When it comes to driving down solar costs, conversations tend to turn to solar cells. After all, they are the most expensive component of a solar-power system. But this week at Solar Power 2007, discussions and company announcements began to shift the focus toward other developments that could slash costs.
Announcements came from both manufacturers and installers.
Among those, manufacturer Sharp Solar Energy Solutions unveiled a system of pre-cut, pre-drilled racks that require less mounting hardware and ground wiring, along with other perks. The company said the system simplified the process, reducing the time and associated labor costs required to install a solar-electric system.
And installer Akeena Solar - which also just got a new CFO and was approved to trade on the Nasdaq - designed new solar panels it claims can cut installation time from half a day to half an hour. The company said the panels have built-in wiring, grounding and racking so they can attach directly to the roof, using 70 percent fewer parts and 25 percent fewer attachment points. Suntech Power is manufacturing the panels.
A number of conference participants said total solar cost reductions could come from nonpanel costs, which make up almost half of the cost of total solar-power systems, according to Photon Consulting (see Brightening the Solar Market, Beating the Odds).
Nazir Mulji, vice president of business development for Canadian power electronics maker Xantrex, said there are advances to be made in next-generation inverters.
Inverters, which Xantrex makes, convert direct current that's derived from solar to usable alternating current.
They cost about 10 percent of a typical solar-power system, Mulji said. "People will tell you in a 20-year installation, you may have to replace the inverter three times," he said.
Xantrex, which also makes inverters, is working to increase the equipment's lifespan, therefore cutting out the need for multiple inverter purchases.
Larger volumes also will reduce costs, companies said.
"To be able to do more and more solar installations allows companies to purchase panels in bulk, said Brian Sullivan, director of business development for SolarCity. "It is a business with very slim margins. So any sliver of economies of scale that we can gain is helpful."
But for Foster City, Calif.,-based SolarCity, a bigger hurdle lies in its way.
"The biggest slowdown we are seeing right now is something we find very hard to control - the permit process," Sullivan said. "In many towns, you used to be able to pull an electrical permit over the counter, and they were all very similar."
Now, there is no standardization, he said. As a result, the company burns cash on the extra employee time and paper to get the green light.
Perhaps some lesson could be learned from Europe. Mike Hill, chief marketing officer for El Cajon, Calif.,-based Borrego Solar, pointed out that Germans pay 70 cents more per watt for solar panels than U.S. counterparts, yet the total cost of an solar-power system - including installation - is less in Germany.
"A big part of it is volume, experience and scale - doing larger projects," he said. "Also, Germans do a lot more pre-planning to figure out - 'How can we put a large project down in a day?' - while Americans are more [likely] to go there and figure it out."
Germans expect installations to be completed in about half the time as it typically takes to complete a project in the United States, he said.
Solaria CEO Suvi Sharma said Europe's solar industry has more sophistication, bank funding, systems planning and market design. With entrepreneurs working on nonpanel costs in the United States, he said he is "quite bullish" those costs will come down in the United States, too.
"Primarily, of course, it's still more of a cottage industry in the United States," he said. "But it will get even cheaper in the U.S. [once the market grows]."
Still, German companies said they are just as concerned about keeping costs down.
"What I really worry about is the material cost increase," said Manfred Bachler, chief technical officer for Germany's Phoenix Solar. And he's not just talking about silicon.
The company, which builds and operates large photovoltaic plants, has been working to reduce materials including the equipment that holds panels in place once they are mounted on the roof or the ground.
But, so far, the savings gained have been lost to the rising costs of steel and aluminum.
"We are looking for other materials that are suitable for constructing mounting systems, which are not necessarily steel or aluminum," Bachler said. He would not elaborate on what those materials might be.
Relying on Innovation
Of course, not everyone thinks nonpanel advancements will disrupt the market.
A number of players still think solar-cell technologies have the largest potential to slash costs, not least of all cell manufacturers themselves.
Q-Cells CEO Anton Milner said his company invested €50 million ($70 million) in research and development of "radical new processes" such as cadmium-telluride, micromorph and copper-indium-gallium-selenide technologies.
SunPower CEO Thomas Werner said the company's high-efficiency cells will drive costs down 50 percent by 2012. Sharma also said he expects most of the future cost reduction will come from new "breakthrough" technologies, like Solaria's concentrating-solar technology.
There's room for many different innovations to play a role in reducing costs, companies said. "All we really need is to do what we're doing better and to do more of it," Sharma said, with a smile.
-Jennifer Kho contributed to this article.