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Intersolar NA 2011: Challenges amid growth in the global solar industry

by Christian Roselund
July 20th, 2011 

Intersolar North America 2011: Bigger than ever

On July 14th, 2011, the Intersolar North America trade show concluded in San Francisco, California, capping three days of conferences, exhibition and networking for manufacturers, installers, policymakers, financiers and advocates of the solar industry.

The lobby of the Moscone Center during Intersolar North America 2011; photo: Solar Promotion International GmbH
The lobby of the Moscone Center during Intersolar North America 2011; photo: Solar Promotion International GmbH

Everything at Intersolar was bigger this year. Not only did the exhibition feature 839 exhibitors, 17% more than last year, on 16,000 square meters of exhibition space in the city's Moscone Center - a 30% increase, but the show reflected a larger industry. The global PV market more than doubled in 2010, bringing with it ambitious production capacity increases, ever larger projects, new technologies, and approaches to problems old and new.


Growing pains for the solar industry in 2011

However, six months after the close of this monumental year, the mood is very different. While many in the industry retain strong optimism for the long-term growth of the industry, short- and medium-term trends are more problematic.

Specifically, Intersolar North America 2011 came at the close of two quarters of weak demand in some of the world's largest PV markets, an oversupply of PV modules, and collapsing prices. The smaller CSP market continues to grow in Spain, but ambitious CSP and PV projects in the United States have been delayed by financing difficulties and lawsuits. Solar heating and cooling markets have also faced difficulties, in part due to the ongoing recession.

This year's conference saw an industry that is having to take a hard look at itself, and confront some of its more serious problems.


Energy storage

As PV capacities continue to grow throughout the world, the issue of energy storage looms large.

Sodium sulfur batteries have are currently the most popular choice to accompany large scale solar generation, but multiple other technologies are being investigated; photo: Hawaiian Electric Companies
Sodium sulfur batteries have are currently the most popular choice to accompany large scale solar generation, but multiple other technologies are being investigated; photo: Hawaiian Electric Companies

And while the United States has lower levels of PV penetration than leading European markets, the larger scale of U.S. PV projects leads to greater risks from intermittent and variable output than distributed solar, and some U.S. PV companies are already taking energy storage seriously.

Notable among these is SOLON Corporation, a subsidiary of SOLON SE, whose Director of Research and Development Bill Richardson presented at an energy storage panel on the first day of this year's conference. SOLON has recently announced a new partnership with Tucson Electric Power Company (Tucson, Arizona, U.S.) the University of Arizona, to test multiple energy storage solutions to accompany PV generation.

"PV is getting bigger and bigger, it is getting higher penetration," Richardson of SOLON told Solar Server at the conference. "We have discovered that utilities are concerned about the effects of intermittency of PV in these large scale projects."

"And so we are looking out in the future, and saying OK, if utilities want control of the PV plants, then we should be experts in giving them that control. And that is going to require storage. And the way you become an expert at installing and integrating storage is you install, integrate and control the storage. You have to do it."

In terms of technologies, one thing that Richardson has emphasized is that there is no one-size-fits-all storage solution, and that the appropriateness of specific solutions is highly differentiated by both climatic conditions and the type of power control needed.

The conference also comes a few months after the commissioning of the Gemasolar plant, the first utility scale concentrating solar power (CSP) project to operate 24 hours continuously, thanks to its molten salt storage system. This technical feat shows the potential of CSP for energy storage at a lower cost than many battery systems, which has caused many in the industry to re-evaluate the potential of CSP.

(Solar Server featured the Gemasolar plant as its June 2010 Solar Energy System of the Month. To read more about the plant, see: www.solarserver.com/solar-magazine/solar-energy-system-of-the-month/concentrating-solar-energy-of-the-future-torresol-energys-molten-salt-power-tower-csp-plant-gemasolar.html)


Thin films on the rise

Among the more exciting technological developments since last year's conference are a series of new efficiency records for thin film PV, particularly copper indium gallium selenium (CIGS or CIS) technology, and a new optimism among thin film suppliers.

Aerial view of Solar Frontier's 1 GW Kunitomi CIGS manufacturing facility; photo: Solar Frontier K.K.
Aerial view of Solar Frontier's 1 GW Kunitomi CIGS manufacturing facility; photo: Solar Frontier K.K.

Perhaps no thin film manufacturer is as ambitious about taking market share from crystalline silicon as Solar Frontier K.K. (Tokyo, Japan), which officially opened its 1 GW CIS production facility in Miyazaki, Japan in April 2011.

Solar Frontier Americas Chief Operating Officer Greg Ashley spoke at  the July 13th, 2011 panel on thin-film technology improvements, noting that in addition to closing the gap with crystalline silicon efficiencies, CIS also offers other benefits, including broader spectra ratios and better performance in low light conditions and hot weather.

Ashley also noted that thin film technologies use a small fraction of the semiconductor material employed by crystalline silicon. He has also stated that CIS has the ability to compete with crystalline silicon prices.

Solar Frontier joins a number of companies that have been able to deliver big increases in CIS efficiencies, including Q-Cells subsidiary Solibro GmbH (Wolfen, Germany), and more recently XsunX Inc. (Aliso Viejo, California, U.S.).

While what is produced on the shop floor is always a step behind what is achieved in the lab, some of these companies - including Solibro and Solar Frontier - have also shown that they can mass-produce modules with impressive conversion efficiencies, 13.4% in the case of Solibro.


Clouds on the horizon in 2011 and 2012

Rising efficiencies and falling prices are more necessary than ever for PV to compete, as the industry faces a gloomy near-term outlook for world markets. At a panel discussion focused on the future of world PV markets, Both EuPD Research Director Daniela Schreiber and IHS iSuppli Photovoltaics Analyst Michael Sheppard released predictions that the aggregate global PV market would rally in the second half of 2011, but decline in 2011 and 2012.

The analysts pointed out that in both Germany and Italy - which together represented 60% of global PV demand in 2010 - market growth has exceeded national goals for PV capacities. Both researchers also predicted that the markets which represent the most hope for the future, including the United States and China, will not replace these markets for several years to come, even given the ongoing collapse in PV prices due to overproduction.


Big questions about the U.S. market

Paula Mints of Navigant Consulting; photo: Navigant Consulting
Paula Mints of Navigant Consulting; photo: Navigant Consulting

Other analysts, including Paula Mints of Navigant Consulting Inc. (Washington D.C., U.S.), have suggested that some of the more optimistic predictions of short-term growth in U.S. PV markets may not be taking all factors into account. The nation possesses enormous project pipelines for utility scale PV and CSP, but as Mints points out, "it is a long way from power points to power plants".

Mints and others have expressed concern about U.S. policy mechanisms, such as California's Renewable Auction Mechanism, which rely on competitive solicitations instead of the set rates offered by feed-in tariffs. Both Mints and the CLEAN Coalition (Palo Alto, California, U.S.), which critically supported the policy, note that such mechanisms can lead to underbidding and projects that are never completed.



Political realities

Intersolar organizers called a national feed-in tariff for the United States at the conference. While this would be obviously beneficial for any solar technologies that would be included, the odds of such a proposal being implemented at the national level are slim to none in the nation's current political climate.

The U.S. Republican Party has shown hostility to both carbon regulation and policies to support renewable energy at the national level; Image source: public domain
The U.S. Republican Party has shown hostility to both carbon regulation and policies to support renewable energy at the national level; Image source: public domain

The return of the opposition Republican Party and the Tea Party movement in the U.S. Congress has already led to slashed funding for the DOE's Office of Renewable Energy and Energy Efficiency and the Environmental Protection Agency, the latter as part of a concerted effort to prevent regulation of CO2. It is an irony that the feed-in tariff proposal was made at Intersolar during a Republican threat to not raise the nation's debt ceiling - which could be disastrous for the United States' economy and industries well beyond the solar industry.

If the right wing of the U.S. political spectrum maintains this momentum into 2012 elections, there is also a potential for national policy supports put in place by U.S. President Barack Obama to be removed. Most significantly, while Obama's Treasury Grant Program (TGP) managed to survive budget negotiations in late 2010 for another year, there is no guarantee that this will happen again. In an interview during Intersolar Paula Mints of Navigant Consulting gave the TGP's chances of extension to 2012 at 40-60 against.

The state-level policy environment is more complex. In the absence of strong federal action, U.S. states and even cities have taken the lead in implementing renewable energy mandates. In several states, including California, Texas and North Carolina, some Republican politicians have supported strong policies to support solar and other forms of renewable energy.


Hope springs eternal, part I: CPV

However, there are several trends that bode well for the U.S. and global solar markets. Falling PV prices mean pain for manufacturers, but also help close the gap between PV costs and grid parity. On a more positive note for the industry, the ongoing advance of technology and new approaches to the problem of financing could both be game-changers in certain markets.

Concentrix CPV module with tracker
Concentrix CPV module with tracker

After decades of development and years of small pilot projects, concentrating photovoltaics (CPV) is finally breaking out into the scale of projects over 100 megawatts.

Among this year's exhibitors, Soitec SA's (Bernin, France) Concentrix CPV technology has recently secured power purchase agreements (PPAs) for a total of 305 MW with San Diego Gas and Electric Company (SDG&E). These PPAs are much larger than any projects that have been completed to date. Soitec is also pursuing pilot projects and research and development collaborations in Morocco and Tunisia.

Much of the potential of CPV comes down to cost. For the right regions, including parts of Southern California and much of Northern Africa, CPV offers a lower levelized cost of electricity than competing technologies. Furthermore, Soitec and others are very confident of CPV's potential to scale without complications.

During the Intersolar conference, Solar Server interviewed Hansjörg Lerchenmüller of Soitec, who co-founded Concentrix before its purchase by Soitec, which can be accessed here.


Hope springs eternal, part II: solar leasing

While much attention is paid to the technical problems of bringing efficiencies up and costs down, many of the solutions to growing PV markets come from other areas, notably policy and financing.

Policy analysts have noted that one of the chief weaknesses in the hundreds of diverse solar incentives in the United States, as compared to a system of feed-in tariffs, is that these combinations of incentives simply do not offer the same investment security, and that U.S. homeowners have difficulty securing loans at reasonable rates to address the high up-front costs installing PV systems.

This has created a booming market for companies including SolarCity Corporation (San Mateo, California, U.S.) and SunRun Inc. (San Francisco, California, U.S.) which lease solar systems to homeowners, with the option of little or no up-front costs. As this solution proves its utility, the field of companies offering such services broadens.

Centrosolar America Inc. (Scottsdale, Arizona, U.S.) has launched a solar lease program geared towards its network of residential installers, making it unique among original equipment manufacturers. The company  advertised its CentroLease solution at the Intersolar exhibition, along with its CentroPack "solar-in-a-box" system and its mounting and racking solutions.

U.S. Cities have also noted the potential benefits of financing programs. During the Intersolar conference the city of San Francisco unveiled a new solar group purchase and financing program for businesses and commercial property owners, "Solar at Work". SolarCity will assist with financing options for the program, which aims to install 2 MW by the end of 2011.

It remains to be seen how dramatic of an expansion in the U.S. market solar leases will enable, but industry analysts are already reporting that installations through solar lease programs are making up an increasingly greater portion of residential and small commercial markets.


Conclusion: many markets, many technologies

While there are many concerns for the global solar industry going into the second half of 2011, there is also cause for considerable optimism.

Even if things do not turn out as planned in specific national markets or market segments, there are many developing markets that offer mid- to long-term growth potential for grid-tied PV, CSP and CPV, as well as solar heating and cooling, beyond North America and Western Europe. These developing and potential markets include China, India, North Africa and the Middle East, Southeast Asia, Central and Eastern Europe, and Latin America.

Other regions offer great potential for off-grid solutions, for those developers that can adapt to different infrastructure, different markets and different demand.

The same can be said for technologies. Currently the solar industry offers a greater variety of real and potential solutions to our energy needs than any other technology. No one can say which technology or company will be the winner in any specific market or market segment in the years to come, but the signs of ever greater efficiencies, lower costs and more adaptive solutions are all positive.

The global solar industry continues to be a testament to the boundless creativity of humanity, and a growing means of addressing our greatest challenges. Nowhere is this as evident in the gathering of talent, ideas, technologies and solutions that was on display at Intersolar North America 2011.

Exhibition floor at the Intersolar conference; photo: Solar Promotion International GmbH
Exhibition floor at the Intersolar conference; photo: Solar Promotion International GmbH