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The Ohio Controlling Board has given final approval for a $10 million loan as part of the more than $1 billion expansion of a solar panel manufacturing facility near Toledo.

The loan is heading to Willard & Kelsey Solar Group LLC, a company that makes thin-film solar panels at a facility in Perrysburg. The company, which runs one production line with about 40 employees, has proposed expanding to as many as 16 production lines employing more than 3,500 in the coming years.

The state loan, a slice of Gov. Ted Strickland’s $1.57 billion job-creation stimulus package passed last year, will help finance the $1.2 billion project and will be disbursed over two years, the Ohio Air Quality Development Authority said.

Development Authority Executive Director Mark Shanahan said in a release that Monday’s Controlling Board approval “affirms that we are gaining momentum in our efforts to support cutting-edge advanced energy projects that are on a fast track toward commercialization and job creation.”

The award for the Willard & Kelsey project was unveiled in June, when state officials also cleared Columbus-based American Municipal Power Inc. for a $30 million loan to help fund construction of a $3 billion generating station in Meigs County. The status of approval for the AMP loan was unclear Monday.

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Aug. 20 (Bloomberg) — Japanese businesses stand to pay as much as 9 billion yen ($95 million) more in monthly electricity bills under a new plan to encourage solar-power generation.

Starting in November, the government will compel utilities to buy surplus solar power generated by households and factories and pay twice the regular rate as an incentive for installing solar panels. The country’s 10 regional power producers, led by Tokyo Electric Power Co., will be allowed to pass on the increased costs to customers starting in April, according to a trade ministry report distributed today.

Japan is following Germany and Spain in forcing utilities to pay a premium for the power, a system known as feed-in tariffs, as part of efforts to reduce greenhouse-gas emissions. The program is meant to halve the cost of installing solar panels within three to five years and help Japan reach a target of increasing solar output 40-fold by 2030.

The premiums will boost costs for Japanese industry by about 3 billion yen a month for the first several years, and the expense may triple in another five to 10 years, according to the report.

Households will pay an average of 30 yen a month more, rising to as much as 90 yen, according to the trade ministry’s calculations.

The utilities will pay 48 yen a kilowatts-hour for electricity from homes and 24 yen for power from businesses, according to the report. A household is classified as any supplier with less than 10 kilowatts of capacity.

To contact the reporter on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.

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IF ALL goes as expected, solar panel sales people across Australia will at some point this week uncross their fingers and toes and crack open the champagne.

Among the immediate winners when the renewable energy bill becomes law will be the 100 staff at Solar Shop Australia, who have been told their jobs depend on it. The solar industry has been without Government support since the $8000 rebate was axed in June.

The replacement, a solar credit scheme expected to yield between $4000 and $6000, has been in limbo for two months since the renewable energy bill was deferred to a committee. The result has been the plummeting sales of rooftop panels.

Beyond boosting the solar industry, the renewable energy target – requiring that 20 per cent of electricity comes from clean sources by 2020 – is expected to increase electricity prices by 4 per cent compared with what would otherwise have been expected.

But the price rise will also depend on the carbon price and be offset by a compensation package for some households if emissions trading is introduced.

The target itself is designed to start slowly and pick up speed after 2015. Analysts estimate it could be met solely through the annual installation of 10,000 rooftop solar panels over the first five years. If so, we will not be getting as much clean energy as the target suggests; the Government plans to hand out free solar credits not associated with energy generation as an incentive to install panels and count them towards the target.

Similarly, a chunk of the target will be eaten up by clean hot water systems that do not put power into the grid.

On a larger scale, the big winner will be wind power. In Victoria alone there are about 20 wind farms approved and waiting on investment. There is disagreement over how quickly they are likely to be built. Investment bank UBS says only the most efficient wind farms would yield an early return, but electricity wholesalers know meeting the 2020 target will require having major clean energy plants in place and ready to go.

Other large-scale renewable energy sources such as solar thermal, geothermal and tidal will struggle to compete, at least initially. The Opposition has proposed a potential solution: setting aside a quarter of the target for forms of energy that could eventually provide baseload power.

Price cuts by manufacturers, tax credits, California incentives and innovative financing ease the cost of going solar.

If you’re searching for a bright spot in a dismal economic climate, look no farther than your roof. The downturn is helping to make solar panels more affordable.

Manufacturers are cutting prices to move inventory. Uncle Sam is helping too. As part of the economic stimulus package, the federal government this year boosted tax credits to homeowners who switch to solar power. Together with state incentives, those subsidies could slash the cost of some systems in California by 50% or more. Some homeowners are banding together into buying groups for even bigger savings.

If you don’t have a lot of extra cash lying around, innovative financing can help you spread your payments out as long as 20 years. Or you can take advantage of leasing deals to get panels on your home for little or no money down.

June was a record month for state rebate applications by California homeowners. Some of them are opting for the steady returns that come from lowering their energy bills rather than betting on volatile stocks or real estate.

So shake off the recession gloom and let the sun shine in. Here’s how to go solar without going broke.

The basics

A well-designed solar-power system can reduce your annual electricity expense to zero over the 25- to 30-year life of the panels. Spending $20,000 or more on a system today amounts to pre-paying your power bill for the next three decades.

Is that a smart decision?

If your aim is to help the planet, the answer is a resounding yes.

If you’re looking to save money, it depends.

Not all homes are good candidates. Generally, the higher your current electric bill and the sunnier your roof, the more solar makes sense. Still, payback can easily take a decade or more. You’ll need to crunch some numbers.

Reputable solar installers will be glad to help you figure the payback period, lifetime savings and rate of return, free of charge. If you want a ballpark estimate without the sales pressure, check out the calculators section on the state’s Go Solar California website. A particularly good one is the state’s own Clean Power Estimator.

Once you’ve made the decision to go solar, your final cost will depend on four main factors.

* System size — Solar modules typically are priced by the DC or direct current watt. A typical-size system in Southern California ranges between 4 kilowatts (4,000 watts) and 5 kilowatts (5,000 watts).

* Panel prices — They’re falling. That’s a good thing.

* California rebate — The state subsidy is declining. That’s not such a good thing.

* Federal Investment Tax Credit — A once-modest incentive just turned into a really big deal this year.

Let’s take a closer look at those last three.

A buyer’s market

Demand for solar-power systems in much of the world has slowed along with the global economy. Meanwhile, solar-cell factories planned when the market was booming are coming on line. The result: too many panels and too few buyers. To move them, companies are cutting module prices.

In the U.S., wholesale prices for top-quality modules made of crystalline silicon have fallen by 50% over the last year to around $2.40 a watt, according to Nathaniel Bullard, solar analyst with New Energy Finance in Alexandria, Va.

“It’s really a precipitous drop,” Bullard said. “The mood in the industry is grim.”

Panels typically account for less than half of the final “retail” price most consumers pay for solar. Unless you’re a do-it-yourselfer, you’ll need to hire a professional installer whose add-ons will include labor, permits, taxes and an inverter to convert the direct current electricity generated by the solar array into alternating current suitable for appliances.

Retail prices haven’t fallen in lock step with panels, but there’s no question that they’re coming down fast. Some residential systems that were retailing for $9 a watt to $10 a watt installed before the recession can now be had for about $7.50 a watt. Homeowners who join together to buy in volume are snagging complete systems for a little more than $6 a watt. Big commercial buyers are paying even less.

And that’s before factoring in government subsidies.

“Jobs are very competitive, and that’s translating into lower prices,” said Ron Kenedi, vice president of Sharp Solar Energy Solutions Group, the U.S. solar arm of Sharp Corp. “This is the perfect time to buy solar.”

If that sounds like sales hype, here’s something to consider: Analysts are predicting further declines in panel prices, so waiting could save you some money.

Or it could end up costing you a bundle.

That’s because another major incentive — the California subsidy — becomes less valuable the longer you wait.

Great state rebate

The California Solar Initiative provides rebates to owners who install solar panels on existing homes. The 10-year, $3-billion program, which launched in 2007, is funded by the state’s utility ratepayers.

These rebates are based on a system’s size, performance — and timing. Californians who purchase sooner, rather than later, are eligible for the biggest subsidies. That’s because the rebates are programmed to drop every time the state reaches a certain target of megawatts installed.

For customers of the state’s three large investor-owned utilities, the rebates started at $2.50 a watt and will shrink to 20 cents a watt by the time the program expires at the end of 2016. That’s a difference of $11,500 on a 5-kilowatt system over the life of the offer.

At present, rebates for customers living in those service territories are as follows: Pacific Gas and Electric — $1.55 a watt; Southern California Edison — $1.90 a watt; and San Diego Gas and Electric — $1.55. To keep tabs on how close all those rebates are to dropping to the next level, check out the Statewide Trigger Point Tracker at www.csi-trigger.com.

Your final rebate will be less than those benchmark figures because the state will apply a discount to account for your roof’s shading, the efficiency of your panels, the conversion from DC to AC and some other factors. So figure on getting about 86% of the benchmark.

California’s municipal utilities have their own solar rebate programs. The Los Angeles Department of Water and Power, for example, calculates how much power your system would produce over 20 years, then pays an upfront subsidy — currently 13 cents per kilowatt-hour — based on those estimates. The DWP website has a calculator known as PVWatts to help you estimate your rebate. (Warning: It’s not very user-friendly.)

Check out your utility’s website for more information.

Reputable solar firms will handle all the paperwork and give you the California rebate immediately, saving you the wait and hassle. Make certain the firm you choose is registered with the state by checking the California Energy Commission database.

Tap your uncle

The second big solar incentive comes from Uncle Sam in the form of an investment tax credit.

Starting this year, homeowners who purchase solar panels can qualify for a federal tax credit equal to 30% of the cost of their systems after the state rebate has been deducted. The credit is a dollar-for-dollar reduction in the amount of federal income taxes owed.

Here’s how the math would work for a resident living in Southern California Edison territory who bought a 5-kilowatt system retailing for $7.50 a watt with an 86% conversion rate for the state rebate.

Material below will be in a chart inserted at this point

System price:

$37,500

($7.50 x 5,000 watts)

State rebate

$8,170

($1.90 x .86 x 5,000)

Post-rebate price

$29,330

($37,500 – $8,170)

Federal ITC

$8,799

($29,330 x 30%)

Net system price

$20,531

($29,330 – $8,799)

Lease it

Although government subsidies can reduce the cost of solar substantially — by nearly half in the case above — most homeowners don’t have a bundle of cash to invest in panels. And falling home values have made it tougher to get a home equity line of credit.

That’s why some solar firms have begun offering residential leases and so-called power purchase agreements, or PPAs. These arrangements are already popular with big commercial power users, including Wal-Mart Stores Inc., that want to go green without tying up a lot of their own capital.

Instead of purchasing their own solar equipment, consumers let a solar-power provider install its panels on top of their homes. Homeowners buy the clean energy generated from these arrays, paying a monthly fee to the solar firm much in the way they currently buy power from their utilities.

Upfront costs to the homeowner are minimal, from zero to a few thousand dollars. There’s no maintenance either; that’s the solar company’s responsibility. Contracts are lengthy, typically 15 to 20 years. But they can be transferred to a new owner if the home is sold.

Many customers cut their monthly power bills immediately by at least 10% to 15%. But the biggest savings come in the later years. That’s because, depending on the deal you cut, you can lock in a fixed rate or get a contract with a predictable escalator that’s well below electricity rate hikes being projected for conventional utilities.

Ned Araujo of Upland turned to SunRun, a San Francisco company that offers residential power purchase agreements. The environmental engineer paid $8,000 upfront to lock in a rate of 13 cents a kilowatt-hour. That’s slightly above the cheapest rate available currently from Southern California Edison. But it’s less than half the utility’s priciest peak rates, and it’s guaranteed not to budge for 18 years.

Araujo said he didn’t want the headache of maintaining solar panels — especially in a seismic area.

“Anything that happens, it’s their responsibility,” he said of SunRun.

Similar arrangements are available from SolarCity, a company based in Foster City, Calif., whose popular leasing program has turned it into the state’s leading installer.

The company is making a big push in Los Angeles, where it recently reached an agreement with the city that allows LADWP customers to participate in such lease arrangements. Homeowners with an electric bill as low as $100 or even less can still save money by going solar, said SolarCity spokesman Jonathan Bass.

The company has a nifty calculator on its website where you can plug in the numbers.

Power to the people

In the last few years, companies, including SolarCity, have courted business by offering volume discounts to groups of homeowners who agree to adopt the technology at the same time.

The so-called community solar movement is gaining traction nationwide, thanks in part to a Bay Area company called One Block Off the Grid, or 1BOG for short. Its business is organizing homeowners into groups of 100 or more and using that bargaining clout to get the best deals from solar installers.

Here’s how it works: If you’re interested in solar, just go to the website and sign up. 1BOG is running campaigns in metropolitan Los Angeles (including Orange County and parts of the Inland Empire), the Bay Area, San Diego, Sacramento and Sonoma County.

There’s no cost or obligation. But the more homeowners 1BOG can get to take the plunge, the more leverage they have with installers, who compete to win the contract. 1BOG makes its money by charging the winning bidder a fee.

1BOG offers educational seminars, provides a leasing option and does all the negotiating with solar companies, saving homeowners a lot of hassle.

Retirees Dorothy and Walter Harris of Ladera Heights were interested in purchasing panels but were dismayed by the steep learning curve. After tuning in to a 1BOG Web seminar, the couple knew they had found their company.

“They presented things clearly . . . and made the whole process easy,” Dorothy Harris said.

The savings can be enormous. Los Angeles 1BOG members can now get solar for $6.05 a watt installed. That would reduce the net cost of that 5-kilowatt system in Southern California Edison territory mentioned above by an additional $5,075.

The drawback is that you don’t get to pick what brand of panel goes on your roof or the company that does the installing. You also might have to wait several months to get your system, depending on how many people are ahead of you in line.

Put it on my tax bill

State legislation known as AB 811 approved last year grants most California cities and counties the ability to offer low-interest solar loans to residents, who then repay those loans through assessments that appear on their property tax bills.

The idea is to make solar more affordable by allowing California residents to spread their payments over 20 years. If the house is sold, the annual assessments become the responsibility of the new owner. That’s appealing to homeowners who aren’t sure how long they’ll stay put.

So far, Berkeley, Palm Desert and Sonoma County have set up programs. San Diego is planning to launch one this fall. A number of cities are in the exploratory phase.

The cost to homeowners and businesses depends on the interest rate provided by the municipality. Palm Desert, for example, offers a 7% fixed rate. So financing a $30,000 system over 20 years would raise a homeowner’s property tax bill by a little more than $3,000 a year.

Want your city to participate? Tell your mayor or council representative you want an AB 811 program in your town.

DMSOLAR is able to offer wholesale price to end users.

NEWARK, N.J. – New Jersey utility regulators say a new $515 million solar power initiative will cement the state’s status as the nation’s No. 2 generator of solar power, behind California.

PSE&G, New Jersey’s largest utility, will spend the money to equip more than 200,000 utility poles with solar panels. The retrofitted poles and other devices are expected to generate 80 megawatts of solar energy , enough to power about 64,000 homes.

Consumers initially will pay $1.28 a year to fund the project. That will increase to $4.08 by 2028.

The New Jersey Board of Public Utilities on Wednesday also approved proposals from three other utilities for projects capable of generating more than 60 megawatts of renewable energy. They will be funded by greenhouse gas credits.

Falling Behind

dmsolar on July-28-09

Whatever your thoughts on the causes of climate change, the irreducible fact is that enough people around the world are sold on the threat of global warming, as well the long term problems from the air pollution, dwindling supply and ever-increasing costs of fossil fuels, that trillions of dollars are going to be spent over the course of the next century on renewable energy technologies. No country, nor even any American state, can expect to stake a leading position in this emerging industry unless there is a strong base of domestic consumption underpinning the industry. One person who seems to have gotten the message Governor Rick Perry seems to have gotten that message, along with his Republican cohorts in Texas, some of whom remain unconvinced that global warming is even a man-made threat to the planet but are nonetheless aggressively seeking to attract high-tech renewable energy companies. Not surprisingly, Texas has long since surpassed California in installed wind capacity.

The U.S. currently trails Japan, Europe, and China in the number of top renewable energy companies. America currently ranks third behind Germany and Japan in installed solar capacity, and is first by a slim margin in installed wind capacity, ahead of Germany, a country with less than a third of our population. The American Clean Energy and Security act (ACES), the federal climate and energy legislation under consideration this summer, which has cleared the House, but is likely to be watered down, if it ever passes the Senate, would aim for between 12 and 15 percent renewable energy by 2020. If other countries follow through with already-existing commitments, in 2020 we’ll be well behind all of Europe, Japan, and China in installed renewable energy (as a percentage of our total energy demand). The company I’m working for, like many solar photovoltaic companies, has relied on sales in Germany and, until the market collapsed, Spain. It is thought that the Chinese market for photovoltaic panels could grow tenfold by 2020.

In the debate over ACES, the Republicans and coal-state Democrats opposing or at least seeking to neuter the legislation repeatedly speak about the competitive disadvantage America will suffer if it takes the lead in fossil fuel regulation, particularly in relation to a still developing country but major rival such as China. Yet China, for all its unwillingness to commit to carbon caps, stands poised to seriously outpace us in the global renewable energy market. The Chinese are actively pursuing a beefed up version of what Republicans like to call an all-of-the-above energy policy. Yes, plenty of coal-fired power plants, but also generous emphasis on wind, solar, and nuclear. It appears as though China will have little difficulty surpassing its 15 percent renewable energy target by 2020, and will end up closer to 18 percent—between three and six percent more than the U.S. To give just one example, the so-called “Three Gorges of Wind” project—named after the Three Gorges Dam, the world’s largest—aims to produce 20 gigawatts of electricity by 2020, and is merely one of six similarly-sized projects currently in development. To give you a sense of how big that is, the entire U.S. today has 29 gigawatts of installed wind power. Oil-tycoon-cum-wind-power-magnate T. Boone Pickens’ roadmap for energy independence, the “Pickens’ Plan,”which got so much press last summer, involves only four gigawatts of wind.

Servicing a billion-plus person domestic market, the Chinese energy industry looks to a future of being both the world’s biggest polluter and source of carbon emissions, as well as the globe’s largest and most mature market for renewable energy. As a result, China could come to dominate the international market for renewables. America, which only very recently ceded the title of “top carbon-emitter” to China after a century of unchallenged dominance, and is still living down the Bush administration’s rejection of the Kyoto treaty, seems poised to position itself as an also-ran in perhaps the most critical industry for the future world economy, despite the best efforts of the Obama administration, It is troglodytes in Congress who are putting America at a “competitive disadvantage” vis a vis China.

California: the incentives
The interest in photovoltaic technologies in California dates back further than most people would expect, starting at the turn of the 20th century when tens-of-thousands of homes in Southern California took advantage of the “California sunshine” to heat water for their homes.
Fast forward to the 21st century and the establishment of statewide solar programs and government incentives lead to a budding photovoltaic industry. The graph of the growth of grid-connected capacity in California between 1990 and 2008 showcases the importance of incentives.
Sources: California Energy Commission, Grid-Connected PVs through December 2007; California Public Utilities Commission, California Solar Initiative Program Update: January 2009.
The 1990s were mainly characterized by little interest in grid-connected photovoltaics until 1998 saw the introduction of the Emerging Renewables and Self-Generation Programs. In the decade that followed, and fully supported by new initiatives established in 2007, the state of California saw a rise of grid connected capacity to approximately 0.5 GW.
In January 2006, the CPUC created the California Solar Initiative, which moved the consumer renewable energy rebate program for existing homes from the Energy Commission to the utility companies under the direction of the CPUC. This incentive program, for renewable systems of less than one megawatt, began in January 2007 and will provide a total of $3.3 billion over ten years.
Beginning in 2007, the California Energy Commission started managing $400 million targeted for solar on new residential building construction. The funds from the Energy Commission will help renewable projects between 2007 and 2011. Called the New Solar Homes Partnership, it focuses on new residential construction.
Along with a nationwide stimulus bill with a major focus on renewables, California is set to be one of the leaders in photovoltaics implementation in the next decade.
California: The technology hub
California does not only offer sunshine but an interesting set of incentives that will facilitate the growth of photovoltaic installations. The state is characterized by a plethora of companies active in the field of photovoltaics that push the developments of the solar industry further, leading to the creation of wealth, job opportunities, as well as cutting edge science and technology advances.
IDTechEx’s Printed Electronics & Photovoltaics USA 2009 (www.IDTechEx.com/peUSA ) conferences bring the state under the spotlight once more, gathering the largest number of attendees in the field of emerging electronic technologies in San Jose in December 2009. California-based companies will be opening their doors for visits during the event and presentations by leading innovators in the area will inform participants on their latest advances.
Applied Materials, established back in 1967 in Mountain View, California, have remained in the forefront of innovation ever since. With a current focus on turnkey solutions for amorphous and microcrystalline silicon solar cells, Dr Omkaram Nalamasu, vice president of advanced technologies will talk about the role of nano-manufacturing technologies and their impact on innovations in energy industry. Dr Nalamasu will be focusing on several issues surrounding innovative energy technologies, generation, conversion, as well as storage.
UCLA, one of the leading academic institutes in the state will be presenting on their development of ambient processed copper indium gallium selenide (CIGS) solar cells. The manufacture of inorganic photovoltaics at ambient temperature and pressure is a veritable paradigm shift that could lead to significant cost savings. The successful development of a production process that would make high temperature and vacuum processes obsolete would lead to the production of cheap solar energy, hence it is a research route followed that holds a lot of promise for the future.
Intel has a different approach to solar cells. The world’s largest semiconductor chip maker is pursuing ways to improve the efficiency of organic photovoltaics since they involve cheap materials that can withstand a small level of impurities, negating the requirements for clean-room manufacturing. Yuri Sylvester, research scientist with Intel Labs, speaking at “Research at Intel” last month, said: “The main problem with the technology is that the dyes or inks that convert sunlight into electricity lose their efficiency when applied at greater than laboratory scales”. Intel’s presentation will be focusing on the work on overcoming these challenges, work that is undertaken in collaboration with the University of Washington.
Complementing the research of large corporations and academic institutions, a wealth of startups across California, including companies often in the news such as Nanosolar, Innovalight, Solarmer and Solyndra, are putting a lot of hard work into the development of innovative solutions in manufacturing, materials and design.
Forecasts for growth
These innovative thin film technologies are set for growth in the coming decade as can be seen from the graph below, taken from the IDTechEx report “Thin Film Photovoltaics & Batteries 2009-2029″ (www.idtechex.com/pv ). Thin films are set to overtake crystalline silicon technologies as cost per watt for thin film solar cells is predicted to be lower, and in some cases is already lower, than crystalline silicon cells. By 2019, the market for thin film technologies will already be in excess of US$42 billion.
Source: IDTechEx

European solar cell and module makers may be forced to speed up shifting production to Asia, rattled by rapid price declines and falling market shares.

The once-booming European solar sector is suffering from a massive oversupply of cells and modules that has driven down average selling prices (ASPs) for solar systems, and Asian companies are grabbing market share by slashing costs.

China revealed more details of an incentive program for solar firms last week that could help further cut production costs, already among the world’s lowest, and tighten the screws on European rivals.

Thiemo Lang, senior portfolio manager for Zurich-based Sustainable Asset Management, said the only way for Western producers to regain their footing was to build production bases where their Asian competitors are.

“It will be tough for Western companies to lower their production costs,” he said. “They will move aggressively to low-cost production countries.”

Already, 2009 is looking like a lost year for the European solar sector. Though Germany is still expected to become the world’s biggest market by installation, according to industry association EPIA, weakening demand and tough credit conditions are dashing hopes for a quick industry recovery.

Meanwhile, China has enhanced cash perks for the solar sector, announcing a 50 percent subsidy for investments on solar power projects.

In March, the Chinese government said it would pay 20 yuan ($2.90) a watt of solar systems fixed to roofs and which have a capacity of more than 50 kilowatt peak (kwp).

China accounted for about a third of the market for global cell production in 2008, while Europe’s share declined to 25.6 percent last year, according to a survey by German industry publication Photon.

WAITING FOR THE SUN

In addition, Chinese module makers now have a market share of about 50 percent in Germany from zero a year ago, a UBS report said.

Chinese firms cut prices by about 25 percent in the second quarter from the first quarter, according to the report. On average, Chinese modules sell for 1.4 euros a watt, nearly 30 percent cheaper than those sold by European companies.

Chinese manufacturers’ costs are about 90 U.S. cents to $1 per watt of generating capacity, or cost per watt excluding polysilicon cost, analysts said.

“China’s market share has grown steadily and will continue to grow. Chinese players produce at lower prices and Europe’s industry has to address this,” said SES Research analyst Karsten von Blumenthal.

Q-Cells, the world’s biggest maker of solar cells and one of those European companies that had to set up a production site in Asia, scrapped its 2009 outlook this month due to pricing pressure.

German cell maker Ersol recently also had to slash its 2009 forecast. It holds a minority stake in Chinese Shanghai Electric Solar Energy, a module maker.

Others will follow suit in setting up production abroad, analysts said.

Norway’s Renewable Energy Corp, for instance, which makes wafers and silicon for the industry but also cells and modules, is in the process of setting up a plant in Singapore, with start-up expected in the first quarter of 2010.

While European players are slashing production and outlooks, Chinese peers such as LDK Solar Co, Suntech Power Holdings Co and Yingli Green Energy are raising capital to support capacity expansion. LDK recently raised its shipment guidance.

Chinese companies, including Trina Solar have been able to cut prices aggressively because they buy polysilicon, a raw material for solar modules, from the spot market and also because of low labor and production costs.

This contrasts with European players who are often tied to very long-term material supply contracts.

“The story has always been cost and reliability. Solar production will continue to migrate from the West to Asia to gain cost-competitiveness, and Asian producers will continue to make headway on these fronts. Chinese solar producers, in particular, have been ahead of the curve in terms of these matrices,” said Peter Tsao, Deutsche Bank’s head of technology, media and telecom banking, Asia Pacific.

A decade ago, only 500 rooftops in California boasted solar panels that harvest the sun’s energy. Today there are nearly 50,000 solar-panel installations in the state, according to the research and lobbying group Environment California.

As a result, California, the longtime national leader in solar energy, has a capacity of more than 500 megawatts of solar power at peak periods in the early afternoon – the same as a major power plant.

The solar capacity in California grew by a third from 2007 to 2008. It now represents about two-thirds of the national total, according to a different report that is being prepared by the Interstate Renewable Energy Council, a nonprofit group promoting expansion of solar energy.

As the Obama administration pushes for a national shift to more renewable energy sources, California’s example is therefore being closely watched. Nationally, the states in which solar installations are spreading fastest are those that provide the most generous subsidies for them, industry experts agree.

Two long-term statewide programs in California provide rebates and other financial incentives to encourage rooftop solar panels, and individual municipalities like Berkeley are also beginning to offer financing for the solar arrays.

New Jersey is a distant second to California in installed solar capacity with 70 megawatts, followed by Colorado and Nevada, the council’s report said.

Within California, solar technology has spread over the last decade beyond highly environmentally conscious areas like San Francisco and Sacramento to gain a hold throughout the state, Environment California’s report indicates. As of the end of 2008, when the report’s figures were compiled, San Diego had more than 19 megawatts in capacity from installations on 2,200 roofs, followed by San Jose with 15.4 megawatts from 1,330 roofs and Fresno with 14.5 megawatts from 1,028 roofs.

“The biggest thing here,” said Bernadette Del Chiaro, the report’s author, “is that from farms to firehouses, the face of solar power is changing. While California’s biggest cities have led the way, the rest of the state and country are quickly picking up on it.”

She added that the cities of California’s Central Valley, which is both heavily agricultural and baking hot in the summer, are natural places for the solar panels. High air-conditioning loads and high peak electricity rates tend to dovetail partly with the afternoon hours when solar panels are most effective, she noted, giving people an incentive to embrace the technology.

Nationally, residential installations account for about a third of the energy supplied to the power grid by photovoltaic arrays on panels; the remainder come from installations on larger facilities, like government buildings, retail stores and military installations.

Each of the four top-ranked cities in California in terms of solar power capacity has more electricity available from these sources than all but six states.

Still, 10 states, led by Colorado and including Hawaii, Connecticut, Oregon, Arizona, North Carolina, Pennsylvania and Massachusetts, more than doubled their rooftop solar capacity in 2008, said Larry Sherwood, a consultant to the interstate council.

But even with the increases of the last decade, solar power is a pipsqueak among energy sources; it represents about one-quarter of 1 percent of California’s total energy capacity, according to the California Energy Commission.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/23/BAP518PJEB.DTL#ixzz0MBYbi3OW