Solar at dawn of new era as it nears global tipping point

By Giles Parkinson on 31 October 2013

The solar industry is moving ever closer to what many expect will be a global tipping point.

As we documented last week, many of the leading manufacturers are now predicting that annual installations will tip 50GW for the first time in 2014. The top range of the forecast has now been lifted to 55GW by leading analyst NPD Solarbuzz.

That is significant, because it means that in the last six months, forecasts for the coming year have soared by 50 per cent. And it would represent a real increase in installations of more than 60 per cent, underpinned by surging demand in three key markets – US, China and Japan.

That is the scale of change that is at hand. It underpins what Deutsche Bank has described as a “major inflection point” in the market in the next 15 months:  the problem for the solar industry is no longer over-capacity, it’s a question about whether it can meet demand.

China’s tier-1 solar module manufacturers are reporting to be operating at near full capacity. Kyocera, the Japanese solar manufacturer, this week lifted its sales forecast for this year by 20 per cent to 1.2GW. And prices are seen as stable.

Even polysilicon supplier Wacker Chemie said silicon had fallen by one third this year, despite increased demand flowing through the system. Polysilicon prices are still trading at around $US18/kilo, despite forecasts of them rising about $US20. Meanwhile, the stock price index for global solar stocks, which had slumped  87 per cent from a February 2011 peak through to November 2012, has regained 55 per cent of its value in the past year, according to Bloomber.

One of the two big US solar manufacturers, and one of only three that are making a profit, the California based SunPower (it’s actually two thirds owned by French oil giant Total) typifies the dynamics that are affecting the market.

This week, it said it will deliver earnings for calendar 2013 well over double what it forecast just five months ago. Now it is about to invest in new capacity, spending around $230 million on a 350MW solar cell manufacturing plant in the Philippines, at the centre of the biggest growing market in the world, east Asia.



That represents a lift of around 25 per cent of SunPower’s capacity. It may not be enough, and there is talk of expanding its manufacturing plant in Malaysia as well. This graph above, from SunPower’s quarterly presentation, shows a near doubling in anticipated capacity from 2012 to 2016. Such growth could not have been contemplated just 12 months ago

SunPower is an interesting example of what’s happening in the solar industry for other reasons. Right now it is completing development of the 270MW CVSR solar farm (pictured below) in California, and in the same state it is also building a 579MW solar PV project known as Solar Star for Warren Buffett’s MidAmerican Solar. Unlike the experience in nuclear, gas and coal projects, costs are actually coming in below target.


Its also building a 70MW large scale solar project in Chile. This one is a groundbreaker because it will be the world’s largest merchant PV power plant. That means it has been built without a contract, or off-take agreement with a utility or consumer. It will sell its output into the spot market.

“We believe that this project represents an important milestone, proving that solar power can provide wholesale power at prices competitive with conventional generation technologies,” CEO and president Tom Werner told a conference call on Wednesday in the US.

“That’s where the long-term sustainable demand is, it’s in markets that don’t require policy support. And so we think it’s really important to seed those markets where you can build a merchant power plant.”

But the other big movement is in the distributed generation market. SunPower is big on leasing and has around 20 per cent of the US market, and has raised $850 million to fund leasing over the past two years. It also has a pipeline of $1 billion in the growing commercial market.

Leasing dominates the US residential market, where size counts. The average installation is now 8.3kW, more than double the average size of recent installations in Australia.

It also has 26 per cent of the Japanese market, which some say will rival China as the biggest market in 2013 and 2014 as it offers generous tariffs to accelerate its uptake of renewables in the prolonged, and possibly permanent, absence of nuclear energy.

Kyocera said its sales are underpinned by the Japanese feed in tariffs, and the market will struggle to keep pace with demand. It also noted there was very strong demand in the rest of Asia, and it believed that the Middle East market would be the next to boom.

All we need now is new battery technology and we can do without the grid.

This would cause some chaos as wealthy people could go off the grid and be independent leaving the entire cost of the grid to be paid by the users that remain on the grid.

greggerypeccary wrote on Nov 2^nd, 2013 at 4:40pm:


A global HVDC network. We could be exporting solar electricity to Europe in the next 50 years. The technology already exists.

muso wrote on Nov 2^nd, 2013 at 5:36pm:




Great, lets get onto it right now, as long a 9/10ths of the project doesn't have to be subsidized by taxpayers by closing off factories due to massive electricity price rises and sending aussie jobs offshore.
If private enterprise can bankroll it then its a goer, but if we have to disconnect the poors power to subsidize it then its a bad idea.

The 4th paragraph i like: not reading past that storage is still an interesting focus point in the worlds eyes! 

miketrees wrote on Nov 2^nd, 2013 at 4:36pm:

All fact 

muso wrote on Nov 2^nd, 2013 at 5:36pm:

YES IT DOES... SO WHAT WOULD NEWTON DO EXCEPT ATTACK WITH IDEAS,..... and there's still people starving?

muso wrote on Nov 2^nd, 2013 at 10:32pm:



I seriously doubt that