Financial Innovation and Collaboration Takes the Solar Cake
If you ask Tom Kimbis what he thinks was one of the most important developments of 2012 for solar energy, he may tell you something you didn’t quite expect to hear. Kimbis, VP of External Affairs for the Solar Energy Industries Association
(SEIA), says that much of the credit for what’s being seen as a landmark year for downstream solar growth belongs not to technical innovations, but financial innovations
— the kind that are making it increasingly possible for people everywhere to be able to afford solar without having to take out a second mortgage on their homes.
Upstream financial collaborations also led to the green lighting of numerous global projects
in 2012, including the Letsatsi and Lesedi solar farms in South Africa. Both were made possible by dollars from U.S. developer SolarReserve and two local companies, Intikon Energy and Kensani Capital. In Peru, OPIC came together with Latin America’s development bank CAF and investment firm Conduit Capital Partners for the funding of two solar projects that will result in a combined solar capacity of 40 MW.
According to the U.S. Solar Market Insight Report
, which was released by SEIA and GTM Research, 2012 has seen total installed solar capacity in the United States reach 1,992 MW. This far exceeds the annual total capacity reached in 2011, which was 1,885 MW — a not inconsiderable accomplishment, considering that 2012 isn’t even over yet. There were 684 MW of solar capacity installation in the third quarter of 2012 alone, and in that same time frame the residential PV sector installed over 118 MW of capacity.
Oversupply Goes Up, PV Cost Goes Down
Despite a boom in solar demand in the United States in 2012 and a growth rate which SEIA estimates will be at about 70 percent over last year (14 percent global market growth
), the reality of global PV panel oversupply remains an issue of concern.
In 2012, that oversupply led to a showdown between Chinese solar manufacturers and the United States Department of Commerce.
Chinese manufacturers were accused of dumping their oversupply into the U.S. market at such low prices that they injured the ability of US-based solar manufacturers to compete fairly. This ultimately led to a decision by the International Trade Administration to levy tariffs
to levy tariffs on the importation of solar modules using cells manufactured in China. In the final ruling
, it was announced that the tariffs would range from 24 percent to 36 percent.
Marc Norman, lawyer for Chadbourne & Parke LLP
and director of the Emirates Solar Industry Association
(ESIA), said that the low cost of solar PV could enable developing countries in particular to benefit from solar technology without even being connected to the power grid. “Solar technology can be applied off-grid,” Norman said. “For example, in rural areas where there’s a lack of infrastructure. There’s a golden opportunity for more bottom-up market evolution, as opposed to a more traditional top-down approach.”
Industry Jobs and Widespread Bankruptcies
In the United States, 2012 showed evidence that growth in the solar industry occurred at a much faster rate than other industries. According to The Solar Foundation’s National Solar Jobs Census
report, U.S. employment in the solar industry grew at a rate of 13.2 percent and the sector added 13,872 jobs in 2012.
“It’s just like any other industry
,” Kimbis said. “Competition is extreme. This is something that the industry has known about for awhile; companies have been bracing for global competition for the last several years. It’s a story which has repeated itself through everything from personal computing, to telecom, to the automobile industry.”
Saudi Arabia: The Dark Horse
When discussing landmark events in solar, it’s impossible to ignore what took place in Saudi Arabia earlier in 2012. In May, the King Abdullah City for Atomic and Renewable Energy (also known as K.A.CARE) established the goal to develop 54,000 MW of renewable energy capacity by 2030.
Why is an oil-rich nation like Saudi Arabia concerned with adopting renewable energy? Quite simply, to limit the local consumption of oil so that exports can be increased. With low cost access to oil and unchecked usage, it’s believed that Saudi Arabia could find itself entirely out of the oil exportation business by 2030.
Under K.A.CARE’s proposed plan, 41,000 MW of the total 54,000 MW capacity will come whole from solar: 16,000 MW from photovoltaic (PV) projects and 25,000 from solar thermal projects. As a first phase, 700 MW of utility-scale projects are set to be undertaken by the end of 2013.
2012’s Impact on CSP
“As a result of the reduction in PV prices, CSP has taken a hit in the last few years,” Norman said. “But they also have an advantage that can’t be overlooked, and that’s storage. Some developers have devised CSP plants that can store energy. That’s something that PV technology can’t measure up to at present.”
Additional Solar Highlights from Around the World in 2012
- In June, Chile brought its largest PV plant online. Although modest in comparison with the scope of other global projects, the 1 MW Calama Solar 3 was an important step that has since resulted in increased interest among developers and investors. There were other notable Latin American solar developments in 2012, including two Peruvian solar farms (the already operational Tacna solar farm and the still in production Panamericana solar farm) whose combined generating capacity will reach 40 MW.
- In Germany, a 145 MW solar park in Neuhardenberg, Brandenberg, was constructed in a record-breaking five weeks. The solar park was finished just under the wire to beat the expiration of subsidies for PV installations greater than 10 MW in size. The construction of Neuhardenberg solar park, which is scheduled to be fully operational by the end of 2012, helped push Germany’s total installed solar capacity for the year to over 7,000 MW.
- 8minuteenergy Renewables, a solar PV developer located in southern California, received the financial stamp of approval in November to proceed with construction on a project that, once in operation, will be the largest PV farm in the world. The Mount Signal solar farm, which is being constructed in Imperial Valley, will generate 800 MW (DC) of utility-scale energy.
- The Charanka Solar Park in Gujarat, India, is home to numerous independent solar power stations, occupying approximately 2000-hectares of land. While many the park’s solar stations remain in production, 2012 saw its combined total output capacity reach nearly 700 MW.
- In an effort to shore up their enormous oversupply of solar panels, China decided in 2012 to underwrite a $1.6B loan — through the China Development Bank (CDB), which is seen as the engine behind the country’s economic development — to essentially create downstream demand within its borders. The loan was given to Shanghai-headquartered Sky Solar, which earlier in 2012 broke ground on two PV projects in China: one 800-MW project in the Xinjiang Province, and another 50 MW plant in the Qinghai Province.