Intersolar NA: Can the industry achieve 2020 challenge of $1/W system cost, 200GW installed capacity

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During the  CEO panel following the “Future of PV—A Market and Technology Outlook” conference session  at  Intersolar North America, Meyer Burger CTO Patrick Hofer-Noser posed a simple but telling question, “How many people here have solar installed on their home?” 

In a perfect world, more than half of the attendees’ hands would have shot up, declaring that they support the very industry they work in by running a solar system on their own home.  However, only a handful of people raised their hands, while the rest of us dealt with mixed emotions of shame and disbelief that in an industry that touts constant growth, the very people pushing solar energy forward, were nowhere near using it themselves.

The main panel discussion centered on Fraunhofer ISE Director Eicke Weber’s curiosity about what the executives foresaw the installed capacity reaching by 2020. Hofer- Noser took a leap into the deep-end with his projection that the world market has the potential to reach a yearly installation base of 200GW by 2020.

Laughter arose from the rest of the  panelists and the audience alike after Hofer-Noser’s hypothesis, and as the question was passed on, Marc van Gerven, managing director of Q-Cells North America, tried to back-pedal from his colleague’s answer, citing that forecasting the market in 2020 was too difficult to properly answer.

However, Shawn Qu, chairman/president/CEO of Canadian Solar, advised that from his point of view, 200GW has a good chance of being achieved in the next nine years. But he believes that in order to attain such a number, module costs will have to reach between $0.50 and $0.60, leading to a global installed cost of around $1 per watt.

Qu’s future ASP estimates were in the neighborhood of those cited in the US Department of Energy’s recently announced SunShot program. During an earlier presentation about the initiative, Doug Hall, Photovoltaic Manufacturing Initiative (PVMI) portfolio manager for DOE’s solar technologies programs, displayed reference “business as usual” prices projected for 2020 on a dollar-per-watt basis. The estimates listed $2.51/W for the utility scale market, $3.36/W for the commercial distributed PV market, and $3.78/W for the residential distributed PV market.

By contrast, DOE’S aggressive SunShot program calls for 2020 prices to reach substantially lower levels, through a combination of drastic reductions in module, balance of system, and power electronics costs: $1/W for the utility market, $1.25/W for the commercial market, and $1.50/W for the residential PV sector. If these prices are attained, the SunShot hypothesis states that 302GW of installed solar capacity, or 14% of the expected US electrical demand, can be reached by 2030.

Amazingly, most of the CEOs and the US government seemed to be on the same page. Both parties wanted to reach at least 200GW by 2020 and recognized the need to significantly lower the price of total systems installation costs. Still, the question loomed, how do we get there?

Hofer-Noser pointed out that politics, finances, and technology are the three main pillars that will determine if and when the solar industry will reach projected installed capacity levels, which in this case fall at 200GW in the next nine years. While DOE and the CEOs on the panel agreed on the necessary reduction in pricing costs and the potential installed capacity, it seems that the rest of the US still has some catching up to do.

Hall commented that solar has become a political issue, noting how  we have to stop seeing this as a Democrat versus Republican problem and focus on it as a resource that can better the country as well as the world’s climate. “I think we need to change our fear into optimism and get to work.” Weber jokingly added that Germany only has one piece of paper you need to fill out when it comes to applying for a solar installation, while the US makes you write a book.

Weber makes a good point: Germany’s lawmakers and citizens did not shy away from solar energy and its intricacies as the US has done, and have greatly simplified the process of installing PV. Of course, a lucrative feed-in tariff didn’t hurt either. 

As a country and culture, we have sometimes been deemed as a secretive bunch: or as Dirk Michaels, a partner with K&L Gates stated, not as willing to share our data as are the people in Europe. However, the issue may not lie in keeping secrets, but rather our fear that not understanding the complexities of solar and its permitting issues will make us look incompetent and, not wanting to look a fool, sends us into our shutdown mode.

The only way to change this is to educate the citizenry; from neighbors to lawmakers, the industry needs to teach local governments and residents the benefits of solar not only as a source of energy, but also as a viable utility. Many US citizens continue to be uninformed not just about solar, but energy and climate change in general.

One can argue that the US, compared to a country like Germany, has made solar more difficult than it needs to be. Incentive structures differ from state to state, while policies and overall red tape abound in the United States, leading consumers and investors to generally stay away from an industry in which they do not feel comfortable enough to participate.  Nonetheless, training for the public sector and investors is available. Organizations like SEIA, SEPA, ASES, and The Solar Way Forward strive to make education on solar technology more readily available for the general public and industry leaders alike.

Even the US government is doing its part with solar education in the form of the SunShot Initiative and other investment or incentive programs. Hand-in-hand with attempting to make the cost of solar more affordable, SunShot has launched programs that engage universities and research facilities to find solutions to the more pertinent cost issues associated with PV, including module and cell efficiency.

SunShot programs include the Foundational Program to Advance Cell Efficiency (F-PACE), which typically awards research institutions with a $1 million to $6 million grant for use towards scientific advances in materials, devices and process research as well as finding a way to close the gap between projected, tested and actual efficiency.  Additionally, the PVMI has granted contract awards between $25 million and $100 million to academic and industry organizations so that they can focus on the near-term impact of US manufacturing and the production of a pilot line scale of development of new technologies.

Naturally, along with the education and development of solar system functions, edification on the investment side of PV needs to take place as well. A veteran of the solar litigation field, Michaels acknowledged that many financial institutions are unable to comprehend the various agreements that pertain to the financing and permitting of solar systems. He stressed the need to not only standardize these agreements, but to also educate the market. Whether it is law firms holding in-house seminars or an open workshop where developers, attorneys, and investors can all participate to gain a better understanding of the financial demands solar installations require, Michaels believes that education on all fronts would lead to a smoother and, eventually, more cost efficient solar installation. 

As the industry progresses and the cost of a solar installation continues to decline, PV installations should eventually make their way to being a commonplace sight throughout our neighborhoods and communities. Van Gerven pointed out that it takes around a year to convince a homeowner to put solar on his or her house, but once the system is installed, neighbors and friends ask the right questions and start the ball rolling for their own systems. We live in an age where news is immediately available, and he stressed that the solar industry should take advantage of social media platforms to act as virtual neighbors and teachers in order to spread the word about PV. 

There is no doubt that even as setbacks occur on a global scale, the solar market has a great potential to keep growing. Qu urged the audience to show our political leaders that solar is okay, going so far as to lightheartedly declare that public outrage would get local and national politicians to begin taking action toward a better solar future. He additionally insisted that the industry must continue to work together and keep co-collaborating to make technology and solar more readily available and affordable.

In the end, it comes down to collaboration among everyone. Citizens and utilities, manufacturers and investors, politicians and policymakers must work together and take a proactive stance to better understand solar PV. A better understanding of the solar world will lead to not only a more diverse population engaging in the photovoltaic world, but will also provide better support for technological advancements. As the public becomes more involved and vocal about module, BOS, and power electronic costs, the need to drive down the system installation costs, and its associated research, the industry will find enhanced support from a population that is more aware of the energy options they have available.

Taking these steps to solve the political, financial and technological questions that surround the current solar market will make reaching the ambitious goal of 200GW installed capacity by 2020 more likely, but might also allow for more of us to raise our hands at the next industry conference when the “who’s got solar on their home” question is posed.

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