07/01/2010 04:16

Thomas Sandner dismisses potential difficulties in the market.

Thomas Sandner, chairman of the board of Abakus Solar, dismissed potential difficulties in the global solar energy market this year telling The Jerusalem Post instead that solar had a “bright future” and predicting increased demand. Sandner spoke to the Post Tuesday on the sidelines of the Cleantech 2010 Exhibition in Tel Aviv.

Abakus, a veteran German company, has joined with Sun City to operate in the Israeli market. Germany, despite its geographic location, is the world leader in solar energy.

“Germany is expecting to install six gigawatts (GW) of solar energy this year. Last year, we installed 3.8, which was more than expected,” he said. So far, Israel has installed 22 MW of solar energy.

Although there have been concerns raised abroad about a lack of solar panels because of the absence of refined silicon, Sandner was not unduly concerned.

“The shortage is not a big issue. The financial crisis and the economic problems over the last few years have slowed down the market, but demand is still increasing,” he said. He said there was also a shortage of inverters, another critical part of the solar energy system, but which would also be overcome with time.

As a very small market, relative to the electronics market which also requires refined silicon, Sandner said the industry would have to wait a bit for supplies to be made available.

He added that demand was being driven in Germany by the government’s decision to lower its feed-in tariffs in July. A feed-in tariff is a set amount per kilowatt hour that the government agrees to pay producers for each kilowatt hour generated by solar energy. It is usually several times higher than the regular price for electricity and has been used to jumpstart solar energy industries since the costs involved are significantly higher, at present, than the cost of producing electricity from fossil fuels. Israel has also instituted a similar system.

Looking to new potential markets, Sandner singled out the United States, especially in light of the BP oil spill in the Gulf of Mexico, which could heighten interest in renewable energies.

“There’s a strong will [for renewable energy] from many governments,” he added.

Turning to the Israeli market, Sandner was not unduly dismayed by the seemingly slow start here.

“In 2000, the first year of the feed-in tariff in Germany, we installed 40 megawatts (MW). This year, we’ll install six GW,” he said.

In addition to a feed-in tariff, the Israeli government has capped the total amount of MWs to be produced from solar energy systems of various sizes. Sandner suggested removing the cap on small rooftop photovoltaic (PV) systems.

“For the residential sector, it’s better to have no cap. People will invest on their own and undergo a behavioral change,” he said. Abakus’s representative here, Sun City, has started in the residential sector and will eschew ground-based systems in favor of rooftops for now, he said, because ground based systems involve additional costs and bureaucracy.

“There’s no problem with integration or grid issues so it’s good to start small with the residential sector [rather than large solar fields]. Renewable energy needs a bottom up system of local installers. It also has a totally different system of investors so it’s good to gain experience on the bigger roofs,” before moving to even larger systems or much smaller ones, Sandner opined.

Sandner said the Israeli market potential was “a question of caps. The government has to decide what programs to implement.” Abakus plans and installs solar energy systems but does not produce panels themselves. However, they have recently entered into a strategic partnership with a Taiwanese company who will be producing panels.

“We’d like to set a standard for panels,” he said.

According to Sandner, the solar energy market is finally coming into its own.

“There are panels that have been in operation for 25 years and they are still working. There are no mechanical issues in producing electricity from sunlight. Electricity is produced in just a part of a second without mechanical issues. Solar has a bright future,” he concluded.

Cleantech 2010 sported 150 booths exhibiting a range of technologies and companies, 30 ambassadors from overseas and many delegations from abroad. Several government ministers, as well as Bank of Israel Governor Stanley Fischer gave addresses during the accompanying professional conferences. The two-day exhibition this week grew by a third since last year with an increased budget of NIS1.5m. from NIS 800,000 last year, according to conference organizer Mashov.