Unstable solar-energy markets

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    Unstable solar-energy markets

    Readers who heard about punitive U.S. tariffs on Chinese solar panels may wonder what has been happening in U.S. markets but will have a hard time finding out from U.S. news media. The Globe pays next to no attention to this area of business, and nearly all other domestic news is weak on numbers and clotted with opinions. [ Matt Daily, Reuters, U.S. sets new tariffs on Chinese solar imports, Yahoo News, May 18, 2012, at http://news.yahoo.com/u-sets-tariffs-chinese-solar-imports-source-195509943--finance.html ]

    Chinese and Japanese sources--in places where solar power is just a business, not a religion--do a better job. U.S. photovoltaic installations increased by two-thirds in 2011 over 2010, but almost all that growth was produced by injection of large federal payments authorized by the 2009 "stimulus" funding. By the end of next year, those projects end. [ News: In 2011 the United States total solar panel installation double-digit growth, Chiko Solar (China), at http://www.chikolar.com/mounting/newsinfo.asp?id=157 ]

    Meanwhile, the federally-funded projects have been scrambling for solar panels, driving up imports. The U.S. is not, however, a dominant customer on a global scale, accounting for less than ten percent of the world market. Its increased demand is much more than offset by falling demand in Europe, where Spain, Germany and several other countries that were once charging ahead are now in severe retrenchments.

    The result is worldwide collapse of solar-panel prices, as falling demands intersect with growing supplies. However, that is mainly an academic pastime, since the market for solar power is almost entirely a political fetish. As most recently estimated by the U.S. government, costs of solar power remain wildly uneconomic. Since solar panels now account for less than half the cost of projects, they would remain uneconomic if the panels were free.

    Total, levelized system costs for bulk electricity from renewable and low-pollution energy sources, averaged across the United States and including connections to bulk transmission, were recently estimated (for 2016), at $0.31 per kWh for solar thermal, $0.24 for offshore wind, $0.21 for photovoltaics and $0.10 for onshore wind. [ U.S. Energy Information Administration, Levelized cost of new generation resources, Annual Energy Outlook 2011, at http://www.eia.doe.gov/oiaf/aeo/pdf/2016levelized_costs_aeo2011.pdf ]

    In an open market, those prices would compete with about $0.05 to $0.06 per kWh from combined-cycle, natural gas-fired power-plants in relatively high-cost New England. The result is that without massive government give-aways and coercion, at great expense to taxpayers and ratepayers, no solar power would ever be installed or purchased by any power utility.

     
  2. You have chosen to ignore posts from topaz978. Show topaz978's posts

    Re: Unstable solar-energy markets

    Gee. At one point in mass we were at 14.7c per KW. What makes 21c per KW unreasonable? The advantages are clear. At your one time cost your bill dissappears and no longer is subject to fuel price inflation. One number and you are done with the bills. At current interest rates and a 20 year plus lifetime solar is a good option for stability. Your wildly uneconomic clain is bs. This is due to the economic value of stability and no transmission costs.
    The wind costs are lower than the current cost of delivered power for onshore wind. the Offshore wind bundles delivery cost that will drop with higher utilization if the infrastructure expands. Your solar thermal number is better than the cost of oil at $4 per gallon. Just be careful what bus you ride it may take you where you did not want to go. There is no where in mass to buy 5c per kw power for a consumer. You are playing fast and loose with the delivery costs and are a moron besides.
     
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    Sticker-shock for "renewable" energy

    As plainly stated for those willing to read, the government's projections were for bulk power--delivered by generating plants into high-voltage transmission lines--not for retail power delivered to households and small businesses. You can, indeed, buy bulk power here at $0.05 to $0.06 per kWh. In fact, you're probably doing that right now. Costs of transmission and distribution, plus utility profits, are added to those bulk power costs. They are broken out these days on our electric bills, although not many people seem to read their bills, either. A "levelized" approach to costing distributes the unsubsidized costs of building, operating and demolishing power-plants over their expected lifetimes.

    Once they understand what has been happening, high and growing costs for so-called "renewable" energy often come as a shock to people who were expecting it at reasonable prices. For years, people thought photovoltaic power could succeed financially, if only the prices of modules could be brought down by better technology and high-volume production. That has finally happened, but it has not helped enough to matter. Costs of large photovoltaic projects are now dominated by infrastructure: land, mounting hardware, wiring, controls, power equipment, installation, insurance and maintenance. Those costs have been steadily increasing.

    The government projects that the unsubsidized costs of bulk power from large photovoltaic solar farms are going to be three to four times as much as today's actual bulk power prices from the plants that now supply most of the electricity generated in Massachusetts. Realistic prospects are that the cost gap will grow rather than shrink. Solar thermal plants would be even more expensive. Since they involve mainly mechanical assemblies, they are also likely to see cost growth in the future.

    Of the "renewable" energy technologies, only on-shore wind farms have good financial propects. Over thirty years of development has made them financially competitive, as estimated on a national average, with costs of power from the "third generation" nuclear reactors, like the two under construction in Georgia. However, on-shore wind resources are unevenly distributed in the United States. New England has only a modest amount. [ Utility-scale land-based 80-meter wind maps, U.S. Department of Energy, 2011, at http://www.windpoweringamerica.gov/wind_maps.asp ]

    The major on-shore wind resources of North America are in a broad band across middle-Western states, from north Texas through Kansas, Nebraska and the Dakotas into Saskatchewan. So far, the only major development has occurred in Texas. Progress is now at a standstill for lack of power transmission capacity.

     
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    In China, the party's over

    After collapse of U.S. markets for solar power--except for a few U.S. projects supported by 2009 "stimulus" funds--it was unclear where a surplus of Chinese solar panels was going to go--maybe nowhere. China's government has not been sponsoring enough solar power projects to absorb outputs from its heavily subsidized solar equipment factories. Even high-flyers Suntech, Yingli and Trina are in trouble. [ Joe McDonald, Associated Press, Chinese solar industry faces weak sales, price war, Boston Globe, August 22, 2012, at http://www.boston.com/news/world/asia/2012/08/22/chinese-solar-industry-faces-weak-sales-price-war/zu0RUeaMGABvLosKVQPS4I/story.html ]

    Spain has already maxed out the capacity of its power grid to buffer intermittent, non-dispatchable sources. Germany still has capacity but may prefer to use it for less expensive wind power. The U.S. is pursuing "anti-dumping" tariffs on Chinese producers said to be offering solar panels at prices below cost, and now European manufacturers based in Germany, Spain and other countries have filed petitions for similar tariffs in Europe. All the major Chinese manufacturers reported heavy losses in the most recent quarter. For now, in China, the solar party's over.

     
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    Re: Unstable solar-energy markets

    So the market for solar panels collapsed causing the price of imported solar panels to be extremely low.  Isn't that called dumping and isn't dumping a violation of the free trade agreement?

    Haven't the Chinese been manipulating the US dollar to gain an unfair trade advantage?  And isn't that manipulation of the US dollar the reason we lost so many manufacturing jobs during the first decade of the new millenium?

    As far as I'm concerned, a tariff should be slapped on all imports from China until they agree to let the dollar float against the Huan. 
     
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    Piles of unsold inventory in China

    A report in the NY Times suggests that collapsed markets for Chinese solar power equipment are only extreme cases of excess capacity and inventory in an export-focused economy. Ten years ago, automobile factories in China catered mostly to small, domestic markets. Now, expanded tenfold to serve export markets that have withered, manufacturers have pressured Chinese dealers to take inventory the dealers cannot readily sell. Dealer lots have filled with unsold new cars and are overflowing. Chinese government staff have been caught at manipulating official reports to help conceal collapses of domestic markets. [ Keith Bradsher, China confronts mounting piles of unsold goods, New York Times, August 24, 2012, at http://www.nytimes.com/2012/08/24/business/global/chinas-economy-besieged-by-buildup-of-unsold-goods.html ]
     

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