Solar Panel Makers Face Supply-Glut `Armageddon'

Solar panel makers from Arizona to Shanghai face a price crunch in 2011 because they’re adding manufacturing capacity just as global demand is poised to fall. Tthe supply of photovoltaic panels may climb to almost triple the level of demand next year, flooding the market and potentially crashing the price, said Gordon Johnson, New York-based solar power analyst.
“It could be Armageddon,” he said in an interview. “Demand is about to fall at a time when you’re going to have a significant increase in supply. In a commoditized industry, that is a formula for disaster.”
Manufacturers have sold a record number of panels this year as developers rushed to connect them to the grid and lock in subsidized power prices before the rates are cut by governments in Germany, Italy and the Czech Republic. In Germany’s case, the world’s largest panel market, demand will fall in 2011 after the state cuts rates producers earn by 13 percent, Johnson said.
That will glut the market next year for photovoltaic panels, which turn sunlight into electricity, and drive the price manufacturers can charge down to as low as $1.10 per watt from about $1.80 this year, Johnson said.
Revenue may be undercut for panel-makers from Tempe, Arizona-based First Solar Inc. to JA Solar Holdings Co., the Shanghai-based company that got a $4.4 billion credit facility for expansion this year from a Chinese state-owned bank. JA Solar alone added 0.5 gigawatt of factory capacity in the second half, or 5 percent of global demand forecast for next year.

Read Entire Article at Bloomberg Business

Why Financing Your Green Energy Projects Makes $ense!!

Cost of Green Power Makes Projects Tougher Sell

Matt McInnis for The New York Times

The United States has relied on a combination of state renewable energy mandates and federal tax credits to encourage greater reliance on energy from renewable sources. Legislation that would have set a price on carbon-dioxide emissions and included a standard for increasing the share of clean energy in the nation’s electricity portfolio failed in Congress this year.

“Our investors tell us they’re nervous about all the uncertainty,” said John Cusack, the president of Gifford Park Associates, a sustainability management and investment consulting firm in Eastchester, N.Y. “They don’t know what’s going to happen.”
To be sure, a lot of renewable power development is still going forward. The American Wind Energy Association estimates that wind farms capable of producing 6,300 megawatts of wind power are under construction, and that a busy second half of 2010 would leave installations about 50 percent behind last year. Solar power is becoming less expensive, and its use is expanding rapidly. But it still accounts for less than 1 percent of the nation’s electricity needs, providing enough to serve about 350,000 homes.
Renewable energy supporters argue that higher fossil fuel prices will eventually make renewable energy more competitive — and at times over the last two decades, when the price for natural gas has spiked, wind power in particular has been a relative bargain. Advocates also argue that while the costs might be higher now, as the technology matures and supply chains and manufacturing bases take root, clean sources of power will become more attractive.
Fold in the higher costs of extracting and burning fossil fuels on human health, the climate and the environment, many advocates argue, and renewable technologies like wind power are already cheaper.
“One of the problems in the United States is that we haven’t been willing to confront the tough questions,” said Paul Gipe, who sits on the steering committee of the Alliance for Renewable Energy, a group advocating energy policy reform.
“We have to ask ourselves, ‘Do we really want renewables?’ ” he said. “And if the answer to that is yes, then we’re going to have to pay for them.”