Solar indices at August 2012
Source: EY analysis
1.Previous ranking in Issue 33 is shown in brackets
2. This indicates US states with renewable portfolio standard (RPS) and favorable renewable energy regimes
Solar market tariffs and loans continue to be the source of controversy in Q2.
The US has fallen a point in the solar index as a result of the ongoing controversy over the future of the loan guarantee support given to the solar sector in particular, exacerbated by a series of bankruptcies of solar companies. Notwithstanding the import duties imposed on China’s solar sector, the US manufacturing market continues to struggle with falling panel prices, with General Electric having announced in Q2 its plan to delay construction of a new manufacturing plant.
China remains level in this issue’s solar index. While the Government has, for the second time this year, cut the FIT awarded to projects under its Golden Sun program by 21% from CYN7.0 (€0.9) to CYN5.5 (€0.7) per watt, this has, to an extent, been offset by the Q2 announcement of increased domestic capacity targets for solar. The country aims to have 21GW of solar capacity on line by 2015 and 50GW by 2020, an increase from the previous target of 15GW and 20GW respectively.
Germany has confirmed solar FIT cuts and spending caps, including a new mid-size category (10kW–40kW) receiving €0.185/kWh — higher than would otherwise be received for such projects — giving some certainty to the sector.
Solar indices at August 2012
In early July, Italy confirmed solar FIT cuts averaging 39%–43% in its fifth Conto Energia, due to come into force from 27 August. Overall outlay of installations will also be limited by a budget to be set every six months; €140m will be available for the first half year, reducing to €120m and then €80m.
Spain continues to see an increasing number of solar project proposals that do not require subsidies, indicating a move toward ‘grid parity’. While this does not outweigh Spain’s current economic situation and the proposed electricity tax hikes in the current solar index, it does bode well for longer-term growth in the sector.
In Q2, France announced the results of its First Solar tender, approving 214 projects totaling 514MW and representing an investment of around €1b. It is hoped that the large number of projects will be the catalyst for accelerated growth in the country’s solar sector. However, Q2 also saw confirmation that FITs relating to integrated power plants installed on certain buildings will be canceled due to eligibility, assessments having incorrectly been based on the utilization of the building.
Morocco received approval for €246.8m of funding from the African Development Bank to finance the country’s largest CSP project, comprising a €168m and a €78.7m Clean Technology Fund concessionary loan to part-finance the first phase of the 500MW Ouarzazate project.
Turkey’s energy regulator announced in Q2 that bids would be invited in June next year for capacity licenses totaling 600MW through to 2015. This is compared with the current 10MW of capacity. Separately, China’s Sinovel and Turkey’s Agaoglu Group have agreed to develop a US$1b (€0.8b) wind farm project with 600MW of generating capacity.
Bulgaria falls a point in the solar index due to the 55.1% reduction in the country’s above-market FIT rates for PV projects greater than 200kW to BGN0.237 (€0.121)/kWh.
Chilean construction company, Sigdo Koppers, has signed an agreement with China’s Sky Solar to build more than 300MW of solar capacity in the country. The Chinese company will invest around US$900m (€725m) in the project.
In other solar news, the Government announced a tender for the construction of a 50MW CSP plant that will receive financing support from the Clean Technology Fund, the Inter-American Development Bank and the International Finance Corporation, as well as a US$20m (€16m) government grant.
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