Prospects Darken For Solar Energy Companies

Hugh Pickens writes "Although global demand for solar power is still growing — about 8% more solar panels will be installed this year compared with 2010 — bankruptcies, plummeting stock prices and crushing debt loads are calling into question the viability of the solar energy industry that since the 1970s has been counted on to advance the world into a new energy age. Only a handful of manufacturers are now profitable in the face of too much capacity, which has contributed to a plunge in prices as government subsidies have been curbed. Prices for solar panels started 2011 near $1.60 per watt, but a buildup of inventory forced manufacturers into a fire sale toward the end of the second quarter that has pushed prices to near $1 per watt now. 'The prices that we're seeing today are likely not covering manufacturing costs in many cases,' says Ralph Romero. With at least seven solar-panel manufacturers filing for bankruptcy or insolvency in the last several months and six of the 10 largest publicly traded companies making solar components reporting losses in the third quarter, public-market investors are punishing the solar sector, sending shares down nearly 57% this year. Although winners are expected to emerge eventually, the question is how much more carnage there will be before that happens. 'The fact of the matter is, nobody really knows which solar companies will be pushed out of business or be forced to merge,' writes industry analyst Rodolfo Avalos. 'Nobody also knows how long it will take for the solar industry to improve even when the forecasted solar global demand for the next 5-10 years is quite promising.'"

Comments

If the visible hand of government lets go

[mangu]

What keeps the solar power industry from taking off is not the market. It's the subsidies that keep fossil fuels artificially cheap.

Subsidies like spending a trillion dollars to keep military control of producing countries, like fucking up the planet for the future generations, and so on.

Re:If the visible hand of government lets go

[ShnowDoggie]

Sitations?
It is very easy to find tax exemptions for oil and mining exploration. There are even sections in the 1040 instructions for it. I am not a tax expert, but clearly there are government subsidies for fossil fuels.

Re:If the visible hand of government lets go

[rmstar]

Get your facts straight. Fossil fuels are never subsidized, but instead heavily taxed by the governments.

They are both, subsidized AND taxed. Not everywhere in the same way, though. Did you know the UK subsidizes oil extraction in the north sea? The reason is of course cronyism and corruption.

Re:If the visible hand of government lets go

[Anonymous Coward]

HAHAHAHAHA. Oh, god, I haven't laughed like that in AGES. Not subsidized... LOL. What do you call the Iraq War? Our gifts to Saudi Arabia? Our support for tin-pot dictators across oil producing regions? Our unwillingness to tax the pollution caused by fossil fuels?

Not subsidized. Right. It'd be like saying "We're going to buy everyone a solar panel and hook it to the grid, but not we won't subsidize the sun's production of light, so no subsidies there!"

Get a clue - fossil fuels are the most heavily subsidized product on the market. The subsidies are not as direct, but they're pretty fucking obvious from an economic standpoint.

Re:If the visible hand of government lets go

[DemoLiter3]

Examples here in Germany:
1. Extremely high taxes on the nuclear fuel (â145 per gram of Uranium or Plutonium). Despite them, nuclear energy stays profitable and has never received a single cent of subsidies.
2. Extremely high taxes on gasoline and diesel fuel, which currently constitute about 60% of the end price, or about 90 Eurocents per liter
3. Taxes levied on electricity contain a special tax that goes to renewable energy subsidies. Currently this tax is about 3.5 Eurocents/kWh. About 2/3 of this tax are for solar power subsidies only, which provides about 1% of total electricity generation.

Re:If the visible hand of government lets go

[copponex]

Governments last year gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices known as feed-in tariffs and alternative energy credits, the London-based research group said today in a statement. That compares with the $557 billion that the International Energy Agency last month said was spent to subsidize fossil fuels in 2008.

Source.

You were saying?

Just wait until Iran blocks the Strait of Hormuz

[BigTimOBrien]

Yesterday Iran threatened to stop the flow of oil in response to new sanctions being floated by the US. Who wants to predict how that would affect solar? Also, what effect is the explosion of shale oil operations in the US having on technologies like solar?

Yes, if you double-check your numbers

[rubeng]

Something went seriously wrong in your figuring to come up with $500 million per person. It should be under $5000 per person or $34.5 billion total - if your run the numbers like I did below in Python (assuming these panels only produce for 8 hours per day, which is a number I just pulled out of the my hat).

Throw in extra for installation costs. It would be interesting to know what the total area is of NYC rooftops that have good sun exposure.

ny_area_sqmi = 302.6
ny_population = 8175133.0
ny_demand_watt_hours_per_year = 64500 * 10**9
panel_watt_hours_per_year = 230 * 8 * 365
panels_needed = ny_demand_watt_hours_per_year / panel_watt_hours_per_year
panel_cost = 360.0
panel_area_sqft = 17.6
total_cost = panels_needed * panel_cost
total_area_sqmi = (panels_needed * panel_area_sqft) / (5280**2)

print 'panels needed', panels_needed
print 'total cost $ %.2f' % total_cost
print 'cost per person $ %.2f' % (total_cost / ny_population)
print 'square miles %.2f' % total_area_sqmi
print 'percent area of nyc %.2f%%' % ((total_area_sqmi / ny_area_sqmi) * 100)
------

panels needed 96039309
total cost $ 34574151240.00
cost per person $ 4229.19
square miles 60.63
percent area of nyc 20.04%

Re:Hardly surprising...

[Idou]

Sure, but no different from nuclear, fossil fuel production, etc . . . How can solar ever move to mainstream with out at least receiving similar subsidizes to the more established forms of electricity production industries?

How about removing the subsidies from the other industries first?

How about finishing the quote?

[alispguru]

The next two lines in TFA:

Granted, these raw totals obscure a few things (if you looked at dollars per unit of energy delivered, oil and coal subsidies would be smaller than wind and solar). But the overall disparity is stunning, given everything we know about the harm fossil fuels are doing.

For some reason, they didn't look at subsidies in $/kwh. It's not like they're hard to find on the web. That source puts fossil fuel subsidies at 0.8 cents/kwh and "renewables" (non-nuclear, non-hydropower) at 5 cents/kwh.

Re:the TFS only talks about the economics

[Curunir_wolf]

After some more research, I actually found some a little closer to the $1 per watt mark. CivicSolar has large panels running around $1.30 per watt. They have laminates, too, but for about twice the cost.

Re:Visible hand of state corruption

[anagama]

I still vote according to the lesser of two evils philosophy

The problem with this philosophy is that it can have the opposite effect and lead ironically to greater evil (*). Take for instance civil liberties. Obama has pushed forward every single civil liberty violating policy of the Bush administration. Yet because he is a democrat, there has been no push back at all. As a result, the radical usurpation of power by the Executive branch under Bush, has become the new normal under Obama.

As an example of the democrats' cynical nature, Marty Lederman once excoriated the Bush administration for using secret legal memos to justify due process free detention. Now that he is part of Obama's legal team, he is writing secret legal memos justifying due process free execution. The sad fact is, if there was a GOP president doing what Obama is doing, the democrats would pretend to care about civil liberties and at least put on a show of resistance. Instead, violating civil rights just became standard practice, a result far more evil than having the practice but also having some hope that opposition would change it.

http://www.salon.com/2011/10/09/the_awlaki_memo_and_marty_lederman/

Vote for a third party candidate. No they won't win, but if enough people abandon the mono-party with the dem/GOP faces, it will inject issues into the discussion as dem/GOP politicians try to figure out how to pander to the disaffected. It certainly is not a waste of a vote to refuse to choose between A) being raped to death at night by the Democrats or B) being raped to death by day by the GOP. You can't win that so don't play.

(*) While Obama did not appear to be a "lesser evil" candidate in 08, he clearly will be in 2012 given his wholehearted embrace of neocon philosophy.