2013 bodes well for solar projects as Buffet buys world’s largest solar PV plant

by James Martin II on January 9, 2013

Solar farm picture

The new year has started off with some more good news for the solar photovoltaics (PV) industry, with Warren Buffet’s MidAmerican Solar buying SunPower‘s Antelope Valley Solar Projects (AVSP) for an amount between USD2 billion and 2.5 billion. AVSP is a multi-location development whose cumulative solar panel capacity will be 579 megawatts (MW) when all locations are online in 2015. The project, the largest planned solar PV plant in the world, is slated for completion in 2015.

Various branches of MidAmerican have been purchasing renewable energy projects across the United States over the past few years according to the Clean Energy Authority, but AVSP is by far the largest in the portfolio, which currently sits at around 1.8 gigawatts (GW) of capacity. Importantly, MidAmerican Solar’s purchase of the massive plant seems indicative of positive development to come in 2013.

Although the struggling manufacturing side of the solar industry is still anticipated to face widespread consolidation due to a global oversupply of components, project developers will be able to choose from a range of components whose prices have come down significantly compared to even just one year ago. 2013 is highly likely to continue to see a buyer’s market for solar PV, with solar projects large and small attractive as investments.

The exact parallels between the UK and the US markets for solar power are admittedly few, so it is impossible to draw broad conclusions from this single example. AVSP is located in southern California, where the climate is dry and sunny; the UK is known for its inclement weather and its high latitude. Whilst AVSP benefits from US government loan guarantees for large-scale projects, the UK solar industry has no such scheme helping out with capital investment; instead there is a nationwide feed-in tariff slanted towards smaller projects–from 1 kilowatt (kW) to 5MW–and a ‘renewable obligation’ (RO) scheme for larger ones, but neither provide up-front financial support for project development.

Nevertheless, the overarching global trend of falling solar PV system component prices–and predictions that solar panels may soon be among the cheapest sources of power–means that more and more governments (including the UK’s) and companies are taking solar seriously, even those that wouldn’t have done so just a year ago. In addition to the drop in prices, solar’s growing investment attractiveness is attributable in great part to the worldwide push for faster uptake of renewable energy technologies such as solar PV and the various governmental support mechanisms that have been put in place to this end.

The UK’s feed-in tariff and RO scheme have served this purpose well–turning solar into a powerful force in the country’s energy mix. Thanks to these programs, 2011 and 2012 saw a huge number of rooftop solar installs–not to mention solar farms and solar parks–go up across the UK, back when the cost of installing a system was more than twice what it is currently.

Even if one disregards the AVSP news, numerous independent analysts are still predict big things for the UK solar market. Some estimate that installed solar capacity could increase by more than 4-fold in the next 3 years, and more than 10-fold before the decade is out. The message? Solar does indeed work in the cloudy UK, and the future is looking bright for its solar industry.

Solar Selections manages tenders for a wide range of solar farms, solar parks, and other commercial-scale solar PV projects across the UK. Get in touch with us today to find out more about how we can help you maximise your solar investment. 

sales@solarselections.co.uk

Phone: 020 7205 2267

© 2013 Solar Selections Ltd

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