7,000 members of the solar power industry converged in San Jose last week. An added 2,000 local individuals also viewed the latest solar power on display. There was enthusiasm for advancements in photovoltaics (PV) and in large-scale concentrating solar power (CSP).
PV installations continue their 20%-plus growth rate in the U.S., showing strong acceptance by business, individuals, government and public utilities. Grid-tied PV now outsells off-grid. Commercial outsells residential. Deutsche Bank forecasts that the PV market will grow from $13 billion in 2006 to $30 billion in 2010. The PV growth rate would be higher, but the basic material polysilicon will be scarce through 2008. Polysilicon supply is expected to triple by 2010.
The shortage has also been a driver of technology that delivers the required electricity output with less silicon. These technologies include thin film, high efficiency PV, organic, concentrating PV (CPV) and balance of system improvements. World leader, Sharp is participating in all these technologies.
SunPower is approaching a 23% efficient PV. This helps it take business from typical 17% efficient PV. Dr. Richard Swanson, CEO, SunPower gave the conference good reason to expect continued high growth. He pointed out that in 1975 solar modules cost $100/watt. By 2002, the cost had fallen to $3 per watt. The industry learning curve of 30 years has been consistent – each time that production doubles, cost drops 81%. Dr. Swanson expects $1.40 per watt by 2013 and 65 cents per watt by 2023.
Growth drivers include improved efficiency resulting in lower cost per kW, regulation and government incentives. California is the dominant U.S. market for PV, with 73% of the grid-tied installations this year. Growth should accelerate in California now that the California Solar Initiative is law with $3.35 billion of funding for new solar systems.
California public utilities are investing in solar. The RPS program requires that by 2010, 20% of their electricity will be from renewables. By 2020, it must be at least 33%. SB1368 closes California to coal produced electricity unless CO2 sequestration is used. This leaves California utilities highly vulnerable to the price of natural gas, providing an added incentive to diversify to renewables.
At the conference, PG&E CEO, Thomas King stated “Distributed generation is not a threat to our business; it is our business.” There are 13,000 PV installations in PG&E’s region with net metering to add power to the grid. Efficiency is the key to PV’s long term success without requiring subsidies. 36% efficiencies have been achieved in R&D labs. DARPA and a University of Delaware consortium are conducting a $53 million research program to produce 50% efficient and affordable PV.
Utilities are especially interested in large-scale CSP plants delivering 10 to 600 MW. Four GW of CSP is being installed globally. There is 200 GW of potential solar power for CSP in the southwestern US. Southern California Edison and San Diego G&E have contracted for 500MW with Stirling Energy Systems. This large-scale plant will include 20,000 curved dish mirrors each concentrating light on a Stirling engine. Other large-scale plants in Europe will also provide hours of thermal storage so that plant output can match the peak load demands of utilities. This counters the utilities’ concerns about intermittency of PV and wind. CSP costs are projected to be 8 cents/kWh, making it competitive where coal and natural gas greenhouse gas producers must buy greenhouse emission credits.
Solar energy and other renewables will continue their strong growth. This will create more energy with less greenhouse gas emissions. This will also provide for cleaner transportation as electric and hydrogen vehicles use energy that is clean from well-to-wheels.
John Addison publishes the Clean Fleet Report. His firm OPTIMARK Inc. conducts fleet outreach, market intelligence, and cleantech market development. He can be reached at www.cah2report.com. John is the author of the upcoming book Save Gas, Save the Planet.