Australian Households Chase Sun to Lead World on Solar Adoption

Australian Households Chase Sun to Lead World on Solar Adoption

Australian households are world leaders in solar power installation, according to new figures from Australia's peak industry body representing the fossil fuel and renewable energy sector.

The Energy Supply Association of Australia, representing the fossil fuel and renewable energy sector, has sourced data from around the world revealing household solar photovoltaic (PV) penetration in Australia is way out in front of any other nation.

The report shows almost 15 per cent of Australian households have adopted the technology to power their homes.

This is more than triple that of Germans, who are second on the world stage and typically thought of as the most prolific solar adopters.

The report breaks the data down to countries and jurisdictions illustrating where the world's most enthusiastic installers of small-scale solar energy are located.

"Germany, the US, Spain and others are held up as being at the forefront of solar power, but it is Australia, where households have taken it upon themselves to install solar PV, that easily lead the world when it comes to solar penetration," the ESAA report states.

The ACT had 15,637 household installations as of September last year, according to ActewAGL figures. Based on 2011 census data this put the ACT at about 10 per cent of households connected to solar – South Australia leads the way with almost 25 per cent of households connected to solar PV.

Although Australia leads the charge on small-scale installations, Germany is out front with utility-scale solar installations.

In terms of total solar energy produced per million people, Germany's capacity is about triple that of Australia's.

Australian Solar Council chief executive John Grimes said that was due to policies that had focused on domestic solar systems.

"The economics are compelling," Mr Grimes said. "The cost of the technology continues to fall at such a rate that it is already much cheaper to install solar than it is to buy electricity from the grid. And with the advent of cheap energy storage technology – battery technology – that really closes the loop.

"People like the Energy Supply Association and others should rightly be thinking about this. If they don't start to embrace the technology as opposed to resist it, their members companies – the big utilities – are set to become the Kodaks of the future."

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You Can't Have Solar Without Silver

You Can't Have Solar Without Silver

With a history that dates back more than 5,000 years, silver has been an incredibly valuable metal through the ages. It was once used as a trading currency along the Asian spice routes and was even the standard for U.S. currency for a while.

However, the precious metal holds far more value than just as a currency. In fact, more than half of the world's silver is actually used for industrial purposes as it is used in X-rays, low-e windows, and even solar panels. As it turns out, even solar energy wouldn't work the same way if it wasn't for silver.

Making Solar Shine

Silver is a unique metal. It has the highest electrical and thermal conductivity of all metals, and it's the most reflective. These physical properties make it a highly valued industrial metal, especially when used in solar cells.

Silver is actually a primary ingredient in photovoltaic cells, and 90% of crystalline silicon photovoltaic cells, which are the most common solar cell, use a silver paste. What happens is that when sunlight hits the silicon cell it generates electrons. 

The silver used in the cell works as a conductor to collect these electrons in order to form a useful electric current. The silver then transports the electricity out of the cell so it can be used. Further, the conductive nature of silver enhances the reflection of the sunlight to improve the energy that's collected. Therefore, if it wasn't for silver solar wouldn't be as efficient in turning sunlight into energy.

Shining a Light on Silver in Solar

The average solar panel actually uses about two-thirds of an ounce of silver, which is about 20 grams. That might not sound like a lot, but at around $20 an ounce it contributes more to the cost of solar than it does to the other industrial products that use silver. For example, a laptop only contains 750 milligrams to 1.25 grams of silver while a cell phone contains just 200-300 milligrams of silver, so silver is a tiny fraction of the cost of those devices.

Overall, the solar industry uses about 5% of the world's annual silver supply, or an estimated 52.4 million ounces. However, as demand for solar increases, especially in China, the demand for silver used in solar could double. Because of this it is estimated that by next year the solar industry will use 100 million ounces of silver.

Because of the volatility in the price of solar, panel makers are working on using less of it on each panel. Still, the overall increase in demand for new solar panels is what's driving the demand silver used by the solar industry. 

This increased demand for silver could have a real impact on the solar marketplace in the years to come as solar could push up the price of silver. So, should silver prices surge it could have an impact on the production costs of solar panels, which would then impact the economics of the solar industry.

Final Thoughts

Silver is a precious metal to the solar industry. Because of this any future spike in the price of silver could hold back the growth of the industry. 

It's a trend to keep an eye on as surging silver prices could dim the prospects of the solar industry in the future because it's becoming such a large consumer of the precious metal.

A New Adaptive Material Could Halve the Cost of Solar Power

 

Solar power is one of the most reliable forms of renewable power-but it's still expensive. Now, a team has developed a smart, adaptive material that could slash the its cost in half.

Developed by start-up Glint Photonics, the new material has optical properties that can change to help it capture as much light as possible. Currently, large-scale solar plants have to use tracking technology to ensure that their cells maximize their exposure to sunlight; this new material changes its reflectivity in response to heat from concentrated light to capture light across a wide range of angles.

 

The new technology is a kind of coating for use in a solar cell which focuses light into a piece of glass. An array of thin lenses concentrate sunlight across a broad range of angles, before it's passed to a glass sheet, coated on both sides with reflective coating. The front coating, however, is made of the new material, and Technology Review explains how it works:

 

When a beam of concentrated light from the array of lenses hits the material, it heats up part of it, causing that part to stop being reflective, which in turn allows light to enter the glass sheet. The material remains reflective everywhere else, helping to trap that light inside the glass-and the light bounces around until it reaches the thin edge of the glass, where a small solar cell is mounted to generate electricity.

As the day wears on, the lenses throw the light-captured across a broad range of incident angles, remember-onto a different spot on the glass sheet, always allowing light in only where the beam of light falls. In turn, it reduces the need to keep the device pointed directly at the sun. Glint Photonics claims that the technology could produce solar power at a cost of four cents per kilowatt-hour, compared to eight cents per kilowatt-hour for normal solar panels.



The technology is still a proof of concept-its efficiencies still need to be upped, and the whole thing need to be scaled to work at commercial volumes-but it's a very promising development.

Australia's 'Vast' Solar Resources Closer to Being Tapped In a Big Way

Australia’s largest solar plant moves one step closer to completion with the first of 1.35 million solar photovoltaic (PV) modules being installed on Wednesday at AGL’s Nyngan Solar plant in central NSW.

Located on a 250-hectare site about 550 km north-west of Sydney, the $290 million plant will have a capacity of 102 megawatts, or enough to power about 33,000 homes.

The plant is expected to be completed by next July and generate an estimated $137 million for the regional economy over its 30-year life span, said Scott Thomas, AGL’s general manager power development.

“AGL has already invested over $3 billion in renewable energy generation in Australia and with projects like the Nyngan Solar Plant, (it) is increasing the proportion of zero-carbon emission generation in the National Electricity Market,” Mr Thomas said.

The Baird government has lately stepped up public support for the renewable energy industry, placing it at odds with Coalition counterparts at the state and federal level.

Last week, Environment Minister Rob Stokes called for NSW to be “Australia’s answer to California” in promoting solar and wind energy, and also backed leaving the national renewable energy target – now being reviewed for a possible cut by an Abbott-government appointed panel – at current settings.

AGL’s Nyngan plant and a sister 53-megawatt solar project in Broken Hill will cost about $440 million to build, including $166.7 million in grants from the Australian Renewable Energy Agency (ARENA) and $64.9 million from NSW coffers.

For Nyngan alone, the cost will be $290 million, with ARENA’s funds totalling $116.1 million and $43.3 million from NSW.

“The NSW government’s support for this project has been vital and a very important role in the widespread development of utility scale solar across NSW and across Australia,” Leslie Williams, Parliamentary Secretary for Renewable Energy, said.

“NSW has vast solar resources and has long been a standout leader in photovoltaic research,” Ms Williams said. “We are now taking the next step and becoming a standout leader in renewable energy development.”

Laid out end to end, Nyngan’s PV panels would stretch about 1600 km, or roughly the distance from Sydney to Melbourne and back.

The twin solar plants may be among the last large-scale renewable plants to be developed for some time as on-going investor concern about the future of the Renewable Energy Target (RET) has all but frozen new spending in the sector in Australia.

Just $40 million was invested in the first half of 2014 – the lowest since 2001 – and a fraction of the almost $2.7 billion poured into large-scale renewable energy in 2013, Bloomberg New Energy Finance reported earlier this month.

Small-scale renewable energy has seen a less precipitous decline although cuts in feed-in tariffs and other support have seen PV installations slide from 60,114 systems in the first quarter of 2013 to 45,369 in the three months to June 2014, according to the Australian Solar Council.

The Solar Silver Thrust

In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar. It's widely expected that the premium will ignite the use of solar power -- and solar uses a lot of silver.

Silver Demand From PV Panels

As you may know, silver is used in photovoltaic (PV) technology to generate solar power. A typical solar panel uses a fair amount of the metal -- roughly two-thirds of an ounce (20 grams). To put that in perspective, a cellphone contains around 200 to 300 milligrams (a milligram weighs about as much as a grain of sand). A laptop contains 750 milligrams to 1.25 grams.

Photovoltaic technology is relatively young, but its use is growing rapidly each year. Just since 2000, the amount of silver consumed by solar-panel makers has risen an average of 50% per year. Demand grew from one million ounces in 2002 to 60 million ounces in 2011. Last year demand from the PV industry represented almost 11% of total industrial demand for the metal (excluding jewelry). According to statistics from CPM Group, demand grew by 11.2 million ounces, the strongest volume growth of all major sources (jewelry and electronics). And this was before the Japanese announcement was made.

(click image to enlarge)



The largest end-user of solar panels is Germany, though that's changing. Last year, Germany accounted for 27.3% of global installations, but due to subsidy cuts, solar-panel installation capacity dropped from 7.7 gigawatts (GW) to 7.5GW. In the big picture, that decline was offset by increases in China, France, Italy, the UK, Japan, and the U.S.

In their 2012 Yearbook, CPM projected a slight decline in silver demand from solar panels due to a reduction of new installation in Europe and oversupply from excess production in China. But with the initiative from Japan, that estimate is almost certainly low.

Japan Gives New Life To PV Industry

After the Fukushima disaster, Japanese authorities wanted to cut the nation's dependence on nuclear energy. Approximately 30% of Japan's power was generated by nuclear before the catastrophe -- now the focus has shifted to other green energy alternatives, including solar.

The new tariffs might work. The suggested rate of 42 JPY ($0.53) per kilowatt hour (expected to be maintained for 20 years) is more than twice the rate in Germany (€0.17, or $0.246). Bloomberg estimates that this generous increase will create $9.6 billion investments in Japan alone.

Here's what that amount of money would do to the sector: There were approximately 1.3GW of solar capacity installed in 2011, but experts anticipate that number to nearly double to 2.3-2.5GW for 2012, and hit 3.0GW in 2013. According to SolarBuzz, Japan could see 28GW of solar capacity installed by 2020 and 50GW by 2030.

That's a lot of solar panels, and -- even assuming improved efficiency -- it'll take a lot of silver.

Price Factors

During recent years, solar panels have become significantly less expensive and more end-user friendly. However, the fact that each panel contains a lot of silver can make it susceptible to large price fluctuations. If the silver price gets too high, manufacturers might seek alternatives, of course, but they can't easily eliminate use of the metal. And if the product gets too expensive, demand could fall. Companies are already looking for ways to reduce the amount of silver used in PV panels, or to replace it with another element.

At the moment, there are two main solar panel technologies on the market. The traditional one is "thick film," where silver is the main component. The other one is a less-expensive "thin-film" method, which replaces silver with another material, cadmium telluride. The development of thin-film solar panels has picked up due to its lower price, but the technology is less effective.

Thick film is more efficient in gathering energy from the sun, and this type of panel still prevails on the market. CPM reports that it accounted for roughly 91% of total installations last year, and analysts expect thick-film panels to maintain their dominance for at least the next several years. Further, both panel types use silver outside of the cell for reflectivity and other functions, so the odds of silver being eliminated from solar panels entirely are very low at this time.

For investors, this means that at least in the near term, the solar industry will continue to use silver-intensive technology, thus supporting growing industrial demand for the metal.

But that's not all, folks…

New Era For Silver Usage

For a long time, silver industrial demand was dependent almost entirely on one industry: photography. Silver-based camera film dramatically changed the structure of silver demand at the beginning of the 20th century. By that time, silver had primarily been used in silverware, jewelry, and as money. At its peak, photographic demand accounted for about 50% of the market.

But this is the 21st century, and in spite of substantial declines in film use, the modern world has developed many other important uses from silver's unique properties.

Probably the most important shift is that industrial demand for silver no longer comes from a single field, but from numerous applications -- almost too many to count -- virtually none of which show any signs of slowing.

This fact makes the forecast for silver demand more positive and stable. When one industry drops, others may offset the decline.

Here's a smattering of uses, many of which are still in their infancy:

• Solid-state lighting (SSL), which uses semiconductors to produce light with either light-emitting diodes (LED) or organic light-emitting diodes (OLED), rather than the more traditional electrical filaments. SSL is used in traffic lights and some car headlamps.
•  
• Radio frequency identification (RFID) uses printed silver ink made from silver nitrate. RFID chips have become so ubiquitous, it's hard to find any new product that doesn't have at least one -- even if that's only in the security tag affixed to the package.
•  
• Supercapacitors and superconductors, autocatalysts and new types of more effective batteries.
• Medical applications, like aseptic coverings for surgery, traumatic wounds, antibacterial bandages and fabrics, dental amalgam, and silver salts that help prevent infections in newborns. It's also used to treat dermatological problems and certain types of cancer.
• Water purification systems, washing machines, air conditioners, and refrigeration. NASA used silver to sterilize recycled water aboard the space shuttle.
• Food packaging and preservation. Manufacturers of commercial ice machines are using silver-embedded hoses, clamps, pipe fittings, and in other places where gunk can build up and harbor bacteria. Meat processors use silver-embedded tables, grinders, tools, and hooks. Silver is used to keep fruit, vegetables, and cut flowers fresh while in transit.
• Public hygiene, such as antimicrobial protection of telephone receivers, door handles, bed rails, toilet seats, counter tops, children's toys, socks, underwear, bed linen, towels, etc.
• Other wide-ranging consumer products used every day: makeup, antibacterial soaps and kitchenware, hand and air sanitizers, and facial creams and masks.

Though the total contribution from these new silver uses is relatively modest, the Silver Institute rather dryly forecasts that "there is a potential for a number of these segments to boost their silver consumption." As you can see in the chart below, its forecast for silver demand for new industrial uses projects that the biggest increases will be in batteries, SSL, and RFID.



The primary uses for silver are growing, too. For example, the automobile industry is increasing consumption, due to both increases in the number of vehicles manufactured and the expanded use of electrical contacts. As the number of improvements in vehicles increase, so does the amount of silver used. For example, silver is used to control seat and mirror adjustments, windshield wipers, and manage navigation systems.
Based on their research, the Silver Institute forecasts that industrial usage will rise to 665.9 million troy ounces by 2015, and account for more than 60% of total fabrication demand.




What It Means For Investors

Since half of silver demand is for industrial purposes, it can act like an industrial metal in addition to its precious metal component. This means it's susceptible to more forces than gold, making it more volatile, as well as more difficult to predict its future price.

Conclusions:

1. The solar industry has great potential to become one of the more important sources of silver demand. This will lend strong support to prices. This industry had zero impact on silver 10 years ago; it now represents 10% of total industrial demand.And it's not just Japan. According to a news report, 102 countries are now installing solar panels -- from just 18 two years ago. Heavy and/or growing usage is reported in Germany, Italy, Japan, France, Belgium, Portugal, Spain, the U.S., Australia, and Asia, including China and India.
2. It appears that the development of the solar industry didn't occur as a result of natural forces, since to a large degree, it was initiated by government subsidies that supported the industry (and indirectly, the silver price). You may like or not like these market interventions, but as investors, it's important to recognize these trends, regardless of whether we agree with them. It's particularly important to keep an eye on these subsidies, as they could vanish if cash-strapped governments change their priorities. That won't happen overnight, however, so we should have ample warning.
3. Due to its unique properties, the number of applications for silver continues to grow. Researchers at the Silver Institute are upbeat about the future for silver industrial demand. That's no surprise, but it doesn't make them wrong -- the implication here is that only the worst type of economy would have a negative impact on demand.
4. If demand grows fast enough, it could impact not only the price, but the availability of the metal, in spite of rising mine production. If that happens, bullion purchase premiums will rise as supply becomes tighter.

The bottom line on the above is that the growing number of industrial applications for silver represents a long-term shift in this market. Increasingly diverse usage is not only here to stay, but will continue to grow, supporting the price and impacting the balance of supply and demand.

For investors, the thing to keep in mind is that while long-term prospects for silver prices are extremely bullish, to the degree prices are driven by this increased industrial demand, they are vulnerable to economic correction/contraction in the short term.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Solar Incentives Slashed Under New Rules

The Baillieu government has cut incentives for rooftop solar panels for next year as part of a shake-up of how small-scale renewable energy is priced in the state.

The changes reduce the Victorian feed-in-tariff for solar to eight cents for each kilowatt hour fed into the grid in 2013 - down from the existing rate of 25 cents - and fulfils recommendations by the state's competition advisory body.

The changes will not affect customers with existing contracts and tariff rates. Households that have paperwork lodged by September 30 with electricity suppliers can also still get access to the existing 25-cent tariff.

A review released today by the Victorian Competition and Efficiency Commission recommends a six-to-eight cents a kilowatt hour tariff be put in place, with the government accepting the top end of that range for 2013.

The tariff will then be adjusted by the government each year in 2014, 2015 and 2016 based on the wholesale electricity price, before moving to a fully floating market price in 2017.

The tariff scheme will also be opened to other forms of renewable energy systems generating 100 kilowatts or less.

The changes fall short of calls by the renewable energy industry that a fair rate of tariff for solar was 12 to 16 cents per kilowatt-hour.

Announcing the changes this afternoon, Energy Minister Michael O'Brien said the falling costs of solar panel systems and rising power prices meant households were taking up solar without the need for over-generous subsidies from other power users.

He said an older 60-cents per kilowatt-hour tariff — closed by the Baillieu government last year — would cost Victorian households $41 million a year to 2024 through electricity bills in subsidies to homes with solar panels.

"People in public housing, tenants who cannot access solar, are paying higher electricity bills in order to subsidise the rooftop solar for other people. Now that wasn't sustainable at those rates, they were over generous," Mr O'Brien said.

Labor's energy spokeswoman, Lily D'Ambrosio, criticised the decision, saying thousands of Victorian families were installing solar panels to reduce their power bills amid increasing cost-of-living pressures.

''The Baillieu government has again shown it just doesn’t care about supporting families who want to reduce their energy costs while also doing their bit for the environment,'' she said.

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Fotowatio Plans to Build Australia’s Largest Solar-Power Project

Fotowatio Renewable Ventures, the solar-power plant developer backed by U.S. energy investor Denham Capital Management LP, won the right to build a 20-megawatt project near Australia’s capital.

Fotowatio will participate in the Australian Capital Territory’s feed-in tariff program, which rewards generators of solar power by paying above-market prices for the electricity, Simon Corbell, ACT minister for the environment and sustainable development, said today in a statement.

The Royalla solar farm, to be built about 25 kilometers (16 miles) south of Canberra, will become the largest in Australia by 2014, according to the statement. The venture will help in an effort to lower carbon emissions and shift away from fossil fuels, the ACT government said.

Fotowatio, which is based in the Netherlands, sought a new project in Australia after losing a competition earlier this year for federal government funds to build a large-scale solar plant in New South Wales state. Denham Capital in March reached an agreement with Fotowatio to invest $190 million in solar projects in markets including Australia.