SYDNEY—BP Plc., the world’s third-biggest maker of solar cells, expects Asian sales to accelerate as 1 billion people seek access to electricity and developed nations such as Japan target lower fuel imports.
       Sales in the Asian market may grow 50 percent a year by 2016, from a maximum of 30 percent now, driven by increased demand in China, South Korea and Japan, Mark Twidell, BP Solar’s director for Asia, said without giving a value estimate. BP expects global solar manufacturing revenue to double by 2008 from almost $500 million in 2005.
       Asia is poised to overtake Germany as the industry’s main source of growth as surging prices for oil, natural gas and coal drive demand for renewable energy. The trend has prompted the emergence of specialized solar companies such as China’s Suntech Power Holdings Co. and Germany’s Q-Cells AG and Conergy AG.
       “Energy security I think is a huge driver” for solar energy demand, Twidell said in a May 17 interview at BP Solar’s plant at Homebush, west of Sydney. “There’s a good school of thought that says just from a straight risk-portfolio perspective you need renewables in your portfolio in that they are not linked to the price of oil or the price of carbon.”
       BP in December formed a joint venture in China with Beijing-based China Xinjiang SunOasis Co., China’s largest electrical transformer company, with the aim of tapping a market that is set to multiply 50-fold in the next 15 years.

China solar market to heat up further
CHINA’S solar market is currently about 20 megawatts a year, and the country is targeting growth of about 1,000 megawatts a year by 2020, about three-quarters of the global market today, Twidell said. South Korea is aiming for similar growth, he said.
       Asian solar panel equipment sales may rise to $36.1 billion by 2010 from $8.3 billion in 2004, Photon magazine said in August, citing Credit Lyonnais Securities Asia. India, which has become the world’s fourth-largest market for wind power generation, also offers potential in solar energy as use is currently “very low,” KPMG International said this month in a report.
       A surge in demand for solar power would benefit BP and rivals such as Kyocera Corp. and Sharp Corp., which last month reported a 28-percent jump in operating profit for its solar panels and rechargeable batteries business.
       Shares in Wuxi, China-based Suntech, which sold American depositary receipts in December for $15 each, have surged 89 percent in New York since the company’s $396-million initial offering. Hamburg-based Conergy’s shares have jumped 57 percent in the past six months.
       In November, BP said it will invest $1.8 billion over the next three years in clean and renewable energy.

Solar panel making to double
BP said last November 29 it expected to double its solar-panel manufacturing capacity to 200 megawatts a year by the end of 2006, at its plants in Spain, Australia, the US and India. The company’s Australian plant at Homebush last year completed an $8-million expansion to lift capacity by 25 percent to 50 megawatts a year from 5 megawatts in 2000.
       BP’s investment in alternative energy this year equates to about 4 percent of its total capital spending budget of about $15 billion. It has about 10 percent of the solar market, which Credit Lyonnais Securities Asia estimated at 1.15 gigawatts in 2004, potentially raising to 1.5 gigawatts in 2005.
       To be sure, the industry would grow faster but for a shortage, at least until the end of next year, of the silicon used in solar power systems to convert sunlight into electricity, Twidell said. Silicon manufacturers are fully sold out for about the next two years due to growth in demand from the semiconductor and solar industries, he said.

Supply shortage a growing pain
“THE industry is going through a growing pain at the moment, in that it’s found itself a little bit stranded on supply,” Twidell said. In the past 18 months, silicon prices have surged to $100-$200 a kilogram from about $20 to $25 a kilogram, he said.
       The supply constraint relates to processed silicon and not the raw material, said Hugh Outhred, associate professor at the University of New South Wales’ Centre for Energy and Environmental Markets.
       “It’s a removable constraint if more silicon production capacity is built,” Sydney-based Outhred said. “It may well be a short-term constraint but just as a signal that more capacity is needed. I’m fairly sure that capacity will emerge.”
       Asia’s solar demand is likely to grow as costs decline, making solar power increasingly affordable for rural areas that aren’t connected to a power grid, Twidell said.

Instant electricity
“MUCH the same way that mobile phones have taken over, you can just deploy the solar panels directly on the school, the hospital, the home, and straight away electricity is generated,” he said.
       The amount of solar power capacity added worldwide jumped 34 percent last year to 1,460 megawatts, led by 53 percent growth in Germany, according to SolarBuzz LLC, a solar industry researcher. Japanese producers, led by Sharp and Kyocera, captured 46 percent of sales, followed by European producers, California-based SolarBuzz said in a report on its web site.
       Global cumulative solar power generating capacity rose 39 percent to more than 5 gigawatts last year, SolarBuzz said. Bloomberg