Solar Power May Already Rival Coal, Prompting Installation Surge

http://www.bloomberg.com/news/2011-04-05/solar-energy-costs-may-already-rival-coal-spurring-installation-boom.html

Solar Power May Already Rival Coal, Prompting Installation Surge
By Ehren Goossens - Apr 5, 2011 9:00 PM PT

April 6 (Bloomberg) -- Katrina Landis, chief executive officer of BP
Plc's alternative-energy unit, discusses the outlook for the London-
based company's investments in clean energy. Landis spoke yesterday
with Erik Schatzker at the 2011 Bloomberg New Energy Finance Summit.
(Source: Bloomberg)

Solar panel installations may surge in the next two years as the cost
of generating electricity from the sun rivals coal-fueled plants,
industry executives and analysts said.

Large photovoltaic projects will cost $1.45 a watt to build by 2020,
half the current price, Bloomberg New Energy Finance estimated today.
The London-based research company says solar is viable against fossil
fuels on the electric grid in the most sunny regions such as the
Middle East.

�We are already in this phase change and are very close to grid
parity,� Shawn Qu, chief executive officer of Canadian Solar Inc.
(CSIQ), said in an interview. �In many markets, solar is already
competitive with peak electricity prices, such as in California and
Japan.�

Chinese companies such as JA Solar Holdings Ltd., Canadian Solar and
Yingli Green Energy Holding Co. are making panels cheaper, fueled by
better cell technology and more streamlined manufacturing processes.
That�s making solar economical in more places and will put it in
competition with coal, without subsidies, in the coming years, New
Energy Finance said.

�The most powerful driver in our industry is the relentless reduction
of cost,� Michael Liebreich, chief executive officer of New Energy
Finance, said at the company�s annual conference in New York
yesterday. �In a decade the cost of solar projects is going to halve
again.�

Installation Boom
Installation of solar PV systems will almost double to 32.6 gigawatts
by 2013 from 18.6 gigawatts last year, New Energy Finance estimates.
Manufacturing capacity worldwide has almost quadrupled since 2008 to
27.5 gigawatts, and 12 gigawatts of production will be added this
year. Canadian Solar has about 1.3 gigawatts of capacity and expects
to reach 2 gigawatts next year, Qu said.

�You have to get better at it as well,� said Bill Gallo, CEO of Areva
SA (CEI)�s solar unit. The French company could shave another 20
percent from the cost of making its concentrating solar thermal
technology, and the same proportion from building and deploying
plants, he said.

Electricity from coal costs about 7 cents a kilowatt hour compared
with 6 cents for natural gas and 22.3 cents for solar photovoltaic
energy in the final quarter of last year, according to New Energy
Finance estimates.

Comparisons often overstate the costs of solar because they may take
into account the prices paid by consumers and small businesses who
install roof-top power systems, instead of the rates utilities charge
each other, said Qu of Canadian Solar.

�Solar isn�t expensive,� he said �In many areas of the solar industry
you�re competing with retail power, not wholesale power.�

Rooftop solar installations also will become cheaper, the executives
said.

�System costs have declined 5 percent to 8 percent (a year), and we
will continue to see that,� SolarCity Inc. CEO Lyndon Rive said in an
interview. The Foster City, California- based company is a closely
held installer and owner of rooftop power systems.

To contact the reporter on this story: Ehren Goossens at the BNEF
Summit in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
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