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The Khosla Ventures-funded Stion is setting records in the lab for its tandem CIGS thin-film solar cell.
The firm just announced that it has produced a 23.2 percent efficiency thin-film cell using its tandem process.
Back in 2011, Tom Cheyney, writing for PV-Tech (and now with Impress Labs), reported on Stion's tandem architecture. He noted that "Stion may be the only CIGS player that has been pursuing a tandem-junction architecture from day one." He quoted CEO Chet Farris as saying, “It’s a mechanically stacked tandem; the device structures are built completely independent of each other."
Farris continued, “We already have two sheets of glass, so we exploit the second sheet of glass for the tandem, and the EVA acts as the dielectric between the two pieces of glass. It’s a four-terminal device that gets converted to a two-terminal device in the box, and the way you match currents is by physical cell dimensions rather than [by trying to] suboptimize the diodes. The high-bandgap devices ( about 1.6eV) will be higher voltage and lower current than the low bandgap devices, which will be lower voltage, higher current, so you have a current-matched diode, and the best way to do that is simply to do it mechanically."
Stion uses sputtering to deposit the complex CIGS material system, in a manufacturing process that is rooted in the Camarillo Siemens/Shell process.
Khosla has suggested that Stion's differentiation was its tandem product "that can compete with all the incumbent silicon (not thin film) players by matching the efficiency of silicon cells with the costs of thin film." He added, "That upside gives the company 'legs' beyond the first few years of sprint, and I think every company needs to have a similar, short-term vector for future improvement. Otherwise, they will be resigned to the world of low-margin bloodbaths in an oversupplied market with few sustainable advantages."
Prior to Khosla assuming majority control, Stion had raised more than $200 million from Taiwan Semiconductor Manufacturing, Khosla Ventures, Lightspeed Venture Partners, AVACO, Korean private equity funds, Braemar Energy Ventures, and General Catalyst Partners. Khosla shared his thesis on thin-film solar with GTM in 2010.More recent CIGS news
In September 2013, Saint-Gobain subsidiary Avancis curtailed production at its German CIGS thin-film solar factory. But the company is still working on CIGS technology in the lab and is setting new marks for conversion efficiency in this high-potential materials system.
The Torgau, Germany-based firm's CIGS module has hit an NREL-certified efficiency of 16.6 percent. According to the firm, that's a "new efficiency world record for encapsulated thin-film modules." First Solar hit 16.1 percent with its CdTe thin-film module in April 2013. (Note that the Avancis record is based on “aperture area” whereas First Solar is a “total area” measurement.)
Avancis' parent company Saint-Gobain operates a float glass plant in Torgau.
The hero module is 30 x 30 cm². The firm noted that "ZSW´s 20.8% efficiency on a laboratory cell...demonstrates the extraordinary potential of the CIS-based thin film technologies." Avancis uses a sputtering process to deposit the absorber layer.
Dr. Jörg Palm, head of process development at Avancis, said in a release, "The very good homogeneity of the CIS absorber properties based on production dimensions of 158 x 66 cm² were demonstrated by the minor deviation of 0.15% absolute between different 30 x 30 cm² modules from the same full-size absorber." The release continued: "The improvement in efficiency is based on the optimization of the buffer layer with respect to InxSy bandgap, band matching, and in particular transmission in a short wavelength range. In addition, the transmittance and the sheet resistance of the sputtered ZnO:Al front contact was optimized and the dead area between the series-connected cells was reduced by the use of picosecond laser process."
Siva Power, a relative newcomer to the CIGS material system, hit an NREL-certified 18.8 percent efficiency with its three-stage co-evaporation CIGS process, achieved in a claimed ten-month time span. The CIGS record holder, ZSW, holds a Fraunhofer-confirmed 20.8 percent efficiency for a CIGS thin-film solar cell, also built using the co-evaporation process.
Markus Beck, CTO at Siva, told GTM that the 0.5 cm2 sample "uses a thinner absorber (<2 micrometers) than ZSW, NREL or EMPA employ. This is to demonstrate that this is a truly manufacturable result. The voltage of the device is 711 millivolts, demonstrating the process capability; the same applies for the fill factor of 79 percent."
Siva CEO Brad Mattson said, "We plan to break the world record this year, and the trajectory indicates we have a good chance."
Mattson added, "One interesting point is that our average efficiency is relatively close to this maximum. In other words, we are not selecting an outlier to get a record. This indicates the process is more stable and repeatable than others think CIGS would be, more transferable to manufacturing. Also, we are doing this with a thin layer. We make it thin so we can hit our throughput numbers. So we are testing the process we want to transfer to manufacturing, not a specialized process designed to achieve records."
Siva also added solar energy expert Charlie Gay, Ph.D. to its Technical Advisory Board.
Hanergy Solar is set to "begin construction of a planned 3 GW CIGS thin-film manufacturing complex in Caofeidian, Hebei Province, China in March 2014, with tool install starting by the end of the year," according to a report on the website PV-Tech. Hanergy Solar claims that it will be launching a 300-megawatt line based on the MiaSolé CIGS sputtering process, as well as a 300-megawatt line based on Solibro’s co-evaporation process, at an estimated cost of $780 million for the two lines, according to reports.
Solibro's batch co-evaporation process and MiaSolé's roll-to-roll sputtering process are two very different processes requiring very different equipment sets.
Hanergy recently hit 19.6 percent conversion efficiency in the lab on a small area sample, as certified by the Fraunhofer Institute.
Solar Frontier announced its intention to construct a 150-megawatt CIS solar module plant, with production starting in 2015, in the Tohoku region of Japan. This will be the solar module manufacturer's fourth production plant and brings its total capacity to more than 1 gigawatt. Solar Frontier has hit conversion efficiency of 19.7 percent for a cell of 0.5cm² in area.
South Africa’s PTiP, a spinoff from the University of Johannesburg, commissioned a 5-megawatt pilot-production line for manufacturing CIGS solar modules using production equipment from Singulus Technologies.
Here's a partial list of CIGS solar players:
This month, the U.S. government agreed to take up another case against China for its solar trade practices. The complaint was filed by German solar producer SolarWorld, but it has limited support within the industry, which is concerned about the potential impact on the economics of solar installation.
So will we reach a settlement? Or will China see a new round of tariffs on its solar products?
In this week's show, the Energy Gang will debate the consequences of the trade war between the U.S. and China. We're joined by GTM Research VP Shayle Kann, who's been watching the case closely.
Also in the show, we'll discuss Tesla's plans for a battery mega-factory and the meaning behind its secret conversations with Apple. And finally, we'll ask whether the "valley of death" is getting any less perilous for cleantech entrepreneurs.
The Energy Gang is produced by Greentechmedia.com. The show features weekly discussion between energy futurist Jigar Shah, energy policy expert Katherine Hamilton and Greentech Media Editor Stephen Lacey.
Tanguy Serra left the CEO post at Vivint Solar to join SolarCity as Executive VP of Operations in April of last year. An SEC 8-K issued today announced his appointment as COO at the solar installer and financier. SolarCity's founding COO Peter Rive will continue as CTO and a member of the Board of Directors.
Nexant, an energy software and services firm, named Jonathan Foster as CFO. Previously, Foster served as CFO of LS9, a biochemicals development firm recently acquired by Renewable Energy Group. Foster's previous positions include CFO at Atempo, CFO at Keymage, and Deputy Director for Management and General Counsel for the White House Office of Science and Technology Policy.
Peter Schenck has moved to Vice President Acquisitions at solar project developer Soltage. Schenck was previously Director of Sales at Jinko Solar. Soltage just announced a JV with the Libra Group for a $40 million equity fund led by John Hancock Life Insurance Company to build and operate a portfolio of solar plants on the Eastern Seaboard.
SunEdison added Todd Michaels, formerly of NRG Energy, as VP of Product Innovations.
Solar balance-of-system vendor Shoals Technologies Group promoted Daniel Koulianos to VP, Global Emerging Markets.
The Department of Energy is targeting from $1.5 billion to as much as $4 billion for a new renewable energy project loan guarantee program, one that could open the door to solicitations for a range of smaller-scale, distributed and grid-integrated projects by the end of this year.
These details on a potential second round of DOE green energy loans were provided by Peter Davidson, executive director of DOE’s Loan Programs Office, during a Wednesday interview at the ARPA-E Energy Innovation Summit outside Washington, D.C. It could be the first time a DOE official has put a dollar figure on a much-anticipated, but mostly hinted-at opportunity for renewable and carbon-free energy projects on the verge of commercialization to access the department’s remaining loan authority.
The amount will be a lot less than the $16 billion in loans DOE delivered to massive solar-thermal projects like the Ivanpah solar tower project, Abengoa’s Solana and SolarReserve’s Crescent Dunes, and utility-scale solar PV projects like Agua Caliente, California Valley Solar Ranch, Antelope Valley, Desert Sunlight and Sempra Mesquite. The last loan from that program, known as the 1705 program, was issued in Sept. 2011, and DOE has remained mostly quiet on new loan guarantee opportunities since then.
No doubt the failure of loan-backed solar manufacturing companies Solyndra and Abound Solar, and the political firestorm that ensued, had a role to play, even though the DOE has cited the program’s 97 percent of still-good loans as evidence that it has picked well so far.
But since October, when Davidson, a former investment banker, took over, the loan office has issued about $6.5 billion in guarantees for two nuclear reactor projects, as well as soliciting projects for an $8 billion fossil fuels technology program -- and renewables are next on the list, Davidson told me.
“It’s our intention to use the authority created by Congress to help replicate the type of success stories we’ve had in wind power, solar PV and CSP [concentrating solar power],” he said of the new program. But he added, “Since we’re not going to have $16 billion anymore, where can we make loans? If the company can demonstrate the technology [and] the technology can function at commercial scale…where will [the funds] still make a difference and move the needle in that industry?”
While DOE’s 1705 program funding is gone, the Loan Programs Office still has $1.5 billion in remaining renewable energy authority under the separate 1703 program, he noted. It also has roughly $2 billion in mixed-use authority, as well as hundreds of millions of dollars in credit subsidy authority, that could add up to about $4 billion in available funds for a renewable solicitation.
None of this is set in stone, Davidson emphasized. But the Obama administration and Energy Secretary Ernest Moniz are eager to fulfill the program’s mandate to back innovative technologies and business models that reduce greenhouse gas emissions, and are viable for commercial scale, yet lack the track records to obtain purely private financing.
In terms of what these next-stage projects might look like, “We’re having those discussions within DOE; we’re having those discussions within the national labs,” he said. "Given the size of loan authority we’re going to have, where will we have impact and be able to transform industries?” (Davidson will be speaking at Greentech Media's Solar Summit 2014 conference in Phoenix on April 14-16, where we may hear more details on this emerging opportunity.)
Smaller, More Grid-Integrated, and Seeking Secure Payback Streams
First of all, it’s clear that any new program will be targeting much smaller projects than the $800 million average loan amount -- and some, like Ivanpah’s $1.6 billion, much larger -- given to the eighteen generation projects funded under the previous program, he said. Second, the new program is likely to target projects that are aimed at answering new challenges -- including those raised by the same kinds of market transformations that the first round of projects helped bring about.
About 10 percent of the 10 gigawatts of U.S. solar energy now on-line came from DOE loan-backed projects, but that kind of support isn’t needed for large-scale solar PV or wind power anymore, he noted. But the growth of renewables is raising a whole host of new challenges, and “one is the integration of renewables into the grid,” he said.
“How do you go from intermittent renewables, to fully dispatchable renewables over time? We have a couple of projects that are demonstrating how that transition can go forward,” including two solar thermal projects, Abengoa's Solana project in Arizona and SolarReserve’s Crescent Dunes project in Nevada, that use molten salts to store heat energy for hours and reduce the units’ dependence on sunlight for when they can generate power.
But there are more possibilities for bringing stability and flexibility to intermittent wind and solar resources, he said. “California now has a huge storage mandate,” becoming the first state to demand grid energy storage ranging from utility-scale to customer-sited technologies. DOE will be looking for “other ways we can work with storage on a more distributed scale,” Davidson said.
Another realm “almost ready for a technological transformation” is waste-to-energy, he said. “We have a huge problem in this country with municipal solid wastes, going into landfills, creating huge methane leakages.” Technologies that offer cost-effective ways to capture and convert that waste to create energy or fuels could be viable targets for loan backing that could, once again, “tip the needle” toward commercial viability, he said.
Even hydropower could be a target for advanced technologies, he added. “The average turbine in a dam in the United States today is more than 50 years old,” he said, and could be ripe for replacement with newer technologies like fish-friendly turbines that also increase energy generation efficiency. But these kinds of projects are subject to a number of challenges, like determining ownership of the improvements, and dealing with the environmental reviews for renovations of this nature. “We would say, if we were able to provide loan guarantees, put money against the problem -- would it help solve that?”
This point brings up an overarching challenge in bringing “bankability” to renewable energy projects, he said. All of the eighteen large-scale renewable projects backed by DOE’s 1705 projects had secure payback streams, in the form of power purchase agreements for the energy they produced, he noted. While DOE’s loan program doesn’t require that all its projects have solid offtake agreements for the energy they’re meant to produce, “From our perspective as lenders, we have to make sure that if the generation is produced, there’s a buyer -- and that the buyer will pay enough,” he said.
In other words, “There has to be someone who will buy the power,” he said. That could come via PPAs from utilities seeking to fill state-mandated renewable portfolio standard (RPS) quotas, or contracts with private buyers. It could also come from broader policy-driven payback streams, such as the feed-in tariffs offered by a handful of jurisdictions in the United States -- or, perhaps, the net metering policies that are a far more common method of valuing renewable energy at the state level, but far more uncertain in terms of their long-term payback potential.
“However states decide that has an impact on the cash flows and revenue flows of a project -- and we can finance a project if it becomes bankable,” he said. While binding offtake agreements are the simplest and most reliable way to do that, “there are other ways that you can show that -- but that’s what our in-depth due diligence is all about.”
Tesla CEO Elon Musk provided some more details on the company's proposed battery factory:
Here's a link to the SEC 8K form filing. It reads:
On February 26, 2014, Tesla Motors, Inc. (the “Company”) issued a press release announcing an underwritten registered public offering of $1.6 billion aggregate principal amount of convertible senior notes, comprised of $800.0 million aggregate principal amount of convertible senior notes due 2019 and $800.0 million aggregate principal amount of convertible senior notes due 2021. In addition, the Company intends to grant the underwriters 30-day options to purchase up to an additional $120.0 million in aggregate principal amount of convertible senior notes due 2019 and up to an additional $120.0 million in aggregate principal amount of convertible senior notes due 2021.
Here's an idea of the scope of the plant by production:
Here's a rendering of the proposed plant:
Here's our earlier report on the Giga factory:
Last week EV pioneer Tesla Motors announced strong fourth-quarter results with record shipments and gross margin. Its investor newsletter also included a tantalizing paragraph:
Very shortly, we will be ready to share more information about the Tesla Giga factory. This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.
During last week's earnings call, Tesla CEO Musk said to stay tuned for the Giga factory announcement this week.
Musk also said that Panasonic, currently supplying hundreds of millions of cells to Tesla, would likely join in on the new factory. Samsung has been mentioned as a potential partner. I'll throw in Apple as a potential partner; computers and tablets need lithium-ion batteries (albeit in different form factors), and there's been talk of recent Apple-Tesla meetings.
The Tesla CEO envisions "a plant that is heavily powered by renewables, wind and solar, and that has built into it the recycling capability for old battery packs."
“It is going to be a really giant facility. [...] We are doing that something that’s comparable to all lithium-ion production in the world in one factory," said Musk in a previous earnings call.
Investment bank Barclays writes, "For the time being, our model does not reflect the additional cost of building out a giga factory, or the significant potential revenue that Tesla could generate from non-automotive sources such as grid storage. Optionality could provide upside for the stock, as investors consider the potential upside to revenue from non-automotive sources."
“We believe the days when Tesla was known as purely an auto company are numbered,” wrote Morgan Stanley analyst Adam Jonas in a January research note, adding, "We are witnessing the most disruptive intersection of manufacturing, innovation and capital experienced by the auto industry in more than a century.” Jonas also opined that “Tesla may be in position to disrupt industries well beyond the realm of traditional auto manufacturing. It’s not just cars."
Global Equities Research analyst Trip Chowdhry said New Mexico would be an “ideal” location for the $2 billion factory according to reports in the Albuquerque Journal. He told the Journal that he believes Tesla will announce plans to build the facility in New Mexico in the next “six to eight months." According to the Journal, "The analyst said the factory would be capable of generating 30 gigawatts of production capacity a year, which would make it the largest such facility in the world. It may also manufacture a hybrid battery pack that could increase the driving range on Model S cars by 10 percent to 15 percent."
An energy investor contact emphasized that the battery pack is the strategic component to Tesla's vehicle, and just as Apple often does for critical technology, Tesla is vertically integrating -- or possibly taking an Apple/Foxconn funded manufacturing partnership approach. "Musk has the ability to mark up the price of his high-end finished vehicle, whereas most battery manufacturers/developers are stuck in an incredibly competitive market, requiring massive scale, with little pricing power and visibility to end consumers," the contact said.
Chet Lyons, principal at Energy Strategies Group (and author of our grid-scale energy report), writes, "This audacious move by Tesla and Panasonic will be the subject of heated crisis discussions in board rooms around the world. Collective reaction to it will lead to global retooling of supply chains and manufacturing and distribution strategies…and result in disruptively lower cost structures for both the EV and grid-scale energy storage industries. This development sounds a death knell for some companies…and signals a new frontier opportunity for many others. In short, I see this as a total game-changer."
Haresh Kamath, energy storage expert at EPRI, notes, "Everyone knows that the big cost that makes EVs more expensive than conventional ICE cars is the cost of the battery, although there’s some cost difference in other components too. The question is, how do you make the battery as cost-effective as possible?" He adds, "Most auto OEMs take the strategy of reducing battery cost by maximizing value. They make the battery as small as possible and try to make sure it's highly utilized, so the battery is discharged as much as possible on each drive. And then they try to maximize the value some more by using the battery for the grid, say through V2G or post-vehicle second-use. The extreme example is Toyota, which puts this tiny battery in the plug-in Prius that only gets around 11 miles electric range, but it’s relatively low cost and most people use 100 percent of it on every drive."
Kamath continues: "Tesla takes the diametrically opposite approach. Tesla has a gigantic 85 kilowatt-hour battery pack. That’s part of its design philosophy: Tesla wants high power and long range in the car, but it’s expensive. But now, since they’re producing so many kilowatt-hours for each car, Tesla has the opportunities to reduce cost through sheer scale. The firm can make a giant plant producing as many kilowatt-hours as possible and amortize the cost of the plant over the kilowatt-hours produced, to try to reduce the fixed cost per kilowatt-hour. Instead of second use, they produce more battery and put it directly into stationary use right now. The whole idea is to get production volume as big as possible as soon as possible so that cost falls through economy of scale."
This isn’t a new strategy for Tesla. The company has been using commodity 18650 battery cells all along, and those cells are manufactured at a scale like nothing else in the battery world. The difference now is that Tesla wants to use a unique technology, and to make its $/kWh cost numbers, the company needs to try to achieve production scale immediately, which means investing in giant capacity.
Kamath adds, "Tesla isn’t completely alone in this strategy. This was the basis of Nissan’s approach too, and we’ll see if its huge new factory in Tennessee pans out. But this strategy is risky. If the market doesn’t materialize, you’re stuck with this huge factory on your hands. Several other companies tried this just a couple of years ago, with government money no less, based on some pretty aggressive ideas on how quickly the market would materialize. But maybe it’s different with Tesla. This is a company that’s used to making its own market, and it’s been very successful with that."
The Q4 investor newsletter mentions the "solar power industry’s need for a massive volume of stationary battery packs," and presents one of the wild cards of this Giga factory scenario. In addition to vertically integrating its automotive business from the ground up, Tesla has the potential to disrupt the storage and solar industries as well.
Tesla's cousin company SolarCity has already started deploying Tesla-battery-pack-based energy storage systems combined with solar in both residential and commercial applications. Tesla's lower-cost batteries could help energy storage pencil out better than it currently does. Combine the improved economics of lithium-ion energy storage with the SolarCity sales and leasing machine -- and these emerging storage markets could grow big and fast.Some Q4 Tesla Financials
Tesla had Q3 revenues of $615 million at a 25.2 percent gross margin. The firm sold a record 6,892 Model S vehicles during the period -- expecting to ship 35,000 Model S units in 2014, representing more than 55 percent growth over 2013. Production is expected to increase from the current level of 600 cars per week to about 1,000 cars per week by the end of the year. First-quarter production is expected to be about 7,400 vehicles. Battery cell supply will continue to constrain production in the first half of the year, but will improve significantly in the second half of 2014.
When microinverters and optimizers first entered the market, their value propositions were largely similar: increased energy harvest, lower risk from module-level data, and improved safety. However, as module-level power electronics (MLPE) suppliers grew more sophisticated, their value proposition changed: Microinverters focused on design simplicity, DC optimizers focused on reducing cost at the inverter and electrical BOS, and all technologies found that they enabled larger systems, increasing profit for everyone in the value chain. According to GTM Research's newest solar report, the MLPE segment is riding these four benefits to strong growth -- and in the process, it is changing the way solar systems are designed and installed.Design Simplicity
Because microinverters operate independently, they are inherently simple to design. Anyone trained in basic layout rules can lay out a rooftop with microinverters. This leads to a number of different benefits, including:
Because these are business-model-level changes, the customers who adopt microinverters tend to be very loyal.Design Flexibility: Expanding System Size
With MLPE, system designers can more aggressively design near shade, resulting in larger and more profitable systems. On a typical commercial rooftop, a single power pole could reduce the system size by 17 percent. With MLPE, these shaded modules can be added back.
Module-level optimization enables marginal modules to produce more energy and therefore become more economically viable, as the following chart indicates.
A larger system is more profitable, since fixed costs can be amortized over a larger project. As an example, consider a 1-megawatt project that can be expanded by 10 percent.
The 10 percent increase in system size increases the project profit by $75,000, or $0.075 per watt. Besides increasing developer profit, this benefit also increases the number of modules used on a project -- making the module manufacturers happy.Improved Inverter Design and Reduced Cost
When paired with DC optimizers, inverters can be redesigned for cost and efficiency improvements. When optimizers can provide inverters with a constant voltage, there are two benefits: the voltage boost stage can be eliminated (thus reducing cost and increasing efficiency), and the inverter can handle more power (because the components can be run closer to their maximum power). Joint-certified products have shown a 10 percent to 80 percent boost in nameplate rating.
Reduction of Electrical Balance of Systems and Associated Labor
DC optimizers can also reduce the conductor quantities needed in solar arrays. Optimizers limit the module’s max voltage to the Vmp, enabling system designers to connect more modules in series. Module strings can be “stretched” by 30 percent to 50 percent, which results in fewer DC combiner boxes and less DC wiring and labor.
As a result, optimizers can save 30 percent to 40 percent of electrical balance-of-system and electrical labor costs. The DC electrical costs vary significantly based on the size and location of the array, with total costs anywhere from $0.10 to $0.25, so the value of reducing these costs can be anywhere from $0.03 to $0.10 per watt.
While energy harvest from module-level optimization is important, there are a number of other factors that are driving significant value for these products. As the market learns how to deploy these design innovations, the opportunity for this segment will grow even further.
For more on GTM Research's new report, The Microinverter and DC Optimizer Landscape 2014, click here.
Opower is undergoing a major evolution in its business model that may take it well beyond efficiency and into the management of distributed energy systems in utility territories.
With the release of its fifth-generation software today, that seems to be where Opower is headed. And it's just one of many offerings the Virginia-based company sees in its future.
"We're having conversations with lots of utilities about how they can play in distributed generation," said Dan Yates, Opower's co-founder and CEO in an interview. "This is rippling across the country, and we don't think it's fair to cut utilities out from saving themselves against the competition."
Yates wasn't ready to be specific about what that might look like, but he said it was part of a "multi-year evolution" that has moved the company into deep customer analytics, smart thermostat integration and residential demand response. With Opower analyzing 100 billion meter reads a year (and counting), one can imagine the value that that information would have for utilities interested in targeting distributed generation opportunities, electric vehicle integration or battery storage.
"It's all the same stuff" in terms of data management and behavioral science, said Yates.
Opower has succeeded in large part because it is a helpful ally to utilities that are required to encourage efficiency. By analyzing utility metering data, the firm sends out messages to consumers through mail, email, text or the web about how they stack against their neighbors. The approach, based on simple behavioral science, has proven remarkably effective for getting consistent residential savings in the 2 percent to 4 percent range -- enough to keep the regulators happy and show that utilities are doing something innovative.
But that part of the company's history is old news.
As Opower has expanded to 93 utilities and crunched data on more than 32 million consumers, its cloud-based software is becoming deeply embedded into utility customer care and electronic billing operations. The result is a company that no longer just does behavioral analytics, said Yates.
"We’ve outgrown our moniker. We are an enterprise customer engagement platform," he said.
Chalk up Opower as the latest intelligent efficiency company in recent months to declare its original description outdated -- joining the ranks of companies like EnerNOC, FirstFuel and Nest that are in the process of rebranding.
The Opower 5 platform is part of that evolution, said Yates. In 2012, the company was getting so many requests from utilities for customization and deeper ways to categorize customers that it couldn't keep up. So over the last eighteen months, Opower has re-architected a new brand new portal based on Apache Hadoop that can handle billions of data points every minute.
The system also utilizes Elasticsearch, a big-data search engine that can instantaneously sort a utility's customers based on location, income, engagement, energy usage and a host of other categories. And along with having customized data on the back end, the utility can also customize the web portal in virtually any way it wants.
"The idea is to give the utility a visual segmentation and provide granular business intelligence," said Yates. "They now have new ways to look at customer data, and we can offer 21st-century marketing."
As Opower moves deeper into residential demand response and smart thermostat integration, it has also added new tools for utilities to manage those programs.
Over the summer, Opower partnered with the Baltimore utility BGE to test out its behavioral demand response program. With simple customized emails and text messages, Opower was able to lower residential demand by 5 percent during peak times. The company said a nationwide rollout could reduce the per-kilowatt cost of demand response by 40 percent.
BGE has expanded the program from 300,000 homes to 1.1 million this year, and Yates said that five new partnerships with utilities could be announced soon. Rather than requiring utilities to invest upfront in switching equipment that may or may not be used during peak times, Opower sees itself as an "insurance provider" that can deploy at low cost when needed just through behavioral cues.
On the smart thermostat side, Opower hasn't had many major updates since partnering with Honeywell in 2012. But Yates said that more functionality will be coming soon now that Honeywell has relaunched its smart thermostat.
All of this new functionality comes as Opower prepares to go public and prove to investors that it can grow well beyond its roots to stay competitive.
It certainly puts Opower in a unique position. While there are plenty of other companies trying to get in the home -- telecoms, security firms and smart equipment producers -- none of them have quite carved out the same relationship with utilities.
Nest and Opower are often pitted against one another as their offerings start to converge. But the company with the closest approach in the residential space may actually be Tendril, which, after a very troublesome shakeout 2012, is repositioning itself to be a "software-centric energy service management" company for utilities. Time will tell if competitors like Tendril can match Opower's steady pace of new offerings and customers.
A lot has changed for Opower over the years. And if the firm can find ways to make data from solar generation, electric vehicles and other distributed energy technologies even more useful to utilities, we could see yet more substantive change.
"We are a much different company today than we were five years ago," said Yates.
ARPA-E, the Department of Energy’s cutting-edge energy research program, is seeing increased private-sector buy-in for the projects it’s brought from concept to near-commercialization reality. But with those successes come some failures, and not a few pivots to realign original plans to meet the needs of the market.
This is the update from this week’s ARPA-E Energy Innovation Summit outside Washington, D.C., where the program meant to recreate DARPA’s technological achievements, such as the development of the internet, in the energy sector is taking its annual appraisal of how far it’s come in its five years of existence, and where it’s planning to go next.
On Tuesday, ARPA-E announced that twenty-two projects that have received about $95 million in federal funding have raised a collective $625 million in private-sector investment. That figure is up from last year’s tally of seventeen projects with $70 million in ARPA-E funding gathering $450 million in private sector funding.
This figure doesn’t include the two ARPA-E funded companies that have gone public in the past few years. One, bioengineering company Ceres, raised $65 million in its February 2012 IPO, far less than the $100 million it had targeted, and has since seen shares fall from a high of more than $17 a share to less than $2 per share today. The other, Ideal Power, raised $17.5 million in its December IPO, and is starting to bring its unique power converter technology to market (stay tuned for more on Ideal Power coming soon).
That’s out of 362 projects that have received more than $900 million through ARPA-E’s programs and open solicitations, and that list keeps growing. Just this month, Energy Secretary Ernest Moniz announced $30 million for twelve projects seeking to combine solar PV and solar thermal energy storage, under its FOCUS (Full-Spectrum Optimized Conversion and Utilization of Sunlight) program. Another $30 million program, titled REBELS (for Reliable Electricity Based on Electrochemical Systems), launched in November to solicit projects that can combine chemical energy storage systems such as fuel cells with solar, and awards for that project are expected to be announced soon.
At the same time, eighteen projects funded by ARPA-E have been canceled prior to their completion, Cheryl Martin, interim director of the agency, said in a Tuesday talk with reporters. That’s not unexpected, perhaps, given the experimental nature of the projects being funded in fields from power electronics and renewable energy to biofuels and carbon capture and sequestration.
More common than failures, Martin said, are projects that have “pivoted, either in their technical approach, or where they were going with it, how they engaged with the market.” That can apply to applying technologies to end uses different than those originally envisioned, as well as to finding ways beyond standalone commercialization to bring these technologies to market.
Corporate strategic investors and licensing partners are one likely route, particularly for technologies like materials science or carbon capture that require huge infrastructure investments to bring to scale, Martin said in a Monday interview.
Another common partner is the government: witness ARPA-E grant-winning flow battery company Primus Power and its work with defense contractor Raytheon on a microgrid project at the Marine Corps Air Station in Miramar, Calif. More than sixteen ARPA-E projects have partnered with other government agencies for further development.
Other ARPA-E programs, such as its SWITCHES (Strategies for Wide-Bandgap, Inexpensive Transistors for Controlling High-Efficiency Systems) funding for next-generation semiconductors, are broad enough to potentially apply from everything to microelectronics to electric vehicles, variable-speed drive motors, solar inverters and grid-scale power electronics, she noted.
“We don’t know today what value people will start to attribute to it, once they see it’s possible,” Martin said. She highlighted the importance of “staying close to [the] market," so that the "market feeds you back the information on where these things are going to be used.”
And while venture investment is one way to measure success in the green technology field, it’s far from the only one, she said. Some ARPA-E grant-winning companies have done well raising VC funding and landing customers and partners on their own, such as smart grid data analytics startup AutoGrid, she noted. But others have business models that simply don’t mesh with the fast and outsized returns that VC investors are looking for.
“If we were a venture firm, we’d be saying, when are they going to go public? When do we get an outcome? At ARPA-E, I don’t care if they go public,” she said. “What I want them to do is to get that technology into the market.”
Here’s the complete list of ARPA-E projects that have won private funding to date:
Microgrids get a lot of lip service at clean energy conferences, even if real-world applications are mostly in the pilot phase. Whether they are defined as generation paired with some storage or mini electrical grids with sophisticated, automated controls, many industry experts, from utility executives to engineers, increasingly see microgrids as an inevitable part of the changing global electric system.
There are many issues to work through, including developing standards for interconnecting the disparate technologies, building business cases that quantify resiliency, and bringing down the cost of energy storage.
At the 2014 ARPA-E Energy Summit outside of Washington, D.C., microgrids came up at various panels, even though specific microgrid solutions are not an integral part of the ARPA-E funding (bringing down the cost of batteries and renewable integration, however, are the goals of two of the ARPA-E programs).
While the world watches the advances made by deep-pocketed defense departments and billionaires, here are ten of the most telling quotes from the ARPA-E Summit about where microgrids are today and what it will take to move them from buzzword to infrastructure reality in the coming years.
Jim Galvin, program manager of energy and water for the U.S. DOD’s Environmental Security Technology Certification Program, on early technology challenges:
“Microgrids matter to the DOD because reliability matters,” he said. “But once you start diving down into the technology, it becomes very difficult. We’re interested in investing in the technology, but also figuring out the business model. They are expensive.”
Robyn Beavers, founder of Station A Group and SVP of innovation at NRG Energy, on the value of microgrids:
“We see resiliency and safety as design requirements. That’s the bare minimum, but not necessarily what [customers will] pay for.”
Haresh Kamath, program manager for energy storage and distributed generation at the Electric Power Research Institute, on technical issues:
“We’re looking at it closely, but there are some obstacles. Some are technical; we need some control technologies. We’d like to see it more broadly implemented. From an economic standpoint, there’s still a question of where and when they make sense.”
David Crane, CEO of NRG Energy, on building simple microgrids that pair storage with solar:
“In Haiti, the cost of storing electricity is killing us.”
John Hewa, CEO of Pedernales Electric Cooperative in Texas, on re-envisioning the grid for the future:
“There will be embedded energy storage [at every layer of the grid],” he said. “It will be a collection of microgrids.”
Sumit Bose, senior electrical systems engineer at GE Global Research, on microgrids as complete systems that incorporate renewables, waste heat recovery and efficiency:
“This holistic view is very important. It’s not just electricity. It’s heating and cooling energy,” he said. “That’s the holy grail. How do you trade that with the risk of not having a resilient system?”
Peter Davidson, executive director of the Loan Programs Office at the U.S. Department of Energy, on microgrids as part of the loan program’s $8 billion solicitation for advanced fossil fuel energy projects:
“We hope we get some applications for the microgrid area. A microgrid with a fuel cell that’s fueled by natural gas certainly applies,” he said. “There are certain parts of the country right now where installing a microgrid makes great economic sense.”
Daniel C. Esty, commissioner of Connecticut Department of Energy and Environmental Protection, on building the business case for microgrids in Connecticut and beyond:
“What will make this work is understanding that it’s a package deal. It’s combined heat and power, it’s storage; it’s demand reduction.”
Joseph M. Rigby, president and CEO of Pepco:
“Going forward, we want to support microgrids. We don’t see distributed generation as a threat.”
David Crane, CEO of NRG Energy, on microgrids that bring together solar and natural gas generation for the home:
"There are already 40 million homes tied to a natural gas system. All they need is a gizmo in the basement to make electricity,” he said. “Then you tell your electric utility to go jump in the lake.”
Renewable energy made up nearly 100 percent of the new generating capacity installed in the United States in January, according to a new government report.
The monthly Energy Infrastructure Update from the Federal Energy Regulatory Commission shows 325 megawatts of new generation going into service in January. The breakdown is 287 megawatts of solar, 30 megawatts of geothermal steam, 4 megawatts of wind, 3 megawatts of biomass, and 1 megawatt of “other” (PDF). Don’t know what that “other” was, but it wasn’t natural gas, coal or oil, so we’re calling this an all-renewables month.
Most of the new solar power came in the form of a few big projects in the Southwest, but North Carolina was active (again), too. Here’s the full roster of projects highlighted in the FERC update:
It has to be said that FERC’s month-to-month reports can be volatile: Last year, solar made up 100 percent of new capacity additions in March, then just 2.5 percent in April. Nevertheless, even with wind suffering a down year in 2013 (likely to be reversed this year), renewables ended up accounting for about 37 percent of the new capacity installed, and they appear to be off to a good start in 2014. As always, too, we note that the FERC data includes only utility-scale development, leaving out rooftop solar on homes and businesses, a sector that these days is averaging over 100 megawatts of new capacity every month.
Consumer Reports just put the Nest smoke (and carbon monoxide) detector through its paces and gave it a mostly positive review. But the consumer product review organization also "found some gaps."
Nest's well-received thermostat looks great and arguably performs better than many programmable thermostats on the market. Similarly, one would assume that the best-designed smoke detector on the market should be the best at detecting smoke.
Last month, Google announced that it was buying Nest Labs -- the VC-funded thermostat startup founded by former Apple engineers -- for $3.2 billion in cash. Nest has promised to redesign many of the common objects in the home.
And next on Nest's hit list is the homely and unappreciated smoke detector.
The consumer product testing organization praised the convenience features of the device -- such as the ability to "wave off" the alarm with a hand gesture (rather than standing on a chair and pressing the power button with an awkwardly extended broom handle). There is a lighting feature as well. The unit can connect with other detectors or the thermostat via Wi-Fi.
"The convenience features worked as promised," determined the agency, although one of Consumer Reports' engineers called the networking setup process “an exercise in frustration.” The review went so far as to say that "only the truly tech-savvy should attempt installing and using the Nest Protect."
The carbon monoxide test worked fine, according to Consumer Reports.
But there were some gaps when it came to smoke detection.
Smoky, smoldering fires are better detected with a photoelectric sensor, and the $130 Nest device performed well in this test.
But fast fires are more readily detected with ionization sensors, according to CR -- and in this test, the Nest device did not perform as well as the well-reviewed detector from Kidde (which costs $23). The Nest device only has a photoelectric sensor, according to the review.
The bottom line from CR is that "Nest does what it's advertised to do -- detects carbon monoxide and smoke" and has strong convenience features -- but the Nest unit "is not your safest option on the market right now."
Consumer Reports suggests that the safest solution is installing separate carbon monoxide and dual-sensor smoke detectors in the house -- and the reviewer wonders why a company like Nest hasn't combined these capabilities.
The final verdict? CR is "not adding Nest Protect to [its] recommended list of smoke alarms."
Google didn't buy Nest for its smoke alarm. It was a big move into the home and the consumer "internet of things." But Nest has set such a high bar for itself (and such a high price point) that it has to deliver superior performance. Rabid Apple fans and early technology adopters might be misguided and willing to overspend, but they will not tolerate mediocrity and lack of performance. Perhaps there are upgrades to come and the potential to incorporate learning into the smoke detector, just as with the thermostat.
According to GTM Research, the home energy management market was valued at $1.5 billion in 2013. That includes hardware, software, subscriptions and residential demand response programs.
Nest has not yet responded to inquiries from GTM.
For the better part of the past two years, the phrase “capacity expansion” in the PV manufacturing industry had been about as fashionable as a Nickelback t-shirt at an indie rock concert. That is, until recently.
After a prolonged dry period, the past quarter has witnessed a spate of announcements by firms across the PV value chain for capacity additions in 2014, as shown in the table below.
It is worth noting that this is not a comprehensive list of 2014 capacity additions, just recently announced ones, and so it excludes most new polysilicon additions. Lead times for polysilicon plants are long, and almost all of the new capacity coming on-line in 2014 was announced more than a year ago.
Source: GTM Research Global PV Competitive Intelligence Tracker
In looking at the table above, one is reminded that most, if not all, PV manufacturers have only been back in the black for a couple of quarters; it was only a year ago that the PV manufacturing sector seemed firmly entrenched within the throes of overcapacity.
How, then, is one to interpret these announcements? Do they reflect irrational exuberance on the part of a few overly aggressive suppliers due to a recent period of stable pricing? Or do they signal that an inflection point has been reached in PV supply-demand balance, and that other well-positioned suppliers will follow the trend set by these early movers?
The chart below attempts to answer this question by comparing installed manufacturing capacity at the end of 2013 to expected PV demand in 2014, which, in terms of installations, GTM Research estimates at almost 42 gigawatts. Accounting for inventory effects across the PV value chain, we see that supply in terms of available capacity exceeds demand in 2014 by 16 percent for polysilicon, 20 percent for wafers, 19 percent for cells and 40 percent for modules.
One would be tempted to conclude from this that even with strong end-market growth of more than 20 percent expected in 2014, the PV market would still be oversupplied and new capacity additions in 2014 would be unwarranted.
Source: GTM Research Global PV Competitive Intelligence TrackerHow Much Capacity Is Too Much?
But supply simply being in excess of demand is hardly an accurate criterion for defining overcapacity. The question is, how much is too much?
As with anything else involving data, the numbers themselves are useless without the context to correctly interpret them. Here, history can be our guide: as the chart below shows, even in relatively “tight” years such as 2010 when pricing was up and supply constraints limited installations, ramped module capacity exceeded end demand by as much as 30 percent.
Source: GTM Research Global PV Competitive Intelligence Tracker
How is possible that even with excess available supply of almost one-third, a market can still be balanced? There are multiple reasons for this.
Supply shortages for input materials like polysilicon can limit effective capacity levels, as was the case in 2010. Nameplate capacity is not always fully available due to downtime or labor shortages. Companies often over-report capacity figures (sometimes by orders of magnitude) to boost their profile. And during prolonged periods of overcapacity or price troughs, manufacturing lines can be idled and plants can be mothballed, as was the case for much of the past two years.
Our estimates show about 14.1 gigawatts of ramped module capacity were not active in 2013 -- much of it not competitive in an environment of $0.60 per watt average selling price. This explains why module pricing over the course of 2013 was stable-to-up for the most part despite module capacity exceeding demand by 67 percent.Where and How Will New Capacity Be Added?
Equipped with a rough guideline that excess capacity of under 30 percent represents a supply-constrained market, we can now begin to understand the case for capacity expansions in 2014, at least for well-positioned, cost-competitive firms. Assuming, then, that capacity additions become an industry trend in 2014, we can factor in expansions for other well-positioned suppliers over and above the announcements that have been made so far. To do so, some educated guessing must be involved, since whether a given firm decides to add capacity depends on a variety of hard and soft factors, including its competitive positioning, the availability of capital for expansion, and its confidence in future market conditions.
Due to the Chinese Ministry of Industry and Information’s restrictions on “pure” PV capacity expansion projects, capacity additions in China are likely to stem from acquisitions of smaller, weaker firms by established top-tier suppliers, something we have already seen with Jinko’s acquisition of Topoint and Trina’s ownership of NESL Solartech. While such acquisitive expansions will not technically add to the bottom-line supply figure, they will transform previously inactive capacity to active capacity.
Producers in other PV manufacturing regions, such as Taiwan, Malaysia and Japan, are likely to do so with new equipment purchases or even greenfield projects. And finally, larger incumbents are also likely to establish small greenfield plants in key demand markets in the form of joint ventures with local partners, as we have seen with ReneSola in Japan and JA Solar in South Africa.2014 Supply-Demand: The Base Case
After having accounted for likely expansions in 2014, a clearer picture of supply-demand for 2014 emerges, as shown in the chart below, where additional supply comes on-line to meet expectations of strong demand growth. Under this scenario, available supply for wafers, cells and module exceeds demand by 30 percent to 45 percent, implying a stable and balanced market. It is only in the case of polysilicon, where excess supply is just 13 percent, that we appear to be headed for a real supply shortage: this is the driving factor behind GTM’s previously expressed view that polysilicon pricing will climb back to levels of $25 per kilogram by the end of the year.
Source: GTM Research Global PV Competitive Intelligence Tracker2014 Supply-Demand: The High Case
Before rushing to conclusions, it is worth remembering a final point. Much of the analysis above ultimately comes down to our 2014 end-demand estimate of 42 gigawatts. But time and time again, early-year PV market sizing forecasts have proven to be conservative in the final analysis.
As with previous years, the forecast risk for 2014 seems to lie very much on the upside, with GTM’s high-case installation estimate for 2014 in the neighborhood of 50 gigawatts. In this case, the market would be grossly undersupplied, and significantly more manufacturing capacity than we currently forecast would have to be added to meet demand. Given China’s new PV regulations, still-prevailing constraints on capital spending and equipment lead times, it is unclear if suppliers would be able to react in time to meet such an upswing in demand, especially in the case of polysilicon.
Source: GTM Research Global PV Competitive Intelligence Tracker
In conclusion, there are definite signs that at long last, balance between supply and demand in the PV market has not just been restored, but is beginning to trend in the opposite direction from the past few years -- with the very real possibility of a supply shortage in the offing. Once again, it is a reminder that when it comes to the PV market, the winds of change can blow very quickly.
Shyam Mehta is Lead Upstream Analyst at GTM Research and author of the recently published report Global PV Pricing Outlook 2014. Join Shyam and other indutsty leaders at the upcoming Solar Summit in Phoenix.
It may come as no surprise that China leads the world in commercial cleantech investment, but it has not just inched past the U.S. or Europe; today, China has a commanding lead.
Commercial cleantech investment had more than quadrupled from $30 billion in 2007 to nearly $160 billion in 2012, according to a recent report from the National Science Foundation on science and engineering indicators.
More than a third of the 2012 investment ($60 billion) is in China, with the U.S. and Europe behind with about $27 billion and $29 billion, respectively. Most of the funding globally went to wind and solar.
“The uninterrupted growth of clean energy investments in China reflects the government’s policies targeted at wind and solar energy to make China a major world producer in these technologies and to reduce China’s reliance on fossil fuels,” the NSF wrote.
The remainder of the investment comes from other emerging economies, such as Brazil, India, Mexico and Indonesia.
One area where the U.S. continues to lead is in clean energy patents; the country holds about half of the approximately 8,800 patents. The U.S. also still commands about 80 percent of venture capital investment, with energy smart and energy efficiency technologies leading the pack in 2012.
The figures from NSF come in the wake of Bloomberg New Energy Finance's recent finding that China surpassed the U.S. for the first time in smart grid spending in 2013.
Fresh on the heels of its $10 billion Ecomagination investment into large-scale natural gas energy technologies, General Electric has announced a $1.4 billion, four-year plan to push into a new natural gas frontier: distributed power.
That’s the name that GE has given to its new business unit, aimed at creating new on-site power systems for a global customer base. It’s also released a white paper, “The Rise of Distributed Power,” that lays out the business case for a new approach to engineering, financing and maintaining a fleet of distributed, gas-fired gear.
GE’s announcement, made in the Indonesian capitol city of Jakarta, seems aimed primarily at parts of the world that lack grid electricity. Lorraine Bolsinger, president and CEO of the Distributed Power business unit, noted in Tuesday’s release that more than 1.3 billion people around the world don’t have access to reliable power today.
But as GE’s white paper notes, the distributed power revolution is overtaking industrialized countries as well as developing ones. Solar PV, which has been growing by leaps and bounds, represents the green power side of this equation, and Greentech Media has been closely watching the ways in which this exponential growth has been disrupting traditional energy utility business models and planning paradigms.
At the same time, solar PV is only a small, if growing, portion of this distributed generation landscape, as we’ve noted in recent coverage. Combined heat and power (CHP) systems that provide heat, cooling and electricity to university and government campuses and corporate facilities are a significant part of that total. And small-scale generators, whether they’re meant for emergency backup power, or for running most or all of the time to power island communities and neighborhoods and facilities in parts of the world where the grid can’t be relied upon, make up an even larger share.
Most of those smaller generators are diesel-fueled, which makes for a noisy, polluting and expensive way to keep the lights on. At the same time, the cost of cleaner alternatives has continued to drop, and combining intermittent distributed power like solar and wind with dispatchable resources like energy storage, fuel cells, or even fossil fuel-fired generators, is becoming more economically viable.
GE defines “distributed” power as anything under 50 megawatts, a category that stretches from basement or garage backup gen-sets to large-scale gas turbines or CHP systems. The key difference to be drawn, GE’s white paper notes, is between "distributed" generation and “central” generation -- the big utility-scale power plants that require long-term capital financing and project planning to bring on-line.
In simple terms, in a world where overall energy demand growth is slowing, new transmission lines are harder to build, and renewable solar and wind power are making up the majority of new generation investment, it’s becoming increasingly difficult to justify central generation’s outsized costs and timelines to development against distributed alternatives.
That concept is backed up by GE’s statistics and projections on the mix of central vs. distributed generation investment around the world. According to the white paper, $150 billion was invested in distributed power technologies in 2012, or about 142 gigawatts, compared to 218 gigawatts of central power capacity.
By 2020, GE projects the share of distributed power will grow to $206 billion to reach 200 gigawatts, representing an annual growth rate of 4.4 percent. That will actually outpace projected annual growth rate of 3.3 percent in global electricity consumption.
In other words, distributed generation could displace central generation, not just augment it, over the rest of the decade. GE isn’t envisioning a grid-disconnected world, however, but rather a grid-integrated distributed energy landscape. According to its white paper, “The forthcoming marriage of the internet and industrial machines promises to transform isolated distributed power technologies into remotely operated and synchronized fleets of virtual power plants.”
GE, along with the rest of its international grid competitors, is delving into the economic potential of microgrids and virtual power plants to help manage these new grid-integrated distributed energy resources. We’re seeing an increased focus on managing the mix of customer-owned distributed energy resources, power management systems, energy storage devices and other grid edge systems as discrete units, to help integrate them into the way utilities manage their grids and generate and deliver energy.
Finally, while GE's white paper does cite wind power and solar power as distributed resources in its mix, it’s pretty clear that it’s looking to natural gas to be the primary fuel of this distributed energy revolution. That may not sit well with renewable energy advocates, but it’s bound to be better than burning diesel to power communities and essential services in markets from China and India to Mexico and Egypt where GE’s white paper cites a big market potential for self-generated power.
For a company just starting to bring its brand-new power conversion technology to market, Ideal Power has some pretty big ambitions: to disrupt the way that solar PV, grid-scale batteries and EV chargers are connected to the grid.
But if its technology works as promised, and as ongoing Department of Energy tests appear to indicate it does, then these ambitions may just be justified.
That’s the promise that this quiet startup turned Nasdaq-traded company is bringing to potential grid storage partners at this week’s ARPA-E Summit conference outside Washington, D.C. Armed with a roster of patents related to its “Power Packet Switching Architecture” technology and just under $26 million in grants, debt and public market financing, the Spicewood, Texas-based company is now developing a set of power converter devices that it says can beat existing inverter technologies for small-scale PV, energy storage and "hybrid" systems on a range of grid-edge performance features.
Those include size and weight. Ideal Power’s 30-kilowatt devices are less than one-fifth the weight of similar scale commercial inverters, based on their reduction of passive elements like electrolytic capacitors and magnetic components. Ideal Power's device also doesn’t require a transformer to electrically isolate batteries from the grid, as is required for other inverters serving that bi-directional storage-grid power flow capability, further reducing weight, complexity and efficiency losses.
But more critically, “It’s all an indirect power transfer process,” Paul Bundschuh, Ideal Power’s president and chief commercial officer, told me in a Monday interview at the ARPA-E Summit. That’s because, unlike traditional inverters, Ideal Power uses a magnetic storage mechanism, or “high-frequency AC link,” to manage the conversion of direct current to alternating current.
This unusual method of converting power can achieve DC-AC efficiencies in the high 90 percent range -- in and of itself, not that much better than the best inverters on the market today.
But unlike traditional inverters, which work best in conjunction with specific batteries, solar PV systems and loads operating at optimal levels, Ideal Power’s technology can keep high efficiencies with different mixes of systems, operating at changing rates and states of charge and discharge, Bundschuh said.
In particular, traditional battery-linked inverters that have high conversion efficiencies at near-full rates of charge and discharge tend to see efficiency drop significantly when the batteries they’re connected to are discharging only a fraction of that power. In general, the lower the “rated power output” from the battery, the worse the traditional inverter is at converting it efficiently, he said.
Because many battery systems “tend to run at 10 percent to 20 percent of rated power, having a low rated power efficiency is, we feel, a good attribute,” he said. "We think that traditional systems are, today, bad at that.”
Overall, Ideal Power claims that it can reduce power losses from traditional inverters by one-third to one-half over a typical span of operating conditions that pertain over the lifetime of a battery-grid interconnected system, as shown by this chart:
Backing Up Its Disruptive Claims for Energy Storage
These kinds of comparisons are sure to draw fire from inverter manufacturers, plenty of whom have done extensive work in energy storage-grid applications. Indeed, as the provider of a brand-new technology, Ideal Power has a lot to prove in bearing out its claims -- which is where third-party tests come into play.
Take a recent report from the Bonneville Power Administration federal power agency, which tested Ideal Power’s battery converter devices in conjunction with a lithium-ion battery array from Powin Energy in Richland, Washington.
According to the BPA report (PDF), the combined system achieved a maximum round-trip efficiency of 86 percent and an average round trip efficiency of 84 percent, and high efficiencies in both charge and discharge achieved across low, medium and high states of battery charge. (While BPA did find Ideal Power's efficiencies a few percentage points lower than the company's stated claims, researchers noted that this could be due to the lack of revenue-grade metering at the test site, as well as the longer wire lengths used in the test.)
Ideal Power landed a $1 million grant from the Texas Emerging Technology Fund in 2010, an ARPA-E grant of $2.5 million in 2011, $4.75 million in convertible debt financing in 2012 from backer MDB Capital Group, and the $17.5 million raised in its December IPO. That’s not a lot of money to take on entrenched inverter giants, and it represents a “radically different approach” from raising lots of venture capital money, Bundschuh said.
Rather than build out its own manufacturing facilities, Ideal Power’s business plan is to license its Power Packet Switching technology to original equipment manufacturers, using primarily commercially available off-the-shelf materials and components, he said. “We develop and test prototype systems in our R&D shop, use a Texas-based subcontract manufacturer” for the reference products the company has deployed in tests so far, “and we can scale with anybody,” he said.
So far, Ideal Power has built its first two reference products -- a PV inverter that it’s sold to eleven different PV installer companies and an energy storage converter of the type tested by BPA. Its third product, a 3-port hybrid converter, has been part of a cooperative R&D partnership with DOE’s National Renewable Energy Laboratory (NREL) since May 2013, aimed at creating a reference architecture for systems that combine electric vehicle charging, solar panels, batteries and the grid.
A recent article (PDF) by John Merritt, Ideal Power’s director of applications engineering, lays out how the hybrid converter could combine solar PV systems and energy storage behind a single unit, which is a challenge for traditional inverters that tend to work best for either PV or batteries, but not both. (That’s one reason why SolarCity has so far chosen to put its PV systems and battery systems behind separate inverters for its storage-backed solar deployments, by the way.)
Buyers of Ideal Power’s reference devices include Johnson Controls, Sharp Labs of America, the U.S. Navy, NREL and NASA, according to the company’s S-1 filing with the Securities and Exchange Commission. In all cases, the main differences between the devices isn’t in the hardware, but rather in the software used to manage the indirect, AC-link-based system’s conversion of power from one side to the other, Bundschuh said.
“Most of our effort is going into embedded software development,” which is the key differentiator between the company's PV, energy storage and “hybrid” power converter systems, he said. That should provide a path toward increased cost reductions and flexibility over time, he said, driven by improvements in the core semiconductor materials that form the heart of Ideal Power’s stripped-down hardware architecture.
“The switches and the software get a lot cheaper every year, but that other stuff doesn’t,” said Bundschuh. Ideal Power’s $2.5 million ARPA-E grant is specifically aimed at incorporating “bi-directional insulated gate bipolar transistors (BD-IGBTs)” into its devices, which now use standard silicon switches, rather than more esoteric silicon carbide (SiC) or gallium nitride (GaN).
Ideal Power’s common, software-defined architecture also allows the company "to use a common platform for multiple markets, and gives us greater speed in addressing new markets,” he said. Because solar PV systems don’t vary their output that widely, “In general, our initial product for PV applications is interesting, but not disruptive -- and the market is so competitive with so many players, you have to have something disruptive to be noteworthy."
But for grid energy storage applications, a system that can keep its efficiencies across multiple and changing use cases could well represent a disruptive technology. Ideal Power’s converters could work with storage devices ranging from high-power, short-duration systems like ultracapacitors and flywheels, through mid-range lithium-ion batteries and up to multi-hour, low-power and high-energy flow batteries and advanced battery chemistries. “Our view is, we’re working with all those guys," said Bundschuh.
So far, it has landed one publicly announced partner: Eos Energy Storage, a startup working on a zinc-based long-duration battery chemistry set to be grid-connected by New York utility Consolidated Edison this year. While Bundschuh declined to comment on further partnerships, Greentech Media has been told that Ideal Power’s converter is being used by another battery startup, Aquion, in one of its off-grid, solar and generator-connected test projects. Energy software startup Growing Energy Labs Inc. (GELI) is also working on that project.
Distributed energy storage is set for rapid growth, as GTM Research has laid out in great detail in its recent report, Distributed Energy Storage 2014: Applications and Opportunities for Commercial Energy. While most of the focus on the economic competitiveness of grid storage has focused on the batteries, the power electronics that allow them to interact with the grid is an important part of the equation as well. Keep a close eye on how Ideal Power, and the rest of the inverter world, tackles the challenge of delivering products that can do the things the grid and customers need from grid-scale batteries.
Our definition of "energy security" continues to evolve.
During World War II, energy security meant access to oil for our fighting troops. Years later, the 1970s oil crisis highlighted our supply risk with the Middle East.
After September 11, 2001, with terrorism at the top of Washington’s agenda, the U.S. connected energy to national security, taking steps like fortifying entrance points to nuclear power plants and natural gas storage facilities and building added physical protection for our electric grid infrastructure. Last week’s gunfire attack on PG&E’s San Jose substation was likely the type of event they were anticipating.
By 2009, with stimulus dollars funding new smart grid rollouts, reports highlighting the new risk of cyberterrorism for our electric grid surfaced. A group of senators and congressman pushed to get the Department of Homeland Security and FERC involved, setting standards to better protect the sector.
In his 2012 book Quest: Energy, Security and the Remaking of the Modern World, Pulitzer Prize-winning author Daniel Yergin detailed this emerging risk, calling it ”cyber-vulnerability.”
This is the energy security theme that is becoming more visible in 2014.
Cyber threats are not new. What’s new is the acknowledgement of risk to new networks being utilized for energy-related systems. All it takes are a few events to get an issue on top of everyone’s agenda.
A decade ago, the U.S. was busy constructing a second layer of barbed wire fencing around nuclear plants. But the 2010 Stuxnet worm attack, which specifically targeted Iran’s nuclear infrastructure through Siemens energy control systems, showed that fences are no longer the way to achieve true security.
The recent revelation that data about 70 million Target customers was compromised via an HVAC vendor’s network was revealing. The HVAC contractor later clarified that back-door network access came not through an HVAC monitoring system, but through access to Target’s vendor portal for billing and project management. However, the most telling quote was the contractor’s description that the level of security protection was “industry standard.”
At Groom Energy, we’ve seen our customers increasingly point us toward installing completely separate networks for energy management applications. Corporate IT doesn’t like providing access for outside vendors, and building management teams prefer to avoid the battle. While installing secondary networks adds cost, the latest wireless HVAC, lighting, metering and energy monitoring systems are now designed to operate on a standalone basis and bring lower installation costs than even just three years ago.
Our friend Paul Baier, VP of Products at First Fuel, tells us that his company is also seeing more security audit requirements from its utility and corporate customers. While First Fuel only needs access to monthly interval cost and consumption data for its energy audit and monitoring application, customers are now holding the company accountable to the security standards associated with personally identifiable information.
Security challenges become even more daunting in the residential market, as smart meter and internet-based thermostat installations roll on. In this space, mom and dad are the IT security consultants.
Consider the Nest thermostat. Google’s Nest system already has perpetual internet access to over 1 million homes. Back-end network access could potentially provide open visibility to all of the home’s computers, entertainment systems and mobile devices.
In a world with so many systems at risk for cyberattacks, energy technologies are becoming some of the newest targets. These systems need to get the attention they deserve.
Jon Guerster is CEO of Groom Energy Solutions.
The process, manufacturing and R&D teams at First Solar are just killing it.
The top news on today's Q4 earnings call was First Solar crushing the previous conversion efficiency mark for cadmium telluride with a world record 20.4 percent, as announced by CEO Jim Hughes. That breaks the previous record of 19.6 percent, also held by First Solar, along with GE's acquired IP. Hughes said that the company would be revising its efficiency roadmaps upward at next month's analyst day.
Efficiency and cost on the production line are also moving strongly in the right direction.
The average solar panel efficiency rose to 13.2 percent in 2013 and 13.4 percent in Q4. The best production line in Q4 was putting out panels with an average of 13.9 percent. These gains in efficiency plus, other improvements, resulted in a reduction in cost per watt to 63 cents, a 16 percent reduction over the last two quarters. The firm reduced the average module manufacturing costs on its best plant from $0.64 per watt in the fourth quarter of 2012 to $0.53 per watt in the fourth quarter of 2013 (excluding underutilization and upgrades).
The company claims a book-to-bill better than 1:1, and the CEO called it a "tremendous result for the year" during the call. Management noted that project pipeline outside of the U.S. is 5.9 gigawatts (56 percent of total) and indicative of the ability of the company to expand its pipeline to sustainable markets. The company produced 444 megawatts in the quarter, and the production lines were 83 percent utilized.
First Solar had net sales of $768 million for the fourth quarter and $3.3 billion for 2013. But revenue of $768 million was down $497 million from Q3, due to project recognition timing and missed analyst estimates. Gross margin for the quarter was 24.6 percent.
First Solar also disappointed against consensus with Q1 revenue guidance of $800 million to $900 million, below a consensus of $898 million. Full-year guidance will be provided next month.
After-hour share price of First Solar is $50.60, down 12.8 percent.
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"Resiliency" is a buzzword in the American utility industry that is becoming a business strategy in itself. But regulators and utilities may have trouble building business cases on resiliency if they're already having problems with the classic model, according to David Crane, CEO of NRG Energy.
“Think how shockingly stupid it is to build a 21st-century electric system based on 120 million wooden poles," Crane said during the fifth annual ARPA-E Energy Summit. "You can strengthen the system all you want, but if you accept that we’re in the first stage of adaptation, the system from the 1930s isn’t going to work in the long term.”
Crane is often introduced as a utility executive at conferences, a misnomer that sends shivers up his spine, he says. NRG may not be a regulated, vertically integrated utility, but it is an incumbent power producer that has about 53,000 megawatts of generation, most of which is oil, coal and natural gas. But it is also an energy company looking toward the future, with solar, energy retailers and electric vehicle networks all under the corporate umbrella.
Although much of NRG’s business relies on centralized power production that uses fossil fuels, Crane is ready for a new energy landscape that is vastly different.
“I don’t understand why it’s so shocking [to imagine a scenario] where the grid is, at best, an antiquated backup system to a different way of buying electricity,” he said.
Even NRG's peaking generation assets could become a liability in coming decades. “The dark secret of the power industry is that American homes waste 20 percent of energy,” Crane said. Energy efficiency will never get far if it involves just asking people to turn things off, but “we’re just at the brink” of automation.
Once homes can automatically shave energy use during peak, Crane argues that utilities will lose out on one of the highest-value products in the business: selling power to homes. Many utilities would likely argue that a flattening of demand would put less strain on assets and help to avoid firing up expensive peaker plants, but for power producers, “As demand flattens, we’re going to stop making money, and that sucks,” said Crane.
Crane’s vision of a world where the 100-year-old grid is nearly obsolete was not shared by the other expert sharing the stage with him, Richard Lester, head of the department of nuclear science and engineering at the Massachusetts Institute of Technology.
”These will be dramatically different times coming up,” Lester said of the innovation coming to the electric industry. “But I don’t think David’s vision of getting rid of the grid is the way we’re going to go.”
They both agreed that changes in demand for electricity, especially given the increasing role of energy efficiency, and the changes in how consumers use and produce energy at the grid’s edge, will drive transformation. But Lester saw another aim -- decarbonizing the power industry -- as perhaps the most significant driver. He noted that driving down carbon may not necessarily mean that the grid becomes obsolete.
“We can’t address carbon just relying on end-user innovation,” he said. “We’ll need big wind, big solar, big nuclear and big transmission,” but he questioned the ability of the U.S. to be a leader in terms of completing large energy projects in the future. “Innovators will not be the utilities,” added Lester.
Crane disagreed about the role of carbon in driving the future of energy production and delivery, but did agree about the dearth of resolve in the incumbent industry and government to transform how business is done.
“We lack the ability to do great things in this sector in this country,” Crane declared. “Ivanpah was something that should be celebrated,” he said of the large concentrated solar project that NRG was involved with. “Instead, it’s just people saying, ‘You killed a bird.’ There’s no vision or passion.”
Both speakers concurred that nuclear should have a place in the new energy economy. “If you are solving for climate change, your strategy starts with nuclear,” said Crane. “The only problem is, I live in the real world.”
He argued that to really bring down cost and increase safety, the power industry should build twenty or 30 nuclear plants at the same time with the same design, “not just one in Georgia.” But there is no support in the political domain or the private sector for that type of investment in nuclear, whether traditional or small modular reactors.
Beyond nuclear, Crane said that the public's perception of renewable energy technologies is vastly more positive than it was even a few years ago. “Green doesn’t mean a compromise of capability and price,” he said, adding that consumer products like Tesla S are “kicking ass.”
And forget about just solar and electric vehicles as disruptors. NRG is also betting on natural-gas generators for the tens of millions of homes that already have natural-gas lines. “Why do I have two expensive electric delivery systems into my home?” he asked. “I don’t want the one that gets ripped down in every storm.”
HelioVolt was founded in 2001, received its initial VC funding in 2005, and aimed to fabricate CIGS solar panels using a process it called "reactive transfer." Thirteen years and more than $200 million in VC later, HelioVolt has shipped no commercial product of consequence, and has finally admitted defeat. Even its white-knight savior, SK Group, has thrown in the towel. HelioVolt's primary output has been press releases for the press and agita for its investors.
The sad and telling announcement came today. HelioVolt is seeking "strategic investment alternatives," has suspended its manufacturing activities and will reduce its workforce over the next two months. According to hometown paper the Austin Statesman, the firm had 127 employees.
The firm boasted a monolithically integrated module structure (as opposed to a selected cell architecture like Nanosolar), as well as some encouraging NREL efficiency test data. HelioVolt was been backed by , Morgan Stanley, New Enterprise Associates, Paladin Capital Partners Fund, Solucar Energia, Sunton United Energy, Texas Emerging Technology Fund, and Yellowstone Capital. Those VCs fled the company when HelioVolt received a $50 million investment from SK Group, Korea’s third-largest conglomerate, in 2011. HelioVolt also raised $19 million from SK Group last year.
HelioVolt's monolithic-construction panels were imagined to possess the same form factor as First Solar's, with what HelioVolt claimed was a comparable efficiency of approximately 12 percent. Like First Solar, these were to be frameless panels with an edge treatment and power output in the 75-watt to 80-watt range.
B. J. Stanbery, HelioVolt’s founder and CSO, who was employed by the product-free startup for thirteen years, suggested in a statement, “We are initiating this process because our strategic partner, SK Group, for reasons related to their business strategy, has informed us that they will no longer pursue their prior global solar PV goals. While we continue to highly value the relationship with SK and have made tremendous technical progress in partnership with them, we are disappointed by their decision at a moment when we believe the solar market is poised for exceptional growth.”
HelioVolt's board has suggested that it consider investment, joint ventures or an M&A transaction. Or acquisition by Hanergy.
A thin film expert offered this take: "Founded on the idea of a transfer process (FAST) which never worked, HelioVolt went to a two-step process and finally adapted co-evaporation. However, the co-evaporation process the firm decided to copy was that of Solibro -- using point sources and an upwards deposition orientation -- something with severe limitations in manufacturing." The firm was "indecisive as to the technology, and in terms of manufacturing, missed the key metrics of throughput, yield, uptime and efficiency completely."
If you would like to purchase the company, you can reach Dr. B. J. Stanbery at Stanbery@heliovolt.com.
Despite this news, the CIGS material system still has some life in it. Here's a partial list of CIGS solar players:
“Noisy.” That's how many analysts, investors and other onlookers have described the cleantech sector in recent years.
“Too many firms with identical value propositions chasing an indifferent market,” or simply “too noisy for us,” were the frequent claims.
For some firms, of course, they were right. Many startups failed to meet expectations once the easy cash of 2006-2009 from investors and public sources slowed down. It was reasonable for shareholders to step back and ask whether their partners would deliver on their promises. Would they fall back on the ropes or hit the mat? Would they be SolarCity or Solyndra, Tesla or Fisker?
However, the challenges cleantech set out to solve -- improving resource efficiency, protecting the environment and cutting pollution -- have only accelerated. A handful of firms have developed meaningful customer relationships and defensible business models to attack these challenges at scale.
Whether it's Nest’s recent $3.2 billion acquisition by Google or Opower’s expected IPO, smart teams are delivering healthy returns while meaningfully improving the world around us. Here at Pulse Energy, we have started new projects with three of the top five U.S. utilities, as well as leading utilities overseas in 2013. These companies have turned to the Pulse platform to better understand and better engage with their entire commercial customer base. This is becoming a key part of utilities' strategies for remaining viable in a fast-changing market.
Why did Nest succeed in a way that innumerable smart thermostats did not? Why did Opower rise above the pack for residential energy efficiency? Many factors played a role, but the fundamental differentiator is this: isolating a need and applying just enough technology to solve it, rather than inventing something impressive and then trying to find a market.
Nest intentionally delayed functionality, such as utility integration and manual fan control, in order to streamline initial setup, choosing to surface advanced features once users were comfortable with the system.
Opower, similarly to what Pulse Energy is doing in the commercial customer segment, applies complex algorithms and energy modeling below the surface. But its primary offering is a mailed report, which explains in simple terms how the home is performing and suggests improvements. Engaged customers can explore their usage online, set up email alerts and make advanced configuration changes, but the standard user experience remains utterly intuitive.
I could also mention expanding market demand, or the availability of big data, or progressive regulation, but the fundamentals remain: Nest and Opower rose above the noise because they understood their customers’ pain and solved it with a sublime customer experience.
This is a simple strategy to describe. But it's difficult to consistently execute. Thankfully, we’re seeing a crop of companies following Nest and Opower, which took hard roads over the past few years but have emerged with devoted customers and sustainable results.
Here at Pulse Energy, we’re taking those lessons and applying energy intelligence, behavioral science and a deep understanding of building operation to deliver only the energy intelligence each of our audiences need -- from straightforward tips in a small business owner’s inbox to targeted customer analytics for our utility partners.
We congratulate both Nest and Opower on their recent developments. And we’re excited about continued progress in the industry as more companies develop a similarly targeted strategy.
David Helliwell is CEO of Pulse Energy, a company founded in 2006 with the goal of leveraging energy intelligence to reduce waste and improve operational efficiency in the world’s commercial and institutional buildings.