Viewing posts tagged "Solar"

Venture Capital Lights Up Solar in Q3

We reported earlier this week on the resurgence of venture capital investment in greentech. We broke it out sector-by-sector in this post. The graph above breaks it down year-by-year and looks at the recovery quarter by quarter

The chart below is another example of some of the work done in the Greentech Innovations Report – where we carefully track every VC deal in greentech as well as report on a different renewable energy topic every issue.

Investors channeled $575 million into 29 solar VC deals in the third quarter.  The investments spanned the solar sector and ranged from the fanciful (solar in space from SolarEn) to the sublime.  Notable in this data is the number of small investments - early stage VC investing is not dead.  Also notable are the 11 European and Asian investments, a larger than typical proportion.  European VC is alive and well.  The largest deal, Solyndra's $198 million, was a requisite piece of funding for Solyndra in order to garner their $535 million federal loan guarantee. 

Does the VC model still work in big solar? Can massively-funded VC startups like Nanosolar ($500M in VC) and Solyndra ($800M+ in VC) provide a reasonable multiple for their investors?  Or are the less capital intensive solar plays like SunRun or Enphase more suitable to the VC investor?  The next few quarters should give us some answers.

KP-Funded Solar Startup Solasta Seeking Next Round

"Separating the path of the photons from the path of the generated charge carriers."

"Decoupling the optical and electronic pathways."

That's what Solasta is trying to do.

The Newton, Mass.-based solar firm was founded in 2006 with A round funding from Kleiner Perkins. KP has a few of those stealth solar firms including Alta Devices and Solexel, none of whom appear on the portfolio portion of its website. In addition to VC funding from KP, Solasta has received more than $3 million in two DOE grants. 

With technology and founding personnel in the form of three physics professors from Boston College (Michael J. Naughton, CTO,  Zhifeng Ren and Krzysztof Kempa), Solasta is using amorphous silicon and carbon nanotubes on a glass substrate in an attempt to create more efficient solar cells that are simple and inexpensive to manufacture.  Solasta is joined by at least 35 other VC-funded next-gen solar firms with similar goals. Most of whom will meet with limited commercial success.

Solasta is currently helmed by former KPCB Executive-in-Residence Mike Clary who has led other advanced technology companies such as GMZ Energy and Nanostar.

According to the executive summary in a February 2009 DOE report, Solasta:

"Provides a photovoltaic medium with independent optical and electronic pathways, separating the photo from the voltaic with respect to required thickness of
photovoltaic absorber material. It does so with innovations in both light and charge collection."

The amorphous-silicon "nanocoax" structure increases current and potentilally lowers materials cost. The company (which is hiring engineers) claims the process could increase the efficiency of conventional amorphous silicon PV by up to 150 percent.

CTO Naughton further explained Solasta's process in an email:

"In contrast to the numerous nanowire solar cell approaches under development, Solasta's Nanocoax, which is literally a nanoscale coaxial cable (think cable TV), requires photogenerated electrons and holes to travel only nanoscopic distances before reaching metallic electrodes. This significantly lowers carrier recombination, allowing more current to get out, and thus higher efficiency, even for noncrystalline materials like (but not restricted to) a-Si. Light collection is controlled by the Nanocoax vertical height, while the charge travels short distances horizontally (radially). This separation of the 'photo-' from the '-voltaic' solves the thick-vs-thin conundrum of solar power, and allows Solasta to use films even thinner than 'thin film,' further lowering cost and weight."

A startup with a new technology in solar can try to become a PV panel supplier like Solyndra or Nanosolar – but that takes hundreds of millions of dollars, could take a decades and cost thousands of innocent lives. The company could try to go the route that 1366 Technologies is trying – selling add-on processes that fits into existing manufacturing schemes.  Or a startup can license its technology and that is currently Solasta's vision.

I spoke with the CEO and CTO this morning. "We look to license the technology to enable a step up in efficiency and to allow companies to differentiate," Clary said. Clary also envisioned a "software model" for the license, where successive generations of the Solasta technology would continue to flow through through their liscensees.

Naughton added that this was "an architecture, not a materials process," and that the firm was "not at all restricted to a-Si."

The startup is currently seeking more funding and my sources tell me that VantagePoint Venture Partners is taking a closer look.

SunPower: How Important Is High Efficiency in PV? (Updated)

SunPower's Doug Rose, the senior director of technology strategy, presented at the Silicon Valley PV Society in a talk titled, "Technology and Economics of High Efficiency c-Si PV." Of course, the thrust of the talk was the strength of SunPower's high-efficiency solar cells and panels, and the impact of efficiency on the cost and payback of a solar system.

The high efficiency of SunPower's solar cell stems in most part from its back-contact technology – a technology pioneered by founder Dick Swanson in the early 1980s at Stanford with low-cost manufacturing breakthroughs in 2001. The back contact design avoids gridlines on the front of the cell so there's no metal obscuring the cell and therefore more light gets converted to power. According to Rose, other design advantages are gained from the back-contact architecture – it allows better optimization of the front surface through texturing, an optimized backside mirror, localized contacts, and obviously backside gridlines.

The all back-contact cells allow SunPower to get to median production efficiency of 22 percent at the cell level. And while they're at it – cell thicknesses in the 150 micron range at about 6 grams of silicon per watt.

Rose raised the question: "How can high efficiency cells be cost effective? You're not using the same platform as everyone else." The response was: "Sunpower spends a little more in cell processing to deliver savings across the value chain."

That's the value proposition of high efficiency cells. The cells are more expensive but cost savings are realized all down the line. 

So how much exactly is this "efficiency bonus?"

According to research performed by crack Greentech Research analyst Shyam Mehta – gains in efficiency drive cost reductions at all steps of manufacturing on a $/W basis, from feedstock cost to module conversion – a 1 percent improvement in efficiency leads to a 5 percent to 7 percent decrease in fully loaded module cost. (Shyam's most recent report is on PV Manufacturing in the US and can be found here). His efficiency thesis is charted below:

In a solar market where prices are plunging, margins are crumbling and market consolidation is on the horizon – how much of a premium can SunPower command for its high-end product? A banker friend believes the dollar per watt premium is only 10 percent to 20 percent over conventional silicon or thin film PV.  With SunPower at a less than $2 per Watt module price in the fourth quarter of 2009 and some c-Si vendors below $1.50 per Watt – can SunPower command a 35 percent premium?

SunPower believes it can. My banker friend says no.

Here are some of the benefits of higher efficiency and the SunPower cell structure:

• Lower area-related costs
• Reduced installation costs
• Reduced shipping costs
• Reduced Balance of Plant (BOP) costs
• Allows more Watts in area-constrained sites, which reduces the $/W cost of project costs such as sales, permitting, design, etc.
• Delivers more energy per rated watt because of a better temperature coefficient, low light performance, broad spectral response, no LID

All factors resulting in a lower LCOE.

A Very Few Words on LCOE

A simplified formula for Levelized Cost of Energy (LCOE) is:

LCOE = Panel cost + BoP cost + O&M costs / Sunlight collection * Conversion efficiency

But, unfortunately it's not really that simple.  SunPower has detailed calculations and displayed the many factors influencing LCOE in its presentation. NREL has its own byzantine formula for LCOE.

An accurate measure of LCOE will have to include:

• Initial investment
• Depreciation tax
• Annual costs
• System residual value
• System energy production

And LCOE calculations have a very high sensitivity to certain input variables such as:

• Annual panel degradation
• Differences in annual discount rate / cost of capital
• System life (inverter replacement, etc.)
• Annual O&M

The major contributors to LCOE are:

• Capital costs
• Modiule $/W
• Area related BoS
• Electrical BoS
• Project related costs

"If someone says the LCOE of my technology is x cents per kilowatt-hour, it still doesn't tell you a lot," said Rose.

Differentiation and Branding in a Commodifying Market

A healthy cost structure, a good balance sheet, and the right level of vertical integration are what will distinguish winners from losers in the coming solar shakeout. Differentiation is going to help as well. And SunPower has that technical differentiation by virtue of the highest efficiency commercial solar product – a 22 percent median efficiency in 2006 looking for over 23 percent in its Gen3 cells. Combined with itss one-axis trackers which increase capacity factor by about 30 percent to match energy production with summer load, an important point for utilities – SunPower has some of the crucial ingredients for survival in the demand-constrained solar landscape.

Single axis tracking is a tremendous lever to reduce the LCOE of power plant, and to deliver significantly more power when the utility companies most want it (late afternoon in summer).

Of further interest in the differentiation department is SunPower's recent plunge into consumer branding of its panels. Ride a bus in San Francsisco and you'll see a SunPower-branding consumer ad campaign. 

Three questions for our readers:

• Do consumers care which brand of solar panel they're buying?
• What is the real value, the real premium for high efficiency?
• And contrarily – what is the penalty for low efficiency?  Where does 6 percent to 8 percent efficient a-Si or OSC fit into the solar landscape?  Or does it?

We welcome your thoughts.

Applied Materials: Displays, Solar Panels, Tom Friedman

This is Applied Materials' SunFab line. Note that standing next to the equipment are standard-size adults, not Oompaloompas.

I was lucky enough to join a group of cleantech investors at Applied Materials today for a presentation and a tour of Applied's facilities. It was an animated group of VC and corporate venture investors that included DFJ, Rockport, Globespan, Venrock, Siemens, Battery, Vantage Point and more.

Randhir Thakur, the Sr. VP and GM of the Display and SunFab Solar Group presented. Note that Display and SunFab are included in one business group. That's because there is is a strong commonality in display and solar glass handling, thin film deposition, and in Applied's hopes – cost curves. 

There has been tremendous performance and cost improvement in flat panel displays. The potential exists for those price-performance curves to be mirrored by a-Si solar panels.

Applied Materials is already the leader in fabrication tools for semiconductor manufacturing. They also provide tools for c-Si solar. But the true pioneering solar activity at Applied is their effort and sales in fabrication tools for building large size amorphous silicon solar panels in single, double and triple junction flavors.

The double junction a-Si cells have efficiencies in the 8% range with lab results in the 10 percent range. That's low compared to c-Si, CdTe and CIGS.

Applied has already furnished fourteen Sun Fab factories to a number of firms including Moser Baer in India, Signet Solar in Germany, Taiwan's G.E.T., firms in China and even Abu Dhabi's Masdar.  Not the US though, much to Thomas Friedman's chagrin.

Cameras were not allowed on the tour so I can't provide photos of the equipment – but this is the domain of the huge.  The current Sun Fab glass size (Gen 8.5) is 5.7 square meters and a full size Signet Solar panel puts out more than 340 Watts. We got a chance to see the Gen 10 glass size, now used for flat panel TV displays and it is seriously massive.  Made by Corning and currently supplied to Sharp for FPDs, Gen 10 glass is 2.85 meters x 3.05 meters.

You can imagine the scale of the tools needed to handle and transport this size panel. Think big overhead cranes, large conveyors and suction cups. You can also imagine the mess when the glass shatters. We wore safety glasses. And booties. Applied, of course is an expert at handling these Brobdingnagian elements. Flat panel display glass is 0.7 mm thick, solar glass is 3.2 mm thick.  Interestingly, at these sizes, there are standing wave phenomena in the plasma deposition field that can vary the thickness of the deposited material and this needs to be monitored and compensated for. 

Despite the relative low efficiencies, the sheer size of the frameless panels has the potential to reduce balance of system cost in metal, cables, mounting equipment, and labor. Although, the full panel size and efficiency does limit deployment to solar farms only.

Returning for a moment to Thomas Friedman's chagrin. Friedman took a similar tour of Applied last week and in an editorial in Tuesday's New York Times lamented the lack of a Sun Fab plant producing PV in the U.S. and the necessity of importing PV panels from China, equating that to importing Mideast oil. Which is a lazy parallel on his part.

Stop lamenting Thomas – right in your editorial you quoted Applied's CEO, Mike Splinter saying, "In the last 12 months, it has brought us $1.3 billion in revenues." And Applied is an American firm. 

Once again, you're simplifying the issue. You cite the German solar miracle – but meanwhile a substantial portion of their magic Feed-in-Tariff gets sent to China. Note that more jobs are created in the installation of panels than in the manufacture of panels in an increasingly automated production process.

Also not being considered by the editorial page at the NYT is the fact that solar factories are actually being built in the U.S. SunTech and SunPower for example.  More domestic PV manufacturing activity is cited by Shyam Mehta in his recent U.S. Manufacturing report. 

And Friedman, do some research.

Trina, SunPower, Clairvoyant: The U.S. PV Hits Just Keep On Comin’

At the risk of sounding slightly self-congratulatory, it feels nice to be right (at least once in a while). A week after the publication of GTM Research's report on U.S. PV manufacturing, which predicted that a major build-out of domestic manufacturing capacity was gathering momentum (the numbers say that the U.S.'s share of module manufacturing capacity will grow from 5 percent in 2008 to 14 percent by 2012), three major announcements vindicated this thesis: Trina Solar, Clairvoyant, and SunPower all made declarations this week to establish manufacturing module assembly plants in the U.S.

These developments aren't particularly surprising when one considers the 2.7+ gigawatts of U.S. PV projects in the pipeline over the next half-decade, combined with the knowledge that module assembly has historically followed markets. Barring a few exceptions, however, media attention on the U.S. PV landscape has focused almost exclusively on the demand side of the coin. It's somewhat understandable given that the stimulus funds made available through State Energy Program grants are all deployment-focused and that installation holds more employment creation potential than manufacturing, being more labor intensive. Still, it's frustrating that this issue continues to be ignored by most: 20,000 manufacturing jobs ain't no joke, especially at a time when unemployment is approaching 10 percent. On top of this, a build-out of PV production in the U.S. will also create all manner of opportunities for their vendors – for example, producers of polysilicon, glass, and encapsulants, and equipment, to name a few.  Perhaps most importantly, while deployments uneasily await the return of credit markets to resume, growth in manufacturing is happening here and now.

And not to beat a dead horse, but this development is all the more interesting in light of the recent competing trend of outsourcing PV production to "low-cost" locations. It certainly provides a tangible counterpoint to those in the industry who believe that, like consumer electronics, PV production will eventually be reside almost entirely in Asia. My guess: While this is likely to be true for crystalline silicon cells and wafers (MEMC, anyone?), the U.S. will be home to a sizeable chunk of thin-film and c-Si module assembly plants over coming years. Then again, with China making all the right noises about gigawatt-scale PV deployment, I could end up having to eat my words. Which, I suppose, is all the more reason to flaunt it when you got it.

SunPower: How Important Is High Efficiency in PV?

SunPower's Doug Rose, the senior director of technology strategy, presented at the Silicon Valley PV Society last week in a talk titled, "Technology and Economics of High Efficiency c-Si PV." Of course, the thrust of the talk was the strength of SunPower's high-efficiency solar cells and panels, and the impact of efficiency on the cost and payback of a solar system.

The high efficiency of SunPower's solar cell stems in most part from its back-contact technology – a technology pioneered by founder Dick Swanson in the early 1980s at Stanford with low-cost manufacturing breakthroughs in 2001. The back contact design avoids gridlines on the front of the cell so there's no metal obscuring the cell and therefore more light gets converted to power. According to Rose, other design advantages are gained from the back-contact architecture – it allows better optimization of the front surface through texturing, an optimized backside mirror, localized contacts, and obviously backside gridlines.

The all back-contact cells allow SunPower to get to median production efficiency of 22 percent at the cell level. And while they're at it – cell thicknesses in the 150 micron range at about 6 grams of silicon per watt.

Rose raised the question: "How can high efficiency cells be cost effective? You're not using the same platform as everyone else." The response was: "Sunpower spends a little more in cell processing to deliver savings across the value chain."

That's the value proposition of high efficiency cells. The cells are more expensive but cost savings are realized all down the line. 

So how much exactly is this "efficiency bonus?"

According to research performed by crack Greentech Research analyst Shyam Mehta – gains in efficiency drive cost reductions at all steps of manufacturing on a $/W basis, from feedstock cost to module conversion – a 1 percent improvement in efficiency leads to a 5 percent to 7 percent decrease in fully loaded module cost. (Shyam's most recent report is on PV Manufacturing in the US and can be found here). His efficiency thesis is charted below:

In a solar market where prices are plunging, margins are crumbling and market consolidation is on the horizon – how much of a premium can SunPower command for its high-end product? A banker friend believes the dollar per watt premium is only 10 percent to 20 percent over conventional silicon or thin film PV.  With SunPower at a less than $2 per Watt module price in the fourth quarter of 2009 and some c-Si vendors below $1.50 per Watt – can SunPower command a 35 percent premium?

SunPower believes it can. My banker friend says no.

Here are some of the benefits of higher efficiency:

• Lower area-related costs
• Reduced installation costs
• Reduced shipping costs
• Reduced Balance of Plant (BOP) costs
• Optimized for area constrained roofs or sites
• SunPower's product has a better temperature coefficient, tighter distribution and better low-light performance

All factors resulting in a lower LCOE.

A Very Few Words on LCOE

A simplified formula for Levelized Cost of Energy (LCOE) is:

LCOE = Panel cost + BoP cost + O&M costs / Sunlight collection * Conversion efficiency

But, unfortunately it's not really that simple.  SunPower has detailed calculations and displayed the many factors influencing LCOE in its presentation. NREL has its own byzantine formula for LCOE.

An accurate measure of LCOE will have to include:

• Initial investment
• Depreciation tax
• Annual costs
• System residual value
• System energy production

And LCOE calculations have a very high sensitivity to certain input variables such as:

• Annual panel degradation
• Differences in annual discount rate / cost of capital
• System life (inverter replacement, etc.)
• Annual O&M

The major contributors to LCOE are:

• Capital costs
• Modiule $/W
• Area related BPS
• Electrical BPS
• Project related costs

"If someone says the LCOE of my technology is x cents per kilowatt-hour, it still doesn't tell you a lot," said Rose.

Differentiation and Branding in a Commodifying Market

A healthy cost structure, a good balance sheet, and the right level of vertical integration are what will distinguish winners from losers in the coming solar shakeout. Differentiation is going to help as well. And SunPower has that technical differentiation by virtue of the highest efficiency commercial solar product – a 22 percent median efficiency in 2006 looking for over 23 percent in its Gen3 cells. Combined with itss one-axis trackers which increase capacity factor by about 30 percent to match energy production with summer load, an important point for utilities – SunPower has some of the crucial ingredients for survival in the demand-constrained solar landscape.

Of further interest in the differentiation department is SunPower's recent plunge into consumer branding of its panels. Ride a bus in San Francsisco and you'll see a SunPower-branding consumer ad campaign. 

Three questions for our readers:

• Do consumers care which brand of solar panel they're buying?
• What is the real value, the real premium for high efficiency?
• And contrarily – what is the penalty for low efficiency?  Where does 6 percent to 8 percent efficient a-Si or OSC fit into the solar landscape?  Or does it?

We welcome your thoughts.