Wednesday, February 08, 2012

When people mistake parity for collapse.

China polysilicon firm reportedly files for bankruptcy

"The rapid price drop of polysilicon has caused close to 80% of polysilicon firms in China to halt production. "

A few months ago Trina Solar came out and said that by 2015, most solar manufacturers will vanish. The CEO of Trina predicted that only 5 companies may survive to 2020. Here. This is the CEO of one of the largest Chinese manufacturers! However, the contraction is coming from every point on the globe.

I only point these things out because the green energy chearleaders/hacks/shills are back out in force. Even Fisker had to come out and defend the company today. These people are in a panic. As well they should be. I would have to add the companies up, but the announced layoffs for this sector have to be close to 5000 since the beginning of the year. And as you can see - China is having a few of their own problems if they are halting 80% of production.

From Marketwatch.

"In describing grid parity here, I am referring to the cost for new energy from utility-scale projects. Many analysts compare the cost of newly built solar vs. existing utilities. That is an apples to oranges comparison however. For new energy needs, construction and financing costs must be considered for all potential power sources, not just solar's. When comparing on a new-new basis, building and operating a solar power plant is roughly on par with building and operating a coal plant in many locations now. Given this reality, it does not take a rocket scientist to know that solar has a sunny future. "

Honestly, that bit made me laugh.

The article goes on to say:

"In China, grid parity is occurring over the next few years as their energy needs continue to increase and fossil fuel prices increase. The Chinese have made enormous commitments to solar and will install about three gigawatts of solar capacity in 2012. There are several Chinese solar companies likely to benefit from the build out. The Chinese commitment to expanding their domestic solar usage will also reduce the supply glut facing the industry at the moment. "

Then, the best part:

"With solar currently producing just under 1% of global energy, but with a growth rate over 35%, big money is pouring into the sector. The question to be asked is whether you will follow their lead and be the long-term buy-low investor you claim to be or will you wait until share prices have doubled or tripled then declare: "Oh, look. Solar is going up. I guess I'll buy some now."

It seems to me that things are happening much more rapidly than anyone could have predicted. Likely they have been selling this stuff for less than market value because the governments make up the difference. That is not reality. Companies die when that happens because governments can not support them forever.

1 comment:

  1. The ONLY reason that Solar is competitive with baseline coal/Steam/Electrical plant is if the Gov regulation has made it fabulously expensive to start a new coal plant.