Posts

Which Way to the Sun? Where is Solar Headed?

I had a chance to talk with David Hochschild, the outgoing Executive Director of PV Now about his thoughts on the solar industry and recent changes. PVNow is an industry association that, among other things, helped lobby for the net metering and the solar initiative in California and increased RPS standards in Texas and New Jersey. David is a well-known advocate and speaker on solar issues.

David, can you give us a bit of background as to PV Now, and your role in the industry?

Sure. I co-founded Vote Solar in 2002 after working on the $100 M solar bond campaign in San Francisco. More info at http://www.votesolar.org/. For the last year, I have been Executive Director of PV Now, the consortium of major solar companies, working to promote pro-solar policy at the state level.

While PV is the only viable solution for small point of use electric generation, solar thermal is generally considered a hugely more economic solar solution at multi-megawatts scale than PV, but PV gets all the press in its drive to compete with the grid at large scale. Why is that? Understanding that your focus is PV, how would you like to see solar thermal fit in the solution set?

Am a huge fan of solar thermal and am getting a thermal system installed on my house this weekend, actually. I think PV gets more attention in California partly because we experienced an energy crisis that was really an electricity crisis and the blackouts were an electricity problem. But the contribution solar thermal can make is very real and very important and I think the passage of the ITC bill this year, if it happens, will do a great deal for solar thermal. States like Hawaii and countries like Israel already have a 30% market penetration for solar thermal and there’s no reason CA couldn’t as well. A little known fact – the country with the most solar thermal in the world is China. My personal view is that US should be leading in both PV and solar thermal and that if we can get the 8 year solar tax credit bill passed this year (HR 550), we will be in position to retake the lead.

It feels like there has been a changing of the guard in terms of the leaders in PV module production. What’s your take? Who would you rank as the up and comers?

I think China is emerging and we’ll see companies like Suntech really continue to grow rapidly. Older industry leaders, like BP, that used to dominate, are now sliding down the rankings of PV manufacturers. It’s also a good time for American solar manufacturers like SunPower and Evergreen, which are growing fast and are aided by the emergence of more state-based US PV markets like PA, TX, NJ, and AZ, in addition to CA.

And similarly on the integrator and installer side – what does the future hold? How do these companies best survive in a much more competitive environment?

I think there will be a major changing of the guard here too and things will get more sophisticated, which is long overdue. The installation cost of PV in Germany is about 30% less than the US so there is a lot of cost cutting to be found in installation. The savings are not just going to come from better manufacturing. Things like mountings systems, electronic shade analysis, snap-connects, better installation methods, customer energy calculators, reducing the # of site visits, all these factors bring down costs.

PV concentrators – I have long felt that concentrators are in a catch-22: if PV module costs don’t fall rapidly (as the industry works hard to drive them down), then the solar industry will struggle anyway, but if PV costs do fall as rapidly as expected – then why would the industry need concentrator technology whose primary advantage is reducing the amount of PV module? What’s your take?

If you are referring to technologies like Solaria’s – that take a concentrating lens and amplifly the amount of light on a PV panel – that will move forward and be important no matter what happens to the cost of PV because the lens will always be cheaper than silicon and the benefit you get from them is profound. I am optimistic about this sector in particular because, if they get it right, it could bring PV costs for conventional silicon technology down by 30% or more, fairly quickly. But there are still obstacles to be worked out such as heat gain and how you deal with that, which is a major issue in PV performance.

And where the rubber meets the road, do you have a PV system on your roof? If so, who did you buy it from, whose technology did you pick and why? If not, whose technology would you use?

I live in San Francisco by Dolores park and my wife and I have a 2kW system on our house that we installed in 2000. BP panels. If I were doing it today, I would opt for a higher efficiency panel such as SunPower.

After thinking about it a bit, I’d asked David to clarify a couple of his comments.

Can you elaborate a little on large solar thermal – like parabolic trough projects. I see little reason to do a large grid connected 5-10+ MW PV system, instead of a solar trough system. What are your thoughts on the competitive situation between PV and solar thermal trough power as PV tries to get to “grid scale”?

You’re absolutely right about CSP. I just visited the new CSP plant outside Las Vegas – 64 MW. And it is a superior technology for central station solar generation. No question. And that will only get better as newer synthetic oils come on to the market that can be heated to hotter temperatures than are currently possible (750 degrees is about the limit and that is a major constraint on how much power CSP can produce but this is likely to change soon). The federal ITC was the only reason that Nevada CSP plant got built so we can expect a lot more if the ITC gets extended.

I think the role that PV is best suited for is rooftop applications and there is so much available roofspace in this country, it’s ridiculous. So large scale PV is great, but in my view, it is best for rooftops rather than deserts.

Also, as to our discussion on changing of the guard, BP Solar among others has announced some major expansions.

Does this indicate that the “old guard” is likely to retake market share? It has been suggested to me that the some of the market share changes were related to silicon supply constraints that are now easing.

Regarding BP, yes they are making capacity expansions, but so is everyone. Nobody in this sector is NOT growing. The question is how fast they are growing. And I do think we are witnessing a major shakeup and many of the companies that were top market leaders over the last 5 years will not be over the next 5 years.

Myself, I tend to agree with David on this. While it is hard to pin down winners and losers, rapidly growing markets and changing competitive dynamics and cost curves do not make for stable market shares. It will be interesting to watch.

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.

Global Warming Solutions – Dell Style

Dell (Nasdaq:DELL), not known as a cleantech company, but long known for being a supply chain expert and direct marketing leader in PCs and electronic devices, is turning its attention to global warming – or at least working to provide consumers some greener product options and more consumer information.

Earlier this year, Dell announced its Plant a Tree For Me program. www.dell.com/plantatree

“LAS VEGAS, Jan. 9, 2007 — Michael Dell today announced a global carbon-neutral initiative that plants trees for customers to offset the carbon impact of electricity required to power their systems. The first of its kind program, announced at the Consumer Electronics Show here, underscores Dell’s commitment to continued broad environmental stewardship.”

I had a chance to speak to one of their public relations specialists and get a little color.

The program is rolling out in stages (global roll-out is next). It launched in January to provide customers the option to buy offsets of kwh required to power computer systems. Dell is passing through all the payments a customer makes to its partners – Conservation Fund and CarbonFund.org. [Note: There are an increasing number of for profit and non profit entities like these two that will buy carbon offsets made in a variety of ways to sell to companies like Dell to “green up” products.] They are not yet attempting to calculate the emissions required to make a Dell product, just use.

I asked about assumptions in program. Basically they are offsetting 3 years of average power usage. “The donation amounts for ‘Plant a Tree for Me’ are based on expected average CO2 emissions from the production of electricity needed to power the systems over three years – for example, a notebook emits .42 tons and a desktop 1.26 tons. The cost of the carbon offset is $4.75 per ton. It costs approximately $6.31 per tree planted. On average a new tree will sequester 1.33 tons of CO2 over 70 years through the program.

The specific energy values are based on EPA estimates provided by the EPA and Lawrence Berkely Labs. Conversion of energy consumption values to CO2 equivalents is done per WRI/WBCSD standard protocol (world resources institute/world business council for sustainable development). The cost for the carbon offset is set by our partners at $4.75 per ton.”

I asked why sinks? Why not energy efficiency credits or some other way of reducing carbon? Planting trees to create a carbon sink sometimes gets dinged for not being “permanent” enough of a reduction, e.g. if the forest burns down, all that carbon goes straight back into the air. But they tend to be the cheapest credits available. They didn’t have especially insightful answers, but low cost and ease of availability probably play into it.

The reason for doing this?

Apparently Dell feels its customers are interested in greener products. However, while Dell says it is “encouraged by the response”, they would not quote me any numbers of the level of uptake achieved or the targets they were hoping for.

In another area of note, Dell is rolling out an Energy Smart Program. through a wide range of product areas.

“Dell made significant progress during 2006 against its goal to deliver customers the most energy-efficient products in the industry. Since announcing the strategy and customer energy resource calculators at www.dell.com/energy in September 2006, we have rolled Energy Smart settings across the latest models of our OptiPlexTM desktop line to enable up to 70 percent system power savings for the OptiPlex 7451. We also recently introduced two PowerEdge products with Energy Smart settings with energy savings of up to 25% accompanied by performance enhancements that afford up to 3X increase in performance per watt over previous generations.

The desktop figures are based on an average unit cost of energy of $0.10/KWh and assume an Annual Usage Profiles of 1 hour max performance, 7 hours office productivity, 1 hour idle and 15 hours sleep state for 264 days a year; 24 hours sleep state for 101 days. The server values assume a 24/7 duty cycle.”

At the same time, Dell is making available on their website a series of online calculators for energy efficiency, along with making the “energy consumption spec” for a wide range of products.

While the devil is always in the details on the assumptions used, I find it refreshing that Dell is putting this level of effort into providing consumer information on the green and energy impacts of its products – kind of like a restaurant providing us information. I am also refreshed to see Dell say that they are passing all the cost through, and are not taking a margin. While I am very excited about the potential to profitably market carbon credits to consumers, Dell’s move tells me they view greening their products as a requirement to be in the business and a benchmark for product quality that they intend to meet, not just an extra option to add more margin to existing products.

I will be even more intrigued if Dell starts to publish or commit to customer uptake numbers on its carbon credit roll-out (like it would if I were an analyst asking for targets and uptake on units sold of a new product line).

And I will be elated if Dell starts to use its strenght in supply chain management to force the carbon credit suppliers into more transparency and standarization (a chronic problem in the market today).

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 and a Contributing Editor to Alt Energy Stocks.

Green Fringe

by Heather Rae

Reading the New York Times Real Estate section is like pulling off the toenail of your little toe. In a world where the price of habitation climbs into the cool millions, this sweet torture leaves you bleeding and worrying for your sanity. You don’t really need the toe or the toenail, and they would have been better off left alone. And now you hurt.

Last week’s “Living Here” section of the paper was somewhat less torturous and kindled some hope in the desert – which is closer to the “here” in “living here” than the streets of New York City. It featured seven straw-bale houses. The hollow stalks of straw bales provide excellent insulation and are ideal for climates like those also ideally suited for second homes – Arizona, Colorado, Montana, New Mexico, Texas and British Columbia. Common features include passive solar, radiant heat, solar photovoltaics…and views. I imagine buyers of second homes do not wince reading New York Times Real Estate section.

Up the east coast, The Boston Globe Magazine ambled into “Your (Green) Home” with three articles on green residential construction (an outlandish earth-berm and two of the “oh-it-looks-normal” urban and suburban variety). A separate article on “earth-friendly, money-saving fixes from paints to appliances” (“Is it Worth It?”) is good, but nothing you wouldn’t find on any green builder supply or architectural website or in magazines like Natural Home. What’s most interesting about this issue of the mainstream Globe Magazine is the complete absence of advertising for the green products and services referenced in the articles.

This past week, This Old House sent a Sneak Preview of an article on their first-ever green renovation project. The energy-efficient lighting section is very good and the section on green products is great fun — complete with links to product suppliers — but if energy efficiency is the heart of green (and it is) then this particular old house renovation, however beautiful, has a weak heart. I need to see the heating and cooling specs.

I would have seen more of green, energy efficiency specs at an exhibit on green architecture at Bowdoin College – a mile away from my well-insulated rental in Maine – had I even known about it.

“Homes built to those standards are significantly more energy efficient than conventionally designed homes, according to MaineHousing Director Dale McCormick. ‘By making these designs available to the public, as well as homebuilders, architects, and contractors, we hope to encourage the development of more green housing in the state,” McCormick said. “Green housing is not only more energy efficient, it is also environmentally friendly, compatible with its location, durable, and healthy for the occupants.’”

This past week, a colleague in the energy technology marketing field was at the NET2007 (New and Emerging Technologies) conference in Orlando, Florida. Orlando was also the site of the 2007 International Builder’s Show held last week. The National Association of Home Builders, a sponsor of the Builder’s Show, posted a press release on its website two days ago, “Builders Embrace Green Building To Save Energy, Conserve Resources” My landlord is on the board of NAHB, so I go easy here. The highlight of the NHBA show, so my NET2007 mole tells me, was the Kohler exhibit where models showered in skin-colored bathing suits behind glass. That’s men standing around ogling. So, what else is new? From the displays at the show, its awards and the press release (despite its assertion to the contrary), not green building. The green building action was over at NET2007, not at the builder’s show where green building is as fringe pulling off a toenail.

Other goings on this week
Ellen Goodman’s, “No Change in Political Climate”in The Boston Globe: “On the day that the latest report on global warming was released, I went out and bought a light bulb. OK, an environmentally-friendly, compact fluorescent light bulb…it was either buying a light bulb or pulling the covers over my head…I would like to say we’re at a point where global warming is impossible to deny. Let’s just say the global warming deniers are on par with Holocaust deniers, though one denies the past and the other denies the present and future…I don’t expect that this report will set off some vast political uprising. The sorry fact is that the rising world thermometer hasn’t translated into political climate change in America.

“American University’s Matthew Nisbet is among those who see the importance of expanding the story beyond scientists. He is charting the reframing of climate change into a moral and religious issue – see the greening of the evangelicals – and into a corruption of science issue – see big oil – and an economic issue – see the newer, greener technologies.”

Heather Rae, a contributor to cleantechblog.com, manages a ‘whole house’ home performance program in Maine. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.