{"id":99752,"date":"2016-12-19T11:00:09","date_gmt":"2016-12-19T16:00:09","guid":{"rendered":"http:\/\/countingpips.com\/?p=99752"},"modified":"2016-12-19T05:00:32","modified_gmt":"2016-12-19T10:00:32","slug":"solar-power-america-invented-it-china-owns-it-opportunity-springs-from-it","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/12\/solar-power-america-invented-it-china-owns-it-opportunity-springs-from-it\/","title":{"rendered":"Solar Power: America Invented It\u2026 China Owns It\u2026 Opportunity Springs From It"},"content":{"rendered":"
December 19, 2016<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Solar<\/p>\n

Americans invented photovoltaic technology. We used it to get to the moon. China may have cornered the market. But we have them right where we want them.<\/strong><\/i><\/p>\n

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\u201cWe argue so much about the silly politics of climate change and fail to recognize the gargantuan economic opportunity that this presents.\u201d<\/p>\n

So says Gregory Wilson, the co-director of the U.S. Department of Energy\u2019s National Center for Photovoltaics in a recent interview with ClimateWire\u2019s John Fialka.<\/p>\n

\u201cThe Chinese,\u201d he adds, \u201cseem to have recognized the significance of this opportunity.\u201d<\/p>\n

China has essentially cornered the global photovoltaic (PV) energy market. That\u2019s the kind of dominance that central planning \u2014 carried out via the National Energy Administration \u2014 can achieve.<\/p>

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Domestic energy demands driven by strong economic growth have forced decision-makers to consider all available options as they formulate China\u2019s famous five-year plans.<\/p>\n

Under the 13th plan, as MIT Technology Review<\/em> reported in March, China will add 15\u201320 gigawatts of solar capacity every year from 2016 through 2020.<\/p>\n

The Middle Kingdom\u2019s installed solar capacity is now 43.2 gigawatts. The global figure is 227.7 gigawatts.<\/p>\n

At its planned rate and the forecast pace of growth for the rest of the world <\/a>, China will account for 22\u201327% of global installed solar capacity by 2020, up from 19% today.<\/p>\n

There\u2019s a massive domestic opportunity. And there\u2019s a pretty big international opportunity as well.<\/p>\n

Indeed, China has already established a commanding lead on the cusp of what ClimateWire\u2019s Fialka wonders may be the \u201cPhotovoltaic Energy Era.\u201d<\/p>\n

\u201cThe Chinese,\u201d he adds, \u201cseem to have recognized the significance of this opportunity.\u201d<\/em><\/strong><\/p>\n

\u201cAn industry that has long been little more than a dream for governments, environmental activists and other strategists hoping to find ways to curb global warming,\u201d writes Fialka, \u201cblossomed into worldwide reality last year.\u201d<\/p>\n

According to the International Energy Agency, 2015 was a year of \u201cimpressive growth and acceleration of the global market deployment\u201d of PV.<\/p>\n

The world added 50.7 gigawatts of installed solar capacity last year, a 26.5% increase compared with 2014.<\/p>\n

As Fialka notes, \u201cNations from all regions reported to the International Energy Agency for the first time that their markets for what is known as photovoltaic energy were growing.\u201d<\/p>\n

Driving this growth is a continuing decline in costs for PV systems \u2014 a trend that\u2019s accelerated in 2016.<\/p>\n

The IEA reports that recent power purchase agreements for solar-generated electricity have been booked at record-low prices of 3 cents per kilowatt-hour.<\/p>\n

The U.S. Energy Information Administration reports, meanwhile, that the \u201clevelized cost of electricity\u201d from PV has declined by 79% since 2010, from $396.10 per megawatt-hour to $84.70.<\/p>\n

The irony is PV technology is a U.S. invention, a \u201cphenomenon\u2026 first observed and experimented with by scientists in Bell Laboratories\u201d in 1953. <\/a> PV helped us beat the Russians to the moon.<\/p>\n

The world added 50.7 gigawatts of installed solar capacity last year, a 26.5% increase compared with 2014.<\/em><\/strong><\/p>\n

High costs impeded solar\u2019s widespread adoption from the 1960s until well into the 21st century.<\/p>\n

But now, thanks to China, it\u2019s getting cheaper all the time.<\/p>\n

As Fialka reports:<\/p>\n

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According to U.S. Department of Energy experts and reports, the remaining two large American panel makers are now outsold by at least six Chinese competitors. China produces 40% of the world\u2019s panels versus 20% by U.S. companies, and it is continuing to expand its lead. Meanwhile, the world\u2019s solar market is generally regarded to have grown into a $100 billion-a-year business.<\/p>\n<\/blockquote>\n

China\u2019s central planners have stated that their solar and overall renewable ambitions (the 13th Five-Year Plan includes goals to more than double wind energy capacity and boost electric vehicles by a factor of 10) are about meeting the country\u2019s commitments under the Paris climate agreement.<\/p>\n

There\u2019s also a pollution factor.<\/p>\n

China, the world\u2019s biggest emitter of greenhouse gases such as carbon dioxide, leads the world in coal-fired generation capacity \u2014 solar is but a fraction of its overall energy portfolio.<\/p>\n

And that solar capacity often sits idle.<\/p>\n

China is making lots of PV panels. But it\u2019s not making much money amid a global solar panel glut.<\/p>\n

Meanwhile, major advances in the technology that could make solar as well as wind truly viable on a mass-consumer or even utility scale continue to be made in these United States.<\/p>\n

Researchers at the University of Texas at Austin, for example, recently published a paper describing a way of making lithium-sulfur batteries \u2014 which, says a Futurism report, are \u201ccapable of storing as much as five times more energy than lithium-ion batteries\u201d \u2014 that maximizes efficiency.<\/p>\n

The economic opportunity is not necessarily in the manufacture of PV panels.<\/p>\n

It lies in the adoption by traditionally risk-averse entities such as U.S. public utilities of new technologies.<\/p>\n

That PV costs are plummeting is enough for utilities to ask, as Michael Bolen of the Electric Power Research Institute put it for Fialka, \u201cHow can we take solar and put it into the generation mix and into the rate base in some form or fashion?\u201d<\/p>\n

We\u2019re moving out to the era of the government mandate \u2014 at least in the United States.<\/p>\n

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Upticks, Downticks<\/h2>\n

\"Downtick\" The Russell 2000 Index lost 1.2% last week, with a slow decline on Monday and Tuesday accelerating on Wednesday following the release of the Federal Open Market Committee\u2019s policy statement. A sharp rebound at Thursday\u2019s open put to rest fears of higher interest rates\u2019 longer-term impact on small-cap stocks. Meanwhile, the Russell 2000 is still up more than 20% for the year.<\/p>\n

\"Uptick\" The Fed raised its benchmark interest rate by 25 basis points, to a range of 0.5\u20130.75%. It\u2019s the first increase to the federal funds rate in a year and only the second in the last decade.<\/p>\n

\"Downtick\" Gold declined by nearly 3% last week and is now down by nearly 12% since Donald Trump\u2019s surprise victory in the U.S. presidential election.<\/p>\n

\"Uptick\" The yield on the 10-year U.S. Treasury note exceeded 2.5% for the first time in more than two years on Wednesday, December 14. In July, the 10-year yield hit an all-time low of 1.34%. The yield on the benchmark has nearly doubled in five months and now sits at 2.58%.<\/p>\n

\"Downtick\" Interesting historic point courtesy of \u201cDowntown\u201d Josh Brown of The Reformed Broker: \u201c<\/strong>Every \u2018Unified Republican Government\u2019 Ever Has Led to a Financial Crash<\/strong><\/a>.\u201d <\/strong>Josh links to work done by the anonymous blogger Wall Street Ranter<\/strong><\/a>:<\/p>\n

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In fact, the\u00a0ONLY THREE PERIODS<\/strong>\u00a0of extended unified Republican governments going back to 1900 ALL DIRECTLY led to banking crises\u2026 Arguably the three worst in U.S. history. To be clear, I am defining \u201cextended\u201d unified governments as anytime they control the House, Senate and White House for at least\u00a0four years<\/strong>. This does not include short two-year stints since it\u2019s hard to screw things up that quick (FYI: There was only one period of that anyway, 1953\u201355.)\u00a0You can look up the periods yourself here<\/strong><\/a>\u00a0and more detail here<\/strong><\/a>.<\/p>\n<\/blockquote>\n

\"Uptick\" The IHS Markit Flash U.S. Manufacturing PMI reached a 21-month high during December<\/strong><\/a>. \u201cU.S. manufacturers reported a strong end to 2016, with business conditions improving at the fastest pace since March 2015.\u201d The manufacturing purchasing managers\u2019 index ticked up to 54.2 in December, from 54.1 in November, as the recovery from the May 2016 post-crisis low of 50.7 continued.<\/p>\n

\"Downtick\" Lockheed Martin Corp. (LMT) suffered a 3% sell-off from its Friday, December 9, close to its Monday, December 12, open after President-elect Trump tweeted<\/strong><\/a>, \u201cThe F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th.\u201d The stock plumbed as low as $245.50 last Monday.<\/p>\n

\"Uptick\" Bespoke Investment Group<\/strong><\/a>: \u201cLast Wednesday, the combined market cap of\u00a0the S&P 500\u2019s members crossed $20 trillion for the first time ever.\u201d<\/p>\n

\"Downtick\" Here\u2019s a great question, posed by Doug Kass: \u201cWhat Would Bertrand Russell Say About Russell Index?<\/strong><\/a>\u201d Kass, who in addition to his prolific commentary on markets and everything that informs their movements, is president of Seabreeze Partners Management Inc., suggests the \u201cpriced to perfection\u201d Russell 2000 index (created in 1984 by researchers at Russell Investments, founded by Frank Russell in 1936 and not actually named for the British philosopher) is a ripe short in the current environment and offers a specific recommendation to that effect. Kass summarizes Bertrand in an epigraph: \u201cThe whole problem with the world is that fools and fanatics are always so sure of themselves, and wiser people are full of doubts.\u201d<\/p>\n

\"Uptick\"That Craig Sager<\/strong><\/a> has died<\/a><\/strong> is no cause for an \u201cuptick.\u201d That he said this in September<\/strong><\/a>, during treatment, including his third bone marrow transplant with stem cells to fight the acute myeloid leukemia he was diagnosed with in April 2014, certainly is: \u201cMan, life is too beautiful, too wonderful, there\u2019s just too many things. It\u2019s not just you. It\u2019s your family and kids and all. Fight. Fight until the end. Fight as hard as you can.\u201d<\/p>\n

Smart Investing,<\/p>\n

David Dittman
\nEditorial Director, Wall Street Daily<\/i><\/p>\n

The post Solar Power: America Invented It\u2026 China Owns It\u2026 Opportunity Springs From It<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com Americans invented photovoltaic technology. We used it to get to the moon. China may have cornered the market. But we have them right where we want them. \u201cWe argue so much about the silly politics of climate change and fail to recognize the gargantuan economic opportunity that this presents.\u201d So says Gregory Wilson, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-99752","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=99752"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99752\/revisions"}],"predecessor-version":[{"id":99754,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99752\/revisions\/99754"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=99752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=99752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=99752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}