Solar Frontier KK, whose parent company is one of Japan’s largest oil companies, is set to open what will be the largest solar-power installation in the world, at a cost of $1.25 billion. Just a couple of problems: low demand and low efficiency. From The Wall Street Journal:
But funneling profit from still-cash-rich oil refining into Showa Shell’s solar operations is a gamble. Nippon Oil Corp., which has become part of JX Holdings Inc., had forged a joint venture with Sanyo Electric Co. to build a solar-cell factory by the end of the fiscal year that ends in March. Those plans were put on hold, however, amid plunging prices for solar panels as a flood of entrants into the market have intensified competition.
Credit Suisse on Wednesday downgraded several solar-energy stocks, expressing concerns that demand can’t keep up with new supply.
A spokeswoman for Japan’s Sanyo Electric Co., which sells crystalline-silicon photovoltaic modules but not thin-film panels, says it is researching thin-film technology but doesn’t see it as a viable business option until its efficiency improves. Sanyo’s modules convert 18.6% of sunlight into energy, compared with 11% for Solar Frontier’s current thin-film panels.
Solar Frontier says panels from its new factory are expected to be 13% efficient, however, about what Sanyo says is viable.
The take-home points from this example (which, by the way, are the norm): (1) Renewable energies are fueled by government policy, not supply and demand. (2) Renewables energies are – currently – exercises in subsidizing inefficiency. (For more, see my previous post on the premature promise of renewables.)