Thursday, May 31, 2007

Sector Snap: Solar Cell Makers

Associated Press 05.30.07, 12:10 PM ET

Shares of Chinese solar cell makers declined in early trading Wednesday following disappointing quarterly reports from two companies. Companies also took a hit from a drop in the Chinese stock market.

Suntech Power Holdings Co. (nyse: STP - news - people ) declined 71 cents, or 2.1 percent, to $33.85, as investors expressed concerns with a drop in the company's first-quarter margins, which fell to 19.9 percent from 30.1 percent.

However, analysts said they still like the stock due to growth prospects. The company's adjusted profit and sales beat estimates.

Solarfun Power Holdings Co. gave up $2.12, or 17 percent, to $10.30, after the company said it swung to a first-quarter loss due to higher expenses.

The company also cut its 2007 sales outlook.

On Wednesday, the Chinese markets tumbled after China's government raised a tax on stock trading to curb a market boom amid concerns about a possible bubble, adding further pressure to the sector.

American shares of other Chinese solar cell makers also lost ground. JA Solar Holdings Co. gave up 58 cents, or 2.5 percent, to $22.46, Trina Solar Ltd. fell $3.52, or 7.3 percent, to $45.01, and China Sunergy Co. shed 65 cents, or 5 percent, to $12.25.

Meanwhile, similar U.S.-based companies also declined. Evergreen Solar Inc. (nasdaq: ESLR - news - people ) declined 13 cents to $8.32, while First Solar Inc. lost 81 cents, or 1.2 percent, to $66.32. Energy Conversion Devices Inc. (nasdaq: ENER - news - people ) lost 31 cents to $33.63.

Bucking the trend, SunPower Corp. (nasdaq: SPWR - news - people ) rose 8 cents to $52.95.

Wednesday, May 30, 2007

The 2nd China Renewable Energy & Energy-saving Products Exposition

The 2nd China Renewable Energy & Energy-saving Products Exposition will be held at National Agricultural Exhibition Center in Beijing June 1st through June 3rd, 2007.

You may see the renewable energy and energy-saving development and utilization here.

Please come to to know more about this exhibition.

2007: The Year of the Thin Film PV Stock

by J. Peter Lynch, Independent Wall Street Analyst

Wall Street is always looking for the next big thing. The market constantly seems to recognize a trend ahead of the general media and once the newspapers start to talk about a subject, many of the stronger public players in that field have already made significant moves. Nowhere in the renewable energy sectors has this been more apparent than with solar related stocks.

In 2005, solar stocks outperformed the average NASDAQ stock by an amazingly wide margin -- almost 100 fold greater. Certainly the solar sector of the market was the place to be in 2005.

* Average Gain for US solar stocks in 2005 = +134%
* NASDAQ Gain in 2005 = +1.37%

Last year, 2006, was the beginning of a significant ramp up in solar financings and solar IPO's and more importantly, it marked the beginning of serious financial resources coming into the solar industry, which will allow the industry to continue and even expand its current robust growth.

In fact, 2006 could be called, "The Year of the Solar IPO," with IPO companies coming from all points on the globe -- U.S., Europe and China. I see this surge in IPO's continuing in 2007 and beyond. This industry has incredible growth ahead of it and will need adequate funding to fuel its growth.

With all of this booming growth and activity in 2005 and 2006, what is left for the current year?

I think that 2007 may mark a very significant chapter in the history of the renewable energy industry -- the beginning of the transition from the current dominant technology, crystalline silicon, to the "next generation" photovoltaic (PV) technology -- thin film technologies. This year may well be the "Year of Thin Film Photovoltaics."

Thin film technologies are various technologies that have been underdevelopment for the past 15 to 20 years and utilize very small amounts of specialized materials to create solar panels. These thin film panels have the potential to produce power significantly cheaper than today's standard silicon technology.

The panels are usually made in the form of a monolithic piece of glass, upon which various thin films are deposited. A number of firms are also working on depositing various thin film materials on flexible substrates, such as stainless steel or plastic.

Types of Thin Film Technology

There are primarily three types of thin film technologies that have each been researched for over 15 years and are the current focus of the solar industry: Amorphous Silicon (a-Si); Cadmium Telluride (CdTe); Copper Indium Gallium Selenide (CIGS).

Amorphous Silicon had the largest share of the thin film market (64%) as of the end of 2005. It has been researched for the longest period of time, may be the best understood material of the three and has been commercial for the longest. Cadmium Telluride had 26% share of the market and is ramping up very rapidly, with Copper Indium Gallium Selenide having a 10% share of the thin film market, with great potential, but is the least understood and least developed of the three materials.

Advantages of thin film technologies over conventional crystalline silicon include:
* Lower cost of production than conventional silicon processes.
* Lower manufacturing facility cost per watt -- CapEx.
* Uses far less material, than the amount used in standard silicon cells.
* Lower energy payback -- amount of time until the product produces more energy than was utilized in its manufacture.
* Produces more useable power per rated watt.
* Superior performance in hot and overcast climates.
* Ability to be attractively integrated into buildings -- Building Integrated Photovoltaics (BIPV).
* Produces the lowest cost power.

Thin Film Publicly Traded Stocks

There are a number of public companies that are working in the area of photovoltaic thin films. But the majority of these companies do not have thin film as their primary business. As a result, I will divide them into two groups:

Thin Film Pure Plays. These are companies whose primary business is thin film photovoltaics

Thin Film Related Companies. These are companies that have a division in thin film, an investment in a thin film development company or internal R&D focused on thin film.

Pure Plays:
* Ascent Solar Technologies, Inc. -- NASDAQ -- symbol ASTIMaterial used: Copper Indium Gallium Selenide (CIG)
* First Solar, Inc. - NASDAQ -- symbol FSLRMaterial used: Cadmium Telluride (CdTe)
* Daystar Technologies, Inc. -- NASDAQ -- symbol DSTIMaterial used: Copper Indium Gallium Selenide (CIGS)
* Power Film, Inc. -- London AIM Exchange -- symbol PFLM-LMaterial used: Amorphous Silicon (a-Si)

Thin Film Related Companies:
* Applied Materials, NASDAQ -- AMAT
* Energy Conversion Devices, NASDAQ -- ENER
* Ersol Solar Energy AG, Frankfurt Exchange -- ES6-F
* Q-Cells, Frankfurt Exchange -- QCE-F
* Solon AG Fuer Solartechnik, Frankfurt Exchange -- SOO1-F
* Suntech, NYSE -- STP

These are not all the companies in the world working on thin film technologies. However, they are some of the public companies that have made significant comments in their annual reports concerning their work in thin film and consider it to be a key part of their future expansion strategy.

As a number of thin film technologies mature, I believe we will see many additional thin film pure plays, like First Solar (FSLR) going public to raise the necessary funding to expand their technology to address the booming worldwide PV marketplace. The future of distributed solar electric is rapidly approaching and it is called Thin Film Photovoltaics.

China's Solar-Powered City

by Xuemei Bai

Buildings in Rizhao, a coastal city of nearly three million on the Shandong Peninsula in northern China, have a common yet unique appearance: most rooftops and walls are covered with small panels. They are solar heat collectors.

In Rizhao City, which means City of Sunshine in Chinese, 99 percent of households in the central districts use solar water heaters, and most traffic signals, street and park lights are powered by photovoltaic (PV) solar cells. In the suburbs and villages, more than 30 percent of households use solar water heaters, and over 6,000 households have solar cooking facilities. More than 60,000 greenhouses are heated by solar panels, reducing overhead costs for farmers in nearby areas.

In total, the city has over a half-million square meters of solar water heating panels, the equivalent of about 0.5 megawatts of electric water heaters.

The fact that Rizhao is a small, ordinary Chinese city with per capita incomes even lower than in most other cities in the region makes the story even more remarkable. The achievement was the result of an unusual convergence of three key factors: a government policy that encourages solar energy use and financially supports research and development, local solar panel industries that seized the opportunity and improved their products, and the strong political will of the city's leadership to adopt it.

As is the case in industrial countries that promote solar power, the Shandong provincial government provided subsidies. Instead of funding the end users, however, the government funded the research and development activities of the solar water heater industry.

Mayor Li Zhaoqian explained: "It is not realistic to subsidize end users as we don't have sufficient financial capacity." Instead, the provincial government invested in the industry to achieve technological breakthroughs, which increased efficiency and lowered the unit cost.

The cost of a solar water heater was brought down to the same level as an electric one: about $190, which is about 4-5 percent of the annual income of an average household in town and about 8-10 percent of a rural household's income. Also, the panels could be simply attached to the exterior of a building. Using a solar water heater for 15 years costs about 15,000 Yuan less than running a conventional electric heater, which equates to saving $120 per year.

A combination of regulations and public education spurred the broad adoption of solar heaters. The city mandates all new buildings to incorporate solar panels, and it oversees the construction process to ensure proper installation. To raise awareness, the city held open seminars and ran public advertising on television. Government buildings and the homes of city leaders were the first to have the panels installed. Some government bodies and businesses provided free installation for employees, although the users pay for repairs and replacement.

After 15 years of effort, it seems the merit of using a solar heater has become common sense in Rizhao, and "you don't need to persuade people anymore to make the choice," according to Wang Shuguang, a government official.

Widespread use of solar energy reduced the use of coal and help improve the environmental quality of Rizhao, which has consistently been listed in the top 10 cities for air quality in China. In 2006, the State Environmental Protection Agency designated Rizhao as the Environmental Protection Model City.

Rizhao's leaders believe that an enhanced environment will in turn help the city's social, economic, and cultural development in the long run, and they see solar energy as a starting point to trigger this positive cycle. Some recent statistics show Rizhao is on track. The city is attracting a rapidly increasing amount of foreign direct investment, and according to city officials, environment is one of the key factors bringing these investors to Rizhao.

The travel industry in the city is also booming. In the last two years, the number of visitors increased by 48 and 30 percent respectively. Since 2002, the city has successfully hosted a series of domestic and international water sports events, including the International Sailing Federation's Grade W 470 World Sailing Championship.

The favorable environmental profile of Rizhao is changing its cultural profile as well, by attracting high-profile universities and professors to the city. Peking University, the most prestigious one in China, is building a residential complex in Rizhao, for example. More than 300 professors have bought their second or retirement homes in the city, working and living in this new complex at least part of the year. Qufu Normal University and Shandong Institute of Athletics have also chosen Rizhao for new campuses.

Monday, May 28, 2007

Shining light on solar power equipment

Commentary: China's demand for alternative energy will grow

By Sage Brennan
Last Update: 7:00 PM ET May 27, 2007

SHANGHAI (MarketWatch) -- Investors in China's tumultuous solar power equipment sector will watch Suntech Power Holdings Co. Ltd.'s earnings report on Tuesday morning, after Suntech competitor Trina Solar reported solid results last week.

After a sluggish stretch following its IPO in late 2006, Trina Solar Ltd.'s stock saw a massive rise through mid April to almost $70, and has since settled in the mid-$50 range. Suntech's stock has seen similar volatility since its late 2005 IPO, and JA Solar Holdings Co. Ltd. has been on a bit of a roller-coaster ride too.

Stocks in this photovoltaic generation technology sector are driven by limited supply of resources, namely their silicon base material, as well as by the recent attention that alternative energy technologies have received as the global warming phenomenon has finally gained acceptance.

Although the largest markets for solar-based energy products are currently found in Europe, countries in other regions are beginning to consider government policies and other incentives that could increase worldwide demand for alternative energy technologies, including solar.

Interestingly, the many solar-cell manufacturers that have cropped up along China's east coast are overwhelmingly producing for export, but this will eventually begin to change as Beijing makes good on recent promises to improve energy efficiency. Currently, of course, China's energy efficiency is degrading with every new power plant and car that is produced, as is the case in other industrial economies.

Like the U.S. and Europe, China's demand for the whole spectrum of alternative energy products will inevitably grow, bringing prices of solar products within reach of Chinese consumers. In my opinion, the question for investors is when, not if, the solar energy market will go mainstream.

Suntech reported a tripling of profits during the fourth quarter of 2006, and I would expect the long-term prospects for companies in the solar sector to be bright.

Sunday, May 27, 2007

Global Solar Industry May Soon Experience Decline In Costs

According to a new assessment by Worldwatch Institute of Washington, D.C., and Prometheus Institute of Cambridge, Mass., the solar industry is poised for a rapid decline in costs that will make it a mainstream power option in the next few years.

Worldwatch and Prometheus Institute's statistics reveal that the global production of solar photovoltaic (PV) cells has grown sixfold since 2001 - the market grew 41% in 2006 alone, the organizations say. This growth has been constrained by a shortage of manufacturing capacity for purified polysilicon - the same material that goes into semiconductor chips. But the situation will likely be reversed in the next two years, the organizations say, as more than a dozen companies in Europe, China, Japan and the U.S. plan to increase production capacity.

"Solar energy is the world's most plentiful energy resource - the challenge has been tapping it cost-effectively and efficiently," says Janet Sawin, a senior researcher at Worldwatch. "We are now seeing two major trends that will accelerate the growth of PV: the development of advanced technologies and the emergence of China as a low-cost producer."

In the meantime, supply shortages have led manufacturers to find ways to use polysilicon more efficiently and have accelerated the introduction of new technologies that do not rely on purified silicon and are less expensive to manufacture, Worldwatch and Prometheus Institute add.

Awakening: China Promoting Solar Water Heaters for a Cleaner Country

China, one of the largest producers of greenhouse gases, is working hard to cut its emission rates. So it's now promoting solar energy powered solar heaters but cost is still a challenge.

NEW DELHI, INDIA, May 25, 2007 - In the past few years, China has posted an impressive growth in the production of solar cells. In a span of just 2-3 years (nearly form 2003 to 2005), China fortified its position in the worldwide solar cell production market by moving from nearly 1.05% to about 7.8%, according to a recent report "China Energy Sector Analysis" by RNCOS.

The country houses some of the most polluted cities of the world and is likely to leave US behind as the largest producer of greenhouse gases by the end of this decade. While the image of 'dirty-dragon' is well deserved for China, Beijing officials are extremely serious about developing solar power capacity domestically and becoming a major player in this fast-emerging and pollution-free technology.

Following a recent strategy to foster nationwide use of solar energy, the government of China is encouraging new constructions (like buildings) and key users of heated water (like schools, restaurants, hospitals, and swimming pools) to install solar water heaters.

"It is time for China to scale up use of solar water heaters as the technology has become mature and cost-effective", said a top official with the NDRC (National Development Reform Commission), the premier economic planning wing of China, at the International Solar Thermal Utilization Conference in Jinan in April 2007, reported Worldwatch Institute on May 8, 2007.

Solar water heaters, with around one in every ten household owning one, have firmed their place as one of the most commercialized pollution-free energy technologies in China. In 2006, the solar water heater industry showed a turnover of over US$ 2.5 Billion (around 19.9 Billion Yuan) in China. Consumption of solar power in China during 2006 accounted for less than 10 MW in the total electricity consumption of around 2.78 Billion MW. However, by 2010, China believes to produce and consume around 300 MW of solar energy, nearly equal to Japan's figures last year, the world's second largest solar energy consumer.

According to the RNCOS report "China Energy Sector Analysis", for energy supply diversity, China has aimed to cut its reliance on oil and gas that will open-up opportunities for renewable sources. But price factor will play a crucial role, as renewables are dearer than coal. Apart from economic benefits, China has rich deposits of coal. But with the advancement in technology, it's projected that renewables can become competitive with coal at value front.

Saturday, May 26, 2007

Overview of Solar Energy in China 2006

From Overview of Renewable Energy Development in China 2006

China has extremely rich solar energy resources.According to estimates, the total solar radiation hittingChina's land area annually is 5 x 1022 J, equivalentto about 1700 billion tons of standard coalequivalent (tce). Based on the distribution of thetotal radiation hitting China's land surface, it can beseen that Tibet, Qinghai, Xinjiang, the southern partof Inner Mongolia, Shanxi, northern Shaanxi, Hebei,Shandong, Liaoning, western Jilin, the middle andsouthwest parts of Yunnan, the southeastern partof Guangdong, the southeastern parts of Fujian,the eastern and western parts of Hainan, and thesouthwest part of Taiwan all receive a relatively largeamount of solar radiation. In particular, areas onthe Qinghai-Tibetan Plateau receive the largestamounts of solar radiation in all of China.

Currently, the main use of solar energy in China is the supply of hot water to urban and rural households. The cumulative installed capacity of solar water heaters now surpasses 80 million square meters of collector area. In 2020 and 2050total installed capacity could reach 300 million and 500 million square meters, respectively, with the potential to conserve 130 billion kWh in 2020 and 230 billion kWh in 2050. Potential reductions in peak power loads resulting from these installed capacities would be 120 GW (2020) and 200 GW(2050). Photovoltaic technology (PV) is the main technology used in China for the generation of electricity from solar energy. PV modules are used in both industrial and commercial applications and provide electricity to remote rural areas and urban lighting applications. At present, China's installed capacity of PV systems in over 70 MW, of which about 50% is used to supply electricity to the residents of remote rural areas, a market that is growing at 30% annually. The industrial and commercial PV markets are also relatively stable. China's annual production capacity for urban PV lighting systems is over 10 MW, accounting for 70% of the world total. Among China's manufacturing capabilities for solar energy applications, production of solar thermal equipment , namely solar water heaters, is first in the world. China now has a solar water heater production capacity of over 16 million square meters per year. PV cell production capacity in China has reached nearly 200 MW. Thus, a firm basis for the large-scale development and utilization of solar energy resources in China has been established.

Solar Energy Poised to Go Mainstream, Say Researchers

SAN FRANCISCO, May 24 (OneWorld) - Solar power is the fastest growing source of energy in the world and likely will become much more affordable in the next few years, according to a new report out this week.

"As production costs fall, technologies continue to advance, and supply and demand come into balance," the report reads, "[solar power] prices will fall more than 40 percent in the next three years relative to prices in late 2006. Such a decline would make solar electricity far more affordable in markets across the globe."

Additionally, China's strong entry in the field could drive prices down even further, the report's authors predict.

Already, global production of solar photovoltaic (PV) cells, which turn sunlight directly into electricity, has risen six-fold since 2000 and grew 41 percent in 2006 alone, says the report from the Washington, DC-based Worldwatch Institute and the Prometheus Institute in Cambridge, Massachusetts. That makes solar power the world's fastest growing energy source, though grid-connected solar capacity still makes up less than 1 percent of the world market.

"Today, high cost is the largest barrier, but this is a temporary challenge," said Worldwatch's Janet Sawin, who authored the report.

The growth of solar power has been fastest in Japan and Germany, the report notes. Sawin said that's no accident. Those countries, she told OneWorld, have enacted laws friendly to solar power, which is generated without emitting carbon dioxide or other significant pollutants.

In Germany a law guarantees that owners of solar panels get a fixed price when they produce more solar energy than they consume and sell the excess back to the national electricity grid. In Spain, ordinances require "that new and renovated buildings include solar [power]."

Researchers said the biggest surprise in the report was the dramatic growth in PV production in China. Last year, China passed the United States, which first developed modern solar cell technology at Bell Labs in New Jersey in the 1950s, to become the world's third-largest producer of the cells -- trailing only Germany and Japan.

"To say that Chinese PV producers plan to expand production rapidly in the year ahead would be an understatement," Travis Bradford, president of the Prometheus Institute, said in a statement. "They have raised billions [of dollars] from international [initial public offerings (IPOs) of stock] to build capacity and increase scale with the goal of driving down costs. Four Chinese IPOs are expected to come to market this month alone."

Most of the solar panels manufactured in China are made for export, according to Sawin. "China is applying its world-leading skills at low-cost light manufacturing of devices such as televisions and computers to the solar industry."

Sawin said that China, with its growing need for energy, large work force, and strong industrial base, could drive dramatic reductions in PV prices in the next few years, helping to make solar energy prices competitive with conventional power even without subsidies.

Solar energy has already dramatically improved living conditions for some 100,000 people in rural India.

In the country where millions supplement a sparse and unreliable electricity grid with kerosene lighting, which is responsible for untold pollution-related deaths and disabilities each year, roof-installed solar panels have offered a clean energy alternative to run a small fan, radio, or television, and a few lights for working or reading.

A UN-sponsored program has encouraged banks in the southern Indian state of Karnataka to finance small loans for the solar systems -- typically $300 to $500 for a system to power two to four small lights or appliances.

The UN credits the solar panels with "better grades for schoolchildren, better productivity for needlework artisan groups and other cottage industries, and even better sales at fruit stands, where produce is no longer spoiled by fumes from kerosene lamps."

The India project has been so successful that similar solar energy programs are being initiated in Algeria, China, Egypt, Ghana, Indonesia, and Mexico, the UN said.

But in the United States, growth has not taken off. The Worldwatch report said only 202 megawatts of solar electricity were produced in the United States last year -- less power than a single coal or natural gas plant.

The legal atmosphere in the United States remains largely hostile to solar power, Worldwatch's Sawin said.

"Many homeowner associations forbid them," she said, and while a handful of states have adopted "net metering" laws, encouraging the use of solar power by allowing customers to run their electricity meters backwards when they feed the power their solar panels generate back into the grid, most states have not.

"There is no state in which customers are paid the full value of the power they generate with PV and feed into the grid," Sawin added, noting that solar panels produce the most electricity on hot days when demand is highest and conventional electricity is the most expensive.

Still, she remains optimistic about solar energy's future.

"The conventional energy industry will be surprised by how quickly solar PV becomes mainstream -- cheap enough to provide carbon-free electricity on rooftops, while also meeting the energy needs of hundreds of millions of poor people who currently lack electricity," she said.

Friday, May 25, 2007

Major Solar Module Suppliers in China

The solar energy industry is booming in China, and there are several hundreds of solar module suppliers in China in 2007. I would like to name just a few major solar panel manufacturers here for your reference, please see below:

1. Suntech Power
2. Yingli Solar
3. Yunnan Tianda
4. Shanghai Topsolar Green Energy
5. Solarfun
6. Super Solar
7. ERA Solar
8. Ningbo Solar
9. Trina Solar
11. Canadian Solar
12. Jetion
13. Jiangsu Shunfeng Photovoltaic Technology
14. Shanshan Ulica Solar Energy
15. Wuxi Sun Power
16. TaiZhou Sopray Solar
17. Jiangsu TianBao Pv Energy
18. Shenzhen Topray Solar
19. ET Solar
20. Himin

If you would like to know more about the solar panel manufacturers in China, please feel free to contact me.

Thursday, May 24, 2007

Suntech starts thin film solar module plant

SHANGHAI, May 23 (UPI) -- One of the world's established leaders in integrated photovoltaic solar technology has begun production on a new facility in China to make thin film modules.

Suntech Power Holdings Co. Ltd. announced the thin film research and development and manufacturing facility is being built in Caohejing Hi-tech Park in Shanghai. The first phase of the new plant is expected to begin operation in 2008 with production targets set for 2009.

The thin film module production will be based on technology that deposits amorphous and micro-crystalline silicon thin film on glass substrate. The product will use less than 2 percent of the silicon required to manufacture equivalent crystalline silicon PV products. Suntech projects that the thin film modules will have a solar conversion efficiency of 6 percent to 9 percent and an initial production cost of approximately $1.20 per watt (based on 6 percent solar conversion efficiency), which is forecasted to continue to decline as both production scale and conversion efficiencies increase.

Suntech made strides to become a world leader in the solar industry through its 2006 acquisition of Japan's MSK Corp. Many senior members of Suntech's R&D team and its officers have significant expertise in the thin film field. Zhengrong Shi, Suntech's chairman and chief executive officer, was a senior research scientist and the leader of the Thin Film Solar Cells Research Group in the Centre of Excellence for Photovoltaic Engineering at the University of New South Wales in Australia and holds multiple patents in thin film technology.

"After having acquired MSK, one of the industry leaders in the building integrated photovoltaic products, we were very pleased to see that there is both a strong and long term global sales market for these products, especially thin film PV modules," Shi said.

Wednesday, May 23, 2007

Solar's Rosy Assessment

Research group sees good news in mass production, global competition.
May 22, 2007
By Andrea Quong

Solar power is poised to become a large-scale, affordable energy source within three to five years, the president of the Worldwatch Institute said Tuesday.

Chris Flavin, who heads the Washington, D.C.-based environmental research organization, based his comments on a forecast suggesting that surging production of photovoltaic cells—the building blocks of solar panels that turn sunlight into electricity—will drive prices of those cells down by 40 percent over the next three years.

The forecast, by the Prometheus Institute, a Cambridge, Massachusetts-based think-tank, suggests that the solar industry is poised to overcome a major impediment to bring sun power to the masses.

"You're going to see this emerge for the first time as an economical and large-scale energy source," said Mr. Flavin. "The dramatic growth that's going on now and the technological evolution is going to break down the costs in the next three to five years."

High production costs have meant that sun-generated electricity is much more expensive to rate-payers than conventional electricity. While subsidies have brought that down to $6 per peak watt, prices need to come down to $3 per peak watt to be competitive, said Ron Pernick, co-founder of Clean Edge, a research and consulting firm.

But economies of scale are expected to lower the cost of producing photovoltaic cells and gradually reduce the price of solar-generated electricity.

Chinese and Taiwanese manufacturers accounted for nearly half of the global increase in solar cell production, which reached 2,521 megawatts in 2006. China and Taiwan produced 547 megawatts last year, compared to only 26 megawatts just three years earlier, according to data from Worldwatch Institute and Prometheus Institute.

China, which exports most of its solar cells to Germany and Spain, displaced the U.S. as the world's third largest manufacturer behind Japan and Germany. Japan, the traditional leader thanks to the likes of Sanyo and Sharp, still controlled the largest share of the market at 36 percent last year, but its production grew only 11 percent.

"The Chinese are, in effect, nipping at our heels," said Mr. Flavin. "This time, they're getting in on the ground floor."

Chinese manufacturers like Suntech Power, which climbed from the world's eighth largest solar cell producer in 2005 to the fourth largest in 2006, rely on conventional, crystalline silicon-based technology. But that could easily change with Chinese companies, many of them startups that went public on U.S. markets, adopting new technologies, Mr. Flavin said.

U.S. market share of solar cell manufacturing slipped to 8 percent in 2006, according to Mr. Flavin. But the U.S. continues to develop next generation technologies for making cells with less or no silicon, which is currently in short supply. In the U.S., production actually rose more than 30 percent to 202 megawatts, largely due to the manufacture of thin-film cells that make do with less silicon by Phoenix-based First Solar, according to the report.

FOCUS - China solar power industry grows, but exports overshadow home market

8/2/2007 05:38 London Time story 0369

BEIJING (XFN-ASIA) - China''s domestic solar power sector will continue to need government help in the near-term as high costs of installation and low returns deter market entry, experts said.

They said the near-term market will remain export-driven and limited domestically to small industrial and commercial applications.

"Manufacturers are expanding their capacity, but I don''t see a major drive to install solar power domestically," said Wang Xing, senior program officer for electricity and renewable energy at the China Sustainable Energy Program.

"Right now there is not a very strong incentive program for solar power," he said.Wang also said most domestic manufacturers are gearing production toward the export market while looking to tap the public investment in projects such as rural electrification programs."

It''s a rural market... an industrial applications market at the moment," said William Wallace, senior technical advisor at the project management office for the United Nations Development Program and Global Environmental Facility, which has partnered with China''s National Development and Reform Commission.Industry analysts said they believe the commercial solar market in China will be slow to develop without adjustments to the country''s electric pricing mechanism as solar installation in China often depends on government investment targeted at development in rural areas.

Wallace said that large scale domestic production of solar electricity is often limited to government-funded rural electrification programs.

Under the rural electrification program, the Chinese government set a goal to install electricity in some 1,000 townships last year, Wallace said, adding that the goal was achieved mostly through small scale hydro and photovoltaic systems.

"They plan to continue this to the small village level, of which there are 20,000... that could require up to (a total of) one gigawatt of photovoltaics," he said.

Wallace added that this would greatly expand the solar market though the plan is expected to take 10 years to complete.

Industry analysts said that one of the largest obstacles for solar energy is the inability to link small scale power production units to a larger power grid. "

Currently, solar energy is only combined with power generation grid networks on a trial basis in first-tier cities like Beijing and Shenzhen, but solar on-grid electricity generation has not been achieved due to its limited scale," said Gao Hu, a researcher with the Energy Research Institute under the National Development and Reform Commission.

Grid connection provides a substantial incentive for alternative energies such as solar, wind, and small scale hydro by allowing excess capacity to be sold back to the power grid.

Industry specialists, who asked to remain anonymous, told XFN-Asia that domestic consumption of solar power should improve in the next few years.

One source said that rumors are circulating in the industry that the central government will introduce policies this year to promote domestic installation of alternative energies such as solar.

But another industry official said that it may be two to three years before these policies are enacted and then another one to two years after the implementation of those policies before they generate meaningful domestic sales of photovoltaic systems.

He added that the central government wants local governments to speed up the creation of incentives.
"The mandate for the central government is... for the regional governments to really start to put in place incentives and subsidies and start to make that happen," the official said.

The central government has set a goal for renewable energy sources accounting for 10 pct of all energy consumed by the year 2010. Authorities are aiming to increase this to 16 pct by 2020.

An industry source said the mix would likely make hydro-electric capacity its top priority, followed by wind and solar.

"I think maybe it (the three- to five-year outlook for domestic Chinese solar sales) will be promising but no one knows for sure," another industry official added.

Wallace told XFN-Asia that wind will continue to dominate over solar electricity as solar energy costs roughly five to six thousand dollars per kilowatt (KW) to install while wind power costs significantly less at 1,000 to 1,500 usd per KW.

"I think the main driver for photovoltaics right now is just the economy of scale. The manufacturing base is increasing, people are gearing up production, the market is expanding and there''s an actual cost and price reduction associated with that," Wallace said.

Chinese companies such as Nasdaq-listed Solarfun Power Holdings and JA Solar Holdings as well as BP SunOasis, a joint venture linking energy giant BP PLC and solar system integrator China Xinjiang SunOasis Co, are planning rapid capacity increases in 2007.

Solarfun had annual production capacity of 120 megawatts (MW) of PV cells and 60 MW of PV modules in 2006, said a research report from Morgan Stanley. The company plans to increase its capacity for cells and modules to 240 and 180 MW by the end of this year with further increases to 360 and 300 MW in 2008, the report said.

Similarly, Jinglong Group subsidiary JA Solar, a manufacturer of monocrystalline silicon-based PV cells that began commercial operations in April of last year, had a capacity of 75 MW in 2006. The Morgan Stanley report said the company will increase capacity by 100 MW this year.

And BP SunOasis told XFN-Asia in a telephone interview that it is also planning to boost production capacity.

However, market sources said that although the domestic market is growing, the capacity boosts are geared mostly toward international markets such as the US and Europe, where policy incentives continue to spur consumption.

"You''ll continue to see growth in the base-line market, which is the commercial market, and this is telecommunications, cathodic protection for pipelines, other industrial type applications - for railroads and so forth," Wallace said.

He added that he expects the government to focus more on grid connection in the future.

For the near term, the solar water heating market will continue to grow as lower costs make it a more viable option. But while the industry ramps up capacity, government incentives will be critical to shifting the attention of Chinese manufacturers away from the export market.

Solar power heads mainstream as costs drop - report

22 May 2007 21:53:08 GMT
Source: Reuters

By Timothy Gardner

NEW YORK, May 22 (Reuters) - Solar power should become a mainstream energy choice in three or four years as companies raise output of a key ingredient used in solar panels and as China emerges as a producer of them, according to a report by an environmental research group.

"We are now seeing two major trends that will accelerate the growth of photovoltaics: the development of advanced technologies, and the emergence of China as a low-cost producer," Janet Sawin, a senior researcher at the Worldwatch Institute and an author of report, said in a statement.

Investors have flocked to solar and other renewable energy sources amid worries about the high costs of oil and natural gas and greenhouse gas emissions. Solar is the fastest growing energy source, but still provides less than 1 percent of the world's electricity, in part because its power can cost homeowners twice as much as power from the grid.

But costs could fall 40 percent in the next few years as polysilicon becomes more available, Sawin said.

More than a dozen companies in Europe, China, Japan, and the United States will boost production over the next few years of purified polysilicon, which helps panels convert sunlight into electricity, and is the main ingredient in semiconductor computer chips, according to the report.

Polysilicon's feedstock is abundantly available sand. But a downturn in silicon refining after the high-tech bubble collapse in the late 1990s has constrained the panel market.

In some of the world's sunniest places, like California, electricity from solar panels costs the same as power from the grid. A drop in solar panel prices could expand that to places that only get average sunlight, making solar more of a mainstream choice, Sawin said in an e-mail.
Last year, China passed the United States to become the world's third largest producer of solar panels, trailing only Germany and Japan.

"To say that Chinese PV producers plan to expand production rapidly in the year ahead would be an understatement," Travis Bradford, president of the Prometheus Institute, a Massachusetts-based group that promotes renewables, said in a release.

"They have raised billions from international IPOs to build capacity and increase scale with the goal of driving down costs," said Bradford, who helped write the report.

Many companies are producing thin-film solar technologies that cut the amount of silicon used in panels. Thin-film could grab a 20 percent share of the market by 2010, up from 7 percent of the market in 2006, the report said.

Monday, May 21, 2007

Emerging opportunity in China's power industry 2007-05-21 13:54:28

BEIJING, May 21 -- To fuel China's rapid economic development, the country's demand for power is seeing an astonishing surge. However, the industry is facing a dilemma brought on by fast development and higher efficiency requirements.

What is the future development strategy of China's power industry? And what opportunities can global investors find in the blooming market?

Francois Nguyen, senior policy advisor from the IEA, or the International Energy Agency. He joined energy experts from around the world over the weekend in Beijing to attend the China Power and Alternative Energy Summit.

"For many countries, China has a golden opportunity for investment in clean and more efficient power plants."

Francois says his organization has estimated that in the near future the electricity sector will account for a larger part of the global investment in the energy infrastructure sector."In terms of the generation sector, there will be a global requirement of 5.2 trillion U.S. dollars, China alone will account for 23 percent of the global generation investment. The investment for China will reach 1.2 trillion dollars over the 2005-2030 period."

In accordance with the global economic growth, demand for power is urging, especially in emerging developing countries. Therefore, diminishing finite fossil fuel resources and the increasing cost of oil, gas and coal have become a significant threat to future energy security worldwide.

The serious environmental problems caused by traditional sources have also attracted more and more attention.

"It is a good time, it is a golden opportunity to implement more efficient generation technologies in most countries, as they are going to enter a new face of investment and those investments will remain for 30 to 50 years, or may be more."

As one of the fastest growing economies and a major power consumer, China is seeking to build a more intelligent structure for energy production.By the end of 2006, the country's total installation capacity reached 622 million kilowatt, rising 20 percent compared with the same period the previous year. The total electricity generation topped 2.8 trillion kilowatt last year, up 13.5 year-on-year.

China's power generation mainly relies on coal-fire generation.Sha Yiqiang, a Chinese energy expert, says such a fact is mind-disturbing.

"China's consumption of electricity has seen an average growth rate of over 10 percent over the past several years. If it continues to follow this rate, by 2020 China's overall electricity demand will reach 11trillion kilowatt. Therefore, the relative demand of coal will exceed 3 billion tons, which is 3 times the current amount. This is unpractical and unsustainable."

The electricity industry has long been a major resource consumer and polluter. It consumes over half of China's coal supplies, 40 percent of the water used by industry, and it also discharges over 60 percent of the overall sulfur dioxide emissions.China's power industry is facing challenges to achieve a sustainable development.Wang Qiang, a senior official from the state electricity regulatory Commission, says the situation must be changed.

"The problems accumulated during the recent development will limit the industry's healthy development, thus the requirement to accelerate the reform will become more and more urgent."

To move away from the current reliance on coal-fire generation, China is promoting the development of alternative energy, including nuclear energy and all kinds of renewable energy such as wind power, solar power and bio-fuels. According to the guidelines of China's renewable energy development, by 2020, renewable energy will account for 30 percent of the overall power generation.But, so far, alternative energy only accounts for a small part of China's energy structure.

The Association of China Electricity Enterprises has said that nuclear power currently only accounts for nearly 2 percent of the total installation capacity, while wind power accounts for even less, 0.5 percent. Sha Yiqiang says the gap may mean opportunities for business.

"To promote the development of alternative energy is an important target and challenge for China's power sector. Therefore, there are lots of good business opportunities for all the global companies who want to participate in building China's alternative energy industry."

For businesses eyeing China's power market, IEA's Francois Nguyen believes it is a good time to choose the right technology and the smart investment. But to do that, investors need sound policy signals to support their decision.

"The market mechanisms work if reforms are properly implemented. The ingredients necessary for efficient investments are competitive market drive, a good competitive framework and cause reflecting pricing. These are required for efficient initial investment, therefore the government should commit to a clear, stable and predictable energy strategy to provide confidence for the market."

The state electricity regulatory Commission's Wang Qiang says building a more energy efficient power industry is of major importance to build an energy-efficient and environmentally friendly country, following the blueprint of China's 11h five year program.

"Reducing energy consumption and pollutant emissions has been highlighted in China's electricity industry's reform agenda. For example, pricing mechanisms will be used to encourage cleaner energy development. Some measures will also be taken to ensure the priority of renewable energy development."

Sunday, May 20, 2007

China Solar Collector Panel Price

China is the biggest producer of solar water heater in the world, and many importers come to China to look for cheap and good quality solar water heaters. In general most of these importers just want to buy the solar collector panels from China, and they integrate the whole system by themselves.

The reference price for the solar collector that supports about 100 liter water is about USD 300.00-400.00. The price varies for different models from different manufacturers, if you may tell me your requirements about the solar collector, I may get the best price for you.

Himin Solar Energy Group - The biggest solar water heater producer worldwide

Himin Solar Energy Group is the torchbearer and exploiter of solar energy industry in China. A decade ago, Himin was founded in an unknown warehouse cherishing the dream of replacing the fossil energy with renewable energy. Presently, it has become the aircraft carrier (pilot) of international solar energy industry.

Himin brand is the only one in solar energy field who has won three championships - "Chinese honorable trademark", " Chinese famous brand" and "free inspection products". In 2004, the trademark of Himin(reaches 5.13 billion RMB) is worth 5.13 billion RMB. By now the annual coverage covered area of Himin solar water heater has reached two million square meters, being equal to 800 megawatt electricity energy. Main products solar vacuum tube, Solar water heater, Warm-screen low-e glass, solar module and solar lamp.

The management theory of Himin Group is "user-friendliness comes before marketability". The Group will always guard interest of the solar energy industry. Himin will never wage the price war. It leads the industry to the direction of high-quality development. Since it has been founded, Himin always provides its costumers with the most favorable price and quality.

In the past ten years, Himin has created world famous "8422" reading, it has covered 80,000,000 kms to popularize the knowledge and application of solar energy; The solar energy utilized by the installation of Himin products is equal to 4000 megawatt electricity, which has surpassed the total amount of that of EU, been twice as much as north America and six times as much as Japan and Korea put together. It has saved totally 200 million tons normative coal for China and has reduced dirty discharge more than 200 million tons. For the time being, Himin can save fossil energy equaling to the reserves of one Zhongyuan oil field yearly by popularizing solar energy, and the utility rate of solar energy can be increased by 30% yearly.

Facing worldwide energy crisis, Himin has founded a large market of solar thermo and photoelectricity without any example to copy or method to be introduced, motivated by market-oriented operation and absolute innovation. To the belief, Himin has grown into modern large-scale industrial solar products production base from manual workshop. The whole industry system of solar energy utility has been set up by Himin in ten years, while it took western countries 60 to 80 years to do so. The commercial promotion model and industrial production system of solar industry created by Himin has set a most valuable example for the development of global renewable energy. In order to further develop solar industry, Himin Group has set up a solar valley in Dezhou City Shandong Province, by which Dezhou City is named "China Solar City" and is preparing for the 2010 "Solar City Conference". In the coming five years, the solar valley will become the center of R&D&I, manufacture, the popularity of scientific education, tourism and meetings &communication.

China Power to spend US$4b on renewable energy

(Reuters) Updated: 2007-05-08 09:42

China Power International plans to spend up to US$4 billion by 2010 developing renewable energy as Beijing pushes to clean up its air and water and whittle down its reliance on imported resources.

To help bankroll the investment -- one of the largest planned investments in renewable energy ever announced by a corporation -- the company is studying listing shares on mainland stock exchanges, Chief Executive Li Xiaolin told reporters on Monday.

Hong Kong-listed shares in the company fell 0.5 percent on Monday, lagging a 0.27 percent gain in the benchmark Hang Seng Index.

China intends to spend an estimated US$200 billion on renewable energy over the next 15 years, partly to build hydropower, wind- and solar-powered plants to fuel growth in the world's largest energy consumer after the United States.

The government aims to boost renewable energy to 10 percent of energy use by 2010 and has ordered its largest power firms to ensure that 5 percent of their generation runs on renewable sources by the end of this decade, rising to a 10th by 2020.

State-run firms from China Power to larger rivals such as Huaneng Power and Datang International Power are gearing up commercial projects.

China Power International, which became the second-largest shareholder of Oriental Investment Corp. this month, wants to change that firm's name to China Power New Energy Development Co. and re-focus it on renewable energy.

By 2010, China Power International plans to put into operation 1,000 megawatts (MW) of renewable energy capacity -- including wind, hydropower and biomass -- have another 1,000 MW under construction and have a further 1,000 MW in the pipeline.

"It typically takes 8 to 10 billion yuan to build 1,000 megawatts of renewable capacity. So the total investment will be 24 to 30 billion yuan (US$3.1-US$3.9 billion)," said Liu Genyu, Oriental Investment's chief operating officer.


Analysts say high costs and low tariffs for renewable energy mean profit uncertainty, but executives remain optimistic.

On the face of it, China Power's five-year investment plan dwarfs spending by the world's largest oil firms. The country spent US$6 billion on renewables in 2005, excluding large hydropower projects, the Xinhua News Agency cited academics as saying.

Shell has invested an estimated US$1.25 billion from 1996 to 2006, according to calculations based on official data and company information, making the Anglo-Dutch company the oil sector's biggest investor in green energy.

And BP Plc. has spent around US$900 million on renewables since 1999, according to published figures and information from BP sources.

"Because of low tariffs and high costs, there are different views on profitability of renewable energy. But we believe the government is endorsing development of new energy and will gradually issue favourable policies," Liu said.

Datang, China's second-largest listed electricity provider, aims to generate 20 percent of its total power output via hydro by 2010 from about 2 percent in 2006.

An A-share sale -- if allowed -- might help with some of the costs.

Many Hong Kong-listed Chinese firms, eyeing record-high valuations in Shanghai and Shenzhen, are pondering mainland listings as a ready source of ample cash.

But regulations are sketchy on whether red chips such as China Power, which are backed by Beijing but registered in Hong Kong or overseas -- making them essentially foreign firms -- can list easily in the Chinese mainland.

"The domestic A-share market is doing very well. We are actively studying the possibility of going back for a listing," Li said without elaborating.

Saturday, May 19, 2007

The quest for clean energy: China's green revolution

The air in Beijing was classified as 'hazardous' this week as the city became choked with smog, but following dire warnings of rampant pollution, alternatives are emerging. By Clifford Coonan reports

Published: 23 November 2006

Desert winds drive the turbines in the vast wind farm on the outskirts of Urumqi, dusty capital of the north-western Chinese region of Xinjiang, and day-trippers come from the city to photograph the spectacular sight in the barren wilderness.

Just down the road, white-domed houses in a village of Central Asian Uighurs use solar power to provide their energy. In the province of Gansu, officials have announced plans to build the world's largest solar power station, part of efforts to ease China's dependence on coal. In fast-moving, sophisticated Shanghai, China's biggest city and its financial hub, hundreds of thousands of householders are using solar panels to heat the water for their morning showers.

Meanwhile in the capital, Beijing, plans are well advanced to use renewable energy for a big chunk of the city's power needs by the time it hosts what China is billing as the first "green" Olympics in 2008. Beijing intends to build a "solar street" where buildings and streetlights will run entirely on energy from the sun. To be green is to be hip in China these days, and even the government is taking note.

But is this the same China, infamous for its dirty rivers and poisoned skies? Nearly all of the world's most polluted cities are in China, and other urban centres such as Los Angeles are suffering the effects of pollution from China's factories. Green China as a concept seems ridiculous, particularly when you look at other headlines coming out of China. Strong economic growth led to a major increase in the discharge of major pollutants in the first half of this year.
Indeed, Beijing's air pollution became so bad this week that it reached "hazardous" levels on a government air quality index. The city was blanketed in heavy fog, visibility was cut to a few hundred metres, 80 flights were delayed and some motorways were closed. From July to September, in Beijing and 15 other major cities, one out of every three days was classified as polluted.

Seventy per cent of China's energy needs are met by coal, and every week to 10 days another coal-fired power plant opens somewhere in China, adding to the country's environmental woes. Meanwhile, China is the world's second-largest consumer of oil, behind the United States.

But China is on a major drive to boost renewable energies and cut pollution - for sound financial and political reasons. Oil is too expensive and the government wants alternative energies to reduce China's dependence on it. People in the highly polluted cities often complain that their children have nowhere to go to escape the bad air, and that they are worried about what all this will mean for their health.

Farmers have rioted and held demonstrations over pollution damaging their crops, making environmental hazards a potential source of political instability, something the ruling Communist Party refuses to tolerate.

China's top environmental watchdog, the State Environment Protection Administration (Sepa), said in September that pollution cost China £34bn in 2004, about 3 per cent of the GDP that year. In true pragmatic style, Chinese leaders introduced laws this year that set a goal of doubling the use of alternative sources of energy. By 2020, 15 per cent of China's energy needs will be met from renewable sources, with the amount of green power produced rising to 10 gigawatts by 2010 and 30 gigawatts by 2020.

"I'm very optimistic about the outlook for renewable energy here. In China, introducing renewables is good industrial development strategy, it's not part of the climate-change argument," says Dr Eric Martinot, a senior research fellow with the US-based Worldwatch Institute and a senior visiting scholar at Tsinghua University.

China invested £3.3bn in renewable energy last year, making it one of the biggest investors in renewables in the world, and Dr Martinot believes the spending was based on sound reasoning. "In other countries it's a question of 'a' or 'b', but here people say 'Let's develop everything - 'a' and 'b' and 'c', we need it all'," he says. "Local air pollution is playing a big factor in driving many of these arguments, as ordinary people don't accept this kind of pollution." There are 30 million solar households in China, which account for nearly 60 per cent of global solar capacity. Wen Jiabao, the Prime Minister, says solar power is central to his government's efforts to cut the use of fossil fuels by 20 per cent as a percentage of gross domestic product over the next five years.

Industry leaders all over the world are watching what is happening in China. The scale of the country makes it prime testing ground for new technologies - if something works in a country of 1.3 billion people, then it is likely to be viable the world over.

The Chinese Renewable Energy Industries Association (CREIA) was set up in 2000 to promote the industrialisation of the use of green energy in China. "Using renewable energy can promote economic development in an environment-friendly way, which would be the key method to balance China's economic development and its environment protection," says Li Junfeng, CREIA's secretary general.

China still has vast coal reserves, but officials are examining the potential of renewable energy to resolve a potential bottleneck to faster economic growth. The experts say the challenges facing China's environment require a multi-faceted response - wind power in particular is especially suitable for remote, economically underdeveloped regions, such as Xinjiang and other barren provinces such as Inner Mongolia. Meanwhile, the CREIA is developing solar energy and biomass energy in several other provinces, including Hebei and Jiangsu.

Local government officials in Dunhuang in Gansu province said they would build the world's biggest solar plant there, a 100-megawatt project costing £400m that will take five years to build. Dunhuang is sunny, with 3,362 hours of sunshine every year, making it a prime spot for solar energy development.

The world's biggest solar plant is at Arnstein, near Wuerzburg in southern Germany, with a 12-megawatt capacity. Beijing is also examining the potential of ethanol and biodiesel. China produced one billion litres of ethanol last year - a small proportion of global production (which hit 33 billion litres) but one that is growing.

China is also getting help from some significant global players, including the World Bank and General Electric. British companies such as BP are also getting involved - the Tsinghua-BP Clean Energy Research and Education Centre was launched by Tony Blair three years ago and receives more than £500,000 a year from BP. It aims to develop clean energy technologies and advise China's National Development and Reform Commission on the use of clean energy. In May, the World Bank said it would work with China to look at how to optimise energy use.

"As the 2008 Beijing Olympics approaches, we are also conducting several related projects, such as the sustainable urban energy system," says the centre's administrative director, Jiang Ning. Ah, yes, the Olympics. With less than two years to go, Beijing is working hard to meet its pledge to make the 2008 Games a "green Olympics" and provide a platform for China to show itself as a modern, progressive country.

It's hard to overstate the importance of the Games as a symbol of national pride and as a motor for change. A pilot project is up and running in Xuanwu Park with solar power for lighting, heating and refrigeration. The goal is that by 2008, up to 90 per cent of the city's street lamps will use solar power, which will also heat 90 per cent of the water used for bathing, according to Tian Maijiu, the deputy director of the Standing Committee of Beijing Municipal People's Congress.

Wind power will generate 20 per cent of the electricity for the Olympic venues, and the city will provide direct investment or interest-free loans to key projects. Solar power, biomass and wind power development will be the three main projects in Beijing's rural ecological park, and the city is also planning to build a series of recycling projects that will include refuse incineration, processing plants and a disposal centre for dangerous waste.

Then there is hydroelectric power. The redirecting of rivers and relocating of millions of people for giant dam projects has caused consternation among environmentalists and human rights activists. But the government sees it as a viable alternative to coal, and the Three Gorges Dam, the world's biggest, which partially opened in May, will produce 22.4 million kilowatts when it is fully operational by 2009. The government is also sensitive to criticism: after Fu Xiancai gave an interview to a German television station in June 2006 to complain about insufficient compensation for relocation, he was beaten so badly that he will be paralysed for the rest of his life.

Another controversial power source is nuclear energy. Six nuclear power plants are due to be built in the south-eastern province of Fujian, part of China's goal of having 40 gigawatts of nuclear power on line by 2020.

It would be naive to think that China is planning to become a green superpower. Coal will continue to provide the lion's share of its energy needs. But crucially, renewable energy will form a more important part of the overall jigsaw of energy provision and that can only be good news for China, and the planet.

The world's economic powerhouse

While China is stepping up its efforts to promote renewable energies for hard-headed pragmatic reasons, there is no question that the environmental picture remains grim.

A relentless drive to boost the country's gross domestic product (GDP) - the economy grew 10.9 per cent in the first six months of the year) led to an increase in the discharge of major pollutants in the first half of this year, according to the State Environment Protection Administration (Sepa).

Over half of all finished industrial goods are made in China these days, and the reason why so many Western companies are turning to China to manufacture their products is because of cheap production costs. But pressure to keep manufacturing costs down generally bodes ill for the environment as companies use the cheapest means of production available, which is often not the most environmentally friendly means. And growing domestic demand for everything from cars to washing machines to double-glazing, all products long denied the vast majority of Chinese people, has also put pressure on the environment and on energy use.

"It is almost impossible to reduce energy consumption within a short period while experiencing such a high economic growth rate," Lu Zhongwu, an expert at the Chinese Academy of Engineering, told the China Daily newspaper.

* Coal output grew by 12.8 per cent in the first half of this year. Coal-fired power plants emit greenhouse gases and a new plant opens in China every week to 10 days.
* Local governments in one-third of Chinese cities have banned increasingly popular electric bicycles, even though they are less polluting than cars. And bicycle lanes for regular bikes are being trimmed back in nearly every city in China to make way for cars.
* China produced 12 billion tons of industrial waste-water in the first half, up 2.4 per cent from the same period last year.
* China is the world's second-biggest emitter of greenhouse gases and is expected to overtake the United States as the biggest, bringing acid rain to roughly one-third of the country and poisoning nearly three-quarters of rivers and lakes.
* Sepa said that under 40 per cent of public projects had undergone environmental evaluations before receiving approval.
* Air pollution in Beijing was "hazardous", the highest category in the China Environmental Monitoring Centre's index, for the 24-hour period ending at noon on Tuesday this week, Xinhua news agency reported.
* Chemical oxygen demand (COD), a common index of water pollution, increased by 3.7 per cent, while emissions of sulphur dioxide increased by 4.2 per cent in the first half of this year.

China Energy Sector Analysis

China energy industry consumption is estimated to reach 1629 Million Tons of oil equivalent in year 2006. Non-fossil fuels, especially coal (it accounted for 69% of the total energy consumption in 2005) & oil (21%), are the major sources for energy in China. With the China's objective to secure energy for future & to look for and embrace clean renewable energy sources is expected to grow at rapid pace.

Key Findings

- Energy efficiency is the major issue for Chinese energy industry. E.g., if national commercial and residential codes are well enforced, they could reduce carbon emissions by 49 Million Tons in 2020, displacing the need for 23 large (1,000-megawatt) coal-fired power plants.

- Natural gas accounted only for 3% of China energy mix in year 2005. For this, Chinese government has see the target of 10% till the year 2010. With limited natural gas reserves, it is expected that to meet set target, China will emerge as big natural gas importer in near future.

- To ensure supply diversity, China aimed to reduce dependence upon oil & gas, which will offer immense opportunities for renewable energy source. Although China's share of renewable energy will rise in future but coal is expected to be the major source for energy in near term.

- In China's biodiesel industry, principal difficulty is the lack of eligible sources of production e.g. China is a net importer (in fact, it is the largest importer in the world) in all the major edible vegetable oils.

- China registered rapid growth in solar cell production. In only 2-3 years (roughly from 2003 to 2005), solar cell production share of the country increased from 1.07% to 8% with respect to the world, only after Japan and Europe. In wind energy, China's abundant inland and offshore wind energy resources provide potential for large-capacity in-grid wind farms.

Solar Panels 2007

China's production of solar panels is estimated to have more than doubled to 400MW in the past two years, making it one of the world's largest providers of the line. The country now accounts for approximately 20 percent of global solar panel output, up from 10 percent in 2004.

Output growth rate, however, will be slower in the next few years. In 2007, annual production is expected to increase by a modest 20 to 30 percent to reach about 500MW, still leaving much of capacity unutilized.

The main constraint to higher growth is the shortage of polysilicon, the main raw material of wafers and cells. While the supply situation is expected to improve, it is still projected to fall short of demand in coming months since most of the expansionary activities of polysilicon companies are expected to take effect only in or after 2008.

China is now capable of producing 1,500MW of solar modules, five times its capacity at the end of 2004, as many suppliers established new facilities or upgraded production lines to take advantage of the high demand coming from the EU and the US.

The following are some of the other key trends that we see in China's solar panel industry:

- Overall capacity will continue to expand, but not as fast as it rose in 2005. Most companies will increase capacity by only 20 percent or less.
- Prices will increase further as polysilicon remains in short supply. The majority of companies will limit adjustments to within 10 percent, however, to keep quotes competitive.
- The amorphous segment will continue to grow as more mono- and polycrystalline panel makers venture into the line. Crystalline panels, on the other hand, will adopt thinner, more efficient cells.
- More companies will vertically integrate their production facilities to improve their control over costs along the supply chain, and to ensure a stable supply of components, especially cells.

Friday, May 18, 2007

Chinese Renewable Energy Markets

Frost & Sullivan, March 2007, Pages: 91

Government's Renewable Energy Law and Economic Incentives Encourage the Development of Renewable Energy Market

The Chinese Government is actively encouraging the deployment of renewable energy having passed its first renewable energy law that requires power grid operators to purchase resources from registered renewable energy. The law offers a national fund to foster renewable energy development and tax preferences for renewable energy projects. "It aims to promote the development and utilization of renewable energy, increase energy supply, improve the energy structure, safeguard energy security, protect the environment, and realize the sustainable development of the economy and society," notes the analyst of this research service.

The series of incentive policies that have been adopted to stimulate various types of investments in renewable energy is urging active participation in the Chinese renewable energy market. Several European, U.S., and Asian manufacturers are already setting up operations in China, while others are seeking opportunities to penetrate the market. In addition to the renewable energy law, the National Development and Reform Commission (NDRC) has proposed the promotion of renewable energy and aims to achieve 16.0 percent of renewable energy consumption through its middle- and long-term program of renewable energy development.

Promising Growth in Most Sectors of the Chinese Renewable Energy Markets

The Chinese renewable energy industry is growing, with the wind power industry at the forefront experiencing the most rapid growth and the best prospect in the near term. The solar photovoltaics (PV) industry is still small but with leading manufacturers already investing heavily in new production technologies such as thin film solar technology, this segment is likely grow rapidly over the coming 15 years. The solar thermal market is also showing promise, with many companies having entered over the past few years and as more are expected to follow suit. The biomass power industry has gained great momentum partly because of sufficient Government funding and also due to the adequate availability of feedstock fuels. Small hydropower market is also undergoing a period of resurgence, but developments are likely to be slower than in other market segments as it is a comparatively mature technology.

"These renewable energy technologies must continue to compete with the relatively low cost of conventional fossil fuel-based generation," says the analyst. "Increasing support by providing incentives and by establishing economic incentives, combined with rapidly declining installation costs, can ensure that renewables gradually become an established part of power generation portfolios."

New Light on Solar Energy

The market isn't mature yet, but it's rapidly picking up speed thanks to rising environmental consciousness and innovative initiatives
by Cassidy Flanagan

Kermit the Frog once exclaimed, "it's not easy being green," but today being green is the fast track to raising both profits and environmental consciousness. Take the rapidly expanding solar-energy market, which has picked up momentum in the past few years and which was the topic of a RBC Financial Group report, "Investing in Solar Now," released on May 9.

The report from the New York City-based group provides a useful snapshot of the current state of the solar-energy industry and its potential for investors. According to the report, the demand for photovoltaic solar power will grow about 40% by 2011, making it an attractive market for venture capital and private investment.

"[Solar energy] isn't mature yet, so a lot of money is going into research and development. About $1.7 billion was invested as private equity and venture capital in the solar industry in 2006—mostly private equity for factories in China and investment in technology companies in the U.S. and Germany," explains Jenny Chase, a senior solar analyst for London-based investor research and information firm New Energy Finance. "In addition, $4.5 billion was invested in publicly quoted solar companies in 2006, most of which is being spent on expanding global manufacturing capacity," she adds.

Solar energy's recent boom is due in part to growing public and governmental awareness of the developing technology, which was introduced as an energy option during the oil crisis of the 1970s. In 1999, German legislation—known as the "100,000 Roofs" law, due to its aim to cover 100,000 roofs with panels—followed by the Renewable Energy Law in 2000, provided low-interest loans for home and business owners to install solar-power panels. It also gave installers the opportunity to earn half a euro for every kilowatt of electricity they generated in the power grid.

Silicon Panels Still Rule

In the U.S., the Energy Policy Act of 2005 currently provides a 30% tax credit on all solar systems installed by private homeowners and businesses. This policy is set to expire at the end of this year, though newly proposed legislation would extend these same credits until 2016.

Of the total solar-energy market, 95% is dominated by photovoltaic solar power, which directly converts the sun's rays into electricity. These panels use silicon, a material that raises its own environmental red flag, though industry professionals claim it has had no proven negative effects on the environment. In 2004, high demand for solar panels led to a bottleneck in the supply chain of silicon, driving up prices—and providing opportunities. "There's currently a lot of money being invested in new silicon production capacity to respond to the demand," says Chase.

But despite growth in the sector, solar power still plays a minimal role in energy production, with only .03% of worldwide electricity generated from photovoltaic power. As Chase points out, the technology is still underdeveloped, though that hasn't stopped innovative engineers and designers using what's available to produce viable, commercially focused products.

One such group is London-based SolarLab, which was founded in 2006 by Swiss-born Christophe Behling. Behling, a designer who has previously worked with companies such as Tag Heuer and Nokia (NOK), has created items from luxury products to solar vehicles. He designed the world's largest solar-powered vessel in Hamburg, Germany. The Hamburg Solarshuttle seats 120 passengers and was launched in 2000. To date, Behling has designed over 40 solar-powered water vessels, from large, commercial boats to smaller, private boats for personal use.

Slow Boat to Hyde Park

"The costs can be recovered on a boat like this in as little as three years," says Behling. "If you were to build a solar powered boat to the same size as a boat with a diesel engine, you would save 15% to 20% from the cost of fuel alone."

Most recent is SolarLab's design of the largest solar-powered boat in Britain, the Serpentine Solar Shuttle. Permanently moored on London's Serpentine Lake, the stunning craft made its maiden voyage last July, its two, silent engines completely powered by the sun. The shuttle moves slowly (at about 5 mph) and can hold up to 42 passengers. The battery can store up to 80 miles of energy when there's no direct sun (as on overcast days) and can travel for 20 miles in complete darkness.

Both the Serpentine and Hamburg Solar Shuttles usually generate more power than necessary and can feed excess energy back into their respective national grids in Britain and Germany. In Hamburg, the shuttle spends the three months of the year it's not sailing docked on the lake, feeding energy into the grid of the Hamburg Electric Company. According to Behling, it provides enough energy to fuel the city lights. In Germany, power companies must buy back photovoltaic power at about 50 cents per kilowatt hour, more than twice what normal utilities charge.

Next Project: Solar Golf Cart

SolarLab's latest ventures include building an even larger vessel, which will be a hybrid boat using solar power and bio-diesel fuel. Does that mean solo solar isn't viable? No, argues Behling. For now it's a question of practicality: As long as solar technology remains underdeveloped, the combined energy vessel can travel at greater speeds and navigate waters with stronger currents.

This boat is intended for London's Thames, and Behling's goal is to have it on the water in time for the 2012 Summer Olympics in London. The Thames boat will be able to reach speeds of 18 knots and will hold up to 200 passengers. SolarLab is also working on a solar-powered golf cart, which the company hopes to mass-produce. Currently, all of SolarLab's vehicles are custom made, making them pretty expensive—the Serpentine SolarShuttle cost around $470,000. Thinking small but mass market could revolutionize SolarLab's business.

For Behling, however, the most difficult part of the solar story is to change consumers' awareness of its current, and potential, capabilities. "Our most challenging aspect is the perception of the client. Many believe solar power isn't a reliable energy or that it's not sustainable. One of our goals is to shift the consumer mindset," he says. By creating vehicles that use reliable solar technology, and are accessible and aesthetically pleasing, SolarLab aims to create change through inspiration.

China will release new policy to support solar energy application in 2007

At present the cost of solar electricity is very high compared with the conventional electricity, in order to promote renewable energy, China's government is expected to release some policy to support solar energy applications in 2007.

China Speeds Up Renewable Energy Development

Jianxiang Yang – October 26, 2006 – 11:03am

Statistics show that in 2005, a total of US$38 billion was invested in renewable energy development worldwide. China topped the list with a commitment of US$6 billion, excluding spending on large hydropower projects.

China has good reason to speed up its renewables development, as the country is fairly poor in many energy resources in per capita terms. Its remaining exploitable reserves of petroleum and natural gas are merely 7.7 percent and 7.1 percent of world averages, while those of coal are 58.6 percent of the world average. At the current rate of extraction, China's proven reserves of these resources could last 15, 30, and 80 years, respectively, compared with world averages of 45, 61, and 230 years.

At a Sino-European economic summit held September 12 in Hamburg, Germany, Chinese Premier Wen Jiabao assured the world that China would rely mainly on domestic supplies to meet energy needs. The government's energy policy would aim to integrate development and conservation, giving priority to the latter. China could definitely find a "new path" for sustainable development, the Premier said.

This new path would have to include energy from renewable resources, in which China is abundant. Two-thirds of its hydropower potential is untapped. Exploitation of wind, solar, and biomass energies has just started. Although renewable energy may not yet be ready for prime time, it is expected to deliver sooner or later.

Already, the pace of adoption is noticeable. China's renewable energy development has grown at an annual average of 25 percent over the past few years, according to Zhang Guobao, deputy director of the National Development and Reform Commission (NDRC). By the end of 2005, the country's installed hydropower capacity reached 110 million kilowatts (kW), compared with 1 million kW in 2004 and only 0.492 million kW in 2000. China's 61 wind-power plants claimed a total generating capacity of 1.26 million kW in 2005, up from 0.764 million kW the year before. The 1,500 or so biogas projects resulted in a combined annual capacity of 1.5 billion cubic meters. In addition, 70,000 kW of solar power facilities were operational nationwide in 2005.

Compared with China's total capacity of 508 million kW for all forms of energy, however, the overall shares of renewables (24.3 percent for hydropower, 0.5 percent for wind, and even smaller amounts for others) remain limited. This means enormous room for development. An incomplete list of exploitable renewable energy reserves puts the country's hydropower potential at 400 million kW, wind at around 3 billion kW, biomass energy at 800–1,000 million tons of coal equivalent a year, and solar energy at a theoretical 1.7 trillion tons of coal equivalent a year.

Premier Wen Jiabao has urged all relevant government departments to take effective measures to accelerate the development of renewable energy, so as to "raise the share of quality, clean energies in the total energy mix."

According to the State Renewable Energy Medium- and Long-Term Development Program, renewable energy is expected to account for 16 percent of China's total energy supply by 2020, up from 7 percent in 2005. In terms of capacity, hydropower is expected to reach 300 million kW, wind power and biomass energy 30 million kW each, and solar energy 1.8 million kW by 2020. Biogas utilization would reach 44.3 billion cubic meters, solar heating 300 million cubic meters, fuel ethanol 10 million tons a year, and biodiesel 2 million tons a year.

China's renewable energy development is guaranteed under the nation's firstRenewable Energy Law, whichcame into force on January 1 of this year. In February, the government issued a set of rules to implement the law. In addition, officials have decided to raise the rate for electricity consumption by 0.025 yuan per kilowatt-hour ($0.32 cents/kWh), a small fraction of which (0.001yuan/kWh, or $0.013 cents/kWh)—is being collected for the development of renewable energy. And in early October, the Ministry of Finance released details of a new fund dedicated to the development of renewable energy sources, which will use grants and interest subsidies to give government support to renewables' development in three main areas: oil alternatives, construction, and power generation.

In general, local government officials are enthusiastic about promoting renewable energy projects. Their motives vary from securing a lucrative source of government tax revenues, to building up a "green" government image, to adding a "bright spot" to their work performance records. Factors such as the embrace of new energy technologies now bear considerable weight in an official's promotion.

Jiangsu Province in eastern China is particularly active in the renewable energy game. The prosperous region appears determined to take the lead in wind power exploitation. In less than five years, it plans to boost its wind capacity from virtually zero to 1,500 megawatts (MW). The region is also an important base for the solar industry, where more than 180 companies are involved in the development, manufacturing, and servicing of solar heating appliances.

Earlier this year, Shanghai, China's leading industrial and financial city, announced a plan to build up 100 MW of offshore wind energy capacity. The metropolis hopes to raise the share of renewables in its total energy capacity to 5 percent by 2010. The capital city of Beijing, meanwhile, in its newly released infrastructure construction plan, has vowed to lift renewables' share in its total energy consumption from the present 1 percent to 4 percent by 2010.

Companies across China—whether state-owned or private, domestic or foreign-funded—are eager to embrace renewable energy projects. Many believe the sector will soon be a gold mine, if it is not already. For some companies, particularly state-owned enterprises, the government's strong support for renewables is an inspiration. At a number of public occasions this year, NDRC deputy director Zhang Guobao noted that big energy developers in the country would ultimately be expected to derive a certain proportion of their products from renewable sources.

Earlier this year, Longyuan Electric Power, the biggest wind player in China, announced a plan to raise its wind-power generating capacity from an existing 416 MW to 3,000 MW by 2010, and to 7,000 MW by 2020. Other major energy developers like Huaneng, Guodian, and the Three Gorges Corporation have set up subsidiary companies dedicated to new or renewable energy development.

Foreign companies have been active as well. The world's leading wind equipment suppliers—Vestas, GE Energy, Gamesa, and Suzlon—have each set up wholly owned manufacturing facilities in China. And seven foreign development banks, including the International Finance Corporation, Germany's DEG, and France's Proparco, have invested in China's renewable energy projects.

The 30,000 MW wind-power goal for 2020 represents a market of 210 billion yuan (US $26.6 billion), and the country's combined renewables targets amount to US$100 billion. The coming years are likely to witness rapid development of these energy sources, and the targets might even be reached ahead of schedule, industry analysts say.

Yet several major barriers are preventing more rapid development of renewable energy in China. One is the weakness the country has shown in independent technology development. To date, most of the renewables' equipment being used—whether for wind power, biomass, or solar—has been imported, resulting in higher production and consumption costs. The Outline of National Medium- and Long-Term (2006-2020) Program for Scientific and Technological Development, released by the government in February, designates energy as the top area needing "urgent S&T support." The document lists a host of government-supported plans covering key fields of study, cutting-edge technologies, and special large programs, as well as basic research.

China is one of 48 countries worldwide that have enacted laws for renewable energy development. But industries have given only a cautious welcome to the country's laws and accompanying rules of implementation. For many, the wording of the rules is too general to be practical. And some measures remain controversial. For instance, new regulations for wind power decree that the grid feed-in tariffs be decided through a tendering process. The measure has been criticized by industry players, who fear the practice will result in price cuts and thus deny companies a reasonable profit.

Human resources are another problem. According to experts, China aims to engage hundreds of thousands of people in wind power exploitation by 2020. The number of specialized workers alone would be in the tens of thousands. But China currently has a very meager supply of wind energy experts. Only one of the country's more than 1,000 institutions of higher learning provides a four-year program dedicated to wind energy. The situation for other renewables is not much better. Solving this problem will require the joint efforts of many government departments and social institutions, experts say.

While the shortage of conventional energy resources is the main driver behind China's push for renewable energy, the country is also making the transition out of environment concern. The nation's coal-dominated energy system has caused severe pollution in many regions, which has compelled the government to turn to cleaner energy resources. Meanwhile, China has pledged to stage a "green" Olympics in 2008, and the environmentally friendly games are expected to be a showcase for the nation's embrace of renewable energy.

Thursday, May 17, 2007

Shrinking the cost for solar power

By Michael Kanellos Staff Writer, CNET
Published: May 11, 2007, 4:00 AM PDT

One of the big problems with solar power has been that it costs more than electricity generated by conventional means. But some experts think that, under certain circumstances, the premium for solar power can be erased, without subsidies or dramatic technical breakthroughs.

A sufficiently large solar thermal power plant (also called concentrated solar power, or CSP) could potentially generate electricity at about the same cost as electricity from a conventional gas-burning power plant, experts say.

It's not easy. The plant would also have to come with a large energy storage system, be built next to others and be located close to users. To date, no one has completed a facility that comports to all of these parameters, said Fred Morse, an energy analyst who has studied the issue.

"Solar thermal is available at much more attractive prices than solar photovoltaic. The land mass isn't huge, but it does take a while to build these," said Stephan Dolezalek, a managing partner and co-head of the clean tech practice at venture firm Vantage Point Venture Partners, an investor in Bright Source Energy, which builds solar thermal plants and components.

Both Dolezalek and Jiang Lin, who heads up the China Energy Group at the Lawrence Berkeley National Laboratory, said that solar thermal is likely the most promising technology in the entire alternative-energy field right now.

When asked when solar thermal can hit parity, Lin responded "now."

Thermal by the numbers

Conventionally generated electricity ranges between 5 and 18 cents per kilowatt hour (the amount of money to get a kilowatt of power for an hour) but in most places it's below 10 cents, according to the Energy Information Agency. Solar thermal costs around 15 to 17 cents a kilowatt hour, according to statistics from Schott, a German company that makes solar thermal equipment.

A solar thermal plant would need a facility to store the heat harvested in the day by its sunlight-concentrating mirrors so that the heat could be used to generate electricity at night. "You need the kind of system that can run in the evening," Morse said. At some sites, such as Nevada Solar One, excess heat is stored in molten salt and released at night to run the turbine.

The plant, ideally, should be capable of generating about 300 megawatts of electricity. Those plants can churn out electricity at about 13 cents a kilowatt.

That's still a relatively high price, so utilities would need to group two, three or more 300-megawatt plants together to share operational resources, Morse said. "They could share control rooms or spare parts," he said. That would knock the price closer to 11 cents a kilowatt hour.
"Under 10 cents is sort of the magic line," he said.

Dolezalek puts it another way: the plants need to be around 500 megawatts in size. Most solar thermal plants right now aren't that big. The 22-year-old thermal plant in California's Mojave Desert is 354 megawatts. Utility company Southern California Edison is erecting a 500-megawatt plant scheduled to open in 2009.

By 2014, solar thermal plants located in the Southwest could crank out nearly 3 gigawatts of power, estimated Travis Bradford of the Prometheus Institute for Sustainable Development, a nonprofit based in Cambridge, Mass. That's enough for about 1 million homes.

Costs can then be reduced further by building the plants close to consumers. It costs about $1.5 million per mile for transmission lines, according to statistics from Acciona Solar Power, which owns solar thermal plants. Solar thermal plants work best in arid deserts that get little rainfall. Since some of the fastest-growing cities in the world are located in sun belts, that's less of a problem than it used to be.

But getting to that point isn't easy. Land-use hearings and permits can drag on for years while construction costs rise. The amount of land required can be an issue too: the 354-megawatt plant in California occupies 1,000 acres. Larger plants would need more land, while smaller plants result in higher costs per kilowatt hour.

Even if all of these factors could be completely optimized, solar thermal power plants would likely not produce electricity at a level that would compete with coal plants. Coal plants, however, will likely be hit with carbon taxes in the near future, which will make solar thermal more competitive. Still, at less than 10 cents a kilowatt, solar thermal would be competitive with electricity from gas-powered plants.

Utilities will also likely work hard to lower the costs of solar thermal in the coming decades, Morse added. Utilities are under mandates to increase their renewable energy sources. Citizen groups often complain about wind turbines and the wind doesn't blow at a constant, predictable rate. Several companies are intent on tapping heat from under the surface of the earth to generate power. Geothermal power, however, works best only in certain locations.

"There is an enough flat, unproductive land in the U.S. to power the U.S.," Morse said. "We just don't have the wires to get there. Eisenhower built the national highway system. Some president will build the national grid."