Review: Here Comes The Sun, a Solar Documentary

I was curious if anyone had created a documentary about solar, and found only one. Here Comes the Sun, a 48-minute, made-for-TV production by a Dutch film crew, was released in 2010. I’m sure it never saw any kind of theatrical release and was only posted to YouTube in 2012 with English voiceover narration. (The original, in Dutch, can be found here.)

The underlying premise of the film is not surprising to anyone in the solar industry: solar is bigger than you think today, and only going to get bigger—much bigger. Most of the film focuses on what’s happened in Germany as a sort of template that the rest of the world will follow.

If the film has a hero, it’s Hermann Scheer, a German politician who might be considered the “godfather” of solar in Germany and, in truth, sparked much of the worldwide solar revolution we see today.

The film intersperses some truly thought-provoking comments from Scheer with interviews with representatives from companies like SunPower, Applied Materials, and SolFocus. It also profiles some interesting utility-scale projects in the US, Spain and Jordan, and touches on the advent of solar in India.

I enjoyed the film. It was prophetic in places. The representative from SolFocus predicted that solar would a gigawatt industry in the next five years, meaning 2015. It’s actually closer to 200 GW today. (She may have meant the market for concentrated PV, which was SolFocus’ market.)

Another prediction was that solar would reach parity in production costs with fossil fuels in 2011 or 2012. It’s happened (at least, in places, at times).

I think the most interesting observation—I wouldn’t call it a prediction—was Scheer’s argument that the costs of renewable energy production can only go down over time. The only cost of PV, he explains, is technology, and technology costs always decline over time. But with conventional energy sources, there are raw inputs (e.g., coal or natural gas extraction and shipping) that can only drop so far in cost and will never be zero. His point is that it is thus inevitable that renewable energy will be cheaper—in fact, much cheaper—than conventionally-sourced energy.

A representative from Applied Materials drove this point home by comparing where semiconductor costs were 30 years ago versus now. Indeed, PV module technology is following the same curves of massive performance improvement at steadily plummeting price points as related technologies like flat-panel TVs and microprocessors.

Of course, there are some inputs into modules and BOS component production (silicon, aluminum, steel, copper, doping chemicals, etc.) that are susceptible to price swings, but those are one-time costs, and those inputs are far more abundant than fossil fuels.

As for correlating what happened in Germany with what has (or will) happen in the rest of the world, the argument falls short. As Scheer explained, energy is more of a political game than a technological one. And it’s a localized one, too. Europe never had the deeply-ingrained love affair that the US has about its vast natural gas and coal reserves. For Europe, it’s less about protecting jobs and more about the environment. Until the US reaches that level of consciousness, if you will, it won’t move forward with solar as quickly as Germany. We won’t see the generous feed-in tariffs here that are found in Germany, for instance. And, importantly, European energy prices were already high. If they were in the US—as they are in California—you’d expect (and get) much more interest in renewables.

Another thing the film did well was debunk some myths about solar. For instance, you don’t need abundant sunlight—Germany isn’t particularly sunny, yet leads the world in solar energy production. Another myth debunked: You wouldn’t need to cover the world in solar panels. The film cites an estimate that a solar farm 300,000 square kilometers in size could power the entire world. That’s the size of France. Doable.

And a final point. As with all technology industries, solar companies come and go, as does countries’ commitment to it. SolFocus shuttered in 2013. The film briefly mentioned BP as the one oil company that seemed to “get” solar (they were exhibiting at InterSolar in Germany in 2009), though BP subsequently left the market. And Spain was depicted as a country that was also aggressively pursuing solar, though has since fallen behind the US. And, sadly, Hermann Scheer died in 2010, probably just months after filming wrapped up. With him, the industry lost a great advocate.

Shifting Demographics and Community Solar

According to the Sierra Club:

The amount of solar energy that falls on the earth’s surface in 40 minutes equals the total annual energy consumption of all the world’s people. Put differently, 27 years’ worth of worldwide energy consumption equals only one day’s worth of solar energy hitting the earth.

I have seen similar statistics floating around the Internet. The most popular: “Enough solar energy hits the earth every second to power the entire world’s energy needs for one year.” The “every second” part varies. Some quote it as an hour.

Whatever the exact figure, the amount of sunlight hitting the earth within a small timeframe, if harnessed, would greatly exceed our current energy consumption needs. It’s thus  seductive to think the entire world could go 100% solar. I consider myself an environmentalist and want to subscribe to that notion. Why couldn’t we shutter every coal or nuclear plant and produce all of our energy from solar (and other renewable energy sources)?

The obvious but grossly incomplete answer is cost. Yes, solar panels and all the related components necessary for their proper installation are still expensive. That’s true despite significant price drops in recent years due to higher demand leading to higher-scale production, increased global competition, better technology, and more efficient manufacturing processes.

Typical parts-and-installation costs for a homeowner in the United States might be $20,000. Federal, state and local incentives can reduce that significantly, but even with those, installing an array is still beyond the financial reach of most homeowners. Financing companies are stepping up to at least partially solve this challenge–and just in the nick of time, too, as the deadline for renewing the Investment Tax Credit approaches.

But I think shifting demographics, not affordability, are actually a bigger threat to solar on the residential side. For example:

  • Fewer Americans are buying homes and choosing to rent instead. Renters don’t care (or at least care much less) where their power comes from.
  • Whether they rent or buy, younger Americans are increasingly choosing to live in urban cores. This usually means apartments or condos that don’t have roofs of their own. And in urban settings, homes are often closer together and more likely to have the sun blocked by other buildings.
  • If they do buy a house, they’re increasingly choosing smaller homes, which will have less roof area on which to mount a solar array (though presumably use less energy, too).
  • Americans are staying in their homes for fewer years. That’s important, because the time it takes to recoup an investment in a typical solar installation is anywhere from three to seven years. This makes the ROI case for residential solar more challenging as long as electric rates remain as low as they are in most states.

The straightforward answer to these demographic shifts is community solar. But with it come challenges of political obstacles and securing space for the array.

But perhaps the biggest issue is an educational one. A community needs to embrace solar power. Few people understand the advantages of solar in general; even fewer have ever heard the term “community solar.”

I think of the 100-unit condo complex where I live. About 30% of the units are occupied by short-term renters, so off the bat, almost a third of “residents” probably won’t care where their power comes from. Of the remaining 70 residents, I’d estimate that at most 20 of them would either want solar or even care enough to cast a vote one way or another. That’s simply too small a quorum to see any action.

Making it more problematic is that our property management company and homeowner’s association Board are “old school.” They generally won’t change anything unless something is truly broken. And as long as our grid is reliable and electricity is affordable–which is the case–a handful of residents’ pleas to invest in a solar project won’t grab their attention.

And on a practical level, I don’t know where the array would be located. My complex is in a well-developed urban area. There isn’t much, if any, land to be had for an array. Land values are high throughout Austin, so even if you find a plot, it’s going to be pricey. That probably won’t make sense to any developer when they could instead build homes or apartments on that land and make more money that way.

I suspect that the case of my complex isn’t unusual. I suspect community solar will only make sense in a small number of communities–particularly large, newly-built ones in mostly undeveloped areas. And that would be a shame, because I love the concept of community solar.

The Coming Waves of Consolidation in Solar

I was a business history major at Carnegie Mellon University. Unless the solar industry somehow breaks every historical pattern of industrial growth, we know with virtual certainty that massive consolidation in this industry is a sure thing. It’s already begun, but it’s tricky to predict who’s next at this early point. I’ve been thinking about some likely tie-ups:

Module manufacturers acquire inverter manufacturers. This is an obvious one, and it’s happened before. In 2013, ABB acquired Power-One, and Advanced Energy acquired REFUsol. In 2014, SunPower acquired SolarBridge.

Module manufacturers acquire storage vendors. “Solar + Storage” was a recurring mantra at Intersolar, and yet few module or inverter manufacturers make storage systems. An acquisition might not be necessary, of course; it could be done through reseller agreements. To wit: SolarCity resells Tesla’s Powerwall, which is not at all surprising given Elon Musk’s involvement in both companies.

Larger module manufacturers acquire smaller (or foreign) ones. There are too many players in the global market right now. To drive manufacturing costs much lower, massive scale needs to be reached. And, this could help companies gain footholds in emerging markets or circumvent tariffs.

Conventional PV module manufacturers merge with thin-film vendors. With the notable exception of First Solar, thin-film vendors seem to be struggling financially (and always have). That makes it challenging to continue R&D until thin-film becomes mainstream. So, a tie-up with a traditional module manufacturer makes sense; sales of those modules becomes a sort of  “cash cow” to fuel continued development of thin-film technologies while that technology and market mature. Once it does, this company would be in the pole position to capitalize on the shift.

BOS vendors consolidate. How many companies does the world need making cable clamps? At Intersolar, I saw only a fraction of the BOS vendors out there. It’s hard to believe there’s room for that many to all be profitable growth businesses, especially when most of what they make are relatively low-cost, probably low-margin, and largely undifferentiated products.

Companies that make trackers and racking equipment consolidate. I believe some tracker vendors do make racks specific to their equipment. But it seems that there’s innovation happening in parallel at racking vendors and tracker vendors, and there could be more synergistic innovation leaps if best-in-class companies in each area joined forces.

Solar companies merge with wind companies. This could take on a variety of models. Consider General Electric. They’re huge in wind turbines, but play a smaller role in solar with things like transformers and through partnerships (e.g., with First Solar). If Total would let it go, what about GE acquiring SunPower? Or Trina Solar?

The big installers acquire mid-sized module manufacturers. Consider SolarCity, the largest installer in the US, which will reportedly soon be making its own modules. By doing so, they will drive down their installation costs significantly. So what about Sunrun, Sungevity or even NRG? According to GTM Research, those three companies, plus SolarCity and Vivint (now SunEdison) do about half of the residential installs in the US. Of course, it’s also possible that the big installers will merge with each other.

There are of course dozens of other interesting tie-up possibilities. I heard almost everyone at Intersolar say this magical phrase, which I can only echo: “It’s an exciting time to be in solar.”

Observations from Intersolar North America: Innovation

I’ve been to quite a few trade shows in my days in the software industry. At every show, there were always a handful of exhibitors showcasing what they claimed is “the next big thing.” Attendees gravitated toward those booths to see that “thing.”

At Intersolar, I didn’t see that unicorn. The big shiny object with buzz in the solar industry right now is Tesla’s Powerwall–but Tesla wasn’t exhibiting. Even so, I stumbled upon two module vendors’ booths where they had a Powerwall hanging on their booth walls because, well, just because. It was just eye candy–from a technical perspective, this could have been any battery–though frankly it was effective at drawing a crowd.

My real point is that I didn’t notice any big innovation. Granted, I’m new to the industry, this was my first solar trade show, and I didn’t spend time at every single booth. So, perhaps there was something there that I just didn’t see or appreciate. But every show has a vibe that tends to differentiate what’s special from the ordinary. I didn’t get that sense at Intersolar.

And maybe solar rarely has any new, game-changing disruptive technologies. After all, the basic solar cell hasn’t evolved much in decades, and the underlying chemistry and physics of PV science date back over a century. Sure, over time, better materials and manufacturing techniques have yielded much higher efficiencies. But today’s best-in-class panels, from SunPower, are still “only” at 24% efficiency. Most of the manufacturers at the show were touting efficiencies in the 16-19% range, which seems about average. Those seemingly low values are good enough for today’s needs, but I heard two conference presenters mention that they believe improvements in module efficiency are coming to an end. We might see modules reach 25-30% efficiency, but no more. Module efficiency is clearly a game of small incremental improvements, not big leaps.

Several panelists argued that thin film will someday (as in, by 2020) become more prevalent than silicon-based PV, largely because it’s far less expensive to manufacture. However, its efficiency is currently in the 10-15% range, though in laboratories thin film is reaching 20-25% efficiencies already. When that innovation moves out of the lab and into production, I’m sure the buzz will be huge. But not yet.

I heard a lot of talk about “smart modules” and systems connected to the “Internet of Things.” Exciting concepts, but today all of these smart, hyper-connected systems seem to be little more than chatter.

It’s the same story for inverters and storage components–lots of small innovations perhaps, but nothing game-changing yet. One startup vendor, Energy Power Systems, intrigued me with their new “advanced” lead-acid batteries. Lithium-ion is all the rage now, but a representative from the company made a compelling case that lead-acid–if done right–offers several important benefits. Lead’s not dead. It reminded me of how Chevrolet has been able to extract mind-blowing performance from its small block V8 in the Corvette, which still employs two valves per cylinder when every other performance engine in the world moved to four years ago.

I know little about BOS components, but I was impressed by how many BOS vendors were there and the innovation they had on display. For instance, there were several racking vendors touting how modules could be affixed to their racks much faster than if using conventional clamps and screws. By my reckoning, the time savings per module might be 2-5 minutes each, which for a typical residential install might shave off an hour at best. That’s good but not game-changing. But for a commercial or, yikes, a utility-scale install, that could shave off days or even weeks.

As another example, I read in a trade journal how 3M (which wasn’t at the show) offers inexpensive adhesives to essentially glue modules and other components to frames. This might be messier than hardware, but it facilitates installations that otherwise might not have been possible because no suitable hardware exists or is on-hand to use.

And maybe that’s just where we are now with solar. The near-term technical innovation is happening at the fringes, with the smaller stuff like better/faster/cheaper BOS components, or even improved software tools for things like site design. The longer-term, game-changing technical innovation is happening with thin-film technologies and “smart” devices.

The really, really big innovation that’s happening now that I left out is business model innovation driven by (or causing) sweeping market changes–the proliferation of affordable financing options, the rapid drop in prices of solar components, renewed market interest in distributed storage systems (largely thanks to Tesla, I suspect), PPAs, the rise of solar in lesser-developed countries, and so much more. I’m excited to see what happens in a couple of years when the breakthrough technical innovations meet up with the continued business model innovations in the industry.

Observations from Intersolar North America: Globalization

I just got back from Intersolar’s North American conference in San Francisco–the first solar-related conference I’ve attended. In the next few posts, I summarize some observations from the conference.

First up, I was struck by the level of globalization I saw on the trade show floor. With the possible exception of the auto industry, I can’t think of a more internationally-balanced industry than solar in terms of where components are sourced, where companies are based, and where arrays are installed. These factors of course have a lot to do with each other. A few reasons, issues and other observations jumped out at me:

“Sourcing” gets confusing. As in the auto industry, “origin” becomes a confusing concept. SolarWorld (a German company) makes some modules in the U.S., Fronius (an Austrian company) makes some inverters in the U.S., First Solar (an American company) makes most of its panels in Malaysia, and Canadian Solar, somewhat ironically, makes most of its panels in China. At the show, there was even a Mexican company that made its panels in the U.S..

And as with the auto industry, where a product is engineered can be equally–or more–important than where it is built. QCells, for instance, touts that its modules are engineered in its home country of Germany, despite most of its manufacturing being in Malaysia.

Shipping weight and time. Obviously, solar gear is heavy. For a typical residential install, which uses a small amount of modules and typically one or two small inverters (or a handful of micro-inverters), weight’s not a big issue and shipping costs can be adequately buried in the total system cost. But consumers are price sensitive, so it’s not surprising to see so many Chinese or Korean (e.g., Samsung) modules used to keep component pricing down.

However, for utility-scale deployments, I have to think that the weight of hundreds of thousands of modules and inverters the size of small houses has to create a significant barrier to offshore manufacturing. The shipping cost (which is proportional to shipping weight) would quickly become cost-prohibitive.

Not to mention, trans-oceanic shipping and then trucking or rail across the country can take weeks. If you’re trying to deploy a massive solar farm, there’s a significant cost to those time delays.

Politics. Energy is obviously a politically-driven arena in which local sourcing helps companies win deals. To wit, it’s not coincidence that all the modules, inverters and trackers used in all of the Alamo projects in Texas are made in San Antonio (by MissionSolar, KACO, and Sun Action Trackers, respectively), even though their parent companies are all foreign.

I can’t help but wonder if Austin would’ve used SunPower modules in its Webberville farm had SunPower already opened its Austin office when the farm was built; instead, it used 127,728 Chinese-made Trina Solar modules.

Trade wars. The tariffs imposed by the U.S. and E.U. on Chinese-made panels have surely had a distortive effect on module prices. It will be interesting to see what happens when those tariffs go away, if they ever do. With cells and modules being manufactured at ever-higher volumes to meet exponential demand growth, and with increasingly more automated manufacturing processes, it’s possible that the true cost differential between Chinese- and foreign-made modules is now slim to none. Lifting the tariff thus might have negligible impact.

But if the cost differential really is significant, U.S., German and other manufacturers might suddenly be priced out of the market, at least for residential and some commercial installs. The real winner might not be Chinese firms, though. Rather, it would be foreign-based companies like SunPower and Canadian Solar that manufacture most or all of their panels in China but have the financial resources to crush their lesser-known Chinese rivals.

We know from history that a common way to get around tariffs is by moving production to countries with even lower labor costs. In China’s case, that means places like Thailand, Vietnam and Malaysia. It’s thus not surprising that Trina Solar is opening plants in those countries.

Let There Be Light: The Origins of My Interest in Solar

I have been fascinated by solar for years. In the early 2000s, I read about an intriguing Austin startup called HelioVolt (now defunct) that was working on a copper-indium-gallium-selenide (CIGS) panel technology. I misunderstood what CIGS was all about. I thought it was a thin film solar “wrap” for tall buildings. Even so, my cursory knowledge of how photovoltaics worked was sufficient for me to understand that this film would not be particularly efficient relative to “thicker” conventional panels, but I reckoned that the sheer size of a skyscraper wrapped in this material would mean that the system could produce quite a bit of power.

Soon after reading about this company, I was driving east into downtown Austin on a summer day, a couple of hours before sunset. There I saw one side of the majestic Frost Bank building, completely bathed in bright sunlight. I remember that moment because that’s when I first thought about how much energy a building wrapped in thin film–or an array of conventional PV modules the size of that building’s face–could produce.

frost-bankThe Frost Bank Tower in 2011 (Source: Braden Piper Photography)

My home of Austin, Texas receives a prodigious amount of sunlight year round. I began to ponder: Why do we not harness this abundant, endless, and absolutely free source of energy? Are there technical obstacles? Is it a cost issue?

The year was 2002. Back then, I know now, there were a host of issues. At that time, PV modules were not particularly efficient and quite costly. The cost of electricity in Texas was low. The generous federal Investment Tax Credit (ITC) didn’t exist (though there was a more modest $2,000 maximum tax credit). And America was a mini-recession after 9/11 that froze a lot of spending. No wonder solar didn’t take off. I put my interest in solar on the back burner.

Like almost everyone outside the solar industry, I didn’t notice when the ITC kicked in in 2009. But slowly, especially after 2010, I began to see more arrays on residential rooftops. And I began to read more stories from around the world about solar growth, fueled both by environmental concerns and plummeting module prices. In 2011, Austin commissioned its first (and to this day only) solar farm, with a modest 35 MW output. Even our airport had a couple of small arrays installed–largely for show, I think, but nonetheless it got people (like me) more curious about solar. And in late 2014, SunPower acquired Austin-based micro-inverter manufacturer SolarBridge. That gave SunPower an office here, and hiring has been strong ever since.

Flash forward to 2014, when I found myself in an executive marketing role at a lead generation firm. The company and the work was good but I felt unfulfilled. At the end of the day, if I did my job flawlessly and the company executed flawlessly, that would mean we helped some companies drum up some new business. There’s absolutely nothing wrong with that; it’s a valuable service to those companies.

But for me, that wasn’t enough. This planet has monumental challenges, and I felt obliged to do my part, however small, to make a positive impact. Like Elon Musk once did, I surveyed all the challenges our planet faced and looked for ones that genuinely interested me–and that I could meaningfully contribute to solving. Issues like eradicating diseases or finding new sources of drinking water would be wonderful to tackle, but without a degree in chemistry or biology I wouldn’t know where to start.

Renewable energy, however, felt right. I knew enough to know that solar, wind and other renewable sources were good enough with today’s technology to make an impact. The real obstacle was more of a business (and political) one. And that felt like something I could comfortably tackle.

With that said, I wasn’t sure where to start. When I’m in that position, my response is always the same: get educated. I enrolled in a community college course that was a soup-to-nuts primer on PV. It covered everything from the basic chemistry of how a panel converts sunlight into current, to considerations in designing a solar array, to installation procedures. There was a lot of math–including the first applications of geometry and trigonometry I’ve encountered in the real world since high school–and I loved it. The inner geek in me reveled in this stuff. And I really “got” it. There’s an elegance in the world of solar that resonated with me.

After the course ended in March 2015, I focused on networking with people in the industry–installers, salespeople, anyone I could find. I began attending every happy hour and event sponsored by SolarAustin, our only local professional networking forum. I asked everyone I could the same question: What’s the biggest problem you face? I was determined to move into this industry, someday, and that meant either working for someone else or, preferably, starting my own company to tackle one of those problems that surfaced.

This blog is here to chronicle my journey–what I’ve done, what I’ve learned, what’s on my mind about solar. Whoever you are, I hope you enjoy taking this journey with me.

— Dave Wolpert