France recently halted its solar subsidy program for 3 months for solar installations under 3 kw as it was deluged with a large number of applications.Solar Feed in Tariffs are quite generous for certain type of solar panel installations like BIPV and greenhouses.This combined with rapidly falling solar panel prices primarly due to low cost Chinese manufacturing has made the business extremely lucrative.Note France is not the first country to see a massive flood of solar applications.Spain,Czech,Germany,Australia have faced problems with solar feed in tariff programs mainly because of poor design by slow moving bureaucrats.However most of these countries have never blamed cheap Chinese panel imports for their badly designed programs.Germany which is the undisputed solar market leader did for a while raise the Chinese bogey but it was for a short while.Anyone with a little understanding of the solar industry would know that almost 50% of the value is created in installation which is all done locally.Also most of the polysilicon raw material is made in the West as also most of the equipment used in producing panels in China.
Dongfang Electric Corporation,China’s largest power equipment producer has bagged major contracts in India.Dongfang Electric is the 3rd biggest Wind Turbine Producer in China as well and has managed to bag a 276 MW $203 billion WTG supply contract with Abhijeet Group .This is the first major contract wind in the Wind Equipment Sector for a Chinese company and could be start of a major trend.Dongfang has also won a small a massive $2.5 billion contract to supply 6. GW of super critical coal equipment to KSK Energy. Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.At almost $700,000/MW,the Turbine order is a steal for the Abhijeet Group and cannot be matched by Indian or Western players.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.Using domestic content requirements and technology transfer,Chinese companies have become top global producers from zero presence just 5 years ago.
The Dollar is being relentlessly attacked by Bears due to massive QE program unleashed by the US Fed.However the US Dollar continues to be a safe refuge in many parts of the world.For countries affected by major politicial and economic problems,dollar is looked upon a safe haven for capital preservation.Many of these places have a history of high inflation and major political upheavals.In these places,Gold and Dollar are looked upon as equals for preserving wealth during times of chaos.Vietnam serves as a reminder where even citizens of relatively fast growing stable economies look upon as Dollar as a rock of stability.The South East Asian country has seen high inflation in recent times and numerous devaluations of its currency.The Communist led country has tried to replicate China in many of its policies some of which have backfired.The recent scandal and debt default of a major government owned company has shaken the confidence of investors.With high inflation and depleting foreign reserves
Rare Earth Metals promise to be a continuing geopolitical drama for the coming few years as Chinese monopoly over these crucial raw materials continues.Japan has already been at the receiving end of a Chinese exports embargo once and has its companies scattering to secure rare earth mineral resources in varied places like India,Mongolia, Kazakhstan, Vietnam.Hitachi is looking to increase recycling of rare earth minerals while other companies too are looking to optimize and reuse these metals.USA is currently less susceptible to rare earth disruptions as its requirements are quite low and anyway it imports most of the products using rare earth in finished form.
Germany is almost certain to cut the solar feed in tariff in 2011 on top of the regular 13% decrease.Note Germany is the largest solar market in the world by far and installed an astounding 8 GW of solar panels in 2010.With almost 18 GW of total solar installations,the German solar energy capacity is almost half of the world’s capacity despite bad conditions for solar energy.Germany had set a target of around 4-5 GW of solar energy this year in the upper case and this has been vastly exceeded as solar module price cuts have made it attractive to install solar panels.
USA has opposed India’s Local Content Requirements for the Federal Solar Energy JNNSM program.Note according to the JNNSM rules,solar panels will have to be produced in India for the first year and solar cells will also have to produced from the second year.There is also a proposal that the local content requirements may be extended […]