Category → Solar
Never Mind All That: Solar on the upswing
I’m going to have to start posting more frequently. My last post was about solar firms going bankrupt in China and now my cleantech news is about how solar is set to rebound. Seems like something should have happened in between that post and this one.
Actually, a few biobased chemical deals were announced. Thanks BASF and Evonik!
Making a better solar cell. Credit: University of Stuttgart Institute of Photovoltaics
Anyway – back to solar. Earlier this week, Lux Research (a rather skeptical gang generally) put out a summary of a new research report titled “Solar’s Great Recovery: Photovoltaics Reach $155 Billion Market in 2018.”
Actually, solar had a great 2012 – at last in the U.S. – but that was mainly due to installations of several large utility projects. The business of producing those solar modules had hit some major potholes. Around five years ago, solar demand was hindered by high prices – held up by shortages of key polysilicon raw material, but balanced by huge subsidies in Europe, especially in Spain and Germany. Then – in the nature of boom and bust cycles – the high prices prompted huge polysilicon capacity increases. Then prices fell, Europe cut subsides, the recession hit… and all that new capacity made solar prices tank and inventories piled up. Whew – what a tale.
In a fun new twist, according to Lux analyst Ed Cahill, the solar crisis will become a boon as record low prices boost demand. (And after that what will happen? Stay tuned).
The rise will take place as those cheaper installations (especially utility and commercial rooftop) become routine and spread into new markets. U.S., China, Japan, and India are expected to speed up installations. That will help to power (no pun intended) a compound annual growth rate in the industry of 10.5% over the next three years.
A few other things might help – according to this New York Times article, the U.S. and Europe are both working to smooth over trade disputes with China. Regional pricing schemes may take the place of tariffs. China had been accused of exporting solar modules at prices less than the cost of production (a practice called “dumping”). China, in turn, accused polysilicon makers in the U.S. and Europe of doing the same thing.
All of this fun news is not likely to help revive solar module manufacturing in the U.S. or in Germany. But new technology might. My colleague Alex Scott flagged a news item from the University of Stuttgart’s Institute for Photovoltaics. Researchers there have tested a crystalline silicon solar cell with a 22% sunlight conversion efficiency. It is difficult to say how much a module made of these cells would convert, but a traditional module is normally around 15%.
The secret to the team’s work is a design that puts the metal contacts on the back layer of the cell, using a laser. While hanging out on the back of the cell, the material will not block light hitting the front of the cell. Ta-da! More electrons.
Solar Boom in Japan, with Battery to Match
Japan has been making large strides in solar since the Fukushima disaster, and those efforts look set to accelerate, at least in the near term. The country, which is not blessed with a wealth of fossil fuel resources, had relied heavily on nuclear energy, but it is now spending big for solar installations as well as energy storage.
Just in time for Earth Day, Bloomberg is reporting that the Ministry of Economy, Trade and Industry plans to spend around $204 million on a battery system to stabilize the flow of solar power on the northern island of Hokkaido. The location’s less expensive land has attracted ground module solar power systems. The report did not state what type of battery will be used, though Cleantech Chemistry will be looking for updates. The ministry is targeting 2015 for the system to be up and running (up and storing?)
The country began a generous feed in tariff for solar in July, which attracted just over 1.33 GW of installations through the end of January of this year. According to IHS iSuppli, the FIT is around 42 cents (in U.S. currency) per kilowatt hour, which is quite generous.
Though the tariff may be scaled back as systems come online, IHS forecasts that Japan will install 5 GW of solar capacity this year. To put that figure in perspective, the European Photovoltaic Industry Association reports that 30 GW of grid-connected solar was installed globally in 2012, about the same as in 2011.
Natural Gas and Cleantech
Cleantech fans: it is time to educate yourselves. Set aside for a moment your interest in wind energy, solar, bio-based chemicals, biofuels, and electric vehicles and read this week’s story about what the U.S. may do with its abundant natural gas.
Here are some things that the country can do with natural gas: it can make electricity, upgrade it to useful chemicals, use it as a transportation fuel, or export it. The U.S. has access to so much natural gas that it could do all four things. And do them all cheaply, and profitably compared to our trade partners.
At this point, even if you only use your knowledge about the promise of cleantech at cocktail parties, you should start to think about the impact of abundant natural gas on your favorite technologies.
My colleagues Jeff Johnson and Alex Tullo’s feature asks what effect DOE policies on liquefied natural gas exports might have on the chemical industry and the wider economy. The flip question – not addressed in the story — is what impact natural gas that stays in the U.S. will have on the competitiveness of renewable energy and materials innovations.
At the recent ARPA-E show, I saw energy technology that is seeking to take advantage of abundant natural gas – and the speakers at the conference were rather fixated on the topic. (see my story on the ARPA-E Show in this week’s issue). Alert readers will recognize which minority member of the Senate appears in both articles.
I hate to give away the ending of the natural gas story but (spoiler alert!) U.S. natural gas prices will stay low even if we ramp up exports. When I was in school and my class learned about the Panama Canal, one of my classmates couldn’t understand why engineers had to build locks to compensate for the different sea levels between the Pacific and Atlantic. Once you connected the two oceans, wouldn’t they level out? Well, no.
Similarly, there is a small aperture through which natural gas would escape U.S. borders via the export market. Liquification imposes a significant surcharge on every unit of gas, it costs a lot to build a plant to do it, the export hubs need to be brought online, and there is a backlog in approving facilities. But read the full story and get the full picture.
Thin film solar maker Miasolé bought by China’s Hanergy
Hanergy, a China-based renewable energy company, announced today that it has completed its acquisition of thin-film solar firm Miasolé. The buyer first reached a purchase agreement with Miasolé’s investors in September.
Of the many photovoltaic manufacturers out there – and/or recently bankrupt – Miasolé is one of the most elegant. And not just because of its attractive-sounding name (news reports online have stripped it of the accent aigu — it’s pronounced MiasolA).
Miasolé makes thin film solar cells of the copper indium gallium selenide variety. This is an attractive technology because it is possible to make CIGS as efficient as heavier traditional polysilicon solar PV. The first thin-film technology was based on amorphous silicon (a technology that Hanergy plans to abandon), which was much less efficient than traditional solar cells. In theory, CIGS can be manufactured in long, flat, flexible sheets and installed in places that cannot support other kinds of solar panels.
For now, CIGS material on the market has an upper-bound efficiency of about 12% or so, while traditional solar starts there and goes up a bit. CIGS are more expensive, and are much more difficult to manufacture.
For Miasolé’s part, in May the company reported that NREL confirmed a 15.5% efficiency on its newest commercial, flexible CIGS cells. It is not clear what the efficiency of a fully installed system would be. But it shows that this firm has been pushing the technology. Back in 2011, it worked with semiconductor maker Intel to help it ramp up its manufacturing. At the time, the company said it was using a low-cost sputtering technology for materials deposition.
News reports have estimated that Hanergy spent about $120 million to buy Miasolé’, a company that was valued as high as $1.2 billion in 2008. Hanergy makes most of its money by generating power from hydroelectric installations. Last year it also snapped up Solibro, a unit of Germany’s solar manufacturer Q-Cells.
Hanergy says it will keep the Miasolé CIGS manufacturing operations going in California. Meanwhile, another CIGS start-up, SoloPower, recently began production in Portland, Oregon.
The Year in Cleantech IPOs: Horrible!
There is no other way to say it. This year has been a terrible one for cleantech firms hoping to access the public markets to fund commercialization. Investors seem to be allergic to the very idea of owning stock in a cleantech firm.
Cleantech Chemistry thinks that one might still squeak through before the end of the year – SolarCity just slashed its offering price and number of shares and may now raise $92 million in an upcoming IPO, down from an initial expectation of $151 million. New York Times Dealbook blog has the details. [Update: CC was correct - SolarCity is live and trading up]
SolarCity is not pushing some obscure technology – it buys industry standard solar panels, and leases them to residential homeowners. This business model has become a common way for homeowners to get around the high up-front costs involved in generating their own power.
Should SolarCity decide instead to withdraw its IPO, it will join a long list of cleantech firms that had second thoughts this year including BrightSource Energy (solar), Enerkem, Fulcrum Bioenergy, Coskata, Elevance, Genomatica (all biofuels and biochemicals), and Smith Electric Vehicles. (Hat tip to Cleantech Group for helping with the list).
The good news is that many of these firms are successfully raising money from private investors including venture capitalists, corporate partners, bankers, and the Federal Government (sometimes in combination as when a loan guarantee is offered from DOE or USDA).
Two firms did go public in 2012, though both raised less money than originally hoped. Ceres, a plant biotechnology company focusing on proprietary energy crops, and Enphase, a maker of a new type of solar inverter, clipped their wings a bit but made it out of the gate.
Moving to the New Year, the true effect of a lost year for IPOs may be mainly one of image. True believers will continue to invest in cleantech firms, but for the general investing public, it seems that the bloom is off the rose for pre-commercial companies in the sector. That means fewer stakeholders to help spread the risk of new technologies, and increasing competition to appeal to deep pocketed private investors such as chemical firms and oil and gas giants.
SoloPower, Gevo: Can a capital-light strategy save cleantech?
I wish I could be in Portland, Oregon today to watch SoloPower start up its first production line of thin film CIGS solar panels. The company says it can manufacture in a continuous process to make its solar material in strips as long as one mile.
The company asserts that its thin, flexible modules are a good fit for building-integrated solar, especially in locations where heavier, traditional glass panels cannot be installed such as on warehouse roofs. The modules are certified to an efficiency rate of 9.7 to 12.7%.
But it’s not so much the technology itself that is interesting, but rather SoloPower’s business model and whether it can succeed in selling what it admits is a premium-priced product while the traditional silicon modules continue to drop in price, taking down many efficient producers with them.
SoloPower is already having to bear up under scrutiny because it will be able to tap into almost $200 million in DOE loan guarantees, under the same program that was behind the Solyndra kerfuffle. NPR did a nice job this morning interrogating SoloPower CEO Tim Harris. Read or listen to the short piece here.
NPR rightly points out that Solyndra was backed by $1 billion in private funding and accessed half a billion dollars in its own DOE loan before going bankrupt. But SoloPower doesn’t have a billion bucks to lose, and perhaps that is a good thing.
Instead of comparing SoloPower to Solyndra I’d like to compare it to Gevo, a maker of biobased isobutyl alcohol (what it calls isobutanol). Both firms are pursuing a capital-light strategy.
SoloPower’s first production line will have a small eventual annual capacity of 100 MW. So far, it has spent only its own investors’ dollars. Gevo, a now public company, is spending somewhere around 25% to one-third the cost of a new fermentation plant by converting existing corn ethanol plants.
When a company that has a technology without a track record wants to build its first large plant, it faces financing risk on top of technology risk. Range Fuels built a shiny new plant in Georgia to make ethanol from wood chips. But since the technology did not work upon start-up, Range could not pay its monthly loan overhead, and the factory was repossessed by its financing bank and sold at auction (Range also had a DOE loan guarantee).
Early this week, Gevo told investors that it had stopped making isobutyl alcohol at its facility in Luverne, Minnesota. Instead, it turned the switch back to ethanol. Gevo’s plan to convert an ethanol plant in Redmond, South Dakota is on hold. The company said though it successfully made isobutyl alcohol in Luverne, to reach its target run rate would require more work. Meanwhile, both locations can still produce ethanol.
Though Gevo’s investors weren’t happy with this news, Gevo has given itself plenty of time to fix its problems, saying it would reach its target run rate in 2013 (it could take a year and still make this deadline).
Reducing a company’s financing risk doesn’t do much to reduce its technology risk – or in SoloPower’s case, its market risk – in either the short or long term. But it may help a company last beyond just the short term. Given the pitfalls of technology scale-up, that could make all the difference.
Tough Times for Thin Film Solar Makers
Two U.S. manufacturers of thin film solar cells based on cadmium telluride have been having a tough couple of weeks.
Tempe, Arizona-based First Solar put out a sobering fourth quarter earnings report. While sales were up a bit from last year’s quarter – to almost $2.8 billion, the firm reported a net loss of almost $40 million, compared to net income of $664 million for the fourth quarter of 2010. First Solar used the last quarter of the year to take a big goodwill impairment charge of $393 million – residue of acquisitions of OptiSolar and NextLight.
Without the goodwill charge and some restructuring charges, the quarter still brought in less profits than the previous year’s quarter. Going forward, the company cut its 2012 guidance on net sales to $3.5 billion-$3.8 billion from $3.7 billion-$4 billion. First Solar stayed firm on an earnings forecast of $3.75-$4.25 per share.
But other issues are haunting First Solar – the company’s filing with the SEC says that it is spending more than expected on warrantee replacements of solar panels deployed in hot climates. And it has a new head of investor relations after an internal investigation of company leaders who may have improperly disclosed that First Solar would not receive a DOE loan guarantee for a large utility solar installation due to not making a deadline for application. Its SEC filing said that the SEC was now investigating the issue (the loan news negatively affected First Solar’s stock price).
Meanwhile, Abound Solar, which makes solar cells similar to First Solar, but is a smaller firm, recently said it would lay off 180 workers in Colorado. It plans to shift manufacturing to a more efficient production line, and says the workforce action is temporary. House Republicans have already been asking DOE why the company received a $400 million DOE loan guarantee for its manufacturing operations in Indiana.
First Solar and Abound Solar will go on, in spite of these hiccups. But they will continue to struggle to compete against traditional crystalline silicon solar cells because the latter have gone down in price by close to 40% in the last year. Thin film modules are well liked – First Solar is doing well with utility scale projects. But the firms have to move very quickly to increase efficiencies while decreasing production costs. To do so, they will have to stop work on older production lines – and they may have to do so abruptly or they will lose money on each module they sell.
Energy Conversion Devices: the other story
For many years of its history, Energy Conversion Devices had more cleantech and related business going on than this blog has categories for. The 51 year-old company filed for bankruptcy on Valentine’s Day, after having failed to generate sufficient revenues from its main business, United Solar Ovonics.
Tech writers are focusing on the Solar part of the tale, which is understandable because it neatly fits into a pattern of high-cost solar makers taking a tumble in the face of low-cost Chinese competitors. But what I found fascinating about the firm is the part referred to as Ovonics.
The word Ovonics was coined by ECD’s founder, Stanford R. Ovshinsky. He took the first two letters of his name and added the end of electronics to create a sort-of blanket term describing the way a bit of energy can convert amorphous and disordered materials into structured crystalline materials. It also covers the reverse process. The various energy and information applications that Ovshinksy put his inventive mind to include nickel-metal hydride batteries, LCD screens, read-write CDs, amorphous silicon thin-film solar material (and a nifty machine to make it), hydrogen fuel cells, and phase change electronic memory. It would be hard to imagine American life without many of these technologies – and some are still to come.
He is considered a Hero of Chemistry by the American Chemical Society. At 88 years old, he is still inventing at his new company Ovshinsky Innovations (he left ECD in 2007). The curious part of the tale is that Ovshinsky is self-taught – he didn’t go to college or graduate school. And his inventions began with research on energy and information that he pursued in the 1950s and 60s.
ECD started out as a laboratory – founded in 1960 – before it became a company. Even as a business, it ran more like a stand-alone research laboratory – think Bell Labs or Xerox labs without the rest of the corporation. The company brought in money by doing everything other than making and selling products - it had equity investors, research grants, and many collaborations along with a bit of licensing revenue.
It seemed to be always on the cusp of the big time, but it was ahead of its time. In some ways it was both ahead and behind at the same time. It had already licensed the nickel-metal hydride rechargeable battery years before it powered the Toyota Prius. Now electric cars will have lithium-ion batteries. ECD made thin-film solar that would find a niche in building integrated photovoltaics, but that niche still is not large enough to save the solar business. Yet its cost structure still belongs to the solar industry of five years ago.
Ovshinsky was also ahead of his time when he focused his work on renewable energy to break the world’s dependence on petroleum.
I don’t know ECD intimately but as an outsider, it seems that the company likely lost its driving force when it lost Ovshinsky five years ago. The management wanted to concentrate on making the company profitable – so it focused on solar energy, which was experiencing a boom. That was a bet that did not pay off.