Utility Scale Photovoltaics

It’s long been my assumption that if PV ever achieves true economic competitiveness, it will be in a distributed mode--mounted on roofs or walls--where it saves users the cost of having electricity delivered to them. However, recent conversations with executives at two top players in the industry are making me wonder. There's been a "dramatic change in the attitude of utilities" toward centrally generated photovoltaic electricity, says Julie Blunden, vice president for public policy and communications with Sunpower. Mark Pinto, chief technology officer and senior vice president with Applied Materials, basically agrees with Blunden that a variety of factors associated with production scale and system costs are shifting interest markedly in favor of PV powerplants.

Applied Materials, a heavyweight supplier of tool-making equipment in the semiconductor and flat panel display industries, has emerged in the last five years as a major supplier to PV manufacturers as well. Its customers include Sunpower, which at present is the top U.S. photovoltaics maker, though it manufacturers all its cells in Philippines with a second plant soon to come in Malaysia. The Sunpower modules, which work to best effect when installed on the ground with trackers that keep them oriented to the sun, are currently assembled in China and Mexico, and soon will be made in the United States and Europe as well.

Both companies have vantage points that give them perspective and insight into broad solar industry developments.

Blunden says that Sunpower began to get a lot of visibility with construction of PV power plants in Europe during 2007 and 2008; combined installations totaled about 200 MW. In 2008, it won a contract to build a 250 MW plant—the California Valley Solar Ranch—for PG&E, following adoption by California of a Renewable Portfolio Standard. Earlier this year, when President Obama wanted to use a PV farm as the backdrop for some important technology policy announcements, it was a 25-MW plant that Sunpower had just built for Florida Power and Light than his aides picked for the photo-op.

Applied Materials, meanwhile, has made a nice business out of offering complete sets of tool-making equipment to aspiring makers of thin-film silicon sheets, in effect just about everything that's needed in the manufacturing process. Chris Eberspacher, CTO of the company's solar business group, describes what they provide as a "complete engineering and operations package,” which they encourage their clients to buy in a standardized form, though "alas, nobody does." Eberspacher and his colleagues have been sighing all the way to the bank. So far they have sold 15 of their SunFabs, at up to $200 million a pop, in Europe and Asia.

Though SunFab tools make films from a combination of amorphous and nanocrystalline silicon, the bigger part of Applied Materials' solar business is still tool-making geared to the traditional silicon wafer. But if interest is indeed shifting to central generation, the thin-film business seems destined to grow. Even though thin films generally have somewhat lower efficiencies than standard silicon, if they can be produced more cheaply and installed over larger areas at reasonable cost, then they can come out well ahead of the game.

According to Sunpower's Blunden, many kinds of economies have been driving down the costs of large-scale solar installations, starting with the ability of the industry--only recently acquired--to deliver large plants in just a year  or two. Not so long ago, she says, you couldn't get financing for a solar farm because banks had no idea how to evaluate them; now they do.

Ground-mounted systems, she observes, can be arranged to greater advantage than typically found in an existing home or commercial building. She says a PV system's capacity factor--the percentage of the time it's making as much electricity as it theoretically can—is perhaps 18 percent for a rooftop system but up to 30 percent for a ground-based system with trackers.

Then there are the usual economies of scale, including non-PV components, installation, and maintenance. To take the simplest case, says CTO Pinto of Applied Materials, if you want to put a module on your roof you have to bring in a special truck, with a driver and perhaps second technician. But that same truck and team could be out installing an entire farm at a pretty good clip, with no extra help. As PV materials costs are coming down below 20 cents per watt, Pinto observes sharply, the significance of peripheral costs like installation grows proportionately.

The European Union's Energy Institute recently predicted that photovoltaics will attain grid parity--competitiveness with other standard sources of electricity--by 2020. Eberspacher and Pinto consider that a reasonable guess. I remain skeptical, mainly because solar costs as measured by dollar per installed watt--the only metric I trust at this stage of the game--have not been coming down all that dramatically.

But hey, Applied Materials is the world's top supplier of tool-making equipment for integrated circuits, very likely the top supplier of equipment for flat panels, and is well on its way to being just as big in photovoltaics. I suppose it's remotely conceivable than they might be right and I may be wrong.

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