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Horseshoes, Hand Grenades & Demand Projections

Daniel Englander: September 3, 2008, 1:01 PM
Valencia, ESP (Actually, in Hong Kong right now) - The solar market is funny in that it exhibits many of the inefficiencies associated with markets that move according to artificial price signals. In this case, the artificial price signals are policy and incentive programs designed to increase deployed capacity. These range from renewable portfolio standards to tax credits to REC programs and ancillary credit markets to feed-in tariffs to something the French have that I’m not sure even they understand. Such programs play a key role in setting local prices and, by extension, determining demand in those markets. Easy, right? Setting a feed-in tariff to EUR 0.42/kWh or an REC to $33.23/MWh, or even a tax credit to 30% of the installed cost, gives customers a somewhat known price. Combine this with suppliers moving into gigawatt scale production in 2008, easing raw material constraints, and cost-engineered process improvements, and you start to get a picture of an industry moving down the cost curve while succumbing to some strong market drivers. Among these are high commodity prices, unpredictable power markets, and growing environmental consciousness (tangible or intangible, depending on who you ask). Taking all of these variables into account, it should be relatively easy to estimate the size of the demand side and the size of the overall solar market. Not quite. Demand side estimates range in accuracy from pin the tale on the donkey to Dick Cheney with a shotgun. Photon thinks demand will reach roughly 24 GW by 2010, outstripping supply by 80 percent. I’ve heard this estimate includes a 500 MW market in the Czech Repubic. I’d like to try whatever it is they’re smoking. Most other estimates range between 5 GW and 10 GW, which isn’t something you wouldn’t want to bet grandma’s life insurance on. Part of the reason estimating demand is so hard is that consumer prices are still largely a function of political will. Sure, economies of scale on the producer side ought to bring down costs, which, tempered by rising demand for cheaper modules, will establish some kind of marginal price to guide producers. But if policies do too well and end up costing too much, it’s pretty easy to lower tariffs or eliminate tax credits. We’re seeing this in Spain right now, and we almost saw in it Germany. It’s possible the demand side models suppliers use fail to take this into account. Instead, they see unlimited demand prospects at a certain price level and at a steady rate of tariff declination. The problem is that this causes a certain amount of, dare I say, irrational exuberance. Sure, I love slicing wafers as much as the next guy, but the hope that markets will materialize shouldn’t justify supply growth at 70 percent while growth on the demand side moves at 45 percent. It’s unlikely we’re going to experience another Spain-Germany-Japan trifecta like we did in the golden days of 2005. Maybe unaccounted for demand in India and China will move this market. Or maybe the Spanish could start making panels out of ham – I’ve seen 243 different kinds of ham this week in Valencia. Clearly, solar ham is the next logical step. I doubt the Spanish government would rescind that feed-in tariff.

An Energy-Efficient Endless Summer for Plants

Michael Kanellos: September 3, 2008, 6:23 AM
COPENHAGEN — Plants need food, water, red and blue. Red and blue light that is, according to John Erland Ostergaard, a professor at the University of Southern Denmark, who has come up with a lighting system based around LEDs that he says could drastically cut the power consumption in greenhouses. (We met at Copenmind, a technology conference taking place this week in Copenhagen. Also to note, Toyota downplays lithium-ion batteries and an Irish scientist makes plastic with bacteria.) In the system, microcontrollers adjust the amount of red and blue light, the portion of the light spectrum that plants need to grow to ensure optimal growth, coming from the LEDs. The amount of red and blue light is tweaked according to time of day, plant species, and time of the year. It can also compensate in case clouds or excessive sunlight. In a demo, he puts he hand over a sensor to simulate sun. The LEDs start giving off more intense light. He removes it and the light level goes back down. The overall effect is an endless summer. In one experiment, a rose grower was able to grow roses in Denmark in winter in 12 weeks, the length of time it takes to grow them in the height of summer. Typically, roses in the winter take 14 weeks to grow. Ostergaard’s group has studied different types of plants — tomatoes, cucumbers — in a closed environment and measured things such as the CO2 and oxygen exchange to try to determine how to vary light intensity during a typical day to maximize growth. Just as important, the power consumption was throttled. The LEDs consumed only 71 watts—an ordinary grow light would have consumed 510 watts. In some cases, greenhouses can cut lighting power by 80 percent, he said. The power consumption comes because the LEDs only put out beneficial light. Ordinary grow lights put out a broad spectrum of light—orange, green, etc. “The LEDs only put out the light that is needed,??? he said. Varying the amount of red and blue light can also impact the overall quality of the plant. Increasing red light can make the plant more compact — the stems stay closer together when growing. You can expect to see something like this advertised in the back of "High Times" soon.

CPV, Pt. 1: Stuck in the Middle

Eric Wesoff: September 3, 2008, 4:00 AM
In the spectacularly high-growth $20 billion dollar global solar market, CPV is a zero billion-dollar market segment with only a few megawatts deployed, stuck in the middle between the rapidly commodifying silicon solar market and the well-financed high-output concentrated solar thermal market. Concentrated Photovoltaic Technology (CPV) has received more than $350 million in venture capital funding since 2005, tens of millions from the Department of Energy (DOE), and tens of millions from public markets to fund development of this promising solar technology. But to a great extent, CPV has been overshadowed by other solar sciences, notably concentrated solar power (CST or solar thermal), thin-film solar and wafered silicon (the current dominant technology). The fundamental concept behind CPV is the use of a very high-efficiency solar cell that is much smaller than the optical collection area. The value is that “cheap??? glass and metal replace expensive (?) and capacity-constrained (?) silicon and provide a super high-efficiency module. GaAs triple-junction III/V solar cells (with >35% efficiency) result in a higher power density, a more efficient use of land, and a potentially lower Levelized Cost of Energy (LCOE). CPV requires high DNI (Direct Normal Irradiation) and is therefore limited in geographical range (SW USA, Spain, Australia, North Africa and the Levant). CPV does not have a storage option like CST but does not require water resources like CST. The big questions here are:
  • Can CPV catch up with CST, silicon, and thin-film’s momentum?
  • Are risk-adverse big-project financiers willing to back CPV with the same gusto they’ve backed CST and silicon?
Recently, Greentech Media in cooperation with The Prometheus Institute released one of the first and easily the most extensive report on Concentrated Solar Power (CSP). The report includes the following table: The table suggests that CPV has the potential to be a 6GW market by 2020. It also suggests that the sweet spot for CPV is squeezed somewhere between smaller-scale installations utilizing silicon and thin-film PV and the massive utility-scale Concentrated Solar Thermal (CST) installations often used in tandem with thermal storage technologies. I’ve compiled a list of public and private players in the CPV market (It’s a long list but probably not exhaustive). Many of these firms have their own slightly different spin on CPV. In Part One, I’ll list the high-concentration system vendors (HCPV).  Part Two, which will arrive later this week, will cover low-concentration systems (LCPV), III-V semiconductors and miscellaneous stuff.  If I’ve missed a firm – let me know at HCPV Systems Abengoa Solar: Abengoa designs and deploys CPV systems. Here is the company’s view on land usage requirements for CPV. Amonix: An early entrant in the terrestrial CPV world, privately-held Amonix uses a 2-axis HCPV system using silicon, not triple junction cells. They make the argument for silicon in this white paper. According to the company’s Website, they’ve manufactured and installed more than 570 kW of their fifth-generation Amonix systems over the last six years. Arima: Here is a datasheet for a 120W module from this Taiwan-based HCPV lens / pedestal systems builder. Concentrix: A Fraunhofer Institute spin-off with investment from Good Energies, Concentrix has installed about 100kW of CPV systems and is now building a 25MW production line. Concentracion Solar La Mancha: Lens / pedestal based HCPV systems from Spain. Cool Earth Solar: Unique mylar balloon-based concentrator system received $21 million in funding in early 2008 from an unnamed PE investor. At a recent conference, CEO Rob Lamkin said that they were currently using triple junction cells but silicon would eventually be used. Emcore: Emcore is a publicly traded, vertically integrated supplier of III/V solar cells as well as CPV systems and is contemplating an IPO for its solar unit in 2009.   Recent earnings calls have revealed that some of Emcore’s orders are less than firm. Emcore cancelled all production slots relating to its supply agreement with customer Green and Gold Energy (GGE), after the Australian firm revealed that it was negotiating the sale of its business. Despite the GGE debacle, Emcore’s CEO Hong Hou says that demand for its CPV components and cells is mounting up. Hou said that Emcore is working on pilot projects in Australia, Canada, Korea, Portugal Spain, the UAE, and the U.S. In Q2 ‘08 Emcore:
  • was awarded a $4.6 million follow-on order for solar cell receiver assemblies from Concentration Solar la Mancha of Spain.
  • agreed to supply CPV systems to XinAo Group in China, one of China’s largest energy companies.
  • entered into a $28 million supply agreement with South Korea’s ES System for solar cell receivers.
Energy Innovations: EI’s low-profile “Sunflower??? is a 2 axis tracking HCPV system.  EI’s VC investors include MDV and Idealab. EnFocus Engineering: Lens based, low-profile III/V system for rooftop applications.  EnFocus recently received a $3M Solar America Initiative award from the DOE. Entech Solar (a World Water and Solar Technologies company): Fresnel Lens and pedestal CPV systems using silicon. ES System: HCPV systems from Korea with cells from Emcore. GreenVolts: VC-funded GreenVolts has a 2MW PG&E contract for their low-profile CPV system to be deployed near Tracy, Calif. The 2MW system is hailed as one of the largest CPV systems undertaken. Guascor Foton: Spanish-based large-scale HCPV. Isofoton: Targeting 10MW of CPV assembly capacity for their lens / pedestal systems in Malaga, Spain. The company estimates that 10MW = 15,000 wafers = 50 million solar cells. Morgan Solar: Angel funded Morgan Solar uses “Light Guide Solar Optics??? (LGSO) to direct sunlight to the edges of an optical element. OPEL International: Listed on the TSX exchange and located in Connecticut, U.S., OPEL builds lens / pedestal CPV systems based on Spectrolab solar cells. OPEL’s technology was developed with the University of Connecticut and Canada’s NRC. Pyron Solar: TJ-based 2-axis HCPV with arrays floating in water. First round funding from New Energies Invest in 2007. Here’s their brochure. Sharp: 700X lens / pedestal system sol3g: Abengoa-invested, Spanish-based HCPV pedestal systems with solar cells purchased from Azur Space. Power density ~28 Wp/m2. Solar Systems: Privately owned Australian firm with a $100M investment currently using a dish-based CPV system but moving towards power tower (?).   Solar Systems placed a large (350 MW 10 year) order with Spectrolab for III/V cells. SolFocus: One of the first VC-funded CPV startups with technology licensed from PARC, they acquired a glass manufacturer and a tracker company to control their supply chain and is in the process of raising another funding round.   They have completed the first 200kW phase of a 3MW system in Spain operated by ISFOC. At one point Spectrolab was their designed-in supplier of solar cells but that might have changed as SolFocus attempts to liberate itself from the III/V solar cell oligopoly. Soliant: VC-funded by Rockport, Nth Power, Trinity, Rincon, this firm started life as a low-concentration company, now targeting standard panel footprint 500X HCPV for rooftop applications. No press releases from them in 2008. Sunrgi: Hollywood, Calif.-based private company claiming 2000X concentration with proprietary heat sinking and cooling technology. Zytech: Private firm headquartered in Spain manufacturing LCPV and HCPV. Click here to continue to Part Two: Low-Concetration Photovoltaics.