Solar M.I.S.T
My Solar Analysis of MIST
Some of you may recall the coinage BRIC, which stood for Brazil, Russia, India and China. This term was created by famous economist Jim O'Neill. Jim's latest grouping is MIST, which stands for Mexico, Indonesia, South Korea, and Turkey. My goal in this article is to overlay the solar potential with the growth potential of the MIST countries.
Quick overview of the MIST group:
Mexico
GDP: $1.6 trillion
GDP Growth Rate: 5.4%
Indonesia
GDP: $1.03 trillion
GDP Growth Rate: 6.1%
South Korea
GDP: $1.46 trillion
GDP Growth Rate: 6.2%
Turkey
GDP: $960.5 billion
GDP Growth Rate: 8.9%
Compared to the California.
GDP: $1.7 trillion
GDP Growth Rate: 2.8% (Q2)
Alright now that we got that out of the way, let's talk solar!
There's not much conversation (if any) about relating the solar industry to the MIST group. This is why I find it very interesting as it presents a great opportunity to dive in and see what kind of potential there is, both in the solar industry as a whole and with the "the market". As a solar professional, my consistent advice to newcomers in the industry is to keep your eyes open with a global perspective. What happens in one country can affect the face of solar in another.
Once I started watching the MIST group, I began to slowly notice interesting happenings within those countries.
Starting with MEXICO -
This article goes into the comparison of Mexico to established players like Germany and Spain. The article goes on to say, "Mexico's average solar resources for PV (5 kWh/m2/day) are more than 60% higher than the best solar in Germany (5.4 GW of installed PV) and yet, Spain and Germany are the global PV leaders."
Referencing the irradiation data, it shows that Mexico 4.8kW/m^2/day with Veracruz having the highest irradiation at 5.72 kW/m^2. However, the data also notes that the information for Veracruz comes from sources lacking information from instrumentation. Therefore, we can just go with the next highest that uses a pyranometer making Altozomo the best at 5.61 kW/m^2/day. Given some of the dynamics of Mexico's infrastructure with many pockets of the region considered rural, it's no wonder that the choice application is off-grid PV. Taking this scenario into account, here's what I will be watching for:
Concentrated Solar Power (CSP) - Utility Scale Solar out of Palo Alto is noted in the article to have already established agreements with Mexico. While CSP is an option, nothing changes the fact
that the Mexican government understands the cost-efficiency of PV. So with that,
Photovoltaics - Earlier this year, First Solar was noted to be stirring dirt to see what kind of semiconductors the company can pull from the Mexican ground. First Solar is a company that is known for the cadmium telluride it uses in its thin-film panels. Well guess what Mexico has. Yes, Tellurium. Although this company has been supported by the government, we nonetheless have to come back to the basis of this article and that's the potential in the MIST group.
Take a look at FLSR's chart and note the 200 moving average. Lately analyst have been upgrading this stock, but just keep note of the resistance at 26 and then at 30.
Here's more on First Solar's presence in Mexico: First Solar Global Expansion: More Reasons To Buy The Best Positioned Solar Stock - Oct 8, 2012 (Seeking Alpha)
Next, INDONESIA -
Photovoltaics - Yes, you guessed it. First Solar (again). In another recent article, First Solar aims to "plant" solar farms in India to address their issues with blackouts. The article mentions how "Traditionally, the company has only made solar panels, but it is now looking to branching out into solar farms." If First Solar is successful with solar farms, this is going to do wonders in the MIST group in its entirety. This opens the door to the question, "Is First Solar taking the MIST approach?"
From the JakartaGlobe - "An estimated 84 million of the country’s 240 million people lack access to electricity with only about 65 percent of the country receiving electricity. Many parts of East Nusa Tenggara, West Nusa Tenggara, Papua, West Irian Jaya and Southeast Sulawesi are still not connected to the grid."
Here is a report on Indonesia from the International Trade Administration. A few things from the report:
-"Phase II will likely include a greater emphasis on independent power producers. Unfortunately, without changes to policy and regulation, it is unlikely that Phase II will garner a significant
influx of foreign investment. Many of Indonesia’s state-owned enterprises will continue to dominate the large-scale power generation sector for several years. The U.S. Department of Commerce,
however, expects a significant opportunity for foreign equipment and services suppliers to provide technology or expertise for large renewable energy projects."
-"After the Crash Program, the government of Indonesia expects a 56 percent increase in overall energy investments by 2014"
-"Indonesia offers significant solar power resources (4.8 kilowatt-hours per square meter per day [kWh/m2/day]), but the country has yet to develop a strong market."
-"Additional solar power development is hampered by the lack of household buy-in and a dearth of maintenance personnel trained at installing solar cells." Seems like a terrific opportunity for a solar training and standards organization.
However, "without interconnection standards that allow consumers to sell excess electricity back to PLN, it is unlikely that the Indonesian solar power market will ever rival the markets in other countries in the region". It doesn't have to rival the markets, just help contribute to its success.
A snapshot of Indonesia's solar irradiation
SOUTH KOREA -
Let's start with the obvious. With the trade dispute with China, look for other countries in the region to pull the weight in the industry. One thing to keep in mind is that a country can improve economics by establishing presence in another country. In this case, Nexelon and Hanwha are doing just that. see article here.
Remember Solar Monkey? Well now they're Hanwha Solar Energy America.
As for their stock, it's following the current solar trend
As an ingot manufacturer, they play an important role in the movement of solar stocks. Keep an eye on 32500. A break through that point and its game on.
SunPower has a 2.2 megawatt solar power plant in Korea. Here is SunPower's latest report. In it, they note that they will be working to establish a headquarters in the Asia-Pacific region. Whether that plays a role in the development of presence in South Korea is up for debate.
SunPower's stock broke out of a wedge and met resistance at 5, which at significant zone for the stock.
One of the things to remember when watching solar stocks is that you don't necessarily have to focus on a specific panel maker. As with the case of Cypress Semiconductor corp., where SunPower Corp is a subsidiary of Cypress Semiconductor Corp.
Note Cypress' stock is in a channel, so wait for it to break from there before acting on it.
Here is S. Korea's (and Asia for the matter) solar irradiation.
Other news for SK:
Saxony-Anhalt looks to South Korea to save local solar industry:
"23.08.2012: The prime minister of the German state of Saxony-Anhalt, Reiner Haseloff, has scheduled a three-day trip to South Korea to speak with potential investors there about investment opportunities in Saxony-Anhalt. Accompanied by the state’s Minister of Economy Birgitta Wolff, Haseloff will attempt to find South Korean companies interested in investing in the German solar industry. A spokesman for the government declined to tell PHOTON which companies the politicians will meet with. South Korean conglomerate Hanwha recently made an offer for insolvent Saxony-Anhalt-based solar cell producer Q-Cells SE. So far, however, no official contract has been signed between the two companies. Failed solar company Sovello GmbH was also headquartered in Saxony-Anhalt. … Source: Saxony-Anhalt Ministry of Economy; Translation and summary: PHOTON"
Investricity and Hanwha to finance 500 MW solar project in Cameroon
"01.10.2012: Representatives from South Korean business conglomerate Hanwha Group, active in the PV sector through its subsidiary Hanwha SolarOne, and Irish company Investricity Ltd., which invests in and develops renewable energy projects, have been meeting with Cameroonian authorities this month to discuss their participation in an eight-year, 500 MW PV project. According to local news portal 237online.com, with the help of investments from Hanwha and Investricity, the 530 billion XAF (€1 billion) project has secured 80% of the necessary funding. The remaining funding is expected to be obtained by the end of 2012. The project was first announced in July, when the government of Cameroon and Spanish investment company Fides Gestion signed an initial agreement to develop the project. At the time, they said the project would consist of hundreds of smaller power plants installed in various communities throughout the country. Construction on the first 100 MW phase of the project is scheduled to begin in October, with the first systems due to come online in summer 2013. The first 100 MW will be installed in the South and Littoral Regions in the southwest of the country and in the Far North Region. … Source: 237online.com, Investir au Cameroun; Translation and summary: PHOTON"
And lastly, TURKEY -
The fact that the country is trying to adopt solar is great news. Solar Turkey is in its fourth year, with SunEdison being one of their gold sponsors.
This article, though dated last year, highlights some of the opportunities. However, the ITA does a great job in summarizingthe potential.
"Energy demand in Turkey is expected to grow 5 to 7 percent per year into 2023, requiring more than $100 billion of investment in power generation, transmission, and distribution. By 2023, Turkey seeks to produce 30 percent of its power needs from renewable resources, including solar, wind, hydro, geothermal, and biomass." The ITA also created a Trade Mission and its interesting to note the participants:
The participating U.S. companies were:
Abound Solar – Loveland, CO
AES – Arlington, VA
Clipper Wind Power LLC – Carpinteria, CA
Combustion Associates, Inc. – Corona, CA
Dow Chemical – Midland, MI
First Solar – Tempe, AZ
General Electric – Fairfield, CT
Ingersoll Rand – North America HQ in Davidson, NC
Johnson Controls, Inc. – Milwaukee, WI
Ko-Tech – Mclean, VA
Kvar Energy Savings, Inc. – Daytona Beach, FL
MEGTEC Systems, Inc. – De Pere, WI
OSISoft LLC – San Leandro, CA
SolarReserve LLC – Santa Monica, CA
Sun Edison LLC – Belmont, CA
World Business Capital – Hartford, CT
Of course, we can exclude Abound solar...
Here's a look at Turkey's irradiation.
The country is ranging in the 3-5 kW/m^2.
So there you have it, my "Solar M.I.S.T". Let's watch how the MIST countries perform over the next few years and see if solar can capitalize on the growth.
~Michael
Some of you may recall the coinage BRIC, which stood for Brazil, Russia, India and China. This term was created by famous economist Jim O'Neill. Jim's latest grouping is MIST, which stands for Mexico, Indonesia, South Korea, and Turkey. My goal in this article is to overlay the solar potential with the growth potential of the MIST countries.
Quick overview of the MIST group:
Mexico
GDP: $1.6 trillion
GDP Growth Rate: 5.4%
Indonesia
GDP: $1.03 trillion
GDP Growth Rate: 6.1%
South Korea
GDP: $1.46 trillion
GDP Growth Rate: 6.2%
Turkey
GDP: $960.5 billion
GDP Growth Rate: 8.9%
Compared to the California.
GDP: $1.7 trillion
GDP Growth Rate: 2.8% (Q2)
Alright now that we got that out of the way, let's talk solar!
There's not much conversation (if any) about relating the solar industry to the MIST group. This is why I find it very interesting as it presents a great opportunity to dive in and see what kind of potential there is, both in the solar industry as a whole and with the "the market". As a solar professional, my consistent advice to newcomers in the industry is to keep your eyes open with a global perspective. What happens in one country can affect the face of solar in another.
Once I started watching the MIST group, I began to slowly notice interesting happenings within those countries.
Starting with MEXICO -
This article goes into the comparison of Mexico to established players like Germany and Spain. The article goes on to say, "Mexico's average solar resources for PV (5 kWh/m2/day) are more than 60% higher than the best solar in Germany (5.4 GW of installed PV) and yet, Spain and Germany are the global PV leaders."
Referencing the irradiation data, it shows that Mexico 4.8kW/m^2/day with Veracruz having the highest irradiation at 5.72 kW/m^2. However, the data also notes that the information for Veracruz comes from sources lacking information from instrumentation. Therefore, we can just go with the next highest that uses a pyranometer making Altozomo the best at 5.61 kW/m^2/day. Given some of the dynamics of Mexico's infrastructure with many pockets of the region considered rural, it's no wonder that the choice application is off-grid PV. Taking this scenario into account, here's what I will be watching for:
Concentrated Solar Power (CSP) - Utility Scale Solar out of Palo Alto is noted in the article to have already established agreements with Mexico. While CSP is an option, nothing changes the fact
that the Mexican government understands the cost-efficiency of PV. So with that,
Photovoltaics - Earlier this year, First Solar was noted to be stirring dirt to see what kind of semiconductors the company can pull from the Mexican ground. First Solar is a company that is known for the cadmium telluride it uses in its thin-film panels. Well guess what Mexico has. Yes, Tellurium. Although this company has been supported by the government, we nonetheless have to come back to the basis of this article and that's the potential in the MIST group.
Take a look at FLSR's chart and note the 200 moving average. Lately analyst have been upgrading this stock, but just keep note of the resistance at 26 and then at 30.
Here's more on First Solar's presence in Mexico: First Solar Global Expansion: More Reasons To Buy The Best Positioned Solar Stock - Oct 8, 2012 (Seeking Alpha)
Next, INDONESIA -
Photovoltaics - Yes, you guessed it. First Solar (again). In another recent article, First Solar aims to "plant" solar farms in India to address their issues with blackouts. The article mentions how "Traditionally, the company has only made solar panels, but it is now looking to branching out into solar farms." If First Solar is successful with solar farms, this is going to do wonders in the MIST group in its entirety. This opens the door to the question, "Is First Solar taking the MIST approach?"
From the JakartaGlobe - "An estimated 84 million of the country’s 240 million people lack access to electricity with only about 65 percent of the country receiving electricity. Many parts of East Nusa Tenggara, West Nusa Tenggara, Papua, West Irian Jaya and Southeast Sulawesi are still not connected to the grid."
Here is a report on Indonesia from the International Trade Administration. A few things from the report:
-"Phase II will likely include a greater emphasis on independent power producers. Unfortunately, without changes to policy and regulation, it is unlikely that Phase II will garner a significant
influx of foreign investment. Many of Indonesia’s state-owned enterprises will continue to dominate the large-scale power generation sector for several years. The U.S. Department of Commerce,
however, expects a significant opportunity for foreign equipment and services suppliers to provide technology or expertise for large renewable energy projects."
-"After the Crash Program, the government of Indonesia expects a 56 percent increase in overall energy investments by 2014"
-"Indonesia offers significant solar power resources (4.8 kilowatt-hours per square meter per day [kWh/m2/day]), but the country has yet to develop a strong market."
-"Additional solar power development is hampered by the lack of household buy-in and a dearth of maintenance personnel trained at installing solar cells." Seems like a terrific opportunity for a solar training and standards organization.
However, "without interconnection standards that allow consumers to sell excess electricity back to PLN, it is unlikely that the Indonesian solar power market will ever rival the markets in other countries in the region". It doesn't have to rival the markets, just help contribute to its success.
A snapshot of Indonesia's solar irradiation
SOUTH KOREA -
Let's start with the obvious. With the trade dispute with China, look for other countries in the region to pull the weight in the industry. One thing to keep in mind is that a country can improve economics by establishing presence in another country. In this case, Nexelon and Hanwha are doing just that. see article here.
Remember Solar Monkey? Well now they're Hanwha Solar Energy America.
As for their stock, it's following the current solar trend
As an ingot manufacturer, they play an important role in the movement of solar stocks. Keep an eye on 32500. A break through that point and its game on.
SunPower has a 2.2 megawatt solar power plant in Korea. Here is SunPower's latest report. In it, they note that they will be working to establish a headquarters in the Asia-Pacific region. Whether that plays a role in the development of presence in South Korea is up for debate.
SunPower's stock broke out of a wedge and met resistance at 5, which at significant zone for the stock.
One of the things to remember when watching solar stocks is that you don't necessarily have to focus on a specific panel maker. As with the case of Cypress Semiconductor corp., where SunPower Corp is a subsidiary of Cypress Semiconductor Corp.
Note Cypress' stock is in a channel, so wait for it to break from there before acting on it.
Here is S. Korea's (and Asia for the matter) solar irradiation.
Other news for SK:
Saxony-Anhalt looks to South Korea to save local solar industry:
"23.08.2012: The prime minister of the German state of Saxony-Anhalt, Reiner Haseloff, has scheduled a three-day trip to South Korea to speak with potential investors there about investment opportunities in Saxony-Anhalt. Accompanied by the state’s Minister of Economy Birgitta Wolff, Haseloff will attempt to find South Korean companies interested in investing in the German solar industry. A spokesman for the government declined to tell PHOTON which companies the politicians will meet with. South Korean conglomerate Hanwha recently made an offer for insolvent Saxony-Anhalt-based solar cell producer Q-Cells SE. So far, however, no official contract has been signed between the two companies. Failed solar company Sovello GmbH was also headquartered in Saxony-Anhalt. … Source: Saxony-Anhalt Ministry of Economy; Translation and summary: PHOTON"
Investricity and Hanwha to finance 500 MW solar project in Cameroon
"01.10.2012: Representatives from South Korean business conglomerate Hanwha Group, active in the PV sector through its subsidiary Hanwha SolarOne, and Irish company Investricity Ltd., which invests in and develops renewable energy projects, have been meeting with Cameroonian authorities this month to discuss their participation in an eight-year, 500 MW PV project. According to local news portal 237online.com, with the help of investments from Hanwha and Investricity, the 530 billion XAF (€1 billion) project has secured 80% of the necessary funding. The remaining funding is expected to be obtained by the end of 2012. The project was first announced in July, when the government of Cameroon and Spanish investment company Fides Gestion signed an initial agreement to develop the project. At the time, they said the project would consist of hundreds of smaller power plants installed in various communities throughout the country. Construction on the first 100 MW phase of the project is scheduled to begin in October, with the first systems due to come online in summer 2013. The first 100 MW will be installed in the South and Littoral Regions in the southwest of the country and in the Far North Region. … Source: 237online.com, Investir au Cameroun; Translation and summary: PHOTON"
And lastly, TURKEY -
The fact that the country is trying to adopt solar is great news. Solar Turkey is in its fourth year, with SunEdison being one of their gold sponsors.
This article, though dated last year, highlights some of the opportunities. However, the ITA does a great job in summarizingthe potential.
"Energy demand in Turkey is expected to grow 5 to 7 percent per year into 2023, requiring more than $100 billion of investment in power generation, transmission, and distribution. By 2023, Turkey seeks to produce 30 percent of its power needs from renewable resources, including solar, wind, hydro, geothermal, and biomass." The ITA also created a Trade Mission and its interesting to note the participants:
The participating U.S. companies were:
Abound Solar – Loveland, CO
AES – Arlington, VA
Clipper Wind Power LLC – Carpinteria, CA
Combustion Associates, Inc. – Corona, CA
Dow Chemical – Midland, MI
First Solar – Tempe, AZ
General Electric – Fairfield, CT
Ingersoll Rand – North America HQ in Davidson, NC
Johnson Controls, Inc. – Milwaukee, WI
Ko-Tech – Mclean, VA
Kvar Energy Savings, Inc. – Daytona Beach, FL
MEGTEC Systems, Inc. – De Pere, WI
OSISoft LLC – San Leandro, CA
SolarReserve LLC – Santa Monica, CA
Sun Edison LLC – Belmont, CA
World Business Capital – Hartford, CT
Of course, we can exclude Abound solar...
Here's a look at Turkey's irradiation.
The country is ranging in the 3-5 kW/m^2.
So there you have it, my "Solar M.I.S.T". Let's watch how the MIST countries perform over the next few years and see if solar can capitalize on the growth.
~Michael
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