While there has been much excitement about the sheer size of the Pentagon’s plans for deploying renewable energy, a recent study from DoD’s Office of Installations and Environment on solar applicability on bases in the California, Colorado and Nevada bases offers both optimism and caution for deploying solar in DoD agencies.

Of specific interest, 7000 megawatts (MW) of solar energy (about seven nuclear power plants) can be produced on only four military bases located in the California desert. This is enough energy to meet two thirds of the current DoD wide electricity consumption.

DoD Energy - "We have the Land & the Demand"

The year-long study, conducted by the consultancy ICF International, looked at seven military bases in California and two in Nevada including Fort Irwin, Naval Air Weapons Station China Lake, the Marine Corps’ Chocolate Mountain Aerial Gunnery Range, Edwards Air Force Base, Marine Corps Logistics Base Barstow, Marine Corps Air Ground Combat Center Twentynine Palms and Naval Air Facility El Centro.

It finds that, even though 96 percent of the surface area of the nine bases is unsuited for solar development because of military use, endangered species and other factors, the solar-compatible area is large enough to generate more than 30 times the electricity consumed by the California bases, or about 25 percent of the renewable energy that the State of California is requiring utilities to use by 2015.

The caution here is that assumptions are routinely made about the land-mass that is available on military installations and extrapolations to solar energy market size without any regards to mission compatibility with base question. This includes missions such as live ammunition training, maneuver training, test and evaluations and a multitude of other vital activities.  This study shows the fallacy of making high level extrapolations of land-mass-to-market size for the renewable energy industry.

According to the study, the largest amount of economically viable acreage is found at Edwards Air Force Base (24,327 acres), followed by Fort Irwin (18,728 acres), China Lake (6,777) and Twentynine Palms (553 acres).  ICF found little or no economically viable acreage on the other California bases (Barstow, El Centro and Chocolate Mountain) or the two Nevada bases because the military’s use of the land is incompatible with solar development.

As usual with any military renewable energy report, the study finds that private developers can tap the solar potential on these installations with no capital investment requirement from DoD, and that the development could yield the federal government up to $100 million a year in revenue or other benefits. Private developers can draw on California incentives and subsidies to make these projects economically feasible. But in places like Texas where there are no state subsidy programs and bases pay a blend rate of $0.05/kWh, the solar viability extrapolation may result in a much smaller market unless DoD can find common ground with developers on providing monetary benefits for energy security. More on this in my next blog.

With the collapse of publicly traded solar stocks in the last 4 months, the general business press has been buzzing with speculation about mergers and acquisitions. But these articles have missed some basic industry drivers and circumstances that may point to minimal M&A activity. A good example includes a recent Bloomberg article about how First Solar is a take over target for GE and Siemens as FSLR’s share price has fallen from $156 in Q1 2011 to $36 today losing enormous value.

First Solar - M&A Target?

While I have tremendous respect for what FSLR has accomplished and believe that high performance thin-film will be a factor at some point in the longer term, rapidly changing market dynamics have caught up with the company.  Manufactured costs of crystalline silicon PV modules have dropped much more rapidly than thin-film as a category or FSLR could match.  Indeed, FSLR’s stated guidance was to decrease manufacturing cost by $0.05 per Watt during the last 18 months compared to a $0.20 – $0.35 per Watt decrease by a variety of crystalline providers.

Solar thin-film as a general category is lower in efficiency, which requires more land/space, balance of systems (inverters, racking, wiring, permitting, administration) and as such, requires a module sale price differential from a crystalline module of approximately 30% to remain competitive. Currently the delta between the 2 module technology types is only 6% – 10% in the spot and long-term contract markets respectively.

The thin-film business model as a general category in the current environment is broken. (exception may be Solar Frontier) While First Solar has their downstream project development and EPC capability glossing over the module manufacturing cost problem, this will continue to be a problem for the foreseeable future. And with behemoths like Samsung, LG, Hyundai and now Foxconn about to enter the market with aggressive low cost capabilities and significant resources, the pace of cost reductions will continue.

I would be more than surprised if GE (especially since GE has its own thin-film effort with an integrated BOS approach) or Siemens or similar entities would buy FSLR with the current market dynamics in play. If the price becomes low enough, they may have interest in FSLR’s substantial project pipeline but that would need to be significantly lower than the current $36 price.

Overall, acquisitions in the PV module manufacturing industry don’t make much sense even at the current low valuations unless there is valuable IP present or there is a substantial project pipeline as a result of downstream integration. This is because the barriers to market entry are quite low. Manufacturing equipment used throughout the supply chain is generally American and European made off-the-shelf production machines with willing and able companies such as Applied Materials ready to supply. Additionally, most Asian solar manufacturers have no brand value established worth purchasing. Foxcon’s entry in the PV industry is a good example where no existing company or capacity was purchased, opting instead for the latest, highest efficiency manufacturing platforms available while partnering with an existing Chinese poly silicon company for raw material supply.

US Department of Defense agencies are leading the nation on the renewable energy front. With plans to have 25% renewable energy use by 2025 and spending $15.2B on DoD energy in 2010, this is a significant and growing market place for the solar energy industry.

DoD energy is segmented into basing power (mostly electricity), operational energy (mostly liquid fuels) and non-tactical vehicle energy.

Operational energy is consumed in forward-deployed situations such as Iraq and Afghanistan among other locations globally.  While a significant amount of diesel

Marines Expeditionary Energy Office Demo at Twentynine Palms, CA.

and JP-8 fuel is used to provide localized power and transportation (Marines = 200,000 gallons per day in Afghanistan), batteries are large part of the picture for soldier power.

A great piece in Outside magazine, “The Marines Go Renewable”, tells the story of how the marines are leveraging renewables, particularly solar, to keep their quick and lethal response capabilities. The main issue has been the Marines outrunning their fuel support systems, requiring a slow down and diminished effectiveness. The problem is the result of their using 3X the amount of batteries and fuel since 1998 to power electronics (command, control & communications) now common in front line operations. Photovoltaic solar technologies in various quick deployment and size configurations have enabled the average marine to reduce the amount of batteries and fuel required on the front line by almost 50%, which has significantly increased speed and effectiveness.

A great quote from the article: “Seeing a picture of a grinning Marine standing next to a still-functioning solar panel riddled with bullet holes makes it difficult to cast renewables as an effete liberal preoccupation.”

Eliminating batteries, winning contests.

Personally, seeing some of the products in use, such as foldable and packable solar PV chargers, has been satisfying, as I worked on these initial products back in 2004. At the Natick Soldier Systems Center, some of the first foldable and portable solar chargers took shape and the skepticism among most of the DoD energy elites and military was strong. The idea that batteries could be replaced by portable PV was a hard sell. As one uniformed person said, “when in a kill or be killed situation, batteries are the only way I trust to stay alive”.

Fortunately, these PV products have demonstrated that soldiers are more secure and can operate more efficiently and lethally.  They are now being deployed widely both in the Marines and the Army. A good example is their prominence in Katherine Hammack’s, (Assistant Secretary of the Army, Installations, Energy and Environment) recent Army energy transition presentations, which can found here. (3 minute mark)

After a recent presentation during a government renewable energy conference, I received a number of questions regarding why there was such a large difference between crystalline solar cell efficiency and a fully packaged and weatherized module. For instance, a 19% efficient crystalline photovoltaic (PV) cell, when packaged into a module with 60 cells results in a panel that is roughly 15% – 16.5% efficient depending on the manufacturer. According to the NREL, the cell to module loss is in the 11% – 17% range for most manufacturers.

Solar Module Packaging

The losses are a result of three distinct issues. 1) physical layout of the PV module and framing,  2) optical loss from encapsulation and glass, and 3) series loss from cell connections

The physical layout of the module affects the efficiency by having a large inactive area, meaning the space between cells, the edge of the module and width of the frame. The larger the inactive area of a module, the lower the efficiency.

The optical loss is a less straightforward problem and has a number of challenges resulting from the top glass and the encapsulation film.

The top glass needs to have low reflectivity so the maximum amount of solar radiation reaches the solar cells. The glass choice has to balance a number of factors including thickness, to meet hailstorm impact rating; tempering, to meet safety standards; and optical clarity, for maximum radiation absorption by the PV cells. A good, if technical overview here.

The EVA encapsulation film used to protect modules from moisture and the elements require a similar balancing act. These include letting the maximum amount of solar radiation reach the cells, while maintaining a near-100% moisture barrier with no significant expansion or contraction of the film over the 20+ year life of the module. And it needs to do this without creating an overheating of the module in hot climates.  A module with a high temperature coefficient (loss due to heat) is the

Copper PV Ribbon

enemy of high solar power production.

The series loss is due to series resistance in the cells themselves and in the cell and string connectors. The cells themselves are made from silicon, which not as good as metal for transporting current, and its internal resistance is fairly high, resulting in current loss.  This loss is compounded by copper ribbon (silver looking ribbon between cells) interconnection loss, and the cells’ series configuration in the module. While cells are put in series to meet a target voltage for a given module, this results in loss from the large number of connections.

There are a number of efforts underway to reduce this cell-to-module loss to 5% or less with novel approaches in all 3 areas. While the reduction to 5% has been achieved in national laboratories in an academic environment, the challenge always is to translate these new methods into a highly efficient manufacturing production line where throughput speed and yield (sellable product) are not compromised.

A good piece in the New York times today answers the question by starting with “. . . . now that nearly every other nation accepts climate change as a pressing problem, America has turned agnostic on the issue.” Every other nation in the world is experiencing significant climate change effects, recognize the urgency of the situation and have CO2 reduction programs in place.

China and India in particular, as a result of disastrous and escalating weather calamities over the last 20 years, are taking action as they are financially pressed to keep rebuilding after each episode. As Bill McKibben wrote in Eaarth, we are fast approaching a point where even the most developed economies won’t have the financial resources to keep rebuilding. A recent example was the squabbling on Capitol Hill about providing FEMA enough budget to clean up after TS Lee and hurricane Irene on the heels of the most expensive weather disaster season in the history of the United States.

As Bill Clinton said, “It makes us look like a joke” when asked about both Democrats and Republicans non-action and denial on the global warming issue.

Create jobs, tax revenue and create a better world - why is this so hard?

Solyndra was an outlier. It was a completely non-mainstream, highly risky technology commercialization play which had no technology history to support a reasonably quick, low-cost commercialization ramp.

An Automotive Outlier

The Solyndra technology and design was highly suspect from the moment it came out of stealth mode. Basic issues included round CIGS thin-film solar cells, which when deployed, had half the solar cell facing away from the incoming solar radiation. CIGS is still a developing story with many challenges on traditional flat plate modules, let alone a round tube. Optical experts found that the reflective claims (that sunlight hitting the white roof membrane underneath would reflect back at high intensity to the underside of the tubes) were highly suspect because of the loss of photon intensity during reflection. The high maintenance cycle for keeping the white membrane clean was another issue.

Of course manufacturing this type of completely new technology was expensive and Solyndra was selling at loss even before the recent crater in crystalline module prices. With scale of manufacturing always being the holy grail for reducing cost, it was hard to see how this would be accomplished without more investment capital in a company that already had $1B in investment capital. Raising additional capital with that cap table size would be more than difficult.

A PV Technology Outlier

The main issue for Solyndra and other new solar technologies that are not highly disruptive (through high exponential cost and performance advantages), is that it is extremely difficult to compete with the crystalline PV industry’s  40-year history and over $50B in cumulative R&D investment.  A complete explanation of this history and advantage can be found here.

The Solyndra event would seem to be another good example of herd mentality investing. Most people in the PV industry never took the concept seriously and mar veled at money as it poured in to Solyndra compared to far more worthwhile PV technology commercialization companies.

The one positive lesson that Solyndra taught was that different form factors and smart installation design can have a significant impact in desirability. Many downstream installers

Form Factor Lessons To Learn

and EPC companies were somewhat dubious of the technology performance.  With Solyndra’s pricing lowered to make projects viable (especially on roofs with weight limitations), they had the opportunity to work with the product and understand these advantages, and had significant enthusiasm for these features.  It’s a good, real-life product engineering test for the PV industry to take notice. Flat plate solar modules are not the only form factor in the future.

The PV industry has an incredible history in the last 7 years with average year over year growth of 60% through 2010. The industry is near $100B in revenues globally and employs millions of people throughout the supply chain both directly and in residual economic activity. The kWh cost of electricity from a PV system is now at or nearing grid parity in vast swaths of the developed world’s economies with minimal or no government support. (And doing so while competing highly subsidized fossil fuel, nuclear and hydro power) Solyndra is a mere blip in evolution of the PV industry and a complete sideshow in an industry that has been the fastest growing throughout the global recession. Unfortunately for the PV industry, the Solyndra story will continue to be a major political story as the 2012 election cycle ramps up and obfuscate this great history.

I took some time off from posting here as a result of a number of events.

Two dear friends passed away in late June, it was good time to step away and reflect on what is important.

In July, I ended my PV industry consulting practice and have taken a position with Suniva, Inc., an innovative American manufacturer of high performance mono-crystalline solar cells and modules. As Senior Director, Federal Business Development, I lead the company’s efforts in assisting civilian and DoD agencies who are diligently working to meet aggressive renewable energy and energy efficiency mandates. With our project developer and EPC partners, we are providing knowledge, experience and products for high resiliency, highly reliable onsite solar energy generation to meet these challenging timelines.

Suniva’s very capable management team is focused on high efficiency mono-crystalline cells but without the corresponding high price which has been typical for this cell type. Using novel intellectual property developed in the U.S., the company excels at innovation both at the cell and module level and on the manufacturing floor, resulting in lower cost to compete on a global basis.

I will be back to posting weekly again going forward. I will also be posting to my twitter feed, @ peacesolar, with specific news and content for my government and business partners in the near future.

Operational Energy - More Capablity, Less Energy Risk

In an effort to better use energy resources to support their strategic goals, the country’s broader energy security goal, lower risks to the warfighter, and more efficiency use taxpayer resources,  the Department of Defense released its first ever “Operational Energy Strategy” on July 14^th.

While the document is fairly high level with many topics and not much detail, it does give the reader a good idea of where DoD is heading. The overall messages are more capability with less fuel, having lower risk via a more diverse energy mix, and increasing effectiveness with less cost. The main goal is energy security using a number of strategies including energy efficiency, energy storage, microgrids, renewable energy, bio fuels and alternative energy. PV solar energy figures prominently in this strategy given its modular nature and ability to add significant value at the soldier, forward deployed and supporting base levels of renewable energy transitions.

The document describes and implementation plan within 90 days that ”will include specific targets and timelines for achieving this strategy in the near-, mid-,and long-term”.

My wife and I have been working on making our daily lives more sustainable every year.  With the world in ecological overshoot and the effects of over-population

The Offending License Plate

and resource depletion showing up day–to-day (climate change-induced weather events, food price spikes, environmental pollution, energy cost hikes, etc.), we have been instituting lifestyle changes some of which include:

• buying carbon offsets when traveling;
• supporting companies that have true sustainability practices;
• buying local food from sustainable agriculture;
• increasing our home’s energy efficiency – new windows, insulation, lighting motion detectors, low flow shower heads, CFL light bulbs, a new high efficiency gas burner, cellulose attic insulation, purchasing a clean energy blend that is mostly wind from our local utility and many other efficiency upgrades (our home is in the woods otherwise we would have a PV system also);
• and driving a hybrid.

The car is a 2006 Ford Escape Hybrid with a license plate that reads “CO2LESS” (we buy carbon offsets for the gas engine use).  Anyone that knows me knows that having vanity plates is not something I would normally do, but I feel strongly about the immediacy of sustainability issues we are facing as a global society, especially C0₂ emissions-induced climate change.

Imagine my dismay as I was approached recently in a Washington D.C. parking lot by a man who pointed at my license plate proclaiming, ‘You liberal elites are killing our country. There is no such thing as climate change and this is a strategy you people are using to corner wealth from the American taxpayer! “

I was too stunned to reply, and he wasn’t the least bit interested in a rebuttal.

According to Wikipedia the term Liberal Elite is a “political phrase to describe affluent, politically liberal-leaning people. It is commonly used with the pejorative implication that the people who claim to support the rights of the working class are themselves members of the upper class, or upper middle class, and are therefore out of touch with the real needs of the people they claim to support and protect . . . .  As a polemical term it has been used to refer to political positions as diverse as secularism, environmentalism, feminism, and other positions associated with the left.”

This definition is not at all a fit with my history in any sense.

Labels and discord like this do nothing to solve the very real climate change problem, which is a result of burning fossil fuel and making bad land use decisions (deforestation, biological decomposition, and over-farming) worldwide. The myriad effects of climate change on populations have no class distinctions. The resulting disruptions to farming, depletion of water resources, and reduction of quality of life is already exceeding expectations in many developing nations where poverty is the norm and coping with rapidly changing climate patterns is exacerbating survival living.  With the U.S. accounting for a large portion of cumulative atmospheric C0₂ over the last 100 years, we are clearly all “elites” in the minds of people in emerging nations as they struggle for basic survival in this new ecological overshoot era.

The Relationships of Fossil Fuel and Land Use and C02 Accumulation Source: Arctic Climate Impact Assessment

My work in the solar energy industry overlaps regularly with sustainability and climate change thought leaders, and as a result, I have a good understanding of the complex and often conflicting facts. These facts are often brushed aside and obfuscated with generalities by the minority of climate change and environmental deniers. Beyond the detailed knowledge I have attained over the last 15 years, I rely on a few simple premises:

1. We use science every day to support our shared and safe human existence.
2. For every action there is a reaction (equal and opposite).
3. The C0₂ accumulation graph at left (click to enlarge) coincides with the discovery and burning of fossil fuels.
4. Detailed science and research shows no prior warming in such a condensed period.

Climate change is happening right now. It can be viewed with fear and paralysis, or it can viewed as a great economic opportunity for all. We have the technologies, science and knowledge (if not the political and economic will power at the moment) to create sustainability solutions, and entirely new industries, as the global population continues to increase.

As many scientists around the globe have said, to do nothing is unacceptable, as the risk of being wrong is too great. If supporting the science and industry that can slow down and eventually reverse man made climate change makes me a Liberal Elitist in the minds of others then so be it!

Climate change resources:

The U.S. EPA Climate Change site presents an easily grasped, balanced presentation of the issue.

Information Visualization has a great “for and against” visualization of the climate change camps.

Carbon War Room is working on solving the problem industry by industry, by seizing on the economic opportunity: “Over 50% of the climate change challenge can be addressed today – and profitably – by existing technologies, under existing policy.”

Click for larger view

As I have wrote previously here, here and here, retail solar grid parity has been achieved in some markets with a large expansion coming the next 3 years around the globe.

A recent industry survey by Applied Materials confirms the acceleration of grid parity as the price of silicon and modules continues to drop. A great graphic set from their survey conclusions blog post can be found here.

Also, Shayle Kann at Greentech Media has a great piece about grid parity and the pitfalls in how the term is used and cloudy expectations about achieving parity at both retail and wholesale pricing levels.

Numerous solar industry analyst forecasts and media articles herald the U.S. as the next big market opportunity for global PV solar energy suppliers. Many offshore PV industry

State RPS Program Driven or ITC Driven?

companies have been setting up distribution and facilities across the country to position themselves for this growth opportunity.

At a recent Wall Street alternative energy conference, progressive utility CEO David Crane , a strong solar energy supporter, gave his view about government support for renewable energy. The federal government is too paralyzed to produce any meaningful support policy via either climate change or energy legislation, says Crane, but the renewables business will move forward strongly on the strength of state level legislation.

While the state-by-state paradigm has been credited with slow but steady solar energy growth in the U.S., the mid-term elections of 2010 resulted in new legislators in various states who have been reversing support mechanisms for clean energy and climate change mitigation.

The most recent example is New Jersey Governor Christie’s recent reduction in the state renewable portfolio standard (RPS) target (30% by 2021 now 22.5%) and language that may remove enforcement teeth for meeting the threshold by making it voluntary for utilities.  (An RPS is a requirement for utilities to produce or buy and sell a certain percentage of renewable energy to their customers.) He also withdrew New Jersey from the highly successful Regional Greenhouse Gas Initiative, an alliance of nine North East and mid-Atlantic states.

Seven other states have quietly reduced their RPS mandate and diminished or eliminated penalties for non-compliance by the utilities in the last few months.

Governor Christie and other detractors of RPS mandates routinely cite escalating costs to ratepayers (utility customers) for their lack of support. Christie believes the RPS is an “unreasonable transference of wealth from ratepayers at large to solar developers.” But an extensive Lawrence Berkeley National Laboratory RPS report in 2010 and more recent studies show that the “cost is a fraction of a percent.” Tiny by anyone’s standard.

The trade off, producing more clean energy which reduces health care costs and environmental damage costs (compared to burning fossil fuel) while creating a high number of quality jobs (17 jobs per $1M spent vs. 5 jobs per $1M spent in oil & gas sector)  in a new economic ecosystem, for that small cost, would seem like excellent bang for the dollar spent. Am I missing something here?

Source: Lawrence Berkeley National Laboratory

The chart above shows the projected amount of installed capacity (in yellow at top) if current RPS programs are kept in place. Approximately 6 million tons of C0₂ would be displaced annually if achieved, along with elimination of large amounts of ground level particulate pollution.

With the rapid reduction in the installed cost of PV systems, declining RPS programs may become less important in regions where high utility cost and other factors line up to make winning project proposals that are close to retail cost grid parity (including only the federal ITC incentive) in the very near future.

Recent, high frequency, global extreme weather events are affecting crop yields and increasing negative feedback loops, not to mention causing significant loss of human life. I am deeply concerned about the near term, current generation effects of climate change. With C0₂ levels now approaching 400 parts per million (350 ppm is the generally agreed tipping point) these decisions and others like it are reckless and irresponsible in my opinion.