Solar Power Growth Continues Despite Supply Limits

Two companies, Mitsubishi and the relatively new SunPower Corp.-backed by Cypress Semiconductor owner T.J. Rodgers-are putting new resources into photovoltaic systems for California. As photovoltaic systems continue to be attracted to areas such as Germany and New Jersey, with higher subsidies than California, these and other solar companies are betting that the proposed Million Solar Roofs legislation, SB 1, can bring the state back into the loop. Compounding the problem, for all markets, are the limits put on solar panel production by a silicon shortage. Last year, solar companies with contracts in hand and subsidies agreed to by the California Energy Commission were often unable to complete installations because photovoltaic panels had become so scarce in California ( Circuit , June 18, 2004). Heavier subsidies from Europe were commanding many of the panels. This year, California's stock of solar panels has been helped by new supply from Mitsubishi Electric. Vern Kowitz, manager of Mitsubishi Electric US's photovoltaic division, said the company began importing two containers of panels a month into Long Beach in February. That's about 74 kW of capacity, he said, adding that the Japanese company hopes to double its shipments in August or September. SunPower said it is adding 25 MW of manufacturing to its facility in the Philippines this year and will add a third 25 MW production line to its manufacturing by early next year to meet demand, to a future total of 75 MW/year of production. Its goal is to increase production capacity to 100 MW by the end of next year. However, while the company is investing in California, it has a $300 million five-year contract to supply Germany's SOLON AG. SunPower claims its technology is more efficient than more traditional photovoltaics. Solar panel efficiency has recently become a sticking point in developing future subsidies. Recently, the CEC changed some of its subsidies from a capacity payment per installed watt to a subsidy for delivered energy. Efficiency is also an issue in a current proceeding at the California Public Utilities Commission on distributed-generation funding that could be tapped if the Million Solar legislation is approved. Even if the Million Solar legislation allows for new subsidies, growth in solar power installations is expected to be limited over the next three years as the industry's raw material suppliers rush to catch up with the demand growth. The Solar Energy Industries Association (SEIA) believes world solar photovoltaic panel production increased 45 percent in 2004, totaling 1,200 MW, SEIA spokesperson Noah Kaye said. That's more than triple the 353 MW produced three years earlier. Last year's growth could have been greater, according to Ali Iz, general manager of GE Energy's Solar Technologies Division. "We think demand growth will be close to 40 percent in 2005 again," he continued, cautioning that this will not be reflected in installations because of supply limits. "Demand exceeded supply last year for the first time," Iz said, citing the lack of silicon, the basic raw material for photovoltaic panels. Because of the shortage, the panel makers' silicon costs doubled last year, he added. The shortage "is why SEIA recently created the Crystalline Silicon Initiative, an industry-led effort to increase performance by 50 percent, reduce solar power costs to less than 6 cents/kWh, cut system manufacturing costs dramatically, and decrease the solar panel price to consumers by 40 percent from today's $6.10 per watt," Kaye said. For the typical 2 kW residential installation, that is still $7,230 before subsidies, compared to the present $12,200. Even if solar subsidy legislation passes in California, it is an effort to catch up with New Jersey, which has the "nation"s best standards," according to the SEIA. Both states trail Germany, with 363 MW of solar capacity in 2004, according to a report that the Paris-based organization ObservER prepared for the European Union. Overall, ObservER said, 410 MW of panels were installed in Europe last year, boosting total capacity to 1,000 MW, an increase of 69 percent over 2003. The report said that six renewable energy groups in Europe forecast installed solar PV capacity totaling 4,500 MW by 2010. The report puts Japanese 2004 installations at 280 MW and says those in the U.S. totaled 90 MW. Observ'ER produces regular reports on the status of renewable energy technologies in Europe and works with the Eurec Agency, EREC, the Jozef Stefan Institute, Eufores, and Syst?mes Solaires, with financial support from the ADEME and DG Tren (Intelligent Energy-Europe program) of the EU.

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Solar Power Growth Continues Despite Supply Limits

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