GigaOM » First Solar

Bright outlook: First Solar sells out of solar panels, inks new deal in China

Ucilia Wang — Tue, 07 May 2013 00:00:58 +0000

After dealing with a market that’s been flooded with low cost solar panels for over two years, solar panel makers are now starting to reverse that trend. First Solar is sold out of its solar panels into the third quarter of the year, company executives said Monday.

The announcement came after SunPower executives said last week that demand in the hot Japanese market exceeded what the company could deliver during the first quarter. Last month, market research firm IHS reported that the average wholesale prices for silicon panels delivered to Europe rose for the first time in several years.

The shift has come at a heavy cost to solar manufacturers like First Solar and SunPower, however. For over two years, solar panel makers have had to reduce production or even shutter factories while posting losses quarter after quarter. Dozens have filed for bankruptcy, including Germany’s Alfasolar, as reported by PV Magazine Monday. The bankruptcy of Suntech Power’s main subsidiary in March rattled the industry, particularly those who have bought the Chinese company’s solar panels.

First Solar, which makes solar panels and develops solar power plants, closed its big manufacturing plant in Germany last year and suspended plans to build new factories in Vietnam and Arizona. Those moves as well as First Solar’s efforts to reduce its spending on administration and, to a lesser extent, research development and sales, have allowed the company to survive the downturn. First Solar brought in new top executives over the past year and presented a convincing plan last month for improving its technology and sales in emerging markets for the next several years.

For the past three years, First Solar’s executives have discussed in earnest the need to grab market share in emerging markets such as India, China, the Middle East and Latin America. Germany was once its largest market, but the country, which has steadily reduced its government incentives for solar energy generation, accounted for just three percent of its sales in 2012, according to First Solar’s 2012 annual report.

In an earnings discussion with analysts on Monday, First Solar’s CEO Jim Hughes pointed out that the company has expanded its market reach since early 2012. Back then, it was talking mostly about sales in the United States, Canada, India, Europe and Australia. Its purchase of a Chilean solar power developer earlier this year created a new talking point about Latin America. The Chilean company was developing about 1.5 GW of projects when First Solar announced the acquisition. Overall, First Solar is working on about 1.8 GW of projects in Latin America, though those projects are under development and the company isn’t promising that all of them will succeed.

Hughes also announced that the company has signed a memorandum of understanding with the Chinese city of Ordos in Inner Mongolia for the second phase of a 2GW plan that it first announced in 2009. The second phase will see First Solar supplying 300 MW-500 MW of solar panels, and construction could start in the second half of 2014. The first phase, a 30MW project, is set to start construction in the third quarter of this year, he added.

Meanwhile, the company is building some of the world’s largest solar power plants right here in California. One of them, the 230MW Antelope Valley Solar Ranch One in Los Angeles County, has run into “weather-related delays” during the first quarter of this year. That partly contributed to lower earnings from the previous quarter. Completion of the project is now set for the end of this year rather than the second quarter.

The company generated $755 million in sales for the first quarter of this year, down $320 million from the previous quarter but up $258 million from the year-ago period. It posted $59.1 million in net income, or $0.66 per share for the first quarter, $154.2 million in net income, or $1.74 per share for the fourth quarter of 2012. It reported $449.4 million, or $5.20 per share, in losses for the first quarter of 2012.

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Why First Solar is buying a silicon solar cell startup no one’s heard of

Ucilia Wang — Tue, 09 Apr 2013 22:25:19 +0000

First Solar is buying an under-the-radar startup called TetraSun to add expertise around silicon solar cell manufacturing to its technology portfolio, which until now has focused on using the material cadmium telluride to make solar cells.

The Arizona-based thin film solar giant announced the pending acquisition on Tuesday during its analyst day — its first since 2009 — in which it laid out a persuasive technology and business development plan for the next five years. Investors liked what they heard and pushed the company’s stock up by nearly 50 percent during trading.

Courtesy of Southern California Edison

The announcement also came after the company’s top executives spent the entire day taking shots at silicon solar technology, which they said hasn’t been able to make a big leap in its sunlight-to-electricity conversion rate for years and is approaching the theoretical limit of its efficiency. First Solar’s bread and butter cadmium telluride, on the other hand, has a higher theoretical efficiency limit, and First Solar has shifted its businesses focus from building large factories to make panels with cadmium-telluride cells to developing more efficient panels, said CEO Jim Hughes during the event.

Who is TetraSun?

So why TetraSun? Apparently Silicon Valley-based TetraSun has some disruptive silicon cell designs that set it apart from the rest of the silicon solar companies. Its designs require fewer manufacturing steps to produce conventional silicon cells, and eliminates the need for silver and transparent conductive oxide. Silver is used to transport electricity produced by the cells, while the oxide is a coating that protects the cells and helps the semiconductor material (such as silicon or cadmium telluride) to grab the light more effectively to produce electricity.

First Solar claims that TetraSun’s cells also can perform better in hot climates than conventional silicon cells. That feature will make solar panels with TetraSun’s cells more desirable in places like the Middle East and India, two markets with a lot of potentials for growth. First Solar says it plans to start making TetraSun’s cells in the second half of 2014.

First Solar believes TetraSun’s technology could produce cells at an over 21 percent efficiency at a cost that is comparable to the expense of making conventional — yet less efficient– silicon solar cells. Most silicon cells today have efficiencies in the mid-teens. SunPower stands out in its ability to make silicon cells at nearly 23 percent, but the company uses a more expensive type of silicon and has its own special cell designs to achieve that high efficiency. First Solar didn’t specify what type of silicon TetraSun has used.

TetraSun has been quiet about its technology development, and its website is just a landing page. Its name did show up as a recipient of a U.S. Department of Energy grant, announced back in January 2010.

First Solar is buying TetraSun from JX Nippon Oil & Energy Corp. and other investors, and it expects to complete the acquisition in the second quarter of 2013. It’s not disclosing the price for the acquisition.

First Solar also talking to JX Nippon about selling solar panels with TetraSun’s cells in Japan, which has become a hot market since the Fukushima nuclear power plant disaster in March 2011 prompted the government to offer generous subsidies for renewable energy generation.

An efficiency play

First Solar previously used its manufacturing scale and efficient production process to roll out solar panels more quickly than its competitors. That enabled First Solar to sell its panels at a much lower price even though the panels weren’t as efficient. But the plummeting prices for silicon, which is used in the majority of the solar panels made today, has eroded that pricing advantage for First Solar and prompted the company to focus on improving its solar panels’ efficiency. More efficient solar panels could fetch higher prices because they allow developers to build a same-size power plant with less land.

But First Solar apparently doesn’t want to rely on just one semiconductor material for its solar panels. It once worked on developing solar panels with copper, indium, gallium and selenium (CIGS), but it scrapped that program over a year ago. Supposedly the decision to ditch that effort came partly because First Solar was posting losses and looking for ways to cut costs. The company’s chief technology officer, Raffi Garabedian, told analysts on Tuesday that CIGS technology has taken the most private and public funding, yet it still isn’t likely be able to deliver the big efficiency improvements that cadmium telluride can over time.

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First Solar shares soar almost 50% on outlook, efficiency records, acquisition

Katie Fehrenbacher — Tue, 09 Apr 2013 19:40:40 +0000

Solar thin film leader First Solar saw its shares zoom almost 50 percent on rosy guidance for 2013, new records for efficient solar cells and news that the company acquired solar panel tech company TetraSun. Marketwatch reported that the stock rallied so much that it “triggered Nasdaq circuit breakers” (which pauses trades if a stock moves more than 10 percent in five minutes) and trading of First Solar’s stock “was halted five times.”

First Solar’s full-year earnings are projected to hit between $4 and $4.50 a share, up from analyst projections of $3.60 a share this year. Sales are expected to come in between $3.8 billion and $4 billion, while operating income is estimated to be $430 million and $460 million.

The news is surprising in that First Solar had a pretty difficult year in 2012, and just reported those earnings in February. For the entire 2012, First Solar took in $3.4 billion in sales, up 22 percent from 2011, but it recorded a net loss of $96.3 million, or $1.11 per share.

First Solar has been focused on raising the efficiency of its solar panels. Higher efficiency means it can sell panels for more and raise its margins, but it also means the overall cost of installing the solar system can be lower (less panels, produce more power, with less space). In February it was touting a world record 18.7 percent efficiency for cells made from the material cadmium-telluride. This morning First Solar announced more efficiency records for cells.

Efficiency is also the reason behind First Solar’s aquisition of TetraSun. TetraSun has developed a solar cell design that can hit conversion efficiencies exceeding 21 percent. Investors in TetraSun include JX Nippon Oil & Energy Corporation.

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Diary from Taiwan: The island nation grapples with nuclear and clean power

Ucilia Wang — Mon, 08 Apr 2013 19:39:53 +0000

Taipei, Taiwan: It was a powerful (6.0) earthquake that ripped through central Taiwan that caused me to think about the similarities between Japan and Taiwan’s energy futures. A day after I arrived in Taiwan a little over two weeks ago, the strong earthquake caused my family’s apartment of the 11th floor in Taipei to sway back and forth — the tremor killed one person, injured at least 19 near the epicenter and invited anti-nuclear newspaper articles the following morning.

As a close neighbor of Japan, Taiwan’s energy future shares similarities for both energy technology development as well as energy challenges. Both island countries have traditionally relied mostly on imported fossil fuel resources and are highly earthquake prone, which have fueled intense debates over nuclear power policies as well as a further push into clean energy.

A wind farm in Miaoli, Taiwan.

A week after the quake, I hiked to a seaside town about two hours south of Taipei, and was greeted with a coastline dotted with wind turbines. On another excursion during the trip, a hydroelectric dam near Taipei exposed distressingly low water levels and a big swath of dry lake shores. The water from the reservoir irrigates farms and supplies drinking water for homes and businesses. Like parts of the U.S. gripped by drought, Taiwan needs more rain and to figure out ways to make up for the shortfall.

Renewable energy, resource conservation and protests over nuclear power are nothing new in the history of energy development in many parts of the world. But population and economic growth, which taxes and at times destroys our environment, requires much more thoughtful planning for where and how we produce energy. Taiwan, along with mainland China, and post-Fukushima Japan, are increasingly being forced to address these issues.

Look to Japan

Japan has become a hot market for solar energy and other renewable energy generation, as well as energy storage, after an earthquake wrecked the Fukushima nuclear power plant in March 2011. The government put in place generous subsidies for alternative energy development. Both IHS and Bloomberg New Energy Finance predict that Japan will add more solar power generation than any country except China in 2013.

A map of wind farms in Taiwan.

The Fukushima disaster prompted Taiwan to re-examine its nuclear power policy and stirred protests against the construction of a fourth nuclear power plant, which is actually close to completion.

Taiwan also subsidizes clean power and plans to increase solar and wind energy development. Late last year, the government raised the 2013 target for new solar energy generation by 30 percent to 130 megawatts. The country is pushing for wind farm construction on the coast because it already has made use of suitable wind resource island, according to Taiwan Power Co. By the end of 2012, Taiwan had 559.66 megawatts of cumulative wind power generation capacity and 134.3 megawatts of solar power generation capacity, the utility said.

Shihmen Dam in Taoyuan, Taiwan.

Renewable electricity generation capacity (excluding hydropower) accounted for just over 6 percent of Taiwan’s total (41.4 gigawatts). In terms of the actual power produced — solar and wind farms can’t generate power around the clock — and renewable electricity made up nearly 3 percent of the total power produced, according to Taiwan Power’s most recent, 2012 sustainability report.

Solar energy should play a larger in Taiwan given that, like Japan, Taiwan is home to major solar cell makers. Promoting more solar energy production also will help Taiwan’s domestic solar manufacturers, who also have been hit hard by an oversupply of solar cells in the global market over the past two years. The glut has caused prices to crash and forced many solar manufacturers to go out of business.

The low water level at the Shihmen Dam.

One of the largest Taiwanese solar cell makers, Neo Solar Power, recently announced a survival plan to merge with another Taiwanese solar cell maker, DelSolar. Neo Solar said the combined company will have “close to 2 gigawatts” of production capacity, which would be comparable to First Solar’s capacity of 1.9 gigawatts at the end of 2012.

For Taiwan and its 23.3 million people, adding more solar and wind power makes economic sense and helps it to gradually reduce its reliance on imported fossil fuels and perhaps its own struggle with whether to build more nuclear power plants over the long run. As the nation takes cues from Japan, and others, expect to see a greater push into clean power, and more controversy over nuclear.

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Solar makers turn a laser-like focus on boosting the efficiency of solar cells

Katie Fehrenbacher — Mon, 04 Mar 2013 19:36:11 +0000

In 2013, solar makers are preoccupied with boosting the efficiency of solar cells, or basically using various techniques to increase the amount of sunlight that each solar cell can convert into electricity. That’s because it’s one of the most important ways they have right now to reduce costs in a difficult year for solar manufacturers. The supply of solar cells in the market over the past year is far more than demand and some companies are selling solar cells at a loss.

It’s a particularly important trend for solar maker startups that need a premium product to sell. For example, on Monday morning, venture-backed solar startup Alta Devices announced that it’s reached 30.8 percent efficiency for solar cells that it’s marketing to mobile gadget makers. For comparison’s sake traditional silicon solar cells are closer to 20 percent efficient.

Alta Devices says it has been working with mobile device maker customers that want to extend the battery life of gadgets using embedded Alta solar cells. The six-year-old company — which has raised $120 million from investors like Kleiner Perkins, NEA and Dow Chemical — has been planning on making a fast-charging solar iPad cover by the end of the year that could end the need to plug an iPad into the wall or laptop to charge.

Alta Devices says the 30.8 percent is a world record for its dual junction solar cell made from the materials gallium-arsenide, and previously the company was saying its cells were 28 percent efficient. Check out this article for more details on Alta Device’s solar cell technology and a tour of its pilot factory. Alta says it has been shooting for an eventual efficiency of 38 percent for its cells.

Remember this type of efficiency demonstrates what a company might be able to achieve. But whether a company will ever do so will depend on factors such as how much does it scale up its manufacturing, how much money is it able to raise and how efficiently it is operating factory equipment.

Alta’s solar cells are more expensive than traditional silicon cells, but the company is hoping that niche markets like gadget makers will be willing to pay a premium for the next-gen cells. Alta is also developing solar cells for military applications, which can enable troops and their devices to charge up off-the-grid in combat less frequently.

Startups aren’t the only ones that are focused heavily on solar cell efficiency. First Solar last week announced a world record of 18.7 percent for cells made from the material cadmium-telluride. That’s up from the 17.3 percent cell it touted in July 2011.

SunPower has long touted highly efficient solar cells. And suppliers like DuPont sell materials that big solar companies can use to boost the efficiency of their cells.

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First Solar’s new world record for solar cell efficiency and why it’s important

Ucilia Wang — Wed, 27 Feb 2013 01:44:35 +0000

One of the important ways to make solar energy cheaper is to improve the amount of sunlight that solar cells can convert into electricity. So it’s a big deal to see that First Solar announced on Tuesday that it’s managed to create a record 18.7 percent solar cell, up from the 17.3 percent cell it touted in July 2011.

That 18.7 percent sets a new world record for cells made from the material cadmium-telluride. It represents the best the company could achieve, but to make cells with that efficiency in mass production will likely take a few years.

Boosting the efficiency helps to reduce production costs of solar cells. Efficiency is correlated with how much power a panel of a given size can produce – more power means higher efficiencies. There is a fixed cost and amount of time for making each panel. If the company produces each panel with a higher power rating (in watts) for the same amount of time as it did before, then that panel’s cost-per-watt is lower.

For consumers, a solar panel with more efficient cells also means they won’t need as many solar panels to get the same amount of electricity. Or they could get more solar electricity with the same number of panels. That’s good news for those who have homes with a limited roof space or want to rely less on their utilities for power.

The Arizona company has long built its reputation as a low-cost manufacturer, but it has faced increasing competition from companies that have gotten better at reducing costs. Like First Solar, many of these rivals have built mega factories and developed their own or licensed technologies to cut costs.

A good number of these solar cell makers are based in China, and in recent years these Chinese companies also have gotten strong financial support from their national and local governments — as well as state-controlled banks — to become formidable players. But that help has gotten the Chinese manufacturers in trouble in the U.S. and Europe, where trade complaints have been filed to stop what their rivals say is unfair competition. The U.S. government started to impose tariffs on imported Chinese silicon solar cells last year after investigating such a trade dispute in 2011-2012.

With the new efficiency record, First Solar also wants to show that its material of choice, cadmium-telluride, is capable of squeezing more and more electricity from sunlight for years to come. Most of the solar cells made today actually use silicon, the same material for chips that run computers and mobile phones. But there has been a long-standing debate over when silicon and cadmium-telluride will be close to hitting the maximum efficiencies the materials can inherently produce.

Without switching to a new material — and spending lots of money to replace factory equipment — solar companies are looking at different ways to boost the efficiencies. One idea is to stack another layer of cells on top of the existing layer to induce chemical reactions that help to minimize the loss of electrons in the process of converting sunlight to energy. Figuring out new ways to boost silicon solar cell efficiency is one area where startups might still be able to attract venture capital, especially if the ideas involve licensing the technologies to big producers.

Many investors have shied away from putting money in startups that want to build factories to manufacture the technologies they have developed. Solar manufacturing technology has shown to take a lot more time and money to commercialize than some VCs have the appetite for, and investors haven’t seen enough success stories to want to place more bets.

When solar cells are assembled into a panel, the efficiency of the entire panel is typically a few percentage points lower than the cell efficiency. First Solar announced a 14.4 percent panel efficiency record about a year ago. But the panels that are rolling off its production lines en masse clocked in at an average of 12.9 percent as of the end of 2012, up 0.7 percentage point from 12.2 percent by the end of 2011.

The company also reported its fourth-quarter financial results on Tuesday. It posted $1.1 billion in sales for the quarter, up from $415 million in the fourth quarter of 2011. It generated $154.2 million in the quarterly net income, or $1.74 per share, compared with a net loss of $413.1 million, or $4.78 per share, from the year-ago period. For the entire 2012, First Solar took in $3.4 billion in sales, up 22 percent from 2011, but it recorded a net loss of $96.3 million, or $1.11 per share, for 2012.

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Solar costs could fall below 50 cents a watt by 2017

Katie Fehrenbacher — Wed, 12 Dec 2012 19:12:31 +0000

Solar panels are as cheap as they’ve ever been, and according to Lux Research the costs of producing solar modules, which make up solar panels, will also continue to fall. It needs to for some of the solar manufacturers to survive.

By 2017, solar modules could cost below 50 cents to produce, says Lux. They are as low as 70 cents per watt now. The lowest costs will be for solar modules made from thin film solar panels of cadmium telluride, particularly the kind made by First Solar. Modules made of copper indium gallium (di)selenide, or CIGS — a lot of startups developing CIGS have struggled to reach commercialization — could reach 64 cents per watt to produce by 2017.

The cost will drop partly because of manufacturing efficiencies, but also because of the efficiencies of the modules themselves. Startups and big companies alike are looking to make their cells more efficient as a way to sell lower overall costs of the system, and survive the difficult price environment of the last fours year.

Due to an overcapacity boom, and subsidized solar manufacturing, many solar makers are operating at a loss, being forced to sell solar cells and modules for rock bottom prices. There will no doubt be even more consolidation and the companies transition through the overcapacity.

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Why greentech startups need to renew their focus on volume manufacturing

Kunal Girotra, ThinSilicon — Tue, 11 Dec 2012 16:00:57 +0000

Back in early 2000, I spent four years working in Samsung’s LCD division, where giant sized TVs were pumped out of their football field-sized manufacturing lines 24/7. Manufacturing at Samsung always had a “war-like” kind of atmosphere, where entire fabs would spring up from scratch in six months and every new process would be ramped up to high manufacturing yields in a short amount of time.

I imagine a similar focus on high volume manufacturing at other successful hardware companies like Intel and First Solar, that make millions of units per month. This is no ordinary feat and is achieved only by a disciplined approach, operational rigor and a clear vision that “he who controls manufacturing eventually controls the market.”

Silicon Valley is the mecca of innovation worldwide, which makes the recent lack of successful greentech hardware startups difficult to comprehend. While there are a variety of reasons for this issue, one thing that might be missing from the greentech ecosystem is this Samsung-style intense focus on manufacturing.

Innovation is good, but scaled up manufacturing matters too.

Silicon Valley startups producing solar panels, batteries, energy efficient windows and other volume hardware products will have to achieve manufacturing at the scale of tens of thousands of defect-free units per month to make a dent in the marketplace. Having a superior product specification might not be enough if the companies are unable to produce the goods cost-effectively in mass numbers. In fact, their very ability, or inability, to do so might end up being the differentiator between survival and failure.

Technology transfer from R&D to manufacturing requires a different crew geared toward an operations-driven mindset and a brute force methodology that can quickly deliver a stable process. The 24/7 lifestyle that is required to deliver, say an 80 percent up-time, is painstaking, time consuming and requires dedication and commitment. At Samsung, the technology transfer engineers were treated like celebrities and provided with five star accommodations at the factory site. Special bonuses and incentives were tied to the speed of progress. One might say that’s an unfair comparison, but the reality is that Silicon Valley is competing against several such cleantech companies from all over Asia. Unless the startups have extremely revolutionary products that can tolerate lower manufacturing yields, there is a need to manufacture as efficiently, if not better, than the competition.

Having said all that, Silicon Valley was the birthplace of the “Intel Way” and has had a rich history of volume manufacturing. But an exodus of semiconductor fabs from the Valley to nearby states has taken the manufacturing focus out of the Valley and along with it, a lot of the manufacturing talent. This, in combination with the rise of Asia and the difficulty in obtaining financing for manufacturing has made it even more challenging for greentech manufacturing startups to scale up.

How to get around the manufacturing learning curve

Here are a few ways that greentech startups could help overcome issues with scaling up to volume manufacturing:

1). Obtain an experienced crew that can transfer R&D processes into a pilot line with an extreme focus on improving yields. Ensure that every employee understands that true success comes not from obtaining one-off records or champion results but from volume data obtained from processing hundreds of samples. At Samsung, no champion results were ever reported as an accomplishment in an upcoming line since those results are meaningless until proven at scale. Companies like Miasole in Silicon Valley took the right approach of involving Intel manufacturing experts for their solar panel factories and it would be wise for others to follow suit.

2). Manufacturing is a costly endeavor and gives the most bang for buck when it’s running 24/7. Hence it’s advisable to not wait for a perfect product but transfer an intermediate process and iron out kinks in the production process. A lower specification product with 90 percent yield might have better economics than having a higher performing product with a 50 percent yield, assuming the market will accept such a product for some time. There is no better example than First Solar who has continued to sell less than 12 percent efficient solar panels for a long time proving that there is room for a lower specification product if you make manufacturing extremely efficient.

3). Excellence in manufacturing depends on the company’s ability to expand and build future lines. For a Silicon Valley startup, a pilot line locally in the area might make sense to be close to the R&D team. But it might be wise to take the cue from other high tech companies and move manufacturing to nearby states given their lower costs of land and permitting, robust manufacturing ecosystem and availability of manufacturing talent. Several companies like Stion, Soladigm and others have already taken that approach, which is a good sign.

The importance of manufacturing to ensure a greentech hardware company’s success cannot be stressed enough. High-yield manufacturing allows a company to reduce the cost of its product and reinvest the profits into newer lines and more R&D. All of this requires a cultural change across the company.

The startups that truly understand the differences of personnel and resource requirements for manufacturing vis-à-vis R&D have a greater chance of success. Those that don’t might perish to the Asian giants who believe it or not, have figured out the art of volume manufacturing.

Kunal Girotra is a Director of Process Engineering at ThinSilicon, a solar cell R&D subsidiary of China Solar Power. Prior to that, he worked in various R&D and technology transfer roles at Samsung’s LCD division for advanced LCD and OLED displays. He can be reached at kunalgirotra@gmail.com.

Images courtesy of Miasole, Shutterstock/Mypokcik, First Solar.

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How U.S. solar makers can break into China: JVs, pilots

Katie Fehrenbacher — Mon, 03 Dec 2012 16:22:44 +0000

China isn’t just the home of low cost solar panel manufacturing, it also has a potentially huge solar project market, thanks to strong Chinese government support and a rapidly growing need for more energy in general. But if you’re an American solar panel maker, how do you break in to the market that’s already flooded with cheap Chinese solar panels and seems to hand deals to domestic suppliers more readily? According to a few deals announced on Monday morning, it’s going to take baby steps like joint ventures and pilot projects.

On Monday, San Jose, Calif.-based SunPower, which makes efficient premium solar panels and trackers, announced a joint venture with silicon materials company Tianjin Zhonghuan Semiconductor, power company Inner Mongolia Power Group and development group the Hohhot Jinqiao City Development Company, to sell solar tech into the Chinese market. The $60 million JV focuses on SunPower’s new C7 Tracker and concentrator technology — a single axis tracker combined with rows of parabolic mirrors and 22.8 percent efficient solar cells — and SunPower is putting in $15 million for a 25 percent stake.

It’s a small move compared to the vast size of the Chinese solar project market. Solar watchers expected China to add 3-4 GW of solar projects this year, 10 GW of solar by 2015, and 50 GW MW by 2020.

And an even smaller deal was announced by an American solar maker in China on Monday, too. Arizona-based First Solar, which makes thin film solar panels, said it has come to an agreement with developer Zhenfa New Energy Science & Technology Company to sell its solar panels to a project in Xinjiang province in early 2013. This would be First Solar’s first commercial project in China.

First Solar actually signed a memorandum of understanding with the local government in Inner Mongolia for 2 GW of solar panels back in 2009 and was hoping to move that project forward last year. But regulatory approval has taken longer than expected. In the most recent quarter First Solar said it has hired Bruce Yung as its new China manager, hoping to kickstart that market.

Looks like large solar deals — like First Solar’s from back in 2009 — tend to get caught up in approval processes and market fluctuations. There was also a 2 GW solar thermal announcement from eSolar back in 2010 with Chinese power equipment maker Penglai Electric, but I haven’t heard about that deal moving forward, either. Smaller steps, working with local partners, seems to be the way to go in the uncertain Chinese solar domestic market.

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India faces growing pains for its solar market

Ucilia Wang — Mon, 19 Nov 2012 18:55:40 +0000

India may be on its way to becoming a major solar market, but that path is far from obstacle-free. Already reports are emerging about tales of growing pains, including component shortages, dust storms that impair solar projects and policy changes that threaten the use of renewable energy credits to bolster more solar development.

A Bloomberg story, quoting an Indian government official, reported that roughly two-thirds of the planned 500 MW of solar thermal power projects will likely be delayed or shelved before they are due for completion in the first half of 2013.

The assessment is a sober reminder that solar energy power plants are big construction projects that could be stalled by one of the many pieces that must come together to make them work. Securing permits and financing is typically a huge challenge even in places with policies and subsidies in place to promote solar energy development. California, for example, has seen delays and the demise of many solar energy projects. Historically, 30-40 percent of the proposed renewable energy projects (which would include not just solar but wind and others) have failed to become reality.

India has become a magnet for solar equipment manufacturers and power plant developers from around the world. The country’s national and state governments have incentives in place to entice solar energy development, and India indeed has become a big destination for solar panels from companies such as First Solar, Suntech Power and Trina Solar in the past two years.

India wants more renewable energy to help provide overall power — the country’s middle class, and accompanying GDP are growing rapidly, and power shortages are a common occurrence. About 25 percent of the country’s population, or 288.8 million people, have no access to electricity, according to the International Energy Agency. India also wants more clean power to help reduce its heavy carbon footprint.

Solar thermal power plants use mirrors to concentrate sunlight for producing steam, which then drives a turbine and generator to make electricity. India’s solar thermal developers are facing a shortage of the fluid that receives the sun’s heat to generate the steam because two major suppliers can’t produce it fast enough to meet demand, Bloomberg reported.

Heavy dust also is a problem for Indian solar thermal projects. Apparently developers are realizing that dust in the desert, where they are developing projects, can seriously disrupt the direct sunlight that maximizes the solar electricity production. That means their projects could end up generating far less profits than expected over time.

It should come as no surprise that dust can make a significant impact on the solar power plant performance and not just those that use solar thermal technology. Projects like First Solar’s solar panels in Abu Dhabi require regular washing to minimize the impact of dust, while First Solar’s other projects in the U.S. don’t need the hosedown.

Solar electricity accounts for a fraction of the world’s electricity supply, so solar power plant development is relatively new in the history of power generation. Better technology needs to come along to reduce the impact of dust on solar power generation or to create more accurate forecast and modeling of dust storms so that developers don’t end up spending money on projects before realizing that they have picked the wrong locations.

There also is trouble brewing in India’s effort to use renewable energy credits to boost solar energy development. Energy credits are associated with each project, and they are bought and sold by solar power plant owners to help finance future projects. Utilities could buy them to meet their government mandates for increasing the amount of clean power they must provide to their customers.

The Indian government is setting a range of prices for the current and future energy credits in an effort to provide assurances and some predictability for developers to map out their project finances into the future. But it recently announced policy changes that would lower the prices and likely cause investors and developers to rush to get their projects completed before the prices are set to fall, according to market research firm Bridge to India.

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