Shi said that solar is already competitive with fossil fuels in India, Hawaii, Italy and Spain. Others at the alpine power-fest agreed with Shi, who runs one of the world’s largest and most important solar panel manufacturers. The head of the world’s largest wind company, Vestas, as well as another Chinese solar panel producer, Trina, both said that their companies would also be able to offer products that produce electricity at prices that matched fossil fuels.
We are at a tipping point. No longer are renewable power sources like solar and wind a luxury of the rich. They are now starting to compete in the real world without subsidies. Fossil fuels are not going away. But we can at least look forward to a world where our dependence on fossil fuels will decline.
The waning of the age of fossil fuels is good news for many reasons: the air will be cleaner and greenhouse gas emissions will be cut; and energy security will be improved, meaning that nations won’t have to worry about transporting fossil fuels long distances — often from foreign countries. Within the foreseeable future, a world where political upheavals or natural calamities could threaten supplies could be a thing of the past. With the right policies in place, many parts of the world over the next decade can look forward to dramatically cutting their dependence on fossil fuels.
But how fast this transition takes place depends not only on the technological and market savvy of entrepreneurs like Shi but on smart, forward-thinking government policies.
Only a few years ago it cost more than twice as much to produce electricity with solar panels than through conventional sources such as coal-fired power plants. Dramatic improvements in technology coupled with plummeting prices for polysilicon, a key ingredient, and big increases in solar panel manufacturing capacity have pushed down prices. Bloomberg says that silicon-based panel prices fell about half last year as silicon makers doubled their output and demand fell in a weakened Eurozone.
China, not surprisingly, has staked out a commanding position in solar panel manufacturing. China now accounts for about half of the world’s solar panel and module production. The U.S. which in 1995 produced more than 40% of the world’s panels, accounted for only 7% of global output in 2010.
U.S. solar panel manufacturers have cried foul and in late 2011 they filed an anti-dumping lawsuit against Chinese manufacturers claiming that a variety of Chinese subsidies are allowing the Chinese to sell solar panels in the U.S. below their true cost of production. The U.S. International Trade Commission, which rules on these disputes, agreed in December that the case could go ahead.
The resulting uncertainty will likely slow the progress of solar sales in the U.S. market, but won’t fundamentally change an extraordinary story of unfolding Chinese success in winning market share and driving down prices in an area of profound significance for the future of the world. We’re not talking iPads or running shoes here, but the ability to create electricity from the sun in a way that promises virtually limitless supplies of light and heat without air pollution or greenhouse gas emissions. And, thanks to Shi Zhengrong and many others, we can install solar not just for the rich.
China isn’t just a maker of solar power — it now is one of the largest and most important markets for renewable energy. China was behind much of the spectacular 165% growth in Asia-Pacific’s solar installations, according to market researcher NPD Solarbuzz, with Chinese 2011 demand up six-fold from the previous year. China increased its targets for total solar power installation to 15 gigawatts by 2015. That’s up from just one gigawatt at the end of 2010. Targets for installed wind capacity were increased to 100 gigawatts by 2015. These are big numbers.
More money will be on the way to support more technological improvements. China and the U.S. are global leaders in clean-tech spending.
“Countries around the world, especially China, recognize the economic potential in the solar market, and are racing at full speed to capture the lead,” U.S. Energy Secretary Steven Chu warned in a recent speech. “America has a choice to make today: Are we going to be importers or exporters of solar technologies? We can accept defeat and watch the solar jobs go to China, Germany and other countries, or we can get in the game and play to win, creating jobs ….across the country.”
Underscoring Chu’s remarks about the importance of the sector, a new report from consultants PwC says that the value of deals in the renewable energy sector jumped 40% to $53.5 billion last year (2011). PwC notes that in the past hydro-power typically dominated the list of big-ticket transactions in the renewables sector. But “big deals are becoming more common in the wind, solar, biomass and energy efficiency fields,” notes PwC. “For the first time ever, $1 billion-plus deals in these four sectors dominate the list of top deals, outnumbering hydro by seven to one as contributors to big deal flow.”
In short, solar power, and its renewable cousins like wind, are coming of age. Profitability may be elusive and trade battles may intensify, but the overall outlook for solar as a power source has never been brighter. The improved efficiency and lower prices for solar power will benefit a broad range of consumers, from affluent urbanites for whom a solar panel is a novelty to impoverished rural dwellers who can enjoy hot water and lighting. The benefits are not just to individual quality of life but to national security and to a world in which energy policy does not drive foreign policy.
There will be a long march to phase out fossil fuels, starting with the more than $500 billion in annual subsidies they receive globally. But the renewable path is becoming more certain and secure with every passing year. China and the U.S. are competitors in this area. They are also both winners. As trade disputes intensify it’s important to remember that winners will far outnumber losers as the price of renewable energy falls.
SOURCE: http://www.marketwatch.com/story/chinas-visible-solar-power-success-2012-02-08
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