The solar industry has taken a beating lately. At their low in November, solar stocks were down 70%. Natural gas and oil prices have plunged, reducing the value of renewable energy. Financing is scarce, making the upfront cost of solar energy a challenge.
Perhaps these conditions will encourage innovation. Here are some tactics for solar companies to weather the storm in the short-term:
Financing with Power Purchase Agreements (PPA)
A PPA is an agreement from a large customer to purchase electricity generated from a plant. Such agreements have been beneficial to the solar industry and instrumental in generating funding.
A recent survey from Alta Terra found that this approach represents 72% of the solar market in 2008. The survey discovered that this approach has, “helped maintain growth and diversification in solar installations under turbulent market conditions” and that “third-party-financed PPAs were instrumental in bringing a broad range of new customers to the commercial solar industry.”
Ease of Installation
Solar Red has designed a plug-and-play solar module that will be available in 2010. They say that installation represents half the cost of a residential or commercial solar system and their proprietary technology could cut the installation cost in half. Each panel will have its own micro inverter, thus decreasing the impact of shade on the entire solar array and simplifying the wiring.
Akeena Solar (NASDAQ:AKNS) is a large US-based solar installer for residential and commercial systems in California, New Jersey, New York, and Connecticut. Andalay, the company’s new solar panel has integrated grounding, racking, and wiring. This panel boast up to 70% fewer parts and 25% less time needed for the rooftop solar installation.
The next few years will push the solar industry to mature. The Obama administration will most likely set policies in place that benefit the industry, but innovation is an important ingredient. Economic conditions will force the industry to make good use of raw materials, reduce installation costs, and develop tomorrow’s technology quickly.
Multiple Land Use
Wind turbines are typically found on agricultural land. Despite some cropland loss due to access roads and installation, wind turbines and crops have a happy coexistence side-by-side.
Although residential solar systems usually occupy underutilized roof space, solar power plants are another story. Acres of land are dedicated to harvesting only sunshine, while vegetation must be short enough to allow for full solar exposure. Solar panels that are higher off the ground however allow for crops or native crops to be cultivated underneath. This is not the norm.
SolFocus, for example, manufactures concentrated photovoltaic (CPV) panels that are mounted on a tracking system. This is necessary to capture as much usable sunlight as possible. The increased height allows the land underneath to be utilized. Shade crops can be cultivated below the solar panels, increasing the diversity of crops that can be grown in sunny regions.
Despite the sluggish economy, investment in clean tech has been strong in 2008. Roughly half of this investment in the US went to solar companies, equating to $1.7 billion in the first three quarters last year. This is a necessary ingredient in creating the infrastructure required to manufacture panels effectively and achieve economies of scale.
“We have to design for manufacturability,” said Nancy Hartsoch, VP of Marketing for SolFocus. “Otherwise, we will end up with an expensive lab experiment.”
Effective Solar Energy Storage
It is common to hear about breakthrough solar technology, but these advances have little impact on the industry if they don’t make it to the market. Two of the most important advances for the solar industry are increasing efficiency of the panels and effective solar energy storage.
Ausra, a developer of large-scale solar thermal technology is developing a promising energy storage system. The ability to utilize solar energy after the sun sets is made possible by a storage system that is up to 93% efficient, according to Ausra’s executive vice president John O’Donnell.
High efficiency is achieved because solar thermal plants do not need to convert energy to another form in order to store it and do not rely on battery technology. Flat moving reflectors or parabolic troughs focus solar energy to generate heat. This heat generates steam that turns turbines, thus generating an electric current.
If you want to generate electricity at 3 am, heat from the sun can be stored for later use. This gives solar thermal technology the ability to not just produce peak power, but also generate base load electricity.
Heat storage is not a new technology, having been used for plastic manufacturing and petroleum production for a long time. Solar thermal plants have a cost advantage compared to photovoltaic technology because energy can be stored as heat without being converted to another form or relying on batteries.
“My favorite example in comparing energy storage options is on your desktop,” said John O’Donnell. “If you have a laptop computer and a thermos of coffee on your desk, the battery in your laptop and the thermos store about the same amount of energy. One of them costs about $150 and the other one costs maybe $3 to $5. On the wholesale level, storing electric power is at least 100 times more expensive than storing heat.”
Photo Credit (top photo): Ausra Solar
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