."

Noting the rare opportunity the deal provides to add large volume to First Solar's pipeline, Ahearn said "there aren't any backlogs like this, not of this size, not of this position in the queue, and (not of this) quality, in terms of location. If you combine that, it's a unique deal."

See the original article here

Silicon Genesis Unveils 20um Solar Cell Foil

San Jose, CA/March 4, 2009

Silicon Genesis, a leader in process and technology for engineered substrates announced today that it has produced the first ever 20um thickness solar-cell foils. The 125 mm square monocrystalline silicon (mono c-Si) foils were found to be robust and highly flexible. Neither a thin-film nor a wafer, the new form-factor was named a “foil” to better describe its unique physical characteristics as a thin, flexible yet free-standing material. This achievement represents an important milestone in the development of SiGen’s PolyMaxTM kerf-free wafering technology.

The 20um solar-cell foil combines the advantages of the low poly utilization of thin-film PV with the high efficiency potential of mono c-Si PV. This sets the stage for dramatic reductions in overall production costs, leading to reduced $/W. It is anticipated that the 20um foil will extend the reach of conventional silicon PV absorber technology well into the future. This mono c-Si foil is the result of continuous development of recently demonstrated pilot line production of full size wafers with thicknesses of 150um and 50um. These pilot capabilities are now being used for development of high volume manufacturing equipment.

The availability of 20um mono c-Si foils will allow PV cell manufacturers to explore new applications and formats with cost effective production. The kerf-free nature of the PolyMax system enables savings of material and the development of a new category using thinner mono c-Si wafers and foils.

“The high efficiency potential of our 20um c-Si foil technology creates new opportunities for the Solar PV industry. The flexibility of the 20um foils allows for development of diverse applications such as BIPV and flexible PV. This strengthens my belief that thin-film technology adoption will be limited by the cost and performance advantages of ultra-thin PolyMax technology”, said Francois Henley, CEO of SiGen.

The PolyMax system concept and 20um substrate results were presented at PHOTON’s 4th Photovoltaic Technology Show recently held in Munich Germany.

About SiGen

Silicon Genesis Corporation (SiGen) is a leading provider of engineered substrate process technology for the semiconductor, display, optoelectronics, and solar markets. SiGen’s technology is used for production of Silicon-On-Insulator (SOI) semiconductor wafers for high performance applications. SiGen develops innovative substrates through thin-film engineering, enabling new applications and markets for its customers. SiGen's customers and partners include top players from substrate and device suppliers throughout the world. Founded in 1997, SiGen is headquartered in San Jose, California.

For more information on Silicon Genesis, visit http://www.sigen.com

Europe Continues to Outshine US with Solar Leadership

Electronic News/Suzanne Deffree/March 4, 2009

Thanks to an early and enthusiastic embrace of solar energy, more than 80% of new worldwide photovoltaic capacity installed in 2008 was in Europe, according to iSuppli.

The United States may have helped to pioneer solar technology, but it has fallen behind nations like Germany, China, and Japan in producing it.

According to iSuppli Corp, these countries have moved ahead of the United States, with Germany holding the lead in this fast-growing alternative energy market due the nation’s and Europe’s long-term commitment to solar power.

“Europe’s early and enthusiastic embrace of solar energy is paying off, with the region leading in production of photovoltaic (PV) cells, potentially paving the way for a 300 billion Euro savings in electricity costs,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli, in a statement.

According to iSuppli's data, European companies supplied 27.4% of global PV cells in terms of wattage in 2008, just besting China’s total of 25.8%, and exceeding Japan's 16.2% and the United States' 13.7%.

The market research company reported that more than 80% of new worldwide PV capacity installed in 2008 was in Europe. Germany and Spain accounted for 84% of Europe’s installed PV capacity during the year.

“Beyond leading in the production of PV cells, Europe is by far the world’s largest market for solar installations,” Wicht said. “This hasn’t happened by accident, as European governments, research institutions, and industry players during the last two decades have worked in close coordination to reach this point.”

Behind the collaborative effort was an aspiration to move the European economies away from hydrocarbon-based electricity sources while creating jobs and establishing a new industry capable of competing on the global stage.

The US Recovery Act, endorsed by semiconductor industry groups including the IPC and the SIA, takes a similar approach in its alternative energy strategy and is expected to in part spur tech job growth while making the US a more formidable competitor in such spaces as solar energy.

ISuppli suggested that when looking for ways to boost the US solar market the Obama administration consider what the company called the "main factor behind Europe’s leadership in this area," feed-in-tariffs. Feed-in-tariffs -- incentives that allow entities that feed the grid with solar energy to receive premium pricing, making the return on investment on PV installations more attractive -- are starting to slow in 2009, iSuppli said, noting this is especially true in Spain. However, such incentives have successfully served their purpose by driving down prices and building a large-scale, competitive PV supply chain, according to Wicht.

ISuppli also noted that during the recent Sustainable Energy Week event in Brussels, the EU Commission further presented a plan for renewable energy in which solar plays a strategic part and will generate 15% (12% by PV electricity and 3% by concentrating solar thermal systems) of the region’s electricity demand by 2020.

According to iSuppli, the world’s top producer of PV cells in 2008 was Q-Cells of Germany. As PV demand expands around the world in the coming years, iSuppli said it expects European companies will continue to play a major role.

See the original article here

Renewable Energy Cos Look For Tax Equity Revival

Dow Jones Newswire/Cassandra Sweet/March 4, 2009

The financial crisis has opened a void in financing for renewable-energy projects as troubled investment banks have pulled back, potentially providing opportunities for smaller banks, investment funds and utilities as new government backing for clean energy starts to flow.

Some non-traditional firms are expected to step up their investment in renewable-energy projects, which had been dominated by big players like Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS). But money hasn't come fast enough for many developers of wind, solar and other clean-energy projects, which are scrambling to secure funds, even as the U.S. government promises a flood of money in the hope of kick-starting investment in a sector seen key to rejeuvenating the economy and weaning the country off of fossil fuels.

Lending was fluid when the banks had large balance sheets and could make use of a 30% renewable energy investment tax credit. The banks would invest in clean-energy projects in exchange for the developing company's tax credit and a related tax write-off called accelerated depreciation, but as losses have mounted, the big investment banks still standing have cut back on their tax- equity financing.

This has hurt companies like OptiSolar and eSolar, privately held solar power developers in California that have had to sell their project development businesses due to a lack of financing.

Medium-size banks like U.S. Bankcorp (USB) and Mitsubishi UFJ Financial Group Inc. (8306.TO) unit Union Bank N.A. say they plan to expand their tax equity investments in renewable projects, and utilities like California's PG&E Corp. ( PCG) and Sempra Energy (SRE) have said they're interested in financing such projects for the first time. The firm has spoken to U.S. House Banking Committee Chairman Barney Franks about its proposal, in which the Treasury Department would provide investor-note financing to eligible corporations that have tax capacity, said Jack Casey, the firm's vice chairman in Washington.

Under the proposal, an investing company would sign a note with the Treasury Department at a 10-year note rate. The company wouldn't make any payments for the first five years, and would pay off the note in the second five years, during which the note would fully amortize, Casey said.

"We think this is the best way to do it," said Casey, whose firm has placed about $15 billion in tax credit equity financing over the last 28 years. "It's no handout, it's just timing and credit."

Several large companies have expressed interest in the plan, including PG&E, Sempra, Exelon Corp. (EXC) and non energy companies including Internet giant Google Inc. (GOOG) and pharmacy Walgreen Co. (WAG), Casey said. He added that his firm hopes to speak with Treasury Secretary Tim Geitner this month about the proposal, which would include tax credits for investments in low-income housing and historical restoration projects.

At the moment a big gap persists between what developers need and what money is available.

"There have been no unconventional additions to the tax-equity market," said Nick Allen, an equities analyst at Morgan Stanley (MS) in San Francisco. "No one has stepped in and provided funding yet. We hope something will change."

Tough Choices For Developers

The stress has started to show.

Privately held thin-film solar panel maker OptiSolar this week sold its entire portfolio of planned solar power plants, about 1,850 megawatts, to leading thin- film solar panel maker and developer First Solar Inc. (FSLR) for $400 million in stock. In a similar move, eSolar last month sold off its pipeline of solar- thermal power plants to independent power producer NRG Energy Inc. (NRG) for a $ 10 million equity investment and a promise by NRG to develop the plants. ESolar competitor Ausra, also privately held, said in late January it was abandoning plans to develop and own large-scale solar plants to focus instead on selling its technology to others.

The lack of tax equity financing could affect larger renewable power developers. U.S. utility holding company and power generator FPL Group Inc. ( FPL), said in late January it might have to scale back its wind farm development plans this year if the financing environment doesn't improve.

Filling The Void

In addition to companies outside the financial sector, renewable energy market participants see opportunities for regional banks, particularly those with experience in tax equity investments, to expand their renewable energy footprint.

"There's a lot of talk about who's going to fill the void," said Russ Landon, managing director of investment banking at Canaccord Adams in Boston, which helps put financing deals together and provides research on public companies. "I think you'll see some of the regional (banks) come in and do it if they have money."

U.S. Bancorp (USB) a Minneapolis-based bank with a market capitalization of about $22.45 billion, for one, has invested in about a dozen renewable energy projects over the last year by providing tax-equity financing, and the company said it will likely expand its investing in renewables, drawn in part by government incentives in the economic-stimulus bill passed last month.

The company is exploiting its experience with other forms of tax-equity financing, such as investment in affordable-housing tax credits and new-markets tax credits for developing retail and other commercial operations in low-income areas. Union Bank, which says it's the 25th-largest bank in the U.S., has 30 years of experience providing tax equity financing for power plants, low- income housing and in the last five years renewable energy projects, said Lance Markowitz, senior vice president. He added that Union Bank plans to accelerate its investment in renewable energy projects.

"Given the impetus from the government, there are a lot of people working on a lot of projects," Markowitz said. "We're hoping to do more."

Union Bank just closed on $20 million in project financing for SunEdison, a Beltsville, Md.-based solar-panel installer backed by Goldman Sachs, Allco and other investors. The financing will be used for a 1.7-megawatt solar array in Rifle, Colo., and another solar project. Union Bank, has invested in about 17 projects over the last five years, with about nine of those deals done in the last six months, including the SunEdison financing and an investment the bank recently closed for a large wind farm in Minnesota, Markowitz said.

In November, U.S. Bank provided up to $105 million in tax equity to San Francisco-based residential solar installer SunRun, to install solar systems in 2,000 homes. In December, the company provided tax equity financing to a unit of Hoku Scientific Inc. (HOKU) to install solar panels at airports across Hawaii.

"We're interested in growing our presence in that space, from the project finance side and the tax-equity side," said Zack Boyers, chairman and chief executive of U.S. Bancorp's Community Development Corporation in St. Louis, the unit that makes the investments. He added that the bank has received numerous inquiries from renewable energy developers in recent weeks.

The renewable energy tax credit market is worth about $6.5 billion to $9 billion a year, according to Meridian Investments Inc., a brokerage that puts together tax credit financing deals for renewables projects as well as low- income housing, historic rehabilitation and new market projects. Companies are eager to invest in these public-private partnerships, said Casey of Meridian. The company's investor-note financing proposal would boost the yield on such transactions from about 8% currently, to as much as 14%, Casey said.

"What you're effectively doing is saying to Fortune 500 companies, 'We're giving you a low cost of capital if you participate in a public-private partnership," Casey said. He added that his firm sees this model as the only viable way to replace the large banks, which used their low cost of capital to finance these types of investments.

Casey said large companies are seeking out these types of investments, to take part in fighting climate change and also as a hedge against expected higher taxes in coming years. These companies haven't invested in this area previously because the yields were not competitive with the yields in their own businesses, Casey said.

"Every utility in the U.S. has a statutory return of 10% to 12%, they can't invest in an energy deal that yields 8%, the shareholders will go crazy," Casey said.

Utilities in states that have state mandates to increase use of renewable power, such as PG&E's Pacific Gas & Electric and Sempra, are getting more involved in renewable-energy financing, in part to ensure that new projects they need to meet state rules get built.

PG&E and Sempra executives said this week their companies' utilities are looking at making direct investments in renewable energy companies or projects, rather than simply signing power purchase agreements for the output.

PG&E Corp. (PCG) unit Pacific Gas & Electric would like to provide financing to renewable-power developers to help them build new projects, said Chief Executive and President Peter Darbee. Such financing might include convertible debt, in which PG&E would make a loan with the option to convert the debt repayment into equity, Darbee said. "If there's a way for PG&E to participate...we foresee an opportunity to be a green knight to provide financing," Darbee said.

Sempra Energy (SRE), of San Diego, is aggressively investing in solar power at its unregulated Sempra Generation unit, but the company also wants to boost renewable energy investment at its regulated utility San Diego Gas & Electric.

Both utilities are required to use renewables for 20% of their retail power by 2010, with pending rules boosting that amount to 33% by 2020. The companies would need approval from state regulators to invest in renewable companies or projects.

As renewable energy market participants wait for the tax equity market to revive, it'll be up to the federal government to provide incentives for companies to invest.

"The devils are in the details," said Casey of Meridian Investments. "They're going to get it. They undrstand the math."

See the original article here

Cheaper Solar Spurring Demand, Hitting Producers

EE Times/Nichola Groom/March 4, 2009

A dramatic fall in the price of solar panels has made the clean power source a better deal than ever before, but solar manufacturers' profits have dwindled thanks to that rapid decline and many may not survive to see solar bargains evolve into booming customer demand.

Skyrocketing demand for solar power was a bright spot in the global economy for much of last year until a pullback in solar subsidies in Spain and frozen credit markets dried up access to project financing choked off demand, sending panel supplies soaring and prices into a free fall.

In turn, solar companies including China's JA Solar Holdings Co. Ltd., LDK Solar Co. Ltd. and Canadian Solar Inc. have cut their production forecasts for the year.

Lower prices led Germany's Q-Cells to cut its 2009 sales outlook twice, while Solon SE withdrew its forecast. It has also meant lower profit margins for many, including China's Suntech Power Holdings Co. Ltd., China Sunergy Co. Ltd., Trina Solar Ltd., and U.S installer Akeena Solar Inc.

Share prices have followed suit, with many solar stocks having logged losses of more than 50 percent so far in 2009, after dismal performances in 2008.

After hitting $4.20 a watt in the middle of 2008, solar panel prices have slid almost 30 percent to about $3 a watt, with research firm New Energy Finance predicting a further 20 percent drop this year.

That is good news for solar customers, analysts say, as the cost of the renewable energy source approaches that of power generated from dirtier sources such as natural gas and coal.

"It's a great thing," said Barclays Capital analyst Vishal Shah. "The pain that we are seeing in the industry right now is going to manifest into stronger growth in 2010 because prices are so low."

A recovery in worldwide credit markets and a flow of funds to renewable energy companies from the U.S. government's economic stimulus bill is expected to boost solar demand beginning as soon as the third quarter of this year.

Before that happens, however, solar panel manufacturers that have already slashed production forecasts for this year will have to make further cutbacks.

Oversupply of panels

The 20 biggest solar manufacturers are currently expected to produce about 7,000 megawatts of product this year, according to Gabelli & Co. analyst John Segrich, who compared that with projected worldwide demand of just 5,200 MW.

"The top 10 vendors by size, if they are all successful in their build plans, would fill worldwide demand this year," Segrich said. "Volumes still need to be adjusted, or pricing is still going to fall further."

Some of those supply cuts may come as companies that cannot reduce their production costs simply shut down.

"We are tracking hundreds of factories around the world, a lot of them in China, and we could be in oversupply until 2012 or so if they all stayed in business," said Jenny Chase, who heads solar research at New Energy Finance. "But of course they are not going to."

Several small, privately-held companies in China have already shut down their factories, Chase said, as customers have feared that they would not have the history or resources to back up warranties that stretch for 25 years on solar panels. Many Chinese panels, she added, are still perceived as being lower quality.

The companies in the best shape to weather this year's oversupply are market leaders with large cash cushions such as U.S. producer First Solar Inc., analysts agreed. First Solar also benefits because its panels are made from cheaper cadmium telluride rather than silicon.

Even First Solar, however, said last week that it would selectively reduce prices on its panels this year to keep its competitive edge when it enters new markets.

Meanwhile, SunPower Corp., a U.S. maker of silicon-based panels, is well-placed because its highly-efficient products command a price premium.

Companies with higher operating costs, including many European companies, and those with elevated debt levels, which includes many Chinese producers, will have the hardest time navigating this year's shakeout.

"The European companies (have) become extremely inefficient and their competitiveness is the weakest, and the Chinese companies that could be competitive are going to have balance sheet issues," Shah said.

Suntech and LDK have the highest leverage ratios in the industry, according to Barclays Capital's Shah, followed by Trina and Solarfun Power Holdings Co. Ltd., all from China, and the United States' Evergreen Solar Inc.

So is there a bright side for solar investors? Yes, according to Shah, who said the carnage in solar stocks has made many of them attractive as current depressed levels assume even 2010 will be a "no-growth year."

"I'm not quite convinced we are going to see that," he said. "The stocks could double and triple from here."

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LDK Reduces Electricity Needed to Make Silicon by 2/3

Cleantech Group LLC/February 27, 2009

The energy efficiency improvements are about the only good news coming out of the China-based solar wafer manufacturer these days.

Chinese wafer manufacturer LDK Solar (NYSE:LDK) finally has some good news to report.

LDK, which has seen its stock drop more than 60 percent in the past three months, said it was able to reduce the amount of electricity needed to produce 1 kilogram of silicon from 300 kilowatt hours to 100 kWh.

The reductions were achieved at the company's polysilicon plant in Xinyu, Jiangxi province, which began operating its first production line in December. The plant is expected to produce 1,000 tons in 2009, eventually ramping to 6,000 tons.

The good news comes as LDK continues to battle negative reports from analysts, including ThinkEquity's Jonathan Hoopes, who downgraded the stock to 'sell' with a target price of $4.50 late last week. Previously he rated the target as $45.

The stock has a 52-week high of $52.40 but closed today at $5.12, down more than 10 percent.

Last week, the company announced it was delaying plans to complete a a polysilicon factory with an annual capacity of 15,000 metric tons until 2010. The company also said it plans to take an inventory write-down of $210 million to $220 million because of the decline in wafer prices (see Suntech optimistic despite stock downgrade).

LDK expects total polysilicon capacity to hit 12,000 metric tons by the end of 2009, down from a previous target of 16,000 metric tons (see LDK Solar might revise ’08 silicon output).

LDK is among a number of solar firms struggling in China (see Is this the end of China's solar boom?). China has around 140 solar-grade crystalline silicon wafer makers. Estimates are that the wafer industry is now operating at half its capacity because of factory shutdowns that have taken place in the past two weeks.

Polysilicon hit a peak of $400 per kilogram in July 2008, falling to less than $100 at the end of the year. Polysilicon is now trading for $30 to $40 per kilogram and is likely to continue dropping (see Top Chinese firms propose solar electricity for 14¢ per kWh).

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