Industrial News - September 2011

- September 28, 2011 - German June Solar Panel Installations Fall Annual 69%

Bloomberg.com - Germany, the world's biggest solar-panel market, added 664 megawatts of the devices in June, a 69 percent drop from the same period last year, according to preliminary figures from the German power grid regulator.

The installations fell from 2,109 megawatts of solar capacity built in June 2010, the record figure for that year, when homeowners raced to beat a July subsidy cut, the Bundesnetzagentur agency said on its website.

German panel makers have been struggling to offset slumping demand in their home market, which has cut subsidies twice since June 2010. They're also under pressure from Chinese manufacturers that have boosted production capacity just as demand slowed, causing cell and module prices to plummet.

"Prices for panels continue to drop and that's suggesting that solar installations in the third quarter will be weak," Katharina Cholewa, an analyst at WestLB AG in Dusseldorf, Germany, said by telephone.

She added that on several occasions, slumping prices didn't result in increased demand as buyers wait for them to fall further.

Cholewa, who said she expected 700 megawatts of installations for June, forecast Germany will add 3,100 megawatts in the second half, down from 3,400 megawatts in the same period last year.

The German government seeks to add 3,500 megawatts of panel installations each year and reduces subsidies if installations exceed that level.

The country's BSW solar lobby expects about 5,000 megawatts of installations in all of 2011, Carsten Koernig, the head of the group, said by telephone today. The next regular cut to subsidies, scheduled for January, will likely be set at between 12 percent and 15 percent, he forecast.

 

- September 22, 2011 - Solar power boom across the UK put at risk by rigid caps on budget, says industry

guardian.co.uk - The fledgling boom in solar power across the UK is in danger of being snuffed out, the renewable energy industry has warned, as ministers have determined to stick by spending plans that would severely limit future investment in the power source.

Almost all of next year's budget for feed-in tariffs – a subsidy paid to generators of solar power and other forms of small-scale renewable energy – is already "spoken for", because it will have to be allocated to existing solar installations, according to Dave Sowden, chief of the Micropower Council, the trade body for the sector. Once the renewable energy equipment has been installed, the owner is entitled to feed-in tariffs for as long as it generates electricity, unless the government changes the rules in future.

As most of the allocated budget, running to £161m next year, will go to owners who installed equipment this year, that will mean much less money available for new small-scale renewable electricity installations next year and in subsequent years up to 2015, when the current government spending period is due to end.

The prospective funding drought has become a serious worry for renewable energy companies, Sowden said.

"The scheme is a victim of its own success," said Sowden. "If the annual caps are as rigid as we are being led to believe, this is a serious problem. The industry is worried that the growth is not going to be there."

Owing to the unexpected success of the scheme, the money could start to run out more quickly than ministers had envisaged. This could effectively put a brake on the growth of the fledgling solar industry, which has already been rocked by changes to the feed-in tariffs that will disadvantage bigger installations.

The Department of Energy and Climate Change (DECC) said: "The scheme is paid for by energy consumers through their bills and has a fixed budget. The scheme is proving popular with households and we are continually monitoring the take up to make sure that we stick to budget. As we have previously said, all tariffs in the scheme are being considered in the comprehensive review with that in mind and we are monitoring the situation very closely."

Sowden suggested that the government could increase the amount available to microgeneration by reallocating money from the Renewable Obligation (RO) scheme, which provides a subsidy to large-scale generators of renewable energy, such as wind farms. That money – about £2.3bn is expected to be the budget next year – is likely to be under-spent, as electricity companies struggle to gain planning permission for wind farms and other large-scale projects.

However, the government appears reluctant to reallocate budgets. DECC said: "The obligation is set as a number of renewable obligation certificates (ROC) per MWh supplied, so the total cost to consumer will depend on demand levels. The RO operates on a financial year basis, so we will know how many ROCs were issued, and how much electricity was supplied for the current year, after 31 March 2012."

Feed-in tariffs have proved immensely popular, as they give householders and businesses a guaranteed income stream from renewable energy, as well as providing them with free electricity. An average installation costing about £12,000 could be expected to generate about £1,000 to £1,200 a year, which means a bigger return than most financial investments can provide.

From April 2010 to the end of June this year, more than 160MW of low carbon electricity generation was put in place under the feed-in tariff scheme, with a total of 44,460 separate installations, most of them solar panels fitted to houses.

The government has budgeted for £161m to be spent on feed-in tariffs in 2012-13. As it was originally envisaged, the feed-in tariff scheme – the money for which does not come from taxation but from energy companies, who recoup the money by adding to electricity bills – would not have been subject to a cap. However, the Treasury under George Osborne insisted that the money for the scheme be subject to government cost controls. Ministers have also acknowledged they were concerned at the idea that electricity consumers could face bill rises in the future, and determined that the scheme should be capped at £860m between 2011 and 2015.

According to the budgets, £269m should be available in 2013-14 and £357m the following year. The increases are to take account of the fact that existing installations will continue to benefit, even as new generating capacity is added.

Around the UK, in the first 15 months to 30 June 2011, more than 160MW of low-carbon electricity generation has been applied for under the feed-in tariff scheme, with a total of 44,460 separate installations, according to data collated by the electricity regulator Ofgem and the Department of Energy and Climate Change. About three quarters of the installations are solar power, though in Scotland wind is predominant.

AEA, an energy and environmental consultancy, has calculated the rate of growth in capacity in microgeneration at about 400% since the feed-in tariff was launched in April 2010. Photovoltaic technology – solar panels – have been at the forefront, with an increase in generating capacity of about 900%, though part of this was owing to the pent-up demand as households delayed putting up panels until the feed-in tariffs came into force. Over the same period, wind generation and hydro electricity – some smaller installations of which also qualify for the enhanced feed-in tariffs – have also grown strongly.

 

- September 11, 2011 - Germany keen to buy solar-generated electricity from Greece

AFP - Greek Prime Minuster Georges Papandreou confirmed Sunday that Germany was keen to import solar-generated electricity from debt-ridden Greece.

He told a press conference in Salonika that he planned to travel to Germany late this month to discuss the project with Chancellor Angela Merkel during a meeting of German industrialists.

"We can supply the Germans with 10,000 to 15,000 MW", he said, underscoring the urgency for Greece to fight "corruption and bureaucracy" which in the past have derailed several investment projects.

Papandreou spoke of a "huge interest" by the Germans for Greece's renewable energy resources in view of of their plan to phase out nuclear energy and doubts about the political stability of Arab Mediterranean countries.

"There was a (solar) project in the Sahara, but it is in jeopardy because of the political turmoil," he added.

His remarks also came as German Economy Minister Philipp Roesler said Europe could no longer rule out an "orderly default" for Greece as it struggles with a crippling debt crisis.

"To stabilise the euro, we must not take anything off the table in the short run," Roesler, who is also Germany's vice chancellor, wrote in the column for the conservative daily Die Welt to be published Monday.

"That includes as a worst-case scenario an orderly default for Greece if the necessary instruments for it are available," he said, reviving an idea that surfaced last year to grapple with the turmoil wracking the eurozone.

Eurozone leaders announced a 159-billion-euro ($223-billion) rescue package for Greece in July, but German Chancellor Angela Merkel insisted Sunday that the Greek government must not waver in its reform drive.

After a recent visit by a German official as part of a joint bid to boost investment to spur a Greek recovery, the German environment ministry said it was looking into a project to set up 20,000 hectares of photovoltaic systems to turn solar energy into electricity for export to Germany.

Press reports said the mammoth project dubbed "Helios" (the Greek God of the sun) would have an initial budget of 20 billion euros and would create between 30,000 and 60,000 jobs in Greece.

German Economy Minister Philipp Roesler is due to visit Greece next month to further a bilateral cooperation accord on developing renewable energy.

Athens is trying to attract investment in renewable energies to replace jobs lost due to the recession which has been exacerbated by the austerity measures demanded by the EU and the IMF in exchange for a multi-billion euro rescue package to deal with the crippling debt burden.

 

- September 8, 2011 - Italy total solar capacity to hit 12,000 MW end-2011

REUTERS - Italy, a major solar market in the world, is expected to boost its total installed photovoltaic capacity to 12,000 megawatt at the end of 2011 fuelled by generous production incentives, Italy's energy services agency GSE said on Thursday.

Italy's total installed photovoltaic (PV) capacity - which turns sunlight into power - has already exceeded 10,000 MW with about 6,500 MW that have come on stream so far this year, Italy the world's top market in terms of new capacity installed in 2011, GSE said in a statement.

Italy's PV market, the world's second largest after Germany in terms of total capacity, has boomed since 2007 when the government boosted production subsidies.

It has attracted the world's biggest photovoltaic module makers such as China's and U.S. firms.

Italy's southern region of Puglia, with 1,685 MW of installed PV capacity and 17,812 solar plants on stream, is the country's No. 1 in terms of total capacity while the northern region of Lombardy is the leader in terms of plants with 36,066 installation with a total capacity of 894 MW, GSE said.

Total number of PV installations is expected to rise to about 350,000 by the end of this year from more than 270,000 at present, GSE said.

Italy's new PV sector incentive scheme, approved earlier this year, favours development of small-scale installations.

 

- September 7, 2011 - German solar incentives facing big cut

REUTERS - A pick-up in solar panel installations in Germany in recent months is likely to cut industry incentives more than expected next year, government and industry sources said on Wednesday.

About 1,250 megawatts (MW) of solar power capacity was installed in June and July, more than in the first five months of the year combined, two people familiar with the figures told Reuters on Wednesday.

Germany's network regulator declined to comment, saying it would soon publish figures for installations in June.

Government sources said incentives for solar power will likely be cut by 15 percent in January as a result, 6 percentage points more than planned but still well below the maximum cut of 24 percent the government can make.

The photovoltaic (PV) industry still relies on government so-called feed-in tariffs which solar power producers can use to offset against their energy bills.

Solar industry association EPIA said this week it could take until the end of the decade for solar energy in Europe to be cost-competitive with fossil fuel generation.

Governments have been cutting back on support to force the industry to lower its costs at a faster rate, a move that has hurt companies in the sector.

Germany's government scrapped a planned reduction of incentives in July, giving companies more time to whittle away their costs, after the volume of new solar panel installations in the country fell dramatically.

Germany derived more than a fifth of its total power requirement from renewable sources in the first six months of the year and aims to raise that proportion to 35 percent by 2020.