Trend: Incremental improvements in solar energy technology and problems with competing dirty sources of energy increase the likelihood of solar becoming cost competitive soon.
Jim Jubak at MSN Money makes the case for solar energy, as petroleum prices stay high and coal and nuclear plants are cancelled.
Link: High-powered solar stocks - MSN Money.
Solar now looks like it will become cost-competitive in the Southwest before 2013. Consider:
- The spot price of oil (West Texas Intermediate grade) climbed to $131 a barrel on May 29 from $80 on Oct. 1, when the Jefferies report was published. That's a 64% increase. Oil isn't used much to generate electrical power -- some is burned in diesel generators -- but it does set the price for other forms of energy.
- The Henry Hub price of natural gas -- which is burned to produce electricity -- climbed 49% from October to May.
- Between 2000 and 2006, U.S. utilities proposed 150 coal-fired power plants. By the end of 2007, utilities had built 10 of those, 25 were under construction, and a whopping 59 had been canceled or delayed due to everything from increased regulatory scrutiny to worries that global-warming regulations that were no more than a gleam in the eyes of some members of Congress would slap new costs on coal-burning plants. The problem got worse with the January 2008 cancellation of the federal FutureGen clean-coal pilot plant. The utility industry projects it will take 15 years to get this technology from a pilot plant to a commercial plant, and the clock isn't yet ticking. Every coal-fired plant put on hold increases the need for substitute generating capacity. That will keep natural-gas prices dancing upward and make electricity more expensive.
- Electricity prices per kilowatt-hour for residential customers climbed 3% from October to May for the U.S. as a whole. In the Pacific region, the likely market for power generated from solar installations in the Southwest, the price of electricity climbed about 9%.
- Hundreds of nuclear reactors are in the pipeline around the world, and about 30 are actually under construction, but it's taking longer and costing more than expected to build them. Finland's Olkiluoto 3 reactor, the first of a new generation of European pressurized-water reactors from French company Areva (ARVCF), was supposed to start producing electricity in 2009. The project is about two years behind schedule, however. Areva and its client, Finnish utility TVO, are arguing over $2.4 billion in cost overruns.
...by 2009, as new silicon production lines come on stream, the recent shortage is likely to turn into a glut. There will be plenty of silicon for every manufacturer, and spot prices could fall as low as $50 a kilogram.
That is great news if you're one of the 60 or so new solar-cell and module manufacturers around the globe that have started up in the past couple of years. These companies -- many in low-wage countries such as China -- will be able to get all the silicon that they need to run their lines at full speed.
That's bad news for established solar companies. Because low-cost newcomers were unable to get all the silicon they needed to operate at full efficiency, these European, Japanese and U.S. solar companies have been sheltered from the full effects of global competition. In my opinion, falling prices for solar cells and modules will act to stimulate demand so that the industry won't see an actual glut of product. But prices will fall.
It's becoming more and more obvious that solar panel installation will continue to grow in popularity. Thanks!
Posted by: danny | June 05, 2008 at 12:02 PM
It's becoming more and more obvious that solar panel installation will continue to grow in popularity. Thanks!
Posted by: danny | June 05, 2008 at 12:02 PM