Solar PV & Renewable Energy prices


US tariffs on Chinese solar panels imported in to the US

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Recent decision by US government to substantially increase tariffs rates for Solar panels imported from China is causing a very mixed reaction in the US solar industry and may ultimately negatively impact consumers who will see a spike in the cost of solar panels cost and installation fees. The goal of the tariffs is to protect US solar panel manufacturers who in the recent years have found themselves increasing unable to compete against the low prices of Chinese imported solar panels. The logic behind this decision is that while in the short run, it may slow down the growth of some US Solar companies, the demand for solar panels is so high that in the long run, the industry will continue to experience steady growth.

In recent years, the US solar industry has been experiencing a real boom. Today, it is a 8.4 billion dollar industry with 2,200 US firms installing solar panels both for residential and commercial clients and about 35 major US manufacturers of solar modules. Last year alone the rate of installation of solar panels grew 109%. There have been a number of forces at play fueling this trend for increasing demand on solar panels. Some of these factors have to do with an overall increased level of awareness in the American public about the environmental benefits of solar panels vs electricity from the grid, attractive annual costs saving benefits and heavy subsidies from both federal and state governments that offered consumers as much as 30% savings in rebates on the cost of installation. Yet another significant factor that made this growth possible, is that the price of the solar panels themselves dropped, driving down the overall costs that consumers would have to pay and therefore fueling the demand. Many home and business owners who even 5 years ago felt that they could not afford the exorbitant prices of solar panels, have been able to purchase and install them last few years.

Why did the cost of solar panels drop?

The reason why the cost of solar panels went down is very simple: the US market was flooded by cheap, good quality solar panels imported from China. A Chinese-made solar panel with 220 to 240 watts of power costs on average for $165 to $196, while an American-made one with 240 to 260 watts costs $240 to $288. Considering that an average size home or facility of 1,800 sq ft requires anywhere between 12-20 solar panes, this difference translates into significant savings when purchasing solar panels made in China. As a result of being able to offer such low prices, Chinese manufacturers were able to capture a whopping 60% of the 2.8 billion US solar modules manufacturing sector, literally squeezing their US competitors out of business.

Import tariffs as a way to protect US manufacturers of solar panels

Flooding the US market with cheap Chinese solar panels that were being priced below production costs caused an uproar among US manufacturers of solar panels. As Steve Ostrenga, CEO of Helios Solar Works, a Milwaukee-based manufacturer pointed out, the Chinese were “unfairly undercutting American companies on prices.This situation was unsustainable, it was hurting us. We couldn’t compete. It had to be fixed”. One common practice to protect the home industry and keep foreign competitors in check that is frequently employed both by US and other governments is to impose high import tariffs on the competitors. This forces them to either import less products or raise their own prices, or both, thereby leveling the playing field for the home industry. This is exactly what US government decided to do in this situation, and on May 17, 2012, the US Chamber of Commerce announced that the new tariffs imposed on Chinese imported solar panels will now be as high as 250%. The US manufactures expressed strong support and approval of this decision.

The tariffs are two-tiered. The first is targeting a group of 61 current exporters, including Yingli Green Energy and Trina Solar, who will now be paying rates of roughly 31%.The second tier is comprised of all other Chinese producers who are not currently exporting to the U.S. These manufacturers would face rates of up to 250% in case they begin exporting solar panels into the US. The second tariff is being imposed to prevent potential efforts by the current Chinese exporters to circumvent the tariff by shifting production to other companies. It remains to be seen how effective these new tariffs will be, as Chinese manufacturers could also shift production to other countries such as Taiwan to avoid the punitive tariffs.

The ruling will be finalized in the fall. However, the Coalition for Affordable Solar Energy, an industry group opposed to the tariffs, made a statement that it plans to advocate to lower the rates before the decision is finalized.

Punitive tariffs can potentially backfire and hurt the US solar industry

US companies in the solar industry who are in the business of selling and installing the panels are actually worried that the tariffs will drive up costs and hurt their business. In fact, most of the jobs in the US solar sector are in the field of sales and installation, and these jobs have been on the rise precisely because the cost of the solar panels themselves went down. Many installation firms in the US have been experiencing steady growth, increases in revenue and have been able to hire more employees because they have been relying on the Chinese solar panels. Many companies that are installing solar panels are worried that they will have to raise their own prices if the Chinese manufacturers will be forces to raise theirs, which will ultimately result in business losses. This sentiment was clearly expressed by Jeff Wolfe, CEO of groSolar, a Vermont-based firm that installs commercial solar panel systems, who is worried that if he will be forced to raise prices, he could lose out on new projects, which bring in $5 million to $15 million each on average. With regard to new job openings Wolfe commented, ” We have a few job openings right now but I’m rethinking them”.

What are the consequences for consumers?

At this point it is not clear how these decisions will impact consumers. If the tariffs will take affect causing and increase in the solar panel prices, consumers will need to be prepared to pay more to purchase and install solar panels. It is possible that even if the spike in prices happens, it would be temporary. As the industry continues to grow and develop, competition from both domestic and international solar manufacturers should bring the prices back down eventually.

Written by lena

October 2nd, 2012 at 4:17 am

Why US Solar Manufacturers are Going out of Business – Part 2

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Read Why US Solar Manufacturers are Going out of Business –

Role of the US government in domestic solar industry:

At present the US government is taking a stance on protecting the domestic solar industry against unfair competition from the Chinese by imposing punitive import tariffs that will be as high as 240%. While this may deter some of the Chinese manufacturers from dumping massive amounts of solar panels into the US market and may force them to raise their prices, it is questionable whether this strategy will help save the domestic industry in the long run.

While taxing foreign competitors will help, it is unlikely that US manufacturers will be able to compete effectively with the Chinese even if their do raise their prices. More importantly, US manufacturers are on shaky ground in terms of current and future government funding, and it is ultimately what they need to have a shot at surviving. Importantly, in 2011, the China Development Bank offered more than $30 billion in financing to Chinese solar manufacturers, which is about 20 times more than the amount secured by US solar manufacturers from the US government (source).

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Written by Levchik B

August 13th, 2012 at 11:54 pm

Why US Solar Manufacturers are Going out of Business: Part 1

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What will be the Future of the Solar Industry in US?

In the US, solar energy has been one of the fastest growing sectors of green renewable energy, backed both by government support and funding as well as a growing interest and buy-in from the general public. Over the last five years, many solar companies have experienced incredible growth, doubling and even tripling their profits every year. This unprecedented growth has been accompanied by the downfall of a number of prominent domestic solar manufacturers, who have been filing for Chapter 11 bankruptcy one after another over the course of 2011 and 2012. The primary reason for these massive failures has been the inability of American solar manufacturers to compete with their Chinese counterparts who have flooded the US market with under-priced solar panels and essentially made it impossible for many US manufacturers to stay afloat. The current situation raises many questions and concerns about the future of the domestic solar industry.

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Written by Levchik B

August 13th, 2012 at 11:53 pm

Solar PV System guide: Off-Grid systems

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In the first part of this Solar PV systems guide, we covered . In this part, we will discuss solar installations that are not connected to electrical grid – Off Grid solar systems, which use battery backup system sto store electricity generated by your solar panels.

Off-the – Battery stored solar energy

A solar system that is not connected to the grid and relies only on the power it generates and stores in a battery is an off – the – grid system. Purchasing this type of a system is not common and there are two main reasons why some people may choose to go for an off -the – grid solar system. First, this is a viable option for people that live in remote areas where there is either no access to grid electricity or it is extremely costly to be tied to the grid. Second, as mentioned before, some people choose this system for ideological reasons of wanting to rely solely on a clean source of energy from the sun.

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Written by Levchik B

July 3rd, 2012 at 8:47 pm

Solar PV System guide: Grid-Tied systems

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Any homeowner seriously considering switching to clean solar energy needs to understand that there are three different types of solar systems that can be installed on your home. Solar systems can be 1. Connected to the grid/grid-tied; 2. Function independently off-the-grid; 3. Hybrid systems. Each one has its benefits and draw-backs and comes with a different price tag. Learn more about each type of solar system to determine which one would be best suitable for your budget, electricity needs and lifestyle. When choosing one of the three systems it is important to keep in mind that there are many factors that will affect which system is right for you, and its highly advisable to consult a  professional solar installer before making your final decision.

Connected to the grid / Grid-tied systems

A solar system that is tied to the grid is a popular choice for the majority of homeowners because it provides a number of advantages that most people find highly desirable. The first benefit is financial. Having your system tied to the grid enables you to use net-metering/feed-in tariffs, which allow you to put access electricity back into the grid, thereby saving you money both in the short and long run. In the short run, it lowers your monthly electric bills and in the long run, you can actually make money by selling the access solar power that your system produces back to your utility company.  The second benefit is security of always having electricity regardless of the weather conditions outside. If your system is connected to the grid, you do not need to rely solely on the power stored in your battery. The energy that can be stored in the battery is limited and especially if you live in areas that do not get a lot of sun, or have many cloudy days, it is safer to be connected to grid.

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Written by Levchik B

July 3rd, 2012 at 8:47 pm

Innovations That Will Keep Bringing the Price of Solar Down

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For the solar industry to ever be compatible with electricity derived from fossil fuels it must achieve grid parity. Steps in this direction are being taken across the globe and there is a clear trend in decreasing costs for PV panels and installation, which means more and more consumers can afford to choose solar power for their homes and businesses. One of the key factors that will contribute to solar energy being able to profitably compete with fossil fuel generated power without government incentives or subsidies is technological innovation. Major technological advancements in solar energy generation will help make solar power not only cheaper but also profitable. In the last few years there have been three major developments in the field of solar technology that will continue to propel the solar industry forward.

Thin-Film Solar Cells

image of Thin Film Solar Panel

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Written by Levchik B

July 2nd, 2012 at 8:16 pm

Innovative way to Finance Your Solar System: FHA loans and home equity lines of credit

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If you are a clean energy enthusiast and always look for ways to make your home greener, there has never been a better time to switch out of the fossil fueled electric grid and instead power your home with solar energy. In the last few years there has been a dramatic drop in solar panel prices, making the equipment affordable for a lot more homeowners. Understandably, even with the lower prices, spending 10-15K out of your pocket is still a big expense for many people.

image of Residential Solar panels

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Written by Levchik B

June 29th, 2012 at 7:26 pm

Global Trends in Solar Power: USA

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The solar industry in the US is on an interesting trajectory of development and there are a couple of key factors at play that effect the growth and future viability of the industry. The last two years have been rocky for the US solar industry, with intense competition from Chinese solar panel manufacturers and resulting chain reaction of bankruptcies of a number of prominent US solar manufacturers. Despite these setbacks, the industry has been seeing growth, as the prices for solar panels have dramatically fallen, solar power became more accessible to consumers. Today, the US is the third largest solar market in the world, but it still has a lot of room to grow. It remains to be seen when solar power will reach parity with grid electricity and will become affordable for everyone who wants to switch to a clean source of energy. How soon this will happen will depend on many factors including government support, private investments, prices of solar manufacturing and installation, global competition and demand.

image of Obama speaking about US Solar industry

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Written by Levchik B

June 28th, 2012 at 7:07 pm

Posted in Solar Prices

Global Solar Power Trends – Asia (part 2)

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Over the last decade, Asia has been steadily claiming a central place in the field of renewable energy, and today many countries such as Japan, India and China have become major players that are actively pursuing the development and proliferation of renewable energy sources such as solar power. The rapidly developing economies of China and India coupled with populations in the billions, many of whom survive without such basic things as electricity, have become fertile ground for the solar industry, becoming both prime consumers and supplies of solar technologies. The active financial and policy commitments that many Asian governments have made to solar power will have a long lasting effect on the industry as a whole. Last year, we have already begun to see these affects in Europe and USA with Chinese manufacturers flooding the global markets with cheap solar panels, causing the prices to drop, making solar more affordable for average consumers and leaving many European and US manufacturers unable to compete and bankrupt. Asia’s role in the future of solar cannot be underestimated and the future of the industry will in great part depend on its development in Asia’s growing economies.

Japan

Image of Floating solar PV farm in Japan

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Written by Levchik B

June 27th, 2012 at 4:30 pm

Global Trends in Solar Power – Part 1: A close look at Europe

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For anyone interested in the future of the solar industry around the globe, Europe is a key region to be watched closely, as it is the leader in solar energy, containing nine of the largest fifteen solar markets in the world. Despite the prolonged economic downturn affecting solar industry, the debt crisis and a slow decline of government support for solar programs in a number of countries such as Germany, France, Spain, Greece and UK, overall Europe is demonstrating an unwavering commitment to solar energy and many countries have already surpassed their targets for renewable electricity for 2020.

In 2011, new European PV installations accounted for 26.7 % of capacity additions, which is roughly equal to 20.9 GW (over 75% of the global total (27.7 GW)). Moreover, according to Bloomberg New Energy Finance report, 2011 was also a strong year for investment into solar energy, with an sizable increase to $136.6 billion, which is a 5 percent increase over 2010 levels and an impressive five fold increase over 2004 totals.

The current trends in the solar industry of a number of leading European countries is profiled in detail.

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Written by Levchik B

June 12th, 2012 at 2:27 pm