California is the biggest U.S. solar market, although its share of the new project market has slipped from 80 percent in the middle of the last decade to about a third as other states, such as Arizona, Colorado and New Jersey have stepped up support for renewable energy.
Developers of large, or utility-scale, solar power plants have sought to expand beyond the Golden State, citing the large number of projects under development in California that have filled the state's demand through about 2016.
Still, only about 6 percent of new project proposals last year won approval by the California Public Utilities Commission, commissioner Timothy Alan Simon said at the Solar Power Generation Conference in Las Vegas.
Some project developers may be seeking the CPUC's approval for solar plants they may be unable to build themselves but plan to sell to other companies to construct, Simon said.
"It does make me nervous," he told Reuters. "Is someone just bidding low to sit in the cue?"
A glut of solar equipment drove solar panel prices down by as much as 50 percent last year, hurting profits for companies such as Suntech Power Holdings, Yingli Green Energy Holdings, Trina Solar and First Solar and driving some of their smaller rivals out of business.
Those price declines have, however, helped companies like Sharp Corp unit Recurrent Energy, REC Solar and SolarCity that buy those panels and use them to build projects.
Some bids for large solar California projects to be built in 2015-1016 were being submitted as low as 7 cents per kilowatt hour, including state and federal subsidies, according to Shayle Kann, managing director for solar at renewable energy research group GTM Research.
Those price levels maybe unrealistically low, Simon said, and may hurt the renewable industry over time.
"I have worries," he said. "Could there be better technologies that get buried in this rush?"
Those technologies could include concentrated photovoltaic solar, which uses lenses or mirrors to focus the sun's rays and increase efficiency, or solar thermal power, which uses heat from reflected sunlight to create steam that powers an electricity turbine.
Still, those prices, which are about 20 percent below those of projects that are expected to be in operation in the next two years, show that competition among developers has become fierce, he said.
"I think now that we are seeing a more robust marketplace, the best developers will have to rise to the top," he said.
SOURCE: http://www.reuters.com/article/2012/02/01/us-solar-california-idUSTRE81001M20120201
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