Here Comes the Sun

http://www.nytimes.com/2011/11/07/op...ar-energy.html
OP-ED COLUMNIST
Here Comes the Sun
By PAUL KRUGMAN
Published: November 6, 2011

For decades the story of technology has been dominated, in the popular mind and to a large extent in reality, by computing and the things you can do with it. Moore’s Law — in which the price of computing power falls roughly 50 percent every 18 months — has powered an ever-expanding range of applications, from faxes to Facebook.

Our mastery of the material world, on the other hand, has advanced much more slowly. The sources of energy, the way we move stuff around, are much the same as they were a generation ago.

But that may be about to change. We are, or at least we should be, on the cusp of an energy transformation, driven by the rapidly falling cost of solar power. That’s right, solar power.

If that surprises you, if you still think of solar power as some kind of hippie fantasy, blame our fossilized political system, in which fossil fuel producers have both powerful political allies and a powerful propaganda machine that denigrates alternatives.

Speaking of propaganda: Before I get to solar, let’s talk briefly about hydraulic fracturing, a k a fracking.

Fracking — injecting high-pressure fluid into rocks deep underground, inducing the release of fossil fuels — is an impressive technology. But it’s also a technology that imposes large costs on the public. We know that it produces toxic (and radioactive) wastewater that contaminates drinking water; there is reason to suspect, despite industry denials, that it also contaminates groundwater; and the heavy trucking required for fracking inflicts major damage on roads.

Economics 101 tells us that an industry imposing large costs on third parties should be required to “internalize” those costs — that is, to pay for the damage it inflicts, treating that damage as a cost of production. Fracking might still be worth doing given those costs. But no industry should be held harmless from its impacts on the environment and the nation’s infrastructure.

Yet what the industry and its defenders demand is, of course, precisely that it be let off the hook for the damage it causes. Why? Because we need that energy! For example, the industry-backed organization energyfromshale.org declares that “there are only two sides in the debate: those who want our oil and natural resources developed in a safe and responsible way; and those who don’t want our oil and natural gas resources developed at all.”

So it’s worth pointing out that special treatment for fracking makes a mockery of free-market principles. Pro-fracking politicians claim to be against subsidies, yet letting an industry impose costs without paying compensation is in effect a huge subsidy. They say they oppose having the government “pick winners,” yet they demand special treatment for this industry precisely because they claim it will be a winner.

And now for something completely different: the success story you haven’t heard about.

These days, mention solar power and you’ll probably hear cries of “Solyndra!” Republicans have tried to make the failed solar panel company both a symbol of government waste — although claims of a major scandal are nonsense — and a stick with which to beat renewable energy.

But Solyndra’s failure was actually caused by technological success: the price of solar panels is dropping fast, and Solyndra couldn’t keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.

This has already led to rapid growth in solar installations, but even more change may be just around the corner. If the downward trend continues — and if anything it seems to be accelerating — we’re just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.

And if we priced coal-fired power right, taking into account the huge health and other costs it imposes, it’s likely that we would already have passed that tipping point.

But will our political system delay the energy transformation now within reach?

Let’s face it: a large part of our political class, including essentially the entire G.O.P., is deeply invested in an energy sector dominated by fossil fuels, and actively hostile to alternatives. This political class will do everything it can to ensure subsidies for the extraction and use of fossil fuels, directly with taxpayers’ money and indirectly by letting the industry off the hook for environmental costs, while ridiculing technologies like solar.

So what you need to know is that nothing you hear from these people is true. Fracking is not a dream come true; solar is now cost-effective. Here comes the sun, if we’re willing to let it in.

I read this yesterday. Elizabeth Warren schooled Krugman well. This is a well written piece sure to please the liberal left, but.....

All well and good, but China manufactures 85% of all solar panels due to cheap labor. So you can buy panels from China, or develop your own energy right here and pay decent wages to Americans. Addressing the challanges of fracking is sure to spur further employment.

Double your salary in the middle of nowhere, North Dakota

http://money.cnn.com/2011/09/28/pf/n...jobs/index.htm

If I where in the home building market, I'd be there. They need houses for all of these new well paid American TAX PAYERS (what wonderful news?).

I would post about Solyndra going bankrupt and the AMERICAN jobs eliminated and the AMERICAN taxes NOT COLLECTED, but Krugman addressed that, or did he? Not, sorry. Krugman failed to identify "why" prices are going south. It is not that technology has increased, it is that there is a glut of panels due to government sweatening the pot - easy money, just like housing.

Solar stocks have been DOGS. Why? For a reason. Everything is for a reason. People know that supply is well in excess of demand - bottom lines are going down. Krugman failed to mention that too.

It just goes to show that a Nobel Prize winning economist can be biased, partisan and lacking of objectivity - not looking at all aspects of the situation -- how anti intellectual.

But I will say that if you are interested in adding solar panels to your home, now very well may be a good time. Prices are low, but may go lower.

Maybe Hava-gafa-kasha is REEEEEEEEEEEEEEEEEEEEEEEEEsearching this??

Or maybe he is ignoring it.

I'd really like to have some dialog.

Price of solar panels to drop to $1 by 2013, report forecasts
Ernst & Young analysis suggests that falling solar and rising fossil fuel prices could make large-scale installations cost-competitive without government support within a decade

guardian.co.uk, Monday 20 June 2011 07.14 EDT

Prices of solar panels are falling so fast that by 2013 they will be half of what they cost in 2009, according to a report from Ernst & Young that argues solar electricity could play "an important role" in meeting the UK's renewable energy targets.

The average one-off installation cost of solar photovoltaic (PV) panels has already dropped from more than $2 (£1.23) per unit of generating capacity in 2009 to about $1.50 in 2011. Based on broker reports and industry analysis, the report forecasts that those rates of decline will continue, with prices falling close to the $1 mark in 2013.

At present, solar PV is economically viable in the UK for homeowners, businesses and investors only because of government subsidies given out via feed-in tariffs (Fits). But the new analysis suggests that falling PV panel prices and rising fossil fuel prices could together make large-scale solar installations cost-competitive without government support within a decade – sooner than is usually assumed.

The report was commissioned by the Solar Trade Association (STA) from Ernst & Young's energy and environmental infrastructure advisory unit in response to the recent shake-up of Fits, which saw government support for large solar systems significantly reduced. This was a result of the government's decision to cap the total that could be spent via Fits and weight the limited budget in favour of domestic and other small-scale installations.

The chairman of the STA, Howard Johns, said the new analysis backed up the industry line that government support for all types of solar systems in the next few years made good economic sense as it would build capacity and enable unsubsidised solar to be as widely deployed as possible as prices come down. "This reinforces the case we have laid out in our Solar Revolution strategy," he said, "and it comes from an independent consultancy."

The report coincides with new data from Bloomberg New Energy Finance that show a drastic 28% month-on-month drop in the spot price of high-grade silicon, the raw material used in most PV panels.

The conclusions of the Ernst and Young report contrast with the view of the government's advisers, the Committee on Climate Change (CCC), which recently argued that solar remained too expensive to warrant serious consideration in the short term and that Britain should instead "buy in from overseas later".

The lead author of the Ernst & Young report, Ben Warren, said the CCC's view failed to consider the wider economic benefits of solar. "Being a laggard has never been very successful in terms of capturing the greater share of the value added for the economy … if you create a sustainable market, you will achieve cost savings and drive economic benefits in terms of tax income and job creation."

To compare the relative cost of solar – usually described in terms of the dollar price of each watt of peak capacity – and other energy sources, analysts consider factors such as upfront expenditure, fuel prices, maintenance and discount rates to calculate the "levelised" cost of each unit of energy. The report predicts that, with continued support in the short term, the levellised cost of large-scale solar will be no higher than retail energy prices by 2016-19. This suggests that within 10 years companies with large electricity demands will find it cheaper to install unsubsidised solar than to buy energy via the grid in the traditional way.

In the meantime, a full assessment of the costs and benefits of supporting solar should recognise that generous subsidies help unlock new sources of capital that can speed up decarbonisation of the energy supply, according to Warren.

"The energy market is starved of capital – and it won't all come from utilities and banks," Warren said. "There's a desperate need to engage with institutional investors."

In the runup to the announcement of the Fits cuts, climate minister Greg Barker told the Guardian that Britain had underestimated the potential of solar energy and in light of falling prices he hoped to find "new pathways" for supporting large-scale solar developments.

Guest post by Kriss Bergethon
A recent industry analysis projects the amount of solar power installed to grow to 15.5 percent per year, but revenues are to stay flat until 2016. Lux Research provided the report. A report from Navigant Consulting discovered that the price of solar panels is down almost 20 percent as of August 2011. The information derived from these two reports show that the consumer is poised to benefit from the price reduction while manufacturers can expect an almost flat profit margin for the next few years.
Manufacturers of solar panels are in a constant price competition. This literally boils down to shaving price per watt by pennies in order to beat out competitors. The reports mean shrinking profit margins with concerns over demand for panels staying strong. Manufacturing capacity for solar hardware is increasing, but the unknown factor is if there will be enough buyers to consume the increased output.
Consumers stand to benefit from the softening in prices as it translates into more solar capacity for the same amount. The lower prices give rise to the idea that solar leasing, an alternative to purchasing panels outright, may gain more traction. However, lower prices go beyond that. A solar industry analyst feels there is an ultimate benefit in the falling prices. It makes solar power leasing viable in states that have been written off in the past.Solar power leasing is designed to provide an alternative to purchasing a solar panel array upfront. Instead of buying the solar panels, consumers pay a monthly fee that reduces their electric bill. In a lease situation, a predetermined fee is set for 20 years. The consumer can also participate in a power purchase arrangement; the consumer buys power from the solar panels. A purchase arrangement is cheaper than buying from traditional grid suppliers.
A consumer can expect to pay $30,000 for the purchase and installation of a complete rooftop solar power array. A 30 percent federal tax rebate and possible state incentives serve to lower the cost. The solar panels make up less than half of the total price, with the rest of the cost going towards labor and necessary hardware. Consumers are going to see little, if any, benefit in the price competition from producers. The price change is going to be seen mainly by installers and solar power lease companies.
It is thought that solar power has the potential to reach what is known as “grid parity,” wherein the cost of solar power is cheaper than traditional grid suppliers. This theory can become reality if the price of solar panels continues their precipitous price drops.
Lux Research projects that grid parity will reach commercial solar panel installations first, and that ten countries will reach that point by 2016. For the time being, state subsidies and the cost of retail power are key to allowing solar power to undercut grid power. Anticipated increases in the cost of wholesale and retail electricity will serve to increase demand for solar power.
Source: Global Warming is Real (http://s.tt/13dlb)

Solar Shakeout Could Soon Reach China
http://www.bloomberg.com/news/2011-1...ach-china.html

The price of polysilicon, the key material in conventional solar panels, dropped more than 90 percent from its February 2008 high of $475 a kilogram, to the end of last month. Source: Graphic by David Yanofsky
By Eric Roston and Ehren Goossens Nov 8, 2011 9:48 AM ET 0 Comments Q

If oil prices fell from their 2008 peak as far as solar component prices have, a barrel of oil would cost about $10 – a 93 percent drop. Everyone could afford to fuel his own Formula One racecar.
Instead, more utilities and companies can now afford to install solar power. A kilogram of polysilicon, the basic material in solar panels, dropped from $475 in February 2008 to less than $35 Oct. 31. Not every manufacturer can stay in business with prices so low. The great shakeout has begun in the U.S. and elsewhere -- even as the largest producers continue to ramp up output. But what’s going on in China?
The price drops are a stunning turnaround for this alternative to traditional power generation, the economics of which have long prevented its widespread adoption.
Polysilicon manufacturing has been growing at an annual rate usually reserved for another silicon product, computer chips. By the end of 2010, the world produced enough photovoltaic panels theoretically to power about four New York Cities. At about 42 gigawatts, that's 43 percent more solar capacity built than in 2009, which itself was a third higher than 2008.
Solar is already competitive with fossil fuel power in many markets around the world, especially where supply is unreliable and diesel backup generation is uncommon. "People are missing out about how cheap solar power has become,” said Ramesh Misra, senior analyst covering solar and technology at Brigantine Advisors in New York. "There is no other energy source that can make that claim."
The falling prices have changed the competitive landscape and knocked smaller manufacturers out of business, including Evergreen Solar, the Marlboro, Massachusetts panel-maker, and Solyndra, the thin-film solar manufacturer whose bankruptcy kicked up a solar storm in Washington, DC, because the Obama administration backed $537 million in loans.
Analysts and investors are studying the effect of this price shakeout on the global solar industry. Leading companies in the U.S., Germany, Korea, Norway and Japan are easier to read than their secretive peers in China. A Chinese analyst, Xie Chen, gave Bloomberg News a glimpse behind the Chinese Wall at the end of last week. About 90 percent of plants in China risk suspensions in production because of the low prices, said Xie, an analyst at the China Nonferrous Metals Industrial Association, something of a cross between a think tank and a government agency. Those factories, most of them quite small, produce about half of China’s overall polysilicon output.
The closings, though perhaps temporary, will lead China to import more polysilicon from large international competitors, Xie said, such as Hemlock Semiconductor Corp., in Hemlock, Michigan, and Wacher Chemie AG, in Munich.
Aaron Chew, a senior analyst at Maxim Group LLC in New York, attributes the price drop to aggressive sales from larger firms such as GCL-Poly Energy Holdings Ltd., in Hong Kong, and OCI Company Ltd., in Seoul. "I don't think the smaller polysilicon manufacturers are responsible for the current downward pricing pressure,” he said. "Even if all of the capacity of these smaller players went offline, there would still be enough to supply the industry."​

http://www.ifandp.com/article/0014500.html

This seems to pour slightly damp water on the concept that the US industry requires help from its own government. The paper, released by GTM and SEIA on 20 September, said, “Leading the way was the US solar photovoltaics (PV) market, which installed 314MW in the second quarter, 69% more than the same period last year and 17% more than the first quarter of 2011. The US remains poised to install 1750MW of PV in 2011, double last year’s total and enough to power 350,000 homes.
“The second quarter data illustrates that the US solar industry continues to be one of the fastest growing in America,” said Rhone Resch, president and CEO of SEIA. “More than 100,000 Americans are employed in solar, twice as many as in 2009. They work at more than 5000 companies – the vast majority being small businesses – across all 50 states.”
The utility and commercial market segments grew 37% and 22%, respectively in the second quarter. The residential PV segment, however, stuttered for the second consecutive quarter, installing 60MW, a 5.7% drop over last quarter. The US Solar Market Insight report predicts greater traction for the residential market, however, in the second half of 2011 and into 2012, as residential solar-leasing business models expand nationwide.
In the concentrating solar market, including both concentrating solar power (CSP) and concentrating PV technologies, over 600MW are now under construction in the US. The US concentrating solar pipeline now holds more than 7000MW (enough to power 1.4m homes), of which more than 4000MW of projects have signed power purchase agreements with utilities.
While US solar is on track for a banner year overall, the market does face a number of potential challenges in 2012 and beyond that could stunt the type of growth seen over the past year and a half.
“The potential expiration of the 1603 Treasury program, along with current malaise in major markets such as New Jersey and Pennsylvania, threatens to slow growth in 2012,” said Shayle Kann, managing director of solar at GTM Research. “Still, with increasing market diversity and the continued emergence of the utility-scale solar market, we anticipate that the US market share of global installations will triple over the next four years.”
The overall solar story remains very positive. “The dynamic second quarter growth is a result of increased competition in the solar market, competition that drove down the price of solar panels by 30% since the beginning of 2010,” added Resch. “This is good news for residential and business customers as solar becomes more affordable every day.”
Another SEIA survey, “Public Perceptions of Solar Water Heating Systems,” was released on 17 October. Its findings, says SEIA, confirm that Americans have strong positive associations with solar energy, demonstrate the widespread perception that solar water heating systems present an appealing offering with a significant economic upside for the country, and establish that more consumer education is needed about the affordability and reliability of solar water heating systems.
So the truth appears to be that whilst international competition with the East does represent a challenge to burgeoning growth in the US, there are plenty of positive for US firms to take into the fight.

thanks for the articles. So what do you think about all of that?

Here's something I'll share with you. I lost a bundle on these guys a while back with the stock was trading in the $30 range. Read some of the articles at the right.

http://www.google.com/finance?client=ig&q=NASDAQ:ENER#