Bright lights ahead for solar in Asia

The total investment in clean energy projects in 2012 may have taken a slight hit from last year's US$280 billion figure, but funds are still being pumped into solar projects. According to Bloomberg New Energy Finance (BNEF)'s Asia-Pacific Head Milo Sjardin, slightly less than US$150 billion went into solar energy last year, and this year's figure is expected to reach around US$160 billion.

Sjardin was among the solar energy researchers and corporates speaking at the Scientists and Solar Leaders Dialogue, which was part of the PV Asia Pacific Conference at SIEW 2012.

Painting an optimistic outlook for the industry, he noted that Bloomberg research indicated total global solar installation capacity will reach 46.7GW in 2014, up from an estimated 35GW in 2012. At the same time, an increasing number of new projects are shifting to Asia, with China (US$30 billion of investments in 2011), Australia (US$7 billion of investments in 2011), India, Thailand, South Korea, Taiwan leading the pack.

"Within the last two years, we have seen the importance of solar energy shoot up, with about 60 percent of money expected to go into the technology in 2012. Yet, pricing has been challenging, especially over the last year, and it will remain challenging for some time," said Sjardin. He explained that there has been consolidation in the industry, with a number of companies going out of business, and of late, there has also been a slowdown in supply.

Asia, he said, would likely experience a trend that swept across Europe--with a large quantity of solar installations coming on-grid and having an impact on the power market. Similarly, Australia and East Asia would likely have more solar installations in the future. However, the availability of financing remains a barrier to further market development as feed-in-tariffs (FiTs) are not developed enough in the region.

Australian National University's Professor Andrew Blakers pointed out that Australia will have about 2.2GW capacity installed by the end of 2012, almost entirely on rooftops. This is driven by the high cost of power in the country which makes it economically feasible for consumers to opt for private installations. However, the trend is currently being pushed back by both the rise in federal taxes and utilities changing their rate structure to charge more for grid connection but less for the power itself, said Prof Blakers. However the actual impact of this move on the demand for solar technology in Australia is yet to be determined.

As for the largest markets in the Asia-Pacific region--India and China--Prof Joachim Luther, from the Solar Energy Research Institute of Singapore (SERIS) said they seemed to be increasing certain trade barriers. India, he said, had passed a law instituting requirements for Indian-made modules and solar cells. China, he added, did not have such laws, but "prices for the locally-produced and installed equipment are very low. So the market is open to the foreign competitors as long as you can match the price".

As for the rest of the regional markets, FITs have been introduced or considered in several markets, including Thailand, Malaysia, and the Philippines. If introduced properly, FITs will encourage private investment in solar energy, thus increasing its adoption.

The speakers also agreed that there were technological considerations that would impact the adoption of solar installations. While crystalline silicon is likely to remain the main technology for the region--given the recent reduction in price and size of cells--manufacturers of solar modules for Asia will need to ensure that these are durable enough to withstand weather conditions. This is because most module tests are done under European climate conditions, and hence some form of certification for the Asian market may be required.

Speaking after Ross, Sydney's Manager of the City Infrastructure & Traffic Operations, George Angelis, gave his views on how to make cities greener, with Sydney as a case study. Sydney has an LED lighting project to cut greenhouse gas emissions by half and to attain greater sustainability by 2030. After a trial in 2009, the rollout LED project led by GE Lighting and UGL Ltd, which commenced in March 2012, has already generated positive outcomes: 45.1 percent savings and a reduction of 1,072 tonnes of CO2.

By :Irena Mehta, INSEAD