In a White House blog post, Chopra asked, "Why can’t the same common-sense concept be applied to the energy industry with a 'Green Button'?  Consumers should have access to their energy usage information.  It should be easily downloadable and in an easy-to-read format offered by their utility or retail energy service provider." Just recently, as Jeff St. John reported, California's largest utilities have risen to the occasion to work on safe, secure ways to share their customers' energy data.

No successor to Chopra has yet been chosen.

Jeannine Sargent was appointed president of Flextronics Renewable Energy, a division of Singapore's Flextronics (NASDAQ:FLEX).  Sargent is executive chairman at AstroWatt, EIR at Crosslink Capital, and former CEO of Oerlikon Solar.
 
 

SolarCity, the solar financier and installer firm, appointed Toby Corey as chief revenue officer. Corey was co-founder and former president and COO of USWeb. (See "Who Reigns Supreme in Residential Solar".)

As part of the completion of production for the massive 30-megawatt CPV installation in Alamosa, Colorado, Amonix contractor Flextronics laid off about 200 people, or two-thirds of its workforce. However, the move is less a layoff and more a retooling of the factory for its next-generation CPV product, according to the company.

Go Green

Keep in mind that the study was commissioned by CASE, the Coalition for Affordable Solar Energy — the group that opposes the tariffs sought by SolarWorld and its anti-dumping claims with the Department of Commerce.

Jigar Shah, President of CASE, said, "We are greatly concerned over the adverse impact of tariffs." He called the likely job losses "staggering" and potentially "devastating" to American workers.

The report looked at 50 percent and 100 percent tariff scenarios. The author of the report said a 50 percent tariff will effectively shut the majority of Chinese imports out of the U.S. and result in a job loss of 15,000 to 50,000 — even accounting for production gains in the U.S. The report also considers that impact of Chinese retaliation in importing polysilicon, which could result in a loss of 11,000 jobs in 2012, for a total of up to 60,000 jobs lost by 2014.

The author of the report did acknowledge that there would be some gains among U.S.-based module producers — albeit at higher module prices. GTM Research's Shyam Mehta has said that only about 6 percent of the world's solar panels are made in the U.S., all in highly automated factories. In other words, solar panel manufacturing is not a labor- or jobs-rich industry in this country. The jobs are created in downstream solar industries such as installation and project development.

According to The Brattle Group’s analysis, the imposition of tariffs will “slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and power producers, resulting in substantial job losses.”

Both tariff scenarios are lower than the up to 250 percent tariffs sought by SolarWorld. 

In a press release, Jigar Shah also noted that "the findings of this study are consistent with a recent story (“Get-Tough Policy on Chinese Tires Falls Flat”) in The Wall Street Journal in regard to tariffs placed on Chinese tires. As the Journal reported, 'The measure was meant to whack imports of passenger and light-truck tires and give a boost to manufacturers and job creation in the U.S. Yet, for a variety of reasons, it has apparently done little of either — and has surely raised prices for consumers.' The WSJ tire story is illustrative of the law of unintended consequences in these types of trade cases."

Shah added, “Imposing tariffs on imported Chinese solar modules will have the same perverse results.”
N

Go Green

The ISO has just released a five-year strategic plan that lays out what needs to be done in four steps.

First, according to the ISO’s CEO Steve Berberich, “We’ve been working on — and will continue to work on — our support of the state’s ambitious energy and environmental goal of 33 percent renewables.” The ISO, Berberich said, has “been doing studies to find out how much capacity we need on the system and how much ramping we will need when the sun doesn’t shine and the wind doesn’t blow.”

It is also working to make sure California has a reliable, cost-effective transmission system with adequate interconnections. Berberich said the ISO hopes to control costs by efficiently interconnecting new transmission with existing lines so as to rationalize development. The newest iteration of the ISO’s annual transmission plan proposes 29 new “reliability-driven transmission projects” at a cost of $ 647 million. That would add to the state’s $ 10.5 billion, 545-project transmission buildout, ongoing since 1998. 

Second, Berberich said, is making sure the ISO has enough non-renewable generation. “What we’re going to find with the generation we have now,” he explained, “are three forces acting on it.”

First, traditional generators are going to be selling less electricity as more renewable capacity is added. Second, there will be excess capacity between 2012 and 2017. And third, between 2017 and 2025, about a quarter of the conventional generation will be retired.

Less well known than the 33 percent mandate is California’s requirement that, as of 2017, power plants using coastal and estuary waters for cooling be retrofitted, repowered or retired. The state’s two nuclear plants have until 2024 to do this. This affects 11 natural gas plants providing 12,000 megawatts of capacity on the ISO grid.

“It takes five to seven or more years to develop a generator,” Berberich said. “When you look out to 2017, you don’t have a lot of years left.” To back up renewables, the conventional fleet must be as clean and as little used as possible, Berberich said, “but it has to be there." He added, "we have to act now to keep the capacity on the system.”

The third strategy, Berberich said, is to make sure state agencies, especially the California Public Utilities Commission (CPUC), the California Energy Commission (CEC) and the ISO, can “connect the dots.”

One example of connecting dots is demand response. “If we had a vibrant demand response program here in the state, I would make sure it was in our assumptions. But we don’t,” Berberich said. “It’s up to the CPUC to get it launched, [along with] energy efficiency. And electric cars — how do we make sure they charge at night as opposed to the middle of the day?” If state agencies don’t "connect the dots" on these issues, the ISO’s only alternative is new capacity, Berberich explained.

Fourth, Berberich said, is collaborating with adjacent balancing areas to take the strengths that each has to offset weaknesses. Giving the ISO access to less costly out-of-state renewables could stimulate a healthy competition. And access to unused out-of-state conventional generation could help balance California’s variable renewables. Both options, he said, “could provide value to the ratepayer.”

Though Berberich stressed that the ISO is building all the capabilities necessary to smooth the addition of variable renewables, it was clear the supply of conventional generation looms large for him. “Assuming marginal load growth as the economy grows,” he said, “and taking out all the once-through cools, except the nuclear units, you have approximately 4,600 megawatts of ramping resources that you need by 2020.”

The flexibility offered by conventional thermal capacity, Berberich said, becomes progressively more vital as the ISO integrates more renewables. “We’ve had a couple of instances where wind has run out 800 megawatts in a half hour,” he said, “and that’s with about 3,500 megawatts of wind on the system. If you triple that, you can triple the run-out. We need to be able to respond to that.”

To reduce dependence on fossil generation, the ISO has introduced a flexible power market operating at sub-hourly intervals with advanced forecasting for wind and solar and in an expanded balancing area, Berberich said.

But the ISO also carries “about 450 megawatts of regulation up and about 350 megawatts of regulation down, and we manage the system on a four-second basis,” he explained. “When you run out 800 megawatts of wind, you exceed the amount of regulation and you get into reserves. When you get into reserves, you have the risk of a reliability issue. That’s with 3,500 megawatts of wind. Let’s say you triple that and you have a run-out of 2,400 megawatts of wind — you’ve exhausted the regulation and you’ve exhausted all your reserves, as well.”

As the system operator, Berberich said, “we have to deal with asymmetric risk. By that, I mean we can’t afford to have reliability issues on the system. In a perverse way, if we start having reliability issues on the system, that’s the quickest way to derail renewable development. So keeping a reliable system is part and parcel of supporting renewable integration.”

Go Green

· The U.S. Dept. of Commerce on Jan. 27, 2012 makes a critical circumstances finding on Chinese solar cells/panels.

· The finding was based on import data from Suntech Power and Trina Solar [Editor's note: see Trina response here] for the three-month periods of October to December 2011 vs. July to September 2011 and the four-month periods of September to December vs. May to August 2011.

· All the data points show that imports tracked greater than 15 percent in quantity and value, and in Department of Commerce parlance, this degree of activity is termed as 'Massive' if it happens in a short period of time.

· U.S. Customs and Border Protection's Port Import Export Reporting Service (PIERS) data shows a massive surge in solar cell/module imports in recent months. Suntech Power's imports have surged 76 percent in November 2011, compared with October 2011, and Trina Solar's imports have risen 209 percent in the 1H December 2011, compared with the 1H November 2011.

· We also note that PIERS data shows that Chinese imports of solar cells/modules in January through November 2011 are up 346 percent by quantity and 138 percent by value. In November 2011 alone, Chinese solar cell/module imports surged 438 percent in volume and 47 percent in value compared to November 2010.

· The critical circumstances finding is likely based on PIERS data, and if the Department of Commerce imposes countervailing duties (CVD or anti-subsidy), they will apply 90 days retroactively to all Chinese solar cell/module imports brought into the U.S. from December 3, 2011.

· We note that the preliminary determination on CVD is now scheduled for March 2, 2012 and was recently postponed from February 13, 2012, and was also previously postponed from January 12, 2012. We believe further delays are unlikely.

· We note that aside from CVD duties, the Department of Commerce is scheduled to issue a preliminary ruling on anti-dumping duties (AD) on March 27, 2012, with a separate finding on "critical circumstances" for the anti-dumping investigation. Further, a final determination of both CVD and AD will only be complete by first week of October 2012.

Bottom Line

· The "critical circumstances" finding is the writing on the wall for Chinese solar cell/module imports in terms of what to expect on March 2, 2012. The U.S. is sending a clear signal that rules of engagement on trade do matter.

· Given compelling evidence of China's state-sponsored asymmetric competition and predatory capitalism in solar PV, we are firm in our view that China's abuse of competitive/trade rules has destroyed capital efficiency, created structural imbalances across the industry, and suppressed price discovery, capital formation, risk and mitigation.

· Solar PV stocks are recovering from the sharp and vicious correction seen in 2011, and trade on tangible book value (TBV) based on survival economics, not earnings. We do not expect earnings for most c-Si players until 4Q12. We maintain our constructive stance on the sector (since November 30, 2011) despite ongoing challenges in the U.S., Germany and China, as cost elasticity will take time but will catch up to price elasticity.

· Despite some cries from solar rooftops that the U.S. imposition of tariffs on Chinese solar cells/modules will lead to major job losses, we believe that the solar industry and companies will adjust to the altered dynamic as they have to the reduction of subsidies every year, and if anything, will emerge stronger based on innovation and healthy competition.

 Ample Evidence in the Public Domain

• As we noted previously, the disconnect between solar module ASP and cost is not easy to dismiss. For 4Q11, shipment-weighted ASP guidance for Chinese solar PV modules tracks $ 1.04/W, but actual ASPs will likely be below cost, given module pricing in the ~$ 0.80/Wp to $ 0.90/Wp range in December, which saw a dramatic ramp in installations.
 
• We note that costs are sticky (despite lower poly/materials costs) and estimate that the Chinese c-Si module cost structure will track ~$ 1.03/Wp (including ~$ 0.07 adjustment for shipping, warranty, insurance, capacity ramp, and stock compensation).
 
• For reference, 3Q11 shipment-weighted ASP for publicly listed Chinese solar PV companies was ~$ 1.28/W versus costs of ~$ 1.24/W (and ~$ 1.15/W normalizing for write-offs). This is for leading, publicly listed companies and not the second- and third-tier names in the private domain that are largely scale- and/or cost-challenged. However, the true cost structure stacks up much higher when extensive, wide-ranging direct and indirect subsidies and other costs are included.
 

***
 
Hari Chandra Polavarapu is the Managing Director of Solar/Cleantech Research at AURIGA USA LLC.

Go Green

In response to those controversies, major renewable energy projects got some not-so-great news from Los Angeles County’s Board of Supervisors in the last week of January. The Supervisors’ decisions threaten California Governor Jerry Brown’s ambition to obtain 33 percent of the state’s power from renewables by 2020.

NextEra Energy’s 200-megawatt Blue Sky wind project and Element Power’s 250-megawatt solar-wind hybrid project were both denied permits for meteorological towers by the Supervisors. Without the data that can be gleaned from those towers, those projects will not be able to obtain financing.

Developers are flocking to L.A. County’s Antelope Valley because of enormous wind and solar resources there and the sizable transmission system being developed by Southern California Edison (SCE). When complete, SCE’s lines will deliver thousands of megawatts of electricity generated by Antelope Valley’s wind and sun to California’s populous urban centers.

The controversies center on the ambiguous term 'mitigation.' It was originally associated with the impacts associated with the development of renewables. If harms could not be avoided, they might be mitigated by preserving adjacent portions of land for habitat, preservation and recreation.

More recently, 'mitigation' has come to also mean something like compensation to the communities being impacted by the projects. Neighbors of large projects contend that upheavals from construction and the interruptions of life as it was before development require this second kind of mitigation.

Silverado Power has a different approach, with which it hopes to minimize the need for both kinds of mitigation by being in touch with the community early and identifying the right sites.

Silverado was founded in 2010 by former executives of Recurrent Energy and Renewable Ventures. It is backed by Portugal’s Martifer Solar, which has recently been installing solar at the rate of 100 megawatts a year, according to Silverado Manager of Business Development Chris Wiedemann.

Silverado Power has 16,000 acres of land under site control and approximately three gigawatts of interconnection positions allotted to it across the U.S., largely in the Southwest. It has been granted 355 megawatts of use permits in the region and expects to soon have some 500 megawatts more.

Antelope Valley was one of the company’s first targets, Wiedemann said. But the company was aware of the mitigation controversies swirling around Antelope Valley Solar Ranch One, the 230-megawatt photovoltaic undertaking First Solar bought from NextLight in 2009 and is now building for Exelon, which it sold to last year. 

Drawing on the experience of “other players in the community who have had varying response to community outreach,” Wiedemann said, Silverado chose to aim for smaller, lower-profile projects. “Our focus in that region is between five and 20 megawatts” and is “interconnection-driven,” he continued.

That approach, Wiedemann noted, reduces the need for mitigation of the first variety through the selection of land “that has been previously disturbed: retired farm grounds or properties that are being actively dry-farmed or grazed.” This avoids “major mitigation hurdles” and “major backlash” from community groups, Wiedemann explained, and “takes the controversial issues out of the picture.”

An indication of the soundness of Silverado’s strategy, Wiedemann said, is that that company was "awarded 100 megawatts of PPAs [power purchase agreements] from SCE in the 2010 bidding for under-20-megawatt projects.”

Initially, Silverado has narrowed its focus to three L.A. County projects, Central Antelope Dry Ranch (52 megawatts), Lancaster WAD (5 megawatts) and Silver Sun Greenworks (20 megawatts).

They have received three conditional use permits (CUPs) from the City of Lancaster and one from the City of Palmdale, Wiedemann said. But those cities welcome renewables developers. The prickly and passionate stewards of L.A. County’s high desert are another matter.

“One of the biggest hurdles facing these projects right now is permitting,” Wiedemann said. “We’re putting a lot of time and energy into the L.A. County approval process” and “working very closely with County planners” so as to move ahead with development and the “jobs and investment” it will mean for the region.

As to the second type of mitigation, Wiedemann said, “Our approach has been to get out there early, meet with these groups, present the projects, address concerns in the earlier stages of development and not do an eleventh-hour outreach approach. We see ourselves as long-term community members and participants, and the only way to validate that is to get in front of these folks early and listen to the feedback.” Silverado, he added, has been in contact with “a majority of the town councils in the region.”

Demonstrating the challenge developers face in the Antelope Valley, a local Town Council member’s comment on the vigorous Silverado outreach was, “You better tell them to get their asses over here.”

Wiedemann is nevertheless cautiously optimistic. “Our hope is to maintain a strong relationship with the local groups and interests,” he said. “What we hope will not happen is being [viewed as] guilty by association with some of these other projects that are sited in less optimal areas. That’s the larger risk. Our process and our siting strategy will hopefully prevail: Smaller projects, lower profile and siting away from sensitive biological and cultural resources and local landmarks.”

Silverado, Wiedemann said, intends to be “a long-term partner in these communities, not a fly-by-night developer that comes and goes.”

Go Green

Ira Ehrenpreis is the cleantech partner at VC-investment firm Technology Partners. For the eighth year in a row, Ehrenpreis is serving as the Conference Chairman of the Clean-Tech Investor Summit today and tomorrow in Palm Springs, Ca. He has been investing in cleantech since long before it was called 'cleantech.'

When Ehrenpreis first started investing in cleantech, "cleantech was niche, not mainstream" and represented less than one percent of the venture capital asset class. Today, cleantech is one of the fastest-growing sectors in the venture capital business.

VC investment in U.S. cleantech companies hit $ 4.9 billion in 2011, a drop of 4.5 percent in terms of capital invested compared to 2010, according to an Ernst & Young study based on info from Dow Jones VentureSource. This still represents a 29 percent increase from the $ 3.8 billion raised in 2009. 

"VCs would show the door to an entrepreneur without a long-term business plan," said Ehrenpreis, bemoaning the state of U.S. energy policy and its lack of a long-term plan.

"We're fighting to provide energy for the 1.3 billion people who lack access to electricity," added Ehrenpresis as he spoke about the $ 1 trillion global energy market, adding, "We're fighting for cheap, clean energy for our children without destroying the environment."

Ehrenpreis' main point in his kick-off speech was that "innovation is going to be the catalyst that changes the trajectory of the cleantech sector."

With regards to cleantech deployment, Ehrenpreis said, "While I've never been more bearish on U.S. cleantech, I've never been more bullish about global cleantech." He noted that R&D investment in energy is 0.3 percent of sales compared to software and pharma at more than 10 percent of sales.

Ehrenpreis addressed the misinformation in the media that the story of solar is not the story of Solyndra, but rather the 64 gigawatts of solar deployed cumulatively across the globe and the price of solar falling from $ 25 per watt to $ 1 per watt. He noted that the high-profile failures at Solyndra and Evergreen are just part of the Darwinian struggle in the cleantech business.

He acknowledged that there are challenges but reminded the crowd that the past 8 years have seen the emergence of the smart grid, new materials, new sources of energy, and new electric vehicles.

And Ehrenpreis pointed to the lesson that Steve Jobs could teach the cleantech sector — Jobs' maniacal focus on innovation — whether it be the iPhone or the iPad or the iPod. Ehrenpreis sees the cleantech sector as waiting for a revolutionary like Jobs to change the industry.

Ehrenpreis closed his speech with this thought: "To all the cleantech entrepreneurs around the world, come with us and help change the world of energy — and the world we're leaving to our children and grandchildren."

***

Ehrenpreis is on the boards of Accelergy, CoalTek, Deeya, FloDesign, PowerGenix, Solexel, and Tesla.  He is also an investor in Alta Devices and Abound Solar.

Go Green

Without met tower data, Element Power is unlikely to be able to obtain financing to proceed.

Across Antelope Valley on the southern slopes of the Tehachapi Mountains, enXco’s Pacific Wind-Catalina Solar project, fully permitted by Kern County, has begun construction. Pacific Wind will be 140 megawatts and Catalina Solar will be 110 megawatts. Conceived separately but almost immediately adjacent to one another, the installations will share a transmission gen-tie and facilities at the point of interconnection, according to enXco Vice President for Southwestern Region Development Mark Tholke. It will be, Tholke said, a “world-class solar-wind hybrid.”

The project is positioned to take advantage of the new Whirlwind substation that Southern California Edison (SCE) is building as part of the Tehachapi Renewable Transmission Project (TRTP) for thousands of new wind and solar megawatts. The high desert has one of the country’s richest wind resources and is also “great for solar,” Tholke said. “The insolation is strong and it’s a little cooler because we have some elevation.”

Though California’s transmission system operator has advanced its management of variability, Tholke explained, a hybrid project makes the task somewhat simpler because, he said, studies show that wind and solar generate at different times. “Wind,” Tholke said, “might feed the transmission system 30 percent to 40 percent of the time. When you layer in the solar, that puts more power onto those same lines.”

Solar-wind hybrids are not uncommon in backyard setups in the U.S. and around the world. Where there is no grid service or in locations where someone wants to minimize grid reliance, a combination of solar panels and a small wind turbine may capitalize on local resources.

According to China state news agency Xinhua, North China Grid Co., a subsidiary of State Grid Corp, China's biggest transmission operator, recently brought on-line a 140-megawatt wind-solar hybrid project composed of 100 megawatts of wind and 40 megawatts of PV solar. It may be the only generating full-size, utility-scale, solar-wind hybrid project in the world. Described as a “demonstration project” in Hebei Province, the project reportedly also incorporates a 20-megawatt battery storage capability.

There are small utility-scale U.S. experiments combining solar and wind around the country. The first and most widely known is Western Wind’s “fully integrated” 10.5-megawatt system in Arizona. It is composed of five two-megawatt Gamesa turbines and a 500-kilowatt Suntech crystalline photovoltaic solar array. A number of developers have announced plans to retrofit solar energy systems immediately adjacent to producing wind projects to test their grid operators’ capability to integrate the two.

There is nothing in the U.S. on the scale of the enXco undertaking. It will use 70 two-megawatt REPower turbines and it will be the biggest Solar Frontier copper indium gallium diselenide (CIGS) PV installation in the world. EnXco has long aspired to build a hybrid project, Tholke said, to show how effective it can be to feed the grid with both resources. The physical proximity of Pacific Wind and Catalina Solar offered the opportunity.

EnXco has other hybrid projects in various stages of development, and, Tholke said, the company remains interested in the concept’s potential. Building this one has taught them much. “There are lessons learned along the way,” he said. “It would have, for instance, been more efficient if we had figured out the mechanics of how to share the gen-tie earlier.”

EnXco did not encounter the kind of local opposition that waylaid Element Power. That is partially due to a tradition of energy development in Kern County that goes back to its days as an oil center. Another reason was what Tholke called “a robust outreach to landowners in the vicinity.” Finally, Tholke noted, the wind-solar project involved “over 300 landowners” and therefore offered a lot of people a personal interest in seeing it go forward.

In the Supervisors’ decision against Element Power, NextEra Energy was also denied new met tower permits for its proposed 200-megawatt Blue Sky project. Local opponents of Wildflower and Blue Sky regarded the Board’s rejection of the met tower applications as a vindication of their ecological concerns.

NextEra Energy’s response to the decision carried a different implication. “Our current focus is on projects further along in our pipeline and executing our 2012 wind development program,” noted NextEra Director of Communications Steven Stengel.

NextEra is the leading U.S. wind developer. The vital production tax credit (PTC) that gives the wind industry a fighting chance to compete with the heavily subsidized oil, natural gas and coal industries may not be extended this year by a gridlocked Congress. U.S. developers are scrambling to get every turbine they can into the ground before the PTC expires on December 31.

Element Power declined to comment on the Board’s decision but is in essentially the same position.

The companies are not as concerned with their opponents in Los Angeles County right now as they are with getting turbines built before the end of the year. And the Supervisors will be more inclined to grant their met tower permits after being re-elected in November, when Governor Brown’s favor will supersede voter sentiment. In the interim, neither developer will forget the rich resources, available transmission and huge nearby demand centers that have been seized on by enXco.

Go Green

What first Solar does in the next few years is important.

Which is why more than 200 people showed up to attend a presentation by Alex Panchula, First Solar's Manager of Performance Analysis, presented by the Silicon Valley PV Society chapter of the IEEE.  

Last week we looked at the market issues that are compelling First Solar to innovate "beyond the module."

This week — we'll look at some of those innovations and some of First Solar's deployments.

According to Panchula, First Solar must deploy 65 gigawatts over the next 10 years in order to thrive, instead of playing whack-a-mole and chasing subsidized markets. First Solar's goal is to get new sales from utility-scale power plants in sustainable markets by 2014. That means eliminating the dependency on subsidies and getting the price of solar down to levels where it is genuinely at grid-parity at utility scale in developing nations.

Panchula's presentation proclaims that, "Our low-cost technology and captive U.S. project pipeline will help us remain profitable in a shrinking, structurally imbalanced industry."

The First Solar strategy is to go after "open markets" at utility-scale. First Solar will not be addressing residential rooftops anytime soon.

The slide below shows a photo of the Aqua Caliente installation – a 290 megawatt (AC) project currently in construction. One of First Solar's cost reduction techniques is to build these massive projects quickly. At one point Agua Caliente was being built at a rate of 5 megawatts per day. That's more than 50,000 panels per day and about 35 acres per day at peak construction.

In "going beyond the module" First Solar looks to lower total solution costs in O&M, financing, balance of system, and cost of capital. Panchula remarked that the First Solar acquisition of RayTracker in 2011 was one of the moves to lower cost and optimize performance. Panchula spoke of more automated construction methods and lowering total BoS to $ 0.70 to $ 0.75 per watt — down from its current $ 1.00 per watt.
 

Recent records for CdTe module efficiency of 14.5 percent and small cell efficiency of 17.3 percent show that CdTe performance still has some life left in it. Panchula looked out towards 14.5 percent to 15 percent module efficiency by 2015.

uhugu

First Solar has over 2 gigawatts of utility-scale solar power plants constructed or under construction.

Go Green

The CASM statement said that CASM lauded "the U.S. Department of Commerce for taking expedited action against a massive, evasive surge of Chinese solar cell and panel imports ahead of Commerce’s first preliminary determination on duties, now scheduled for March 2, 2012.  Commerce’s finding of 'critical circumstances' means that if the agency imposes preliminary countervailing duties on March 2, the duties will apply to all imports of cells and modules from Chinese exporters that were brought into the United States starting Dec. 3, 2011."

That might be a bit of wishful thinking of behalf of the curiously timed release from CASM. According to sources close to the case, today’s news was simply an initial indication of how the Department of Commerce will rule on March 2 in its Countervailing Duties (CVD) preliminary determination.

The bar is typically low for critical circumstance decisions and there will be no reactive application of duties unless the ITC also issues a critical circumstances determination as part of its final investigation. This will not occur until July of this year and it is rare for ITC to find critical circumstances, according to the source.  

According to CASM's public relations group, Ogilvy, "This is the first time the Department has ever applied critical circumstances before a preliminary determination. This is a win for CASM and the U.S. solar manufacturing industry.  Moreover, it confirms our report from last week that the Chinese were pushing product into the US market to avoid tariffs."

CASM, the SolarWorld-headed coalition has estimated that "Chinese producers have more than doubled imports of crystalline silicon solar cells and modules in advance of potential U.S. government duties on those imports, according to an evaluation of U.S. Customs and Border Protection data. The coalition alleges that the recent "110 percent surge in import volume since July 2011 is further proof of illegal dumping and subsidies by Chinese solar producers and warrants a finding of critical circumstances that would apply retroactive duties to Chinese imports."

CASM cites Suntech and Trina Solar as ranking amongst those Chinese producers.

Trina Solar has responded with these points:

• We are opposed to any suggestion that our U.S. imports surged as the result of efforts to evade potential tariffs.
• Nearly all of Trina Solar's U.S. shipments served orders tied to the federal 1603 grant expiration. We stand by our practices and the fact that they matched an increase in overall U.S. market demand.
• Further, due to production cycle and delivery logistics, it is an established industry pattern to see the majority of any quarter's shipments occurring in the last month.

Here's the text of the statement from the Department of Commerce:

In summary, in accordance with section 703(e)(1) of the Act, we find that there is a reasonable basis to believe or suspect that certain subsidy allegations under investigation are inconsistent with the SCM Agreement, and we find that there have been massive imports of solar cells over a relatively short period from Suntech, Trina, and all other producers or exporters.

Given the analysis summarized above, and described in more detail in the Preliminary Critical Circumstances Memorandum, we preliminarily determine that critical circumstances exist with respect to imports of solar cells from the PRC for Suntech, Trina, and all other producers or exporters.

According to GTM Research's Shyam Mehta, only 6 percent of the world's solar panels are made in the U.S.

***

The SolarWorld/CASM solar panel anti-dumping and countervailing duties case is still percolating at the International Trade Administration. It's a case with long-ranging implications for U.S. and Chinese solar manufacturers and the entire U.S. solar ecosystem. We've covered the case in detail and have provided perspectives from a number of angles since its initial filing on October 19 of last year.

There's not much to do other than wait, now until March 2, and in the meantime the parties will busy themselves with publishing studies and launching further public relations campaigns.

***

The decision on countervailing duties will wait for another month.

According to the Department of Commerce, "SolarWorld made a second timely request on January 19, 2012, for further postponement of the preliminary countervailing duty determination by 18 days, to March 2, 2012" and the department "has found no compelling reason to deny the request."

***

In Obama's State of the Union address last week, he announced the creation of a Trade Enforcement Unit to investigate trade issues, saying, "I will not stand by when our competitors don’t play by the rules."
 

***

We've contacted the International Trade Administration and asked them about the process itself, and specifically, about how and if citizens and concerned parties (other than the claimant) can make their views or evidence available. We await their response.

Go Green

The firm combined expertise in high throughput manufacturing gained from the making of automotive and microelectronics assemblies and working with large thin substrates in the flat-panel displays to become the solar industry leader in the design and construction of thin film solar Fabs (solar module factories) and automated process tools.

The thin film module making process begins with glass and a thin film solar panel maker’s unique cell design, Willingham said. Initially, Schiller worked primarily with amorphous silicon designs. As thin film makers using newer formulations like cadmium telluride (CdTe) and copper indium gallium diselenide (CIGS) entered the market, they sought Schiller’s expertise, which does not depend on any specific cell technology.

To date, Willingham said, Schiller has brought its deep experience to the automation of eleven complete Fabs out of the “few of dozen in the world.” Nine are in full operation, one is ramping up and one is being delivered.

“Most are amorphous silicon,” Willingham said. “But we have also done CdTe and CIGS.” He could offer no more information without revealing proprietary information about the intensely competitive thin film industry. “In thin film, in particular,” he explained, “companies consider their own cell formula and method their secret to success and very private.”

Schiller’s automation work has been either in automating specific steps in the cell- and module-making process or in developing and implementing a complete and unique process design. The company's expertise has also been called on, Willingham said, to cope with high failure points in the manufacturing process like junction boxes, back plates, rail attachments, and framing systems. In both these roles, Schiller has the capability to design and build tools and/or plan how they will fit into the manufacturing process.

“Most thin film companies,” Willingham said, “have a technology they think is the superior way to put that thin-film solar cell on glass.” To turn technology into modules, Schiller manages the flow of substrates through its customers’ process tools. “Some of those tools we might provide, some of those tools they will design themselves and some of those tools they will buy from other people for whom that is their only business. In the end, they have a solar module.”

Schiller plays a similar role in turnkey manufacturing systems, adding to each to fit unique needs. In some cases, Schiller also works on the design of the process “to connect the factory together.” The entire process must be precisely automated because of the chemistries involved. A delay between steps could interrupt and even harm or ruin the product.

A large Fab can have up to 200 independent tools, each requiring monitoring and maintenance. Schiller oversees the flow of the process in the factory to minimize potentially devastating disruptions or unplanned downtime. Its unique Dynamic Buffering capability sustains Fab efficiency, automatically and without the need for operator intervention, even through unforeseen or emergency interruptions.

“It gets to be pretty complicated,” Willingham said. “If you think of a thin film Fab that’s going to make 120-to-150 megawatts a year, that’s upwards of a million substrates — pieces of glass — going through that factory. We provide all of the automation, the logic, the buffering, to manage all those substrates.”

Times are tumultuous in solar manufacturing. “There is much more supply of modules than there is demand right now,” Willingham said, but “the problem is more short-term. People have built way more modules and they’ve built way more capacity to build modules than is currently needed, [... so] 2012 will be a year in which there are too many modules for much if not all of the year.”

But business for Schiller’s BackBone and Pro-Load systems is good. “Mostly what we’re reading about is layoffs,” Willingham said. “We did not have any reduction in workforce in 2011 and none is anticipated. We’re busy as hell.” Their strategy is simple. “We’re doing it,” Willingham explained, “by aligning ourselves with the companies we believe will be the market leaders of tomorrow.”

Based on the orders it is getting — as well as those it is not getting — Schiller has a unique vantagepoint on the current turmoil in the solar panel business and a strong sense of who the winners and losers are likely to be.

“We believe the type of company that will survive is either a large producer or a very diversified producer,” Willingham said. “We think customers are going to prefer to buy from producers who have a diversified portfolio. They make modules, maybe they make light bulbs, maybe they make many technology products, but they have a lot of different business elements that allow them to be a very stable company,” Willingham explained, “because people want to buy modules from a company they believe will be around 10 years from now when they might have a warranty claim.”

Schiller has, Willingham said, focused its efforts on the needs of those kinds of companies.

“Companies that did a good job, that make good products, that have a good model, are going to have a hard time surviving if this goes on for a long time because they are so focused in solar,” Willingham said. “Nobody will buy the routine, but there is a market for things that are innovative. Things that improve your efficiency. Things that actually save you money with your existing factory. Schiller makes these products and that is why we are growing while the market struggles.”

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