Competition
February 15, 2012
India's Energy Storage Market is seeing strong action from foreign MNCs looking to grab a piece of this fast growing market. India's Electricity Situation is quite bad with huge deficits and problems across the whole supply chain starting from fuel to the end distribution. A Huge Segment of the Population has to depend on privately generated power to meet their energy needs. Storage of power becomes essential for places where power goes off for 8-10 hours a day. Using Lead Acid Batteries is the only cheap option in these cases as running a diesel genset my not be convenient for a home. UPS companies have been doing great business in the country for a long time and will continue to do so.
February 14, 2012
Solarcity which is the largest US Solar Installer has got sued by Sunpower for stealing trade secrets. Note Sunpower which was recently bought by French Oil Giant Total is facing tough times. Sunpower which makes the most efficient solar panels in the world is facing tough competition from super cheap Chinese solar panels. In fact according to Total CEO the company would have been already bankrupt with Total support. Beside making solar panels, Sunpower is also one of the biggest solar integrators and developers. The company has been in the business of installing solar panels after it acquired solar system installer Powerlight.
February 14, 2012
The US Import Sanctions on Chinese Solar Panel imports will become a non-event soon as Chinese solar panel producers are easily short circuting the sanctions. They are using a number of strategies to protect themselves from the upcoming duties and anti-dumping measures. This shows that globalization makes the use of specific duties on a nation quite useless and only benefits the lawyers . The reason is that private companies are much more faster and nimble compared to the slow moving bureaucrats .
February 13, 2012
However it has now thankfully put its plan on hold of spending another 520 million euros on solar energy. The company has already wrote down $1 billion in solar after the valuations of Ersol and Aleo have crashed from the time it bought it. Note most Western solar companies are going bankrupt as they can't compete with the 80c/watt solar panel prices. Stalwarts Q-Cells are defaulting on the debt payments while according to Total CEO, Sunpower would have been bankrupt if they had not bought it. Even the biggest US Solar Panel Company First Solar has been ravaged by the price war. Bosch has bravely said that it would continue to remain in the solar panel market while it makes more sense for them now to make an exit and concentrate on their core competencies. It can realistically never hope to get into the top 20 solar panel suppliers and stop spending good money after the bad.
February 9, 2012
US Coal Companies are being forced to close coal mines and reduce production because of a massive glut of cheap natural gas and emission standards . Note Coal Disadvantages are much more than that of other fossil fuels making it the dirtiest form of energy. While India and China face massive coal shortages , USA on the other hand faces a glut . Coal has been coming under increasing attact in the West with few new thermal plants being opened and many closed due to tougher pollution standards. Note Clean Coal Technolgies and CCS is being promoted to prolong the use of Coal but they are not getting much traction.
February 8, 2012
California which has the largest number of solar installations in the USA and is the capital of solar energy in North America is seeing a rapid exit of solar panel manufacturers. First it was Solarworld which closed a solar module manufacturing facility. Now Sanyo Solar Panels will stopped being made in the state as well as Panasonic consolidates manufacturing in Asia. Note cheap Chinese solar panels have made western manufacturers exit the solar industry and their have been a number of media grabbing bankruptcies as well. Western solar companies as well as Japanese solar panel makers have been shutting down in droves now .
February 7, 2012
Chinese Legal System is mostly a joke with the communist party running the world's most populated country with an iron hand. The courts are mostly for show as dissidence against the Party is not tolerated and human rights are non-existent.Also most of the major companies are run under crony capital rules rather than free markets. Most of the rulings are done which favor the ruling party mandarins with little respect to whatever Communist Party laws are. IP Theft has been a big problem for overseas companies operating in China with Google existing the country sometime ago after it was hacked. With the world's largest Internet companies having to run because of IP theft, smaller companies have no chance.Sinovel is the biggest wind company in the world right now because of Chinese government support and policies. It commands huge influence in the corridors of power as it is unlikely to have become this big without major government and bank support.
February 6, 2012
China which is home to the biggest solar industry in the world and most of the top solar panel manufacturers has decided to lower subsidy in 2012. Note China did not pass a Feed in Tariff Law for a long time as prices of solar energy remained high. But after a massive crash in solar prices and energy in 2011 it passed a FIT law in late 2011 to take advantage. This resulted in a big jump resulting in China becoming one of the top 5 markets in 2011 . Now China is set to become one of the top 3 markets in 2012 if not the biggest . This is due to the fact that other European solar panel markets are rapidly reducing subsidies and China needs to support its solar companies many of which are effectively insolvent like LDK.
February 5, 2012
Japanese Companies which were the leading solar companies in 2006 have steadily lost the top global rankings to Chinese companies. Now many of the top Japanese Solar Energy Companies are retreating from markets and manufacturing. Sharp which was the largest solar company in 2009 and 2010 has radically restructured its strategy but is still losing marketshare. Panasonic the second biggest solar company has closed down its Japanese factory. Other Japanese solar companies like Mitsubishi, Kyocera are also being forced to rethink solar panel manufacturing.
Note most of the higher cost producers in the solar industry are effectively bankrupt and are only being supported by government or big parents. Many Western companies have already closed or are on the verge of closing. Some of the bankrupt companies are not finding buyers of their equipment even at 10c/dollar. Massive overcapacity remains in the solar industry particularly in China which is not being taken out fast enough which will probably lead to another bad year for solar stocks in 2012.
February 4, 2012
The Indian Mutual Fund and Asset Management Companies are facing tough times and foreign asset managers are exiting in droves. Fidelity has put up its $2 billion of funds on the auction block trying to find a buyer as it exists India. This is only after a couple of months when Blackstone another of the trillion dollar asset managers existed the Indian business. In 2008 during the boom times, every Tom Dick and Harry of the asset management business wanted to get a piece of the Indian pie. The local brokerages were commanding super high valuations while growth and profits seemed endless.
February 4, 2012
We would like to incorporate BIPV solar tiles or roofing when we build - so we are trying to find out a this point what products are now available in Australia and what our choices would be and the range of prices each would be in ...just to give us a starting point as we begin to pull all the ideas together ?
We'd really appreciate any information you can send our way that would help us achieving this - the brand/type of BIVP we can use, the best inverter and battery you'd recommend - obviously it will depend on where we are and how much sun our roof will get - but we plan to make it as much as is possible as we'd like to be able create 100% of our power needs or if not at least 80 % . At present as a guide my household uses approx 10.7 khw of power a day - so that will give you an idea of how many solar tiles we'd need perhaps ...if the sun was at its optimum ? We hope to be building on a reasonably sunny block between Ferntree Gully and Belgrave on the high side near bushland ...beginning in a couple of months or so
January 31, 2012
I receive a lot of inquiries regarding how to enter the solar industry . Note the Solar Business is one of the fastest growing industries in […]
January 31, 2012
Solar Power in India has taken off under the ambitious JNNSM government subsidy scheme with almost 400 MW of Solar Capacity installed in 2011 . With various states like Gujarat, Karnataka coming up with aggressive solar subsidy schemes on their own as well, solar power capacity in India should surge by around 1 GW in 2012. This has made India one of the fastest growing solar markets in the globe right now.
January 27, 2012
The Chinese Dominance of the Solar Industry in the last 2 years have seen numerous Western companies go bust . This has accelerated sharply in 2011 with companies like Evergreen Solar,Spectrawatt, Solar Millenium, Solon, Photowatt etc. either gone for good or in various stages of bankruptcy. Other US Solar Panel Manufacturers like First Solar, Sunpower have fired thousands and some are continuing with large losses. European Solar Companies are the worst off given their high cost structure and lack of differentiation. Solland Solar recently killed its solar module line while some like Schott have killed their solar wafer lines.
January 27, 2012
So what are the criterea for staying alive in 2012
a) Government Support in Some Form - Most of the Tier 1 Chinese Solar Companies will fall into this bracket. However given that there are so many you would have to look at the biggest like Suntech, LDK, Yingli for survival in any case. LDK is a BANKRUPT COMPANY ,the only reason it continue to produce a solar panel is because of the Chinese government support
b) Low Cost - Though seems like an obvious idea, there are still companies existing which have high costs like Q-Cells, REC. You just can't invest in them given that even low cost is a necessary though not sufficient condition to survive
c) Branding - Very necessary to get financing for solar projects as without a brand you are not bankable and will have to sell at a 10% discount in a market which is already selling at below cost
January 26, 2012
Quick quiz. What is common to Suzlon, Moser Baer, Indo Solar, Websol Energy systems and Orient Green Power? All these stocks had successful runs on the stock market and hyped as the next game changers in wind energy, semi conductors, solar power and hydel/geo thermal power. Valuations were more on growth stories than through an hard nosed DCF spreadsheet. But now, they trade at record lows(like other stocks but what is different is the pressing fundamental concerns in each case). Is this a bubble finally bursting, or are investors panicking?
January 19, 2012
Solar Jobs have been cut in the tens of thousands this year by a number of European Solar Companies including marquee names such as REC, Q-Cells, Solarworld ,SMA Solar besides many of the smaller names. Some of the solar companies like Solon have completely shut down. 5000 solar companies have downed shutters in 2011 according to German association BSW. This is despite global solar demand in 2011 increasing by around 30-40% compared to 2010. The reason is that massive overcapacity has been created in China and other parts of Asia. Backed by cheap loans and massive subsidies, around 50 GW of solar panel capacity has been created . This has led to a crashing of solar panel prices by 60% which has decimated the higher cost companies in Europe.
January 19, 2012
The Indian government is not going to impose any new duties on imports of Chinese solar cells. This is despite the petition by the Indian solar panel manufacturers to give a level playing field. Note Chinese solar panels have virtually destroyed the solar manufacturing industry in the West with big companies falling under the relentless price pressure where solar panel prices have gone down by 60% in one year. Only the Koreans seem to be standing up to the Chinese government backed top tier solar companies from China. The rest have mostly folded up and are facing survival questions including those from Taiwan. Indian solar companies were never that big and cost competitive anyway given the headstart and support of the Chinese backed companies. The price crash in 2011 has seen most of them close their factories as they can't even cover their costs at the Gross Margin Level.
January 19, 2012
The company is planning to introduce a big bang plan for broadband coupling a cheap tablet with a cheap monthly plan. This is on the lines of a mobile phone with a monthly connection. Reliance has a good chance of winning the broadband market which remains under penetretad and high cost. It poses a direct existential threat to India's telecom companies which have failed to compete on data effectively.
Reliance in continuation of its strategy in the media industry has bought a small stake in Den Networks one of India's largest cable networks though one its subsidiaries. The company is slowly and methodically capturing the entire media development and delivery network in the country. The stake in the cable companies will give it leverage to deliver its broadband and content.
January 18, 2012
First Solar the Big Daddy of Thin FIlm Solar Panels too is under pressure and if not for the DOE funded solar farms in California would have been facing a huge global marketshare loss. There are only a few thin film companies that can hope to compete . Those that can have big parents with massive balance sheets like Solar Frontier backed by Showa and Shell, Sharp ,TSMC and others . VC and PE backed startups have a snowball chance in hell of surviving because they need to get their costs to 50c/watt an impossibility even for First Solar leave alone poor startups.
January 16, 2012
Germany has seen the biggest increase in solar installations in the history of solar energy with 3 GW in the month of December 2011 alone. For perspective this is almost equal to the installed capacity of the Chinese solar energy which has almost 6-7 times as much electricity generating capacity . The returns are still high in 2012 with existing FIT , so the German government may have to plan additional cuts with plans of
a) cut of 2% FIT every month in 2012 to slow down the installations and bring down the solar system IRR
b) a cap on feed in tariffs to solar systems of 3 kilowatts only .This will prevent larger solar installations and building of large solar farms
January 16, 2012
China add the most electricity capacity annually in the world at around 100 GW and its total electricity generation capacity is second only to the USA which it will surpass in the next few years. China is highly dependent on thermal power for its energy needs which is becoming scarce and expensive by the day. Not to speak of the big disadvantages of coal as a fuel which causes thousands of deaths each year. Solar Energy has now reached grid parity in many parts of the world thanks to the low cost cheap solar panels being made by Chinese solar panel producers. With many countries now thinking of putting an anti dumping duty on Chiense solar modules, the government is looking to boost domestic demand . Chinese solar panel Tier 1 players like LDK, Suntech, Trina and Yingli besides some others are the biggest beneficiaries of this new solar policy from China.
January 16, 2012
SMA Solar ,the biggest German Solar Energy company is now losing marketshare to the new solar inverter manufacturers in USA and China. Note SMA Solar held a dominating 40% solar inverter global marketshare in 2010 compared to the solar panel manufacturers none of which has managed more than a 10% marketshare . SMA Solar however is now feeling the heat of the competition as solar energy prices continue to go down steadily. The pressure on the solar inverter companies has been increasing as solar inverter prices as a percentage of the total solar system cost has risen from 5% to almost 10% now as solar panel prices have come down much more rapidly.
January 14, 2012
How Chinese Module Makers will use the Taiwanese Cell Producers to Circumvent US Anti-Dumping Policy
The USA and China are locked in a bitter tiff over solar panel imports from China. Note Solarworld filed a petition with the ITC which in all probability will put an anti-dumping duty on Chinese solar modules. Other countries whose solar panel producers have been swamped by the super cheap Solar Panel imports too are thinking of special custom duties. However the big Tier 1 Chinese solar panel makers are not sitting idle . They have already come out with strategies to circumvent the US Solar Panel Duties if they are imposed .
January 14, 2012
The Indian Solar Power has been one bright spot in the gloomy infrastructure and engineering sectors in 2011. With share prices crashing with growing corruption, land acquisition and financing problems, Solar Energy has surged in India thanks to government support and subsidies . While a number of Green Technology companies have started up to capitalize on the growing renewable energy trend, the established constuction companies in India have not been far behind . While utilities like Tata Power, Adani, Reliance Power, NTPC have already built or are setting up power plants based on solar panels , L&T has become a major solar EPC players . L&T is now raising debt with a $100 million issue to fund its solar expansion plans .
January 12, 2012
The number of solar factories closing in Europe has increased tremendously in the 2nd half of 2012 despite a record surge in Germany which would have raised 2011 solar growth to 25%. However the relentless price pressure from Chinese solar panel companies has decimated the solar companies in the West. While there have been a number of famous cases of bankruptcy like Solyndra and Solon, there have been bigger solar factory closedowns. REC has closed down more than 1 GW of wafer capacity while a pure play Spanish solar wafer factory also closed down recently . British solar wafer maker PV Crystalox is also near the verge of failure. Solar Wafer prices have fallen by almost 60% in the last 1 year with the prices much below the cost of production in Europe. It seems unlikely that any solar wafer maker will remain alive in Europe by 2013.
January 11, 2012
China's solar market growth has hit the rocket phase in late 2011 with the announcement of the long awaited national Feed in Tariff . Many of the Chinese utilties have set up large solar farms utilizing the cheap solar panels produced by Chinese solar panel companies. Note Chinese solar companies are the dominant players in the world having almost killed the western solar industry in the last couple of years. With cheap costs and massive government support, China is almost ruling the solar industry globally . In the domestic Chinese market they have even a bigger advantage given the local home conditions and preference of domestic companies . Note China become home to the biggest wind turbine companies when China enacted the domestic content requirements in 2006. With the solar industry , the Chinese government does not need this law as its companies already possess massive advantages over the foreign competition.
January 11, 2012
Europe has got the largest installed capacity of wind and solar energy due to the proactive policies enacted by the governments there.However the renewable energy industries have not been left unaffected by the European debt crisis. Offshore Wind Energy is a European development with most of the major offshore wind power farms located in Germany and UK. France which is tendering for 5 GW of offshore wind energy farms has seen reduced bank interest according to Areva. Offshore Wind Energy grew by more than 50% in 2010 and is expected to continue at above 50% growth rates over the next several years as the global installed offshore wind capacity multiples by more than 25 times over the next 10 years.