Friday, July 23, 2010

Photoelectric Applications 1.0

OK... random entry here. I was driving home today through a bunch of road construction. I noticed several porta potties along the way. It made me think about a potential photoelectric application. I have thought of many B-side applications of photoelectrics over the years. I will try to collect them here.

--Photoelectric smoke detectors. Once upon a time the company I worked for did a community outreach project at a trailer park. A few weeks earlier a trailer had burned down and the occupant was killed. The fire department determined that the smoke detectors failed to alarm due to dead batteries. I think we should build photoelectric smoke detectors. They could still sound an alarm or indicate a warning light even when their batteries were dead.
--Photoelectric porta potties... Put a PE powered fan on these fuckers.
--Photoelectric standby power. My Cable box light doesn't need to tell me what channel it's on when I'm not watching it. My microwave doesn't need to tell me the time. VCRs (just kidding) and DVD players are other applications. We could incorporate a PE strip on these gadgets that trickle charged the time, channel and XYZ function. In addition to charging a small battery the photocell would be able to tell whether or not lights had been turned on for the last few days and turn off the display function if nothing was going on for X amount of time. This will happen.
--Photoelectric trickle charging of cell phones. No brainer. Slap in some A-si and extend battery life.
--Photoelectric lights. We have the outdoor variety but the indoor variety could work too. They could be set up next to the windows for charging. Even if they only extended the daylighting in a room for a short period of time it might be a feasible application. This application could complement daylighting developments in LEDs.
--Photoelectric emergency lighting. Emergency lighting is already battery powered. Make it PE battery powered. You don't need to use these lights often so they will always be topped up. The ability to situate these lights in stairwells that are normally lit without needing to run wires could make this a winning application. It might just promote more safety lighting.

I have so much fun thinking in this way I can't describe it. PE can't go in everywhere but it can go in a lot of wares.

Thursday, July 22, 2010

Monday, July 19, 2010

The GIG is Down - Version 1.0

Grass is Greener (GIG) technologies promise you everything tomorrow for a hamburger today. Daydreaming about their Neato Factor is fine but these hope technologies become cuss-worthy bad when they steal stage from true talent.

The List (I'll add to this as I come across appropriately screwy examples. Eventually I'd like to break these down into categories.)

High Altitude Wind
Solar Islands
Solar Space Power
Super-conductive Transmission Lines
Tidal Snake

12 PowerPoint Slides That Confused the Earth

An astute reader made a comment on Greentech's recent offering. Sierra Fong says, "Information graphics should be immediately understandable and contain all the information you need. That’s what people react to."

What about information graphics that are immediately understandable but communicate a mixed message that may contain more bad than good? We know cartoons and cowboys sell cigarettes but it took us a while to figure out who was buying. Clearly, there needs to be some consideration of the unintended consequences of seemingly simple messages.

The famous information graphic slide (a genre really) I have a problem with is the type that shows the area required to power the US (or where ever else) with solar panels. This slide communicates the idea that it doesn't require a lot of land (overall) to power the US. Unfortunately, it mis-communicates the area requirements and logistics of transmission. It also communicates the worst sort of over-centralization that you can possibly think of. The area of land slide is immediately "understood" but how much truth and how much lie come packaged together?

Relatively easy fix for this one. You create a "Million Points of Light" slide. That dumb 50 by 50 km square plot of PV turns into a constellation that would look something like the almost famous "US at night" slide. I think you'll get a more honest message from this sort of display. Does it pass the immediately understandable test? I don't know. To be continued after arts and crafts time.

Thursday, July 8, 2010

Of Moore's Law and Float Effects

A Moore's Law for solar should predict the rate at which the $/kWh price of photoelectricity falls and tie this into market growth. This prediction would partly be based on learning curve potentials but mostly on market conditions. There are several things at work.

The Float Effect Rides High Down Incentive Lane

There's a distribution of incentives in the world market. These incentives have inspired solar developers to move into Germany, Spain, the Czech Republic, California, New Jersey etc. The higher the incentive the more developers move in. You'd expect this to push down system prices but prices tend to float at a level higher than input costs would have you expect.

The best (or worst) example of solar incentives increasing prices comes from Spain. Their particularly high Feed-in Tariff coupled with high insolation, floated system prices to up over 6 Euro/Watt in 2008 - A nosebleed level compared to today's average prices of about 3 euro/Watt in Germany. There were several factors in play that led to these high prices. One could say it was all because of the silicon shortage which pumped up module prices. This certainly had something to do with the high prices but remember that the silicon shortage (at least the severity of it) was attributable to incentive programs like Spains' in the first place. Supply and demand for silicon, inverters, labor etc. feed into the float effect but are not the primary driver. The primary driver of the float effect is the incentives themselves, the high FiT in this case. If a solar installer knows the FiT rate, they can infer an acceptable IRR for their customers and from this know how much they can get away with charging. If there's any sort of supply shortage, a high incentive and a limiting time factor the installer holds all the cards and can set system prices at will. Spain's FiT program ended badly. There's no market left. There's no way to see if the Float Effect is still playing out there. We have to look at Germany for this.

The Float Effect vs. The 2009 Recession

Germany provides a better snap shot of the Float Effect at work. We've seen system prices float down with the FiT over several years, crash in early 2009 due to limited liquidity (a discontinuity) and equilibrate by the end of 2009. We saw average system prices in Germany step down by about 9% with the year end degression. What was the year end degression you ask? 9 percent. If Germany remains the driving market, the Float Effect predicts that the July 1st degression will lead to a 13% step down in prices, followed by another 3% step down in September and another 13% step down in January. Will Germany remain the driving market? For 2010 definitely, for 2011 probably.

The Float Effect vs. The Competitive Market

The Float Effect becomes most useful when we start visualizing the longterm competition of photoelectricity with the grid. To be continued...

Hubbert's Sneak

Hubbert peak theory is the prediction/observation that petroleum production will follow a bell-shaped curve. Photoelectric growth will follow a bell-curve too - a sneaky curve. See graph...

SNL aside: You likeah my photoshop... yes... the photoshop is good no... yes... You likeah the photoshop... It's good yes... And scene.

The graph describes how the photoelectric market will evolve. We should see this trend in Germany first. DISCLAIMER: The curve will not be smooth but the stages of growth should be observable.

Stage 1. Healthy growth until market saturation.
Stage 2. Deceleration until equilibrium.
Stage 3. Floating equilibrium

Deceleration is due to a combination of technical and market factors. We can expect the competitive economics of PE to become less favorable in time due to an increasingly less attractive stock of potential sites and falling incentives in the case of FiT countries. There is only so much PE the current grid can handle and this will eventually slow growth if the mitigation of instabilities can't keep pace. A third factor has to do with global demand for PE which will eventually make other markets more economically attractive and halt the decline of local PE prices which fueled the healthy growth stage.

Equilibrium is a combination of trends.

1. Improving economics on the system side should be pulling the market back towards growth.
2. Improved engineering and smart operating strategies should mitigate grid instability issues association with PE.
3. You'll naturally reach a balance point between the rate at which modules are getting retired and rehired.

The floating equilibrium stage is due to more of 2 & 3.

This curve describes localized markets only. I'd expect the world market perspective to smear out most of these details. The world market would have a longterm equilibrium of course but this is too far away to be interesting.

Wednesday, July 7, 2010

Power Sketch - A Work in Progress

The Theory

My thinking is that PV will have a tendency to pull some demand into the day and push some supply into the night. The combination of less load and excess generation at night will push night time prices down. As prices fall you hit trigger points that encourage different trends and strategies. One price signal might encourage a strategy of two shifting coal plants while another price signal would encourage full blown storage. We know both strategies have already been used so I think it’s reasonable to expect them in the future under circumstances similar to those which have encouraged them in the past.

The Status Quo

Traditionally there's been a dynamic between hydroelectric and thermal generation in power systems. Hydroelectric units have flexible operating characteristics and their reservoirs give them storage. These qualities give hydro operators the ability to sell into high priced markets mostly during the day and buy from cheap markets at night while they store up water. This happens in the Northwest (NW) where hydroelectric operators sell expensive electricity to California during the day and buy nightly from thermal generators in the Southwest (Montana, Wyoming, Utah, New Mexico and Colorado) that don’t want to turn down their units. This is a mutually beneficial situation for the SW and NW operators. The NW trades their flexibility to the SW for cheap energy.

The Imaginary Scenario

Let's say we see a rapid 10, 20, 30, 40 GW progression of PV into California over the next 10 to 15 years. How does this change California’s energy mix? To identify the displaced energy you'd have to look at the combination of pre-existing contracts, competitive pricing and reliability rules that give preference to internal generation vs. imports. My rough guess is that PV will displace natgas imports first, some percentage of internal natgas generation second and then move on to displacing imported hydro and coal (mostly hydro but it's hard to tell). Less hydro sold to California will mean the NW operators will probably start selling more to the Southwest (SW) to displace NG there. But then if the SW starts installing a bunch of PV too you’d expect some of the NW imports to get pushed out in preference to internal generation. With less customers to sell daytime electricity to the NW operators will have to start operating their units more at night or else their reservoirs will overfill. This means the coal operators that have always sold to NW at night will have a smaller market to sell into. The upshot is that there will be excess power on hand at night and this will lead to lower prices, different operating strategies and maybe some storage projects. This is how PV could lead coal operators to install bulk storage. It's just a theory.

Saturday, July 3, 2010

Dwarfs standing on the shoulders of giants

This phrase is credited to Bernard of Chartres. The version I learned in school came from Newton: "If I have seen further it is by standing on the shoulders of Giants." Newton liked Giants you see but he didn't want to be be seen as the little person in the equation.

Another way to rephrase this idea is: Understanding proceeds at every elevation by climbing upon ideas. But then I noticed with a wow, the word understanding is a standalone four syllable story of the very idea I'm describing. Perhaps some Carlinization has occurred over the years. I don't know.

Carlinization [n. see George Carlin]

Of or relating to the linguistic phenomenon that occurs when successive generations of yahoos add complexity to a simple and/or concise idea.

Interestingly, Carlinization is itself an embodiment of Carlinization. That makes me a yahoo.

Sunday, June 27, 2010

Nuclear Cashew

Nuclear (n. from Latin nucleus "kernel," from nucula "little nut")

1. Of or relating to atomic nuclei
2. Using or derived from the energy of atomic nuclei

Cashew (n. from Tupi acajuba)

1. A tropical American evergreen tree (Anacardium occidentale) widely cultivated for its edible nutlike kernels
2. The kidney-shaped seed of this tree, eaten after roasting

Nuclear Cashew (n. Slang, nuclear + cashew)

1. A gigantic cashew
2. An inexperienced person who makes voluble claims to skill or knowledge of nuclear technology

aka. double nut
see also. armchair quarterback, pajama jerry

Saturday, June 26, 2010

Jevons Paradox Warped Into Enigma

Something interesting occurred to me in regards to Jevons Paradox. Not a new observation I'm sure, but new to me.

Wikipedia defines the Jevons Paradox like so: the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource.

Jevons showed that improvements in the conversion efficiency of steam engines tended to result, counter-intuitively, in an increase, rather than a decrease, in the amount of coal used. This observation has been used as an argument against increasing efficiency standards because these standards will actually lead to more energy use.

The problem with this interpretation is that it's wrong. Although conversion efficiency might seem to be the critical variable leading to increased consumption this isn't the case. The critical variable is the economic efficiency of conversion. Jevons indicates this in the preface of The Coal Question.

"The fact is, that a wasteful engine pays better where coals are cheap than a more perfect but costly engine."

It is well recognized that what pays more will be done in preference to what pays less. If efficiency doesn't pay, don't do it, if it does, do. There must always be this compromise in strategy because the matter of most importance is not conversion efficiency. It tends to be, this is true, but it need not be. The matter of most importance is the economic efficiency of conversion.

And so, I would reformulate Jevons Paradox more pointedly as: Economy of consumption tends to increase consumption.

How is it that efficiency has taken the place of economy and made this Paradox such a big deal? I think this switcharoo is best explained by the fact that calculating the efficiency of an engine is a straightforward matter for an engineer but there is no equivalently compact metric in economics - there's no ideal 100% perfect investment to compare everything to. Efficiency is an E word. Economy is an E word. Let's just just ummm... Put in efficiency where economy should be and see if nobody notices.

I'm not trying to steal Jevons' thunder. He knew this stuff, at least I think he did. Now I do too.

Tuesday, June 15, 2010

The Feed-in Tariff and Installed Costs in Germany

In a few weeks Germany is going to drop their Feed-in Tariff rate from 39.14 cents/kWh down to 32.88 cents/kWh. *CORRECTION (JULY 27TH) 34.05 CENTS/KWH. As a direct consequence of this rate reduction we should see a drop in the average price of PV systems from 2900 Euro/kWp down to around 2450 Euro/kWp during Q3 and Q4. *CORRECTION (JULY 27TH): AFTER REVIEWING IRR DATA IT LOOKS LIKE PRICES WILL STAY RELATIVELY STABLE IN Q3 & Q4. PERHAPS FALLING TO THE 2700 TO 2800 BUT EVEN THIS IS IFFY. On January 1st 2011 the Feed-in Tariff rate will drop from 32.88 cents down to around 28 cents/kWh. This should lead to the price of PV systems dropping from 2450 down to around 2200/kWp during 2011. **CORRECTION (JULY 27TH): I'M GUESSING FOR PRICES TO GO TO AROUND 2500 IN Q1/Q2 OF 2011 AND STAY RELATIVELY STABLE THROUGH THE YEAR. I'M DOUBLE DOG-DARE GUESSING FOR PRICES OF 2100 TO 2200 IN 2012.

I might be a tad off with my price projections but the overall point is that the FiT reduction will lead to a drop in system prices. If my math is right, Germany should hit grid parity at an installed cost (pre-tax) of around 2200 Euro/kWp. So, from my perspective it appears as though this price point will be hit sometime next year. *CORRECTION (JULY 27TH) SOMETIME IN 2012 SEEMS MORE LIKELY NOW. NOTE: GRID PARITY DOES NOT CREATE A SUSTAINABLE MARKET.

That's interesting in an of itself but in the back my mind I keep thinking that if Germany can reach 2200 Euro/kWp, a similar location with access to the same basic capital & labor ingredients should be able to match these installed costs - maybe not tomorrow or the next day but within the next 5 years. I think this is a reasonable assumption. But then I think - California gets 1200 to 1400 kWh per kWp compared to Germany where you get 800 to 900 kWh per kWp. Your LEC in California is going to be 30% lower!

Thursday, June 3, 2010

Visualizing the Installation Market as a Factory

The photoelectric zeitgeist tends to focus on manufacturing and its symbol, the factory. This makes sense because the factory has a concrete footprint, a time line to completion and most importantly a measurable cost. As an added bonus we have mental shortcuts (research even) that helps us understand how a 1 GW factory is more efficient and competitive than a 100 MW facility.

I think we fall short when it comes to visualizing what a 1 GW installation workforce looks like. We rarely talk about how creating a 1 GW installation workforce requires a significant investment comparable to building a factory. I think this lack of recognition causes problems. It allows racking manufacturers to claim savings of 50 cents/Watt on installation without anyone calling them on the hollowness of their statements. More generically, we don't seem to be thinking about how installation costs will change as markets transition from 100 MW to 1 GW. This lack of consideration allows us to be distracted by technologies that claim installation savings which will most likely never exist. We're missing the fact that these supposed savings are more likely to be captured naturally by competitive pressures and learning by doing effects inherent is scaling up the size of the installation market. This is similar to the improvement in performance associated with scaling up from a 100 MW factory to a 1 GW factory that some of us have come to take for granted.

Big Installation Market = Cheaper Installation Costs = Higher Panel Price Sensitivity

I suspect a big part of the reason why Germany was able to soak up so much PV in 2009 was because they had a multi-GW workforce. By way of analogy with manufacturing, they had already made the jump from the 100 MW facilities up to the GW level and captured all the associated efficiencies along the way. When the panel prices started plummeting in 2009 the Germany market with it's low installation costs was more sensitive to the drop in panel prices than anywhere else. It's now been a year since Germany's PV market began its surge (June 2010) and Germany is still the only multi-GW market around. Germany still has the lowest installation costs and by extension they still have the greatest sensitivity to falling panel prices.

What does it all mean? Sensei say the zeitgeist is out of balance. There needs to be more focus on the installation side of things. Only then will there be peace.

Wednesday, June 2, 2010

EPIA Goal for Photoelectrics in 2020

The EPIA wants 12% of EU electricity consumption to come from photoelectrics by 2020! That's roughly 425 TWh.

Assuming a ballpark thumbrule of 1 TWh per GW of installed capacity you'd need to install 425 GW in the next 10 years. If you assume a steady 35% YoY growth rate Europe will need to consume half of the yearly worldwide production for the next decade. That is an ambitious goal.

Moore's Law vs. Learning Curves

Moore's Law is not alone in the world of manufacturing thumbrules. Haitz' Law is a corollary manufacturing thumbrule for Light Emitting Diodes. Admittedly, these Laws are exceptions to the general rule. The general case is better described by learning curves.

Ct = Co(qt/qo)^-b
PR = 2^-b
LR = (1-PR)

Co/Ct = initial/final cost
qo/qt = initial/final production
PR = progress ratio
LR = learning rate
b = learning coefficient

If you have a decent price/production data set you can solve for b, PR, and LR. You can then resubstitute the numbers to "predict" what the future costs of production might be. Two basic caveats: 1. These equations should only be applied to young industries. 2. The results are all SWAGs.

Example a) Photoelectric cells have historically had a learning rate of about 20%. Cell production was about 10 GW/year in 2009 and if you assume a constant 25% growth rate it will reach 100 GW/year by 2020. Since we know production costs were about $1.50/watt in 2009 we can "predict" that production costs in 2020 will be about $.57/Watt.
Example b) If you hold all the variables above constant but change your assumed growth rate to 35% you get production costs of about $.47/Watt in 2020.

As pointed out above, these examples are educated guesses. Thing is, when you get down to it, Moore's Law and Haitz' Law are also educated guesses. The surprising thing about Moore's Law and learning curves in general is that, when all is said and done they work pretty damn well. This is why governments and manufacturers continue to use them to guide policy and inform strategy.

The IF game part I... If Haitz' Law holds up for another 10 years we can imagine we'll be seeing a lot of LEDs. Given the validity of this risk we can imagine that Phillips and GE have transition plans and roadmaps for their lighting divisions.

The IF game part II. If photoelectric cells continue on their path for another 10 years we can imagine we'll be seeing a lot of them. But wait... something funny happens when people suggest that the learning curve for solar cells might hold up for another 10 years. Educated guesswork morphs into techno-optimistic faith. In general, you can put it down to territorial emotionalism and ignorance. Given the validity of this risk we should be thinking about transition plans and roadmaps.

Saturday, April 24, 2010

German Photovoltaic Thumbrule

A fellow by the name of Kollector coined this thumbrule...

The installed cost of the photoelectric set should not exceed the ten year payout of the feed-in tariff.

Example: A set that delivers 850 kWh/kWp in its first year will deliver approximately 9700 kWhs/kWp over ten years of work. The following examples give a rough picture of how this thumb rule predicts installed costs will trend between now and the beginning of 2011.

--If the value of the feed in tariff is 39 cents/kWh (current FiT) the installed cost should not exceed 8275 kWhs x .39 cents/kWh = 3227 €/kWp.

--If the value of the tariff is 33 cents/kWh (FiT as of July 1st) the installed cost should not exceed 8275 kWhs x .33 cents/kWh = 2730 €/kWh.

--If the value of the tariff is 26.5 cents/kWh (projected FiT as of Jan 1st, 2011) the installed cost should not exceed 8275 kWhs x 26.5 cents/kWh = 2193 €/kW.

With Chinese panel cost falling under a euro per watt it looks possible to achieve installed prices in Germany of under 2200 €/kW. One interesting question to ponder goes something like: will sunnier markets outside of Germany start producing higher rates of return for PV investment such that Germany no longer drives the market clearing price of panels?

Another interesting question is, how will Germany transform the FiT structure once grid parity is reached (installed costs of 2200-ish €/kW). Will the self-consumption premium result in smaller PV sets compared to the oversized 10 kW+ sets that have become common? Will batteries come into common use? Hmmm... Neglecting the cost of input energy and assuming a daily charge/discharge cycle, what are the LCOE for batteries over their lifetimes? Something for the EV car guys to deal with.

Wednesday, April 14, 2010

The Future of Polysilicon

A recent report (Polysilicon Industry Faces Shakeout) notes:

"...fluidized bed reactor technology has not delivered on its promise of lower manufacturing costs."

The funny thing is, I've heard the exact opposite from insiders as recently as a few months back. Is FBR going to take over the poly space overnight? No, but we should start to see a shift in what kind of plants get built in the medium term - i.e. over the next 5 years.

Comparing Then to Now

THEN (2004-2006): Polysilicon was bottlenecking and prices were rising. You could sell any poly you made for a handsome profit. What do you do when prices are high? Add production capacity so you can sell more... Given a choice between Siemens and FBR plants, which are the refiners going to build? One could reason that the shovel ready refinery projects with short lead times (real or perceived) had a clear advantage. That means Siemens refineries.

NOW (2009-2010): Spot market and contract prices have been trending down continuously for two years. There is excess poly supply with still more coming down the pipe. The expectation is for poly prices to trend down in the future. We're projecting more demand for PV which means more demand for poly but the confidence level of these projections isn't there yet. The only course for a refiner to take in this sort of environment is to methodically plan capacity expansions. In this sort of environment the advantage shifts from short lead times to low production costs. That means FBR refineries.

If REC or MEMC announce yet another 10,000 MT FBR plant in the next year or so (which I expect) we'll have a strong indication that FBR delivers a cost competitive product.

Saturday, April 10, 2010

The Photons, Germany and the EEG/FiT - Plus Thoughts on Germany

Photon Consulting is the smartest kid in the Solar Analysis class. They are the only consulting house that deserves any respect - by respect I mean, when you think they're wrong you need to take a moment and think again. They will smoke you.

Perhaps there's something about using the term Photon in your moniker because the folks at Photon Magazine also deserve props. Their managing director Anne Kreutzmann is the only one I know of within the PV community who has openly spoken out against the current FiT structure in Germany. She has said the obvious. Hey guys look... The FiT is set higher than it needs to be. This high FiT is going to result in a lot more installed capacity than what has been planned for. There are two options. Option 1. Let the FiT stay where it is and apologize in the aftermath Option 2. Recognize that the FiT is too high, control it and suffer a slightly lower growth rate. Option 2 is much better because it gives the PV industry more control over its destiny.

Option 2 points towards sustainability. Sustainability jargon gets thrown around in a lot of smelly ways but the core idea behind "sustainability" is balance. Balance is something the PV industry needs in a big way. There is much too much snake oil and slick-shit advertising these days.

Thoughts on Installation costs in Germany

Many companies have claimed they have some sort of quick snap or stick on technology that lowers installation costs. That's great press but it needs to be examined. We should ask two basic questions.

Question 1: What is the underlying installation cost assumptions of these companies? Question 2: What trajectory are installation costs actually on?

Answer 1: The general assumptions are $1/Watt in installation costs. This is currently a reasonable assumption for the US.
Answer 2: No one knows for sure what installation cost will be in three years but it's a fair assumption to expect the trajectory of installation costs to follow Germany's example. That means installation should fall from $1/Watt to around 40 cents/watt.

The upshot here is all these fancy technologies that claim to lower installation costs are assuming much higher installation costs than we can reasonably expect in the future. To put it another way, a 25 cent/Watt mounting structure that saves you 50% on installation labor will not be competitive for much longer.

I'm not saying all these technologies that claim to lower installation costs are bunk. Just pointing out the obvious trend in installation costs that we're seeing in Germany and how this will project into future markets.

Thursday, April 1, 2010

The Osama Bird Laden Event

In 2004, bird droppings caused a three unit trip at Palo Verde and subsequent loss of the Redhawk Power Station. Losing 4 GW is a big deal - a big fucking deal as Biden would say. And upon reflection he would continue, "If a god damn DC line had been out we might have lost the fucking Western Interchange!"

I am reminded of the Palo Verde event when people mention the intermittency of photoelectricity leading to grid instability.

Wednesday, March 17, 2010

Price Breakdown of a Photoelectric System

Here's a price breakdown for a 12.3 kWp system in Germany. Prices are in Euros and are pre-tax.

German Panels - 2.02 Euro/Watt
Inverters - .33 Euro/Watt
Racking - .156 Euro/Watt
Cabling - .038 Euro/Watt
Mechanical installation labor - .195 Euro/Watt
Electrical installation labor - .068 Euro/Watt
Surge Protector - .012 Euro/Watt
Total - 2.819 Euro/Watt

Note: Total with Chinese panels (Yingli) - 2.455 Euro/Watt

15.12 kW
Installation cost - .30 Euro/Watt

Learning Curves, Levelized Costs and lots of Rambling

An important tool in the study of photovoltaics is the Learning Curve (AKA: Experience Curve). See Gregory Nemet's excellent work (1,2) for a primer on the subject. I've built an excel based learning curve simulator that can be downloaded here.

If you want to guesstimate the future cost of photoelectrics, a learning curve analysis is a good start. If you want to translate the future costs of photoelectrics into the future costs of photoelectricity then use the output of the learning curve calculator as an input into the levelized electricity cost calculator. The result is what's known in professional circles as a scientific wildass guess (SWAG) - on the street it's known as mathematical masturbation.

Current Production Costs

The current best of breed PV companies can produce crystalline photoelectric panels for $1.30/Watt. These costs are broken up into two parts: silicon costs (i.e. polysilicon cost) and non-silicon costs (i.e. wafer, cell and module processing costs).* Silicon and Non-silicon costs are around 70 and 60 cents/watt respectively (March 2010). These costs can be further broken down into...


Crystalline PV panels are made from polysilicon. Polysilicon is the same material used to make computer chips. In fact, scrap polysilicon from the computer industry has been the primary feedstock supply to the PV industry until relatively recently.

The expansion of the PV industry throughout the 1990s led many observers to note that the supply of scrap poly was going to run short of demand in the early part of the millennium - this is exactly what happened. The same observers noted that the supply crunch was going to lead to higher silicon prices but most everyone underestimated how high the prices would go. Why did they guess low? Short answer: the success of Germany's Feed-in tariff.

Anyways, the silicon crunch led to extremely high silicon prices and a commiserate boom in new polysilicon refining capacity. As a result the current polysilicon environment is one of glut and falling prices. The guessing game we currently face is figuring out how far and how fast polysilicon prices are going to come down. Further down the rabbit hole we go...

There are two types of refineries used to make polysilicon. Siemens process based refineries and Fluidized Bed Reactor (FBR) type refineries. The historical cost of production for Siemens refineries is around $25 to $30/kg while FBR plants have production costs a smidge under $20/kg. This begs the question, why isn't everyone building FBR plants? My gut feeling is that expanding Siemens based silicon production over the last few years was the quickest means to an end. FBR, while superior from a costs standpoint, was new and therefore riskier from a deployment standpoint.

So... My guess for polysilicon. Contract poly prices are going to come down to $30/kg in the next few years and approach $20/kg within 10 years. Fluidized bed reactors should start to dominate new refining plant construction in the medium term.

Wafer Processing Costs

Best of breed (Renesola, LDK) wafer processing costs are currently a little over 30 cents/Watt. These costs are expected to come down to 25 cents/Watt in the near term based on increased scale and improved manufacturing.

*The exact definitions of silicon and non-silicon costs vary by manufacturer. For example, Yingli and Trina define the terms as I have above. Suntech on the other hand includes wafer processing costs in their definition of silicon costs.

Friday, January 29, 2010

Solar Advisor Model (SAM)

Check out the Solar Advisor Model. Additional weather data can be found here

Thursday, January 21, 2010

Solar Talking Points - Version:17

Short Term Focus Trumps Long Term Vision

Solar power has been sitting on the bench for decades. This sideline status has given solar philosophers ample time to cook up visionary plans for large-scale solar projects. Archetypical examples include the Club of Rome’s DESERTEC scheme, the Zweibel-Fthenakis Solar Grand Plan and the Jacobson-Delucchi Wind, Water and Sun program. These Grand Plans have several generic features in common.

1. Build a Mega Solar Array (MSA) in the desert. There are two general analogies that accompany this first feature of the plan: the Area Analogy that shows how much land is needed to power the planet and the Time Analogy that shows how so many seconds of sunshine equals all the world's oil. Sometimes you'll get a 'look at all these numbers' show - there are some real productions out there. The math-lite version is: The Sun powers the Earth and can power Us too.

Poetry aside:

the Geek love is a strange love
odd hobbies so too
offset are the dreamings
that suffer such fools

hark... what goes there behind yonder shrub? Me!, came a piping reply... Who's Me?, I'm Me... So you're Me... Yep. Come forth... What do you have to say for yourself, Me?

the fool who finds happy
is not a fool at all
so suffer him his foibles
be kind, rewind, freeball

I want to see a commercial with a bunch of cats sitting around drinking beer and talking about football with Texan accents. Throw in a yeehaw or two or three and you'd really have something. Now that's what I'd call entertainment.

lyrics aside:

A boring ready region upon anything we did exposing every weakness how the kid did bye the kid (laughter)

Out in the middle of nowhere they were home at night with friends, psychopathic wads would flash down with a inches of their lives

wicked whoa stuff there...


2. Build a Big Transmission Web (BTW) connecting renewable resources to several parts of the country. The song says... High voltage! DONE! DIRT! CHEAP! If only that were true.

Frivolous aside:

Did you know PG&E signed a power purchase agreement for space solar power? That's funny... Not as funny as Hippo Eats Dwarf but still funny. The fact that PG&E signed a space power deal tells me they have no ability to discriminate between good, bad and ugly.

3. Build a Super Storage System (SSS) to handle intermittency. This component of the Grand Plan is generally accompanied by a list of storage options with their hypothetical costs and potentials. What's most important here is that the storage components covers the third leg of the 'money is no object' hat-trick. The acronym for this portion of the Grand Plan was made as if to - SSS - sear closed the wounds this plan would inflict upon us. Truth is, no healing is possible here.

Slick advertising is an integral part of all Grand Plans. Promotional teams work in packs, sampling shiny pictures and slinging slogans. Common highlights include precariously rising populations, energy security and saving the environment. The Manhattan Project, Apollo Program and the Interstate Highway system are often mentioned to inspire our collective have-done-can-do-again attitude. The propaganda is palpable throughout.

The grand plan philosophy with its far off futurescapes is the stuff of fantasy. This castles in the sky mindset is fundamentally flawed. We need to pick our present path with seriousness and keen attention to detail.

Where light steps ought tread the fool looks afar...

Integrating Photoelectricity Gracefully

Solar power needs to play directly to its near-term strengths. Here are some generic guidelines.

1. The economic advantage to end-users needs to be the focal point of all solar promotion. The mantra goes: The choice to go solar is an investment choice.

2. Promotional policies should move away from directly incentivizing installation as steadily as possible. This will accelerate the overall adoption of solar power by placing pricing pressure on manufacturers and installers.

My guess is that Germany can squeeze another Euro per Watt from residential photoelectric system costs over the next 2 years. That would get costs down to ~2.25 Euro per Watt installed.

3. Solar should be deployed such that the need for additional transmission infrastructure is minimized or avoided – end-user rooftop solar is the ideal.

4. Local balancing authorities need to calculate maximum capacity levels for solar on the grid. The levels should be figured so that reaching them will not incur significant network integration costs or require special storage capacity. Addressing the integration costs with an engineering study is the only way to answer the question completely but, in general, it looks like 10% of the grid can go solar without issue.

Photoelectric power needs to be branded. It needs an abfab adman to cast it as a benevolent character with a simple one-two punch message. 1. It works good lasts a long time 2. It delivers a return on investment. Imagine a cartoon showing a smiling Sun shining down on a solar home. The dad explains to his son how the panels work and you see a corny animation of electrons going from the solar panels down to an outlet. The dad flips a switch and smiles. Bam! Sunlight to lamplight. Then he points at the outlet again and says, son, power isn't the only thing coming from the outlet. What else does dad? Cash son... Another corny animation shows a thought bubble with cash signs spitting out of the outlet and into a piggy bank. The jingle would follow, (Bada Bada ba baa-bump!) Saving money with Sunshine!

The goal of these guidelines is simple: For solar to be a broadly cost-effective supplement to the grid around the world. Call this a Stage 1 goal. Too far to fathom go farther goals than this.