New Hampshire, US Say ‘PV’ to even the most astute of solar observers, and the conversation will most likely turn to the low-cost polysilicon panels that have come to largely define the industry. Their production is at scale, their technology is well vetted and their installed costs continue to decline.
Low-cost silicon PV has caused difficulties for other solar technologies working to gain a share of the solar market, especially at utility scale. First Solar has an impressive pipeline of projects, but most others in the thin-film sector are struggling to take that leap to scale. Concentrating solar power has even seen some of its biggest projects switch over to polysilicon panels, apparently because the deal for panels was just too good to pass up.
Which brings us to high-concentrating photovoltaics (HCPV), the most nascent of the technologies, but also the one that could potentially lead PV to new markets. As the HCPV industry makes its slow march out of the labs and into the fields, sceptics argue that the technology amounts to little more than an interesting, if commercially non-viable, dead end.
Many see the mountain to get to scale as too steep to climb, the technology too dependent on precision and the traditional PV ship with too large a lead. They’ll also point to the deciding factor when choosing your technology. In a world dominated by cost, HCPV lags far behind fixed systems mounted with Chinese panels, where costs are inching ever closer to 75 cents/W.
And that wariness about the future of HCPV gained some legitimacy when industry leader Amonix announced in late July 2012 that it was closing its 150 MW manufacturing facility in North Las Vegas in part because it just couldn’t compete with PV prices. Nonetheless, many observers saw the struggles in a wider context; there are plenty of others ready to take the leadership reigns without committing the same tactical errors.
In an HCPV report released before the plant closure, analyst Ed Cahill of Lux Research warned of the troubles surrounding Amonix, a company that he said had scaled up too fast and too soon – essentially before the right markets developed. That’s a continuing challenge for an industry whose technology is ideal in only certain environments.
HCPV thrives in areas with high direct normal irradiance (DNI), a measurement of high-intensity direct sunlight. In fact, its cells remain more efficient than the competition in these typically hot environments. You’ll find high DNI in places like the Middle East, India, parts of China, Australia, Chile, Mexico and the southwestern US. Those markets – with the exception of the US- have lagged behind in solar installations. Those same markets see large-scale solar built for their climates as essential to increasing their domestic energy supply.
Getting there won’t be easy for HCPV, which was conceptualised in the 1980s but only recently achieved its first true utility-scale development. The technology is still relatively unknown outside the solar industry. Even those who question whether it can survive appreciate the high-tech approach required in using optics to concentrate sunlight, usually between 500 and 1000 times, onto ultra-efficient multi-junction cells about a square centimetre in area.
For a company like Semprius, which is just now opening up its production line, cells – about 600 microns thick – cover just 1/1000th of the module’s surface area. As with concentrating PV (CPV) which typically uses concentrations of 20-100 suns, far less cell material is required. But the system-wide cost is much higher because concentration requires relatively sophisticated optics, dual axis tracking devices which enable the module to precisely follow the sun’s path and software that can monitor a system’s performance in real time.
Every gain in efficiency and precision comes with a cost, but HCPV advocates argue that cost can mean a lower energy price tag in the end. For instance, Semprius has secondary optics mounted above each cell. Those optics come at a cost, but they further focus the sunlight precisely onto each cell, making it more efficient.
Greater efficiency means that projects use less land, which saves on things like permitting, construction, wiring, maintenance and the number of trackers needed for a development. Semprius looks at each of its decisions, from the materials it uses on the cells themselves to the type of encapsulant in tests.
‘We have to look at everything as a cost tradeoff,’ said Russ Kanjorski of Semprius. ‘If someone comes out with an anti-reflective coating that’s applicable to our cells but it costs more than it’s worth, we’re not going to do it. It all goes back to the LCOE (levelised cost of energy). We have to look at all the impacts, from trackers to transmission. We’re looking at it system level.’
Gaining on the Competition
Even those regions with high DNI aren’t likely to fully invest in HCPV unless the technology proves that it can compete with traditional PV panels. In a bid to address this, the industry is moving aggressively to position itself once it’s ready to scale.
In the meantime, HCPV is expected to move ahead at a methodical pace, proving its technology and building investor confidence. HCPV currently has a global installed capacity of about 88 MW – including the recently completed 30 MW Alamosa development that features Amonix technology. That number is expected to grow to nearly 700 MW of installed capacity by 2017, still small in relative terms, but it could represent a much larger share of the market by then.
If the technology can achieve those competitive costs, Lux Research predicts a US$1.6 billion market for HCPV systems by 2017. According to Lux, within about five years HCPV’s downward cost trajectory – fueled by ever-growing cell efficiency and the benefits of increased scale – will allow it to catch up with fixed and tracked multi-crystalline panels.
According to Cahill, HCPV system costs are currently about $3/W installed, and that is expected to fall to about $2.33/W by 2017. By 2018, the technology will have a levelised cost of electricity about equal to fixed and tracked multi-crystalline silicon systems. At that point, HCPV could move beyond the niche and into the mainstream. But a lot needs to go right between now and then.
Besides the early ramp-up that ultimately plagued Amonix, financing is also proving to be a challenge. Financing large projects is already difficult, and the number of players is relatively small. Those companies looking to move into solar will usually gravitate toward traditional PV, which is considered lower-risk.
Some companies are making headway in financing their projects, and the success of those developments could prove vital. California-based SolFocus secured financing for its 50 MW project in Mexico, a country with high DNI, a growing need for energy and an essentially non-existent solar market. The deal could eventually expand to as much as 450 MW. This project could open up that country to more solar, and especially more HCPV developments. With Amonix out of the manufacturing picture – at least for the time being – it could present opportunities for Soitec, for example, which is building a manufacturing facility in San Diego that would be well positioned to serve both Mexico and the southwestern US.
In China, backing through the central government means that HCPV manufacturing could be set to scale up rapidly, especially if HCPV is to take up a portion of its ambitious target of 21 GW of installed solar capacity by 2015. Many industry analysts are confident that the nation will achieve that level of growth, though it is certainly moving rapidly in domestic capacity.
For US and European-based companies, their expansion and their ability to do business in new markets will likely be defined by the types of partnerships they can put together. Aside from Soitec, other emerging HCPV players are aligning themselves with large global energy giants with wide distribution networks. Semprius has a strong investor in Siemens, and Greenvolts, another small but respected company, is aligning itself with ABB.
The future of HCPV solar projects is in the multi-MW scale, but to get financing by third parties, smaller companies that don’t have the history or the ability to finance from balance sheets are looking to more established firms to provide that strategic support, David Gundmandson, president of Greenvolts, told REW during a video interview.
Kanjorski of Semprius sees the partnership model as a reflection of the changing times.
‘We don’t have to do it all by ourselves, which is mandatory – especially in this solar shakeout world we’re living in,’ said Kanjorski. ‘Five years ago, capital was almost free. That’s an exaggeration, but there was a massive amount of capital going in [to new technologies], billions and billions of dollars. Companies would say, ‘Let’s do a $200 million round on our way to viability.’ That’s not the approach we’re taking here, nor can any new company do it that way.’
The bread and butter of HCPV is in its cell and module efficiency, and many in the industry see that as an area that could drive down costs system wide.
More than 30 layers can be found in some lattice-matched multi-junction solar cells. The materials, such as gallium and indium, and the processes used to create these cells can make them up to 1000 times more expensive than those typically used in the flat-plate market. But because HCPV cells take up such a small part of the surface area, the push to greater efficiencies is seen as the best place to focus innovation. Cell maker Solar Junction claims a record-breaking 43.5% efficiency on its cell, though most in the industry top out at around 40%.
Cahill sees a path to the HCPV industry reaching about 45% within five years and 50% efficiency within 10 years. Semprius, meanwhile, says it could conceivably get to about 37%-38% module efficiency over the next couple of years.
‘With silicon, there’s not much more headroom on a single junction silicon cell,’ said Kanjorski on the efficiency comparison with HCPV. ‘There may be some areas where the polycrystalline guys can move up slightly. But they’re focused more on scale. [With HCPV], there are options and headroom to push it up, not just a fraction of a percent, but three, four, five percent.’
In an example of projected cost reduction provided by Lux Research, a module increase from 30% to 32% would drive down total installed costs from $2.95 per watt to $2.79 per watt – a $0.16 cent decrease, providing that component costs remain the same.
Beyond the cell, many of the materials used in HCPV – lenses, glass, aluminium and steel – have little projection for cost gains. And these heavy materials weigh down HCPV systems, making them expensive to ship and more difficult to set up on-site.
The other driving force beyond efficiency is scale – one of the major factors that have driven down the cost of traditional PV panels. Balance of systems typically accounts for 35% of a system’s cost, compared to 32% for the module. According to Lux, once scale is achieved, increased buying power and greater access to suppliers is expected to further drive down BOS costs from $1.05 per watt in 2012 to $0.76 per watt in 2017.
On-site assembly improvements and greater efficiencies found with larger projects will also modestly reduce construction costs, and further reductions in capital costs are expected as more large-scale projects secure investor confidence.
This downward cost trajectory also doesn’t account for one of HCPV’s chief advantages over fixed and single-axis tracked PV. The spacing required of HCPV allows the site to be used for purposes beyond energy generation. Since the pedestal trackers typically used with HCPV don’t create permanent shading, they allow for land to be used for agricultural purposes.
‘With HCPV, you can start to look at the secondary benefits,’ said Kanjorski. ‘You don’t have to flatten the whole area, but instead you put up relatively small posts. It’s a lighter touch. I don’t think people are going to pay twice for the electricity to have that, but if you have a cost-effective solution, you’ll have people who want it for different reasons.’