Plug and Play PV
by Richard T. StuebiIt's notoriously the case that most photovoltaics installations are custom-tailored -- designed, engineered and installed -- specifically for each application. This, of course, dramatically increases the cost and hassle factor for a customer to implement PV. For awhile now, PV pundits have stressed that the technology needs to become "plug-and-play" in order to make it much easier and cheaper for customers to buy.
Recently, Cincinnati-based
Melink Corporation released a 500 watt ground-mounted PV system with an embedded inverter and a 3-prong electrical cord that plugs into an outside socket, allowing anyone to generate electricity from the sun and use it to help power their house. Called "INGRID" (get it? "In-Grid"), this system costs less than $5000, and can be hooked up virtually immediately without any engineering. All you need (just like a satellite dish) is a clear view of the southern sky.
It's so simple, basic and obvious that it's a wonder that Melink was first to market (or at least claims to be first to market) in the year 2008 with such a gizmo. Innovation comes in all sorts of flavors.
Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc.Labels: cleantech, green tech, photovoltaic
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Cutting the Cost of Solar the Unsexy Way
Most of Silicon Valley focuses on the cost of the photovoltaic module, and how to bring that down. In fact, most of Silicon Valley focuses on how to fundamentally change the basic technology of the module - from crystalline silicon based to thin film deposition. Very sexy. And very risky. And currently breaking the back of more than one company and investor who is trying. What's worse, the module is only 30-50% of the per kwh cost anyway.
In the meantime, the cost of solar on a per kwh basis has continued to improve, primarily on the back of unsexy work on the integration and installation side, as well as the growing size of the average photovoltaic installation. This is despite the increase in average module prices in recent years, driven by the silicon shortage.
Cleantech Blog has written about the concern that the real make or break for solar economics is how much power you get out of the system, not just the cost per watt of the panels. We believe that
installation and design decisions are the make or break for that variable, not the technology choice. We have also written on the topic of integration and installation, and the need for
better data and monitoring on the back end, like our friends at
Fat Spaniel are improving, to inform the analysis.
But what about the analysis on the front end of the installation process? Everyone in the industry knows that installation is a large portion of the upfront costs, and everyone knows that how well you design your solar system has large implications for the economics of your installation.
So how do we actually streamline solar from the front end? Well, it's happening. The solar decision making software tools are slowly developing. There are a number of products available now to streamline the modeling and estimation of solar installation costs and performance, and make the end user and installer's life easier: including products like
CPF Tools,
OnGrid, and
PVOptimize, which range from spreadsheets to on demand services. My favorite is CPF Tools, by
Clean Power Finance, and I had a chance to meet with a couple of their executives, including Joseph Brakohiapa, the other day to discuss what they are doing. For one, they have married solar estimation and modeling tools with an on-demand MRP system for solar installers. I certainly believe in on demand software, and it's hard to see how modeling tools without links into your inventory and proposal systems can actually take much cost out. And second, they are working to integrate those tools into the financing model for small scale solar loans. When coupled with backend monitoring like Fat Spaniel's, I can see the path for real progress - and possibly more importantly, I can see a way for both the installer and the end customer to finally begin to manage risk and cut costs.
From monitoring, to ERP, to decision support and business intelligence. No industry in today's world can scale without it. It's time the solar sector grows up.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, a blogger for CNET's Cleantech blog, and the Chairman of Cleantech.org.Labels: cleantech, green tech, photovoltaic, solar energy
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Rising Solar Prices - Where is the Shakeout?
18 months ago I did an article on rising solar prices threatening the industry, and I think it's time to revisit some of those thoughts.
"One of the most disturbing things about the solar industry, the rising star of cleantech, has been its recent rising prices. According to the SolarBuzz.com survey, module prices are up close to 7% in the US this last year, after years of falling.
The main culprits according to most solar watchers are a combination of:
- High demand driven in large part by the US state and German subsidy programs
- Tight supply on module capacity
- Tight supply on silicon capacity
The first issue here is that rising solar module prices threaten the viability of the industry, at a time when it is gaining momentum and trying to reach critical mass. Worse, almost every manufacturer of solar modules is increasing capacity trying to take advantage of the industry growth. As a result, we think the industry may be in for a rude awakening if that capacity increase begins to outstrip demand, or if key subsidy programs underpinning growth falter for political reasons.
The businesses most at risk are the young technology developers, who are spending significant equity dollars on technology development and building to a critical manufacturing and sales base. These are the businesses that the VC community is funding at a tremendous rate. These aren't businesses that are throwing off tremendous amounts of cashflow to weather a storm.
One concern, if the market does turn down, the major Japanese, European, and oil company solar manufacturers are likely to lower prices to keep their factories full, and really hurt the smaller businesses. Keep in mind, if you launched a solar business 5-10 years ago, reaching a 20 MW plant would put you in the top 20 manufacturers. With that same launch today, looking ahead five years to when your technology is commercialized, you will have to hit perhaps 50-100 MW of capacity to be an elite player. That's a big difference that I don't think the investment community has understood yet. "
I thought now was a good time to rethink some of those conclusions, given all the recent news in the solar energy sector, and add a few new thoughts:
- I still believe a silicon price reversion to the mean is coming, and a shakeout with it whose winners are the lowest cost and highest capacity providers.
- Young technology developers are still the most at risk from this.
- We have since written about Applied Material's (NYSE:AMAT) entry into solar and the potential for the double junction tandem cells - which are really hybrid thin film/advanced silicon cells. I think this technology, along with dramatically increased industry capacity, and First Solar's low cost advance into the sector, is moving the bar for new entrants.
- So perhaps I was off on my expected timing. And perhaps a coming shakeout will be even more drastic. Or maybe I'm dead wrong and the whole industry will keep growing with no business cycles to worry about. You decide what you want to believe.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.
Labels: cleantech, Cleantech Blog, energy, green tech, greentech, photovoltaic, solar
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When it Comes to Solar - Lest We Forget
I saw a news article recently on the space walk to do repair and relocation on solar photovoltaic array on the International Space Station.
It reminded me to keep in perspective a bit of energy history. The US basically invented the solar industry to help power the space race. And the industry grew out of that to become a possible solution in the first energy crisis (though still way too early and way too expensive at the time). And we helped keep the industry alive post energy crisis with our off grid market and federal R&D funding.
Now that costs have fallen precipitously, and a wide range of major companies from Sharp and BP to Applied Materials and IBM are in the business to drive costs to the magical grid parity (
Cleantech Blog has blogged about this numerous times), it is disappointing to see that the US leadership has fallen victim to stronger government support in newer national entrants like Japan and Germany (which combined have a solar market some 7x larger than ours) who major subsidy programs in place roughly 15 and 5 years ago respectively.
I think it is fair to say that we are not going to regain our leadership in the crystalline silicon end of the business, though perhaps we can make a dent. So perhaps we must look to the growth of thin film technology for our leadership. But there are bright spots on that front.
As usual, when it comes to new technologies and reinventing business - we'll be leading the way. Let's not give it up this time.
Labels: alternative energy, cleantech, Cleantech Blog, energy, green tech, greentech, photovoltaic, solar
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