Solar manufacturers like Suntech are struggling. Hundreds need to die for the industry to recover.
Suntech, a Chinese company that as recently as 2011 was the world’s largest producer of solar panels, is teetering on the edge of bankruptcy. It’s running low on cash, owes bond investors half a billion dollars (which it failed to pay Friday), and is saddled with payments on billions of dollars in loans as it struggles to make money in a market flooded with its product.
If Suntech fails and shuts down its factories, that might not be a bad thing. Some industry experts say that hundreds of solar companies need to fail to help bring the supply of solar panels back in line with demand. That would slow the fall in prices and, as demand recovers, allow companies to justify buying new equipment and introducing the innovations that will ultimately be needed for solar power to compete with fossil fuels.
But there’s a good chance that Suntech, and many other companies in China, will be bailed out by local governments, which would delay the much-needed reduction in production capacity. Worldwide, solar companies have the capacity to manufacture between 60 and 70 gigawatts’ worth of solar panels a year, but demand in 2013 is only expected to be about 30 gigawatts.
The worldwide glut of solar panels—which has lasted nearly two years—is partly the result of big government-backed investments in factories in China, where two-thirds of solar panel production capacity is located. The surplus has been good news for consumers and installers, because it’s helped drive a precipitous drop in solar panel prices. They’ve dropped 60 percent since the beginning of 2011, according to GTM Research. Solar panels sold for $4 per watt eight years ago. Now it’s common to buy them at 78 cents per watt, says Jenny Chase, an analyst at Bloomberg New Energy Finance.
But the rapid decline in prices has been hard for solar manufacturers. As prices have dropped, they have been able to lower costs because the price of materials has been falling and they’ve made incremental imprvements to existing manufacturing equipment. But in many cases costs haven’t fallen fast enough for companies to keep up with the falling prices for their panels, eliminating profits and making it difficult to invest in the new equipment needed to keep reducing costs.
Although the Chinese government supported the rapid growth in solar manufacturing capacity, it now says the current situation is unsustainable and recommends allowing the least competitive companies to fail. “Beijing knows that you cannot have 500 module makers in China, which is what you currently have,” Chase says. The story is not necessarily the same for local governments, which want to keep companies open to avoid losing thousands of jobs.
The situation has delayed the commercialization of advanced technology that would have required new manufacturing equipment. For example, Suntech has been promising for years to scale up production of its Pluto solar cells, which are based on designs from the University of New South Wales that set new records for efficiency and can generate significantly more electricity than conventional ones (see “The Chinese Solar Machine”). But that technology has been put on hold.
The oversupply of cheap solar panels has been particularly difficult for startups and other companies with novel technologies. They’ve had to cancel plans to build factories because of a lack of demand. GE has developed its own alternative to conventional silicon solar panels, but last year it announced that it had to put its factory on hold until the market improves (see “GE Stalls Solar Factory Construction”). Even companies founded specifically to help conventional silicon solar manufacturers lower costs are struggling because no one is buying new equipment, and some of them have gone out of business as a result.
The recovery of the solar market will depend in part on how fast companies are allowed to fail. It will also depend on expansion of the worldwide market. The drop in solar panel prices is opening up new markets as solar power starts to look competitive with conventional sources in many places—especially countries like Chile, where sunlight is abundant and electricity prices are high. But it’s not clear how fast those markets can grow.
To be sure, the failure of Suntech and other solar companies could have serious downsides. Yet it’s also true that the companies left standing would be more likely to acquire technology and push it forward—if it seems promising. Chase says the best way to determine who has the best technology is to let the market decide, and that means allowing companies to fail.
Tuesday, March 26, 2013
Google.org signs up Arun Majumdar from the DoE to run energy strategy
Google.org, the charitable wing of Google, has made a new hire designed to help run the organization's energy initiatives and improve the company's energy use at large. Dr. Arun Majumdar was previously at the Department of Energy, where he was a founding director of the ARPA-E research group. Google has a keen interest in green energy; the company has invested in projects such as an offshore wind power transmission line, and has opened up about the energy conservation methods it employs at its huge data centers. Google hasn't gone into specifics of the projects that Majumdar will be working on just yet, but notes the need for a "new energy blueprint for the future" to bring "reliable, sustainable, and affordable" energy to everyone.
'Google Energy' subsidiary considers clean power
Google took a step toward entering the energy business with the creation of a subsidiary called Google Energy and a request with a federal agency to buy and sell electricity on the wholesale market.
The search giant formed a Delaware-based company called Google Energy on December 16 of last year, according to Delaware state records. The Federal Register on Tuesday referenced Google Energy's request to the Federal Energy Regulatory Commission (FERC), the agency with oversight over the power grid.
Rather than represent a shift beyond Google's core search business, though, the moves are meant to give Google flexibility in pursuing its corporate goal of carbon neutrality, according to a Google representative.
"Right now, we can't buy affordable, utility-scale, renewable energy in our markets," said Google representative Niki Fenwick. "We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits."
Google already has a very large, 1.6-megawatt solar installation at its Mountain View, Calif., headquarters. But having the ability to buy and sell electricity the way utilities do gives Google the flexibility to use much larger amounts of renewable energy to offset the energy consumption of its operations.
"We don't have any concrete plans. We want the ability to buy and sell electricity in case it becomes part of our portfolio," Fenwick said.
Google is seeking to become a carbon-neutral company by improving the efficiency of its operations, including its energy-hungry data centers. It also has a program of purchasing "high-quality" carbon offsets and it has invested in a renewable energy companies through its philanthropic arm, Google.org.
Google.org has funded technology start-ups in solar, enhanced geothermal, and wind. It also developed PowerMeter, a Web-based home electricity monitoring application offered primarily through utilities.
Outside of those efforts, Google employees are active in exploring the intersection of IT and energy, such as ways to use a network of electric car batteries to stabilize grid frequency. Google also created a partnership with General Electric to lobby for policies to promote clean energy.
At an event to discuss U.S. energy policy last November, Google's director of energy and climate initiatives, Dan Reicher, also indicated that Google could get involved in financing large-scale renewable energy projects, according to reports.
Over the past two years, Google has been active in pushing clean energy and efficiency in a variety of ways without becoming directly involved in the business the way a utility is. Making a request with FERC to buy and sell energy for a company outside the utility business is a highly unusual move, experts told Energy & Environment Daily, which reported on Google Energy on Wednesday.
"It's interesting that they'd want to take on the burdens of being a FERC-regulated public utility," John Decker, a partner in the energy regulation practice at Washington, D.C.'s Vinson & Elkins, told Energy & Environment Daily. But, Decker said, "there's no substitute for actually being in the industry if you want to learn about it."
Arun Majumdar Biography
Arun Majumdar is currently a vice president for energy at Google where he is driving Google.org’s energy initiatives and advising the company on its broader energy strategy.
In October 2009, Dr. Majumdar was nominated by President Obama and confirmed by the Senate to become the founding director of the Advanced Research Projects Agency - Energy (ARPA-E), where he served till June 2012. Between March 2011 and June 2012, Dr. Majumdar also served as the acting under secretary of energy and a senior advisor to the secretary of energy.
As part of his legacy, Dr. Majumdar helped create a vision for ARPA-E to innovate the future of energy technologies, recruit top talent and create new programs to translate science into a broad spectrum of potentially game-changing energy technologies, while setting up an organization with a culture of speed, efficiency, transparency and integrity. As the acting under secretary of energy, Dr. Majumdar was responsible for integrating technologies and policies across all of DOE along techno-economic sectors to maximize leveraging of federal funding and to accelerate technology transition from research to markets.
Prior to joining the Department of Energy, Dr. Majumdar was the Almy and Agnes Maynard chair professor of mechanical engineering and materials science and engineering at the University of California, Berkeley and the associate laboratory director for energy and environment at Lawrence Berkeley National Laboratory. His research career includes the science and engineering of nanoscale materials and devices as well as large engineered systems. In 2005, Dr. Majumdar was elected a member of the National Academy of Engineering. He received his bachelor's degree in mechanical engineering at the Indian Institute of Technology, Bombay, in 1985 and his Ph.D. from the University of California, Berkeley, in 1989.
Access to affordable and reliable energy has been a cornerstone of the world’s increasing prosperity and economic growth since the beginning of the industrial revolution. Our use of energy in the 21st century must also be sustainable. This talk will provide a techno-economic snapshot of the current energy landscape and identify several research and development opportunities and challenges, especially related to materials science and engineering, to create the foundation for this new industrial revolution.
'Google Energy' subsidiary considers clean power
Google took a step toward entering the energy business with the creation of a subsidiary called Google Energy and a request with a federal agency to buy and sell electricity on the wholesale market.
The search giant formed a Delaware-based company called Google Energy on December 16 of last year, according to Delaware state records. The Federal Register on Tuesday referenced Google Energy's request to the Federal Energy Regulatory Commission (FERC), the agency with oversight over the power grid.
Rather than represent a shift beyond Google's core search business, though, the moves are meant to give Google flexibility in pursuing its corporate goal of carbon neutrality, according to a Google representative.
"Right now, we can't buy affordable, utility-scale, renewable energy in our markets," said Google representative Niki Fenwick. "We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits."
Google already has a very large, 1.6-megawatt solar installation at its Mountain View, Calif., headquarters. But having the ability to buy and sell electricity the way utilities do gives Google the flexibility to use much larger amounts of renewable energy to offset the energy consumption of its operations.
"We don't have any concrete plans. We want the ability to buy and sell electricity in case it becomes part of our portfolio," Fenwick said.
Google is seeking to become a carbon-neutral company by improving the efficiency of its operations, including its energy-hungry data centers. It also has a program of purchasing "high-quality" carbon offsets and it has invested in a renewable energy companies through its philanthropic arm, Google.org.
Google.org has funded technology start-ups in solar, enhanced geothermal, and wind. It also developed PowerMeter, a Web-based home electricity monitoring application offered primarily through utilities.
Outside of those efforts, Google employees are active in exploring the intersection of IT and energy, such as ways to use a network of electric car batteries to stabilize grid frequency. Google also created a partnership with General Electric to lobby for policies to promote clean energy.
At an event to discuss U.S. energy policy last November, Google's director of energy and climate initiatives, Dan Reicher, also indicated that Google could get involved in financing large-scale renewable energy projects, according to reports.
Over the past two years, Google has been active in pushing clean energy and efficiency in a variety of ways without becoming directly involved in the business the way a utility is. Making a request with FERC to buy and sell energy for a company outside the utility business is a highly unusual move, experts told Energy & Environment Daily, which reported on Google Energy on Wednesday.
"It's interesting that they'd want to take on the burdens of being a FERC-regulated public utility," John Decker, a partner in the energy regulation practice at Washington, D.C.'s Vinson & Elkins, told Energy & Environment Daily. But, Decker said, "there's no substitute for actually being in the industry if you want to learn about it."
Arun Majumdar Biography
Arun Majumdar is currently a vice president for energy at Google where he is driving Google.org’s energy initiatives and advising the company on its broader energy strategy.
In October 2009, Dr. Majumdar was nominated by President Obama and confirmed by the Senate to become the founding director of the Advanced Research Projects Agency - Energy (ARPA-E), where he served till June 2012. Between March 2011 and June 2012, Dr. Majumdar also served as the acting under secretary of energy and a senior advisor to the secretary of energy.
As part of his legacy, Dr. Majumdar helped create a vision for ARPA-E to innovate the future of energy technologies, recruit top talent and create new programs to translate science into a broad spectrum of potentially game-changing energy technologies, while setting up an organization with a culture of speed, efficiency, transparency and integrity. As the acting under secretary of energy, Dr. Majumdar was responsible for integrating technologies and policies across all of DOE along techno-economic sectors to maximize leveraging of federal funding and to accelerate technology transition from research to markets.
Prior to joining the Department of Energy, Dr. Majumdar was the Almy and Agnes Maynard chair professor of mechanical engineering and materials science and engineering at the University of California, Berkeley and the associate laboratory director for energy and environment at Lawrence Berkeley National Laboratory. His research career includes the science and engineering of nanoscale materials and devices as well as large engineered systems. In 2005, Dr. Majumdar was elected a member of the National Academy of Engineering. He received his bachelor's degree in mechanical engineering at the Indian Institute of Technology, Bombay, in 1985 and his Ph.D. from the University of California, Berkeley, in 1989.
A New Industrial Revolution for a Sustainable Energy Future
Access to affordable and reliable energy has been a cornerstone of the world’s increasing prosperity and economic growth since the beginning of the industrial revolution. Our use of energy in the 21st century must also be sustainable. This talk will provide a techno-economic snapshot of the current energy landscape and identify several research and development opportunities and challenges, especially related to materials science and engineering, to create the foundation for this new industrial revolution.
Wednesday, March 13, 2013
Thin-Film Solar Upstart Nanosolar Slims down
One-time ambitious CIGS solar startup has layoffs and goes into “quiet period,” hinting at potential financial troubles.
Nanosolar makes flexible solar cells with CIGS using a printing process. Credit: Nanosolar
Back in the mid-2000s, CIGS solar was alluring: with low-cost production techniques, these thin-film cells promised to slash the cost of solar panels. But making a business with CIGS technology has proved difficult.
Silicon Valley-based Nanosolar laid of part of its staff and is now in a “quiet period,” according to a company representative. Two reports suggest the cuts were significant, as much as 75 percent of the staff. Regardless of the magnitude, the “workforce reduction” is a sign that this well-funded and ambitious upstart could be in financial trouble and may need to change its business plans.
Founded in 2002, Nanosolar developed a printing process to make thin-film cells made of copper, indium, gallium, and selenium (CIGS) on a metal foil, an alternative to expensive vacuum-based methods. The company has capacity to make 100 megawatts worth of panels per year and, in its labs, has achieved 17 percent efficiency, about the same as standard crystalline silicon cells.
The company, which received seed funding from Google founders Sergey Brin and Larry Page, has raised more than $450 million from venture investors. It invested in large factories in California and Germany and targeted the utility solar market where thin-film cells, which tend to take up more space per watt, have generally done well.
Despite Nanosolar’s innovative process (See, Advanced Solar Panels Coming to Market), thin-film solar technology has lost its cost advantage to traditional silicon panels, driven by a massive investment in manufacturing capacity by Chinese producers. A number of CIGS solar companies have been sold off or folded.
Another Silicon Valley CIGS startup, Miasole, last year was acquired at a great loss to investors to Chinese energy project developer, Hanergy Holdings, which also acquired CIGS startup Solibro from QCells in Germany. Austin, Texas-based Heliovolt attracted funding from SK Innovations in Korea to fund its initial production and Stion has also forged deals with Asian manufacturers. These deals suggest that the CIGS technology is still viable, even if the company ownership has changed.
CIGS has long proven to be a difficulty process to master, but other thin-film solar companies have had similar difficulties keeping pace with rapidly falling solar prices. Abound Solar, which made cadmium telluride solar cells, went bankrupt and General Electric needed to delay introduction of its thin-film solar technology to achieve higher efficiencies.
Nanosolar makes flexible solar cells with CIGS using a printing process. Credit: NanosolarSilicon Valley-based Nanosolar laid of part of its staff and is now in a “quiet period,” according to a company representative. Two reports suggest the cuts were significant, as much as 75 percent of the staff. Regardless of the magnitude, the “workforce reduction” is a sign that this well-funded and ambitious upstart could be in financial trouble and may need to change its business plans.
Founded in 2002, Nanosolar developed a printing process to make thin-film cells made of copper, indium, gallium, and selenium (CIGS) on a metal foil, an alternative to expensive vacuum-based methods. The company has capacity to make 100 megawatts worth of panels per year and, in its labs, has achieved 17 percent efficiency, about the same as standard crystalline silicon cells.
The company, which received seed funding from Google founders Sergey Brin and Larry Page, has raised more than $450 million from venture investors. It invested in large factories in California and Germany and targeted the utility solar market where thin-film cells, which tend to take up more space per watt, have generally done well.
Despite Nanosolar’s innovative process (See, Advanced Solar Panels Coming to Market), thin-film solar technology has lost its cost advantage to traditional silicon panels, driven by a massive investment in manufacturing capacity by Chinese producers. A number of CIGS solar companies have been sold off or folded.
Another Silicon Valley CIGS startup, Miasole, last year was acquired at a great loss to investors to Chinese energy project developer, Hanergy Holdings, which also acquired CIGS startup Solibro from QCells in Germany. Austin, Texas-based Heliovolt attracted funding from SK Innovations in Korea to fund its initial production and Stion has also forged deals with Asian manufacturers. These deals suggest that the CIGS technology is still viable, even if the company ownership has changed.
CIGS has long proven to be a difficulty process to master, but other thin-film solar companies have had similar difficulties keeping pace with rapidly falling solar prices. Abound Solar, which made cadmium telluride solar cells, went bankrupt and General Electric needed to delay introduction of its thin-film solar technology to achieve higher efficiencies.
Ubiquitous Energy Developing Transparent Stick-On Solar Cells that Can Power Your iPad
Tablet photo from ShutterstockPortable gadgets, like smartphones and tablets, have changed the way we consume information and communicate, but at this stage they all have one common flaw: they need to be tethered to the wall for a few hours to recharge their batteries. From portable solar panels to kinetic energy harvesting, we’ve seen several clever ideas aimed at generating energy on the go, but a new startup called Ubiquitious Energy promises to revolutionize the way we power our mobile devices. The company plans to develop see-through solar cells that can be installed on top of tablet screens, keeping your iPad running all day long.
According to the MIT Technology Review, Ubiquitous Energy’s solar cells collect wavelengths at the ultraviolet and infrared end of the spectrum, but they allow visible light pass through, making it possible for users to still use their tablets as the solar cells absorb energy. In contrast, most solar cells collect light in the visible portion of the light spectrum, making it impossible for them to be completely transparent. The solar cells are made from several organic layers that are placed, one layer at a time, on the glass screen of a tablet, Miles Barr, president and chief technology officer of Ubiquitous Energy, told MIT Tech Review.
The company, which was formed in the lab of MIT electrical engineering professor Vladimir Bulović, is still in the research and development stage. Prototypes have achieved about 2 percent efficiency and visible transparency of about 70 percent, but Barr says the company is working on improving both of those numbers. Ubiquitous Energy hasn’t announced any plans to release the solar plans or how they will be priced yet.
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