A new report from Dow Jones and the solar manufacturing sector indicates that consolidation, or mergers, is likely to be the next wave for solar.
Lawmakers, already struggling to balance energy independence and the availability of oil, recognize the inevitability of market consolidation if America’s solar manufacturing industry is to achieve any kind of worldwide presence, let alone domination.
Let’s face it, at this point, U.S. solar is not a cost-effective solution for foreign firms. Land and labor are both too expensive, and even U.S. firms are struggling with solar impediments like efficiency, reliability, deployment speed and transmission availability.
The way to make solar effective in a world market may be to consolidate small solar and solar startups so that, in the very near future, solar manufacturers can offer the sort of workmanship, life-span guarantees, and service solutions to solar installations that are currently enjoyed by the traditional energy industry.
In other words, notes Michael Liebreich of New Energy Finance, if a company like NRG buys 100 megawatts of solar energy, it needs the certitude that system failures will be addressed by an experienced maintenance crew in a timely and affordable fashion under a contract maintained and operated by the same company for the lifespan of the solar farm. Currently, Liebreich notes, only a few solar cell manufacturers are at that point, and only a few more will reach it in the next several years.
Phil Schneider of Deloitte Consulting agrees, and notes that for foreign investment in U.S. solar to occur, a whole platform of incentives needs to be present, not the least of which are government tax incentives. But reliability, and serviceability, remain a huge part of the equation.
How confident are foreign investors that the U.S. is ‘good ground’ for emerging solar? Quite confident, if Schott Solar’s new Albuquerque, New Mexico, manufacturing facility is any indication. This plant, estimated to eventually cost more than $500 million, will ramp up over a decade to 800,000 square feet and employ 1,500 people.
More recently, eSolar leased its concentrating solar power technology to Indian company ACME Group for one gigawatt of solar power. But eSolar and First Solar are among the leaders in solar technology, with First Solar showing signs of the times by recently acquiring solar installer Turner Renewables and purchasing a 10-percent interest in SolarCity, another installer.
What about all the little guys, the solar startups? The recession has dampened investment, and many are struggling with high inventories, deflated revenues and a sense that solar has seen, and passed, its peak, at least in America – an impression driven by falling natural gas prices (80 percent since the summer of 2008) that have created cheaper manufacturing capacities and manageable (if not delightful) home heating bills.
The World Solar Energy Index fell 60 percent during the same period, suggesting a correlation that Liebreich describes as: “Solar and wind versus gas.” In Liebreich’s estimation, solar doesn’t, and can’t, compete with oil. But when natural gas prices start rising again, as they surely will, solar becomes more viable, and the field will be ripe for solar mergers and acquisitions, and these can and should be seen as the natural evolution of a new market becoming solidified.
There are about 60 solar panel manufacturers in the U.S. large enough to gain a position on the U.S. Energy Information Agency’s website, with another 20 companies vested in peripheral solar parts (batteries, parabolic collectors, etc.). There are an equal number of solar startups too new, or vested in such currently arcane technology, to be noted anywhere.
This isn’t to say that the newer technologies aren’t promising, because they are. But they haven’t been field-tried and proven durable, efficient at collecting solar energy, or cost-effective on a commercial scale – the three tests of solar technology that allow it to survive, let alone thrive.
In that respect alone, the current recession may be a proving ground for solar, allowing the winners to push forward and the losers to go back to the drawing board. All in all, it’s an inevitable shakeout for solar, and may the best team win.
Cooler Planet is a leading solar resource for connecting consumers and commercial entities with local solar Installers. Cooler Planet’s solar energy resource page contains articles and tools about solar panels to help with your solar project. Article Source:http://www.articlesbase.com/environment-articles/solar-energy-not-effective-1317143.html
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