The outlook of the Solar Power market moving forward
----Interview with Christian Spies, Managing Director of Solar Surge
Solar Surge’s target is to provide clients with more technical and commercial insight into their investment opportunity within the solar industry, giving you advice and the necessary comfort to invest in new opportunities. Furthermore they provide the possibility to step in the due diligence process as a technical/commercial catalyst to build a bridge between EPC, Technical Advisors and the client themselves. With the solar market holding huge promise for demand for aluminium, copper and tellurium, Mr Spies agreed to speak with Asian Metal regarding the sectors’ outlook.
Asian Metal: Could you tell me a little bit more about your company?
Christian Spies: Solar Surge Consultancy limited was founded in 2014. In times of continuous price reductions, the Solar PV Industry is experiencing an increasing amount of product and installation quality deficits. Our target is to provide end clients with more technical and commercial insight into their investment potentials, giving them advice and the necessary comfort to invest in new opportunities. Furthermore we provide the possibility to step in the due diligence process as a technical and/or commercial catalyst to build a bridge between EPC, Technical Advisors and end client.
Asian Metal: How did you get involved in the solar industry?
Christian Spies: Post my Master’s degree in industrial engineering, a combined degree in economics and engineering, I started my involvement in the renewable energy industry in 2007 shaping new business opportunities in the renewable energy sector for one of the key players in the industry. The technology experienced a big price drop in 2009 making it commercially viable in countries with lower additional incentive schemes leading to a big boom in ‘renewables’. Key markets were European countries, but also new emerging markets like India and South Africa, which launched bigger incentive programmes.
Asian Metal: Up until recently, the solar industry was a tremendously promising sector, could you explain the difficulties that are currently being experienced?
Christian Spies: The Solar industry is still a pretty successful energy form looking at the volumes on a global basis. The solar energy solution works generally better in regions with more sunshine hours in a combination with higher irradiations. These regions don’t need an additional government incentive as the higher irradiation generates a higher yield.
However countries above the 47° latitude generally need an additional government support in combination with the existing electricity price in order to make it a valuable investment.
A few of these countries are facing a financial crisis at the moment which leads to general budget cuts which out of the experience have an impact on the public and energy sector.
The government in England and Wales decided to stop most of these existing programmes. This fundamental change will have a big impact to the local PV industry.
Asian Metal: How do you think these issues will be resolved?
Christian Spies: Considering the current system price, the required investment for a commercial installation is still pretty high. The main component (PV Module) still covers around 70% of the system price. These costs need to experience a further drop in order to make the technology viable.
This target can be achieved in two ways, in both short and long term. The short term, European government needs to drop the MIP (Minimum Import Price) imposed upon Chinese and Indian Solar Panels. The stop of this program could reduce the costs by up to 20%.
The long term, looking at the global demand I would expect that this problem will resolve itself over the next few years, which will then allow systems to be installed in low irradiation regions again.
Asian Metal: What are your thoughts on the market moving forward?
Christian Spies: The market is moving. I experienced markets rising and going down which were always led by government policies which have an impact on the industry. The emerging markets will bridge the demand until the technology return to the lower yield markets.
Asian Metal: Despite Europe, are there any other locations that are promising opportunities for the solar sector?
Christian Spies: The current legislations in North America support the industry very well; the industry is currently experiencing a high growth rate. Mexico started a large incentive scheme which seems to be pushed by their government. Brazil and Argentina launched big energy auction rounds which have been partially awarded to Solar PV. South Africa is still a fruitful market on domestic and large scales installations. Egypt, Israel and Jordan have a scheme in place which allows for direct PPA agreements with energy providers, proofing to be very successful. India has a new target to support 20 GW until 2020. Japan, Thailand and the Philippines have an energy trading scheme which make domestic and large scale installations viable. China is a big market with large turnaround numbers.
Asian Metal: Any final remarks?
Christian Spies: In total it is fair to say that solar has never been bigger in the world. The European region had its time but I am sure it will have it again.
Asian Metal: Thank you very much for taking the time to speak with me today.
