Down down, deeper and down: lovers of the status quo had little to cheer this week as solar PV continued to shift the goalposts of what is considered affordable energy.
From India to China via the U.S., costs tumbled rapidly as the solar pitched up at the Inn marked Grid Parity and ordered itself a bed for the foreseeable future.
In Indias Andhra Pradesh, U.S. solar developer SunEdison turned heads with a reported bid of INR4.63/kWh ($0.0706/kWh) for a 500 MW power plant project in the state prompting some industry analysts to question the viability of projects at such low prices.
The Indian coal and renewable energy minister Piyush Goyal had no such qualms, tweeting: "Delighted that an all-time low solar tariff has been achieved during reverse e-auction ", but more sanguine responses emanated from experts familiar with the Indian solar market.
"Developers in India are getting very aggressive to capture market share as there have been a dearth of new projects to bid for," Raj Prabhu, Mercom Capital CEO, told pv magazine. "SunEdisons record low bid is still very unexpected."
The analyst added that "almost none" of the banks or solar developers in India believe that such low tariffs will prove attractive in terms of returns, but nevertheless it would appear that SunEdison will attempt to press ahead at this price point. Leading the race to the bottom in terms of tariffs in India is not where you want to be, warned Prabhu.
No such words of warning in Chile where Deutsche Bank reported that solar and wind energy are now cheaper forms of power than fossil fuels, with the bank citing Chiles latest tender round in October saw solar offered at between $65 and $68/MWh, compared to coal power, which is currently being offered at rates of $85/MWh.
This price reduction precedes an anticipated boom in solar PV development in the country, with more than 2 GW currently under construction, but Deutsche Bank did warn that future installation growth in 2016 and 2017 could be punctured if issues pertaining to transmission, interconnection and low spot market prices are not addressed.
"All the big solar projects are in Northern Chile/Atacama desert region where interconnection is the main issue. All the best spaces for solar projects have generally been already taken away. New contracts in this region are difficult to come through because of interconnection challenges," wrote the bank.
In the U.S., microinverter supplier Enphase Energy has been experiencing its own difficulties in a market that is increasingly exposed to downward price pressure. As SolarEdge has turned the screw in the residential market, Enphase has seen its position as the leading supplier in this space threatened, prompting the California-based company to cut the average selling price of its components by 19%, from $0.58/W in 2014 to $0.47/W in Q3 of this year.
"The fourth quarter of 2015 is more challenging than expected. To accelerate the expansion of our business we have adopted a more aggressive pricing strategy," said Enphase CEO Paul Nahi.
Hemlock, SolarWorld lawsuit details emerge
German solar giant SolarWorlds liquidity could be threatened by the ongoing lawsuit it is battling in the U.S. against Hemlock Semiconductor Corporation, pv magazine learned this week.
On October 28, a subsidiary of SolarWorld, Deutsche Solar GmbH, received notice that its motion to reconsider a decision by the United States District Court for the Eastern District of Michigan regarding antitrust defenses was denied.
News of this sent shares of SolarWorld AG tumbling to less than half their value during the day, although they regained slightly by the end of the day, ending up 27% lower. This may have had something to do with a statement issued by SolarWorld, where the solar manufacturer said, "The partial decision of the court on antitrust defenses is no judgement, but only relates to one of several defenses of equal value against the complaint and is of technical nature."
On March 7, 2013, Hemlock filed a case against Deutsche Solar claiming it had breached four take-or-pay long term supply agreements for polysilicon. It said under the first agreement, for 4.8 million kg of polysilicon and active between August 30 2005 and December 31, 2015, Deutsche Solar made regular purchases on a monthly basis between 2005 and 2012. However, in 2012, Deutsche Solar reportedly tried to suggest material pricing and purchase quantity concessions, with the threat that if they were not made, it would not meet its contractual obligations.
According to Bloomberg, SolarWorld CEO, Frank Asbeck was then said to have threatened to put Deutsche Solar into bankruptcy, before repurchasing its assets for a de minimus amount to free it of the agreements, if the concessions were not made. SolarWorld has told pv magazine this is not the case, however.
Solar analyst at Bloomberg, Jenny Chase told pv magazine SolarWorld’s situation appears "as if it could be serious." She adds, "SolarWorld’s H1 2015 report said that ‘the silicon supplier’ (presumably Hemlock) claims USD 676 m on the basis of the take-or-pay contract agreed by SolarWorld’s wafer subsidiary Deutsche Solar. Since SolarWorld has cash assets of $141.4m as of the latest filing, this is significant."
Tesla revs up its Gigafactory
In more encouraging news for the industry, Tesla Energy announced this week that it had brought forward plans to begin producing its much-coveted Powerwall and Powerpack batteries at its Gigafactory in Nevada, with production due to begin in Q4 2015, rather than in early 2016 as previously believed.
While production at the Gigafactory in Q4 will remain largely in battery assembly, Tesla has brought forward plans for lithium-ion cell production by "several quarters."
Tesla Energy has also signed "conditional purchase orders" for raw material lithium hydroxide in Q3. By doing so, Tesla management hopes to "promote sourcing of this commodity at lower cost and with reduced environmental impact."
Chinese-owned solar firm Canadian Solar is going to take a yieldco public, the company confirmed, just a few months after declaring it had reservations about the investment vehicle.
Canadian Solar announced that it had confidentially submitted a draft registration statement to U.S. financial regulators for an initial public offering for a yield vehicle.
The company says that the number of securities to be sold and the price range for the proposed offering have not yet been determined.
Canadian Solar has ample solar assets in late-stage development and under construction to move into a yieldco, as well as a large project pipeline and plenty of experience as a developer. However, as recently as August the company was expressing reservations about forming a yieldco vehicle.
"The yieldcos that serve OECD countries and have strong projects, the yields are still value accretive, but they are not in the ranges that you would wish," noted Canadian Solar Chief Financial Officer Michael Potter on the company’s Q2 results call. "We do have good projects that are in high demand, and we do have alternative plans should that be necessary."
REC and roll
Norway-owned solar firm REC Solar had a busy week, putting online a 12 MW-AC solar plant in Hawaii that will meet 12% of the islands energy needs, and also publishing Q3 financial data that revealed all-time record revenues and near-full utilization rates, based on the companys strong showing in the U.S. market.
"REC Solars success in the U.S. really began several quarters ago when there was the initiation of the antidumping tariffs on Chinese manufacturers," Graré told pv magazine. "This caused some panic by some larger potential customers for us [about module supply]. These customers then came to us because we are manufacturing in Singapore."
Over in Latin America
Data from Chiles CIFES, the nations renewable energy center, revealed that a total of 741 MW of solar PV was operational in the country at the end of September (links in Spanish), with a pipeline of 2.11 GW under construction. Completion of this tranche of PV power is expected by August 2017, by which point the pace of installations may have slowed. Elsewhere, Cuba announced it is to construct a 3.6 MW solar farm on the island, which once complete, would become the largest single solar PV array in the country.
Germany sees renewables hit 33%
Germanys ZSW solar energy research institute and the German Association of Energy and Water Industries (BDEW) published data this week that showed the country is on course to source 33% of its energy from renewable sources in 2015. In the first 10 months of the year solar PV plants generated 35 billion kWh of energy, with wind delivering 63 billion kWh. Elsewhere, Germanys federal cabinet approved further development of the countrys electricity market, which included the rollout of smart meter adoption (links in German), while Daimler and Getec revealed their involvement in the creation of the 13 MW Mobility House battery storage system.
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