First Solar Sees Modest Solar Market Growth In 2010, Expects Pricing Pressures

December 16, 2009

The world’s largest solar module producer offered a cautious outlook for market growth next year and signaled that significant pricing pressure will continue through the year.

The outlook led the company to restrain its factory expansion even as Chinese manufacturers steam ahead with their production line expansion. The difference could leave the company at a disadvantage if market growth is greater than expected and the company can’t ship enough products.

First Solar said it anticipates the solar market to be 7.5 GW in 2010 and to grow only 35 percent a year until 2012. The forecast is below the aggressive projections of some analysts.

The Arizona company also estimates that production in the industry is still 2 GW greater than demand, a situation that will lead to more pricing pressure in the coming year.

“2010 will be stronger, we think, than 2009,” said CEO Robert Gillette. But “supply will exceed demand…(and pricing) pressures will still be there.”

Gillette said he expects the world’s largest solar market, Germany, to be strong in the first half of the year. But expected reductions in the country’s feed-in tariff could slow demand later in the year.

The Spanish market, meanwhile, is beginning to recover, and California and Ontario represent opportunities for manufacturers. However, the real growth opportunities will be markets in China and India, where feed-in tariff are anticipated, and in France.

With oversupply continuing, some competitors will drive manufacturing costs to 75 cents a watt by the fourth quarter of the year. First Solar produces at $1 a watt or less today.

On the capacity front, the company’s guidance is that it expects to add 8 manufacturing lines in Malaysia in 2010 and 2011 and two lines in France in 2012 in an attempt to retain its manufacturing lead. Additional lines will follow in China, it suggested.

But it acknowledged that it could lose share against the Chinese if the market is stronger than it expects.

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Posted by Mark Boslet

Clean Tech Is Top Investment Theme For Venture Capitalists

December 16, 2009

Clean tech investing is likely to see a boost from venture capital funds in 2010.

A recent siurvey found 54% of VCs sees anticipate higher clean tech investment levels next year

A recent survey from the National Venture Capital Association found clean tech to be the category most VCs cited for growth. Fifty-four percent said they expected investment levels to increase in 2010.

The next highest category was Internet investing, where 46 percent said investment levels would rise from 2009.

But even while optimism ran high over clean tech, VCs in general were reserved. Sixty-three percent expected overall investment levels in the industry next year to remain similar to this year’s.

They also anticipated a shrinking industry. The survey found 87 percent expect new funds next year to be smaller.

However, IPO activity is projected to improve modestly: three quarter predict 20 or more IPOs. And 91 percent expect acquisitions of venture-based companies to rise, with a majority anticipating deal prices to be higher.

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Posted by Mark Boslet

Proposed Green Road Tax In Netherlands To Reduce CO2 By 10 Percent

December 15, 2009

Dutch drivers presently pay sales and ownership taxes that amount to more than a quarter of the value of their cars.

Starting in three years, both could be scrapped in favor of a green road tax that will charge them for the kilometers they travel.

Intially tax rate will be 3 euro cents a kilometer (7 cents) but will double in five years.

The tax is likely to be among the most effective climate-change measures in the world and perhaps one of the most controversal. It has yet to be approved by Parliament. If enacted, it would assign each vehicle in the Netherlands a tax rate based on its size, weight and emissions – in essence proving as decidedly anti-carbon policy as a tax on gasoline, which has been talked about briefly in the US. and advocated by ExxonMobile. Buses and motorcycles are exempt from the new fees.

According to a statement from the Dutch government, the tax will be levied beginning in 2012 and is aimed at cutting CO2 emissions by 10 percent. The fee is scheduled to double by 2017 to 6.1 euro cents a kilometer after starting at 3 euro cents (7 U.S. cents).

Tax collectors will keep track of miles covered by installing GPS devices in every car. Officials say the tax will not increase bills for consumers, but shift them away from sales and ownership fees. Research suggests drivers will cut down their mileage by 15 percent.

The tax clearly as several benefits. For one, it will lower the price of cars since sales taxes will be abolished. More importantly, it is likely to be an aggressive climate policy at a time when stronger measures are needed.

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Posted by Mark Boslet

Even Airlines Get Green Religion As Major Bio Jet Fuel Pact Is Announced

December 15, 2009

They are not known as green companies. The world’s top airlines send jets with powerful turbofan engines high into the atmosphere, where they spew out tons of greenhouse gases.

Dozens of U.S. companies have cut back on business travel because of the environmental impact of regular flying, and to save money during the recession. On Tuesday, 14 major airlines began fighting back.

Airlines negotiating to use camelina based jet fuel starting in 2012.

The carriers announced that they are negotiating with Seattle-based AltAir Fuels to buy up to 750 million gallons of bio jet fuel over 10 years.

Whether their decision to begin using bio jet fuel comes in response to changing demand, or because of an altruistic streak, it is a welcome change.

The fuel will be made from the Mediterranean herb camelina, which has potential to reduce carbon emissions by 80 percent. The camelina will be grown in nearby Montana.

AltAir said it plans to construct a new plant to produce the fuel next to the Tesoro oil refinery in Anacortes, Wash. The facility will have an annual capacity of 100 gallons and is to be completed by 2012. Engine modifications on the Boeing and Airbus jets that service most major U.S. airports aren’t needed.

The airlines negotiating with AltAir are American Airlines, Air Canada, Alaska Airlines, Atlas Air, Delta Air Lines, FedEx Express, Hawaiian Airlines, Jet Blue Airways, Lufthansa German Airlines, Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines, and US Airways.

Camelina is a tough, drought resistant plant that grows well is marginal soils, so is a good match for the Montana climate. It will be processed using technology from Honeywell.

As politicians quibble about the details of climate change agreements, it is good to see major companies step up to the green alter. Nevertheless, more needs to be done. The volume of fuel produced at the AltAir plant is only enough to replace 10 percent of the fuel used annually at the Seattle-Tacoma airport.

Additional pacts will need to be struck. It is too bad the airlines didn’t get started a decade ago when the dangers of global warming first became widely known.

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Posted by Mark Boslet

Start-up Finds Way To Turn CO2 Into Plastic Wrap

December 14, 2009

A Massachusetts start-up using technology developed at Cornell University has begun turning the greenhouse gas CO2 into plastic wrap and bottles.

Novomer, which won a $400,000 grant from the New York State Energy Research and Development Authority, is in pilot stage production and hopes for a commercial product in a year.

The technique combines equal quantities of a petroleum-based polymer and CO2, allowing the CO2 to react with the petroleum. The production is taking place at a Kodak plant.

“We can turn pollution into a valuable material,” says Mike Slowik, manager of strategic planning and analysis.

The end product is polyproylene carbonate, which can be used to make a clear plastic wrap for food packaging or plastic bottles. The company’s goal is to increase production volumes, which in turn will increase the amount of CO2 it recycle from the atmosphere.

Novomer's plastic is made with equal parts of a petroleum-based polymer and CO2

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Posted by Mark Boslet

2010 Outlook For Solar Industry Improves

December 14, 2009

JA Solar gave the solar cell industry a positive shot in the arm Monday.

The Chinese manufacturer said fourth quarter sales were better than expected with only several weeks in the quarter remaining.

It also said it sees strong growth of 67 percent next year – suggesting that the industry is experiencing building momentum as the global recession fades.

JA Solar said in a press release that it expected fourth-quarter shipments to be 210 MW of cells, well above the 170 MW to 200 MW range it offered in November. It anticipates 2010 shipments to be about 775 MW, or 67 percent above the 2009 level of 463 MW.

Solid demand is anticipated in Germany, China, the U.S., Italy, South Korea, Spain and France, the company said.

Full steam ahead.

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Posted by Mark Boslet

The Case For Selling Cap And Trade Credits For Carbon Rich Rangelands

December 14, 2009

Mention carbon capture and visions of large scale projects aimed at skimming CO2 from coal plant plumes and burying it deep underground come to mind.

Rangeland makes up 31% of the nation's land and soils holds three times more carbon as the atmosphere

But there are simpler and potentially more effective ways to sequester carbon and help restore the earth’s natural, pre-industrial atmospheric balance. One getting more attention these days can best be described as soil sequestration.

Cropland and rangeland in the United States are a net carbon sink that annually filter about 18 percent of fossil fuel carbon emissions and store it in leaves, roots, wood and soil.  Much of this benefit has come as the nation has re-grown its forests.

So what about expanding the effort to the 31 percent of the U.S. that is rangeland? (Rangeland make up about half the planet’s surface worldwide.) Doing so would offset 3.3 percent of the country’s CO2 fossil fuel emissions, according to a report by the Environmental Defense Fund.

The big gain comes because soil holds three times as much carbon as the atmosphere. Looked at differently, one ton of carbon stored in the soil removes 3.67 tons from the atmosphere.

If rangelands were re-forested or simply seeded with shrubs and brush, the nation would get a boost in the fight against global warming.  But since about half the rangeland in the U.S. is owned by the government and most is used for grazing by ranchers, the politics are likely beyond reach.

That’s unless financial incentives are used. What if the re-vegetated lands were offered emissions reduction credits that could be bought and sold under a cap-and-trade bill, the defense fund asks?

Such a scheme might work. Dollars talk and ranchers might consider re-growth a simple way to make money. It also might shrink the nation’s beef industry, also a plus in a climate change fight.

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DOE Favors Batteries For The Electric Car Over The Grid

December 11, 2009

Electric cars get all the buzz.

Budding manufacturers draw crowds at auto shows and the electric Nissan Leaf is presently touring the country as if a gold medal winning Olympic athlete.

Every move by darling Tesla Motors is repeated by a fawning media, from its selection of a southern California factory site to the possibility it may sell shares to the public.

This bias was a part of the grants and loan guarantees the Energy Department doled out this summer and fall. Of the total spent on battery technology, $11 billion when to electric vehicle batteries and about $300 million to grid batteries, says Victor Babbitt in a blog post this week.

Designing an advanced battery for the more stable environment of the grid may make more sense

Perhaps the department should think twice.

Cars are difficult places for batteries, with heat, vibration and widely varying performance demands stealing capacity and endurance.

In contrast, grid batteries capturing the electrical output of a solar plant for use later have a relatively stable environment in which to live. They can be more reliable and have a longer lifespan.

“The main issue is cost. Presently, a Sodium Sulfur (NaS) battery by NGK Insulators will run you in the neighborhood of $600K/MWh, and NGK sold several hundred million $ worth in FY2009, and is primed to double production in 2010. Zinc Bromine flow batteries can be purchased today in the neighborhood of $300K/MWh, and several new technologies I’m familiar with are working toward breaking the $100K/MWh barrier, and beyond,” Babbitt says.

Get a grid battery below $100,000 a MWh and the market begins to take off. Beat $70,000 and it reaches into the stratosphere.

Advanced battery development is proving a monster technical hurdle. Perhaps more money should be brought to bear and targeted where it will do the most good.

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Posted by Mark Boslet

DOE Biofuels Grants Showed Level Headed Bets On Multiple Approaches

December 11, 2009

The Energy Department seemed pretty level headed last week when it pumped $600 million into biofuels companies.

As we reported at the time, the department had a clear emphasis on second-generation cellulosic ethanol. In other words, fuel sources other than edible corn and sugar cane, the purer sugars.

ZeaChem is using a $25 million grant to build its first bio-refinery in Oregon. Key technology integration results are expected in January

But the emphasis was as well on companies that are making steady, measured progress toward commercialization – not those swinging hard for the fence in one blow.

Jim Imbler, CEO of the biofuels company ZeaChem, also says the DOE was careful to hedge its bets. There were firms focused on the fermentation of cellulosic plants, gasification and the conversion of algae into fuel, among other initiatives.

Even the funding for algae-based biofuels – which is further off than cellulosic ethanol – was done with reasoned judgment, not unbridled hope, he said.

Among those getting grants and loan guarantees were BlueFire Ethanol Fuels, eager to build a Mississippi plant to process wood residue, Archer Daniels Midland, BioEnergy International, Enenkem, and algae fuel producers Sapphire Energy and Algenol Biofeuls.

The department also selected ZeaChem for a $25 million grant, which the company will use to build its first ethanol bio-refinery in Oregon.  ZeaChem is earmarking $40 million in private capital for the project, which will use the wood of poplar trees.

Imbler says the company is in the process of proving out the integration of the three key pieces of its conversion process. Key results will be available in January showing whether the technique it uses to convert biomass into sugars is ready for commercial production.

“We’re very confident,” says Imbler of the microbe ZeaChem uses to break down wood chips – and which could be used with switchgrass and other cellulosic fuels.

The data should be broadly useful to the industry, he says. And to the DOE, which is now negotiating the final grant terms with the company.

If the numbers look good, one of the department’s big bets might suddenly look like a sure thing. And second-generation biofuels will appear a step closer to reality.

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Posted by Mark Boslet

Will China Rescue the Solar Industry. What About Its Secret Over Capacity Problem

December 10, 2009

China is expected to bring bright days back to the solar energy business.

Subsidies have been cut in numerous European countries – Spain, for instance – and the Germans are likely to whittle down their feed-in tariff. Demand in the world’s largest solar market is feeling the pain of this year’s recession.

Filling in for swooning Europe is what many observers see as a government induce boost of interest in China. But the nation appears to be plagued by a surprising amount of over capacity, and the government pressure for sub-market pricing may steal away some of the projected prosperity.

Solar farms in China, like this one, are expected to increase, but panel pricing will be low.

Chinese solar producers have been crowing in the past several weeks they can’t make enough cells to meet demand. JA Solar was among them.

But another, perhaps more realistic, account of the Chinese market tells a different story. CCID Consulting, based in Beijing, claims the country’s solar cell industry has instead a substantial production over capacity of 1,000 MW.

That could delay the good times as idle factories await orders to restart. China, the world’s largest producer of solar cells, saw a sharp drop in overseas orders in this year’s weak economy. The cooling of the European market has had a big impact.

The nation stepped up by stimulating internal demand. The recent Golden Sun Project calls for 500 MW of demonstration solar projects around the country in the next three years. A separate industrial revitalization plan is to be revised shortly with a solar target of 20 GW of projects, up from 1.6 GW.

So far China’s government has approved only three farms – the largest is a 100 MW solar farm in Gansu Province. Three more are under consideration, including a 1 GW farm in Qaidam and a 550 MW development in Wuzhong.

These projects should boost demand in the solar industry in 2010. But first idle lines will need to be reactivated. And prices expected at the facilities are to be low.

The Gansu project, for instance, has come in at .69 Yuan a KWh of electricity, or about 10 cents. More typical pricing around the world is 22 cents a KWh.

Chinese demand may move product next year as factories come back online. But the corresponding prosperity may be more difficult to achieve than people anticipate. Low prices will be the explanation.

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Posted by Mark Boslet

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