With three major new initiatives in progress in Europe alone, the industry is committed to removing PV’s last barrier: funding. We look at the efforts being made to help solar’s sums add up – including an ingenious crowd-funding initiative…
Just this month it was revealed that Chinese solar companies, some already heavily indebted by massive amounts, will need to raise many billions of dollars to fund the required expansion in capacity, in what will be a major test of investor confidence in a sector hit hard by the global financial crisis.
Chinese Issues
Why? Beijing has announced a solar installation target of 17.8 gigawatts (GWs) for 2015, up 70 per cent on the previous year, and industry experts say that will entail total investment from big state-owned enterprises and debt-laden private businesses of over $23 billion, most of it from state banks, and the domestic debt and equity capital markets.
Chinese banks, however, remain wary after writing off billions of dollars via a wave of defaults and plant closures in the sector when European demand for Chinese solar products collapsed during the euro zone debt crisis.
“We will only provide limited support to the sector,” a leading executive of a northern provincial branch of Industrial and Commercial Bank of China (ICBC) was reported as saying.
Brazilian woes
Meanwhile, on another continent, the story is startlingly similar. The vast majority of the winning solar projects in Brazil’s October 2014 auction will not be realised due to financing issues, market research firm LAS Research has recently claimed.
On October 31, 890 MW of solar developments won 20-year power purchase agreements (PPAs) at an average electricity sale price of BRL 215 (USD 71/EUR 65.7)/MWh. At that time, solar experts were worried that the price was too low. Now the dollar appreciation “makes profitability even more of a stretch as nearly all the components are currently imported,” LAS founder Rugi Kavamahanga has reportedly claimed.
