A Visit to SolarWorld Headquarters

SolarWorld HQThis past Tuesday the Bundeskanzler Stipendiaten group got a tour of the SolarWorld headquarters, led by Peter Finger, a member of their public relations staff. Besides our group, however, the place was deserted – they’re just about done moving to newer, larger facilities down the street, and production of solar panels of course takes place elsewhere, in Freiberg (Eastern Germany, where they probably got a big tax break as part of efforts to encourage investment), California, and Oregon.

However, the facility still houses several demonstration installations. They’re generally a couple of years old, so not quite state of the art (think better roof integration & sleeker look, simpler installation, higher efficiency, and cheaper), but still interesting. And it was especially interesting to hear Peter’s perspective on the solar industry today and in the future. While the industry today is responsible for only a small percentage of Germany’s energy mix, solar’s contribution is expected to rise to 11% in 2020, and ultimately, Peter hopes, to about 23-25%.

Tour of SolarWorld HQAdmittedly, his perspective seemed a bit “durch rosarote Brille” (“through rose-tinted glasses”). For example, while he acknowledged that China is a major competitor, he didn’t seem to view this fact as an existential problem for the German solar industry. He also strongly defended the company’s policy of manufacturing solar panels on location in their major target markets, rather than outsourcing to Asia. Political and regulatory uncertainties also didn’t seem to trouble him – he seemed to feel that prices are sinking so dramatically that in the end the market will develop on its own, regardless of other factors. He even foresees a time when it will be economical to put solar on north facing or heavily shaded roofs.

Peter did mention that while his company does some utility-scale work, their emphasis is on rooftop installations. His reasoning is that there is more demand at the smaller scales, and less NIMBYism to oppose development.

Demonstration PV panels at SolarWorldMost interesting, I thought, was hearing Peter’s thoughts on the future of the solar market. He acknowledged that a new business model will be necessary once the feed-in tariff is sufficiently reduced (or phased out altogether). Solar will be cheaper, but it is nevertheless hard to expect many homeowners to invest thousands of Euros in purchasing a system that can only sell back to the grid at wholesale rates.

The solution? Use storage (batteries/EVs) to enable homeowners to consume the energy produced on-site, reducing the amount of electricity they need to purchase from the grid. However, storage is expensive and, unless it comes in the form of EVs, generally makes more sense when it is centralized, rather than being located in every house.

These conditions lead to a community-based model for adapting solar at scale. In Germany, it is not the case that everyone buys their energy from one giant utility, as I am used to in California with PG&E, SoCalEd, etc. Rather, separate entities are responsible for the final distribution phase. (Historically these were city-based, but now the market has opened up so that you can get your power from one many independent entities, each with their own energy mix. Providers range from GreenPeace to the discount store Tchibo. However, the concept remains more or less the same.) The community (or other organization) realizes that it can get electricity for less by utilizing its members’ roof space rather than buying from the grid. So it purchases solar systems, installs them on its members’ roofs, and pays them a small leasing fee. It also installs a community-scale energy storage system, so that the afternoon power production can be used later. Grid power is then used to supplement the solar power generation.

While this vision might seem far off, it could be nearer than you’d think. There are already “roof exchanges” in Germany, wherein property owners can offer their roofs for long term lease, and investors can place solar panels on these roofs and collect the feed-in tariff payments.

It’s a nice vision – I like the idea of working locally and in a distributed manner, and I think that cities, towns, and community organizations are much better suited than individuals to make the major investments required to achieve solar at scale. At the same time, it seems like a major challenge. Technically, the grid needs to be smart enough to deal with this more complex system. Regulation needs to be able to deal with the new relationships in the market. And the business models of the major energy companies farther up the chain need to somehow remain viable, despite the fact that on the one hand customers will be buying less energy, and on the other hand there will be much higher demands on the grid.

I guess I have my work cut out for me, eh?

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Joanna Gubman is a 2011-2012 recipient of the German Chancellor Fellowship for Prospective Leaders. She is spending her fellowship year at the German Solar Industry Association, BSW-Solar , exploring incentive and business model alternatives as the German market achieves grid parity. Previously, Gubman was a Managing Consultant in the Energy Efficiency group at Navigant Consulting. There she analyzed technologies and policies to improve energy efficiency, including analysis and implications of the CPUC Long Term Energy Efficiency Strategic Plan (net zero energy new buildings and widespread adoption of whole-house retrofits); identification & promotion of emerging technologies for utility energy efficiency incentive programs; and development of corporate sustainability initiatives. She also served as project manager for the California Sustainability Alliance. Gubman received her B.S. and M.S. degrees in Mechanical Engineering from Stanford University. You can find her online on LinkedIn , Twitter ( @JoannaGubman ), and xing , and via email at cleantech@alumni.stanford.edu . The views she expresses here and elsewhere are her own, and do not reflect those of the Alexander von Humboldt Foundation or the German Solar Industry Association (BSW-Solar).

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