If someone would have told me a few years ago that the price for solar panels would drop to 36 cents by 2017, I might have had some question about the mental health of the one making the assertion. But now, look at what Green Tech Media is reporting. The price per watt of solar PV will keep falling. All of this is well and good for the emerging solar industry, but there is a hitch: the sun doesn’t shine at night. price The price per watt to produce solar panels will fall to 36 cents by the end of 2017. With this cost reduction comes a price – disappearing subsidies for solar PV. The subsidies, which cost billions in taxpayer dollars, are believed to be less and less necessary as the price of solar energy reaches grid parity. Solar PV systems require panels, yes, but also a considerable number of other parts. Inverters, wiring, solar batteries for off grid or backup systems, and a good deal of cash for professional installation account for a large percentage of the startup cost that is so daunting to prospective investors, residential and utility alike. The most prohibitive drawback that has solar producing just .195% of the nation’s energy is easy to overlook, but oh so obvious once considered: when the sun goes down over the horizon, the panels are not producing energy.In order to make solar a real answer to our energy needs, it needs to be able to produce energy around the clock, and specifically when it’s needed during peak hours. Price per watt can drop all it wants for panels. To stay competitive, solar energy will need help, and subsidies won’t be coming back to the rescue. The answer is in energy storage.
Posts Tagged ‘solar industry’
If you have seen one solar module, have you seen them all? Many in the solar industry have long argued that solar panels are a commodity, interchangeable at the whim of the developer. We have strongly disagreed, but we conceded that the market has not agreed with us. All you need to do is ask the many companies who fill the halls of bankruptcy courts around the country and abroad about the market forces that drove them out of business. This argument has been settled—until Tom Woody authored a New York Times article that solar panel quality is a growing concern within the solar industry. Maybe the world is beginning to agree with us, but in any event, you should become an educated consumer as you look at which panels to put on your roof for the next 25 years.
SolarTown attended the GW Solar Institute’s Fifth Annual Symposium. The theme of the symposium was “Going Global,” although the panel that we attended was more of a celebration of solar’s arrival on the world stage. Since the discussion had the feel of preaching to the choir, one solar advocate in the audience suggested that the Institute should have invited a few more skeptics to generate more lively discussion. Representatives of three powerhouses in the solar industry participated in the panel discussion. They represented the survivors in an industry that has seen considerable consolidation—meaning that a lot of companies have lost their shirts betting on solar. Some have sold their solar divisions, others have filed for bankruptcy. Survivors in the industry shakeout see opportunity. The panelists did not see the recent upheaval in the solar industry as anything “unnatural.” The industry is still at its infancy, and the recent industry shakeout is part of a natural business cycle. Solar still comprises less than 1% of the energy production in the U.S., despite huge growth in the industry. The opportunity lies ahead for those companies that survive.
First they were in outer space, then they invaded our homes and businesses, and even our backyards. Now solar panels are getting into our most sacred possessions, right next to our automobiles. Solar panel roofs are providing shade for cars through the U.S. and at the same time these panels are producing a lot of electricity. Solar panels are particularly well-suited for certain applications, and solar carports should be right on top of the list. We could be talking about the Mars Rover, where the next Shell gas station is no closer than 30 million miles away. But here we are talking about solar carports, which are relatively new areas of huge potential for the solar industry.
The solar energy industry experience a lot of highs and lows during 2012. The biggest development has been the continued growth of solar energy in the United States. As recently reported, if you compare the third quarter of 2012 with the third quarter of 2011, you would see that there was a 44% growth in the amount of solar photovoltaics (PV) installed in the United States. By anyone’s measure that is a huge growth rate. In our first blog post on the solar energy year in review, we discussed the huge price reduction in solar panels, dwindling incentives, and the effect of competing energy sources particularly natural gas on the adoption of solar energy in the U.S. In this blog post, we can’t avoid talking about some of the troubling issues facing the solar energy industry. We will discuss the Department of Energy loan program and tariffs.
We know this much about the solar industry as we approach the end of the year. It was another year of fast moving changes in the industry. The good news is that in 2012, there were a whole lot of solar panels going up on homes and businesses in the U.S. And there were some setbacks for the industry. At the beginning of the year, few had even heard of Solyndra—but by the end of the year, Solyndra had become a household name. As the New Year approaches, we want to reflect back on what 2012 meant for the solar industry. In our blog, we will discuss some of the highs and lows for the solar industry this past year. In this first of two blog posts, we will reflect on the decrease in the price of solar panels, on the effect of natural gas and coal on the solar industry, and finally on the dwindling incentives available to support solar energy.
Innovation is often seen as the way to the future for solar energy. Everybody sees the value of solar panels on rooftops or in fields, but they also see the huge price tag attached to solar energy. Prices have dropped substantially in the past couple of years, mainly because of the Chinese entry and domination of the solar panel industry (and some will say unfair dumping of cheap modules onto the U.S. market). But that still leaves the question of the extent to which innovation plays a role in the developing solar industry. The Wide Lens, a recent book by Dartmouth professor Ron Adner, should be required reading for the up and coming solar equipment manufacturers.
Is this any way to drive an industry? The answer is a resounding no. The US has virtually no federal renewable energy policy, and almost by accident has become a major solar market in the world despite itself. Many naysayers like to frame the argument in terms of subsidies and handouts, but virtually all forms of energy get some form of governmental support, which for those industries is called policy—somehow people call it subsidies when referring to support for the solar industry and other renewable energy. What makes the solar energy industry special is the extent to which it has had to depend on a patchwork of state and local incentive structures that are as fragile as the state and local budgets to which they are beholden. As local budgets tighten, the windows close leaving many homeowners out of luck and out of patience. Only those who have been able to maneuver their way to the front of the line get the reward. As states cut back on their budgets, solar support has become precarious. Underfunded and handled on a state-by-state basis, failed incentives are leaving homeowners who want to put solar panels on their homes out in the cold and the market unstable and unpredictable. There is a clear need for a stable, long-term federal incentive structure and Congress and the Administration should see that it is in the interest of the country to forge this policy sooner than later.
You think that the solar industry is just emerging. Well, you may be right, but don’t tell that to the people who have been on the solar home tours for the past 21 years. The 21st Annual Metro Washington, D.C. Tour of Slar and Green Homes took place this past weekend, and if you missed this solar home tour or the one in your area, then you missed out on seeing some of the vibrant solar homes that have taken the solar challenge. This year’s solar home tours, like the Solar Decathlon on the National Mall a week before, was not blessed with sunny weather, but that did not deter the spirits of those who wanted to check out the solar home panels, and solar water heater systems throughout the DC metro region. Despite the rain, solar homeowners were eager to show off their energy efficient houses and to show that, even when it is not sunny, their solar arrays help save on energy costs.
SolarTown is just up the street from a local independent sporting goods store, which moved in when this area was just making a comeback from years of neglect. The service is good, the product selection is good and the prices are right. These factors should make the store a fixture in the community, but three months ago, a sporting goods chain moved in just a block away at DC USA, the largest retail complex in Washington, DC. The prices for the chain store may be slightly better, but even more than the prices, the location is much better. The small independent store saw its revenue drop by over a half in three months, and as you can see from the picture at the right, it is now going out of business. Oh, how in just a few months, the fortunes of this small store changed. So has been the effect of the tsunami of Chinese manufacturing on the solar industry. In just a couple of years, the Chinese ramped up production, lowered prices and swamped the US and other markets.