SolarCity to Bring 3P-Financing to the Mass Market

When asked the question of what stands in the way of solar power adoption, I've often answered that among the barriers is the lack of innovative financing techniques to make the installation of solar panels affordable for the homeowner.

SolarCity, in collaboration with Morgan Stanley, is answering the call to bring such innovative financing to the mass market through its SolarLease program, under which homeowners need only to put $2,000 down, and subsequently pay a fixed monthly fee (not a rate) for a fixed amount of solar power. In other words, SolarCity will arrange for the installation of the solar panels, continue to own such panels, but lease it to the homeowner for the provision of clean solar energy. More importantly, it significantly reduces the upfront costs of purchasing an entire home solar system.

Makes a lot of sense. Afterall, which homeowner really wants to fork out $25,000 for an entire solar system (more than 10 times the upfront fee for the SolarLease program) and physically own those solar panels? Its the power that these panels generate that the homeowner is interested in. SunCity, as the owner of the solar panels, will take advantage of commercial solar tax credits (which are higher than residential solar tax credits) and pass the savings down to the customer. According to the SolarLease webpage, the monthly fixed fee that SolarCity charges would be less than what a homeowner would expect to pay from its utility.

As this article from Greentech Media points out, SolarCity is not the first company to introduce "third-party financing" (or 3P-finaning) to the solar world. The likes of Tioga Energy, MMA Renewable Ventures and SunEdison have been doing it for a while for larger commercial projects. But SolarCity maybe among the first, if not the first, to provide 3P-financing directly to homeowners.

CSP Heats Up

There has been a beehive of activity on the concentrated solar power (CSP, aka big solar) front over the past week. Lets start with a comprehensive 145 page report on CSP by the Prometheus Institute and Greentech Media. The executive summary accompanies this press release. The report provides an excellent overview on the state of the various kinds of CSP technologies, the current market conditions, and Here are some key findings of the report, as presented in the press release:

• CSP clearly has a role to play over the next decade. With the current plants, those in construction, those under consideration, and the pace of development, it is clear that some tens of GW of cumulative production over the next decade - possibly as much as 50 GW - of CSP capacity will be installed by 2020.
• PV will remain dominant in the distributed market. That said, flat plate PV for distributed applications and some fixed or single-axis tracking systems for central systems will remain economically competitive. Unless CSP technologies can match those of PV, the distributed market will be tough for CSP technology to penetrate.
• Centralized generation market up for grabs. While each of the technologies has core markets that they best serve, it is where these markets overlap that is most interesting for evaluating competition for solar technologies.

The report indicates that it will be at least another decade before centralized CSP achieves "grid parity," and that in the meantime, distributed PV will continue to be dominant. So why the flurry of investment activity in CSP recently (see list of some recent deals below)? One explanation for all the utility-scale CSP deal making of late is the adoption of Renewable Portfolio Standards throughout the increasing majority of states in the U.S., that require utilities to distribute a certain minimum percentage of their power from renewable energy sources.

Reported utility-scale CSP projects reported over the last week:

• Brightsource and PG&E sign a 900MW solar thermal deal.
  
• Florida-based FPL to build a $1 billion, 250MW solar power plant in the California Mojave Desert.
• Israeli-based Solel to build a 140 million manufacturing facility in southern Spain.

NREL and Mitsubishi boast new efficiency records

Researchers at the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) have achieved conversion efficiency world record for a CIGS (copper indium gallium diselenide) thin-film solar cell of 19.9 percent in testing at a lab. This compares favorably to a conversion efficiency in certain multi-crystalline solar cells of 20.3 percent, providing an important milestone for the coming-of-age of the newer technologies of thin-film vis-a-vis silicon based solar cells. According to NREL, the record was achieved by improvements in the quality of the material applied during the manufacturing process, boosting the power output from the cell.

Meanwhile, Mitsubishi Electric Corporation claims it has set a new world record with a photoelectric conversion efficiency rate of 18.6 percent in a 150-millimeter square practical use multi-crystalline silicon solar cell, an improvement of 0.6 percent over the company's previous record. The company claims it achieved the new record by (1) adding a low reflectivity surface texture on the multi-crystalline silicon wafer, (2) optimizing the p-n junction to increase electric current generation and (3) developing a process to print electrodes on the surface of the silicon (metallization) to reduce shade loss of front grid electrodes. Such technological adaptations contribute to higher efficiency in small installations such as narrow roofs.

The Road to Grid Parity may be through Route 1366

1366 Technologies (what's in a name?), a spin-off company of MIT, has received $12.4 million in seed money. The company is co-founded by Ely Sachs, the father of the string ribbon solar manufacturing process that has been the hallmark of Evergreen Solar.

1366 aims to be bring the costs of solar power down to $1 a watt (the price which many agree will make solar competitive with fossil fuel energy) by employing its light ribbon technology. The beauty of the technology is that it does so not by tinkering with the solar wafer itself, but but replacing the interconnect wire between solar panels with a grooved light-capturing ribbon strip, which as the schematic below illustrates, reflects incoming light back onto the surface of the solar cell.Apart from the light ribbon technology, 1366 is also developing "new [solar]cell architecture that uses innovative, low-cost fabrication methods"that can increase the polycrystalline efficiency by 25%. According to MIT Technology Review, 1366's design includes two other key innovations in addition to its light-capture ribbons:

The first is a method for adding texture to the surface of the cells that allows the silicon to absorb more light, a trick that's been used before with single-crystalline devices but has been difficult to implement with multicrystalline silicon. The rough surface causes light to bend as it enters the cell so that when it encounters the back of the cell, it doesn't reflect right back out; rather, it bounces off at a low angle and remains inside the slab of silicon. The longer the light remains within the silicon, the greater the chance that it will be absorbed and converted into electricity.

The second innovation involves the silver wires that harvest electrical current generated by the silicon. Sachs has developed a method for making these wires as small as one-fifth the width of the wires that are typically used, while improving their conductivity. The thinner wires use less silver, which cuts down costs. Also, because the wires are thinner, they can be spaced closer together and still block less light than ordinary wires can. The closer spacing makes the wires more efficient at collecting electrical current generated in the silicon.

The company plans to build its pilot solar cell manufacturing facility in Lexington, Massachusetts. .

AES and Riverstone also go Big on Solar

Yet another wealth fund and energy company are pairing up to build utility-scale solar power plants. A hint of deja vu (see earlier post on the Torresol joint-venture)? Global diversified energy giant and Virginia-based AES and New York private equity firm Riverstone, an affiliate of the Carlyle Group are forming a joint venture in the name of AES Solar. AES and Riverstone will each "provide up to $500 million of capital over five years to invest in PV solar projects around the world, ranging from fewer than two to more than 50 megawatts in size."

In my view, this is a significant announcement. What sets this venture apart from the Torresol venture is that AES and Carlyle are both powerhouses in their respective industries of energy (although much has been made of AES' sustainability push, they have traditionally been, and still are, very much vested in fossil fuels) and private equity and very much represent the status quo. As this Washington Post article notes, this investment represents AES's first venture into solar. For the two giants to come together and make a billion dollar bet on big solar is a major validation on the outlook of the role utility-scale solar will play in our global energy mix.

Torresol: The New Kid on the CSP Block

Credit to the Green Wombat for first covering this company, and for the graphic below.

Torresol Energy, a 60-40 joint venture between Masdar, Abu Dhabi's $15 billion renewable energy initiative, and Sener, a Spanish engineering company, aims to build a series of utility-scale power plants using concentrated solar power (CSP) technologies, starting with projects in Spain and Abu Dhabi.

Torresol aims to build two solar plants a year in order to reach 320 MW in total capacity by 2010, and 1,000 MW by 2018. Their target geographic areas consist of Southern Europe (especially Spain), Northern Africa, the Middle East and eventually, southeastern USA, constituting a de facto "global sunbelt". I for one would be thrilled if the likes of China and other Asian markets are eventually included.

I'd like to take a closer look at Torresol’s technologies:

The prototypical Torresol solar plant structure consists of multiple rows of heliostats circling a central receiving tower filled with molten salt. The heliostats consist of parabolic troughs that pivot around an axis to track the changing position of the sun through the day. The heliostats concentrate and reflect the sunlight onto the central receiving tower filled with molten salt, which acts as an energy storage conduit. Though the technology was conceived in the 1970s, the company claims to be the first company in the world to apply this molten salt energy storage technology in a commercial plant.

According to the Sandia National Laboratory National Solar Thermal Test Facility, the molten salt, also known as saltpeter, is a mixture of 60% sodium nitrate and 40% potassium-nitrate. Sodium has a high heat capacity and hence, saltpeter serves as an effective medium to store the solar power in the form of heat. Heated saltpeter is channeled into insulated storage tanks where they can be released into a conventional steam-generating system to boil water to generate steam to cycle through turbines to produce electricity.

The upshot of thermal storage is that the ability of the solar plant is no longer subject to the intermittency of solar irradiation—surplus solar energy collected on the sunny days can be stored in the molten salt for discharge on cloudy days or at night. According to Torresol’s website, molten salt storage allows for 15 hours of independent electricity generation without sun irradiation, resulting in electricity production during 6,500 hours a year, 2.5 to 3 times more than other renewable energies such as wind or photovoltaic energy.

More Singapore solar milestones

A few more solar milestones for Singapore's burgeoning solar industry have been achieved (see previous posts on Singapore's solar scene here and here):

Norwegian solar wafer manufacturer, NorSun, is the latest major solar company to announce plans to set up shop in Singapore. Norsun plans to build a US$300 million mono-crystalline solar wafer manufacturing facility, which will be NorSun's largest production centre in the world. The facility is expected to produce at least 120 million mono-crystalline wafers every year and will account for 60% of NorSun's global output, making it its biggest facility. The first phase of the new plant in Singapore is scheduled to be completed in the third quarter of 2010 and is expected to require 300 new hires.

The Norsun news comes close on the heels of last month's announcement that a National Research Institute on Solar Energy. More importantly, Singapore lured world renown solar expert Professor Joachim Luther, former director of the renown Fraunhofer Institute for Solar Energy Systems - Europe's largest solar energy R&D institute - to head NRISE for an initial two-year tenure. This research and educational component is an important ingredient in the solar ecology that the tiny island-city hopes to build up.