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Report: Solar Panel Revenue Could Drop 20% in 2009

Ucilia Wang: December 22, 2008, 1:54 PM

If you are convinced that next year will be a painful one for solar, then check out the latest figures from market research firm iSuppli: Revenue for the global solar panel market is expected to plummet nearly 20 percent in 2009.

That would be a drop from $15.9 billion in 2008 to $12.9 billion in 2009, coming after solar panel companies have experienced eight years of growth.

Blame it on the oversupply of panels. There will just be too many companies making them and not enough demand to erect them all. The problem already has occurred: The industry produced 7.7 gigawatts worth of panels in 2008 but installed only about half of them, said iSuppliā€™s solar analyst Henning Wicht.

Wicht expects the gap to widen in 2009, when 11.1 gigawatts worth of panels could be produced while only 4.2 gigawatts will likely be installed. The average selling price for panels could drop to $3.10 per watt next year from $4.20 per watt in 2008.

Needless to say, companies with the manufacturing might to keep the costs low will do better.

Solar companies and analysts have been predicting an oversupply of polysilicon in 2009. Polysilicon is the main ingredient to produce most of the solar panels on the market today.

With cheaper polysilicon on the horizon and a growing number of new players entering the solar market, solar panel makers such as SunPower and Suntech also are expecting the panel prices to drop between 20 percent and 30 percent next year.

News Roundup: Solar Crunch in Conneticut, Losses for Toyota, and Aussie Carbon Cuts

Michael Kanellos: December 22, 2008, 7:18 AM
It's another dismal day in the neighborhood. Connecticut's solar initiative -- which had hoped to offer consumers subsidies for installing solar systems over the next two years, is out of cash six months into the project says the Green Inc. blog at the New York Times. The governor is trying to scrape a little cash together and the federal tax incentives passed in the week of the financial debacle could help, but installers are worried. Spain went through a similar turmoil, which lead to an oversupply of panels. Connecticut is much smaller so the same won't likely occur. Meanwhile, Nikkei Net (subscription required) reports that Toyota may suffer a $1.67 billion (that's U.S., not Yen) in fiscal 2008. It would be the company's first since 1940. Elsewhere, Green Car Congress says Australia wants to reduce carbon emissions to 5 percent to 15 percent below 2000 levels by 2020. That's less ambitious than some plans -- President elect Obama wants to cut them to 80 percent of 1990 levels by 2050 -- but that also makes the Australian ones more realistic. It will also have a carbon market by 2010. Meanwhile, writes about Alex Cheimets, a homeowner in Massachusetts who is covering his house with two layers of foam board to insulate it. It's to save energy, not to win style points. This one seems weird to me. There are actually great insulating materials -- such as aerogels -- you can use on the inside of your home. But he is saving a lot of power. At TechOn, check out a Q&A on Honda's battery initiative. And finally, VentureBeat has an interview with creamy-skinned VC Steve Jurveston on why cleantech will do OK in the downturn.

Solar Startups, Part 6: Concentrating Solar Power (CSP)  (Update May 20)

Eric Wesoff: December 22, 2008, 7:00 AM

CSP Concentrating Solar Power

Despite the staggering capital requirements for the plant build-out, VCs have invested enormous amounts of early-stage funding in parabolic troughs, power towers, and Stirling engines. Once the technology is worked out, the challenge for these firms in 2009 is the financing of these billion dollar projects. VCs can’t do that without help from banks, PE investors, and government.

Ausra:  Utility-scale solar thermal using a parabolic trough-based system with a “compact linear fresnel reflector" used in conjunction with a yet undisclosed thermal storage technology.  Their most recent funding round was $60.6 million from KERN Partners, Generation Investment Management, Starfish Ventures, Khosla Ventures, and KPCB. Ausra’s first commercial CLFR project, in Australia, will augment power production at an adjacent conventional power station. The firm is also developing a 177MW CLFR power plant for PG&E in central California.

BrightSource Energy: Brightsource Energy is developing utility-scale heliostat/power tower plants using high-temperature solar thermal technology. In its prior incarnation 20 years ago as Luz, the team built over 350MW of solar thermal generation capacity. The firm has raised more than $150 million from investors including VantagePoint Venture Partners,, BP Alternative Energy, StatoilHydro Venture, Black River, Morgan Stanley, DBL Investors, Draper Fisher Jurvetson, and Chevron Technology Ventures. It has a PPA in place with California utility PG&E for 900MW of thermal power. Like any solar thermal technology driving a steam turbine the firm needs direct uninterrupted sunshine preferably at altitude, access to water, and access to transmission lines.

eSolar: With an April 2008 $130 million investment from, Idealab, and Oak Investment Partners, eSolar is building large scale (>46MW) heliostat/power tower systems. They claim that their differentiators include the use of smaller mirrors, designing the components to fit efficiently into shipping containers to keep transportation costs low, and pre-assembly at the factory to minimize on-site labor, resulting in a capital cost reduction compared to existing solar thermal power plants. eSolar has signed a PPA with SCE to build 245MW of concentrating solar plants in the Antelope Valley region of Southern California.

Heliofocus: In 2008 Heliofocus received a $20 million investment from Israel Corp Green (ICG) and Musea Ventures. Claiming high optical and high thermal efficiency, the company's system uses a large parabolic dish concentrating sunlight onto a receiver that feeds a turbo generator. HelioFocus looks to build both small modular plants as well as combined cycle solar power plants. 

Unlike dish Stirling, HelioFocus uses a gas turbine that can hybridize with natural gas.

Infinia: Infina closed a $57 million B Round in 2008 from investors Foxconn, GLG Partners, Vulcan Capital, Khosla Ventures, EQUUS Total Return, Idealab, and Power Play Energy. Infina uses a “free-piston" Stirling engine with a dish concentrator to produce 3kW of AC power. In 2007 Infinia acquired Stirling Cycles, a Stirling engine developer, as part of its $9.5 million Round A. (Stirling Cycles had been incubated by Idealab.) Targeted applications are micro-CHP, remote power, and tactical power.

Luz II: (an engineering and R&D subsidiary of Brightsource Energy) converts water to superheated steam in a heliostat/power tower architecture. The firm's first installation is being built in Israel as a pilot plant. A series of 100MW and 200MW commercial solar power plants are scheduled to come on line in 2010.

Menova Energy:  Canadian CSP firm with at least $3.6M in VC funding and Canadian government funding.

RawSolar: The company's flagship product is a tracking mirrored parabolic dish that captures sunlight to produce steam or hot water.

Skyfuel: Parabolic trough solar collectors using light weight and potentially lower cost reflectors and materials. The company's reflective silvered-polymer film coating material allows for the elimination of glass mirrors in CST applications. It closed a $17 million Round B in April of 2008 led by Leaf Clean Energy.

Solar & Environmental Technologies: China-based CSP start-up reportedly with $3M from Hong Kong’s Entropy Ventures.

Solar Systems: Privately held Australian firm with a $100M investment from Australian utilities and private investors is currently using a dish-based CPV system but moving towards a power tower architecture(?).  Solar Systems will work on the Alice Springs solar power station, which is proposing to produce 1800 megawatt-hours of electricity per year, as well as the 154MW, $420M NW Victorian project (using heliostats). Solar Systems placed a large (350MW 10 year) order with Spectrolab for III/V cells.

Solel: Israel’s Solel designs, manufactures and installs parabolic trough solar fields for large scale power generation as well as manufactures solar thermal receivers which use a synthetic oil as the heat transfer fluid. Ecofin, a U.K.-based investment manager, invested $105 million in Solel in early 2008. The company claims to have had over $450 million in backlog in 2008.

Sopogy: While most CSP companies focus on large-scale power generation, Sopogy is targeting “Micro CSP" in ranges from 200kW to 20MW with applications ranging from power generation to AC to process heat. Too large for small residences, too small for utilities, the size is just right for industry, apartment houses, and campuses. It raised ~$9 million in 2008 from Ohana Holdings, Bethel Tech Holdings, Energy Industries Holdings, Kolohala Holdings, Black River Asset Management, et al. Hawaii’s state legislature approved ~$35 million in bonds for Sopogy to build and operate a local solar plant. The firm looks to close another VC round in early 2009.

Starpoint Solar: Starpoint Solar has developed a Stirling Dish technology claiming to generate electricity at half the cost of other solar technologies with production costs equal to new gas-fired power plants.  Starpoint is negotiating an LOI for a PPA with Inland Energy. The firm is looking to raise $10M to construct a 4-unit demonstration solar field and prepare for its initial 50MW solar plant.

Stirling Energy Systems: SES proposes to build 30,000 40 foot-wide mirrored dishes focused on 25kW Stirling engines in California’s Imperial Valley to fulfill a contract with San Diego Gas & Electric, enabling SDG&E to meet their 2010 RPS. Transmitting the power will depend on whether Sunrise Powerlink, a proposed 1,000MW power line, gets approved and built. In April of 2008, Irish developer and operator, NTR bought a stake from initial investors for $100 million and will supposedly be investing another $100 million in 2009. Stirling has a contract to provide 300MW to SDG&E by the end of 2010, and an additional 600MW if and when Sunrise is built.

Sundrop Fuels: Solar thermal systems that produce hydrogen and electricity via Solar Reduction of Carbon Dioxide, or Solarec.  According to Venture Beat, Sundrop received a $20M investment from KPCB in early 2008 and is also backed by Sun Mountain Capital and Oak Investment Partners.

That wraps up our series on solar startups.  Check out the other parts of the series here:

Let us know if we've missed any, your picks for winners and losers, and any comments you might have.

The Stubborn Appeal of Hydrogen

Darryl Siry: December 22, 2008, 4:30 AM
There are some very strong arguments why hydrogen (used in a fuel cell EV) does not make sense as a short, medium or long-term solution. The most fundamental argument is that hydrogen is an energy carrier, not a fuel, since it requires energy inputs to "refine" into pure hydrogen from water or natural gas (it cannot be mined, like oil, coal or gas). Since the energy to create hydrogen for use in a fuel cell can be more efficiently transmitted and stored in a battery for use in a EV drivetrain, it will never make sense to pursue hydrogen since the energy is always better used in a battery electric vehicle (so the argument goes). The problem with this argument is that it is a technical argument and it ignores the consumer psychology side of the equation. I'm not saying the argument is wrong, I'm just saying to really understand the persistent attractiveness of hydrogen, you can't underestimate the consumer appeal of the overall system relative to a battery electric vehicle. At a minimum, proponents of EVs must understand this because it offers very important lessons and conclusions for where EVs must evolve to gain broad adoption. Why, battery proponents must ask, does the public and consumer appeal of hydrogen persist so stubbornly? Simple: The idea of being able to refill the tank in a matter of a few minutes is a very strong consumer benefit -- one that is deeply embedded from decades of pouring extremely energy dense gasoline into our gas tanks. In our hectic lives today, even the four or five minutes it takes me to fill my tank at the gas station at the corner seems like an eternity. I believe that this issue is acknowledged by the battery EV community but the importance and impact is vastly underestimated. Recharge time is the single most important barrier to customer adoption of EVs in the long run, not range. One reason is that as long as recharging a battery pack (in practical, readily available locations) takes hours and not minutes, it is a major shift in consumer psychology for a driver to accept the fact that when the battery is depleted they are essentially down for the count. Even getting the charge time down to one hour or 30 minutes will not be quick enough to be practical and acceptable for broad consumer usage. Enthusiasts will plan lunch stops around the one hour charge during a road trip, but it won't be practical for daily use. Another reason is that range becomes less important as quick charge becomes more readily available. Imagine a future scenario where the energy density improves to enable 500 miles on a single charge and the infrastructure for quick charging exists. The availability of practical quick charging will mean that no one will need to carry the weight and incur the cost of the additional batteries for the full 500 mile range. Put another way, if the infrastructure for quick charging exists, improvements in energy density will result in cars with fewer batteries (resulting in less weight and less cost) to achieve the same distance between refills. So my conclusion is that EV companies, battery companies and utilities must innovate in the area of quick charge and infrastructure development if EVs are to gain broader adoption. It will be more important than innovating on increasing the maximum range of EVs. (Note: The tradeoff that is implicit in my argument is that battery chemistries that tend to have better rapid charge capability and cycle life also tend to have lower energy density. High energy cells tend to have shorter cycle life and less ability to handle a quick charge. This is true today and has been true for a while, but perhaps we will have a breakthrough in the future that is the best of both worlds.) Daryl Siry is the former chief marketing officer for Tesla Motors. He now consults on marketing and the automotive industry. You can read more here: