In light of the presumed slowdown of the European solar markets due to declining feed-in tariffs, the global solar industry is training its gaze on other growth markets: the U.S., China, and India, as well as Ontario, Canada and Gainesville, Florida.
The U.S. is a prime target today. With a healthy utility sector and regional policies that make the country more than just a two-state game (those two states being California and New Jersey), the U.S. could double to two gigawatts in 2011. There is a large pipeline of solar projects in the queue.
Ontario, Canada, with its aggressive feed-in tariff and domestic content rules, has created an active solar market. Hopefully, it's a sustainable market with an intelligent vision and a flexible long-term policy. The Ontario Power Authority has awarded 1,570 contracts representing 3,565 megawatts of wind and solar projects for Ontario. The majority of the projects are on-shore wind.
Which regions will grow after that?
Well, there's a potential domestic China market -- it's only a few hundred megawatts today but there are big plans in the works. China is considering raising its five-year goal for PV industry capacity from five gigawatts to ten gigawatts in response to Japan's nuclear disaster, according to state-run media. But that's capacity, likely for export, with uncertainty about whether there will be a powerful domestic solar policy akin to the policy that made China number one in wind power.
And then there's India. The country has a strong GDP growth rate, good solar resources, short- and long-term solar plans and a need for reliable power.
The state policy of Gujarat in India, with a population of 50 million, is one of the drivers in Indian solar. Gujarat has the fastest growing economy in the country. Another driver is the Jawaharlal Nehru National Solar Mission with an initial feed-in tariff structure, which is already under fire from opponents. That plan, in three phases, looks for one gigawatt to be commissioned by 2013, half of which will be CSP (see diagram below). The state of Rajasthan proposes 550 megawatts in a reverse bidding process.
Gujarat has a target of installing one gigawatt by the end of 2012 and three gigawatts by 2016 under a fixed tariff structure. That plan is also under fire from opponents.
I spoke with Julian Hawkins, Senior VP of Sales and Marketing at Abound Solar, who had just returned from a long trip to India. Abound is a rising solar star, building cadmium telluride thin-film solar panels in Colorado, and shortly in Indiana in a factory made possible by a U.S. DOE loan guarantee. Abound shipped about 30 megawatts last year and will double that in 2011. Their original factory will soon have a capacity of about 200 megawatts, while the new facility will have a capacity of about 640 megawatts.
Hawkins sees a number of factors in India's favor: There's a lot of sun and a market for power in the country. In Abound's case, India's hot weather makes thin film's temperature coefficient a better fit than crystalline silicon. Gujarat is a dusty place, according to Hawkins, and the diffused light in that environment is also better suited for their thin-film modules. Hawkins sees Gujarat as a "very business focused state," that is "making sure that the grid is ready for solar."
He acknowledges that there are conflicting and overlapping policies and sees "these plans as moving fast and evolving," adding, "The program is going to iterate. Hopefully there won't be too many surprises." (See Spain, Italy, The Czech Republic, etc.)
Most projects are going to be in the one megawatt to five megawatt range and Abound is going to partner with key players in India to get the work done. Hawkins observed that there will be a market for off-grid PV systems, as well.
Abound entered India's PV market with a sales agreement with Solarsis, a Hyderabad, India-based solar system integrator. The agreement also covers design, procurement, installation, and financing. Their first project is a one-megawatt PV ground-mount array to be deployed in Andhra Pradesh. Solarsis is looking to also set up a test facility to engineer balance-of-system designs for Abound's thin film panels.
Abound will be joined by the usual global solar behemoths in looking to grow the Indian solar market to 20 gigawatts by 2022.
On a related note, the Ex-Im Bank just approved two financing transactions for solar-energy exports to India that will contribute to jobs at Infinia in Kennewick, Washington and First Solar in Perrysburg, Ohio. Ex-Im Bank is the first international financing institution to approve solar-power projects under the National Solar Mission and the State of Gujarat's Solar Power Policy. Infinia builds a free-piston Stirling Engine, an old but as yet unestablished solar technology. The Ex-Im bank will provide a $30 million direct loan to the project sponsor, Dalmia Solar Power, for a 10-megawatt project in Rajasthan.
Ex-Im Bank also authorized a $19 million loan to ACME Solar Technology (Gujarat) for a long-term fixed-interest rate loan supporting sales of First Solar modules for a 15-megawatt solar power plant in Gujarat.
India Solar Growth Plan (image from SolaRishi)
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