Monday, October 17, 2011

Blame Chinada.

"Factories in China have been churning out solar panels so fast that prices have plunged. Just ask the folks at Solyndra, the bankrupt photovoltaic-cell maker that has gotten the Obama Administration into hot water over loan guarantees. Those Chinese manufacturers are now disrupting another corner of the solar industry: so-called solar thermal installations, which make electricity by bouncing sunlight off mirrors to boil water, creating steam that drives turbines.

At least four companies have abandoned plans for solar thermal plants in the U.S. in favor of electricity-producing solar cells, which have fallen in price by nearly half this year, according to Bloomberg New Energy Finance."
Read More here.

Yes.... China is the problem. Or it could be that these types of installations have proven to be insanely costly.

"Solar thermal startup BrightSource recently finished building a solar-to-steam farm for oil giant Chevron, which will enable Chevron to use steam from the solar farm for enhanced oil recovery. But according to BrightSource’s latest amendments to its S-1 (the filing that indicates it will go public), that project, called Coalinga, ended up costing significantly more than BrightSource expected.

BrightSource says that when the project was first established back in December 2008, the company thought it would take a loss on the project, because it was the company’s first and was intended to be a proving ground. BrightSource says it had estimated contract losses of $10.5 million at that time.
However, as of this summer, June 30, 2011, BrightSource says its loss since inception of the project was $58.6 million, “or $48.1 million greater than the initial loss estimate as recognized in December 2008." Read more here.

The article goes on to say:

"These cost overruns are worrisome, because Coalinga was a smaller 29 MW project for Chevron, and BrightSource is currently knee-deep in building a far larger 392 MW farm in the desert near Las Vegas. BrightSource and the owners of Ivanpah say they have committed to funding up to “$66.5 million of overrun contingency reserves, known as the funded overrun equity,” for Ivanpah"

So.....Chevron *a public company* got a five fold increase in costs on this type of installation. The Ivanpah installation is the one that just got a 1.6 billion dollar loan from the government. I can only imagine what we the taxpayer will experience in cost over runs. I mean, they have the government checkbook. But this is all China's fault.

What would make you axe a purchase faster? Paying 5 times what you expected for something, or getting something much cheaper than you expected?

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