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Guest larryvand

re: Grid parity I'm not an expert but I would like the experts of the board to comment. Does solar "grid parity" include the costs of operating for example a nuclear or coal power plants, when comparing them? Cause for the life of me, I can see a solar power plant having minimal operating costs over its 25 year life time, while a nuclear or coal power plant having massive costs. Even with only daylight operation for solar. the operating costs for a nuclear or coal fired plant must be massive compared to solar. And then you have pollution, safety issues, etc... that solar power plants do not have. If you also add cap and trade of carbon emissions, solar power plants must be the cheapest to cost and operate over their life time. So can the experts comment on that? Why isn't solar the cheapest form of energy when compared to 25 year life time power generation and it does not have the many add-on operating costs that the others do? Thank you.

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re: grid parity I think the question is complex, since electricity prices vary with consumers. Additional costs arise when generation and consumption are not done in the same place. A small household in a region far away from major generation plants pay much more per kWh than the heavy consuming paper mill down the stream from the hydro plant. Big consuming industries strategically situated can get heavy discount compared to households in isolated locations, which are hard to distribute to. Industries can often also get subsidies for political reasons to make a country more attractive for job creating investment, by having competitive electricity cost. The big opportunity for PV is to align generation location with consumption location. Rooftop solar for own consumption is the obvious example. Here it is pointless to compare generation cost of PV with coal, since the PV has no distribution cost. I can imagine plants outside villages as something in between the big plant and distribution network and the rooftop solution. Retail price for households can be many mulitples above the cost of coal baseload, but the PV generated electricity price only has to beat that retail price to be a better alternative for households.

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Guest larryvand

Correct me if I'm wrong but many of the poly producers are running at 50-60% utilization their poly plants. So supply can shoot up on a moments notice, right? They just bring more of their utilization up from 50-60% to 70-80% for example. The only time that poly will sustain a rise is when all the excess poly capacity out there is either mothballed or used up. Then yes, it will take a long time to bring new capacity on line. But till then, we have a lot of excess capacity on standby that can come on line in a moments notice. Some data that I've seen says that current capacity is double of current demand. As I said, correct me if I'm wrong. Thank you.

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Hi Klothilde, Taiwan has a good relationship with Japanese manufacturers . They can absolutely benefit from that. However I am confused with their poor results as Japan is skyrocketing. The only explanation I have contains two causes. One would be Chinese are moving on the turf, which they do, acknowledged by the module shipment data. Second is price protection. Interestingly Gintech characterized the situation as lack of capacity and employees as they have plenty of orders. I am not sure if I buy this as the whole industry was in the red, but I fully see this to be a price control in Taiwan, as they simply agree not to sell at certain levels. If the bit about orders coming in and capacity being down is real, they have now exposure to orders in Janaury, Digitimes can be talking about this. But they always talk big about Taiwan, so I would be cautious. Since we are on topic of Taiwan, I got info that there are plans in China to import poly from Taiwan. There is an expectation that poly will go up in price at least temporary. Instead of buying poly, companies will be also buying wafers from Taiwan. So Taiwan is becoming in the sphere of interest again, the same way their cells got into it when the US was declaring tariffs. Imho, I think that relationship may not be lasting. I expect large Chinese companies to set up shops globally, Taiwan is simply to expensive and too far for shipping costs, to be the choice.

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Yes the mono is getting demand now particularly 125*125 wafers for rooftops for Japan and China. Poly for mono is higher quality and this is till issue in Mainland. The imports are continuously 3,500MT but they expected to drop to 2,000MT. Wafers are expected to be bought from Taiwan as well, so poly will go there first. A bit depression for domestic wafer makers is expected, not much of the difference from pressures today, but in addition to it. Those who do mono are in demand now. Did not know about Golden Sun having the 15% requirement.

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Guest spiritcraft

It has been my experience that many "grid parity" discussions and articles do not include maintenance. They often do not compare new plant expense with new plant expense either. With nukes, they never factor in maintenance, storage, risk or any negative effect or the long term cost of permitting, construction interest carry etc. With coal, they never mention the human cost and compare it to the dirtiest vintage, low cost operation they can note. I usually see that these discussions use PV cost from 1-4 years ago as well though they will conveniently use currently low natural gas costs for example. It comes down to who is trying to spin what. Not every discussion is slanted but it would be good to have apples to apples comparisons.

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Larry, yes and I think that applies particularily to the low efficiency multi products. Now that HP multi is becoming more available its hard to sell your standard and sub-standard multi products.

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Guest eysteinh

Everytime I see Gordon on a news article I keep thinking someone is trying to get out of a short. The guy is a joke and there are so many half truths in what he says.

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Guest larryvand

Thanks for the reply explo and I agree. I would like to see a lot of inefficient capacity get mothballed, but so far nothing. How can these companies keep posting losses when they see that they can not compete and it will only get worse going forward? Starting sometime in Q1'13, Renesola is going to be producing some of the lowest price poly, lowest price wafers and lowest price modules, while having some of the best HE for that price. How can companies think they can compete with that? PS. I assume HP stands for HE (High Efficiency).

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Guest eysteinh

"REC might give up and let one of those take over their plants, instead of risking to burn the fresh capital they got injected just before final price crash. I think such consolidation of capacity would help the poly segment." Why would rec do this with lowest cost and all set to go for electronic grade fbr at 8$/kg (fbr b expansion in the future.)? If you read some of RECs patents you realise it will be very hard to reproduse a single reactor design like they are doing for the EG quality fbr they are making so it can be argued this will be a superior design to the MEMC way of doing it with 3 reactor process. But a joint venture or some other cooporation would be perfect for REC that is conserving cash at the moment to survive this part of the solar cycle. And yes you are correct they got the cash infusion just in time. (I was one of the investors publically critizing them for letting the majority stock owners get a much higher ownership than minority owners but in the end it worked out for all of us.) Let me also note REC have a butte plant that is selling Eletronic grade to customers like Intel on long term contracts. In the semiconductor industry quality beats price so and the fabric in butte has a very long history of supplying this material to the semiconductor industry. This is a very good cash generating unit for rec in this tough times where they are bordering production cost prices even on the fbr polysilicon. The one capacity that is going down is LDK it seems. Other than that I think both wacher oci hemlock etc have a problem if one of the customers they are locked in long term contrackt is taken over by the state or the contracts are not honored. GCL poly I really dont know what the future will bring but all I know is they had very low shipment numbers for polysilicon i q3 so it will be interesting to watch that for q4.

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Guest eysteinh

Gordon Johnson is a farse. For a good overview of how they are solving the problem in germany photon international i think oktober edition have a good article on the subject with the german energy minister there for an interview. They also have an article outlinging how gas powered power facilities could be used for the times wind and solar cant produce enough during peak. Germany needs about 2/3 wind and 1/3 solar and its possible to go 100% renewable with some back up gas ready to "heat up" things when needed.

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eysteinh, my point is that REC has some real value to offer a potential buyer. Good technology with low cash cost and cleaned up balance sheet after restructuring. But they have a lot riding on the poly business now, while other incumbents are more diversified and might have better access to capital. At $15 they'll make losses and continue burning the fresh capital. This price level must be a drag after all the clean up they did and being a newly cleaned up bride they have the chance to join a strong ownership or hope to survive on their own now. Compare with consolidation phases in other industries. It's not just best technology that survives, well capitalized, patient and visionary ownership is equally important when the industry appears dead after the bubble phase. Not sure REC was the best example here and portraying them as an acquisition candidate in the needed consolidation process was not meant to bash REC. I personally found their FBR China presentation intriguing and will be following them. I'll follow Wacker too. That's a piece of quality that might hit an attractive entry level this year.

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Guest greensolar

China Plans To Ramp Up Solar-Power Capacity

[*]

In a speech at China's annual national energy work conference dated Monday and released on Tuesday, Liu Tienan, deputy director of the National Development and Reform Commission, the country's top economic planning body, said China would add an additional 10 gigawatts of installed solar power capacity this year. Mr. Liu didn't provide any specific details of how it would achieve this goal.

China's solar power capacity rose to seven gigawatts in 2012, Mr. Liu added. Chinese officials previously said the 2011 capacity was three gigawatts.

The ambitious target would put China's solar capacity within striking distance of its goal of reaching 21 gigawatts of installed solar power capacity by 2015, and suggests the government could either exceed or even adjust its goals.

The state-run Xinhua news agency reported last month that "high-ranking government officials" are considering doubling China's solar-capacity target to 40 gigawatts by 2015 to support local solar manufacturers, citing Meng Xiangan, deputy board chairman of the Chinese Renewable Energy Society.

China's solar manufacturers have suffered from a global overcapacity in solar-panel manufacturing and thinning margins. China's State Council, or cabinet, said last month that the industry's problems also include "excessive dependence on foreign markets and broad operational difficulties." Gross margins for solar panels globally have fallen to less than 10% from more than 30% in 2010, according to investment bank Maxim Group.

China has other motivations. Beijing has set targets for limiting increases in carbon emissions, which are blamed for causing climate change. It plans to reduce carbon intensity—the amount of carbon dioxide emitted per unit of gross domestic product—by 17% between 2011 and 2015.

It wasn't clear how China would pay for such a plan, said Aaron Chew, clean-energy analyst at Maxim Group. "The pipeline [for these projects] is real, but lack of financing making the realization of that pipeline is another matter," he said, though he added that China's solar growth should make its 2015 capacity target "easy to beat."

Chinese solar companies accumulated heavy debt between 2009 and 2011 to fund their capacity expansion, but a market downturn left them struggling to make interest payments. Support from local banks and local governments helped carry the weight of the debt.

The country's support of its solar companies has been central to a global fight over solar subsidies between Beijing, Washington and Europe. In what is potentially its largest trade dispute to date, the European Union has accused China of dumping some of the $21.48 billion in solar panels it exported to the EU last year at unfairly low prices.

However, the State Council has said it will reform the industry, such as by encouraging mergers and acquisitions. The cabinet will reduce government support and ban local governments from backing failing domestic solar companies, it said.

Other efforts announced by the cabinet last month included plans to strictly control the expansion of new projects to manufacture polysilicon and solar panels, promote electricity-price reform, encourage the use of independent solar-powered generators and make it easier to supply solar power to China's electricity grid.

"We believe that it is no coincidence that China is aggressively expanding its solar installation goals at a time when its manufacturers are struggling to stay alive," Shyam Mehta, an analyst at clean-energy market-research firm GTM Research, wrote in a research note last year. "While our current base case forecast already anticipates cumulative installations of 22 [gigawatts] by 2014, there is a definite possibility that demand in China in 2013 and 2014 ramps up even faster than that due to continued downstream support for ailing manufacturers."

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Guest spiritcraft

At the very least it should help balance supply and demand. Is anyone here trying to guess at 2013 total global installations like some used to do at yahoo? Back when it seemed to matter in the good old PE ratio days. (which will come again)

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Guest abcdefgjoho

an estimation created in 2 minutes from me. would need to dig more into it again but just rough numbers. china 10 Gw japan 5 Gw US 4,5 GW Germany 4,5 GW Italy 2 GW France + UK 1 GW Spain+ Portugal 1 GW Eastern Europe 2 GW Benelux .5 GW Turkey .5 GW South Africa 1 GW Middle + South America 2 GW Canada .75 GW Arabs 1 GW That would put totals around 36 GW which would be 20% annual growth. If china delivers 10 GW this is achievable IMO. These are just rough numbers. Some things like arabs or south america, south africa are extremly tough to guess. Generally mid-term I see arabs as going much higher. Sell oil, produce solar at home.

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Thanks Abc.

I have to say things are really falling into place in my head. The pattern in the export data we've seen, the guidances and Yge's revision, the decline in Taiwanese sales since the summer, the 10GW China target for 2013. Klothilde's comment about efficiency requirements for government sponsored program like Golden Sun. The rumoured list of 12 companies to be priority backed by large Chinese banks and the inefficient poly plant curb. Thoughts in order if inception:

[*]Yingli has not exported much in October and November. With only 40% of guidance shipped to China as guided they would miss with more than 100 mw. Instead it looks like they will beat with almost 50 mw. That must mean Yingli has been shipping much more than guided to China in Q4.

[*]The other pronounced 2H China focused names like JASO and JKS with 30-60% China shipment target in Q4 had same exports pattern. And the likely explaination would be the same as for Yingli. This can be applied to Trina and LDK too who've seen huge exports drops in Q4 and already in Q3 in LDK case. The exports data from Q4 is now starting to make more sense.

[*]The Taiwanese players have seen less business after the summer, when the US tariff helped them. This could be explained by Chinese cells being back in business again with domestic instead of US and other shipment by Chinese players (no point in involving Taiwan if module destination is China).

[*]Word from China is that they now target 10 GW of new installations in 2013. They must have seen the enormous momentum in Q4 and aligned expectation for 2013. 10 GW is such a significant demand injection that it might pull the whole industry up from the depression.

[*]If the industry revives, has enough weak player gone belly-up already or will the overcapacity just be fired up and, if demand doesn't spirals up for prolonged period, we'll soon be back to glut mode?

[*]Klothilde's comment about efficiency requirements for government sponsored programs like Golden Sun. Basically only 245W+ modules would be sellable here. This could be a away for China to push all sub-standard (235W-) and standard players (240W) and capacity out of business. This could also lead to a HP shortage and an extra price boost for the high efficiency components beyond what we already see with mono wafers and cells being up last week.

[*]The rumoured 12 prioritised list. Major banks should only help 12 Chinese companies out (I’ve seen some examples of the list and it seems to basically be solar 11), is another way to push small players out, by not throwing the cash life-lines.

[*]The old China poly plant requirement news we’ve seen is another way to force consolidation, by elimination of small and weak capacity firing up to curb demand booms. Was it 90% of poly makers in China that had to shut down production?

[*]News about hundreds of Chinese small players halting production due to bad market and suspected being in dormant mode. China clearly wants to prevent these from ever waking up again in order to save the big ones.

It seems to me that China has created the new big market needed, but more so they’ve tailored it for access only to the biggest and strongest Chinese players. These are all thoughts of course, but I think it is in line with what can be expected of China when forced to carefully plan the rescue of its prize child.

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Guest larryvand

Does anyone have a good number of solar capacity at 100% utilization??? Cause I heard some numbers of 50-60GW. Is that correct? Cause if that is correct, the trough bottom will end up being a slog recovery instead of a V recovery. Unless demand in 2013 is a lot higher than 36GW.

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50-60 GW might be right, but not all are competitive. Demand in 2013 should not cause any severe shortage scenarios, where some vertical disrupt the supply-chain and cause problems, like in 2008 and 2010. Utilization rates should be up though. Top players may run around 60% (except the very top at 80-100%) now, while the majority of supply (by a minority of players) still average maybe 30%. I think the top players will see their rates go up first.

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Guest larryvand

I would give anything to see some of that supply mothballed and completely taken out of the equation forever and ever. Instead, everybody is holding and waiting and they make it worse for the whole industry. If LDK was a company in any other country, they would have been gone long ago. Not saying that will be the solution to all the industry's problems, but it would help and it will show that the Chinese are playing fair.

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Guest spiritcraft

Chile has 3.1GW worth of approved PV projects in the pipeline, according to a report published by Centro de Energías Renovables, the country's renewable energy body. The report reveals that there are a further 908MW worth of PV projects currently under consideration for approval by Chilean environmental authority Servicio de Evaluación Ambiental (SEA). These figures are significantly larger than the figures relating to the realisation of such projects. Indeed, the report cites that at present Chile only has 2.4MW of installed PV capacity in operation whilst an additional 2.5MW are currently under construction. Chile is set to become a solar hotspot and has been identified by NPD Solarbuzz as a key emerging market in Latin America. According to the market research firm, Chile along with Mexico and Brazil are set to become mainstream markets, absorbing nearly 70% of demand in the region. The country has attracted the attention of manufacturer First Solar, which has acquired Chilean project developer Solar Chile as part of its international expansion plans.

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Guest spiritcraft

So with the 900MW in consideration this is 4GW out of almost nowhere. We have talked about S America as a future market but Chile seems to have seen the light. I wonder what time frame this entails.

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Guest Klothilde

This doesn't mean much yet. It means that some people have the idea of building some plants in the desert there and that government has corroborated that no lizards and no tortoises will be harmed. The hard part for these projects still lies ahead, which is getting a PPA signed by an offtaker. To my understanding hardly anybody is far along in that process. My tip for installations in Chile. 2013: <50MW, 2014: 100-200MW

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See my points above. China is specifically designing the plan to kill off all the hundreds of small players simultaneously as support for the chosen ones increase (the well tested first let a few prosper and become strong, then we'll all reap some). LDK plants will survive. The problem for LDK shareholders is that management blew it and shareholders no longer have any stake in those assets. One part of it has already been chopped off in the spirit of the national government encouraged consolidation process.

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Guest abcdefgjoho
Guest Klothilde

How many GWs of panels are exported out of China to Chile each month? Buy the data and you will know! :D

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