Thursday, January 24, 2008

Biopolymerzing Solar in a World of High Oil Prices

As autofuels go "bio", so does solar

PV's commercial potential hinges on getting PV-generated power to grid parity (i.e. ), where it hasn't already been achieved (for, e.g., in Japan, with some of the highest electricity rates, make PV power cost-effective even without subsidies). There are various ways to achieve this, including increasing subsidies for PV, reducing the costs of solar installation (see previous post), reducing the cost of producing PV panels. One company that is working on reducing the costs of PV panels, with a unique approach, is BioSolar (OTCBB: BSRC.OB), a Santa Clara, California-based company that I've previously blogged about.

Rather than focusing on increasing the efficiency of solar conversion of its cells, or streamlining the ingot manufacturing process, BioSolar is aims to replace oil-based plastic components in PV systems with bio-based components. In the current environment of sustained high oil prices, BioSolar represents a value proposition that makes a lot of sense. According to the company:

When using BioSolar materials, the cost reduction over the materials being replaced can be in excess of 50%. The current market for plastic components and layers exceeds $1 billion and growing rapidly. We estimate that the market for backsheet products alone is currently at $300 million.
Look here for more details (and cool diagrams!) on how BioSolar will introduce biopolymers into PV backsheets, thin film substrates, and other components traditionally made from plastic or glass.

BioSolar's shares trades on the U.S. OTC markets and is highly volatile (so trade with care!!), but the general trend upward of its share price in recent months reflects the anticipation of the commercialization of its products. A research report notes:

During the last three months, the Company has set the stage for the commercial launch of its products by implementing a tactical scenario to reduce the amount of time for attaining Underwriters Laboratory (UL) certification for PV modules incorporating its bioplastic backsheet material. UL certification is required to sell photovoltaic modules in the US.

Sunday, January 6, 2008

Getting to Grid Parity

Renewable Energy World magazine has an excellent piece on the prospects of the US solar industry reaching price parity with current sources of grid electricity (i.e. coal, natural gas and nuclear). I highly recommend everyone reading the full article, but I’d like to highlight a few points of enlightenment that struck a chord with me:

1. We need not solely rely on falling prices of PV; the rising prices of fossil/nuclear-based grid electricity can help us get to the promise land. The prices of coal, natural gas and uranium are going nowhere but up.

Source: US DOE, via REW
As the cost of PV electricity decreases, PV market penetration increases. But rising conventional grid electricity prices can also accelerate PV market penetration.

2. Real-time pricing of electricity, coupled with smart electricity meters to allow consumers to appreciate how peak period electricity (which is typically in midday, where air-conditioning use is greatest, and which coincides with peak PV production as the sun shines at its most) is in fact more expensive than PV generated electricity. Such smart metering devices are in fact already in the market. See, e.g., products byItron (Nasdaq: ITRI).

3. Developing renewable energy sources in a way that allows them to be predictable sources of electricity production, and enable utilities to integrate such renewable sources into their planning. Up to now, the stigma about renewable energy sources such as wind and PV is that they are intermittent and unreliable, and hence utilities plan their electricity production and distribution system assuming there is no wind or PV power on the system. Apart from achieving an critical mass of renewable power (i.e. the sheer quantity of renewable sources can allow planners to make conservative estimates of reliably available renewable power at any one time), the development of appropriate energy storage systems for PV and wind power systems will play an integral role in turning such renewable energy into predictable and reliable sources of power.

4. The price parity of PV must be assessed on a location-specific basis. Many variable affect the competitiveness of PV energy vis-à-vis conventional grid prices, such as the local price of electricity (which ranges from 6.15 cents/kWh in Idaho to 18.84 cents/kWh in Connecticut), degree of insolation (i.e. amount of sunshine), presence of regulatory incentives such as tax credits and renewable energy portfolio standards and net-metering, and availability of PV installers among other factors. Thus, it is simply disingenuous to assume that the answer to the question of whether PV electricity is competitive with coal or natural gas electricity. It all depends on where (and when). Indeed, in many states either with high electricity prices (typically the northeastern state) or high insolation (the southwester states), and especially at peak load periods on hot summer days, PV electricity is in fact clearly price cheaper than conventional grid energy.