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Tech advances fuel solar industry
A worker staples a roll of photovoltaic solar panels on a roof of a warehouse in Laudu-LaArdoise, France, in February 2008.
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Kai Ryssdal: The weather in San Diego today is just like it is most days -- sunny, beautiful, about 85 degrees. But solar power companies that're meeting there this week don't have quite as bright a forecast. The looming recession and enduring credit crunch are threatening to take some of the heat out of the industry's rapid expansion.
Still, as Sarah Gardner reports from the Sustainability Desk, solar companies are confident about grabbing the ultimate prize -- a technical term called "grid parity."
Sarah Gardner: In the solar power business, "grid parity" is the Holy Grail. That's when the cost of solar electricity will match the price of electricity from fossil fuels. Right now that means about $1 a watt. And the race is on.
Mike Gering: For example, at the end of next year, our costs will be approximately $1.20 a watt.
That's Mike Gering, CEO of Global Solar Energy. [factory noise] In a spacious factory in Tucson, Arizona, Global Solar is making solar cells, the 4-by-8 inch building blocks of solar panels.
Gering: Our people down here are producing thin-film photovoltaic cells.
Thin-film solar cells are a recent technological innovation. They're one of the reasons many analysts are optimistic the industry will achieve grid parity by 2015, a national goal set by President Bush.
Gering: If we go over here, this is the CIGS machine. This is the one machine we would not allow our competitors to see.
The "CIGS" Gering refers to is a new material used to conduct electricity. It's made of copper, indium, gallium and selenium. They're on that Periodic Table of Elements we were all supposed to memorize in high school chemistry. Other companies are making thin-film cells out of something called cadmium telluride. But the point is:
Karina Funk: Thin-film modules are just much simpler and use less materials.
That's solar stock analyst Karina Funk. She says thin-film cells use just a fraction of the raw material that conventional solar cells do. They also take less energy, less labor and they can be made without silicon, a traditional solar ingredient that's been in short supply. Renewable energy expert Travis Bradford says these and other recent advancements in solar technology bode well for making solar price-competitive sooner rather than later.
Funk: Solar's getting cheaper fast. Where do we hit the point where half the people in America will find solar to be an economic solution? I'd say it's coming sometime between 2012 and 2015.
Others analysts are more conservative, but Bradford notes that solar power has already achieved grid parity in expensive energy markets like Hawaii, where they use diesel fuel to make electricity. All the progress in technology, though, is tempered by a looming recession and credit crunch. Analysts say it will no doubt slow the solar business' rapid expansion. Again, Karina Funk:
Funk: It takes a lot of capital to finance these projects and banks are more risk averse these days.
One solar exec told me he's frustrated. The industry's on the brink of achieving grid parity and it just got an eight-year extension of tax credits. But the storms on Wall Street, he said, threaten to block some of that sunshine.
I'm Sarah Gardner for Marketplace.
As a San Diego resident and a California voter, I would like to know if you have any insight into the economic and environmental effects of California's Proposition 7 on the November ballot. It promotes itself as an environmental boon, requiring utilities to produce a greater percentage of energy from renewables (especially solar) in a shorter timeframe. But one of the detracting arguments is that it will lock in electricity prices of solar above the market rate- which would be the opposite of grid parity. Finally, detractors also claim that the prop. would only benefit large, centralized solar plants, and damage the innovative market by automatically excluding small-scale renewable energy producers. Do you have an informed opinion about what the likely outcome would be should Prop. 7 pass?
As a San Diego resident and a California voter, I would like to know if you have any insight into the economic and environmental effects of California's Proposition 7 on the November ballot. It promotes itself as an environmental boon, requiring utilities to produce a greater percentage of energy from renewables (especially solar) in a shorter timeframe. But one of the detracting arguments is that it will lock in electricity prices of solar above the market rate- which would be the opposite of grid parity. Finally, detractors also claim that the prop. would only benefit large, centralized solar plants, and damage the innovative market by automatically excluding small-scale renewable energy producers. Do you have an informed opinion about what the likely outcome would be should Prop. 7 pass?
I love Market place news and the indepth, concise stories you present. I am a business professional that tracks all types of commodities for our corporation. Your story on solar panels, and the silicon industry shortages helps me to understand the silicon market and helps me negotiate contracts with major corporations that supply chemicals. One industry slowing their usage of silicon can affect another markets interests. Solar panel switching to another commodity from silicon could bring down pricing on silicon and help address the needs of the consumer for cheaper raw materials to make packaging, flooring, and even cosmetics.
