INDUSTRYNEWS Italy tipped to boom in 2011
ITALY’S solar market is going into overdrive in the fourth quarter, setting the stage for a doubling in photovoltaic (PV) installations in 2011, as global investment flows into the country, according to the photovoltaic market research firm iSuppli.
Based on interviews with leading project developers and energy performance contractors in Italy, iSuppli predicts the country will install 975 megawatts (MW) worth of PV solar systems in the fourth quarter, doubling the 487 MW in the third quarter, and rising 239 percent from 288 MW during the fourth quarter of 2009. This fourth-quarter surge will cause installations in 2010 to rise to 1.9 gigawatts (GW), up 100 percent from 720 GW in 2009. The rise in installations will set the stage for a doubling of the market in 2011, with installations rising to 3.9 GW.
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“The strong fourth-quarter growth is a breakthrough for Italian PV installations, which had been limited to 300 MW, with growth propelled by installers rushing to take advantage of subsidies scheduled to expire soon,” said Dr. Henning Wicht, senior director and principal analyst for PV systems at iSuppli.
“Despite the expected FIT declines, the IRR of Solar investments in Italy still will be higher than anywhere else. As a result, installations in Italy will rise to approximately 1GW per quarter in 2011.”
Installations finished by the end of the year and connected to the grid by June 30, 2011, will still be able to benefit of the 2010 feed-in tariff (FIT) tariff of Italy’s Second Conto d’energia. Under the current FIT, and with installed system prices of 2,500 to 2,800 euros per kilowatt-peak units (kWp), a highly attractive internal rate of return (IRR) of 15 to 18 percent is possible in Italy. Italy’s IRR is alluring to solar investors given the depressing news about caps or severe reductions of solar FITs in France, the Czech Republic and Spain.
“True, Italian solar installations will drop at the start of the first quarter of 2011 but the decline is set to last only weeks with the rate of new installations to rise rapidly again following this period,” Wicht added.
Renewables on a par with Nuclear
ACCORDING to the most recent issue of the “Monthly Energy Review” by the U.S. Energy Information Administration (EIA), “nuclear electric power accounted for 11% of primary energy production and renewable energy accounted for 11% of primary energy production” during the first nine months of 2010.
More specifically, renewable energy sources accounted for 10.9% of domestic energy production and increased by 5.7% compared to the same period in 2009. Meanwhile, nuclear power accounted for 11.4% of domestic energy production but provided 0.5% less energy than a year earlier. Among the renewable energy sources, biomass and biofuels accounted for 51.95%, hydropower for 31.50%, wind for 10.52%, geothermal for 4.65%, and solar for 1.38%. Comparing the first three- quarters of 2010 against the same period in 2009, hydropower declined by 5.2%
but geothermal expanded by 1.8%, solar grew by 2.4%, biomass/biofuels increased by 10.0%, and wind grew by 26.7%; combined, non-hydro renewables expanded by 11.5%.
Preliminary data also show that fossil fuels accounted for 78% of primary energy production. Overall, U.S. primary energy production rose by 2% compared with the first nine months of 2009.
“Members of the incoming Congress are proposing to slash cost-effective funding for rapidly expanding renewable energy technologies while foolishly plowing ever- more federal dollars into the nuclear power black hole,” said Ken Bossong, Executive Director of the SUN DAY Campaign. “The numbers clearly show this would be betting on the obvious loser while ignoring the clearly emerging winner in the energy race.”
Some signs of trouble may lie ahead. For one, a risk to the positive market outlook exists in that the government might reduce the FIT quicker than scheduled. It is unlikely that authorities will be able to change the FIT before the third quarter. Official data from the state-run power management agency GSE could be delayed by as much as six months, resulting in the deferral of an assessment that would lead to FIT adjustments.
For their part, regional governments also might try to limit the amount of land used for solar, even though any such limitations must pass Italian federal law. Finally, the grid connection in Southern Italy will certainly prove more challenging than elsewhere, posing additional headaches. Just the same, if fourth-quarter 2010 figures for PV installations can rise at such healthy rates, project developers more than likely will be able to overcome difficulties in 2011.
And according to EIA’s latest “Electric Power Monthly,” renewable energy sources accounted for 10.18% of U.S. electrical generation during the first three- quarters of 2010. Compared to the same period in 2009, renewables grew by 2.2%. While conventional hydropower dropped by 5.2%, non-hydro renewable used in electrical generation expanded by 16.8% with geothermal growing by 4.9%, biomass by 5.5%, wind by 27.3%, and solar by 47.1%. Non-hydro renewables accounted for 3.9% of total electrical generation from January 1 - September 30, 2010, up from 3.5% the year before.
www.solar-pv-management.com Issue I 2011
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