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Here on this page, we would like to share with our visitors, exciting new developments and relevant news articles from around the world pertaining to the solar industry as solar power gains critical mass and goes mainstream: (Please click on the headlines to read the article) » I Don't Relax (An article in Forbes Magazine on our Company's Chairman) » Keynote Address by Mr. Ray Lane of Kleiner Perkins Caufield & Byers at the opening plenary session at Solar Power 2007. » 'Major discovery' from MIT primed to unleash solar revolution Anne Trafton, News Office July 31, 2008 » Japan adopts action plan against global warming 29 Jul 2008, 06:18 AM ET » The Southwest desert's real estate boom By Todd Woody, senior editor - Last Updated: July 11, 2008: 4:38 AM EDT » The economics of solar power by Peter Lorenz, Dickon Pinner, and Thomas Seitz, June 2008 - The McKinsey Quarterly » Hawaii requires solar water heaters for new homes By JAYMES SONG 6/27/2008, 1:46 p.m. PDT © 2008 Associated Press. » Solar dish may revolutionize energy production updated 1:56 p.m. ET June 20, 2008, LiveScience.com » Solar powered street lights installed in Chennai slum Published: Sunday, April 20, 2008 www.chennaionline.com » Loadshedding duration will be increased to six hours: Pepco deficit touches 3,000MW By Ahmad Fraz Khan DAWN.com » Pepco to give 100MW more to KESC By Mubarak Zeb Khan DAWN.com » The Energy Challenge - Turning Glare Into Watts By MATTHEW L. WALD - Published: March 6, 2008 - New York Times » Drastic cut in energy use to be put in use: Markets to close at 7.30pm DAWN.com I Don't Relax Competition is suddenly much stiffer for Pakistan clothingmaker Kings Apparel. But Chairman AZIZ MEMON is spending big to keep his export machine cranked up. Forbes.com : http://tinyurl.com/55j8k3 The advent of free trade in clothing last year was supposed to open new markets and boost business. Instead it has landed Pakistan's garment industry in a dogfight. After years of rising, exports have fallen, from $3 billion in 2004 to $2.5 billion last year, and some 150 of the country's 2,500 factories have shut down in the past 12 months. "At this rate hundreds more will be shuttered in the next 12 months," says Bilal Mulla, president of the Pakistan Readymade Garments Manufacturers & Exporters Association. "We just can't compete anymore." But Aziz Memon is gambling that his closely held Kings Apparel Industries in Karachi can compete, even as many of the country's smaller and less efficient outfits disappear. He's spending more than $60 million to upgrade his operations, and he's rolling out new products, such as organic yarn, so he can break into new markets. "He always thinks about doing things that others think can't be done," says Majyd Aziz, Memon's friend of 14 years and the president of Karachi's MHG Group of Companies, which produces fabric and trades commodities. For years an international system of quotas rationed the export business among dozens of developing countries. That system helped make Pakistan the world's 15th-largest clothing exporter. But that regime ended at the beginning of last year, freeing up huge-scale producers such as China and India to export as much clothing as they could. Finding it tough to compete on either volume or price, garmentmakers elsewhere are getting hammered. Kings is typical: Revenues (all from exports) dropped from $43 million in 2004 to $25 million last year, and its profit margin fell from 15% to 6.5%. "Competition from India and China has meant sales and profits are not what they used to be," says the 62-year-old Memon matter-of-factly. Bangladesh has swiped some of his customers, too. The end of quotas also ended Pakistan's exemption from a 12% tariff in the European Union, but Bangladesh, as a less-developed country, held on to its exemption. Kings was hit particularly hard, because 62% of its revenue in 2004 came from the EU. "That was a real setback for me," he says. Pakistan's textile industry, which also saw quotas lifted last year, has fared much better. More than twice as large as the garment sector, it's dominated by players such as Ibrahim Fibres and Nishat Mills, both of which last year made FORBES ASIA's list of the best 200 companies with up to $1 billion in annual revenue. This heft allowed the industry to invest heavily to prepare for the start of free trade; it spent $5.7 billion versus just $300 million for the garmentmakers. Memon, who is the chairman and co-owner of Kings (his younger brother, Munir, holds the other half), has a lot at stake. Kings is one of Pakistan's largest garmentmakers. With 6,000 employees, it makes clothes for global names such as Van Heusen, and sells almost half its production to U.S. retail giant Wal-Mart (nyse: WMT - news - people ), some $12 million worth last year. Sears (nasdaq: SHLD - news - people ), J.C. Penney (nyse: JCP - news - people ) and Target (nyse: TGT - news - people ) are also major buyers. Of course, dealing with big American discounters is a mixed blessing. "Target and Wal-Mart keep advertising their slashed prices," Memon says. "Well, guess how they did that? By squeezing me." Memon has overcome setbacks before. At the age of 18 he emigrated to Karachi from Mumbai with his family, then worked as a bookkeeper to pay his way through college. Later a job with an airline business took him first to Saudi Arabia and then to New York, where he found his calling. It was 1986. "Upon hearing I was from Pakistan, everyone I met in the U.S. would ask me how to buy textile products from there," he says. He finally accepted an order for 240 T shirts from a Spanish company. He filled it with the help of his brother and then returned to Pakistan to set up a knitwear factory. Memon built his company by pulling off something rare in business: He's been both Mr. Inside and Mr. Outside. Inside Kings, he's demanding to a fault and an obsessive stickler for details. "I can't compromise on the way I want things to be done," he says. "And I don't relax, not even on Sundays. I take vacations but only if my cell phone goes with me." Outside the company, he's involved in all manner of social, community and trade groups, heading up the Pakistan-Japan Business Forum, for instance, and often helping to represent Pakistan at World Trade Organization meetings. And despite a taciturn nature, he's a consummate partygoer. Memon says he's out at least six nights a week, driving his Mercedes 220 to as many as four events a night. Today his challenge is not to build a business but to turn it around. He's already spent $10 million upgrading his knitwear factory in Karachi. "We have to increase capacity so we can do larger orders and keep big customers," he says. "Besides, big orders mean lower costs because of scale." Another $50 million will go to build a second factory and enter a new business--cotton yarn. Pakistan is the world's fourth-biggest cotton producer, and Memon figures that Kings can add $27 million to annual revenue by spinning homegrown cotton into yarn, turning some into garments and exporting the rest. The new factory should be ready to start production in nine months, he says. At the same time Memon is trying to cash in on the global organic craze, which is now reaching the textile industry. Going back still one more step on the production chain, he leases 4,000 acres of land west of Karachi, where he produces 10,000 bales of organically grown cotton a year. Part of his crop will be turned into organic yarn that will be sold to textile customers in Indonesia, India and Turkey. He admits that the organic label is a marketing tool. "You have to show you're always up to something new," he says. Meantime, the more-efficient factory machinery will help Kings cut costs in competing with China. He says China's prices are 20% lower than Pakistan's because labor and power are cheaper there, and in a recent visit he marveled at Chinese factory productivity. He arranged to have Chinese quality-control experts visit his plant and give him advice. But he insists that Pakistani exporters are more reliable at shipping out orders. "China has big delivery problems," he says. "Some of our customers have seen that and are now coming back to us." He expects sales to pick up this year because price cuts also are bringing back customers--he gave buyers in Germany, France and Spain a 12% break to get them back from Bangladesh--and his greater capacity is winning bigger orders. He expects to export 30% more this year, or $32.5 million. "He's very aggressive in marketing, has invested in machinery and R&D, and has created a class of professionals in this field [people he's trained]," says garment association chief Mulla. "This is a very rare combination in Pakistan, and it's what's made him successful." For his part, Memon credits years of toil, inspired by heroes like former South African president Nelson Mandela, "who have not had it easy but have desired and then struggled." Keynote Address by Mr. Ray Lane of Kleiner Perkins Caufield & Byers at the opening plenary session at Solar Power 2007. Solar Power 2007 America’s Largest Business to Business Solar Event : http://tinyurl.com/26fxuk 'Major discovery' from MIT primed to unleash solar revolution Scientists mimic essence of plants' energy storage system Anne Trafton, News Office July 31, 2008 : http://tinyurl.com/5uu53h
The project is part of the MIT Energy Initiative, a program designed to help transform the global energy system to meet the needs of the future and to help build a bridge to that future by improving today's energy systems. MITEI Director Ernest Moniz, Cecil and Ida Green Professor of Physics and Engineering Systems, noted that "this discovery in the Nocera lab demonstrates that moving up the transformation of our energy supply system to one based on renewables will depend heavily on frontier basic science." Japan adopts action plan against global warming 29 Jul 2008, 06:18 AM ET : http://tinyurl.com/5lwngp TOKYO (Thomson Financial) - Japan's cabinet on Tuesday adopted a plan to slash carbon emissions up to 80 percent by 2050 by starting carbon trading and stepping up research on carbon-capture technologies. "Japan must continue showing leadership on the issue of environment," Prime Minister Yasuo Fukuda told the cabinet meeting. "To lead the world, Japan must take the initiative by achieving a low-carbon society." Japanese industry leaders, particularly steelmakers and the power industry, have strongly opposed Fukuda's plan, arguing it would hurt an already weak economy. Environmentalists in turn have said the plan is not ambitious enough as it does not set more immediate targets for the coming decade, which many scientists say is crucial to stopping the planet from heating up. Fukuda unveiled the plan before hosting this month's gathering of the Group of Eight rich nations, where climate change was a key topic. It establishes an experimental "cap and trade" system, which requires firms to slash emissions and gives them an economic incentive by trading credits. Under the plan adopted Tuesday, Japan will start carbon trading, which has developed into a rapidly growing market in the European Union, on an experimental basis later this year with an eye to fully introducing it later. The plan also calls for research on carbon-capture technology, which contains greenhouse gases emitted by power plants and factories and stores them underground, to put in place a nationwide system by 2020. Japan will also increase the use of solar power tenfold by 2020 and 40 times more by 2030, while forging ahead with plans to build nine more nuclear reactors by March 2018. Leaders of the G8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- agreed at their summit to cut carbon emissions by at least 50 percent by 2050. The G8 called on the developing world to take part, a key demand of the United States, the only major industrial nation to reject the Kyoto Protocol, whose obligations to cut emissions expire at the end of 2012. afp zr/zr COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. The Southwest desert's real estate boom From California to Arizona, demand for sites for solar power projects has ignited a land grab. By Todd Woody, senior editor Last Updated: July 11, 2008: 4:38 AM EDT FORTUNE MAGAZINE Brainstorm 2008 : http://tinyurl.com/642wsa
Over the past year a parade of executives bearing land claims have made the trek to a stucco BLM office just off the interstate in the dusty city of Needles, Calif., a 110-mile drive south from Las Vegas. (It's the town where the late "Peanuts" cartoonist, Charles M. Schulz, briefly lived as a boy; in the comic strip, Snoopy's brother Spike is a resident.) The Bush administration has instructed the BLM to facilitate renewable-energy projects (along with nonrenewable ones). But Sterling White, the BLM's earnest Needles field manager, is also concerned about what could happen if they transform the Mojave into a collection of giant power stations. "One of our biggest challenges is the cumulative impact of these projects," he says. Nearly 80% of the land that White's office oversees is federally protected wilderness or endangered-species habitat. That leaves about 700,000 acres for solar power plants, only some of which are near transmission lines. Land leases are handed out on a first-come, first-served basis, but White is also supposed to weed out speculators from genuine solar developers based on loose criteria such as who is negotiating with utilities and who is applying for state power licenses. White has yet to approve a single lease, but he has summarily rejected four because they lie in protected-species habitat. *** Solar prospectors tend to be as secretive about their land as forty-niners were about the veins of gold they discovered. Most bids are placed by limited-liability corporations with opaque names that conceal their ownership. And no one has been as quick to move into the Mojave - or as tightlipped about it - as Solar Investments. That entity, it turns out, is Goldman Sachs's (GS, Fortune 500) solar subsidiary. The investment bank's designs on the desert are a topic of intense interest and speculation. Goldman declined to comment. But here's what we know: Solar Investments filed its first land claim in December 2006 and within a month had applied for more than 125,000 acres for power plants that would produce ten gigawatts of electricity. Many of the sites lie close to the transmission lines that connect the desert to coastal cities. (Goldman has also staked claims on 40,000 acres of the Nevada desert.) ** Nobody expects Goldman to begin operating solar plants. It will probably either partner with another developer or sell its limited-liability company (and its leases) outright. The firm has been making the rounds of solar developers. "The conversation's been pretty wide-ranging, primarily as an investor interested in financing deals," says one solar energy executive approached by Goldman. "But there's clearly an element of interest in our technology." Goldman has requested permission to install meteorological equipment on its sites and is evaluating "competing technologies, including solar dish systems, power towers, and large-scale photovoltaic arrays," according to a letter Goldman sent to the BLM in August 2007. Competitors are lining up behind Goldman, staking claims on some of the same sites in hopes the bank will abandon them. PG&E (PCG, Fortune 500) and FPL (FPL, Fortune 500), for instance, are in the queue after Goldman on one site. Solel, an Israeli solar company that last year scored a contract to deliver 553 megawatts to PG&E, is third in line behind Goldman on another. "I view Goldman as a very interesting indicator of things to come," says Brian McDonald, PG&E's director of renewable-resource development. "They're usually ahead of the curve - you can extract a huge amount of value if you get in early." There's other smart money here too. A Palo Alto startup called Ausra received $40 million from the elite green venture capitalists Vinod Khosla and Kleiner Perkins Caufield & Byers. Ausra has signed a deal with PG&E and announced its intention to construct a gigawatt's worth of projects a year. Most of the power production contemplated for the Mojave will rely on solar thermal technology - the common approach in large-scale generation projects - in which arrays of mirrors heat liquids to produce steam that drives electricity-generating turbines. But a secretive Hayward, Calif., startup called OptiSolar has filed claims on 105,300 acres to build nine gigawatts' worth of photovoltaic power plants, which employ solar panels similar to those found on residential rooftops. (The company also has applied for leases on 21,800 acres in Arizona and Nevada.) To put those ambitions in context, the biggest photovoltaic power plant operating today produces 15 megawatts. Says OptiSolar executive vice president Phil Rettger: "We have a proprietary technology and a business approach that we're convinced will let us deploy PV at large scale and be competitive with other forms of renewable energy." *** With the prime BLM sites quickly being snapped up - recently the agency temporarily stopped accepting new land claims while it develops a desertwide solar policy - competition is growing for private land. Here, too, the emphasis on secrecy borders on the obsessive. A request to view a piece of desert that is up for sale is treated as if I had asked to visit Area 51. Waiting outside a roadside diner in southwestern Arizona - I've promised not to say where - with BrightSource senior vice president Tom Doyle, I expect to see a weather-beaten farmer come chugging up in a battered pickup. Instead, a pale-green Volvo SUV driven by a physician glides into the parking lot. The doctor, who wishes to remain anonymous, acquired the land two years ago as the renewable-energy boom got underway. "We thought we'd put solar on it - that's the reason we bought it," the doctor says as we pile into the Volvo and head into the desert to visit the site. After about five miles we turn off the road and come to a stop in a rocky patch of desert framed by low-slung mountains and buttes. Doyle quizzes the physician about water rights, endangered species, and access to transmission lines before moving out of earshot to talk dollars. The whole process takes only about 20 minutes - the two sides ultimately decide not to do a deal - and then Doyle is on to visit the next potential property. Such is the land frenzy that farmers in Arizona were paid $45 million for 1,920 acres by Spanish solar company Abengoa so that it could build a 280-megawatt power plant; the land had an assessed value of a few hundred thousand dollars. The company also plunked down $30 million for 3,000 acres in the California Mojave that had traded hands for $1.25 million nine years earlier. That prompted developer Scott Martin to put his adjacent 300-acre parcel - land he had bought only a few months earlier for $457,500 - on the market for $3 million. Also for sale: a $15 million, 3,000-acre tract near Palm Springs, which Martin began shopping around to solar executives like Ausra's Perry Fontana. When I join Fontana to check out the site, a onetime World War II air base outside the Mojave ghost town of Rice, he says, "I probably get three calls a day from brokers or landowners." As if on cue, his Bluetooth earpiece lights up with a cold call from a broker peddling some land near Needles. *** Green energy is not about to get a green light from all environmentalists. "We're going to challenge these big solar projects, and there's going to be tremendous environmental battles," says veteran California activist Phil Klasky, a member of several green groups who helped lead a campaign in the 1990s that scuttled a radioactive-waste dump planned in tortoise territory in the Mojave. "Large solar arrays will have an impact on surrounding critical habitat for the desert tortoise and other threatened species. We have to fight global warming, but just because it's solar doesn't make it right." The developers are worried about resistance. "I remember the spotted owl," says Fred Morse, a former Department of Energy official who is a senior advisor to Abengoa's U.S. operations. The widespread logging of ancient forests, home to the northern spotted owl, set off epic environmental fights in the 1980s and '90s. As Morse puts it, "The Mohave ground squirrel or the desert tortoise - any one of them could become a cause." Solar energy companies may make for less tempting targets than timber barons, but development of the desert has never been attempted on such a scale. The result is that some environmentalists find themselves anguished over which side to take. "We've had our share of conflicts over endangered species in this state, no doubt about it," says Kevin Hunting, a biologist and a deputy director of the California Department of Fish and Game, which enforces the state endangered-species laws. "We're actively looking to strike that critical balance between the state's renewable-energy goals and conserving species that are vulnerable. It's challenging." California wildlife regulators, for instance, have peppered Ausra with requests for more biological surveys on the site of a 177-megawatt solar power plant to be built in San Luis Obispo County. The feds could also require Ausra to prepare a plan to protect the San Joaquin kit fox, a process that could take years and shred the project's economic viability. Worse for developers, state and federal law require wildlife officials to consider the total impact of multiple projects when weighing whether to approve any individual facility. Next door to Ausra's solar farm, for example, is OptiSolar's planned 550-megawatt power plant, which would cover 9 1/2 square miles of potential endangered-species habitat with solar panels. Will the regulators approve one? Both? Nobody knows. In the meantime, the solar land rush is unlikely to cool down. Which is why Morse wants to keep quiet Abengoa's $30 million real estate deal. The company is applying to build a 250-megawatt solar power plant on the site, and it may be in the market for more land. "We don't want to publicize that purchase," he says, "as the speculators will be coming out of the woodwork."  The economics of solar power Don’t be fooled by technological uncertainty and the continued importance of regulation; solar will become more economically attractive. Peter Lorenz, Dickon Pinner, and Thomas SeitzJune 2008 The McKinsey Quarterly : http://tinyurl.com/5ys3g7 A new era for solar power is approaching. Long derided as uneconomic, it is gaining ground as technologies improve and the cost of traditional energy sources rises. Within three to seven years, unsubsidized solar power could cost no more to end customers in many markets, such as California and Italy, than electricity generated by fossil fuels or by renewable alternatives to solar. By 2020, global installed solar capacity could be 20 to 40 times its level today. But make no mistake, the sector is still in its infancy. Even if all of the forecast growth occurs, solar energy will represent only about 3 to 6 percent of installed electricity generation capacity, or 1.5 to 3 percent of output in 2020. While solar power can certainly help to satisfy the desire for more electricity and lower carbon emissions, it is just one piece of the puzzle. What’s more, solar power faces challenges that are common in emerging sectors. Several technologies are competing to win the lowest-cost laurels, and it’s not yet clear which is going to win. Rapid growth has created shortages and high margins for early players, such as the silicon refiners Dow Corning, REC Solar, and Wacker, as well as the component manufacturers First Solar, Q-Cells, and SunPower. Fueled by ever-increasing flows of new equity from venture capital and private-equity firms—$3.2 billion in 2007—innovative new competitors are entering the sector, and with them the potential for excess supply, falling prices, and deteriorating financial performance for some time. With competition heating up, the companies building the equipment that generates solar power must relentlessly cut their costs by improving the processes they use to manufacture solar cells, investing in research and development, and moving production to low-cost countries. At the same time, they must secure access to raw materials without tying themselves to the wrong technology or partner. The evolution of technology looms large for utilities as well. If they hesitate to undertake large long-term investments until the dust clears, they risk losing customers to players such as panel installers willing to put up and finance solar units on the roofs of buildings in return for a share of the savings the owners enjoy. As always in the utility sector, it will be essential to deploy smart regulatory strategies, which in some regions might mean including solar investments in the capital base used to set rates for consumers. Government policies will also continue to influence the sector’s development heavily. Deciding when and how to phase out subsidies will be critical for creating a vibrant, cost-competitive sector. Even in the most favorable regions, solar power is still a few years away from true “grid parity”—the point when the price of solar electricity is on par with that of conventional sources of electricity on the power grid. The time frame is considerably longer in countries such as China and India, whose electricity needs will require large amounts of new generating capacity in the years ahead and whose cheap power from coal makes grid parity a more elusive goal. The birth of a sector The solar sector includes a diverse set of players, including the manufacturers of the silicon wafers, panels, and components used to generate much of today’s solar power, as well as the installers who put small-scale units on individual roofs, utilities and other operators setting up enormous solar collection systems in deserts, and start-up companies striving for breakthroughs such as lower-cost thin-film technologies. All are operating in a dynamic environment in which long-held assumptions—subsidies, the primacy of incumbents, and the predominance of silicon-wafer-based technology—are being eroded. Beyond subsidies Government subsidies have played a prominent role in the growth of solar power. Producers of renewable energy in the United States receive tax credits, for example, and Germany requires electricity distributors to pay above-market rates for electricity generated from renewable sources. Without such policies, the high cost of generating solar power would prevent it from competing with electricity from traditional fossil-fuel sources in most regions.
These conditions set in motion a virtuous cycle: growing demand for solar power creates more opportunities for companies to reduce production costs by improving solar-cell designs and manufacturing processes, to introduce new solar technologies, and to enjoy lower prices from raw-material and component suppliers competing for market share.
Each has its advantages for certain applications, but none holds the overall crown. Major innovations and shifts in the relative cost competitiveness of these technologies could occur. Companies that use either of the current photovoltaic technologies, which generate electricity directly from light, are striving to reduce costs by making their systems more efficient. In power conversion, efficiency means the amount of electrical power generated by the solar radiation striking the surface of a photovoltaic cell in a given period of time. For each unit of power generated, more efficient systems require less raw material and a smaller solar-collection surface area, weigh less, and are cheaper to transport and install. Silicon-wafer-based photovoltaics. Although 90 percent of installed solar capacity uses silicon-wafer-based photovoltaic technology, it faces two challenges that could create openings for competing approaches. For one thing, though it is well suited to space-constrained rooftop applications (because it is roughly twice as efficient as current thin-film photovoltaic technologies), the solar panels and their installation are costly: larger quantities of photovoltaic material (in this case, silicon) are required to make the panels than are to make thin-film photovoltaic solar cells.4 Second, companies are starting to approach the theoretical efficiency limit—31 percent—of a single-junction silicon-wafer-based photovoltaic cell; several now achieve efficiencies in the 20 to 23 percent range. To be sure, there is still room for improvement before the limit is reached, and clever engineering techniques (such as concentrating sunlight on solar cells or adding a number of junctions made of different materials to absorb a larger part of the light spectrum more efficiently) could extend it, though many of these ideas increase production costs. Thin-film photovoltaics. The other important photovoltaic approach, thin-film technology,5 has been available for many years but only recently proved that it can reach sufficiently high efficiency levels (about 10 percent) at commercial production volumes. Thin film trades off lower efficiencies against a significantly lower use of materials—about 1 to 5 percent of the amount needed for silicon-wafer-based photovoltaics. The result is a cost structure roughly half that of wafer-based silicon. This technology also has significant headroom to extend the cost gap in the long term. But challenges abound. The lower efficiency of thin-film modules6 means that they are currently best suited to large field installations and to large, flat rooftops. Furthermore, the longevity of these modules is uncertain; silicon-wafer-based photovoltaics, by contrast, maintain their output at high levels for more than 25 years. Of the most promising thin-film technologies, only one—cadmium telluride—has truly reached commercial scale, and some experts worry about the toxicity of cadmium and the availability of tellurium. A final complicating factor is that a new generation of nanoscale thin-film technologies now on the horizon could significantly increase the efficiency and reduce the cost of producing solar power. Concentrated solar thermal power. The third major solar technology, concentrated solar thermal power,7 is the cheapest available option today but has two limitations. Photovoltaic systems can be installed close to customers, thereby reducing the expense of transmitting and distributing electricity. But concentrated solar thermal power systems require almost perfect solar conditions and vast quantities of open space, both often available only at a great distance from customers. In addition, the ability of concentrated solar thermal power to cut costs further may be limited, because it relies mostly on conventional devices such as pipes and reflectors, whose costs will probably fall less significantly than those of the materials used in semiconductor-based photovoltaics. Nonetheless, several European utilities now regard concentrated solar thermal power as the solar technology of choice. The road ahead The extent and speed of this emerging sector’s growth will depend on its ability to keep driving down the cost of solar power. No single player or set of players can make that happen on its own. • The necessary technological breakthroughs will come from solar-component manufacturers, but rapid progress depends on robustly growing demand from end users, to whom many manufacturers have only limited access. • Utilities have strong relationships with residential, commercial, and industrial customers and understand the economics of serving them. But these companies will have difficulty driving the penetration of solar power unless they have a much clearer sense of the cost potential of different solar technologies. • In some regions, regulators can accelerate the move toward grid parity, as they did in California and Germany, but they can’t reduce the real cost of solar power. Poor regulation might even slow the fall in prices. Although these considerations make it difficult to predict outcomes and to prescribe strategies, certain economic principles do apply. Solar-component manufacturers The fundamentals are clear for photovoltaic-component manufacturers that hope to remain competitive: there’s no escaping significant R&D investments to stimulate continued efficiency improvements, as well as operational excellence to drive down manufacturing costs. Furthermore, in view of the technological uncertainty, established silicon-wafer-based companies should hedge their bets by investing in advanced thin-film technologies. Some manufacturers have considered establishing partnerships or vertically integrating—approaches that could give them access to supplies, customers, and financing but might also lock them into the wrong technology. To make the right trade-offs, the manufacturers of components for silicon-wafer-based and thin-film technologies should focus on fundamentals, such as manufacturing costs, efficiency improvements, and the movement of prices for raw materials. Raw materials. Polysilicon is the main raw material for silicon-wafer-based solar-cell manufacturers, which now consume more of it than the semiconductor industry does. Over the last two years, shortages and price spikes have been the result. High margins have encouraged incumbents to add capacity and have attracted new entrants. Many observers have therefore been predicting that global polysilicon production capacity will at least triple from 2005 to 2010, while our forecasts indicate that demand for the material will only double during the same period. This mismatch suggests that the spot price of polysilicon could drop from over $200 a kilogram to levels previously seen in the semiconductor industry—as little as $30 to $50. Of course, if global demand for silicon-based modules surged, or if announced capacity additions did not materialize or were delayed (due to cancelled projects, quality issues, or the sorts of engineering and construction delays that are currently prevalent in many other capital intensive industries), the price effect might be dampened significantly. Industry participants should therefore screen supply and demand developments continuously. Production process technology. The way companies manufacture solar cells has the largest impact on the cells' efficiency and their cost. Many incumbents have invested heavily in developing proprietary manufacturing processes. Some start-up cell manufacturers, by contrast, buy entire manufacturing lines from equipment companies such as Applied Materials. Cell manufacturers are valuable partners for equipment companies hoping to tap into the growth of the solar sector. The equipment companies need formal partnerships that will allow them to retain ownership of the intellectual property associated with their manufacturing processes—a difficult trick that these vendors tried (and failed) to pull off in the semiconductor sector. The same thing could happen again unless equipment providers can figure out how to make their offerings extremely cost competitive and difficult for operators to imitate or enhance. Producing in low-cost regions. Many leading silicon-wafer-based photovoltaic solar companies are located in high-wage countries. These manufacturers produce cells that are typically more efficient than those produced in lower-wage countries; for example, many German and US cells achieve an efficiency of 20 percent or more, compared with 15 to 16 percent for Chinese ones. Yet countries like China and India will inevitably gain an overall cost advantage by developing the skills needed to produce more efficient cells. Companies in regions with high labor costs should therefore constantly monitor the benefits and risks of locating their next plant in an area that offers lower-cost labor and generous subsidies. Utilities Although the distributed nature of solar power might seem to clash with the utilities’ business model of centralized electricity generation, these companies do have assets in the solar era, starting with strong customer relationships. They are also in a good position to integrate electricity generated at large numbers of different locations (such as rooftops) into the existing network. Many utilities could use their advanced metering infrastructure to calculate the full value of solar power during peak times. One way of leveraging these assets would be to form partnerships with component manufacturers. Building profitable partnerships will require utilities to develop new skills, such as installing and managing solar-generation capacity, as well as deciding which solar technologies best suit their service territories. The technology that currently seems most attractive for utilities is concentrated solar thermal power, because it involves centralized electricity generation—much as traditional coal, nuclear, and hydroelectric facilities do—and is today’s low-cost solar champion. Its long-term cost prospects, though, are less favorable than those of some emerging photovoltaic technologies, so choosing it now is in effect a strategic bet on how quickly relative costs and local subsidy environments will change. While the natural tendency might be to postpone investments until the technology picture becomes clearer, sitting on the sidelines poses risks for the utilities. As the cost of solar energy decreases, the growing number of companies that will probably enter the business of installing solar equipment could cut off some utilities from their customers. Installers buy solar panels, mount them in homes and businesses, and then lease them in return for a stream of payments lower than prevailing electricity rates but still high enough to earn a healthy return on the panel investment. Since people who now pay the highest electricity rates would be the most likely to switch, utilities would lose their most valuable customers. One way of coping would be to forge relationships with solar-cell and -module manufacturers that could help utilities claim a portion of this emerging business while they gain experience integrating distributed generating capacity into the grid. It should be in their interest to strike up such partnerships quickly, before disintermediation reduces their attractiveness as partners, since savvy manufacturers will pit them against installers in a quest for the most favorable financial arrangements. Another approach for the utilities involves regulatory strategy—for example, they could try to persuade regulators to add solar investments to their rate base (the expenses and capital investments that regulators use to calculate fair retail electricity prices). Although such a readjustment would raise electricity rates, utilities could argue that the long-term benefits would be significant: increasing their reserve margins while making conventional power generation investments unnecessary, dampening future rate increases from rising fuel prices, meeting environmental targets, and accelerating the decline in solar-power costs. This approach yields a fixed return on capital that might ultimately be lower than what would be possible if utilities bet successfully on the right technologies, but it also mitigates investment risk. Governments and regulators The decisions of regulators will affect not only utilities but also the entire solar sector. During the march to grid parity, well-understood and targeted subsidies will be critical to build the confidence of investors and attract capital. The impact of government policies in rapidly growing emerging markets such as China and India will be particularly important for the pace of the sector’s growth. Our base-case forecasts do not include aggressive growth in these markets. But if China installed rooftop solar panels on, say, 13 percent of all new construction in 2020, the country would add 15 gigawatts of solar capacity a year, about 40 percent of the world’s annual increase. Similarly, government policies encouraging the use of electric vehicles may also accelerate the growth of solar demand. While the optimal regulations for different countries will vary considerably, all governments should focus on a few major factors. Clarify objectives. Before establishing policies, regulators must decide whether they want to increase energy security, lower carbon emissions, build a high-tech manufacturing cluster, create jobs for installers, or any combination of these goals. Once regulators have identified and prioritized them, appropriate policies can be developed to stimulate specific parts of the sector. Reward production, not capacity. Subsidizing capacity rewards all solar-power installations at the same rate, regardless of their cost-efficiency. Production-based programs, which reward companies only for generating electricity, create incentives to reduce costs and to focus initially on attractive areas with high levels of sunlight. Phase out subsidies carefully. In virtually every region of the world, solar subsidies are still crucial; in 2005, when they expired in Japan, capacity growth declined there significantly. But since solar power could eventually be cost competitive with conventional sources, regulators must adjust incentive structures over time and phase them out when grid parity is reached. Solar energy is becoming more economically attractive. Component manufacturers, utilities, and regulators are making decisions now that will determine the scale, structure, and performance of this new sector. Technological uncertainty makes the choices difficult, but the opportunities—for companies to profit and for the world to become less dependent on fossil fuels—are significant. About the Authors: Peter Lorenz is an associate principal in McKinsey’s Houston office, where Thomas Seitz is a director; Dickon Pinner is a principal in the San Francisco office. The authors wish to acknowledge the contributions of their colleagues Joel Conkling, Stefan Heck, and Christer Tryggestad. Hawaii requires solar water heaters for new homes By JAYMES SONG 6/27/2008, 1:46 p.m. PDT © 2008 Associated Press : http://tinyurl.com/5dgybe HONOLULU (AP) — With a heavy reliance on imported fossil fuels, Hawaii has become the first state to require solar water heaters in new homes, pleasing environmentalists but leading opponents to note the island chain's already high home prices. Republican Gov. Linda Lingle signed a bill Thursday requiring the energy-saving systems starting in 2010. She said the law is "another important step in our long-term plan for energy independence in Hawaii." Hawaiian Electric Co. estimates that about 85,000 households, or roughly 20 percent of all homes in the islands, already have solar water heating systems. They come standard in many new homes. "It's one of the best things a homeowner can do," said Darren Pai, spokesman for the utility. A traditionally powered water heater is the largest consumer of electricity inside a home, accounting for about 25 to 40 percent of the power used. A solar system costs about $6,000, compared with about $700 for an electric or gas water heater. Environmentalists applauded the requirement. "At a time when the globe hungers for smart energy solutions, Hawaii is demonstrating how it can be done," said Jeff Mikulina, director of the Sierra Club of Hawaii. But opponents argued the law is unfair and will drive up home prices in Hawaii, where a modest home can start at $600,000. Sen. Gary Hooser, a Democrat who first introduced the measure five years ago, said home buyers will save money in the long run with electric bills at least $50 lighter a month in a state with the highest electricity rates in the nation. "I'm hoping this will start a trend nationwide," said Hooser, who plans to meet with lawmakers in other sunny states, such as California, Nevada, New Mexico and Arizona, to push similar laws. Hawaii relies on imported fossil fuels more than any other state, with about 90 percent of its energy sources coming from foreign countries, according to state data. The new law prohibits issuing building permits for single-family homes that do not have solar water heaters. Some exceptions will be allowed, such as forested areas with little sunshine. In January, Lingle announced the Hawaii Clean Energy Initiative partnership, which aims to have at least 70 percent of Hawaii's energy needs supplied by renewable sources by 2030. Solar dish may revolutionize energy production Inventors: Dish is 'user-friendly, user-friendly, so anybody can build it'  updated 1:56 p.m. ET June 20, 2008 © 2008 LiveScience.com : http://tinyurl.com/54lexw
"I've looked for years at a variety of solar approaches, and this is the cheapest I've seen," said MIT Sloan School of Management lecturer David Pelly, in whose class the project first took shape last fall. "And the key thing in scaling it globally is that all of the materials are inexpensive and accessible anywhere in the world." Solar powered street lights installed in Chennai slum Published: Sunday, April 20, 2008 Chennaionline.com : http://tinyurl.com/6kgdv6
Sources in the Corporation saidapproximately 600 units could be saved by using solar powered lights and it has embarked upon a programme to cut down the failure rarte ofstreet lights to zero Solar street lamps are part of the state’s efforts at harnessing renewable sources of energy. Tamil Nadu already leads in the production of wind energy. - Bureau Report Loadshedding duration will be increased to six hours: Pepco deficit touches 3,000MW By Ahmad Fraz Khan DAWN.com : http://tinyurl.com/5qz3cs LAHORE, March 19: The Pakistan Electric Power Company (Pepco) says that its deficit has gone up to 3,000 megawatts — about 25 per cent of the peak demand of 12,000MW — and announced that the duration of loadshedding will be increased from four to six hours a day across the country. Blaming the shortfall on the worsening hydro-power situation, a Pepco official said that independent power producers (IPPs) and the company’s own thermal units were trying to ease the situation, otherwise the crisis would have been much worse. There has been a decline of over 50 per cent in water availability in two main dams — some 32 per cent at Tarbela and 21 per cent at Mangla. The former has already hit the dead level and power generation has been reduced to the run of the river. The inflow at Tarbela has also dropped, to a mere 22,100 cusecs. Though the inflow at Mangla, which is an early riser, has slightly improved, Punjab has restricted the outflow to 24,000 cusecs. As a result, hydro-electric generation has dropped by 1,200MW, from 3,400MW last year to 2,200MW. This deficit had taken the overall shortfall of an unmanageable 3,000MW, he said. “The company can manage the deficit better through load-management as long as it remains below 2,000MW. It does not mean that below 2,000MW does not hurt the consumers, but it keeps the situation under control. Anything beyond 2,000MW starts hurting the consumers badly and takes things out of the company’s control.” The IPPs which contributed around 4,800MW on Wednesday had been of great help, he said. It was possible only because the IPPs built up oil stocks and kept all generators in working condition. That was all the company could do at this stage. And not only the IPPs, but the company’s own thermal units have also been contributing to their limit. They have been consistently generating around 2,900MW for the past month and been instrumental in keeping the situation under control. But with the hydel-generation dropping to an abnormally low level, the thermal relief has lost its utility. “The company, like all other public institutions, keeps offering technical excuses for the massive loadshedding, instead of finding solutions of the problem,” said an irritated consumer, Shabir Hussain of Gulberg. Only a few days ago, Pepco officials were blaming the IPPs. When the latter started contributing their full share, it blamed reduced gas supplies. The company claimed on record that the demand-supply gap could be overcome if it started getting full gas supplies. Now with the onset of summer, when the problem of gas supply is not there, the company has found another excuse, the poor hydro-power situation. Pepco to give 100MW more to KESC By Mubarak Zeb Khan DAWN.com : http://tinyurl.com/5mgw89 ISLAMABAD, March 18: The federal government announced on Tuesday that electricity supply to Karachi would be increased from 200MW to 300MW till the end of this month to help the city overcome an acute electricity shortage. The additional electricity will be supplied by the Pakistan Electric Power Company (Pepco) and the National Transmission and Dispatch Company (NTDC) to the Karachi Electric Supply Corporation (KESC). The decision was taken at a meeting held here under the chairmanship of caretaker Minister for Water and Power Tariq Hamid. The meeting was attended by secretary water and power, additional secretary finance and the managing directors of Pepco and KESC. The meeting decided that the additional supply would continue till March 31 when KESC’s own plant would come into operation. The meeting was informed that additional electricity would be supplied to Karachi in spite of a gap of over 2000MW between supply and demand in the NTDC system. Karachi suffered major power breakdown recently after NTDC, a subsidiary of Pepco, disconnected supplies to the KESC over outstanding dues. The KESC is on a notice from Pepco to pay Rs3 billion by April 1 against the outstanding amount of Rs37.5 billion. According to an official announcement, the meeting decided that the KESC would make all payments directly to Pepco. The ministry of finance assured the meeting of providing assistance in the recovery and adjustment of dues including general sales tax (GST) refunds from the Federal Board of Revenue (FBR). Meanwhile, caretaker Prime Minister Muhammedmian Somroo has directed chairman of the Prime Minister Inspection Commission and National Disaster Management Authority, Lt-Gen (retd) Farooq Ahmad Khan, to hold meetings with all stake-holders in Karachi so that the government could take required corrective measures for overcoming the electricity shortage in the city. An official announcement said Gen Khan had been asked to take a close look at the issue. He will hold meetings with the representatives of the KESC, Wapda and business community.
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