Recently American solar companies like Solyndra, Evergreen Solar and Spectrawatt have filed for bankruptcy. These events may lead investors to believe that Solar is finished.
The US solar industry was hit hard by announcements out of Europe that some nations, like Italy, were scaling back their expenditures on solar due to their debt crisis. At the same time we have nations like India announcing a US $19 billion plan to produce 20GW of solar power by the year 2020.
Where will the solar panels for this market be manufactured?
India does not have sufficient rare industrial metal inventories or rare earth metal production to meet the demands of the government plan.
China has positioned itself as the country with 97% control over the majority of rare industrial metals and rare earth metals needed to produce high efficiency solar panels.
What does this mean for companies producing solar panels?
Among many other reasons for restricting exports of rare metals, China wants companies to produce the products in China to keep its workforce employed. If companies want to import metals from China in to produce the panels in other nations they will have to pay much higher prices for the metals due to taxes, shipping, export costs and other import costs. Accordingly, The US manufacturers will have a difficult time competing with the manufacturers in China.
The other issue that the companies do not want to talk about is government subsidies and tax breaks. Jason Burack the co-author of the, ¨Dragon Metals Report¨, and owner of www.wallstformainst.com recently said, ¨Message to all CEOs in solar, “Switch immediately to the best Solar panel technology using materials like rare earths, rare industrial metals and graphene and stop relying on the government for subsidies to produce inferior technology panels the market does not want, also a successful long term business model for any company should not be to rely on getting all of your revenue and contracts from the government, which is what many solar companies have done¨.
There are three, ¨Thin-Film PV¨ kinds of solar panels.
1. CdTe or Cadmium Telluride with an efficiency of 6%-11%.
2. a-Si or Amorphous Silicon with an efficiency of 6%-12%
3. CIGS or Copper Indium Gallium Selenide with an efficiency of 10%-20%
A. Highest energy yield
B. No environmentally hazardous materials
C. You can mold the panels to fit many applications
D. They can possibly bring the cost of solar energy panels down to below $1 per watt.
The other technology on the horizon is graphene composite solar panels. They are made of copper, molybdenum and graphite. Molybdenum and graphite have both been deemed highly critical to national security for many nations. Once again China has a powerful position because they control over 80% of the graphite market. So once again China has the foresight to see the technologies on the horizon and has positioned itself to prosper.
Currently 89% of the total installed solar panels worldwide are located in Germany, Japan and the USA. In the coming years we will see a growing demand from China for its own solar needs. Between China and India the demand for solar panels will far exceed our current ability to produce the panels. The costs of solar are coming down and the closer we are to grid parity, the more use of solar we will see. Since many of the metals used to produce these panels have been deemed critical to many nations national security, the prices of these metals are bound to stay elevated. China has shown that it will continue to restrict the exports of the rare industrial and rare earth metals further tightening the supply chains.