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Solfocus

Friday, February 17th, 2006

Solar May Get Cheaper (http://www.redherring.com/Article.aspx?a=15764&hed=Solar+May+Get+Cheaper)

SolFocus says that its concentrator photovoltaics will cost only half the price of competing solar PV technologies.
February 16, 2006

The high price of solar panels has slowed the wide-scale adoption of solar energy, but news Thursday that a partnership could make half-priced solar power commercially available in a year may help change the game.

The Palo Alto Research Center is partnering with solar company SolFocus to produce its cheaper concentrator photovoltaic technology. The technology includes small lenses and curved mirrors that concentrate sunlight onto solar cells. The cells use germanium instead of the most common material, silicon.

While the high-efficiency material is expensive, SolFocus’ system uses so little of the germanium—1 square centimeter per panel—that the company is able to cut the installed price of solar in half, compared to the average price today, and still make a healthy margin.

SolFocus estimates the current installed price of photovoltaic (PV) systems at about $7 per watt. Marc Cortez, a spokesperson for Sharp Electronics’ solar group, in August estimated the average price at about $8 per watt, while Solarbuzz, a research firm in San Francisco, said the systems average $5.15 per watt.

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Gary Conley, CEO of SolFocus, said the company will begin shipping its systems to the city of Shanghai, as well as to undisclosed customers in Hawaii and California, for pilot testing within the year.

These tests will include 2 megawatts of PV. Mr. Conley said even at that low volume, the average cost of the technology before shipping or margins will be $2.40 per watt. At 1 gigawatt of annual production, which will take several years to reach, the cost will be $0.50 per watt, he said.

Mr. Conley said the first-generation technology, targeted at large field power plants, will be commercially available in a year to 18 months. The mirrors in that system are “slumped” in the way that windshields are made, so they can be made “pretty much anywhere,” he said.

Second Generation

At the same time, SolFocus is working with the Palo Alto Research Center (PARC) on developing the second generation.

Using PARC’s expertise in optics, cell mounts, tile pressing, and other processing technologies, SolFocus says the second-generation product will be even cheaper. They could reach $0.32 per watt at volumes of 1 gigawatt annually and will be lighter and smaller than the first-generation system.

The second-generation technology, made using a glass-pressing process used to make bright LED lights, reduces the mirrors and lenses into a single solid glass tile. Corning is already manufacturing the prototypes, Mr. Conley said. Using this technology, at volumes of 10 megawatts, the price of the tiles will match the price of glass, he said.

Those second-generation tiles will be used for commercial rooftops, instead of large field power plants, he said. But the second-generation product can only be made in modern electronics assembly plants, and that’s not ideal for every situation, he said, such as in Africa. He noted that the second-generation systems will be rolling out in about two years.

Analysts have been skeptical of concentrator PV, saying many of the systems have reliability problems. Concentrator systems require direct sunlight and must track the sun, so many have a number of moving parts which can fail. Also, many of the systems leave mirrors exposed to the elements.

Competition Abounds

Energy Innovations, a concentrator PV company that raised a $16.5-million round of venture capital funding in June, said its system is expected to last 15 years, compared with the 20- to 25-year life span of most solar panels (see Energy Innovations Gets Cash).

Not only is SolFocus claiming its systems will reach a 20-year life span by the time it commercializes, but it’s also claiming it will offer its products at a dollar less than the $4.50 per watt that Energy Innovations is expecting to charge at its launch.

Steve Chadima, chief marketing officer at Energy Innovations, said SolFocus’ technology is “very clever; a good design.”

But he’s not concerned about competition, he said.

“It’s a very interesting technology, and I think there’s going to be a lot of different solutions to the solar problem,” he said. “They have one, we have another, and the market is so large and the potential is so great, that there’s going to be room for a variety of different solutions. We wish them luck.”

Mr. Conley said SolFocus is raising money for its Series A round, which it expects to close at the end of September. SolFocus is raising $8 million to $10 million to add to the $800,000 of financing that Mr. Conley brought to the company. SolFocus also received in-kind funding from an undisclosed “major corporation,” as well as $1.5 million of in-kind funding—such as research and facilities—from PARC.

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