Archive for the ‘Solar Manufacturing’ Category

Solar and Wind Manufacturing is Thriving in the USA. Why Don’t Mainstream Reporters Know?

At a time when facts are ignored for expediency of a view point, the fact that renewables are creating more jobs than any other sector needs to be highlighted to the new White House and corrected when junk economics are claimed.

Published on LinkedIn , Co-Founder at Generate Capital, Inc.

Like many Americans, I am an avid listeneus-renewable-energy-manufacturingr to American Public Media’s Marketplace show. The show bills itself as “the most widely heard program on business and the economy — radio or television, commercial or public broadcasting — in the country. That popularity can also be a problem when journalists on the show discuss something they don’t understand.Earlier this month, Marketplace had a weekly roundup on the economy, focusing on manufacturing jobs because of emphasis provided on this topic by both of the presidential campaigns. The guests were John Carney of the Wall Street Journal and Catherine Rampell from the Washington Post.

At the third minute, Rampell weighs in on whether clean energy jobs would really help laid-off manufacturing workers. At 4:30, Carney shows his complete ignorance and claims that clean energy jobs are “science fiction.”

I know that Marketplace knows better. Scott Tong does excellent clean energy reporting for the show on a regular basis.

Let’s set the record straight since Rampell and Carney clearly couldn’t do a basic Google search.

The solar industry alone has created one out of every 80 jobs in the United States since the great recession. When including wind, LED lighting, and other clean energy categories, that number could be close to one in 33.

For the solar industry, a majority of these new employment opportunities are blue collar construction and manufacturing jobs that pay an average of $21 per hour — far higher than the $16 per hour non-union manufacturing jobs that South Carolina was touting later in that episode.

Amazingly, even Kai Ryssdal got into the bashing by questioning if clean energy could make a dent in hiring laid off manufacturing and mining workers.

In fact, the solar industry has hired more veterans than anyone elseretrained coal workers, and even provided a soft landing for oil and gas workers who have lost their jobs. The vast majority of solar and wind workers are trained in less than six months because their previous work experience and training is completely transferrable.

According to the U.S. Bureau of Labor Statistics, wind technician is the fastest growing job category — expanding twice as much as the next-fastest growing job, occupational therapy assistant.

In 2015, the manufacturing arms of the solar and wind industries employed tens of thousands of people making pieces and parts in the United States. This is up by 20,000 people over 2014. In fact, this number is expected to continue to grow at that pace for the next five years.

How does an amazing show like Marketplace get these things so wrong? How do folks from the Washington Post and Wall Street Journal not know that solar and wind power now make up over 75 percent of new electric capacity additions in the United States — representing over $70 billion in new capital investment in 2016 alone. In so doing, these industries are generating substantial fees for investment banks, lawyers, accountants, and often advertising dollars for their newspapers and radio shows.

My sense is that these folks want to run as far away from environmentalists as possible. Clean energy in the United States has been defined by earnest environmentalists who, to their credit, embraced it wholeheartedly. But to our collective detriment, they spun an ideological, naïve story divorced from the reality of the energy economy transformation actually taking shape around us.

The result is that clean energy is mistakenly seen as a passive and precious solution for a future society — a delicate sunflower waving in the face of a muscular coal miner or a pristine field of green and sky of blue set against a dirt mound penetrated by a fracking rig. It feels more Utopian than aspirational, more luxury than necessity.

In short, it doesn’t feel American.

American is can-do, right-now, yes ma’am. Luckily, the actual transformation of the energy economy is as American as the Hoover Dam or the interstate highways, and even more earth-shaking. If only the discussion among politicians, media, business leaders, and the American public reflected that reality.

Unfortunately, the clean energy conversation is profoundly and unnecessarily polarizing. Like climate change itself, it’s become part of a larger culture war that fits neatly into the media’s predictable tendency of false equivalence, pitting workers against activists, businessmen against academics, and common sense against idealism. As a result, according to recent surveys, public sentiment about the urgency of action to prevent climate change is split along party lines between “let’s do something!” and “meh.”

The energy might be clean, but the work and the jobs are as rooted in dirt, sweat, and back-breaking labor as any American endeavor, and even more lasting.

We need to change the conversation to align with the deep emotional and aspirational narratives that speak to the American public. Clean energy could feel as all-American, cutting-edge, rugged, reliable, resilient, and tough as fracking. The same American ideals of independence, freedom, self-sufficiency, and opportunity can bring together green advocates and Tea Party stalwarts, labor and entrepreneursmain street and Wall Street.

Independence is the heart of American identity. Clean energy is independence turned into electrons: the application of cunning, sweat, and ingenuity to harness the restless power of the American landscape.

The American energy economy is changing, and changing rapidly. Clean energy and energy efficiency is where the growth is happening. We can move of millions people from coal mining, low-tech manufacturing, and even oil and gas into good paying jobs that don’t negatively impact the health of people and the planet.

By rebranding clean energy, we can empower all Americans to work together for a stronger future. It’s time to get down and dirty

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Deutsche Bank expects final ‘gold rush’ in the US solar market to begin in 2017

But that prediction is less than certain as a result of the negatives and positives of the 5 year ITC extension.

Article originally posted on PV Tech 

Deutsche Bank said it estimated around 8GW of primarily utility-scale projects were under various stages of development in Texas alone, while nationwide that figure stood at around 31GW, which would translate into a relatively flat 2017 market with 2016 but generate strong growth over the next three years. Image: SunPower

Deutsche Bank said it estimated around 8GW of primarily utility-scale projects were under various stages of development in Texas alone, while nationwide that figure stood at around 31GW, which would translate into a relatively flat 2017 market with 2016 but generate strong growth over the next three years. Image: SunPower

Author:  Mark Osborne

Updated: According to the latest analysis by Deutsche Bank and in contrast to market research firms, Bloomberg New Energy Finance (BNEF) and GTM Research the US solar market is expected to grow in 2017, heralding in the last ‘gold rush’ period through 2020.

Deutsche Bank analyst, Vishal Shah said in a research note that PV module and inverter price declines would drive improved solar economics in 2017 and result in continued strong demand seen in the US market in 2016.

Shah noted: “This precipitous decline in module prices is also accompanied by a sharp decline in inverter prices, especially in the utility-scale and C&I [Commercial & Industrial] markets. As a result, we expect solar economics in several U.S. markets to improve significantly over the next 12-18 months. Our analysis suggests that project returns in the U.S. could likely exceed the returns solar developers achieved in other markets during prior cycle peaks and these returns are unlikely to improve as incentives gradually decline or net metering phases out. As such, we expect the final “gold rush” in the U.S. market to begin in 2017.

However, BNEF has recently cited the US ITC extension as “hurting” solar growth in 2017, due to the urgency to complete projects ahead of future ITC cuts is several years away. According to BNEF, overall US solar demand in 2017 is set to experience its first major slowdown after years of strong growth. BNEF also expects the US residential solar market to stay steady at around 2.8GW in 2017, a 0.3% increase over 2016 forecasts.

GTM Research had been the first firm to warn of a slowdown in the US market in 2017, citing utility-scale project slowdowns after the ITC extension at the end of 2016. The market research firm expected the overall US solar market to decline from around 14GW in 2016 to levels of around 7 to 8GW last seen in 2015.

Update: However, GTM Research has since told PV Tech that it latest forecast was closer to a flat year in 2017, compared to a dramatic drop. The research firm is guiding installs at 13.7GW in 2017, down slightly from 13.9GW in 2017.

A major decline in US installations is expected to occur in 2018, yet rebound to around 15GW in 2019 and over 17GW in 2020.

Deutsche Bank said it estimated around 8GW of primarily utility-scale projects were under various stages of development in Texas alone, while nationwide that figure stood at around 31GW, which would translate into a relatively flat 2017 market with 2016 but generate strong growth over the next three years.

“For 2018-20, we expect strong growth in all segments, and raise demand estimates from 13.2GW, 15.2GW and 17.4GW to 16.5GW, 18GW and 19.7GW respectively,” noted Shah.

Deutsche Bank’s forecast would seem to be the more bullish, currently.

PV module price declines steeper than expected

Only a month ago, Deutsche Bank’s Shah noted that industry participants at the SPI 2016 exhibition in Las Vegas expected average PV module prices to approach US$0.35c/W within the next 6-9 month timeframe, down from US$0.60c/W at the end of Q2, 2016.

However, Shah said in the latest report that US module prices had already declined by nearly a third in the Q3 to US$0.40c/W and were set to decline further to US$0.35c/W in the fourth quarter of 2016.

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Understanding Photovoltaic Cell and Module Level Efficiency

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

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

PV module ribbon series connection

Solar Cell 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.

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21% of Energy Production, 380,000 Jobs

1.5MW Audi roof   source: Gehrlicher Solar

1.5MW Audi roof source: Gehrlicher Solar

Gem of a video here showing the progress of PV solar energy proliferation in Germany. (runs fast, so freeze frame to digest statistics) Now 21% of the energy mix, renewable energy in Germany has provided 380,000 jobs and a road map for other countries to follow. Over the last 12 years of successful policy implementation, PV solar energy (near 10% of German energy) has eliminated the energy peak in Germany which is reducing costs and environmental degradation considerably while increasing energy security.

Germany is demonstrating that a large number of distributed renewable inputs from solar and wind can be integrated successfully into the grid infrastructure without stability or reliability issues. This is a common misconception about intermittent generation sources that, after 12 years of operation, the German market has proved otherwise.

Germany is also demonstrating that the distributed generation model works and is real threat to established utilities working in the standard centralized model used the world over. While its easy to be in the solar energy and say that we may

have the utilities on the run in the near future as distributed generation makes in roads, that one side “we win” mentality is a no win proposition. It would be prudent for utilities and the renewable industry and government to work together on policy and a road map that takes into account the enormous past and current investment of the utilities in existing infrastructure while following an economic and technological road map that leads to a smooth and profitable transition to a distributed generation model for all stakeholders.

Some interesting snippets from Energy Rebellion, the producer of the video:

. . . . . . . solar gold rush that lead to investments around the globe was mainly driven by demand in Germany up until recently. The first effects of this rush is prices for PV-solar systems have fallen by up to 70% and continue to decline.

PV solar energy

Large solar PV success with only moderate solar resource

. . . . . . . today industry experts claim that photovoltaic & multi-kWh energy storage will become the cheapest source of electricity even in OECD countries within the next 10 years. 
This will lead to a very fast structural change of the entire world economy.

. . . . . . . . large scale market development has just started, but with 24.5 GW of PV-Solar capacity installed on more than 1 million roofs in Germany, the first signs of this new industrial revolution can already be observed.
 For example even during the dark & windy winter month of January, PV-solar produced up to 7 GW or 10% of peak-load demand in Germany.
 When a deadly cold wave brought the fossil & nuclear dominated energy system of France close to collapse, German PV-solar kept many gas & oil fired power plants offline, which significantly lowered the spot-prices at the European Energy Exchange.

 

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A New Year Greeting

solar bankability

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All the Best in New Year

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Solar Industry M&A – Really?

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.

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Solyndra – A Solar Industry Side Show

Solyndra, the high profile bankruptcy in the solar energy industry, continues to generate media attention as a result of the $520M US government loan guarantee. While the attention is driven by political competition to portray the Obama administration as inept and the green jobs program a failure,  and Solyndra claiming it could not compete with highly subsidized Chinese manufacturers, the media misses the main reason for the failure.

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.

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Endings and Beginnings

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 Suniva mono-crystalline 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.

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PV Supply Chain ASPs: Not At The Bottom Yet

Continued weekly monitoring of various entities throughout the supply chain shows the average selling price (ASP) on the spot market continues to decline in all categories except the inverter.

Of particular note is the sharp drop in poly silicon ASP from the previous week. Its widely believed that the efficient silicon refiners cost basis is approximately $25 – $28/kg and we may well see further substantial reductions if the demand situation remains week.

While the data above is sampled broadly from Tier1, 2, and 3 providers, the weaker entities with little or no bankability status will be feeling the pressure, soon, to idle further production and in some instances find an acquirer. Over the last 5 years, there has been speculation about consolidation of the many industry manufacturers when demand has temporarily weakened. This current market demand bust may be the one that results in bankruptcies and acquisitions of the lower tier players. The large Tier 1 players with weak cost structures are looking for strategic partners or majority acquirers such as the deal we saw between Sunpower and Total last month. This may also be the opportunity for the mega sized electronic manufacturing services companies like Flextronics, Foxconn and others substantially grow their PV industry presence with acquisitions.

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Video Resouces for PV Manufacturing – Don’t Mind the Music!

In response to questions about how a solar cell operates, how labor cost aren’t a big component of the module price and the technology differences, following are a few solar panel, solar energyvideos that provide some answers and detail.

1) Energy 101: Solar PV

A great video for the U.S. Department of Energy on the basics of photovoltaic’s. Good visual on how a solar cell converts photons to electricity toward the end.

http://www.youtube.com/watch?v=0elhIcPVtKE

2) Crystalline Module Manufacturing

Corporate video from Spire, a leading U.S. based module assembly company that provides automated module production machinery.

http://www.youtube.com/watch?v=HUO3MDH_4Qo

3) Crystalline Solar Cell Manufacturing

Somewhat outdated corporate video from Q-Cells (no longer 2nd largest cell manufacturer) but gives a good view of the manufacturing facility.

Solar panel, solar energy

Module Assembly - Stringer Tabbing

http://www.youtube.com/watch?v=9KECQS-W6xg

4) Amorphous Silicon Micromorph Thin-Film Manufacturing

Sungen corporate video (apologies for the background music!) with good visuals and narration on the process.

http://www.youtube.com/watch?v=fNwZrKR4gRI&NR=1

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