After the recent news of Amonix closing its North Las Vegas, NV factory and the other bad news from Amonix, I am returning to my practice of labeling concentrating photovoltaics (CPV) "The zero-billion-dollar market."

I had shelved that phrase, and in a rare instance of optimism, had tried to be patient and understanding with PV's low-functioning sibling, CPV.

Amonix was the presumptive leader in the CPV solar market niche, and despite its press release claims of "adjusting our business" in order to "restructure the company," these words and actions typically represent the death rattle of a VC-funded startup. Amonix has the most CPV systems installed, the largest kilowatt system size, the largest installations (Alamosa, CO and Hatch, NM), the most employees (at one point), had closed one of the largest CPV venture capital rounds, and had the support of some of the most savvy VCs. (Savvy in fields other than solar, at least.)

Charles Vaughan, VP of Sales Marketing at Amonix stated in a company release that:

  • Based on intense competition, the challenging solar energy equipment pricing environment and lower-than-anticipated demand for CPV (concentrated photovoltaic) solar energy in Nevada and other states in the U.S. Southwest, Amonix has made the difficult decision to restructure the company and shut down its manufacturing center in North Las Vegas, NV.
  • The only federal incentive Amonix received for the North Las Vegas facility was a $5.9 million federal manufacturing incentive tax credit that was never utilized. Tax credits can only be used to offset taxable income, and Amonix has not realized taxable income to utilize the tax credits. Thus, those tax credits have not been claimed and have had no cost to U.S. taxpayers.

 
Forecasters such as Lux Research are still maintaining high growth forecasts for the CPV market. In fact, a few years ago, former GTM Research Analyst Brett Prior provided gigawatt-scale forecasts for the CPV sector. Lux sees the market for HCPV growing to 697 megawatts in 2017 with a system market value of $1.6 billion and a module market value of $700 million, at a system price of $2.33 per watt, according to a recent report.

Note that $2.33 per watt in 2017 will be two or three times the selling price of flat-panel photovoltaics -- meaning there is no good reason to buy that forecasted 697 megawatts. Lux did say that "Amonix expanded too soon and too fast" leaving "the door open for emerging players like Soitec, SunCore, and SolFocus."

In the tradition of forecasters having the accuracy of dart-throwing monkeys, I'd like to make my own forecast: CPV is not an economically viable technology for production of large-scale terrestrial solar power. The forecasters, the entrepreneurs, and the investors got it wrong. The price of the triple-junction solar cell and balance-of-system, the required tracking accuracy, and reliability requirements dooms the technology in terrestrial applications.

Ben Kortlang of Kleiner Perkins is on Amonix's board of directors and is a former employee of Goldman Sachs. Kortlang once told me, with a straight face, that the Amonix LCOE and cost per watt were lower than First Solar (about $0.72 per watt). If that were the case, Amonix might not be shuttering its factory doors.
 
Mark Jaffe, The Denver Post's energy writer, has spoken with Cogentrix, the operator of the 30-megawatt Alamosa (the world's largest) CPV plant, which uses equipment from Amonix. According to Jaffe, Cogentrix says that it is prepared to go on the market and buy individual components to service and maintain its Alamosa plant -- if Amonix is not around to do it. Cogentrix claims that since the facility went into operation on April 1 it has met its contract with Xcel, and Xcel says the same.

Cogentrix is also the recipient of a $90 million DOE loan guarantee.

I've tried to obtain performance information from Cogentrix, the Alamosa developer and part of Goldman Sachs, and from Xcel, as well as the operators of the 5-megawatt Hatch CPV facility, and have been shut down every time. You'd think that these firms would want to trumpet positive performance data. Or bury their disappointing energy harvest, as the case may be. We have heard unconfirmed reports that both Alamosa and Hatch have had their share of technical issues.

The impact of this shutdown on the employees and the concentrating photovoltaics industry, such as it is, is tragic.
 
If the market leader in CPV can't make it, it's difficult to fathom how the others in the field such as SolFocus, Soitec, or GreenVolts (with its investment from ABB) can possibly survive. The collapse of the CPV systems players could have a domino effect on the component suppliers such as Emcore and Spectrolab and, more painfully, to Solar Junction and other semiconductor startups. Soitec and SolFocus will continue to chug along, for a while at least, fueled by an infatuation with technology rather than with low-cost energy. Idealab-funded CPV startup Energy Innovations already gave up the ghost earlier this year. Rooftop CPV firm Soliant sold to Emcore for pennies on the dollar last year.

The competition remains flat-panel PV with costs of $0.50 per watt in five years. Or more realistically, the competition is natural gas, along with its cheap price in the short- and medium-term.

Amonix might continue to soldier on in its diminished state. With a much lower burn rate and its debts renegotiated, the firm might close a little more VC in a pity round and slowly fade away or return to its former incarnation as a lifestyle business for its original founder.

Tags: amonix, concentrating photovoltaics, cpv, emcore, first solar, kleiner perkins, pv, soiutec, solar, solar junction, solar panels, solfocus, vc, venture capital, wind