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Solar Power 2007

By John Addison (10/2/07) Like a castle under siege, Solar Power 2007 was such a hot event that registration had to be closed a week prior to the conference opening in Long Beach, California. Over 12,500 people attended last week. There was enthusiasm for high growth and technology advancements in photovoltaics (PV) and in large-scale concentrating solar power (CSP).

In 2006, PV grew over 40% to $20 billion in revenue and over 2,500 MW of new solar power. Renewable Energy World. The European Photovoltaic Industry Association (EPIA), forecasts a €300 billion industry by 2030 which will meet 9.4 per cent of the world’s electricity demand. By 2030, solar is forecasted to be the least expensive source of energy in many sunny regions of the world.

In the last 12 months, over 40% of PV installations were in one country – Germany – where high feed-in tariffs make it financially compelling to sell solar power to the electric utility than to buy power from the utility. Some presenters argued that even in select U.S. markets, such as Hawaii, subsidized solar is at price-parity with grid delivered electricity.

PV prices have fallen 90% in the past twenty years; 40% in the past five. This is good news to counter a hot-climate future as solar prices drop and coal prices increase.

The PV growth rate would be higher, but polysilicon will be scarce through 2010 according to most forecasts from the conference’s CEO panel. Polysilicon supply is expected to triple by 2010 from 2006 capacity. 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 (SHCAY) is participating in all these technologies. Sharp continues with market share leadership, despite little growth due to the polysilicon shortage. Sharp plans to bring online new capacity to maintain leadership. Q-Cells (QCEG.F) and Kyocera (KYO) have taken market share from Sharp with their high growth. Suntech (STP) wants to take advantage of China’s low cost structure and vast market to surpass all.

First Solar (FSLR) has the cost to beat with its cadmium telluride (CdTe) alternative to polysilicon. First Solar’s (FSLR) production costs are $1.25 per watt of generating power vs. $2.80 for traditional solar systems. In the next few years, First Solar plans to be the first to achieve $1 per watt. This year, First Solar did not have an exhibit at Solar Power 2007. It is backlogged for several years, with contracts for $4 billion through 2012. Other cadmium telluride producers are in early-stage mode.

Public utilities had a record presence at Solar Power 2007. Many are mandated to increase their renewable portfolio. For example, the California 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.

Utilities are especially interested in large-scale CSP plants delivering 10 to 600 MW. Four GW of CSP is being installed globally. 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 drop to 8 cents/kWh, making it competitive where coal and natural gas greenhouse gas producers must buy greenhouse emission credits.

By 2010 major utility PG&E will meet its 20% target of delivered electricity from clean renewable energy. This will include 553 MW of concentrating solar power (CSP) from a new Solel project. When fully operational in 2011, the Mojave Solar Park plant will cover up to 6,000 acres, or nine square miles in the Mojave Desert. The project will rely on 1.2 million mirrors and 317 miles of vacuum tubing to capture the desert sun’s heat. It will be the largest CSP project in the world. Solel utilizes parabolic mirrors to concentrate solar energy on to solar thermal receivers. The receivers contain a fluid that is heated and circulated, and the heat is released to generate steam. The steam powers a turbine to produce electricity.

FPL Group announced $2.4 billion investments in CSP and smart-grid technology. The planned investment includes up to $1.5 billion in new solar thermal generating facilities in Florida and California over the next seven years, and up to $500 million to create a smart network for enhanced energy management capabilities. FPL plans to build 300 MW of solar generating capacity in Florida using Ausra http://www.ausra.com/ solar thermal technology. The company recently received a $40 million in funding from Silicon Valley venture capital firms Khosla Ventures and Kleiner, Perkins, Caufield & Byers (KPCB).

Ray Lane, a Managing Partner at Kleiner Perkins gave a compelling opening keynote speech at Solar Power 2007. He declared that there is no energy shortage, because there is no shortage of sunlight. Mr. Lane showed a map of 92 x 92 miles of desert in California and Nevada. Using CSP, that unoccupied area could generate enough solar power to meet all power needs in the U.S. Challenges of such a project include multi-billion dollar investment in high-voltage lines to carry the electricity to remote cities. Storage is another major challenge. Although these investments are significant, the potential will drive strong CSP growth.

Expect solar to continue with its historic 35% growth over the next decade. Forecasts for solar supplying over 9% of the world’s energy needs by 2030 are achievable.

John Addison publishes the Clean Fleet Report. For articles describing the use of solar power in transportation.

Riding on Sunlight

By John Addison (9/20/07). Electric light rail is a popular way to whisk millions through cities with speed, ease, and minimal emissions. Per passenger mile, source-to-wheels emissions are far less than people trying to navigate busy cities in their cars. Even if there is a coal power plant supplying the electricity, the efficiency of moving masses with efficient electric drive systems results in very clean transportation.

Unfortunately, the initial capital expense of light rail prevents many worthy projects. MTA New York City is spending over $7.5 billion to extend its sub-way. Most light-rail costs over $10 million per mile.

Buses can move millions for a fraction of the cost of light-rail. Bus routes can be easily changed as cities grow, change in shape, and alter in transportation demands. Light-rail tracks are likely to be fixed for over forty years; bus routes may change annually. For most major cities, the ideal is intermodal solutions that include both bus and light-rail.

Now AC Transit in Oakland, California, is making bus travel as appealing as light-rail. Each day, over one thousand people ride on three hydrogen fuel cell buses in Oakland and in environmentally conscious Berkeley. By 2012, five thousand people daily will be riding on twelve such buses. The only emission is water vapor.

At the heart of these electric buses are Siemens electric-motors, similar to the larger motors which power electric light-rail. The motors are powered by electricity generated from 120kW fuel cells and from 95kW of batteries. The batteries are also used to capture braking and downhill energy. The batteries are recharged nightly, making these buses plug-in hybrid hydrogen fuel cell buses.

The hydrogen is made by onsite reformation of natural gas. Basically CH4 is combined with steam (H2O) to produce hydrogen. The electricity to power the reformation and the compression of the hydrogen gas is from solar power. The 150 kg/day of hydrogen is used by the three buses and up to eleven Hyundai vehicles for supervisors.

The net result is electric buses that can run hundreds of miles up 18 percent grades, and then be cleanly refueled in minutes. By 2010, the buses are likely to run 16 hours daily, up from the current eight. In five years, AC Transit is likely to buy at least seven hydrogen buses annually, staying ahead of California’s zero-emission bus mandate.

These are the most advanced buses used in the world with 40-foot Van Hool A330 bus chassis modified to accommodate UTC’s PureMotion™ 120 kW fuel cell power system and ISE’s hybrid-electric drive system. Hydrogen tanks on the roof give the bus a range of 300 to 350 miles, and batteries recharged during braking can provide an extra 95kW of power for acceleration and climbing steep grades.

HyRoad, this exciting model of public transportation, was made possible by more than $21 million of funding from the Bay Area Air Quality Management District, California Air Resources Board, California Energy Commission, California Transportation Commission, CalStart, Chevron Corporation, Department of Energy, and the Federal Transit Administration.

The National Renewable Energy Laboratory released a preliminary report on its evaluation of AC Transit’s fleet of fuel cell buses. The report includes eight months of performance data on three fuel cell buses in service, as well as data from a fleet of diesel control buses.

AC Transit; SunPower (SPWR); MMA Renewable Ventures; and PG&E (PCG) dedicated the AC Transit’s state-of-the-art 621-kilowatt solar electric system. The system, located on AC Transit facilities in Hayward and Oakland, is expected to generate approximately 767,000 kilowatt hours of power each year.

Over the 30-year life of the system, AC Transit expects to save $5 million in utility costs as a result of the clean, renewable solar power that the system will generate. It will offset the production of more than 14.5 million pounds of carbon dioxide emissions – equivalent to planting 2,000 acres of trees or removing 1,400 cars from California’s highways.

“AC Transit is committed to reducing emissions of greenhouse gases and improving the quality of life for the entire region in which we operate,” said AC Transit General Manager Rick Fernandez. “While installing a solar system to power our facilities makes a great deal of financial sense, it will also provide more than enough power to offset the 189,000 kilowatt hours per year required to operate AC Transit’s hydrogen production facility, and help lower the overall amount of energy we use from conventional sources.”

Instead of spending millions to install the solar system, AC Transit arranged to pay 13.5 cents per kilowatt hour to MMA Renewable Ventures, which finances and owns AC Transit’s solar power systems under a SunPower Access™ program. “AC Transit selected an innovative financing structure to effectively meet its financial goals and environmental objectives,” said Matt Cheney, CEO of MMA Renewable Ventures. “With its forward-thinking approach and commitment to clean energy, AC Transit is demonstrating that solar power is an affordable option for public agencies concerned with reducing carbon emissions.”

“AC Transit is an environmental leader that is doing its part to address our ongoing energy challenges,” said Howard Wenger, SunPower vice president. “By generating solar power, AC Transit is reducing demand from the utility grid, reducing operating costs, and improving air quality for its community. This energy solution saves money while helping the environment.”

A large portion of the installation cost of these solar systems was covered by a $1.9 million incentive from PG&E, under California’s Self Generation Incentive Program. Through this program, PG&E can provide almost $950 million in incentives over the next 10 years to help customers buy their own solar systems.

In the past twenty years, solar power has dropped 90% in price due to technology breakthroughs and production volume. Over the next twenty years, we will see the same improvement with hydrogen transportation. Already, the hydrogen used cost AC Transit no more per mile than diesel fuel used in similar buses.

As fuel cells reach lives beyond 10,000 hours, and as costs are significantly reduced, advanced transportation like AC Transit’s HyRoad will become available worldwide. When it does, we can thank AC Transit and its partners for leading the way.

John Addison publishes the Clean Fleet Report (www.cleanfleetreport.com). September 24 to 27 he will be researching future articles at Solar Power 2007. On October 25 he will be a featured speaker at the California Hydrogen Business Council. Permission is granted to reproduce this story.

In the real world, solar often gets barely a passing grade

I’m a big fan of solar power. But as with anything, I like to know exactly what I’m getting. One of the big unspoken issues in the solar sector is the difference between the rated or estimated potential output of a solar system–and the actual production of kilowatt-hours. A range of factors from the margin of error in the modules, to temperature, dust and losses from wiring, conversion to AC power and any batteries all can contribute to as much as 30 percent lower actual power production–even in the first year.

Compounding this problem in my mind is that in California only about a third to half of our solar installations are actually independently monitored, according to one of my friends at Fat Spaniel, one of the leading monitors of solar systems.

The California Energy Commission did some good thumbnail analysis of solar in the real world several years ago.

Here’s the punch line from their analysis:

“So the ‘100-watt module’ output, reduced by production tolerance, heat, dust, wiring, AC conversion and other losses will translate into about 68 watts of AC power delivered to the house panel during the middle of a clear day (100 watts x 0.95 x 0.89 x 0.93 x 0.95 x 0.90 = 68 watts).” From A Guide to Photovoltaic System Design and Installation (PDF) by the California Energy Commission. If you are interested in solar, you need to read their report.

But this 68 watts is only part of the story. If you have battery storage on the system they say it could reduce the power another 6-10 percent. They then stated that poor installation layout problems–including shading can take an additional toll. Another big issue is the angle of the roof and the direction it faces (in California, where your roof faces can affect the power output up to another 15 percent for many roofs). And interesting enough, for all the talk about making windows out of solar in what is typically described as Building Integrated Photovoltaics (BIPV), a vertical installation can reduce the power output up to about half all by itself!

Their bottom line: if the system is perfectly installed under perfect conditions the best case scenario for San Francisco would be 1,724 kwh, or electricity per year for each kilowatt installed and for Los Angeles would be about 1,758. But that’s before all the “real-world” adjustments. When you make all those real-world adjustments–take another 25-30 percent or more off the top, even for a well designed system. This fits with our best San Francisco benchmark, our major 675 kW rooftop solar facility in the San Francisco at Moscone Center, which produces around 1,200 kilowatt-hours per year per rated kilowatt installed.

So when it comes to solar, let’s make the right choice for solar power, but make it with our eyes open to the real world.

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, and a blogger for CNET’s Green tech blog.

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.

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.
  • First Solar – Far and away the market leader on size and cost in thin film today with Cadmium Telluride based technology. Location: Arizona/Ohio
  • Energy Conversion Devices – Long-time market leader in flexible thin film amorphous silicon. Location: Michigan
  • Applied Materials – Massive market share in equipment for hybrid thin film/silicon tandem cells which could hammer the crystalline PV business when they hit the market over the next few years. Location: Silicon Valley/Germany and beyond.
  • Silicon Valley – Hundreds of millions of venture capital investment is pumping in to back amorphous silicon and CIGS technology start ups. Some of them will crack the nut, too.
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.
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.

Is IBM Going Solar?

Cleantech Blog has commented on the maturation of the solar sector for some time now. About a year ago, Cleantech Blog broke the story about Applied Material’s entry into the solar market with the San Francisco Chronicle. We have also written on solar concentrators, the coming of consolidation in the solar markets, inverter technology, and subsidy policy. And the fascinating look into the possible future of solar continues.

I had a chance recently to visit with one of the individuals responsible for IBM’s (NYSE:IBM) Big Green Innovations strategy – which has made a splash in the cleantech world over the last half year. We were talking on a range of topics, but one that piqued my interest was the description of IBM’s work in photovoltaics – and a few thoughts on where they were going. I did not ask, and he did not offer, any particulars on the work in progress, but he did make mention of a few points that I thought were well worth repeating:

  • IBM is expecting to be a player in the solar cell business – likely seeing commercial impact in the next 18 months to two years.
  • IBM is developing both advanced crystalline technologies and CIGS processes – relying on their semiconductor manufacturing expertise and nanotech research to make breakthroughs in controlling PV manufacturing processes.
  • You will not likely see IBM making branded modules – perhaps instead a cell production business strategy?
  • IBM sees the potential for very high efficiency multi-junction cells in foreseeable future.

The fascinating part is that IBM is not a newcomer to the game. When you do a little background research, you dig up some fascinating tidbits, including a couple of articles dated 1978 in the IBM Journal of Research and Development that are interesting given the historical perspective they add to the discussion. For those still thinking that Silicon Valley venture capital is the real innovator behind the solar sector – see below.

As far as the mainstream (or even cleantech) press on IBM’s solar photovoltaic development, though, there has been little mention, and no details. News.com had a recent mention (but no details) of IBM’s solar interests (along with an oblique mention of their work in developing desalination membranes for the water sector). There was a brief mention of IBM and an organic solar cell development in a 2004 year old Business Week article. And a brief mention of interest in solar technology in an Information Week article about the IBM Innovation Agenda – which the Big Green Innovations is a part. But that’s about it.

There are over a dozen recent US patents and published applications by IBM referencing a range of solar cells or photovoltaic technology, a few are listed below – that can give some indication of what work IBM has going on.

  • 7,109,584 Dendrite growth control circuit
  • 7,094,651 Hydrazine-free solution deposition of chalcogenide films
  • 6,933,191 Two-mask process for metal-insulator-metal capacitors and single mask process for thin film resistors
  • 6,875,661 Solution deposition of chalcogenide films
  • 6,774,019 Incorporation of an impurity into a thin film
  • 6,316,786 Organic opto-electronic devices
  • 6,351,023 Semiconductor device having ultra-sharp P-N junction and method of manufacturing the same
  • 20070057255 Nanomaterials with tetrazole-based removable stabilizing agents
  • 20060032530 Solution processed pentacene-acceptor heterojunctions in diodes, photodiodes, and photovoltaic cells and method of making same
  • 20050158909 Solution deposition of chalcogenide films containing transition metals

And here are the 1978 articles I promised above from IBM Journal of Research and Development. As I said – for those who still believe Silicon Valley is inventing solar.

Low Cost Silicon for Solar Energy Conversion Applications Economically viable means of producing silicon solar cells for the conversion of solar energy into electric power are discussed. Emphasis is given to the discussion of crystal growth techniques capable of growing single-crystal silicon ribbons directly and inexpensively from molten silicon. The capillary action shaping technique (CAST) recently developed by IBM has a good potential for producing low cost silicon sheets suitable for solar cells. This technique has produced ribbon 100 mm wide and 0.3 mm thick. Problems that CAST must overcome in order to supply material for low cost solar cells are discussed. Economic and technological computer-modeled comparisons indicate that continuously grown CAST ribbons of these dimensions can meet a cost objective below $50/m2 of sheet material. The results require that it be possible to fabricate a twelve-percent-efficient solar cell from CAST ribbon 100 mm wide and 0.3 mm thick at a polycrystalline silicon cost of $10/kg.

Fascinating enough – while much earlier, this looks very similar to the Evergreen Solar (NASDAQ:ESLR) story whose success helped launch the recent venture capital rush into solar just a couple of years ago.

Growth of Polycrystalline GaAs for Solar Cell Applications Films of polycrystalline GaAs have been grown on foreign substrates by the metal-organic process. The main objective was to produce films with as large a grain size as possible, so that high-efficiency photovoltaic devices may eventually be fabricated from such thin film/substrate structures. At 973 K the average grain size was less than 1 µm, and was unaffected by the choice of substrate. Increasing the deposition temperature to 1123 K, while maintaining all other conditions the same, resulted in grains as large as 10 to 20 µm in diameter. Grain sizes as large as 10 µm could be obtained by precoating the substrates with thin films of evaporated gold or tin. However, both of these methods gave films that were discontinuous. A two-step procedure in which the films were nucleated at 873 K prior to growth at 1123 K yielded continuous films with an average grain size of 5 µm. Schottky barrier solar cells fabricated from these films exhibited short-circuit current densities as high as 15.7 mA/cm2, even though the highest conversion efficiency (AM0, uncoated) was only 1.3 percent because of the low fill factor (0.28).

Novel Materials and Devices for Sunlight Concentrating Systems Photovoltaic conversion under concentrated sunlight is a highly promising technique that could make solar-electric power generation economically competitive with fossil fuel power generation by the mid-1980s. An economic analysis has been performed which demonstrates that solar cell efficiency, concentrator efficiency, and concentrator cost are the most important parameters in a concentrating photovoltaic system; solar cell cost is only of secondary importance (at least for Si solar cells). Six novel structures are described, including modified conventional Si cells, Ga1-xAlx As/GaAs devices, interdigitated cells, vertical and horizontal multijunction cells and “multicolor” devices.

So whether it’s high efficiency multi-junction cells to compete in the concentrator market, or organic or CIGS cells for BIPV, or providing advanced silicon cells to enable a new group of entrants into the rooftop module market, or something new entirely – IBM bears watching in the solar sector.

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.

Micro Fuel Cell Killer – What’s Next?

About 4 or 5 years ago micro fuel cells were quite a hot topic in cleantech. They were going to power our laptops, cell phones, PDAs, blackberries, hand held multimedia devices, etc.

The story ran like this:

The digital age and increasing customer demand for more power hungry features like bandwidth, multimedia, et al on mobile devices like laptops, PDAs and cellphones mean the increase in power requirements are outstripping the pace of technology of lithium ion battery – therefore the only solutions will be micro fuel cells. And since battery manufacturers are a plodding, unimaginative lot, silicon valley and smart scientists can build a company to leapfrog them.

We saw major players like Motorola, Toshiba, Intel, and others taking a look, and startups like Smart Fuel Cells, Medis and MTI Micro seeking to make their name on a fuel cell the size of a credit card (or thereabouts) .

Today, still no micro fuel cell powered devices are on the market, many of the larger players have gone quiet, and all the startups are talking up battery charger (not device power pack) products – especially for the military and first responders.

What happened? What killed the micro fuel cells? Can they come back? And is something similar lurking around the corner for solar, electric vehicles, biofuels, next generation batteries or one of today’s other darlings of the cleantech sector that we can learn from?

Well . . . let’s see:

The technology is actually hard – Micro fuel cell technology proved a harder nut to crack than everyone thought (at least at anywhere near the same cost point) – and the product development issues given the state of the technology proved to be a real challenge.

Rational expectations – Market reaction to the underlying drivers has been aggressive. We’ve got global warming and high energy prices making people like Sun, Dell, and others hell bent on designing power saving devices – which the consumer is now interested in buying as a premium product. Once the electronic product companies actually put their minds to reducing power usage – well, it turned out that you actually CAN optimize a device to save power, and still pack enough features in to sell product.

The incumbent technology – Despite high profile thermal issues, the incumbent lithium ion technology turned out not to be so bad, and has continued to keep pace (as far as us lowly consumers can tell) – Bottom line: I now carry 2 very small 4 hour battery packs for my laptop – I can last a transocean plane flight without needing to plug in.

Infrastructure, infrastructure, infrastructure – And yes, having to make infrastructure changes is very costly in anything energy-esque, whether its in fuel, entrenched distribution, or tooling. As usual, winning technologies in energy tend to be owned by businesses that find a way to work with existing infrastructure, not to try and replace it.

And in the end, the batteries (and the big battery makers) still rule the roost, for now.

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.

3rd Generation Solar Cells – Dyesol Interview

Nick Bruse runs Strike Consulting, a cleantech venture consultancy; hosts the cleantech show, a weekly podcast of interviews with leaders involved in clean technology research, entrepreneurship, commentary and investment; and advises Clean Technology Australasia Pty Ltd and the leading advocate of Cleantech in Australia.


It seems we cant go a day at the moment without hearing about a new commissioning of a energy plant, or new technology development, or fund raising in the solar energy space at the moment.

Last week on The Cleantech Show I interviewed Sylvia Tulloch (podcast), the Managing director and founding team member for 3rd Generation solar cell technology company Dyesol (ASX: DYE). 3rd generation solar cell technology utilises biomimicry of the chlorophyll dye in plants to produce energy from the sun.

You can access the interview here

Many of you may be aware of Dyesol which has been a pioneer in the field of Dye Sensitised Cells (DSC) over the last 10 years, now providing the key dyes and Titania pastes to some of the 800 research and commercial organisations around the world developing DSC applications.

Don’t miss this interview, as Sylvia goes into detail about how DSC technology will have a large roll in the coming decade. Dyesol has also recently signed a number of large partnership agreements and supply contracts to for new DSC applications.

We discuss the technology and the applications where its lower cost high volume potential for energy generation in building materials, consumer devices and a host of other applications means it will have a signifcant roll in the future.

Nigerian Scams Move into Solar?

I received this brief missive in my email box last night. Fascinating, but true, Nigerian scams appear to be moving into solar. Does that mean solar has grown up?

The email read:

“Dear sir/Madam,

This is to introduce our co. to you that we are in Uganda (East Africa) andwe kindly request you to give us prices of the 75watts and 80watts of solarmodules Please, we kindly request you to make all pricesin USD that are cif Entebbe airport.We shall be very happy for the quckest response.

rgds Lutaya Macon the behalf of

MM. GENERAL MERNDISE PLOT NO.4 BOMBO RD P.O BOX 5435 KAMPALA UGANDA EAST AFRICATEL: +256-772-579326″

It looks like a classic Nigerian scam, where after making contact, one eventually receives the opportunity to pay or front some money, in order to unlock illgotten gains that they will pay into your account later – but of course never do.

I get one of these every day, and as usual:

– it came from a hotmail or free account but purported to represent a legit business or a scam opportunity,
– came from an African country addressed to Dear Sir/Madam,
– very polite if unsophisticated writing style (complete with abbrev.),
– had a very long generic sounding PO Box address
– had nothing to do with my business, but acted like it did (I don’t actually sell solar cells, I just write about them).

They’ve been getting more sophisticated over the years – and now rarely ask for money up front, instead trying to lure you into some sort of a business relationship first. But it’s still a Nigerian scam.

Here’s the rub – never in the 10 + years I’ve been getting these things, have I seen one using solar cells as the bait!

Obviously the solar industry’s sex appeal is transcending boundaries and attracting the “wrong” kind of attention. But that’s good right? Does it mean the industry has “made it”? Your guess is as good as mine.

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.

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.

Cleantech: The Problem and Solution

Two interesting cleantech reports came out in the last couple of days. One talking about the problem, the other the solution.

On the problem side, as reported in USA Today, a team of researchers working at Texas A&M found that increased pollution in Asia, primarily from the rise of industrialism in China over the last 10 years, is affecting weather patterns over the Pacific and even into the US West Coast.

I guess the last 10 years of environmentalists harping over the growth in “dirty Chinese coal plants” had some real merit.

On the solution side, the 2007 Clean Energy Trends report authored by Clean Edge, came out this week.

The highlights from my review of their document:

$2.4 Billion in clean energy (as distinct from cleantech) venture capital investment in 2006, up 2.4x from 2005.

They project $220 Billion in market for Clean Energy by 2016.

Their 5 Trends to Watch:

  • Carbon Finally Has a Price…and a Market – They note the major advances including California’s GHG law push. We agree. But like wind and solar, we pioneered it, but Europe is leading it today.
  • Biorefineries Begin to Close the Loop – They are big on the advances of cellulosic ethanol. We remain cautious here.
  • Advanced Battery Makers Take Charge – They note the coming rise of lithium ion in the automotive sector. We agree.
  • Wal-Mart Becomes a Clean Energy Market Maker – They note major moves by Wal-Mart to go green. Long a shareholder of Wal-Mart myself, I definitely agree. We have been saying for a while that when it comes to cleantech, startups talk the talk, the big boys walk the walk.
  • Utilities Get Enlightened – They note that utilities are getting on the climate change band wagon. We would add that corporate venture is back, in a new and possibly smarter form.

You can download their report from the Clean Edge website. We have written on each of these topics before. Onwards and upwards in cleantech.

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.

What has Changed in the Alternative Energy Investment Landscape

Is the time right to invest in alternative energy? We’ve seen a lot of this before in the 1970s and 1980s. Solar and biomass hot, big regulatory pushes, and then companies and investors lost a lot of money when things changed. We’re still a bit skeptical. We’re also all about not getting pulled in to each and every overpriced hype (read, the ethanol race) – but fundamentals are fundamentals. And they’re hard to ignore and pretty darn impressive. We think the real question today is not “are alternatives a good investment?”, but “which ones have legs and make a good investment bet?”

In four words – broad-based critical mass – Unlike alternative energy of yesteryear, this alternative energy explosion has been slowly building for 10 to 15 years, and is reaching critical mass in multiple markets. Take a couple of examples – the solar market is on pace for a $20 Billion per year number globally within 3 years (SolarBuzz.com), across several major jurisdictions (in the 1980s we were talking less than 5% of that). World ethanol production is on the order of $12 Billion/year. In the US wind capacity production has growing at 25%+ per year for the last 2 years wind generation capacity additions have been second only to gas-fired generation adds in the US mix.

“It’s the global economy, stupid” – Don’t forget, this is global now, and it wasn’t really like that 25 years ago. The US pioneered solar photovoltaics, but Japan and Germany (with China catching up) are the biggest markets today. The US pioneered large scale wind power (remember Altamont Pass?), but 3 of the top 4 wind turbine companies today are European. The US engineered cap and trade in carbon, but Kyoto is a European driven engine. Lots of examples of why it’s not just us anymore. For an investor worried about the legs of the industry, that’s a really big point.

In two words – cost structure – alternative energy is still more expensive than conventional energy – that’s why we call it “alternative”. But the cost curves for each and every alternative energy source have fundamentally changed for the better over the last 10 years (NREL), are moving into striking distance, and continue to improve. This trend is not going to reverse, so it’s just a matter of time.

In three words – carbon, carbon, carbon – The carbon credit trading market, driven by Kyoto protocol was $21.5 Billion in the first 3 quarters of last year (World Bank and IETA) – that’s up from virtually zero three years ago. Now we’re talking real numbers. The US has been left out of this so far, but not for long. California is committed, the Democrats are in control of Congress, and we will likely be seeing a strengthening of some sort of cap and trade system before long.

The bottom line – alternative energy is cool and the consumer cares. Of all this activity, it’s really high gas and electricity prices and climate change that have put alternative energy on the map in the consumers minds. And they care. And they vote. And they blog. And they are buying hybrids, uneconomic hybrids, lots of them. And as the battery technology continues to advance (think lithium ion overtaking nickel metal hydride), they’ll start buying HEVs and Plug-in HEVs in massive quantities. And they are buying green power. And little pieces of paper certifying their green power. In enough quantities for Toyota and Walmart and GE and Google to brand green as part of their core strategies. How’s all that for impact?

And finally, the regulations are here. Don’t kid yourself, alternative energy has ALWAYS been a regulatory driven market. But now the regulations are pretty widespread. Take electric power, for example – it’s not just the federal production tax credit anymore, or just the solar tax credit, or the state solar subsidy programs – 23 US states now have Renewable Portfolio Standards for electricity production (Pew Center) , including Texas, California, Pennsylvania, Arizona, Illinois, etc. That’s up from 1 in 1991. Put another way, if you could swing the electoral votes from just the RPS states, you’d have a landslide presidential victory.

Yes, it’s still possible that if oil and gas prices prices fall back to 1990s levels (we expect them to pull back somewhat, but are scared to make a precise prediction) and we have 5 or 6 normal, cool winters that make the climate change debate disintegrate, then a new political wave will come in (in 30 different western countries), and each and every major alternative energy regulatory program along with all the consumer demand will collapse – in a dozen major nations worldwide. But as the saying goes, that ain’t the way to bet it.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.