Low cost CPV and new markets: an interview with Skyline Solar co-founder and CTO Bob MacDonald

Bob MacDonald
Bob MacDonald

Bob MacDonald is the co-founder and chief technology officer at Skyline Solar. The company was recently awarded a contract to build a 500 kW CPV system in Durango, Mexico. Upon the completion of the multi-phased project, it is predicted to be the largest CPV installation in Latin America.

Prior to Skyline Solar, Bob led the product marketing program at fellow CPV maker, SolFocus. He also co-founded and served as vice-president of sales and marketing for Onetta, a leading optical amplifier company. During his tenure at Onetta, he secured strategic funding from Sequoia Capital and Matrix Partners.

Earlier in his career, Bob started the telecom components unit for New Focus, a division within Newport Corporation. Newport specializes in photonics development and manufacturing and Bob’s involvement enabled them to complete a successful IPO and, subsequently, secondary offerings. He holds a BSEE from Brown University, MSEE from Stanford University, and MS and Ph. D. in Physics from Brown University.

 

Solar Server: First off, congratulations on winning the Durango project. The Skyline X14 System white paper states that the system produces electricity, in optimal regions, at a levelized cost of energy (LCOE) of USD 0.095/kWh. This includes leveraging the U.S. 30 percent solar investment tax credit. Can you tell me a little about CPV economics and what factors make up this low projected LCOE?

Bob MacDonald: Thanks, we are very excited about this project.

There are two key parameters with a CPV system that can impact the LCOE: dollars per watt and electricity production. When you’re looking at the overall project economics, there are other parameters that can be factored in, but in terms of the technology itself, any new solar or PV technology can affect the overall LCOE and equipment costs. I think what's behind the 9.5 cents you cited is the fact that the Skyline X14 system significantly improves upon both parameters.

In terms of the dollars per watt, Skyline's approach is unique within the canonical CPV space. The system’s design delivers a lower dollar per watt figure by optimizing system design elements that are proven in the thermal and concentrating markets. For example, Skyline Solar reduces the amount of silicon needed, which is always a fluctuating cost variable, by focusing on holistic cell optimization.  

In terms of electricity production, Skyline Solar engineered a complete system that includes structural cost optimization, optics, electronics, photovoltaic materials and aspects of thermal technology to reduce the equipment costs, while at the same time, producing increased energy harvests in sunny climates.

By focusing on reducing the dollars per watt and increasing energy production, Skyline Solar has found a way to quickly reduce the kilowatt-hour costs.

 

Solar Server: In terms of the 500 kW project in Durango, Mexico, can you talk about how your experience working in Mexico differs from your experience developing projects in the United States?

Bob MacDonald: Sure. It's interesting because, in some respects, this project is not as different as you’d expect. I'd say that's partly because, fundamentally, photovoltaic projects are rather straightforward in the infrastructure required – mainly land and a grid-interconnection, which are available in most developed nations.

As with most ventures, policy and laws regarding business differ from region to region. For example, project developers must pursue permitting and other regulatory approvals that vary across nations, states and even municipalities. But those variables can be effectively navigated by savvy project managers and installers.

Even from a policy standpoint, the Durango project is not so different from projects in the U.S. Remember, policy, laws and regulations differ between California, Arizona, Texas, etc. In Durango, we pursued the appropriate permitting and approvals that were unique to the region, but it has remained a customary process.

One way I look at it is that the solar resource is global and politics is local. I think this perfectly applies to PV projects in any part of the world.

Skyline Solar's HGS architecture
Skyline Solar's HGS architecture


Solar Server: Does Skyline Solar have plans to develop more of these projects in Mexico and Latin America?

Bob MacDonald: Absolutely. One deciding factor, that inevitably impacts solar adoption in any region, is the availability or process for leveraging incentives and other economic motivators. We will need to see more policy coming from Latin America that financially drives adoption before solar can gain momentum in the region.

It’s well known that there are significant differences between U.S. renewable energy policy and European policy. The European feed-in tariffs establish certain processes for project development, while tax credits tend to be the main driver in the U.S. market. Financing projects in the U.S. also differs from the European financing process due, in part, to the varying policies and incentives of each region.

Mexico and Latin America will likely develop differently from both Europe and the US. We do know that there is a strong interest in having more renewable energy capacity installed in Mexico and Chile and we anticipate this interest will spread across other Latin American countries. Incentives will likely be more local in origin, similar to the way the U.S. market evolved. Three or four years ago, the U.S. had incentives that varied state-by-state, in some cases city-by-city, with Gainesville and Austin implementing their own feed-in tariff. California has always been the leader in renewable energy policy and perhaps Durango can be the leader for the rest of Mexico and Latin America.

We think Latin America is an exciting market for us. Many regions have sunny climates to maximize the peak performance of the Skyline X14 system.

 

Solar Server: To touch on this for a moment more, what do you see as the main barriers in Mexico and other parts of Latin America for the development of these kinds of projects?

Bob MacDonald: Looking at these markets, PV is still very much in the early adoption phase, and we are well beyond that in many of the key European markets where PV is now widely embraced.  Initially, European adoption was gradual and it could be a similar process in parts of Latin America where there is a lack of familiarity, local incentives and overall confidence.

I think the key to adoption will be winning over key stakeholders, including the grid operators and agencies in charge of permitting and resource allocation, to the idea that these PV systems can seamlessly fit in to the energy infrastructure and do what they are advertised to do.

 

Solar Server: Thank you. I note that your parabolic concentrator design is quite different from other concentrator designs employed by industry leaders such as Concentrix, Amonix and SolFocus. What are the advantages and challenges of Skyline Solar's parabolic concentrator design?

Bob MacDonald: That's a very astute question, because when most people think of CPV, they imagine a high concentration PV system, with the three companies that you listed as the leaders and pioneers in that area. There are probably dozens of companies using the triple junction cells with Fresnel lenses or other optical components.

The industry still has a very strong pre-disposition towards lower dollars per watt, even though for many markets, the kilowatt-hour cost is the most valuable metric.

Skyline's first commercial system tracking the sun. This installation is at the Valley Transportation Authority's bus yard in San Jose, California.
Skyline's first commercial system tracking the sun. This installation is at the Valley Transportation Authority's bus yard in San Jose, California.

I'd say one of the principal advantages to Skyline Solar's approach is the ability to deliver lower dollars per watt as the starting point. By using proven low-cost components, we are able to get much lower dollars per watt than a high-concentration system.  To my knowledge, we’re the only CPV company that is able to go to the market with system costs below First Solar.

The second advantage of the Skyline X14 is the inherent durability of the design. In the current market environment/post-financial crisis, the Skyline X14 system uses proven materials to mitigate risk and optimize overall bankability.

For example, Skyline uses silicon cells which have been the proven workhorses of the PV industry. It has even been used for concentrating PV for many years, dating back to the early 70's. So there is an extremely rich track record and a firm foundation for the durability of the silicon cells.

The mirrors we use have been a proven asset to the evolution of the solar thermal industry and received a lot of investment throughout the 1980's and 1990's. Additionally, as you have accurately identified, mirror technology has gone through kind of a renaissance recently.

In terms of challenges, up until late last year, we struggled with spreading the word and gaining visibility with audiences who weren't familiar with the CPV technology landscape. We are starting to see a widespread understanding of the technological advantages and financial benefits to the Skyline X14 and CPV overall.

One thing that propelled awareness of our technology was when SunPower announced their CPV product at their annual analyst day presentation in November 2010. To an audience, made up of analysts and bankers, SunPower unveiled a new CPV project and their plans to bring the CPV product to market in late 2011.

They showed images of the prototype and highlighted its benefits, which directly aligned with what Skyline has been doing since 2008. It's a medium concentration design using parabolic reflectors, linear panels, and horizontal single-axis tracking.

So while visibility used to be one of our biggest challenges, I think we've really seen that flip in the last few months and this is partly due to the fact that a major solar player validated the Skyline X14 system approach by making plans to launch their own medium concentration design in the future.

 

Solar Server: Can you tell me a little about the PV cells that the Skyline X14 system uses, and what factors were behind your choice of cells - I note that you are not using multi-junction PV cells.

Bob MacDonald: That's right and it is a very intentional choice. Here, in Silicon Valley, there is a long track record of companies in other markets and applications that have failed trying to displace silicon.

Now, this doesn't mean that there is no room for other materials, but there is immense knowledge of silicon as a material, and an established ecosystem for its fabrication and processing. This also applies to the PV industry.

In a nutshell systems, like the Skyline X14 that focus on a system-wide approach, favor higher efficiency and durable silicon cells.

Additionally, monocrystalline cells have seen an almost complete transition from the 125 mm pseudo-square cells to 156. Because of these advancements, we designed our system around really mainstream, front side contact cells based on 152 mm pseudo-square wafers.

Skyline Solar developed a proprietary mask design, or metallization pattern, that delivers high performance in our system. We have been working with cell companies who have high volumes running for standard PV applications, but also have an ability to put in a custom screen for Skyline Solar.

The Skyline X14 can be manufactured with the same fab and design tools already in use in the industry. For example, Skyline uses the same metallization placement and processes that can be found in existing plants. To manufacture the Skyline X14 system, we do not use new processes or added steps and we still maintain the level of customization in a standard process. This positively impacts our ability to scale quickly and limits costs often associated with creating a new manufacturing plant or process.

 

Solar Server: Is there anything that we didn't talk about that you would like our readers to know about the Skyline X14 system, your company and future plans?

Bob MacDonald: I appreciate you opening that up. I should add that at the end of the day, the Skyline X14 system improves the overall project bankability and ROI for the project stakeholders.

Another financial benefit I haven’t mentioned is the upgradeability of the Skyline X14 system. For most PV projects, using high-volume solar technologies, it’s assumed that once the panels are in place, the system has to remain static for 20 to 30 years. Most believe that there is a 25-year expected life for solar. This is because in the 1980's and 1990's, the industry became accustomed to this limited rate of innovation. Cell and module technologies continued to remain static through 2004.

But in the last seven to eight years, the industry experienced rapid acceleration of innovation that increased energy production and drove down costs. Unfortunately, as a result of the earlier stagnation, new solar technologies have to rid project developers of the erroneous belief that solar is not a long-term investment with increasing profit potential.

Skyline Solar is starting to engage with financiers, project developers and government entities who are interested in being long-term owners of a project.  The first question we pose to them is whether they are planning on investing in the non-upgradeable PV technology, or the upgradeable PV technology. We consider upgradability to be the crux of a long-term solar investment.

I would encourage people to think about upgradability in the context of two scenarios:

A. Upgradeability for large-scale projects being installed today; and

B. Upgradeability as a force driving behind the re-awakening of PV innovation and the commercialization of increasingly more efficient cells. These two possible scenarios, depending on of the future efficiency gains, can have an impressive impact on the investor's rate of return.

Skyline Solar is committed to delivering attractive returns on the project finance side so that project developers will be able to grow their business.  We are confident that we have engineered a system specifically designed to optimize the rates of return which balance dollars per watt with energy production.

 

Conducted on May 24th, 2011 by Christian Roselund