New Hampshire, USA — Ramamoorthy Ramesh is a man in a hurry. As the director of the Department of Energy’s SunShot Initiative, he hears the clock ticking as the program inches toward its mission to slash the installed costs of solar 75 percent by the end of the decade.
Two years into this ambitious program, Ramesh and his staff are still guided by the dual principles of zero-subsidy solar and that looming 2020 target.
“There is a sense of urgency because the stakes are so high,” said Ramesh during an interview ahead of the program’s gathering this week in Denver, Colo.
In an industry often judged by yesterday’s stock prices, quarterly installation numbers and incremental increases in efficiency, Ramesh’s role is to take a holistic, multi-year view of the industry, whose value he says will extend well into the trillions of dollars. What are the challenges, where are the bottlenecks and what are the technologies that will make solar a free-standing industry that will produce 15 to 18 percent of America’s electricity generation by 2030? And how can the program better align America’s growing installation capacity with its shrinking manufacturing base?
The SunShot Initiative is trying the elicit the same national focus that was launched by President Kennedy’s challenge to land a man on the moon by the end of the 1960s. That became a movement defined equally by innovation and pride. The SunShot Initiative certainly won’t ascend to that level in the national consciousness, but those politically invested in the program — from the White House on down — are looking to mirror the moon landing’s successes in linking new technologies with American manufacturing and buying power.
The DOE’s SunShot Initiative is working to do this as well, and it’s looking at more than just the crystalline silicon panels that are currently dominating the industry. What it’s seeking are those high-risk, high-reward technologies and models that challenge conventional wisdom and redefine the possibilities of the American solar market.
The program, with a $310 million budget planned for next year, is looking at many options, from lowering costs for concentrating solar power (CSP), concentrated photovoltaics (CPV) and all sorts of thin films to re-examining financing and policy models. But it’s doing so in a way far different that the program’s much maligned loan guarantee program. Rather than pump large sums to private companies to effectively scale-up, the SunShot directs smaller amounts of cash to national laboratories and academic institutions as well as private companies — all with the goal of reducing installed solar’s bottom line.
This is all being done against the backdrop of political reality. Organizations like the Heartland Institute have criticized the program as another example of “solar getting a handout,” and it’s unlikely the program would receive a vote of confidence from a Romney Administration. So with that in mind, the initiative is in even a greater hurry to prove its effectiveness and to chart a viable course toward its stated $1 a watt installation goals.
In the past few days alone — as it geared up for a two-year update of sorts in Denver — the program announced a series of endeavors that could drive cost reduction in manufacturing, financing and installation. And in typical SunShot fashion, it’s done so in a way that unites stakeholders through a shared vision. Here are three recent projects that underscore the diversity of the program’s approach.
Manufacturing: Competition Through Cooperation
A winner of a SunShot investment in 2011, The U.S. Photovoltaic Manufacturing Consortium (PVMC), an industry-led coalition that will create a roadmap for thin-film CIGS technology, announced this week its leadership team while further detailing its plans to unite the supply chain.
The technology that uses copper indium gallium selenide lags far behind crystalline silicon in terms of market share, but companies like Japan’s Solar Frontier are starting to make a dent. The new group aims to bring together companies and organizations, from labs and material makers to module producers, integrators and utilities.
To help CIGS catch up to low-cost panels coming out of China, the group is turning to some leaders with deep experience in the solar space — Alain Kaloyeros of the College of Nanoscale Science and Engineering; Dan Armbrust, President and CEO of SEMATECH; Larry Kazmerski, Director of the National Center for Photovoltaics at the National Renewable Energy Laboratory (NREL); Joseph Laia, most recently President and CEO of American CIGS manufacturer Miasole; and Richard Swanson, founder and current president emeritus at SunPower.
“One important objective of PVMC is to build leadership around roadmapping to establish the disciplines of financial and cost modeling, strategic planning and other long-term activities for CIGS PV manufacturing and applications,” said Armbrust. “PVMC will take a lead role in bringing in the entire industry supply chain to collaborate in defining critical challenges and potential solutions for over the next decade.”
The collaboration will be headquartered at the College of Nanoscale Science and Engineering (CNSE) of the University at Albany in New York.
Installation Costs: The $2 A Watt Challenge
The big headlines tend to come with the major utility-scale announcements. These mammoth projects have come to define much of the American solar industry, and in fact they could turn out to be the legacy of the Department of Energy’s Loan Guarantee Program.
Rooftop solar, though, remains a vital component of the mix and it is in many way the best approach for bringing solar into the living rooms of everyday Americans. But there are pricing challenges, and right now the installed costs of solar are hovering around $6 a watt, a figure much higher than the installed costs we’re seeing for commercial and utility-scale installations.
To address this, the SunShot Initiative just unveiled a $10 million rooftop challenge. The issues are complex, but the premise of the competition is simple: The money will go to the first three teams that install 5,000 small-scale (defined as up to 15 kW) rooftop solar systems at an average price of $2 per watt or less by the end of 2014. If that target isn’t reached, then the money will be returned to the United States Department of Treasury.
Financing: Everyone Pitches In
Panels and balance of systems play a huge roll in the overall cost of solar. But soft costs are increasingly being seen as an area where serious gains could be made. According to Energy Secretary Steven Chu, these costs associated with permitting and financing can make up about 25 percent of a system’s actual price tag.
As someone with a deep technology background, Ramesh says he’s increasingly aware of how financing drives solar costs. For its part, the DOE is working to reshape the solar financing landscape. “Financing is a major part of getting the cost of solar down. There is a huge difference between borrowing at 12 percent versus 10 percent versus 8 percent,” said Chu.
SunShot recently awarded a $2 million grant to a new company that is working to take solar mainstream by building an online crowdfunding platform to drive individual investment.
California-based Mosaic, which recently raised $2.5 million in venture capital, says it will make it easier for homeowners, business and community groups to invest in solar projects. During the company’s first phase, hundreds of individual investors funded more than $350,000 to complete five rooftop solar projects in California and Arizona with a combined capacity of 73 kW. In addition to the installation jobs created, the company says it helped community groups save a combined $600,000 on their utility bills.