1. First Solar
First Solar is making an ambitious bid to conquer the project development business. The solar panel maker paid about $400 million for gigawatts worth of unfinished solar power projects from OptiSolar earlier this year, including a crown-jewel deal to build a 550-megawatt solar farm in California and sell power to the utility Pacific Gas and Electric Co. First Solar also recently won a contract to build a 48-megawatt solar power plant for Sempra Generation.
All these projects will keep the Tempe, Ariz.-based First Solar very busy in 2010. The public company has built a successful business making cadmium-telluride solar panels at its factories in the United States and Malaysia, and selling them largely to Germany and other European countries. Its ability to expand manufacturing quickly enables it to deliver the low-cost promise that many other thin-film solar panel makers have yet to fulfill. The company generated produced $348 million on $1.25 billion in revenue in 2008. It more than tripled its first-quarter net income this year and vowed to keep its panel prices ultra low to gain a strong foothold in the U.S. market.
First Solar has been a force to be reckoned with in the solar panel business, so it could do the same in the power plant engineering and construction sector. It isn't the only solar panel makers entering the project development business – SunPower and Suntech Power come to mind. First Solar has to compete with companies that specialize in developing and operating solar power plants, such as SunEdison and Fotowatio, which just bought a solar power developer, MMA Renewable Ventures.
2. Suntech Power
Suntech Power has built up the manufacturing muscle to deliver crystalline silicon solar panels at lower costs than many competitors. The Chinese company reached 1 gigawatt of solar cell production capacity at its factories in China by the end of 2008. The Chinese public company also is seeing results from its investment in what it calls the Pluto technology, which can boost the rate of sunlight-to-electricity conversion of solar cells to close to 20 percent. That will help it to close the gap with SunPower, which makes cells with 22 percent efficiency and sell the panels at higher prices. Most of the solar panels sold today are made with crystalline silicon.
The United States is the market to conquer, and the federal government is expected to dole out grants, loans and other incentives in earnest in 2010. Although most of its customers are still in Europe, Suntech has been aggressive in expanding its network of dealers in the U.S. residential market, growing from around 30 by the end of 2008 to more than 100 a few months later. Suntech also entered the project development business when it announced last October that it was buying installer EI Solutions and forming a joint venture called Gemini Solar Development, which recently won a contract to develop a 30-megawatt solar farm for the city of Austin. The company generated $111 million in profit on $1.92 billion in revenue last year.
Suntech risks of spreading its resources too thin – the company also is developing amorphous silicon thin films and building-integrated components. There is no shortage of competitors in each of the market segments it's attacking (see First Solar item above). Trina Solar, a fellow Chinese solar panel maker, produces its own silicon ingots and wafers for making solar cells, which are then assembled into panels for installation. Japan's Kyocera Solar and Sharp and Germany-based SolarWorld are other companies focusing their resources on manufacturing.
Making solar energy affordable takes more than low-cost manufacturing. It also requires a retailer who can expand its service network quickly. SolarCity has been able to do just that. The Foster City, Calif.-based private company serves California, Arizona and Oregon and claims to be one of the largest in the country. It says it certainly has served more customers than other companies, based on data from the California Solar Initiative, the state rebate program for customers of three largest investor-owned utilities.
The company began offering a leasing program a year ago to make solar energy more affordable to consumers (see SolarCity Sees Sales Spike). The company won the backing of First Solar, which has invested $25 million in the company and is supplying SolarCity with its low-cost solar panels. Having Tempe, Ariz.-based First Solar as a reliable source of cheap panels gives SolarCity an edge over competitors, many of whom believe First Solar's panels aren't suitable for residential rooftops. The cadmium-telluride panels convert sunlight into electricity at a lower rate than conventional, crystalline silicon panels, but crystalline silicon panels tend to be more expensive.
The solar installation market is very young and full of startup companies that opened shop only in the last few years. An increasing number of them are partnering or merging their businesses so that they can offer cheaper services and over more territories. GroSolar and Alteris Renewables recently signed up with San Francisco-based SunRun to offer financing plans and installations to homeowners in Massachusetts. Earlier this year, GroSolar, in White River Junction, Vt., bought Borrego Solar Systems' residential business, which operates in California and Massachusetts. All these alliances and acquisitions mean SolarCity is facing equally ambitious competitors. SolarCity plans to expand to the East Coast later this year or early next year.
For years, developers of copper, indium, gallium and selenide panels have promised to provide a good alternative to the conventional crystalline silicon panels. Fremont, Calif.-based Solyndra appears to be making good progress to deliver just that. The company has signed sales contracts worth more than $1 billion, and has seen commercial installations of its panels (see Solyndra Boosts Power Output). In comparison, many of its competitors are still getting ready to mass-produce their CIGS panels.
That gives Solyndra a good head start. It has a factory that can produce 110 megawatts of panels per year, though the company has declined to disclose its production rate. It is planning to build a second factory, and is set to receive a whopping $535 million federal loan to build a second factory that could produce 500 megawatts of solar panels per year. If plans go as expected, Solyndra will be busy building that factory in 2010 and start shipping panels from there in early 2011.
The federal loan would cover 73 percent of the project cost, and Solyndra hasn't said whether it's lined up the rest of the funds, however. Meanwhile, fellow CIGS companies also are claiming to be making good progress on their plans. San Jose, Calif.-based SoloPower said it plans to start commercial production in a few months (see Gunther Portfolio). Nanosolar, also in San Jose, began building a 1-megawatt power project in Germany last October (see Nanosolar Broke Ground on 1MW Power plant, Launched German Panel Factory).
5. Enphase Energy
Solar energy systems these days typically rely on a central inverter to convert the direct current produced by each solar panel to alternating current for the grid and to monitor the performance of the entire system. Enphase Energy, founded in 2006, is offering an alternative that could improve energy output by 5 percent to 25 percent and do a better job tracking the system's health.
The Petaluma, Calif.-based startup has developed a miniature version of the inverter that is bolted onto each solar panel. This approach makes it easier to harvest energy from panels that perform poorly as a result of shade or debris. When a few panels are compromised, they can have a big impact on the overall energy output of the system. Enphase launched its micro-inverters last June and said that it already has "tens of thousands of micro-inverters in the field," said Raghu Belur, co-founder and vice president of marketing at Enphase.
It has lined up a good number of customers. It is selling its products through solar equipment installers and distributors such as Akeena Solar and AEE Solar. Akeena plans to sell to electricians and roofers solar panel systems that they could install easily, and those systems would come with Akeena-designed panels and Enphase’s micro-inverters. Suntech Power, a solar panel maker, said last month it would order and market Enphase’s micro-inverters to its network of U.S. dealers.
Enphase entered the micro-inverter market early, but it will face some tough competition soon. SmartSpark Energy, another startup, plans to start commercial production. Other companies such as National Semiconductor are developing devices that also would be attached to each panel, but would boost the direct current output that then goes to a central inverter. National plans to launch its product in May this year.
6. BrightSource Energy
In the desert of American Southwest, plans are being drawn up by a host of American and European companies that want to use the sun's heat to generate power. BrightSource Energy has emerged a serious contender. The company was founded in 2006, but it technical team came from Luz International, which built nine solar-thermal power plants in the California's Mojave Desert in the 1980s.
Oakland, Calif.-based BrightSource has convinced the two largest utilities in California – Pacific Gas and Electric Co. and Southern California Edison – that it can build power plants with up to 2.2 gigawatts in capacity and start delivering electricity to them several years from now (see BrightSource Inks 1.3GW SoCal Edison Deal). It also recently reached a land deal to build on private property in Nevada, in addition to its plans to build on public land in California. Construction for al these projects are scheduled to start next year.
The company is pursuing a different technology development than what Luz did. BrightSource is setting out to build a field of mirrors, or heliostats, that would concentrate and direct the sunlight to a central tower for heating up water to generate steam. The steam will then be piped to a turbine next to the tower to generate electricity. The technology is newer and considered less proven than the parabolic trough design that uses curved mirrors to heat fluid-containing pipes in front of them. Aside from proving the concept, BrightSource also is competing with companies that have built small solar-thermal power plants in Europe, including Abengoa Solar and Solar Millennium. Abengoa and Solar Millennium both have deals with utilities in Arizona and Nevada.
7. Sharp Electronics
There is no shortage of companies developing amorphous-silicon technologies, but the one that could push them into the mainstream market is Sharp Electronics.
As First Solar and other large manufacturers have demonstrated – size matters. Sharp already is one of the world's largest makers of crystalline silicon panels, the kind that dominates the market today. The Japanese behemoth is now making a big bet on amorphous silicon.
Sharp spent 22 billion yen and built a factory in Katsuragi, Japan last year for producing amorphous-silicon cells and assembling them into panels. The move boosted its production capacity from merely 15 megawatts per year in 2007 to 160 megawatts (see Sharp Guns for U.S. Thin-Film Market). The company announced last October that it had begun production and would ship to Europe first. It's on schedule to launch the product in the United States this summer, Ron Kenedi, vice president of Sharp's Solar Energy Solutions Group, told Greentech Media last month.
The Katsuragi factory is rolling out panels that use a second-generation amorphous silicon technology. Instead of using only a layer of amorphous silicon, the material that converts sunlight into electricity, the second-generation solar cells contain a layer of amorphous silicon and a layer of microcrystalline silicon. Sharp expects the panels to be able to convert 9 percent of sunlight that hits the cells inside into electricity. In comparison, many of startup companies in the space have only recently begun producing panels using the first-generation technology, which can produce roughly 6 percent efficiency.
Sharp already is building another factory, located in Sakai, Japan, where Sharp already has factories for making glass and LCD display panels. The Sakai solar manufacturing plant would produce triple-junction cells, starting in March 2010, the company has said. The 72 billion yen factory will have an initial production capacity of 480 megawatts, with room to expand to reach 1 gigawatt of capacity.
Triple-junction cells would contain two layers of amorphous silicon and one layer of microcrystalline silicon. This third-generation technology could produce panels with 10 percent efficiency, the company said. In comparison, First Solar's cadmium-telluride panels currently have 10.9 percent efficiency.
Sharp will face tough competition from fellow Japanese electronics giant, Sanyo, which also plans to begin producing second-generation amorphous silicon panels next year (see Sanyo Build New Factory, Enters Thin-Film Fray). Smaller competitors Sunfilm and Sontor, meanwhile, are merging to better complete (see Sunfilm, Sontor Merge to Ready Amorphous Silicon for Battle). Sunfilm bought its factory equipment from Applied Materials which, along with fellow factory equipment developer Oerlikon Solar, are making it possible for startups to enter the amorphous silicon space.
There is no shortage of companies aiming to successfully commercialize concentrating photovoltaic technologies – the use of mirrors and lenses to concentrate the sunlight onto solar cells to generate electricity. SolFocus is one of the few that is making a steady progress toward that goal.
The Mountain View, Calif.-based startup last year erected two projects with a total production capacity of 500-kilowatts in Spain to show that its technology could be deployed in the field (see SolFocus Completes Spanish Project, Eyes California). SolFocus installed a 7.2-kilowatt system for a San Francisco-based radio station last fall. Last November, it unveiled a second-generation system that could convert 25 percent instead of 18 percent of the sunlight that hits the cells into electricity, the company said (see SolFocus Boosts Solar Efficiency). The company has announced a $103 million deal to build 10 megawatts worth of solar projects in Spain for EMPE Solar by the end of 2010. It also is teaming up with the Samaras Group to build 10 megawatts worth of power projects in Greece starting this year.
SolFocus has big plans to commercialize its technology this year and next. The company hopes to install 10 megawatts to 15 megawatts of its systems by the end of this year and then install another 85 megawatts in 2010. It aims to impress power producers at a time when falling prices for silicon-based solar panels and the promise of solar-thermal technologies could make the company's proposition less attractive. It is competing against competitors who also have shown results, including Concentrix Solar in Germany and Sol3g in Spain.
9. SoCal Edison
California leads the country with aggressive policies to promote renewable energy production and use. And Southern California Edison (SCE) stands out as the most aggressive in buying renewable power and pursuing its own power generation projects in the state, particularly solar.
SCE has added the most renewable power in its offerings, reaching nearly 16 percent by the end of 2007. That means the utility is mostly likely to be the first to meet California’s stringent renewable energy standards, which require power retailers to include 20 percent of their supplies from "new' renewables (i.e., solar, wind, geothermal and small hydro) by 2010. The mandate will then increase to 33 percent by 2020. To reach those goals, the utilities will both build their own solar power plants, buying panels from a variety of vendors, as well as buy power from independent providers.
SCE is doing all three. Notably, it took a plunge and announced plans to become an owner and operator of a 250-megawatt solar power project, which would place solar panels on about 65 million square feet of commercial rooftops. The project set SCE apart from other utilities that only have recently warmed up the idea of owning and operating their own solar power plants.
SCE also has signed a good number of power-purchase agreements from a wide range of solar technology providers. It inked a deal to buy power from 1.3 gigawatts worth of solar-thermal power projects being developed by BrightSource Energy. SCE also signed a power purchase agreement with Stirling Energy Systems, which is developing 500-megawatt to 800-megawatt worth of projects. Last summer, SCE also agreed to buy power from wind developer DCE, an affiliate of Caithness Energy, which is working on wind farms that can produce about 909 megawatts of power.
SCE ranked No. 3 among the country’s investor-owned utilities that are serving up wind power to their customers, according to the American Wind Energy Association’s 2008 annual report.
Now, Pacific Gas and Electric (PG&E) and San Diego Gas and Electric have signed their shares of renewable power purchase agreement with solar and wind project developers. PG&E is ahead of San Diego on selling renewable power, and it recently announced plans to own solar projects. PG&E also is ahead of SCE on smart meters deployment (it claims it leads the pack nationwide).
10. CH2M Hill
Every solar panel and power project developer is gunning for opportunities to build power plants for American utilities, so firms with an expertise on power plant engineering and construction will have an advantage to win contracts. CH2M Hill is poised to profit handsomely from the rush by utilities and independent power plant operators to build large-scale solar farms.
Englewood, Colo.-based CH2M claims to have 40 years of experience delivering solar energy projects internationally. It won a contract to oversee the construction of Schott Solar’s $100 million factory in Albuquerque, M.N. to make solar panels and solar-thermal equipment. CH2M announced last October that it would conduct a feasibility study and other consulting work for a 1-megawatt solar project at an AT&T facility in San Ramon, Calif. CH2M also is managing the first-phase development of the carbon-neutral, greentech-filled Masdar City in Abu Dhabi that would get the bulk of its electricity from rooftop solar and solar farms. The engineering firm added that it has worked with an unnamed industrial operator to install solar-thermal equipment for power generation, and with other companies such as Pacific Solar in Australia on starting or expanding solar energy equipment factories.
Competition for utility-scale projects will be intense, of course. Serious contenders include San Francisco-based Bechtel. Bechtel worked on a solar-thermal power tower project with Boeing, Southern California Edison and the National Renewable Energy Laboratory back in the late 1990s. In its recent annual report, Bechtel said it had launched new efforts to pursue solar projects.
Another contenders is defense contractor Lockheed Martin, which says it entered the solar space two years ago because energy had become a national security issue. Lockheed, based in Bethesda, M.d., unveiled a test solar array in New Jersey last month, a project to investigate different types of solar-thermal technologies. It also is teaming up with Starwood Energy Group, which would line up financing, land and permits for developing solar power plants.