Many solar industry watchers compare the similarities of the U.S. Department of Energy's SunShot Initiative program to President John Kennedy's goal to put a man on the moon by the end of the 1960s. One would think the fact that the U.S. consumes more electricity than any other country in the world, and may have more solar resources than most developed nations, the country would generate more of its electricity from solar power plants. However, the latest statistics show the U.S. generates less than one percent of the country's electricity from solar energy systems - comparable to the global average.
When U.S. Energy Secretary Steven Chu unveiled the program earlier this year, he said, "America is in a world race to produce cost-effective, quality photovoltaics. The SunShot initiative will spur American innovations to reduce the costs of solar energy and re-establish U.S. global leadership in this growing industry."
The program has the primary goal of cutting the cost of utility-scale solar installations, currently between $1.95 to $2.35 per watt, to the cost-competitive benchmark of less than $1 per watt or $0.06 per kilowatt-hour by 2020. The initiative plans to reduce the cost of solar installations by 75%. The DOE has committed the annual solar research budget of $200 million towards accelerating every aspect of research, development, and commercialization of solar energy technology. DOE expects it initiative to lead to high market penetration, as well as eliminate the need for rebates, grants or subsidies.
SunShot Initiative Basics
Working in partnership with colleges, universities, research laboratories, industry, and government entities, the DOE will center the program resources on the development of scalable cutting-edge solar technologies. Several organizations received $27 million to kick-start the program. They will promote development, commercialization, and manufacturing agenda. Their objectives include the following items:
- Engineer advances in solar cell and modules - reduce costs, improve energy storage, reliability and safety
- Reduce the cost of electronic components, make them more advance, reliable, and smart grid-ready
- Make the PV manufacturing process more effective and efficient
- Streamline and digitize zoning, building codes, permitting, design and business processes
The DOE also wants to make building codes and standards address the issue of performance over the lifetime of solar products -- about 20 years.
Lexington, Massachusetts's 1366 Technologies obtained funding to improve the manufacturing process, which significantly reduces the costs of “Direct Wafer” fabrication by eliminating the “sawing” of crystal ingots to make silicon wafers for solar cells. 3M (NYSE:MMM aims to develop and market a bendable, transparent “Ultra Barrier Topsheet” to help commercialize flexible PV.
Veeco (Nasdaq: VECO) focuseson R&D, integration, commercialization a of cutting-edge thin film CIGS (Copper, Indium, Gallium, Diselenide) PV system PV multi-stage thermal deposition production system to manufacture cost-efficient CIGS PV solar cells. Varian Semiconductor (Nasdaq: VSEA) concentrateson lowering manufacturing costs for interdigitated back contact cells. These cells have the highest rating for solar cells current in the market. PPG will develop coating, designs and production processes
Transforming the U.S. PV Manufacturing Base
Fifteen years ago, the U.S. companies dominated the global solar market with a 43% share. In 2009, American firms claimed about six percent of the booming market. According to the Energy Information Administration (EIA) report, the U.S. solar industry installed a record 1.3 peak gigawatts - a 30% increase over the previous year and marking the sixth straight year of growth.
The DOE unveiled another aspect of the program called the SunShot Advanced Manufacturing Partnerships (AMP). AMP focuses exclusively on manufacturing development plants and consortia to enhance the competitiveness of the country's photovoltaic sector and supply chain. This program funds research projects and the building of infrastructure. In addition, a variety of organizations from across the supply chain, including rivals, will confer with the objective of developing potential industry solutions.
The DOE plans to invest up to $125 million, over the next five years, into three groups -- The Bay Area PV Consortium (BAPV), SVTC Technologies, and Photovoltaic Manufacturing Consortium (PVMC). BAPV, which consists of Stanford University and University of California, will award funds to universities for solar research and development with an emphasis on high-volume photovoltaic manufacturing.
SVTC Technologies has the mission of developing a “fee-for-service” PV Manufacturing Development Facility (MDF). The MDF will open it services and equipment to other PV companies for the purpose of complete manufacturing lines, expertise service and advice, specialized tools, and other PV-related tools , equipment/services. MDF helps startups and other firms reduce major capital costs.
The third group, U.S. Photovoltaic Manufacturing Consortium (PVMC) has the responsibility of organizing the drive to speed up the development, manufacturing, and commercialization of innovative tools, technologies, and materials in the copper indium gallium selenide (CIGS) thin film PV manufacturing segment. PVMC will team closely with The College of Nanoscale Science and Engineering at the State University of New York at Albany and work with the University of Central Florida.
Ramamoorthy Ramesh, the DOE's Solar Energy Technologies Program manager, says the U.S. can attain the SunShot Initiative objectives, despite the program's lofty intentions. The program deploys strategies that can overcome challenges and roadblocks currently plaguing the industry. Ramesh lists the following items as crucial to reaching the objectives by the 2020 target:
- Create an environment for innovation and expansion in the domestic PV market
- Robust leveraging of government resources
- Offer solid assistance to start-up companies make it pass the initial “Valley of Death”
- Provide gap investing at the pre-IPO phase between $50 million to $100 million
- Build a strong public-private partnership, including federal, state, local and private equity
Ramesh believes achieving these objectives establish a strong manufacturing foundation for the U.S. solar industry. In addition, it creates an environment for accurately assessing various advance technologies. Participating on a panel at the Santa Barbara Summit of the Institute of Energy Efficiency, Ramesh said, “if the industry can meet the challenge of the SunShot Initiative, that number would skyrocket to 16-17%,” referring to the less than one percent global production of solar energy to power homes, businesses and factories.
Solar Energy Industries Association (SEIA), president and CEO Rhone Resch, said “This initiative will have the dual benefit of helping America stay competitive in the global marketplace and reducing the costs of solar energy to the point where solar is the cheapest form of electric generation for all Americans.”
Critics who question the wisdom of spending the DOE's solar research on this program only have to look to the litany of spills, natural disasters, regional conflicts, and oil prices to get their answer. The DOE drive to promote innovation in solar technologies, revolutionize the solar module manufacturing function, and drastically reduce the cost of solar power system makes the SunShot Initiative a wise investment that can pay huge dividends over the next several years.
