Prepaid Solar gains traction amongst Bottom of the pyramid customers in the Third World

10 Mar, 2014 by Sneha Shah

Prepaid Solar

One of the biggest problems in the growth of solar energy is the capital cost which accounts for almost 90% of the total lifetime cost of solar energy. Even small scale solar energy systems which can power a couple of lights with energy storage are out of the reach of poor customers in places like India and Africa. These people cannot afford the $200-$500 for such systems, though they spend a greater amount on alternative forms of energy such as kerosene.

Converting these customers towards solar energy makes a huge amount of sense both from a commercial and an environmental point of view. It’s a win-win for the customer, the financing agency as well as the government. There are a lot of social enterprises that are providing financing and products to the bottom of the pyramid customers in India and Africa. We have already featured D.Light as one of the first firms to provide quality products by partnering with SHGs. Now telecom providers in Kenya and Uganda are also starting to provide such services.

Read more about Efficient Solar Products here.

Note prepaid telecom services have been a huge hit in these countries and have allowed telecom penetration to jump exponentially even amongst the poorest customers who make $2 a day. Now the same telecom companies are using their expertise and distribution networks to target their own customers using the prepaid solar schemes. Many areas in the Third World do not have access to the power grid and use primitive fuels for energy. Solar energy is a boon for these people as it does not require a grid. The solar systems are sold for a small payment, while the rest of the cost is amortized over a longer duration. This benefits the customers, as he/she does not have to use expensive kerosene and helps the environment as well. While companies such as Solarcity (SCTY) and Sunrun are doing this for middle class and upper class customers in the USA, these companies are making a huge difference to the poorest of the poor.

Maharashtra sees faulty Policies and Regulatory capture in Wind Energy Procurement

7 Jan, 2014 by Sneha Shah

India,Wind Energy

India’s power industry remains in the woeful, desperate state because of the endemic corruption, vested interests and regulatory capture by powerful corporates. This regulated industry has become a toy for powerful political and business lobbies who use the industry for their own personal advantage. Despite having one of the largest reserves of coal in the world. India is importing millions of tons of coal. The gas policy is a complete mess held hostage by India’s biggest private company, which excels in “managing the environment” than in business. The country has no oil and now even renewable energy has become a hostage to corporate interests.

Maharashtra infamous for the Dabhol disaster, is in the spotlight again after the state distribution utility was forced to buy high priced wind power. The utility wanted to buy wind energy through a tender, but the state electricity regulation has ruled that it has to buy fixed price wind energy. This does not make sense and will lead to increased cost for customers. While there was no dispute that renewable energy needs to be encouraged and the renewable purchase obligations have to be met, still why should the consumers pay unduly high prices when cheaper RE power can be bought.

The wind power developers have managed to influence the regulators to force the state utility to buy high fixed price wind energy using specious arguments. The state utility wanted to buy wind energy using a reverse auction like what is being done for solar power. Note World Bank recently praised India for having the cheapest solar power in the world, thanks to the reverse auction policies which help in finding the true price of solar power. However, despite having a tried and tested mechanism for buying cheap renewable power, MERC has decided in all its wisdom that the utility will have to buy wind power at high tariffs.

Please note that the lack of market based selling of public resources such as telecom spectrum and coal mines had resulted in scandals. The MERC is inviting the same problem by not allowing market forces to determine the true price of procurement. If wind energy developers do not find adequate returns, they will not bid during the tenders. Fixed priced wind power may result in supernormal return for some leading to corruption.

TOI

Even as MSEDCL is facing allegations of irregularities in power purchase, Maharashtra Electricity Regulatory Commission (MERC) has turned down a plea in which MSEDCL was seeking transparency.

MSEDCL wanted to purchase wind power through competitive bidding, but the Commission wants MSEDCL to buy it at rates fixed by it. MSEDCL filed a petition in MERC seeking a review. The Commission agreed that it was a valid point, but referred the matter to a committee headed by principal secretary (energy), with representatives of wind power companies, Maharashtra Energy Development Agency (MEDA) and consumers representatives. Incidentally, principal secretary (energy) Ajoy Mehta is also managing director of MSEDCL.

Fact or Fiction – Is India’s JNNSM Solar Subsidy Scheme a Fraud

3 Oct, 2013 by Sneha Shah

India,Solar Energy

JNNSM A Fraud?

India has been rocked by scams in almost all industrial sectors be it telecom, aviation, real estate, construction, defence etc. Renewable energy is not immune to the general malaise and recently a large solar scam was unearthed in India’s southern state of Kerala. Top ministers were involved with actresses making it a regular “tamasha”. As usual nothing came out of it as is the wont with all corruption scandals in India involving top politicians/ bureaucrats. The media circus continues for a month or two before a new corruption scandal comes up. The scandal investigation mainly consists of hyperbole by both sides with little grounding in facts.

Read on GWI India Solar Subsidy JNNSM Guide – What you needed to know.
The Left wind parties in India have termed the whole India solar subsidy scheme a scandal on the basis of the Kerala scandal. We examine if this is true or not. My first impression is that India’s solar subsidy scheme has managed to get one of the lowest electricity rates in the world with solar developers earning little in the way of profits. The reverse auction scheme has seen over competition leading to losses for many of the developers. This means that the scope of corruption is low given that there are little profits to be siphoned off.

The allegations is that while the government pays $3.5/watt for an off grid solar power plant the cost is only $1.1/watt. This is total bollocks. Even the biggest utility solar power plants in the world will cost at least $1.1-1.3/watt in the world with their large economies of scale. Small rooftop solar power plants cost much more as the installation and commissioning costs are much higher. Balance of System costs also are higher for the smaller power plants as they lack the scale. Likewise permitting, inspection and testing costs will be higher. It will cost at least $2.5-3/watt for building an off grid solar power plant, which means that this accusation of windfall profits being made by empaneled solar vendors is nothing but hyperbole.

Business Line

The MPs said the benchmark price fixed by the Government agencies for the off-grid roof top solar units is around 2,10,000 per 1 KVA. They said in Kerala, a consumer pays Rs 1,15,000 to install 1 KVA solar power at his house, while the balance of Rs 95,000 will go to the empanelled Solar Company, through the implementing agency of the State as Centre and State Government subsidies. The MPs argued that the actual cost of panels is about Rs 70,000 per 1 KVA. “This is resulting into windfall profits for companies who are ‘fortunate’ enough to get empanelled by the Government. By investing just Rs 70,000, these companies are getting a profit of around Rs 1,40,000 thousand, which is a profit of 200 per cent,” the MPs said in the letter.

Sharp sees a Doubling of Solar Revenues driven by Japanese Boom but is it Sustainable

19 Aug, 2013 by Sneha Shah

Japan,Solar Panels

Sharp’s Revenues Double Itself

The Japanese electronics giant Sharp has seen its revenues from solar sales double in the first quarter of 2013 to almost $850 million, as Japan is all set to become the largest/ 2nd largest market in the world for solar panels. Japan has been seeing a huge surge in solar panel demand as the fixed feed in tariff given by the Japanese government for electricity generated by solar panels is leading to crazily high returns. Every big Japanese company whether it is a gambler, oil and gas, telecom company etc. is jumping into the solar plant construction business. Not only are the large mega megawatt solar farms booming in Japan, but also residential rooftop solar installations.

Read more about Japanese Solar Panels here.

Sharp Faces Stiff Competition

Sharp has been battered in all its businesses by competition from the Asian countries such as Korea and China. Sharp has seen its display and electronics business erode due to competition from Samsung and others. In the solar energy segment too Sharp has seen its numero uno position in solar panel sales, being decimated by the Chinese solar majors such as Yingli Green Energy (YGE). Sharp has already decided to get out of a number of markets in solar energy and is also shutting down some of the unprofitable solar panel capacity. The company is in talks to sell a portion of itself to Taiwanese EMS Hon Hai. Samsung has already taken a small equity stake in Sharp to provide the much needed equity. Sharp has now gotten a great tailwind in the form of the Japanese solar boom but I don’t think it will last too long.

Sharp cannot compete in costs with the Chinese companies and the only major reason for its doubling of sales is the domestic Japanese market, where it has the home market advantage. Once the boom peters out, Sharp will again see its sales dwindle. The company manages to sell its high cost panels mostly in the Japanese market and has been edged out in other developed markets. In the booming countries like China it has no market share to speak of. While the yen deprecation might help save the company, it is hard to see a future for Sharp in solar panel manufacturing.

Comparing Japanese Solar Panels – Kyocera and Solar Frontier

5 Aug, 2013 by Sneha Shah

Solar Energy,Solar Panels

Solar Frontier is a Japanese company which was earlier known as Showa Shell Solar. The company joined the rank of major solar companies once it started the new 900MW “Kunitomi” production plant in Miyazaki. Solar Frontier manufactures CIS (copper, indium, selenium) thin-film solar modules for customers all around the world. The company has offices in Europe, the U.S.A., and the Middle East, with headquarters in Tokyo.

Kyocera is amongst the oldest Japanese vertically-integrated solar panel manufacturers. It also manufactures industrial ceramics, telecommunications equipment, office document imaging equipment, electronic components, semiconductor packages, cutting tools, and components for medical and dental implant systems. Kyocera Solar Corp. in Japan was founded in 1996 and Kyocera Solar, Inc. in the U.S. in 1999. The company has production bases in Japan, Mexico, Europe and China and is planning a factory in California as well.

Japan’s share of global PV system revenue have shown an increase from just 9% in 2011, to 14% in 2012 to 24% in 2013. Japan is a country where solar energy is flourishing because of its Government support through generous feed in subsidy. The Japanese are very particular about using their home brand. They also follow strict certification requirements, hence it will not be easy for the foreign players to enter the Japanese market. The Japanese market will also offer another market to the many suppliers who have exited the European markets, owing to the Anti-dumping proceedings there and reductions in FITs. As opposed to Europe the FITs in Japan are very attractive.
Read more about Japanese Solar Panels here.

Distinguishing Features between Solar Frontier and Kyocera Solar Panels

Solar Frontier modules have conversion efficiency of 11.8% to 13.4%. Their “Light soaking” effect increases the output after installation. They are Cadmium- and lead-free. Solar Frontier uses recyclable substances as packing material and are cardboard free. They use the CIS technology in module manufacturing. Kyocera Solar uses high-performance solar cells, with efficiency of over 16%, for its solar module production.Classification of Solar Modules and Available Models

Solar Frontier Modules – can be conveniently used for residential, commercial and utility purposes. They manufacture thin film modules.

SF145-S – 145W
SF150-S – 150W
SF155-S – 155W
SF160-S – 160W
SF165-S – 165W

Kyocera Solar Modules – can be conveniently used for residential, commercial and utility purposes. Kyocera solar modules are all multicrystalline.

1) F Series –

a) KD – 135-320 W

b) KD300-80 series – 315-320 W

c) KD200-60 series – 240-250 W

d) KD200-54 series – 215-220 W

e) KD100-36 series – 140 W

2) Off grid Series – KD100-36 FSX series – 140W.

Wattage

Kyocera solar modules have a wattage range of 135- 320 W. Solar Frontier modules have a wattage range of 145- 165 W.

Weight

Kyocera solar panels wegh in between 12.9 kg and 27.5 kg. Solar Frontier modules have a standard weight of 20 kgs.

Frame

Kyocera solar panels come with black anodized frame. Solar Frontier modules also have a black anodized aluminium frame.

Standards and Certifications

Kyocera solar panels are NEC 2008 compliant, UL 1703 listed and IEC61215, ED2, IEC61730 certified by JET. Solar frontier modules have PTC/STC rating over 90% and are also UL, JET and RoHS compliant.

Warranty

Solar Frontier gives a 25 year extended warranty on all its solar panels. These Solar Panels are reinsured by the German insurance giant Munich Re, which means in case if Solar Frontier goes out of the solar panel business, Munich Re will insure that the warranty holds good. This is better than the standard warranty given by solar panel manufactures.

Kyocera solar panels have:

i) 10 years limited PV warranty on materials and workmanship,
ii) limited power output of 20 years (80%/ 90%) or
iii) 1/ 2 years limited PV modules warranty.

For more technical details read here: Solar Frontier and Kyocera solar panels.

SMA wields the axe on Workers as Revenues keep dropping

10 Jul, 2013 by Sneha Shah

Solar Inverters

SMA Solar is firing 700 workers from its nearly 4000 workforce, as the company tries to align costs to its falling revenue. The German solar inverter maker is the world’s largest producer and shipper of inverters for the global solar market. The company had a 40% market share just 2 years ago, thanks to the strength of its domestic German market. The company used to sell its inverters at a premium over others and managed high margins. SMA Solar was not affected by the gloom in the solar panel industry, as Asian companies did not have the technological expertise of SMA and other European makers. However, Chinese companies such as Sungrow have managed to improve their quality and reduce costs at the same time.

Read on GWI List of Major Solar Inverter Manufacturers.

We have predicted in the past that SMA Solar might face the prospect of other German solar companies as solar inverter ASPs go the solar panel way. The Chinese and other Asian companies have entered the fast growing $7 billion solar inverter market in a big way. They have also been helped, as China is set to overtake the saturated German market as the largest demand driver of solar panels. SMA Solar has been trying to curtail market share losses by buying a Chinese inverter company. However, its efforts have not been too successful as it continues to see a double whammy of lower revenues and lower ASPs.

SMA Solar needs to make a radical change in its strategy if it hopes to survive the change in the industry. I don’t think it will even manage to keep the current 3000 German workers. The company will need to outsource to other locations, otherwise it might face the fate of European telecom equipment makers.

Also Read on GWI Why Solar Inverter Top Dog SMA Solar is Losing Marketshare.

Bloomberg

SMA Solar Technology AG (S92), the world’s biggest maker of inverters, said it will eliminate 700 full-time jobs in Germany by the end of 2014 as the photovoltaic market it supplies shrinks.

SMA Solar has begun talks with its works council to ensure the cutbacks are handled “in the most socially responsible way,” the Niestetal, Germany-based manufacturer said in a statement

“For the first time in many years, measured in euros, the global photovoltaic market will decline in 2013,” Chief Executive Officer Pierre-Pascal Urbon said in the statement. “As market leader, we will be especially affected by this,” he said, forecasting “an extended period of consolidation in the solar sector.”

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