Wednesday, July 9, 2008

Solar Prius; GT Solar to List; Country Briefs

The Toyota Prius is going solar. Sort of. It is reported that electricity from Kyocera solar panels attached to a models of the famed hybrid car to be released next year would make up a portion of the 2 to 5 kilowatts needed to run parts such as air conditioning. It won't power the cars for 5 to 8 miles or reduce gas mileage by 17 to 29% as this white paper by Solar Electric Vehicles, a seller of solar electrical systems for cars, would lead us to believe (hat tip to Earth2Tech). Its really more a “symbolic gesture” than anything else.

But this prototype car from Taiwan (again, h/t to Earth2Tech) is totally solar-powered and capable of running at 70 kmh.

Speaking of autos and solar, General Motors will be the beneficiary of the world's largest rooftop solar installation (12 MW) on its assembly plant in Zaragoza, Spain, courtesy of thin film flexible solar laminates from United Solar Olvonic, a subsidiary of Energy Conversion Devices.

GT Solar to List

Solar manufacturing equipment company GT Solar has set its IPO terms. It will sell 30.3 million shares at a price range of $15.50 to $17.50 and trade on Nasdaq under the ticker “SOLR.” Interestingly, none of the IPO proceeds are going to be used as working capital; they are all being paid out as distributions to existing shareholders. Infer from this fact what you will about GT Solar’s future ambitions, or better yet, check out their IPO prospectus.

Around the World

Japan is contemplating reviving subsidies for solar installation which were discontinued in 2005. Solar is one of eight pillar strategies in India's climate change action plan. It is short on details but does set some numerical targets, such as the establishment of 1,000 MW of concentrating solar power (CSP) by 2017 and the production of 1,000 MW per year of photovoltaics by 2017. Spain, on the other hand, is contemplating reducing their feed-in tariffs for solar after Germany reduced theirs last month, but by not as much as the solar industry feared.

I am getting more and more reports of solar activities in Korea. With its industrial experience in semiconductors and electronics, I’m betting big things for the Korean solar industry. the solar coaster first mentioned Korea last month. Today, The Korea Times reports that familiar names Samsung, LG, and Hyundai Heavy Industries are all getting active in the solar game, building solar production lines. KCC, South Korea's largest manufacturer of construction materials, will reportedly invest KRW 3.9 trillion (USD 3.8bn) to expand polysilicon production capacity through 2020.

Tuesday, July 8, 2008

National Semi Conjures Some Magic

National Semiconductor is the latest semiconductor company to enter the solar industry. It has done so in tantalizing fashion, teasing the industry with vague descriptions of a potentially game-changing product that can dramatically improve systems-level performances of solar installations.

The company announced the development of its proprietary SolarMagic technology, which it says on its website “recoups up to 50 percent of the lost energy, dramatically improving the economics in shaded and other real-world conditions.” SolarMagic optimizes solar panel performance particularly in instances of shade or blockage by debris. The company did not specify what form the technology would take other than that it is a “per panel electronic solution” and that is is “compatible with today's solar architectures regardless of the underlying solar cell technology.”

The very general product description is vaguely reminiscent of Enphase’s per-panel micro-inverters, which, coupled with their proprietary monitoring software, is able to maximize performance of a whole solar system by circumventing the “weakest link phenomenon.” Said National Semi on its website:

Today's systems are limited by the weakest link, and one or two compromised panels can take down the entire string or array. This is somewhat similar to a section of Christmas lights that go out when one light fails. However, with SolarMagic technology, if one panel in a solar installation is shaded, dirty, or otherwise compromised, that panel is allowed to produce what little energy it can while the other panels continue to operate at their full potential.

According to Greentech Media, the device is expected to add 10% to the cost of each panel. Expected to be available commercially in the first quarter of 2009, SolarMagic is currently undergoing pilot tests by California-based solar installer REgrid Power, Inc. According to REgrid Power, the SolarMagic technology has yielded performance improvements of up to 44% in shaded conditions and 12% overall versus systems running without SolarMagic.

the solar coaster is spellbound, and will keep tabs on further product announcements concerning SolarMagic.

Saturday, July 5, 2008

Fed-Up with Solar

The U.S. Bureau of Land Management did an about turn on its decision to suspend new solar project application in the desert lands it manages. This is good news for proponents of a joint paper by Clean Edge and Co-op America, which projects the US to obtain 10% of electricity through solar by 2025 if it gets its policies right.

BLM Reverses Moratorium on New Solar Project Applications

In May, the Bureau of Land Management (BLM), a U.S. fedeal agency, announced that it would temporarily suspend the receipt of new applications (but would continue to review the 125 applications already received) for solar projects on the 258 acres of federal lands it manages over 12 states (predominantly in solar irradiance-rich western states) for two years while a programmatic environmental impact study (PEIS) would be carried out. The New York Times ran a story covering industry reaction to BLM’s decision only last week, apparently sparking off a flurry of backlash resulting in a dramatic reversal of the moratorium on solar applications on Wednesday (July 2). As are result, the BLM will continue to accept new applications for solar projects, in addition to reviewing the 125 existing applications, while also carrying out the PEIS.

The reasons for the moratorium in the first place are worth a look. At least one blog as posited that the unspoken reason for the suspension was to give breathing space for the understaffed BLM to process applications currently in their docket. However, the official reason for the suspension—the conduct of a PEIS—deserves further scrutiny. As the feds point out, the law, specifically the National Environmental Policy Act, requires agencies to conduct environmental impact studies on “major federal actions with the potential for significant impact on the quality of the human environment.”

What sort of environmental impacts might large scale solar projects pose? The first thing to recognize is that the lands in question encapsulate fragile desert ecosystems that serve as habitat to a unique diversity of flora and fauna. The environmental impacts of solar projects can be categorized as land disturbance/land use, visual disturbance, hazardous materials, water impact, and others. Click here for more detailed explanations. I have no sympathy for those who charge that solar projects spoil the aesthetic of the beautiful Mojave Desert. It sounds all too Kennedy vs. Cape Wind to me. If you can’t build solar plants on a freakin’ desert, where the hell can you build them? But the concerns of water impact are worth an extra mention. I for one was recently caught off guard to learn from a 2006 government report that certain solar tower and solar trough technologies consume comparable amounts of water to coal and nuclear plants. I need not state the obvious—water is not exactly abundant in deserts. Ooops, I just did.

Indeed, the BLM has previously conducted a PEIS for wind projects on federal lands, and recently published for public comment a Draft PEIS on geothermal energy development. So although the proposed PEIS on solar development may stoke fears of this being yet another case of environmentalists blocking green power, it is consistent with BLM’s past actions and with federal law. I also agree with Green Wombat on the value of having BLM conduct a ecosystem-wide PEIS when he says:

...developing a desert-wide environmental policy is absolutely essential for huge power plants that in total would cover hundreds of square miles of a fragile landscape home to protected wildlife and rare plants. Otherwise, watch each individual project get bogged down in endless environmental challenges.

U.S. Can Achieve 10% Solar Generation by 2025

Still, BLM’s reversal is good news to the proponents of "Utility Solar Assessment (USA) Study: Reaching Ten Percent Solar by 2025," a joint report by Clean Edge and Co-op America that projects that the US can obtain 10% of its electricity from solar power by 2025 if technologists, utilities and policy makers adopt its prescription. Desert solar power is an important component to achieving this goal, and BLM’s reversal only serves to bolster the chances of making this goal reality. I’ll leave it to other blogs to provide you the executive-executive summary of the joint report, but I will highlight two things that stood out for me in reading it.

First, the central premise of the report is that it is the utilities, more than any other stakeholders, which have to drive the solar bus. Promoting distributed power generation in the form of solar panels represents a paradigm shift for delivering power; utilities can’t wrap their minds around how to manage such a dispersed system as they are used to managing centralized coal, natural gas or nuclear facilities. This report is rather refreshing to me as it means that the very institutions that have resisted solar in the past should now come to terms with the new realities that leave them with little alternative but to champion it. These realities, the report points out, include:

  • Rising coal and natural gas costs in the wake of supply scarcity and soon, US carbon regulation
  • The cost-competitiveness of solar power with peak fossil fuel electricity generation
  • The growing number of states that have enacted Renewable Portfolio Standards, and some even with solar power set-asides.
  • The declining costs of solar power due to technological improvements and growing economies-of-scale (18% decline with each doubling of capacity).
  • The emergence of new players such as SolarCity who have introduced innovative financing models that spare end-users the upfront costs of owning solar panel installations and making it more attractive to switch to off-grid power options like solar, thus posing a threat to traditional utilities market share.
  • The growth of utility-scale concentrating solar power projects, predominantly in the southwestern desert regions in which the BLM has just relit up the neon “OPEN” sign, still offers a familiar centralized model of energy distribution for utilities to take comfort in.

Indeed, some leading investor-owned utilities have already heeded solar’s siren call. North Carolina’s Duke Energy is one. Since the solar coaster last reported on Duke’s PPA to purchase electricity from Sun Edison’s proposed 16 MW solar PV plant, Duke has announced plans to install distributed PV systems across 850 sites in the Tar Heel State at the cost of $100 million, yielding 16 MW of power, enough to serve 2,600 homes. Duke Energy will own and operate these PV systems and sell the resulting power to its customers. Florida-based FPL has accelerated its own solar investments, with 110 MW of solar capacity in Florida, the self-dubbed “Sunshine State”, pending approvals.

Second, the report mentioned certain game-changing trends that could really accelerate solar adoption which the solar coaster has not dwelled into too much detail to date—smart grid technologies, plug-in hybrid electric vehicles (PHEV) and all-electric vehicles (EV). With smart meters, utilities can introduce “real time” electricity pricing and allow consumers to fully appreciate the true value of solar power during peak generation periods. Intelligent grid interconnections can also better facilitate net metering—i.e. allowing PV users to sell electricity back to the grid during periods of excess generation, thus bringing a better return on investment for the PV users.

Energy storage has been considered the “Holy Grail” of renewable energy development as it addresses the issue of intermittency of such sources. It just so happens that the quest to find on-grid energy storage solutions dovetails really well with the quest to build green cars, specifically PHEV/EV. PHEV/EV is where the world of electricity meets the world of auto fuels. The development of PHEV/EV represents additional demands on the electricity grid, but they also represent an additional source of electricity, in the form of storage! Says the report:

Since vehicles typically aren’t’ in use more than 90 percent of the time, they could provide the perfect “vehicle” for storing electricity (in their battery packs), then sell this energy back to the grid at times when it is most needed, such as evening hours after commuters return home. Vehicles’ power might come from rooftop solar carports at work, from residential solar PV systems, or from centralized PV or CSP power plants.

Sounds great time me but one point is worth checking—I was led to believe that the premise of PHEV/EV was that they would be plugged-in in the evenings so as to relieve pressure on an already over-taxed grid. Under this scenario, the feeding-in of electricity by vehicles would not occur at night, when solar systems are not operating. This perhaps suggests that for the co-benefits of solar and PHEV/EV to be fully realized, careful whole-systems planning between both realms of clean energy development is needed.

Wednesday, July 2, 2008

Solar's Journey to the West

This post was originally published on The Green Leap Forward on Jun 17, 2008.

I attended the inaugural Western China Photovoltaic Industry & New Energy Development Forum which was held in the city of Chengdu, Sichuan province earlier this month (June 5-7).

A full transcript in Chinese of the proceedings is available here.

A recurring theme was the need to develop China’s domestic PV market. Although China is among the largest producers of solar photovoltaic (PV) cells in the world, over 90% of such PV cells are exported, leading Shi Dinghuan (石定寰), causing the Chairman of the Chinese Renewable Energy Industries Association (CREIA) to lament that China ships out its clean energy only to leave pollution (i.e. coal fired power generation) behind. At the end of last year, just 80 MW of solar PV was installed in China compared to almost 6,000 MW of wind energy. But more on this paradox later. Let's first see how Chengdu (成都)and Shuangliu (双流) in Sichuan province are seeking to leapfrog Jiangsu province and Baoding (in Hebei province) as the solar PV manufacturing hubs of China.

Sichuan: the Solar Gateway to the West

Sichuan is pushing solar as its next pillar industry. The governments of Chengdu and Shuangliu have established the Chengdu/Shuangliu Photovoltaic Industrial Park. The goal is to turn the region into a “Western Solar Valley” (“西部光谷”) and achieve RMB 100 billion in annual output. On the first day of the conference, some 17 agreements amounting to RMB 14.5 billion in investments into the Solar Valley were penned.

China has abundant solar resources, with solar irradiation comparable to areas of corresponding latitudes in the US, and comparing favorably over areas of corresponding latitudes in Japan and Europe (click here for Greenpeace’s China Solar PV Report 2007). Tibet, in particular, boasts the best solar irradiance of all of China, in part due to its elevated altitudes which greatly reduces irradiance diffusion. The development of a vibrant solar industry in the western regions is also consistent with the national “Go West” policy of developing China’s interior western and remote regions that have traditionally lagged behind the coastal economies. Incidentally, it is these very western remote regions that are homes to a significant portion of the estimated 15 million people in 2006 with no access to electricity. Distributed energy solutions such as solar PV, among others, can be the most cost-effective sources of power in these regions. But as alluded to earlier, these regions are not where the PV panels are being deployed.

In terms of solar PV manufacturing, Sichuan, and Chengdu/Shuagnliu in particular, boasts certain strategic advantages, such as favorable investment policies, an abundance of hydroelectric power and affordable electric power in general, and the availability of skilled labor from surrounding universities. It also a relatively well developed logistics supply chain given the pioneering work of the aviation industry which Chengdu/Shuangliu has up to now built its economic base around. But take a read at this post for a devil’s advocate point of view on shifting supply chains to the western regions.

Some anchor companies at the industrial park include Tianwei New Energy Resources and Apollo Solar, both of which are taking vertically integrated approaches in developing their operations in Sichuan. Tianwei New Energy Resources Southwest Industry Park, a subsidiary of Tianwei Group, will channel some RMB 3 billion into building solar production facilities with a capacity of producing 200 MW of silicon ingots, 50 MW of solar modules and 100 MW of solar cells and a solar research center.

Another recurring theme of the conference was thin-film PV technologies. The solar industry as a whole has hitherto been anchored on silicon based technologies. The recent explosion of solar demand, however, has cause a short to medium term bottle neck on silicon feedstock supplies, providing a boon to so-called “thin-film” technologies which use little to no silicon. Apollo Solar is striving to be the foremost vertically integrated thin-film PV module manufacturer. The competitive advantage of Apollo is that it has mining rights to certain quarries such as Dashuigou (大水沟) and Majiagou (马家沟) within Sichuan province that gives them access key precious metals such as telluride, bismuth, indium, selenium and others that go into making thin-film modules. Some conference attendees told me that the rumor on the market is that it is Apollo which is providing First Solar, the world’s biggest think-film manufacturer based in Arizona, U.S., with its supply of these precious metals. A factory visit to Apollo’s plant revealed metals processing infrastructure and a think film module manufacturing line in place, but nary an employee in sight. Reportedly, operations are to commence this October.

Quantity AND Quality

Anthony Chia, Vice President of Quality Control at Trina Solar based in Changzhou, Jiangsu province, said at the conference that the way to set Chinese module manufacturers apart from the competition is through quality. Until recently, Chinese modules have suffered from an image problem of having lower quality. Although that has quelled somewhat with established Chinese brands such as Trina and Suntech Power gaining increased global market shares, Chia envisions a world market where it is Chinese, rather European or North American institutions that set quality certification standards. In a very real sense, China’s PV module industry is vulnerable to the whims of these quality certification bodies (or if one might dare read into it, protectionist measures to protect local PV industries). For example in Europe, it currently takes three to six months for newly developed module to be approved for sale by one of these quality certification bodies in the European market, explained Chia. Even minor amendments to certification criteria may threaten to extend the approval process to up to a year. The essence of Chia’s message is this: If China is going to be the world’s leading producer of PV modules, does it not also make sense for it to be the standard setter for quality certification? (I suppose critics might gripe against a potential conflicts-of-interest.)

Domestic Solar Adoption: A Chicken and the Egg Problem?

But I come back to the key issue of developing China’s domestic solar market. There is no doubt that China will have continued success in producing homegrown companies that have mastered the process of low-cost manufacturing and dominate the global PV manufacturing market. But rather than exporting all this clean energy, the Chinese solar industry should think about how it can take steps to develop the local solar market as well.

In my few months of talking to industry professionals, I have gotten the overwhelming sense that everyone is waiting for the government to enact the right policies to spur development. In turn, I have also gotten the sense that the government is waiting for the cost of solar (which in the US costs about 20 to 30 cents per kwh compared to 5 cents for coal-fired power) to drop before it goes all out to push the solar power in the same way it is pushing wind. But the price of solar is not going to achieve these dramatic cost reductions without a scaling up of solar technology deployment, and what better market (for sheerly physical reasons) to scale up solar than in China?

Here’s a preliminary policy prescription from The Green Leap Forward:

  • Enact feed-in-tariffs. The National Reform and Development Commission should promulgate comprehensive feed-in tariffs which require grid companies to purchase solar power at preferential tariff rates. These tariff premiums are to be fixed, but also gradually decreased over a period of, say, 20 years. As a possible "safety valve", these fixed tariff rates can be reexamined periodically to adjust for changing market conditions. The German government, for example, recently reevaluated the feed-in tariffs for solar. The premium that the grid company paid to solar power producers should be spread across all end-users, per the Renawable Energy Law of 2006. The hesitation of Chinese policy makers in adopting feed-in tariffs is something I hope to explore a little more in future posts.
  • Strengthen Solar Lobby. Chinese solar companies should actively lobby the government to push ahead with solar policy reform. It is to their advantage, afterall, to develop a broader customer base. The newly established New Energy Chamber of Commerce may provide an avenue for such activities.
  • Financial Innovation. Think about innovative ways of providing financing for solar installations. Given the early development of consumer credit in China, it may be some time before we can think of mass solar deployment in the residential sector, so continued advances along the credit front should be encouraged. For now, we should think about how third-party financing arrangements—whereby a facility engages another institution that installs and continues to own the solar panels, but sells the solar-generated electricity to the facility owner just like a utility, thereby relieving the user of prohibitive upfront costs of installing and owning the solar panels—can positively alter cost perceptions to solar power. Such third party financing institutions should target commercial and industrial entities, perhaps with the support of provincial and municipal governments which have energy efficiency and renewable energy goals to meet.
  • Technical Capacity Building. Develop the necessary capacity and technical expertise for all steps of the PV value chain, but especially for downstream solar activities such as systems integration, installation, and after-sales services such as performance monitoring and system repairs and upgrades. This will require significant investments in education, but also lead to significant positive externalities such as job creation and spill-over benefits to other electrical engineering sectors.
  • Government Procurement. Initiate mass procurement and deployment of PV in government facilities. Not only does the central government setting a right example work in China, but it provides a necessary starting point for the scaling up of PV deployment. The central government is large enough a bureaucracy after all.
  • Strategically Increase R&D. Much hype is generated whenever announcements on breakthroughs in PV conversion efficiencies or silicon wafer thickness are achieved. But there are plenty of cost reductions to be gained in other parts of the solar value chain. Increasing efficiency of polysilicon production, module assembly, balance-of-systems or even installation are all avenues that R&D dollars can be channeled to increase technological (and hence cost) breakthroughs.

These merely represent my initial thoughts on how to push to PV adoption agenda in China. What are your thoughts? Please leave a comment!

Sidebar: This piece in Renewable Energy World on China's PV industry focuses on polysilicon production.