Daily Archives: June 16, 2011

GT Solar bets on lighting apps for sapphire growth

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GT Solar International, a U.S. solar and LED equipment maker, forecast its sapphire materials business will contribute about a tenth of its fiscal 2012 sales as orders for general lighting applications pick up.

Sapphire is the main base used in making LEDs, an industry that GT Solar CEO Tom Gutierrez expects will expand rapidly as incandescent and compact fluorescent light (CFL) bulbs are replaced by the cheaper and environment-friendly LED bulbs.

The Merrimack, New Hampshire-headquartered company, which makes sapphire material used in the LED, medical and aerospace industries, expects the business to contribute $70-$90 million to its fiscal 2012 sales of more than a billion dollars.

The sapphire material business is a part of the company’s Crystal Systems segment, which also sells furnaces to companies looking to make their own sapphires. The entire segment reported revenue of $15.3 million for the fiscal year ended on April 2.

Its sapphire business backlog then included new orders worth more than $184.2 million, of which just $10 million was related to sapphire material contracts, with the rest coming from the furnace and other equipment orders.

But Gutierrez expects the demand for energy-efficient LEDs — touted as the future of the lighting industry — to grow despite the high investments required which have made its mass adoption slower than expected.

LED lights need to pay back hefty investments a lot quicker before they go mainstream, LED maker Cree’s CEO said at the Reuters Global Energy and Climate Summit on Monday.

GT Solar’s Gutierrez, however, said that as more capacity is brought on board, prices will fall, helping sales. He said the company’s customers, centered in South Korea and China, were not averse to operating in a low-margin, high-volume environment.

“Our Asian customers are looking to make 15-20 percent gross margins versus the much higher margins that other suppliers in the industry are making today, and so it will sort itself out,” he said on a conference call to discuss the company’s fast-growing sapphire business.

On Monday, GT Solar, which has won a string of contracts this year, substantially raised its April-June forecast due to higher revenue recognition in the quarter.

Shares of the company, which from August will be known as GT Advanced Technologies, rose 6 percent at $12.89 in morning trade on Nasdaq.

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IEEE sees solar as the winner among renewables in 10 years

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The Institute of Electrical and Electronics Engineers (IEEE), the organization behind standards such as WiFi, Wimax and hundreds of others, sees Solar energy as becoming the cheapest power source in ten years.

The organization, which is increasing its focus on Solar this year through the setting up of a journal and experts groups, is one of the few international bodies to throw its weight behind a single source of energy and hold it up as the definite candidate to bet on. Most other experts and bodies tend to see a combination of sources, such as Wind, geothermal and nuclear as the solution to getting out of the hydrocarbon problem.

The IEEE, after which many standards are named, is considered the world’s largest association of professionals — encompassing experts in nearly all fields from electronics to aviation.

The forecast, if it comes true, will also pose a challenge to countries such as Saudi Arabia which derive a lot of its income from its deposits of fossil fuel. Many such countries actively limit their production so that that the reserves last for 20-40 years more. If Solar is sure to become cheaper than fossil fuels, such countries would be better of producing as much as possible when there is still demand for such products.

IEEE says Solar has the potential to more than meet the entire energy requirement of the planet.

“The rate of energy from sunlight hitting the earth is of the order of 100,000 terawatts. Just a fraction is needed to meet the power needs of the entire globe, as it takes approximately 15 terawatts to power the earth,” it pointed out. “No other alternative source has the same potential,” says James Prendergast IEEE’s Executive Director

Currently, power produced from solar photovoltaic plants costs around 4 US cents (Rs 18) per unit, while coal powered plants produce a unit of power at around Rs 3 or 4, without including cost of pollution. Many governments, such as India’s, provide purchase guarantees for solar powered electricity production. India, for example, is offering around Rs 17 per unit of such electricity, under its massive Solar Mission.

However, global solar PV production is still minuscule — around 20-30 Gigawatt per year, not enough to even meet the incremental power demand for a country like India. India has a total of around 155 GW of capacity most of which is able to run 24-hours a day, compared to solar which runs effectively only for around 6 hours.

The production capacity, however, has been increasing at an average annual growth rate of more than 40 percent since 2000. At current trends, by 2050, it is expected that solar PV will provide 11 percent of global electricity production, corresponding to 3,000 gigawatts of cumulative installed capacity.

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India set to produce 700 MW solar power in 2011

India is on track to produce 700 megawatts of solar power at a cost of $2.2 billion by December, ahead of an initial target for an ambitious plan that seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022.

Under India’s Solar Mission , investors bid to build solar power plants and the winning bids are determined by the electricity tariff that they accept as viable. Such has been the interest that the government has been flooded with investment pledges for the first batch of projects rolling out in December.

India’s 20 GW solar plan is likely to attract overall investment of about $70 billion, the government has estimates. Issued in 2009, the plan envisages India producing 1,300 megawatts (MW) by 2013, another up to 10 GW by 2017 and the rest by 2022.

“The entire solar industry is no longer worried about the upheavals that are taking place in the European markets because they find a very new and very promising market is developing in India,” said Debashish Majumdar, chairman and managing director of Indian Renewable Energy Development Agency.

IREDA, a state-run agency, is the leader in the country’s solar energy financing.

“So far, every year the general mood was that nobody knew what would happen to the German policy or what would happen to Spanish policy,” said Majumdar, who attended a global summit on clean technologies in Munich last week.

Germany , the world’s top solar power producer with about 17 GW installed by end-2010, is considering cutting incentives for photovoltaic energy by an additional six percentage points in another step on March 1, 2012.

Germany, Spain , Italy, Japan and the United States are the leading producers of solar power in the world. While India’s solar sector remains a risky venture because of a shortage of data and trained manpower, such deficiencies also open up a huge market for expertise and technology such as Colorado-based Juwi Solar, Schneider , Schott Solar.

“The (Solar Mission’s) second phase would create a very large market for service providers, especially EPC contractors and people who can analyse data to ascertain how much resources like sunlight are available and how much (solar energy) is going to be produced,” Majumdar said.

“These agencies would get lots of business,” he told the Reuters Global Energy and Climate Summit in New Delhi, adding it was still not possible to determine the size of such a market.

EPC contractors handle the engineering, procurement and construction of solar power plants.

SUNSHINE POLICIES

If everything goes to plan, and the rollout of the first projects in December should be an indicator, solar would contribute the equivalent to one-eighth of India’s current installed power base by 2022.

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