Future use of solar energy
For my Independent Study I will be working with Enealt-USA, Inc., an alternative energy start-up located in Asheville, NC. The company was founded by Jason Ramsey and focuses on the production of thin film solar technology. Their goal is to manufacture thin film solar panels to sale to power companies, energy co-op's, and other companies that choose to supplement their current energy systems with solar energy. I will be conducting Market Research for solar energy, other energy companies and their technologies, and possible incentives (grants, loan programs, tax credits, etc...) for those investing in solar energy. The information that I gather will be included in the writing of the Executive Summary for the company. My market research will include current/future use of solar energy in areas of the world, current countries leading the way in the production of solar energy, and market forecasts for thin film solar technology.
Renewable Energy Market
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The United States' current energy supply comes mainly from coal, oil, and natural gas. Fossils fuels, such as these, are non-renewable. This means that they draw from a limited resource and they will eventually diminish. They will then become too expensive or too environmentally unsafe to regain (NREL).
The National Renewable Energy Laboratories states, "Most renewable energy comes either directly or indirectly from the sun. Sunlight, or solar energy, can be used directly for heating and lighting homes and other buildings, for generating electricity, for hot water heating, solar cooling, and a variety of commercial and industrial uses."
Heat from the sun drives winds across the world. These winds can be captured by wind turbines. The winds, along with the sun's heat, cause water to evaporate. These vapors turn into rain and/or snow which eventually flow from hills into rivers and streams. The rivers and streams can be dammed in order to capture an energy called hydropower (NREL).
A combination of rain and/or snow and sunlight allow plants to grow. These plants are made up of organic matter which is known as biomass. Biomass can be used to produce electricity, transportation fuels (biodiesel), and chemicals. The production on any of these as a byproduct of biomass is referred to as biomass energy (NREL).
Hydrogen, which is the most abundant element on Earth, may be found in numerous organic compounds. Hydrogen is usually found combined with other elements, such as the composition of water which is a combination of hydrogen and oxygen. Once hydrogen is stripped from these other elements, it can be converted into fuel or electricity (NREL).
The Earth itself also produces an energy that can be captured in order to produce electricity and it can be used to heat and cool facilities. This type of energy is called geothermal energy. This energy comes from within the Earth's crust (NREL).
The ocean is also a source of energy. The ocean combined with the sun's heat produce thermal energy and it also produces a mechanical energy from the tides and waves. The mechanical energy of the ocean is another form of hydropower (NREL).
Photovoltaic ("PV") solar energy directly transforms solar radiation into electricity using silicon and other materials as the semiconductor raw materials. Each solar panel is made of photovoltaic cells that are electrically connected through two layers. Depending on how thick these layers are and the type of semiconductor material used, determines the different types of solar panels. Crystalline Silicon: mono and poly crystalline. Thin-film: Amorphous Silicon (a-Si), Cadmium Tellurium (CdTe) and Copper Indium Gallium Selenium (CIGS) (Ramsey).
Each of these technologies will result in different panel compositions, efficiency coefficients, production and installation costs, etc... At the moment the most commonly used technology in the market is the crystalline silicon. However, continuous improvements in the thin film technology are making it more and more competitive in terms of both performance and cost efficiency. Some of the advantages of solar power could be summarized as follows: It is environmentally friendly; It is "emissions free" since it does not use any type of contaminant fuel (post the initial refining of the silicon); On average solar panels have a long lifespan (approximately twenty years although it will depend on the type of technology); It resists extreme weather conditions; It does not generate noise; It has no mechanical parts, which reduces its maintenance to the cleaning of the panels; The power can be increased by only incorporating more photovoltaic modules. Module (Panels) Manufacturing is the Key Component in the Value Chain (the same as turbines are for wind energy projects) of solar power generation (Ramsey).
Higher oil and energy prices, together with concerns over supply disruptions as well as increased environmental activism has led to increased global government-sponsored incentives for solar power. The years 2009/2010 will be critical for solar energy. The focus this year will be on the demand side of the ledger. The key issues are:
- The evolution of solar incentive programs
- What medium and long-term impact they will have on demand
- Energy Independence: In the changing political landscape, governments are implementing renewable energy incentives programs worldwide. North Carolina specifically has recently introduced Senate Bill 3 with the first Renewable Portfolio Standards (RPS) requirements for renewable energy production by utility companies in the southeastern U.S.
- Energy Prices: Rising demand for natural resources has led to higher prices for raw materials (oil, natural gas, uranium) required to produce electricity (EIA).
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Bank Sarasin's Sustainability Research team estimates that the worldwide solar energy industry is likely to grow 48% between the years of 2008 to 2012 (Sarasin). However, this growth will vary depending on the country and the technology being used. There are two key variables that will determine this growth:
- Government -sponsored incentive programs: these incentives are increasingly making solar cost competitive and in many cases actually less expensive than retail electricity for the consumer, which has helped drive the increase in global demand.
- Dependence on silicon as a feedstock: the ramp in demand for solar energy generation capacity has led to shortages of solar grade silicon (SGS), the key feedstock for crystalline solar cells, which currently represent more than 90% of all solar installations. New technologies, such as thin-film, will overcome this obstacle.
Installations to date have been focused on a few countries with Japan and Germany representing nearly three-quarters of total installed capacity as of the end of 2008. Germany has passed Japan and now has the largest installed solar capacity base with approximately 5.6 GW as of the end of 2008 (Reuters). In terms of solar panel manufacturers, the worldwide market is very concentrated, being the Japanese companies are the leaders with almost half of the market share in production of solar panels, followed by European companies and then the Chinese companies, which are gaining more and more importance. Behind those are the U.S. companies.
Demand is not the issue; supply of solar modules is the main limiting factor to industry growth in the near term (Sarasin). The goal of the solar industry is to become cost competitive with the traditional forms of generation without incentives. Currently, incentives are required for solar to be cost competitive. Incentives are the key to the solar industry as they serve as an accelerator for sales to allow producers to reach a scale not possible without government support. Historically, the cost of solar declines by 5% per year; therefore, should electricity prices continue to increase and prices decrease, the cost advantage of the traditional forms of energy generation have over solar power will also decline (Sarasin).
With growing government incentives and a favorable trend in policy, the U.S. has surfaced as the fourth largest solar market behind Germany, Spain, and Japan. The two main measures taken by the U.S. Government are:
- Renewable Portfolio Standards (RPS) at the State level:
- most of the policies (see Federal & State Incentives, Loans, and Guarantees section of notebook) that impact the U.S. solar industry are created at the State level, in contrast to other solar markets such as Germany, Japan, and some European country markets,
- once enacted, RPS set renewable energy policies and goals for the individual state that can include solar carve-outs and set-aside requirements,
- stable, long-term, and adequate policies are key; lending an increased level of certainty to pricing and demand and facilitating long-term contracts with utilities and ultimately increased adoption of solar energy generation nationwide,
- prime examples include California and New Jersey - California's programs strongly support commercial and residential solar installation (making it the largest solar energy state by pipeline and installation) and New Jersey is emerging as the new solar friendly state with aggressive standards toward solar and renewable energy.
- Investment Tax Credits (ITC) at the Federal level
Why Thin-Film Technology?
The main characteristics of the thin film amorphous (a-Si) technology versus the industry standard silicon crystalline cells could be summarized as follows: The low market penetration of a-Si is generally considered to be a result of its relatively low energy conversion efficiency and perceived high per-watt installed cost. The National Renewable Energy Laboratory (NREL) has developed thin film solar panels that are more competitive with the traditional silicon-based panels. The (CIGS) panels set a new world record by reaching an efficiency of 19.9%. This means that 19.9% of the sun's light that the panel captured was converted into electricity (Richard). Multi-crystalline solar cells have reached efficiencies of 20.3%, without concentrators. This demonstrates that thin film is getting closer to taking the lead in the efficiency of solar panel technology (Richard). However, in spite of the lower conversion efficiency, amorphous technologies have better real world efficiency in terms of electricity production per installed watt. With comparable installed costs/W, a-Si systems are expected to see at least a 15-20% lifetime energy cost advantage relative to crystalline systems. Thin films are not subject to the silicon supply constraint and the associated price impacts that have given rise to higher module costs in recent years (Ramsey).
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Thin-film solar panels are expected to decrease in price by almost 18 percent in 2010 to $1.40 per watt. Average prices for silicon-based panels will likely fall 20 percent to $2.00 per watt by 2010. Thin film technologies offer the promise to achieve greater cost reductions (it is estimated to reduce prices at about 1/3 that of the former technology) due not only to the continuous manufacturing process, but also the low materials requirement. Thin film PV also offers shorter energy paybacks as compared to flat plate PV modules (currently 4 years for multi-crystalline versus 3 years for thin film and anticipated to reach 2 years versus 1 year) (Ramsey). Unlike silicon cells, thin film PV cells do not exhibit significant degradation in performance when the cell temperatures rise and the output from thin film PV systems is less affected by shading and overcast conditions (i.e. lower power-loss temperature coefficient and more favorable temperature coefficient) (Ramsey).
To summarize, amorphous silicon (a-Si) offers several attractive benefits in terms of energy production, cost, Building Integrated Photovoltaics (BIPV) suitability and environmental attributes. With Anticipated improvements, both the financial savings and the performance increase are projected to approach 20% and more. Thin-film solar technology will make up 28 percent of the solar market by 2012 (Earth2Tech).
Why the U.S.?
The US has a growing and supportive framework for photovoltaic energy investments with an increasing number of states enacting Renewable Portfolio Standards (RPS) policies that set out solar requirements and goals as well as Investment Tax Credits (ITC) to spur residential and commercial solar adoption. With government incentives, the US has surfaced as the fourth largest solar market in the world, with growth having increased by 57% in 2009 to 220 MW. Some forecasts project that the US' PV market is likely to grow approximately 90% in 2010. Outlook for additional robust capacity growth thus continues to be positive, particularly when viewed alongside existing installed capacity of global market leaders - Germany and Spain (Ramsey).
Energy Secretary Steven Chu announced that the DOE will make available $87 million in order to support the development of new solar energy technologies. The American Recovery and Reinvestment will contribute $50 million of this money. There have been 47 projects selected within universities, power utilities, the NREL, and local government agencies in order to help support the adoption and use of solar energy technologies (DOE). Chu says, "These projects will help speed adoption of solar energy nationwide, while supporting development of a skilled workforce, and continuing to pursue new scientific breakthroughs to increase the efficiency and lower the cost of solar technologies." Seven projects will be used to model, test and evaluate the impact of incorporating large amounts of energy from photovoltaics on the stability of our current electric grid (DOE). These projects will help pave the way for broader adoption and growth of grid-tied solar energy systems by improving understanding of the impact of PV electricity on the grid (DOE). As the load centers of energy use across the nation, cities play a strategic role in accelerating solar technology adoption at the local level. Sixteen cities have been selected for projects that will address specific barriers to solar adoption in urban settings and support innovative approaches that can be widely replicated. Many cities will use this funding for multiple efforts. There have been a number of colleges and local organizations selected to participate in a "train-the-trainer" program (DOE). This will help prepare a national coordination network of training programs. This round of funding will help bring to light the need for qualified solar energy system installers. Fifteen of the projects at DOE National Laboratories will focus on the improvement of current technologies, devices and processes for both the PV and Concentrating Solar Power (CSP) industry. CSP projects focus on improved energy storage technologies to enable consistent and reliable energy generation (DOE).
The U.S. is beginning to compete with countries such as Germany, Spain, and China in investments and incentives in the solar technologies. These investments make the U.S. a prime location for solar energy technology development.
Why Enealt USA?
The Company is a pioneer in thin film manufacturing in the United States with European experience that allows the business model and off take relationships to be more advanced than other proposed projects. The projects has the total support from the Federal and State Governments as well as all local and County Authorities and has secured commitments and continues working to finalize additional grants and favorable loans from the state government and the Federal Department of Energy Funds as well as USDA. Thin Film technology: high-end "non - refined silicon" technology manufacturing equipment only offered by two reputable companies worldwide. Non-silicon technologies are expected to grow faster than the industry (50% in 2009-2014). ENEALT will have capacity to manufacture not only solar panels but also "BIPV" modules. ENEALT will have its own Technological R&D platform and a "solar park" will be built on the roof of the facility (both for its own testing as well as to sell power to the grid). By exporting a percentage of the modules produced, the company will benefit not only from the U.S. renewable energies regulations but also from other tax exemptions that will largely impact the profitability (Ramsey).
The new socioeconomic attitude as well as focus toward increasing "GREEN" energy and decreasing Carbon Footprint guarantees ENEALT's production will be sold in the market due to the incentive to make immediate change in our environment in additional to the coming energy policy change by the new administration.
- Fehrenbacher, Katie. Earth2Tech. Thin-Film Solar to Grab 28 Percent of Solar Market by 2012. http://earth2tech.com/2008/07/01/thin-film-solar-to-grab-28-percent-solar-market-by-2012/. July 2008.
- Energy Information Administration (EIA). Renewable Energy Consumption and Electricity: Preliminary Statistics 2008. Office of Coal, Nuclear, Electric, and Alternate Fuels, U.S. Department of Energy. Washington, DC. July 2009.
- GreenTech Solar. Report: Solar Electricity Costs Likely to Fall 50% in 2009. http://www.greentechmedia.com/articles/read/report-solar-electricity-cost-likely-fall-50-in-2009/. November 2009.
- National Renewable Energy Laboratories (NREL). Learning About Renewable Energy. Renewable Energy Basics. U.S. Department of Energy. Washington, DC. December 2009.
- Ramsey, Jason. Personal Interview. Why Enealt USA?. June 18, 2009.
- Richard, Michael G. Treehugger. 19.9%: New Thin Film Solar Efficiency Record. http://www.treehugger.com/files/2008/03/thin-film-solar-panel-efficiency-record.php. March 2008.
- Sarasin, Banks. AMEInfo.com. Solar energy 2008 - Stormy weather will give way to sunnier periods. http://www.ameinfo.com/175954.html. November. 2008.
- USA, Siemens. Solar Energy. http://www.energy.siemens.com/hq/en/power-generation/renewables/solar-power/. 2009.
- United States Department of Energy (DOE). Photovoltaics. http://www1.eere.energy.gov/solar/photovoltaics_program.html. June 2009.
- United States Department of Energy (DOE). EERE News. http://apps1.eere.energy.gov/news/news_detail.cfm/news_id=15545. 2009.
- Winkler, Rolfe. Reuters. Germany to Post Record Rise in Solar Capacity. http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE5AM36E20091123. November 2009.
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