London, UK — Considering the short term of one to three years, what technology advances may be expected in the CPV sector? What conversion efficiencies might be achieved and costs/kW installed reached? And what, if any, are the technical and investment barriers which must be overcome in order to achieve these forecasts?
Jeroen Haberland, CEO, Circadian Solar
In the next three years lowering manufacturing costs will be crucial to the CPV industry. As well as the gains from adopting best practises and economies of scale, part of the cost reductions will come from advances in cell manufacturing techniques to lower the amount of material required in each cell. Exploiting increasingly optimised bandgap combinations, either by metamorphic growth or by layer transfer techniques, will produce cells with higher fundamental efficiency limits.
We expect the current trend of 1% annual increases in research cell efficiency, from the 2010 level of 42%, to continue, although advances in cells with more optimum bandgap combinations could deliver more significant increases. Production cell efficiencies meanwhile will most likely continue to lag behind world record research cell efficiencies by 2%-3%. Overall system efficiencies are expected to rise to around 32% by 2013. This will be driven not just by cell efficiency increases, but also by the combination of high efficiency optics, optimal concentration factor, innovative thermal management, high accuracy solar tracking and through automated precision assembly too.
Commercially, the emphasis will increasingly be placed on levelised cost of electricity (LCOE), rather than just system efficiency and system price/watt, since LCOE is the key determining factor in commercial payback and return on investment.
The key barrier to investment is ‘bankability’ — the requirement to guarantee to financiers the kWh energy yield from CPV systems over 25 years for a given investment in the plant. Without this, either the cost of finance will be very high, or there will be no finance. Publicly funded projects are one of the best/only ways to demonstrate bankability and well thought out incentives, such as feed-in tariffs, will be an important enabler for the industry to reach the economies of scale necessary to reduce system costs.
Carla Pihowich, Senior Director of Marketing, Amonix
The most important technology advances in CPV solar over the next three years will be performance improvements to III-V multi-junction cells and how they are integrated into CPV.
Amonix incorporated III-V multi-junction cells into our systems in 2007 leading to dramatic improvements in efficiency — currently 39% at the cell level, which translates into 31% at the module level and 27% at the system level. At these levels of efficiency, CPV has by far the greatest efficiency of any solar technology. In addition, as we have done in the past, Amonix will deploy performance improvements over the next year that will lessen the gap between cell and system efficiency. In the years to come, we expect multi-junction production cell efficiencies will reach 42% or higher using current or new high-efficiency cell designs.
On the question of cost, we believe that CPV offers greater potential for cost reduction than conventional PV technologies such as single-crystal silicon and thin-film PV, which are nearing performance limitations that will make it difficult for them to drop below their current installed system costs. In contrast, the CPV performance advantage has plenty of headroom and can achieve continual reductions in the levelised cost of electricity (LCOE).
Achieving the cell and system efficiencies is not without its challenges — cell performance must be effectively transferred to production environments, for example. But we believe these challenges can be managed. Bottom line, efficiency improvements combined with the future cost advantages of CPV over PV, the greater deployment flexibility — and the advantage of using no water compared with CSP systems — make CPV the best choice for utility-scale solar deployments in sunny and dry climates.
Nancy Hartsoch, Vice-President Sales and Marketing, SolFocus
In 2010 industry-leading CPV companies have become commercial, demonstrating scalable deployment, bankable products, and volume manufacturing. So what does lie ahead for CPV?
One way to describe CPV’s path over the next one to three years is that it will have a steep trajectory. CPV conversion efficiencies are on a steep upward path. System efficiencies of 26%+ today will continue to increase as CPV cell efficiencies move from 39% upwards to 45%.
Manufacturing costs for CPV systems are also on a steep trajectory, but going downward, as factories are ramped from manufacturing hundreds of kW to hundreds of MW per year. The upward efficiency trajectory combined with the rapidly declining manufacturing cost trajectory provides a very steep reduction in terms of the levelised cost of electricity (LCOE) for CPV in the upcoming three years.
In 2010 CPV won competitive bids around the world against other PV technologies because of its high energy yield resulting in a very strong value proposition, which will become even more commanding in the future. Bankability of the technology remains perhaps the biggest hurdle, however, this is rapidly changing through thorough due diligence on the technology and creative approaches to reduce the risk for developers.
Certification to industry standards for CPV combined with multiple years of on-sun performance and reliability data also contributes to the increasing adoption of CPV into large distributed and utility-scale projects around the globe.
With 150 MW forecast to be deployed in 2011, CPV has finally turned the corner on commercialisation and is moving forward into a market where its high energy yield with the largest energy output/MW installed has the potential to dramatically change the opportunity for the PV market. Add in the need for environmentally friendly technology and it provides an extremely low carbon footprint, along with low cost of energy, It becomes easy to forecast a major impact by CPV solar.
Andreas W. Bett, Deputey Director, Fraunhofer ISE
Concentrating PV and specifically HCPV technology is now ready to enter the market. I am aware this has already been said, but the difference is that there are now serious companies in the market.
They have set up production capacities which are in the two-digit MW range, and collectively the production capacity today is more than 150 MW. Two years ago it was less than 10 MW. This achievement is an important milestone for CPV and the first step to overcome their infancy.
In respect to technology advances, due to steady and continuous improvement for cells, optics and tracking CPV-system AC operating efficiency will eventually be 25% on an average. System efficiencies as high as 30% are possible, but it will take more than three years to achieve this goal. These high efficiencies, in combination with advancing along a steep learning curve, will lead to energy costs in the range of €0.10/kWh at sites with solar radiation of more than 2400 kWh/m²/year.
One has to take into consideration that for the moment the cost per installed kW is not an appropriate measure for CPV technology. This is simply because the corresponding rating standards for CPV are not yet established. Indeed, missing standards can be seen as one hurdle for CPV and a barrier for investors. Consequently, the financial side must learn more about CPV technology and the industry must teach and demonstrate reliability — a major obstacle today for bankability.
At present CPV struggles not so much with technology, but with funding. However, this barrier will soon be overcome, for example if guarantees can be provided by the CPV companies.
It is then that the growth and the technology development speeds up, leading to still lower CPV costs.
Hansjörg Lerchenmüller, CEO and Founder, Concentrix Solar
Leading players in the CPV sector continue to surpass record module and system efficiencies, leveraging optical and electrical expertise to optimise output from the world’s highest efficiency III-V cells.
CPV systems are typically twice as efficient as conventional PV systems, with current module efficiencies at 27% and expecting to break the remarkable 30% barrier in the near future.
At Soitec Concentrix we are currently working on the next generation of smart cell technology which is targeting cell efficiency of 50% – in turn leading to a system efficiency of more than 35%. Soitec’s patented Smart Cut™ technology, used for over a decade in the semiconductor industry, will provide crucial layer transfer expertise for the optimisation of the cell design.
The first results of the smart cell development programme will be available within the mentioned time period. In the long term, it will be integrated exclusively into Concentrix’ systems.
Prices for a full turnkey CPV power plant are today already below $4/watt and will go down to $3/watt in the coming years. Specific prices very much depend on size, the site of the power plant and timing. At the same time, it is well established that CPV technology provides some 40% to 50% more energy output than conventional PV and due to its use of dual-axis tracking, maintains a consistent, high output during periods of peak demand when energy prices are highest.
Given that we have already achieved a 27% module efficiency in production and that we have commercial plants of hundreds of kilowatts, we foresee no major roadblocks on performance reliability and cost for the CPV industry for driving down the levelised cost of electricity (LCOE) produced to reach grid parity levels.
Key issues from an investment point of view are a relatively quick return on investment and bankability. The scalability of CPV helps to address this — due to the modularity of the technology, the project size can be adjusted to the financial capabilities of the investors/banks and also energy is produced as soon as the first tracker is installed, helping to reduce the time delay normally associated with utility-scale solar power plants.
In terms of bankability, Soitec Concentrix have partnered with energy efficiency and sustainability company Johnson Controls, which will build, operate, maintain and provide lifecycle support for solar installations using Concentrix CPV technology.
The combination of the respective strengths of both companies will provide advantages, allowing the partners to accelerate and widen the successful installation of solar renewable energy utility-scale plants in high direct normal irradiation regions across the globe.
Eric J. Paul, Analyst, AltaTerra Research
Short-term advances in CPV systems will be mostly technical and focused on improving the cost/performance ratio. However, longer-term advances in market development may produce even greater economic value for the sector.
In the short term, high concentration PV (HCPV) systems will continue to see technology advancements in the efficiency of III-V multi-junction cells. Multi-junction cells are at the heart of high concentrating PV systems and are a key driver to reducing costs and increasing overall system efficiency. As a rule of thumb, for every percentage increase in multi-junction cell efficiency there is a 0.75%—0.8% increase in system efficiency.
Today, most HCPV systems use 38%—39% efficient multi-junction cells and have a system efficiency of between 24% and 35%. In 2011, multi-junction cell efficiencies are expected to rise to more than 40% and on to some 42% in 2012.
The increase in the number of multi-junction cell manufacturers and number of new cell technologies under development will help the CPV industry make steep efficiency improvements in the coming years.
Like any new technology, the CPV industry still faces the challenge of justifying financing from risk-averse financers in terms of ‘bankability’. In response, SolFocus, for example, has recently announced that Munich RE will offer an insurance policy to backstop SolFocus’s warranty. Meanwhile, Morgan Solar self-financed an initial 200 kW test project to demonstrate its technology. Certification standards — particularly IEC 62108 — are also helping to provide investors with assurance. As more and larger CPV projects come online and manufacturers take direct steps to address the issue, bankability should therefore become less of a problem.
In the long term, it is the distinctive character of concentrating PV that will lead to greater commercial uptake. With sites in very sunny regions that make use of tracking, pedestal mounting and other distinctive features of CPV installations, the industry will lower costs through volume and more effectively create economic value by focusing on customers that prize or require particular features.