Intersolar 2010 is one of the larger gatherings of the Solar Energy industry. I had the opportunity to attend InterSolar 2008 when it was still relatively new. In the last two years the Solar Energy industry has grown very quickly, chalking up 35% growth in 2009 over 2008 and with similar forecast growth for 2010. Overall revenue generated from the sale and installation of solar energy systems in the US was estimated at over $2.4 billion. This is made up of solar panel sales across the residential, commercial and utility customer projects with a mix of technology including some solar hot water systems, some large scale solar concentrator systems and a whole lot of solar panels being installed with racking, inverters, tracking systems, engineering design, contractor labor, etc.
The contrast between InterSolar 2010 and 2008 was very noticeable. This year’s trade show reflected the growth and sophistication. Tremendous effort is being put into every aspect of the photovoltaic technology, tandem junction semiconductors that produce the photovoltaic effect at 2 different light frequencies, enhanced surface texturing of the surface glass to improve transmission of light and reduce the problem of incident angle of light, new chemistries like Copper-Indium based photovoltaics which are now “printable” as ink coatings, and ongoing development of thin film silicon, concentrated light focusing on silicon, recycling of the silicon itself, and a host of improvements all targeted at reducing the cost of producing electricity from sunlight. As you might expect, incredible support from semiconductor equipment makers to provide new equipment to make the technology scalable in production and cost effective in the marketplace. Solar is the new growth engine in semiconductor equipment.
Solar Panels, like other types of semiconductors, are subject to decreasing cost with increasing volume. In typical Semiconductor Industry fashion, a lot of capacity has been ramping up since early 2000 which led to a 40% correction (read “drop”) in the price of solar panels during 2009 which played havoc with project bids and created serious difficulties for distributors with inventories or contracts for solar panels at the higher prices of early 2009. However, now that prices are lower, more demand is expected, and hopefully, companies that had a tough time during 2008-2009 will find business conditions in 2010 and 2011 more favorable.
There is continued optimism that the US solar market will continue to grow at 30%+ per year for the next couple of years, some forecasts are 50% per year and one forecast from Europe suggests 100% growth in the US market next year. Huge growth forecasts combined with caution on the manufacturing side has created shortages and long lead times for new deliveries.
But we should note, with caution, that this market is largely subsidized by State Renewable Energy Portfolios mandating the alternative energy systems, Utility Company Rebates and Federal Tax Incentives. Solar energy technology is generally sold on the basis of avoiding future increases in energy costs, not on the basis of eliminating energy costs.
So there is still a big gap in bringing electricity costs down using solar power. Modern coal plants produce electricity that the utility company can sell at a profit for 6 cents per kilowatt/hour. By comparison, a 300 watt solar panel will cost at least $1500 installed and functioning. It can only produce about 756 kilowatt hours per year, and even at 12 cents per kilowatt/hour, won’t break even for about 16 years without government incentives. So you’re not eliminating your electric bill, you’re prepaying it with a bank loan for a bunch of equipment that doesn’t burn coal.
That’s OK if you can afford it, just don’t make the mistake of thinking you are getting rid of your electric bill. But be on the lookout for the next breakthroughs in solar. They are coming.