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| Solar for Dummies By Nick Hodge | Wednesday, June 22nd, 2011 The headlines say it all...
In only a few years' time, the solar market has gone from “That stuff'll never work” to a billion-dollar acquisition target of the biggest oil companies in the world. At the turn of the century the world only had 1.4 gigawatts (GWs) of installed solar capacity. By the end of last year 40.7 GW had been installed – a growth of 2,752%. Oil didn't do that. Coal didn't do that. Nuclear didn't do that. Most of the growth has come from Europe – particularly Germany with 17 GW – which boasts over 75% of all installed solar worldwide. Their head start can be attributed to attractive policies the U.S. failed to embrace. But falling prices, as you'll soon see, will mean the spread and mass adoption of solar in the next few years. Advertisement Retire Healthy and Wealthy One company is the key to your long-lived and prosperous retirement. It's a small biotech that uses your own tissue to grow new organs and limbs. That's for your health. And it trades for $3.00 with the backing of some of the world's largest drug companies. That's for your wealth. Reaching Scale All technologies are more expensive in the beginning. I paid $1,300 for a 42” flatscreen TV in 2006. You can get one today for $450. Solar is the same way. Panels cost $60 per watt in the mid 1970s. Today the price is down to $1.50 per watt.
Just like similar industries – circuit boards, for example – costs will continue to fall with volume. For every doubling of solar manufacturing capacity, costs fall about 20%. In some markets solar is already cheaper than grid electricity. And as more and more solar is installed, the costs will only fall further. We're at a point now where solar installations are growing at a compounded annual growth rate (CAGR) of about 65%. Slightly more than 17 GWs were installed last year alone. And as SunPower (NASDAQ: SPWRA) founder and chief technology officer Tom Dinwoodie (the man who just sold a majority stake of his company to Total for $1.4 billion) puts it: That 17 gigawatts installed in 2010 is the equivalent of 17 nuclear power plants -- manufactured, shipped, and installed in one year. It can take decades just to install a nuclear plant. Think about that. I heard Bill Gates recently call solar "cute." Well, that's 17 gigawatts of "cute" adding up at an astonishing pace. We'll still need nuclear baseload power to be sure. The point here is twofold.
Forecasts Between now and 2020, solar installations will double almost three times. Check out how that looks graphically:
Germany will continue to dominate the market for the next few years, with the U.S. expected to come on strong in the second half of the decade. China, Italy, Japan, Australia, Canada, and Spain are other countries to watch for coming installation growth. But, at least as it stands right now, there's only one country to watch for when it comes to the actual production of solar equipment – not just the installation. Advertisement China's Master Plan Stumbles They worked for 20 years to build the world's most wide-reaching — and potentially dangerous — monopoly... China's goal: To seize control of the world's consumer and military high-tech industries. What they didn't count on was a discovery made in the Arctic Circle earlier this year — a strike so gigantic, it sent China's master plan reeling. Find out who made this discovery and what's next for the resource valued at over $273 billion. The Players In the early oughts Germany was by far the solar production leader. But as always happens in the manufacturing industry, China was quick to enter and dominate the game. Though Europe is still the installation leader, China owns a majority of the production – as much as 60% by some estimates. And for the first time last year, half of the largest solar companies in the world were Chinese. Though the list may vary slightly depending on the source, here's the current list along with 2010 shipments:
I know I've thrown a lot at you today, but a thorough solar update was long overdue. And in addition to future editorial and our paid services, this should serve as a good base for anyone looking to start investing in solar. For more information, I've just recorded a short white-board video about materials of the future. It covers new solar materials that'll be used in the next few years, as well as new types of battery and rare earth technologies. We'll start posting videos like this once a week to help you better capitalize on the topics we cover in daily e-letters. Call it like you see it,
Nick P.S. One of the main things allowing the wider use of solar is advanced batteries. I told you last week how the Army and Marines were using solar energy and batteries to power crucial communication equipment. But soon, entire neighborhoods will use this perfect combination to eliminate the need for fossil fuels. More information on how that's being done – and how you can invest in the technology – can be found here. Related Articles Big Oil Solar PlayVanadium: The Best Thing Since Lithium Canadian Solar and Chinese Solar Cell Plants Tapping into 'Cambridge Crude' From the Archives...How They're Taking a Piece OPEC's Trillion Dollar Profits2011-06-21 - Keith Kohl Oil Prices Lowest Since February 2011-06-21 - Brianna Panzica Nuclear Regulations Weakened to Keep Plants Running 2011-06-20 - Brianna Panzica The Great Ethanol Scam of 2011 2011-06-20 - Jeff Siegel Energy and Capital's Weekend Edition 2011-06-19 - Keith Kohl Economic Releases for the week of Monday, June 20th, 2011: Jun 21 - Existing Home Sales Jun 24 - Durable Orders Jun 22 - MBA Mortgage Index Jun 22 - FOMC Rate Decision Jun 23 - New Home Sales Jun 24 - GDP Brought to you by Wealth Daily | |
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Wednesday, June 22, 2011
Solar for Dummies
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