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Bharat_A
RWatkins
I await the jury results of yet another Chinese tech bubble forming. The prior ...
An entrepreneur's view of solar
Rick Merritt
9/1/2011 1:25 PM EDT
SAN JOSE, Calif. – "The solar panel business is all going to China," said Valdis Dunis, a long time entrepreneur and friend.
It was July and we were having coffee in one of Hong Kong's snazzy upscale hotels. I was on my way to Taipei to write about Windows 8 on ARM and fabless IP companies, so I was just storing away his comments to a place somewhere in the far back of my mental filing cabinet.
Yesterday when Silicon Valley's clean tech icon Solyndra publically crashed and burned, Valdis' comments flooded back to the forefront of my mind.
As usual, Valdis' opinions were well informed. He had been working for some time as the founder of Solar Cities Asia, assembling the business plan for a company that aimed to be a leader in rooftop solar installations in this sun-drenched region.
Much of Valdis' time recently had been devoted to pouring over complex financing issues. He was jazzed he had found a way to make the numbers for installing rooftop solar on commercial buildings very compelling, essentially using creative ways a lowered utility bill could be factored into the equation of amortizing the hardware.
I got the impression the solar rooftop business was all about how you ran the numbers, including what government incentives were available. But Valdis is an engineer at heart, so he kept a keen eye on the technology as well.
He had watched China sources of mainstream crystalline solar panels ramp up in volume and down in price over the last year or so. He was very curious about TSMC's plans for solar panels based on CIGS technology. He encouraged me to research how the initiative was going and expressed skepticism even they could master the complex technology behind it.
I didn't make the connection those giant Solyndra fabs along I-880 back in Fremont, Calif., were using similar technology and were in a similarly dicey position. But it didn't take long for market realities to catch up to what Valdis had already concluded.
Word is China has given away tens of billions of dollars to help its local manufacturers step on the gas in mainstream crystalline technology, essentially buying market share in solar. They were following the pattern set by Samsung and LG in DRAMs and LCDs a generation ago.
These days the big U.S. and Japan memory and display makers are consolidating to catch up with Korea's giants. Similarly a solar shakeout seems to be here in the wake of the rising China juggernaut Valdis saw coming months ago.
CIGS, thin-films and other solar technologies still have plenty of promise. Efficiencies of solar cells are abysmally low. A new approach could offer a performance breakthrough to leapfrog China in the market--someday.
But that technology is not here today. The lesson of Solyndra, experts say, is solar alternatives deserve private and public funding at the level of lab research to pave the way for next-generation breakthroughs, but crystalline is the bet to make in mainstream manufacturing. It is edging toward the dollar/Watt sweet spot and its competitors don't seem to be close at the moment.
U.S. investors love to bet on leapfrog technologies that will become the next big thing. But in solar China appears to have a smarter approach at this stage of just out-producing everyone in what the market wants today.
I am headed back to Taipei shortly and thinking maybe this time I really ought to check into TSMC's solar plans. They may be digging in Hsinchu the next big hole in a consolidating solar industry.
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george.leopold
9/1/2011 8:22 PM EDT
Greetings to Valdis Dunis, a good friend and guide to mysterious Hong Kong!
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dleske
9/1/2011 9:22 PM EDT
Greetings to Valdis Dunis - the first person at my high school to get his own computer (in 1979), I was the second!
David Leske.
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Jack.L
9/1/2011 10:53 PM EDT
It did not take a genius to know that Solyndra was not going to make it. Look at their technology:
- Glass tubes: Inherently more difficult to make than flat glass
- Quite a few glass tubes to equal the output of similar power simple flat glass and cell mono panel
- Manufactured "inside" a glass tube ... I can only imagine how hard that was ... not to mention how hard to inspect
- Ok, but not great results that really required roof top modification (reflective coating) to get the best out of it
About the only thing it had going for it was lack of ballast if installed on a flat roof and a flatter output curve which is actually better for grid connection.
Being in electronics for 20+ years, I have seen new technologies come along that "promise" to lower costs ... and maybe they do in the short term, but they are not scalable to lower costs. Solyndra was a prime example. It may have been cheaper to start, but it had limited ability to drive cost down compared to other technologies.
This is just one CIGS technology though and to compare it to simpler CIGS technologies like Nanosolar or Miosole (neither guaranteed to succeed) is not accurate. Their technologies are more scalable.
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chipmonk
9/2/2011 12:31 PM EDT
The key to getting even 11 % efficiency from CIGS is in developing and maintaining optimal microstructure in the deposited film. This has not yet been demonstrated in HVM by the few who started with CIGS on flat panels.
From Day 1 of Solydra ( Sep 2008 ) the numbers did not add up. But they were still able to get $ 400 million + of Obama's stimulus money with very little due dillegence while DOE asks one to jump through multiple hoops for any of their PV grants ! All we are left with is another large building in Freemont by I-880.
Does not speak too highly of DOE is being run by Chu or his stunt-seeking boss Obama.
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elctrnx_lyf
9/3/2011 9:36 AM EDT
Solyndra is a business failure. The technology could have been evaluated well for the right market need before investing so many dollars into it. This failure is also because the urge of government to actually create jobs which doesn't exist.
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elPresidente
9/5/2011 5:35 AM EDT
Nope - it's cronyism that was cutting the losses of those who were about to lose a ton of money by sliding them loan guarantees from the Treasury. Bank money being slid to VCs.
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t.alex
9/3/2011 8:17 PM EDT
If solar is just about manufacturing, it make sense to be shifted to China.
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elPresidente
9/5/2011 5:33 AM EDT
BS - if it has heavy automation, China has no advantage apart from its own government subsidies. In fact, bulky things have a disadvantage in China due to shipping costs. Chinese government subsidies, and US government ineptitude, is what's killing solar in the USA.
That said, VC's are guilty of rounding up money for Solyndra to cut their own losses - their own inept investments in something that never should have left the lab.
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katgod
9/14/2011 9:20 PM EDT
I am with you on this, well said. I did not hear any mention of our other 2 domestic players, FSLR and SPWRA each using a different technology and 1 claiming to have broken the $/watt barrier. I suspect they will need continued government help to survive. I am personally not against this and think we need a coherent national energy policy so that these companies can plan.
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Robotics Developer
9/5/2011 7:25 PM EDT
I often wonder if solar is "the way to go" when it seems to require grants/government subsidies. If the technology is promising and can be manufactured then the business VCs will flock to it if there is an advantage. Clearly this was not the case with Solyndra, just one more example of a failed government program (not even going to discuss the "jobs created" -not and the taxpayer monies lost).
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GREAT-Terry
9/5/2011 9:25 PM EDT
It seems the government subsidy is necessary to make solar popular. It may not be a good business model but alternative energy is a very tough to beat task when oil price is still comparatively cheap (it has so long history...) so I still think it is necessary for the government to get involve and invest in the infancy stage.
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iniewski
9/12/2011 2:18 PM EDT
I am not convinced that crystalline material is the most economical way of building solar cells. Yes,the efficiency will be high but the cost will always higher than thin-film poly or amorphous materials...Kris
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Jose_engineer
9/14/2011 4:40 PM EDT
"EV vehicles, and solar are not competitive with fossil fuel alternatives." So, the govt. subsidizes Solar and EVs, while they subsidice fossil fuels?
Govt. subsidices Tabacco production, and then subsidice efforts to get people to 'stop' smoking?
You see the problem?
I any case, if the chinese govt. wants to subsidize our shift to cleaner power generation more power to them. I say "thank you".
Technology is easy. Economics is reeeeeally hard!
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RWatkins
9/15/2011 10:11 AM EDT
I await the jury results of yet another Chinese tech bubble forming. The prior results were a lot of hype and the dumping of large amounts of goods of dubious quality. Take for examples exploding ceramic capacitors powered at voltages below rated, cadmium alloy children's toys, lead painted promotional glasses, etc. I hope that in a few years that, if China corners the market for solar panels by such hype and government subsidies, we don't again see why real quality has been a problem there.
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Bharat_A
9/15/2011 10:12 PM EDT
Thank you. Finally I get to hear the word "Chinese Tech Bubble."
The facts & figures we have for US solar companies (cost/quality/tech/etc)are good enough to analyze the solar industry thread by thread and media-flog it. But I am not sure if we have the same kind of info about Chinese solar industry that gives it such a hype.
After the Solyndra's downfall, one can find many articles online on- "faltering steps of US in the domestic solar industry." Good analysis and thorough research.
But I hardly find articles or see anyone discussing, in such detail, about the Chinese Solar Industry. We just hear about the companies leaving US and entering China...and not much after that.
Pretty much everyone talks about the Chinese Govt subsidies in this sector. But this is not the first time Chinese Govt subsidized its products to drive the industry and compete in international markets.
It would be good to know the technological prowess of these companies and the quality of the products.
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