Ted Sullivan's Interview on the State of the Solar Market Part I
Earlier this month a new report from Lux Research entitled “Solar State of the Market Q3 2008: The Rocky Road to $100 Billion," shed some light on changes that will likely transform the solar industry, creating a market where sales grow dramatically, but it is increasingly difficult for companies to profit. To get more insight on the subject, we were able to arrange an interview with Ted Sullivan, Senior Analyst at Lux Research. Here is what he had to say:
Bright Hub: Your report “Solar State of the Market Q3 2008: The Rocky Road to $100 Billion" attributes the oversupply of solar power as a major factor that will result in significant price drops. What does this mean for end users?
Ted Sullivan: Indeed, we have been forecasting price declines of 20 percent or more for some time now as modules supplies increase. This will obviously mean more choice for the end customer, who will see an end to solar module makers secretly shipping modules to Spain for higher price points, which has driven down available supply in the U.S. and Germany. Additionally, it will of course reduce the price significantly for consumers, making solar a more viable option for residential, commercial and utility customers alike.
BH: Why is the availability of polysilicon so crucial to solar market growth?
TS: Polysilicon is the key material feedstock at the root of the crystalline silicon value chain. Since crystalline silicon is the dominant technology -- currently holding roughly 85 percent of the market – the shortage of polysilicon has stifled growth of crystalline silicon supply. Going forward, however, polysilicon will decrease in importance with respect to the solar market's growth, as more suppliers emerge with thin film, concentrating photovoltaic, solar thermal, and other technologies, which do not require polysilicon.
BH: What has been the biggest hold up in solar deployment in the United States?
TS: Cost and regulation. Currently, solar is economical without subsidies only in a few places, typically off-grid locations or places with incredibly high electricity rates, such as Japan. The U.S., like Germany, has instituted incentives to spur the development of solar. However, these incentives are hamstrung by myriad bureaucratic requirements and certifications that actually increase the cost of solar back to just below the un-subsidized levels. For example, solar farms in New Jersey take as long as 15 months to approve and certify.