A model of competition in the solar panel industry

We develop a model of competition in the solar panel industry. Solar firms manufacture panels that are differentiated both vertically and horizontally, and compete by setting quantities. The equilibrium of the model is consistent with a set of stylized facts that we document, including variation in prices, markups and market shares across firms. We calibrate the model using a new dataset data on prices, costs and shipments of leading solar companies, as well as solar sales in four leading markets. The calibrated model is applied to evaluate the impact of a decline in the price of polysilicon, a key raw material used in the manufacture of solar panels, on the equilibrium price of solar panels.     

Cost-reflective electricity pricing: Consumer preferences and perceptions

In Australia, residential electricity peak demand has risen steeply in recent decades, leading to higher prices as new infrastructure was needed to satisfy demand. One way of limiting further infrastructure-induced retail price rises is via ‘cost-reflective’ electricity network pricing that incentivises users to shift their demand to non-peak periods. Empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost-reflective pricing. This research consulted residential electricity consumers in three Australian states on their perceptions and acceptance of two cost-reflective pricing scenarios (Time-of-Use and Peak Capacity pricing) and associated technologies to support such pricing (smart meters, in-home displays and direct load control devices). An energy economist presented information to focus groups on the merits and limitations of each scenario, and participants’ views were captured. Almost half of the 53 participants were agreeable to Time-of-Use pricing, but did not have a clear preference for Peak Capacity pricing, where the price was based on the daily maximum demand. Participants recommended further information to both understand and justify the potential benefits, and for technologies to be introduced to enhance the pricing options. The results have implications for utilities and providers who seek to reduce peak demand.     

Solar feed-in tariffs and the merit order effect: A study of the German electricity market

This study investigates the merit order effect (MOE) of the recent years' implementation of solar power in Germany. Market clearing electricity prices and production levels are compared for the years 2009–2011, and a model for the relationship between the electricity price and price sensitive electricity production is developed and applied to predict electricity prices in Germany from July 2010 to July 2011 with and without solar electricity generation (SEG). The results show that the SEG has caused a 7% reduction in average electricity prices for this period. The average daily maximum price and daily price variation are also found to decrease, by 13% and 23%, respectively. When taking the MOE into account the net consumer's cost of the solar feed-in tariff (FIT) system is found to be 23% less than the charge listed in the electricity bill. The German FIT policy for solar power has been subject to considerable public debate, and a common argument brought up in disfavor of the system is the high cost for the consumers. In this study we demonstrate the importance of including the MOE when evaluating the total costs and benefits of the FIT policy mechanism.     

Does renewable energy generation decrease the volatility of electricity prices? An analysis of Denmark and Germany

Although variable renewable energy (VRE) technologies with zero marginal costs decrease electricity prices, the literature is inconclusive about how the resulting shift in the supply curves impacts price volatility. Because the flexibility to respond to high peak and low off-peak prices is crucial for demand-response applications and may compensate for the losses of conventional generators caused by lower average prices, there is a need to understand how the penetration of VRE affects volatility. In this paper, we build distributed lag models with Danish and German data to estimate the impact of VRE generation on electricity price volatility. We find that in Denmark wind power decreases the daily volatility of prices by flattening the hourly price profile, but in Germany it increases the volatility because it has a stronger impact on off-peak prices. Our analysis suggests that access to flexible generation capacity and wind power generation patterns contribute to these differing impacts. Meanwhile, solar power decreases price volatility in Germany. By contrast, the weekly volatility of prices increases in both areas due to the intermittency of VRE. Thus, policy measures for facilitating the integration of VRE should be tailored to such region-specific patterns.     

Energy price forecasting - problems and proposals for such predictions

This paper discusses the value of price forecasting in the electricity market during bidding or hedging against volatility. When bidding in a pool system, the market participants are requested to express their bids in terms of prices and quantities. Since the bids are accepted in order of increasing price until the total demand is met, a company that is able to forecast the pool price can adjust its own price/production schedule depending on hourly pool prices and its own production costs. This paper also discusses the challenges of price forecasting and describes some of the proposed methods for meeting these challenges.     

Accounting for fuel price risk when comparing renewable to gas-fired generation: the role of forward natural gas prices

Unlike natural gas-fired generation, renewable generation (e.g., from wind, solar, and geothermal power) is largely immune to fuel price risk. If ratepayers are rational and value long-term price stability, then—contrary to common practice—any comparison of the levelized cost of renewable to gas-fired generation should be based on a hedged gas price input, rather than an uncertain gas price forecast. This paper compares natural gas prices that can be locked in through futures, swaps, and physical supply contracts to contemporaneous long-term forecasts of spot gas prices. We find that from 2000 to 2003, forward gas prices for terms of 2–10 years have been considerably higher than most contemporaneous long-term gas price forecasts. This difference is striking, and implies that comparisons between renewable and gas-fired generation based on these forecasts over this period have arguably yielded results that are biased in favor of gas-fired generation.     

2009年新能源行业投资策略报告

本文认为,新能源行业中光伏行业的上游多晶硅价格面临巨大压力,受产能快速扩张和国外需求降低影响,2009年下半年到2010年多晶硅市场价将快速跌到成本附近,行业暴利时间所剩不多,而下游的切片、电池组装、发电系统的利润稳定,整个行业发展前景广阔,给予光伏行业"中性"投资评级。新能源行业中风电受国内政策推动,近几年发展迅速,国产化率的提高和市场的扩大,行业盈利进入高潮期,给予风电行业2009年"推荐"投资评级,投资策略上对该行业采取高配置策略。     

Distributed solar renewable generation: Option contracts with renewable energy credit uncertainty

Solar energy is rapidly emerging thanks to the decreasing installation cost of solar panels and the renewable portfolio standard imposed by state governments, which gave birth to the Renewable Energy Credit (REC) and the Alternative Compliance Payment (ACP). To make profits from the REC market in addition to reduced energy costs, more and more home and business owners choose to install solar panels. Recently, third-party financing has become a common practice in solar panel investments. We discuss optimal timing for the host to potentially buy back the solar panels after being installed for a period of time and how to incorporate the optimal timing into a power purchase agreement between the host and the third-party developer. Because the REC price is a major source of uncertainty and also due to the ACP capping the REC price, we first propose a REC price forecasting model that specifically considers the ACP values. Then by a modified real option structure, we model the buyback contract as a real option and solve it with an approximate dynamic program based Monte Carlo simulation method. We find that as the ACP value increases, the value of the buyback option also increases under optimal timing. The method used does not only apply to solar projects but also to other distributed renewable projects that are third-party financed, such as wind generations.     

Expectations and forward risk premium in the Spanish deregulated power market

Deregulation in energy markets has entailed important changes in the way agents conduct business. Price risk arises as a result of fluctuations in the future price of electricity and agents assume long or short positions in the forward and spot markets to hedge their exposure to price risk. The presence of forward risk premium in prices is evidence of the fact that agents act in the market according to risk considerations. This work aims to analyse the information content of the difference between the forward and spot prices (the so-called forward premium) regarding the agents’ decisions. We find that the sign and magnitude of the ex post forward premium depend on the unexpected variation in demand and on the unexpected variation in the hydroelectric capacity, and that both the ex post and the ex ante forward premia are negatively related to the variance of spot price, as Bessembinder and Lemmon (2002) predict. We provide additional insights about relevant aspects of spot price pricing in the Spanish electricity market such as the positive relation between spot prices and CO₂ emission allowance prices or the impact on spot prices of the set of market matching rules introduced in March 2006.     

Electricity prices and generator behaviour in gross pool electricity markets

Electricity market liberalisation has become common practice internationally. The justification for this process has been to enhance competition in a market traditionally characterised by statutory monopolies in an attempt to reduce costs to end-users. This paper endeavours to see whether a pool market achieves this goal of increasing competition and reducing electricity prices. Here the electricity market is set up as a sealed bid second price auction. Theory predicts that such markets should result with firms bidding their marginal cost, thereby resulting in an efficient outcome and lower costs to consumers. The Irish electricity system with a gross pool market experiences among the highest electricity prices in Europe. Thus, we analyse the Irish pool system econometrically in order to test if the high electricity prices seen there are due to participants bidding outside of market rules or out of line with theory. Overall we do not find any evidence that the interaction between generator and the pool in the Irish electricity market is not efficient. Thus, the pool element of the market structure does not explain the high electricity prices experienced in Ireland.     

Assessing the impact of renewable energy sources on the electricity price level and variability – A quantile regression approach

The literature on renewable energy sources indicates that an increase of the intermittent wind and solar generation affects significantly the distribution of electricity prices. In this article, the influence of two types of renewable energy sources (wind and solar photo voltaic) on the level and variability of German electricity spot prices is analyzed. The quantile regression models are built to estimate the merit order effect for different quantiles of electricity prices. The results indicate that both types of renewable generations have a similar, negative impact on the price level, approximated by the price median. When the price volatility, measured by the inter-quantile range (IQR), is considered, the outcomes show that wind and solar influence prices differently. Conditional on the level of the total demand, the wind generation would either increase (when the demand is low) or decrease (when the demand is high) the IQR. Meanwhile, the increase of solar power stabilizes the price variance for moderate demand level. Thus, policy supporting the development and integration of RES should search for a balance between the wind and solar power.     

A financing plan for solar industrial process heating

68% of industrial energy needs in the U.S. are in the form of process heat. Solar industrial process heat (SIPH) is an economical business proposition with the appropriate financing plan. A limited partnership form of operation is a great advantage to the corporate user of the SIPH because the corporate user does not have to put up capital for construction. It merely pays the partnership a fee for the amount of solar energy delivered. In addition, there are substantial tax advantages for both the corporation and the investing limited partners, which will be examined in detail. Assuming that the delivered natural gas price would average $4.35/Mcf for 1983 and that gas prices would increase at the nominal rate of 10%/yr, a limited partner can obtain a rate of return of over 31% by investing in an SIPH installation.     

Well-functioning balancing markets: A prerequisite for wind power integration

This article focuses on the design of balancing markets in Europe taking into account an increasing wind power penetration. In several European countries, wind generation is so far not burdened with full balancing responsibility. However, the more wind power penetration, the less bearable for the system not to allocate balancing costs to the responsible parties. Given the variability and limited predictability of wind generation, full balancing exposure is however only feasible conditionally to well-functioning balancing markets. On that account, recommendations ensuring an optimal balancing market design are formulated and their impact on wind generation is assessed. Taking market-based or cost-reflective imbalance prices as the main objective, it is advised that: (1) the imbalance settlement should not contain penalties or power exchange prices, (2) capacity payments should be allocated to imbalanced BRPs via an additive component in the imbalance price and (3) a cap should be imposed on the amount of reserves. Efficient implementation of the proposed market design may require balancing markets being integrated across borders.     

The environmental and cost implications of solar energy preferences in Renewable Portfolio Standards

Many state-level Renewable Portfolio Standards (RPS) include preferences for solar generation, with goals of increasing the generation diversity, reducing solar costs, and encouraging local solar industries. Depending on their policy design, these preferences can impact the RPS program costs and emissions reduction. This study evaluates the impact of these policies on costs and emissions, coupling an economic dispatch model with optimized renewable site selection. Three policy designs of an increased RPS in Michigan are investigated: (1) 20% Solar Carve-Out, (2) 5% Distributed Generation Solar Carve-Out, and (3) 3× Solar Multiplier. The 20% Solar Carve-Out scenario was found to increase RPS costs 28%, while the 5% Distributed Generation Solar Carve-Out increased costs by 34%. Both of these solar preferences had minimal impact on total emissions. The 3× Solar Multiplier decreases total RPS program costs by 39%, but adds less than half of the total renewable generation of the other cases, significantly increasing emissions of CO₂, NO_x, and SO₂ relative to an RPS without the solar credit multiplier. Sensitivity analysis of the installed cost of solar and the natural gas price finds small changes in the results of the Carve-Out cases, with a larger impact on the 3× Solar Multiplier.     

Method of evaluation of solar collector cost under fuel price change

When we take into account the problems of large-scale use of solar energy, the matters of economic perspectives of solar plants in the future become vital. We present the method on whose basis evaluation of the cost of solar collectors is performed taking into account the change in the fuel prices. The method is based on the approach to evaluation of the cost of energy generated by the solar plants offered previously by the authors. Assuming that the components of expenditures for production are not changed, we obtained that the cost of solar collectors will grow, at approximately the same ratio as the growth of the prices for fuel (energy). Thus, the problem of creation of the economically effective solar collectors should be solved already today, at the existing prices for materials and fuel. At present, it is assumed that competitiveness of the solar plants will increase with the growth of the fuel prices.     

Economic analysis of photovoltaic-powered solar domestic hot water systems in Kuwait

The present paper first presents a comparison between the photovoltaic four-parameter and five-parameter models. The comparison was performed using polycrystalline and amorphous silicon solar cells. The results showed that the four-parameter model can accurately determine the I–V characteristics of single- and polycrystalline solar cells. On the other hand, the five-parameter model can be used to accurately determine the I–V characteristics of amorphous solar cells in addition to its capability of predicting the I–V characteristics of single- and polycrystalline solar cells.Secondly, the economic feasibility of photovoltaic-powered solar water heating systems in Kuwait has been examined. The system includes photovoltaic arrays instead of solar collectors used in common solar water heating systems. The five-parameter model was used to simulate the performance of amorphous silicon modules used with the photovoltaic-powered solar water heating systems. Oil prices in the range of US$20–30 per barrel were studied. At the current prices of photovoltaic modules and a low oil price, photovoltaic-powered solar water heating systems were found to be economical. On the other hand, assuming a low oil price, the price of photovoltaic modules should be reduced to 50% of their current prices to make photovoltaic-powered solar water heating systems feasible in the Kuwaiti climate.     

Thermal utilisation of solar energy : Croatian National Energy Program SUNEN, 1998 – 2010

In the paper, thermal use of solar energy as well as prospects and problems of its utilisation in Croatia have been given. The National Solar Energy Program, SUNEN, has been established to stimulate the usage of solar energy. The main goals of the program are the assessment of technical and economically viable solar potential in order to define real objectives and tasks to provide use of exploitable indigenous clean and renewable energy potential. The Program addresses benefits, the most promising solar applications and solar potential. Much attention has been given to identification of obstacles and barriers in the process of solar technology dissemination. SUNEN is an initiative to increase solar energy use and to become more compatible with the present renewable energy sources policy in EU and Mediterranean countries. The program proposes twelve different types of thermal solar energy systems, which could be multiplied up to 28 000 installations until the year 2010 with annual heat recovery of approximately 1,5 TWh (5,4 PJ).     

Innovation subsidies versus consumer subsidies: A real options analysis of solar energy

Given the interest in the commercialization of affordable, clean energy technologies, we examine the prospects of solar photovoltaics (PV). We consider the question of how to transition to a meaningful percentage of solar energy in a sustainable manner and which policies are most effective in accelerating adoption. This paper develops a stochastic dynamic model of the adoption of solar PV in the residential and commercial sector under two sources of uncertainty – the price of electricity and cost of solar. The analytic results suggest that a high rate of innovation may delay adoption of a new technology if the consumer has rational price expectations. We simulate the model across alternative rates technological change, electricity prices, subsidies and carbon taxes. It is shown that there will be a displacement of incumbent technologies and a widespread shift towards solar PV in under 30 years – and that this can occur without consumer incentives and carbon pricing. We show that these policies have a modest impact in accelerating adoption, and that they may not be an effective part of climate policy. Instead, results demonstrate that further technological change is the crucial determinant and main driver of adoption. Further, results indicate that subsidies and taxes become increasingly ineffective with higher rates of technological change.     

Physical market determinants of the price of crude oil and the market premium

We analyze the determinants of the real price of crude oil by means of an equilibrium correction model over the last two decades where we focus on the aspects of the physical market that impact on the clearing price. We find that two cointegrating relations affect the changes in prices: one refers to OPEC's behavior, attempting to control prices using its market power and quotas; the other to the coverage rate of OECD expected future demand using inventory behaviors. We derive a forecasting equation for the change in oil prices which we use to assess the speculative elements of the price increases of the period 2000–05. We show that worries alien to the physical markets were the causes of the increase in oil prices and we quantify their overall impact.     

Solar energy, its conversion and utilization

This paper briefly presents a summary of solar energy research, comments on the need for continuing these studies, and describes the activities of the University of Florida Solar Energy Laboratory. These activities include converting solar energy to more practical forms of power, and devising ways to produce it in the fewest possible steps by the simplest means. The devices developed are used in the University of Florida Solar House with its Solar-Electric Car and solar-heated swimming pool.