Why America Will Still Win the Solar Race

As I have said before, there is deliberate bearishness about solar power, much of it coming from the fossil fuel industries.


They ignore solar economics. Install a capital good now and money comes out day-after-day, year-after-year, literally for decades. Regardless of the current price of grid electricity you will, in time, pay for that capital good and generate a positive return. As grid prices rise, the deal gets better. As panel prices fall the deal gets better.


As I wrote before, Solyndra was actually a good deal. They promised costs 35 percent below the market. They were worth the investment. The “problem” was that costs fell a lot more than that due to over-production in China, even before Solyndra could get into production. This created a glut that now has panels selling below their production costs.

Problem? No, opportunity. For those who buy and install panels, or finance installations, it’s the biggest no-brainer in the history of Earth. The oil power forces the government out of the good end of the solar business? Fine. The private sector is happy to step in.

Technology has to change to deal with lower costs for competing technologies. Solar thermal systems like Ivanpah need innovation to become viable. Fine. Brightsource brings in energy storage with molten salt, reducing the necessary size of the project, and we move on.


Whatever happens to panel prices and yields, there are many other ways to save money, to reduce costs, and to increase returns on solar investments. One way is by putting microinverters on each panel, making them plug and play. This is the business of (among others) Enphase Technologies, which just raised another $8 million for micro-inverter production and is aiming at an IPO.

Another way forward is to cut channel costs, standardizing contracts not just on the high end and low end, but in the middle market. I know people in that game, who are doing just what companies like Tioga Energy have tried to do — cut paperwork costs. You standardize contracts, you standardize approvals, you lower the cost of selling systems and you make the whole system more efficient. You lower costs, shorten the time to a positive return on investment, increase the size of the market. No technology needed.

  • So costs will go down, and convergence will approach, even if technology remains static. But it doesn’t, there are emerging technologies cropping up everywhere:
  • Stanford graduate student Colin Wessells (above) has authored a paper describing how copper hexacyanoferrate, a nano-particle derived from Prussian Blue, can deliver batteries that recharge tens of thousands of times without failing. You say solar has storage problems? I got your storage problems right here.
  • HyperSolar says it can produce natural gas directly from solar power. Turning solar power into something we already know how to use eases the transition to renewable power in vehicles.
  • SageGlass adjusts its color on-demand, meaning buildings can use less energy, absorbing heat and light when that’s efficient, reflecting it when that’s efficient.
  • Taiwanese scientists are using porphyrin as a sort of “artificial chlorophyll” to increase the solar power yield of current technologies by 20 percent.
  • Sharp has used a stacked three-layer structure to create a solar cell with a yield of 36.9 percent. This was done by reducing the resistance between the layers of the cell. Now they have to figure out how to get this into mass production.

It’s not just that these are breakthroughs, of course. They each answer important questions the market faces right now. How might we get dramatic increases in efficiency from current polysilicon technology? Sharp’s stacked structure may hold the answer. How might we turn solar energy into something that powers our cars, without replacing current engines with hydrogen fuel cells? HyperSolar’s technology may provide a way forward. Just as Wessell’s work with storage technology could end that “but the Sun goes down” nonsense.

The real answers of course, come not through science but the dance of the market. Licensing these technologies, or building companies around them, is a process America’s venture capitalists are very good at, and that dynamic is something China simply does not have.

Which is why, on solar, I remain so bullish on America. It’s not just what are you making now. It’s what will you make tomorrow, and how will you get breakthroughs like these from the lab to the customer as quickly, and efficiently, as possible.

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