The Dark Side of Solar

As if to rebut my last blog post on the positive environmental performance of PV generated electricity vis-a-vis fossil fuel derived power, the Washing Post has run an excellent expose on the collateral damage of polysilicon (a raw ingredient to crystalline-based PV solar cells) production in China. Silicon tetrachloride, a highly toxic byproduct of polysilicon processing, is being dumped by Chinese polysilicon factories into the soil rather than being reprocessed, so as to cut investment costs and time.

The result? The global solar boom in the likes of Germany and the US is creating a toxic legacy of silicon tetrachloride dumping by Chinese polysilicon factories.

Ironic and depressing. Kinda like this story in the New York Times about glycerol dumping by biofuel plant operators, or this piece in an old blog I used to maintain on tropical rainforest deforestation in Indonesia for the sake of planting oil palm for biodiesel.

All this means that we'll soon be needing certification systems for the audit of the supply chain of our clean energy.

Life-Cycle Assessment results in thumbs up for solar!

A new study that measures the life-cycle greenhouse-gas, pollutant and heavy metal emissions of four types of photovoltaic (PV) technologies--multicrystalline silicon, monocrystalline silicon, ribbon silicon, and thin-film cadmium telluride (CdTe)--reveals certain findings that are predictable and others that are surprising.

Simplified process-flow diagrams from mining to system manufacturing stages, namely
cradle-to-gate for (a) mono-, ribbon-, and multi-Si PVs, and (b) thinfilm CdTe PVs. Source: Study

Predictably, the authors of the study concluded that "all PV technologies generate far less life-cycle air emissions per GWh than conventional fossil-fuel-based electricity generation technologies." Despite concerns that the manufacture process of PV panels may be energy intensive, PV technologies harness a clean and ubiquitous source of energy, whereas fossil-fuel or nuclear generate electricity requires capital-intensive (i.e. energy and emissions intensive) plant infrastructure and significant transportation of fuel from its source to the location it is used.

The authors go on to say that at least 89% of emissions can be reduced if electricty from "central PV systems" replaces those from the grid, and that even more emissions can be reduces with decentralized PV systems due to the reduction in energy loss as the need for electricity transmission is reduced.

In an article in Scientific American reviewing this same study, it is suggested that if solar power can be used to start powering the production of PV cells--a so-called "PV breeder cycle"--then the emissions reductions will be even more dramatic.

Among the four PV technologies, CdTe came out tops, against conventional concerns of the toxicity of cadmium (cadmium in its metallic form is a toxic substance that has the tendency to accumulate in ecological food chains). CdTe thin-film PV technologies outperforms silicon-based PV technologies because less energy is required in the manufacture of the former (indeed, the purification of solar-grade silicon is a energy-intensive process), resulting in lower emissions of GHG, criteria pollutants and heavy metals.

More:
Click here if you are interested in other comparative life-cycle studies of PV technologies. by the Columbia University Center for Life Cycle Analysis.

The "Foolish" State of the Industry

Here at the Solar Coaster, my policy has largely been to generate original content or at least original takes on the latest policy, business and technology solar developments available on the web. But every now and then, I get tempted to reproduce articles wholesale, and today is another example. The following is investor website, Motley Fool's industry survey on the state of solar today:

Innovation Series: Solar Energy, by Toby Shute, February 6, 2008

Over the next several years, industry analysts peg the growth of the solar market at around 50% per annum. In a market moving that fast, it's develop or die. Because of the pace of change, it's hard to imagine a more perfect match for the Fool's series on innovative business sectors.

To do justice to developments in the solar area, I'll break my overview into three parts. We'll begin with standard photovoltaics (PVs), before getting into the more exotic thin-film and concentrated solar stories.

Standard PV under the microscope
For a sense of where innovations in standard solar modules have and will come from, it's important to get a handle on the industry's economics and the stages of the production process.

Each management team in the space has its favorite cost metric, which invariably casts the company as the most competitive coal-slayer of the near future. First Solar (NYSE: FSLR) claims the industry's lowest manufacturing cost per watt. SunPower (Nasdaq: SPWR) focuses on minimizing the cost of an installed system. I'm not completely sold on either metric, but both point to the industry's motivating force: making solar power as cheap as possible. It bears repeating that solar's Holy Grail is "grid parity," or achieving costs per kilowatt-hour on par with fossil fuel-derived electricity.

There are as many opinions on how to achieve low costs as there are solar companies, but the many stages of the production process open multiple avenues for innovation. In the beginning, there is metallurgical silicon, supplied by Hemlock Semiconductor -- of which Corning (NYSE: GLW) is part-owner -- and others. That silicon is then gasified, refined, solidified, melted, crystallized, sliced, doped, coated, fitted with electrical contacts, tested, framed, and sealed. I'm sure I missed a few steps, but that gets us close to a solar panel.

With so many steps involved, leading companies have naturally found tons of ways to cut costs. REC Group uses a closed-loop process that eliminates feed gas inputs and slashes waste by-products. Q-Cells has automated its entire production process. SunPower uses monocrystalline rather than multicrystalline cells to achieve higher efficiency across the same surface area.

Fundamentally disruptive fare captures most of the venture capital dollars these days, but there are still major innovations occurring in the traditional silicon realm. To name but one, REC's fluidized bed reactor technology is poised to slash the company's polysilicon deposition costs. This would further REC's goal of slashing its 2005 per-watt module production cost nearly 50% by 2010, akin to SunPower's aim of halving its installed system cost by 2012, and a good reminder that the more traditional players aren't going down without a fight.

Thin-film throwdown
In the near-term, thin-film technology excites folks because it eschews polysilicon, which is really scarce these days. But there's a more disruptive element that makes me think thin-film might eventually dominate the solar market.

First Solar, which uses cadmium telluride, is the biggest and best-known thin-film player, but there is a veritable cornucopia of startups waiting in the wings.

CSG Solar is eschewing wafers by depositing a thin layer of amorphous silicon directly onto glass; Ascent Solar (Nasdaq: ASTI) and Miasole are attempting to commercialize thin-film solar solutions based on copper-indium-gallium-diselenide (CIGS).

Perhaps most promising, though, is Nanosolar, a company that prints CIGS nano-ink onto highly conductive foil. The company counts the Google (Nasdaq: GOOG) founders among its early investors, it's officially commercial (although their limited production run is sold out for 2008), and the panels are reportedly selling for less than $1 per watt.

Some people dismiss thin-film because of its lower efficiency. The panels are cheaper and less powerful than standard PVs, which sounds exactly like the sort of disruptive technology outlined by Motley Fool CAPS mentor Clayton Christensen in his work on innovation. This is why I can't shake the idea of these panels' eventual dominance.

Let's concentrate here, people
Another contender is arguably the hottest technology around. The terminology, yet to be standardized, is known alternately as concentrator, concentrated, or concentrating photovoltaics (CPV).

These systems use the most efficient cells there are -- the ones developed for satellite applications by EMCORE (Nasdaq: EMKR) and Boeing's (NYSE: BA) Spectrolab. When focused with low-cost lenses, the sun's rays can be magnified hundreds of times, resulting in industry-leading efficiency, and the amount of active semiconductor material is inversely related to the degree of magnification. Naturally, the super-efficient cells are super-expensive, but they're a tiny piece of the overall package.

A traditional problem has been offsetting the heat that results from this intense concentration (I told you this technology was hot). Both SolFocus and Concentrix, two leading start-ups in this field, indicate that heat sinking should not be a major issue.

But just as with the thin-film entrants, it would be premature to declare victory before these new technologies are battle-proven. Demonstrating efficiency in a lab is far different from decades of exposure to the elements, and it's fairly inevitable that some of these unproven applications will sputter out well in advance of their warranty.

SolFocus may actually best First Solar and SunPower's cost metrics with the more holistic concept of levelized cost of energy -- the lifetime value of energy produced divided by total costs. This means that any innovator will not only have to win in the realm of production and installation costs, but the product will have to perform at a high level for decades.

In other words, the race to grid parity is a marathon, not a sprint.

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.

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.

More solar stories from China

Nantong Qiangsheng Photovoltaic Technology Co Ltd (QS Solar) has launched a $400 million project to build three 25 MW amorphous silcion thin film production facilities in Nantong in northern Jiangsu province. QS Solar has intentions of an IPO in the U.S. sometime next year, joining the highly successful league of Chinese solar companies listed on U.S. stock markets. This piece speculates that QS solar is getting its supplies of production equipment from the likes of GT Solar or Applied Materials.


An industry observer predicts, however, that the sunny days of Chinese solar companies may cloud in the face of international foreign competition, as China's advantage of low labor costs slowly erodes. Chinese companies, whose products are predominantly exported out of China, need to seize the opportunities of tapping into its domestic market, although that would entail overcoming serious challenges in grid connection and pricing which Chinese policy makers are still grappling with as they try to implement the country's new renewable energy laws.


Finally, an uplifting rags-to-riches expose on China's Mr. Solar Water Heater--Huang Ming, founder of China Himin Solar Energy Group, the world's biggest producer of solar water heaters. The company had revenues of 2 billion yuan last year. Of the other 3,000 solar heating companies in China, only 10 earn 200 million yuan annually. More than 2 million sq m of Himin's heaters alone are installed on rooftops every year, nearly twice the total of Europe and North America. Huang Ming's solar dreams look set to expand as favorable government policies seek to expand the use of solar water heaters.

China--the solar water heating capital of the world

My friends at China's Green Beat did a podcast (click image on right) on solar thermal heating last month. According to the self-dubbed "Green Brothers" of China's Green Beat, China has 40 million solar water heating systems covering 90 million square meters and accounting for two-thirds of the world's market share. The Chinese government intends to more than triple such surface area to 300 million square meters by 2020. The podcast takes a closer look at the city of Rizhao (日照）(which literally means "sunshine") in the northeast province of Shandong, the producer of 15% of China's solar water heating systems. According to Worldchanging, solar water heaters are currently installed in 99% of all buildings in Rizhao’s urban area, and in more than 30% of residences in rural areas.

Often mentioned in the same breath as Rizhao is the city of Kunming in the southern province of Yunnan, as this Worldwatch Institute story describes.












Solar water heating systems in Kunming, Yunnan.
Source: Worlwatch Institute