CPV: The Zero Billion Dollar Market

More than one hundred people gathered last night at an EBC (Environmental Business Cluster) event at the Tech Museum in downtown San Jose, Calif. to hear the story of GreenVolts, a Venture Capital-funded startup aiming to take HCPV (High Concentration Photovoltaics) to market.

There really isn't a CPV market – it's a new technology, yet to be deployed in any meaningful scale. Companies like Amonix, SolFocus and Concentrix have managed to deploy a few megawatts here and there but the power being generated is negligible in comparison to other solar technologies like flat panel silicon-based PV or solar thermal. The real metric in question with CPV, as with any energy source, is Levelized Cost of Energy (LCOE) and CPV has no track record to prove its' LCOE advantage. The price of triple-junction solar cells and two-axis trackers, maintenance, installation and other costs remain unproven and risk-laden for CPV.

We've covered CPV in detail:

CPV minimizes the use of silicon, which was a reasonable value proposition when the price of polysilicon was $500 per kilogram a few years ago. But  today, with the price of polysilicon stabilizing at between $50 and $70 per kilogram – CPV's value proposition starts to evaporate.  That makes life for a CPV startup pretty challenging.

I'm on a Boat (Featuring B-Cart)   

About four years ago Bob Cart was on a sailboat in the Pacific with his pregnant wife when his solar epiphany occurred. The boat used solar panels, big, bulky and inefficient ones. So he asked himself: "Why not pick the biggest problem to solve?" He decided to enter the renewable energy market to try to solve the "big, gnarly problem" of energy.

Moonlighting in his garage, he filed for a $95,000 grant with the CEC (California Energy Commission) and filed a patent. While the grant percolated – he entered the California Cleantech Open (CCTO ) and won in the renewable category and swimsuit competition – $50,000, office space and some other goodies that allowed them to get going. He also eventually received the $95,000 grant. Cart was now the CEO of a modestly-funded CPV startup.

Since then GreenVolts has raised more than $45 million from Oak Investment Partners and other investors in three rounds:

  • $2 million seed
  • $10 million Series A
  • $34 million Series B

PG&E and the CPUC Encounter GreenVolts

Hal LaFlash of PG&E encountered GreenVolts as a judge on the CCTO.  He has since favorably scored GreenVolts' RFO application for a 2-megawatt energy project on project viability, believing that "this was a viable technology that could make a difference."  The 2-megawatt project was deemed of sufficient size to prove the technology and help GreenVolts reduce their costs. In Hal's words, "It was more a qualitative thumbs-up, not a quantitative thumbs-up."

Paul Douglas of the CPUC was initially somewhat less enthusiastic. The CPUC looks for least cost, best bids and all bids are ranked by those metrics, while viability is a soft metric.  He viewed PV as a subsidized technology suitable for rooftops and not a really a utility project.  Since then he seems to have come around, believing that, "To get to the aggressive California RPS we need to diversify our portfolio with 10 megawatts and below projects on the distribution network, not in the desert."  And GreenVolts does meet those requirements.

2012: Something Completely Different

On a slightly different note, unrelated to GreenVolts, the ubiquitous Hal LaFlash flashed-forward to 2012 and saw the following:

  • PG&E's smart meter roll-out will be complete by 2012
  • Up to 4,500 megawatts of wind power will be online from the Tehachapi wind farm project  
  • The need for big-time energy storage to cope with that much wind power and other renwables on the grid

Small Matter of Actually Executing

This was a heartwarming story about a smart startup that was able to raise cash from the state, from business plan competitions and from VC-investors. It filed patents and won small contracts with major utility players.  It's had the requisite board room shake-up. Now all GreenVolts has to do is build a reliable and innovative product, deploy it in an economical fashion, and generate energy at grid-parity and a competitive LCOE.