strategy challenges of solar energy players-1

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”... I'd put my money on the sun and solar energy. What a source of power!” Thomas elva edison

Prepared by Pranay Kumar Under guidance of Prof. Patrick Courtin

HULT International Business School One Education Street

Cambridge, MA – 02141, USA

STRATEGYCHALLENGESOFSOLARENERGYPLAYERS

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TableofContentsContentsPages1.Executivesummary12.SolarEnergyTechnologies2‐73.Comparisonoftechnologies‐Applicationsenvironment8‐94.GovernmentPoliciesandsocio‐politicaldimensions10‐145.IssuesandChallengesforsolarenergyplayers15‐166.StrategyChallengesforsolarenergyplayers17‐207.TechnologyIllustrations21‐278.Appendix‐Governments28‐339.Valuechainofselectcompanies34‐3810.Manufacturingpolysilicion‐costanalysis39‐4011.Bibliography41

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ExecutiveSummaryWorldisfacingnewchallengesinrapidlyevolvingscenariossuchasclimatechange,carbonemissions,watercrisisindevelopingcountries,warsoveroil.Energyandwaterhavecometotheforefrontasthetwomostimportantissues.Thisstudylooksatoneoftheemergingenergyalternatives,solarenergy.Thegapbetweendemandandsupplyofenergyishuge,especiallyindevelopingcountrieslikeChinaandIndia.Solarenergyisoneofthealternativesforenergyinthesecountriesasthefuel(sunlight)isfree.Butthefocusofthestudyisonthreecountries,Germany,USAandIndia.Thechoiceisbasedontheemergenceofthedifferentneedsofthesecountries.Thesecountriesareindifferentstagesofdevelopmentofsolarenergy,whichmakesitinterestingtoobserveassolarenergyplayers.Inthisstudywelookatdifferenttechnologies,establishedandemerging.Welookatadvantagesanddisadvantageofeachtechnologyandusagecompatibilitywithdifferentgeographiesanddifferentcustomersacrosstheworld,butfocusingonthreecountriesofourchoice.GovernmentIncentivesandprogramsformthebackboneofthesolarenergyasthisindustryisinnascentstageofdevelopment,costishighandawarenessamongstthepublicislow.Economiesofscaleislowsocostishigh,thusinstallationisalsolow(3.5Gigawattin2007throughouttheworld).Herewelookatdifferentprogramsandimplicationsandfuturescenarios.Issuesandchallengesfacingthesetechnologiesincontextwiththecountriesarediscussed.Strategychallengesbasedonusage,issuesandtechnologiesarediscussedtolookintothefutureuntil2015.Asthetechnologiesaredevelopingandtryingtoreachequivalenceincosttotheconsumersandgovernmentsaretestingdifferentmethodologiesforsolarenergysupportprograms,thefuturedependsonhowthesefactorswillplayout.

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SolarEnergyTechnologiesTheSolarenergyisclaimedtobetheenergyofthefuture.Thistechnologysectionlooksintodifferenttypesoftechnologiesavailablenowandinfuture.Thestudyalsolooksatfuturistictechnologieslikenanotechnology,whichhavethepotentialtobelowcostenergysolutions.Thissectionintentionistolookatsolarenergytechnologiesfrombusinessperspective,ratherthanbeingatechnologyreport.ThetotalenergytheSunproducesatitssurfaceis4*1026watts/second.Thismeanspowerproducedby2.5billionspowerplantsof5000megawattseach.Thetotalenergytheearthgetsonanaverageis164Wattspersquaremeter.[Technology appendix- A1, A2]

TheSunproducessolarflux(energyperunitareapersecond)accordingtotheformulagivenbelow:SolarfluxattheEarth=TheSun'ssurfaceflux×(Sun'sradius/Earth'sdistance)2=1366watts/meter2

Basisofsolarenergytechnologies:Alltechnologiesarebasedonanyofthethreemethodslistedbelow:

1)Increasingthesurfaceareaforabsorptionofsunlight.

2)Theotherbasisiswattageorintensityoflightperunitarea.

3)Usingdifferentlayerstoincreasecaptureoftheincidentlightontheprincipleoftotalinternalreflection

Photovoltaicgenerationsandtechnologies

PhotovoltaicEffect:Whenthesunlight(photons)strikethesemiconductormaterialwithinasolarcell,negativelychargedelectronsflowfreelytoproduceelectricity.AselectricityproducedisDC(directcurrent),ithastobeconvertedtoAC(alternatingcurrent)electricitybyaninverter.

GenerationsofPVtechnologiescanbecategorizedonbasisofrawmaterialsused.

ThefirstPVgenerationcanbeconsideredtobebasedoncrystallinesilicontechnology(monoandpoly).Bothmonoandpolycrystallinetechnologiesarewellestablishedanduseoneofthemostabundantelementsonandinsidetheearth,silicon.

Thesecondgenerationisbasedonthinfilmstechnologies:CadmiumTelluride(CdTe),CopperIndiumdiselenide(CISandCIGS),amorphoussiliconandtandem(amorphous+crystallinelayers),andpolycrystallinethinfilms.(see Technology illustration 1 for working of PV cells)

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Thecombinationsofmaterialsareusedtomaximizeabsorptionofphotonsandgenerateelectricityorheat.ExtremelythinsemiconductorlayersareprovidedthroughtheuseofpolycrystallineCdSandCdTe.ThirdgenerationPVtechnologiesarebasedonorganic,hybridanddyesolarcells(DSC).HereonlyDSCispresentlyinthemarketingphase.Thetechnologyisbasedonapplicationofdifferenttransparent/semi‐transparentdyeswhichabsorbs/filtersparticularwavelengthstomaximizelightintensitytogenerateelectricity.Principlesoftotalinternalreflection,diffractionareusedformaximizingthecaptureoflight/photons.Theseapplicationshavelimitationsofbeingonlyusedwithhorizontallyinclinedstructuresandcan’tbeusedinverticalwindows,presently.MonocrystallineSiliconCutfromasinglecylindricalcrystalofsilicon,ithashigherefficiencyof16‐18%inproduction.Thisisthenslicedintothinwafersandassembledintosolarcells.38%oftotalPVmanufacturingMulticrystallineSiliconComposedofmulticrystallinelayersofsiliconit’slessexpensivethanMonocrystallinebutlessefficientalso14‐16%inproduction.Differentprocesseslikesingleandmultipleribbontechnologyareusedtoproducewafersdirectlyfromsiliconcrystalthusreducingwastageandcost.EvergreensolarisoneofthepioneersusingtechnologydevelopedbyDr.EmanuelSachs(whonowisheading1366technologies).ThinFilmTechnologiesCdTeMostcommerciallyadvancedinthinfilmtechnologieshasapotentialdownsidethatitcouldbetoxicduetocadmium.Secondly,telluriumisararemineralontheearthanditsproductioncanbeaconstraintinfuture1.CIGSCopper‐indium‐gallium‐selenideisapromisingtechnologyandcanbeusedtoproduceflexiblematerial,openingthepathtoBIPV(buildingintegratedPV).Itsefficiencyisquitelow(5‐11%)AmorphousSiliconLowcostglass,aluminum,polymerorsteelcanbecoatedwithamorphouslayersmakingitveryflexible.Stillintheearlystagesofcommercializationit’ssuitedforBIPVapplicationsthoughithaslowefficiency(6%)untilnow.Researchisgoingonfullerenestoproducemoreefficientcells,whichcouldbepotentiallyinexpensive,asthereisnoneedtoproducewafers.OrganicPVManufacturedusingthinfilmsoforganicsemiconductors.Thesesemiconductorsaremadethroughbiosynthesisormodificationsofnaturalpolymers.It’seasytofabricate,lightweight,flexibledisposablewithminimalenvironmentalimpact.Unproventechnologyinthefiledandlowefficiency(5%)isitschallenge.KonarkaTechhasdevelopedOPVwhichcanbeprintedorcoatedandmanufacturedasaroll.

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1~http://minerals.er.usgs.gov/minerals/pubs/commodity/selenium/mcs‐2008‐tellu.pdfNano‐structuredPV‐Thesestructuresmakeuseofsomeofthesamethin‐filmlightabsorbingmaterialsbutareoverlainasanextremelythinabsorberonasupportingmatrixofconductivepolymerormesoporousmetaloxidehavingaveryhighsurfaceareatoincreaseinternalreflections(andhenceincreasetheprobabilityoflightabsorption.Nanosolarisoneoftheleadingcompaniesinthistechnology[See, Technology appendix A 3, for different PV technologies and

processes](Technology illustration 2 for different PV technologies)

KeyadvantagesofPVtechnology 1)PVpanelsarelightandcanbeusedwithtrackingsystemtoincreaseproductionofelectricity2)Establishedandproventechnology3)Nodirectimpactontheenvironment4)Minimalmaintenance5)Availabilitythroughouttheworld6)Canbeinstalledandoperatedinareasofdifficultaccess7)Cheappowersource8)Longlifeanddurability9)Lowoperatingcosts. [see Technology appendix A4 for Polysilicon manufacturing cost analysis]

10)Usableindecentralizedplantsaswellasinlarger,centralpowerplants11)Canbebuiltinsizesfromcm2uptokm2andcanbeusedinmanydifferenttypesoflocations12)Nottheleast,thefuelisfree!DisadvantagesofPVtechnology1) Lowefficiency(5‐17%)2) Lowsupplyofsiliconcreatingaglitchforprogressofsiliconbasedtechnologies3) Highextractionpriceofsiliconfromsand(SI02 ) andcomplexprocessconsuminga large

amountofenergy4) Installationchallengesandintegrationwithbuildings5) Largeareasrequiredtoproducelowamountofenergyduetolowefficiency.6) Challengedbylowcost,moreefficientemergingtechnologieslikeCSP,CPV.7) SomethinfilmapplicationscouldbetoxiclikeCdTeorGaAsConcentratedPhotovoltaic(CPV)CPVsystemscanbethoughtofas“telescopes,”(see Technology Illustration 3)trainedonthesun’spositionandfeedingtheconcentratedlighttothecell.Referredtoas“III‐V”or“Multi‐junction”,itwasoriginallydevelopedforspaceapplications.ThemagnificationratiousedindifferentCPVsystemdesignsvariessowidelythatthreeclassesofsystemshavedeveloped:•Lowconcentration,wherethemagnificationratioislessthan10X;•Mediumconcentration,between10Xand100X;•Highconcentration,wheretheratioliesabove100X,butisusuallylessthan1000X

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Therearetwomaintypesofconcentratingopticalsystemsinusetoday:refractivetypesthatuseFresnellenses,andreflectivesystemsthatuseoneormoremirrors.Regardlessofthechosenopticalsystem,theresultisconcentratedsunlightbeingaimedatthesensitivefaceofthecell,toproducemoreenergyfromlessphotovoltaicmaterial.Advantages:

1) Highefficiency30‐35%ofthemulti‐junctioncells2) Lowcostperunitareaduetoconcentrationandminimaluseofhighcostmateriallike

Silicon(10‐15%)3) ScalabilityduetoestablishedPVtechnology4) Economicalinhigh‐sunlightintensityarea

Disadvantages

1) VerylowefficiencyduringlessintensesunlightorhazydaysascomparedtoPVtechnology,worksbestinsunnyconditionswithhighdirectsunlight

2) Lowfieldofvieworacceptanceangle(areaexposedtosunlightverylow,decreaseswithincreasingconcentrations),sorequiretrackingononeortwoaxes.

3) Cannotbeusedinlowintensitylightorhazyconditions

ExtremelyConcentratedPhotovoltaic(XCPV)Inthistechnologylightgatheringcapacityisincreasedbyaconverginglenstoincreasetheintensityoflightby1600timesonmoreefficientPV[triplejunction]cellsincreasingtheefficiencyto37%andreducingthecostdrasticallyto5cents/Kwh(asclaimedbySunrgi).Thereisaspecialheatremovaltechnology,sothatcellsdonotgetdamaged.Thistechnologyisledbyonecompany,SUNRGI.(Technology illustration 6)Advantages

1) Mostinexpensivetechnologypresentlyat5cents/Kwh2) GreaterefficiencymeanslessPVcells,lessdependenceonsilicon3) Lessarearequiredtoproduceaunitofelectricity

Disadvantages

1) Notproventechnologyonfield2) Heatmayreducetheefficiencyofcellsoveraperiodoftime3) Notusableacrossallintensitiesoflighthencegeographies

ConcentratedSolarPower(CSP)Concentratingthesunlightbyuseofmirrors,parabolictroughs(likeintelecommunicationtechnology)orsemicirculardishproducepower.Thisisthebasisofthetechnology.Heatisstoredinatransfermediumlikemoltensalt(asinnuclearreactor),whichisusedtoboilwaterandproducesteamanddriveaturbinetoproducepowerlikenormalthermal/nuclearpowerplant.

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DifferentTechnologiesParabolicTroughMostcommerciallyadvancedandmaturesolarthermalelectrictechnology.Thesetroughsusearraysofparabolicmirrorstoconcentratesunlighttoheatupfluids,runningthroughpipesundermirrors.Heattransferfluid(HTF)isheated,whichisusedtogeneratesuperheatedsteamtorunturbines.Itcanbehybridizedwithnaturalgas‐firedtocomplimentandproducepowerevenduringnight.(see Technology illustration 4)PowerTowerIndevelopingstage,thetechnologyusessuntrackingmirrors(heliostats)toconcentratesunlightonareceiver.HTF(moltennitratesalt)isusedtotransferheat.SolarChimneys(Tower)Heatunderlargesemi‐transparentcheapplastic(parabolicshape)coveredarea(collectorfield)isusedtodriveairunderneathit.Airthusbecomestheheattransferfluid.Thishotairisguidedtowardsatowerwhichcontainsaturbine,thusproducingpower.DishEngineAparabolicmirrorusedasacollectorfocusessunlighttowardaconcentratorplacedonastructurelocatedatmirror’sfocalpoint.Twoaxestrackingsystemisusedtofollowthesunandmaximizethepowerproducedduringtheday.(see Technology illustration 5)CompactLinearFresnelReflectorCLFRusesflat,suntrackingreflectors,whichisconcentratedwithaFresnellenstofocuslightonpipes,wheresteamisgenerateddirectly.MicroCSPUsesthesameconceptasCSPbutcanbeusedforresidentialandsmallcommercialpurposes.Sopogyistheleaderinthistechnology.Sponova4,Sopogy’smicroCSPpanel(12feetby5feet)canproduce2.56Kwh/day.Productionof1megawattofelectricityrequiresaround5.5acresofspace.Advantages

1) LessexpensivethanPVtechnologies2) Powergeneratedperunitarea,high3) Thermalstoragesystemsprovidepowereveninabsenceofthesun.4) Usesteelandglass,reducingcostanddependenceonsilicon5) Drycoolingcandecreasewaterconsumptionby90%6) Canbecombinedwithnaturalgas‐firedcombinedcycletoincreaseefficiencyand

reducecostDisadvantages

1) Requireshighintensityofsunlightsocannotbeusedthroughouttheyearorinareaswithlessintensesun.

2) ExceptforParabolictroughtechnology,nootherCSPisestablished.3) Requireslargeinvestmentasminimum25Kwcanbeproducedwithpresenttechnology4) MicroCSPrequireslargeareamakingitsinstallationfeasibleonlyinfewlocations

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UpcomingTechnologiesCarbonNanotubeArelativelynewarea,carbonnanotubecanbeusedatransparentconductorfororganicsolarcells.Nanotubenetworksareflexibleandcanbedepositedonsurfacesavarietyofways.Withsometreatment,nanotubefilmscanbehighlytransparentintheinfrared,possiblyenablingefficientlowbandgapsolarcells.Nanotubenetworksarep‐typeconductors,whereastraditionaltransparentconductorsareexclusivelyn‐typetheavailabilityofaptypetransparentconductorcouldleadtonewcelldesignsthatsimplifymanufacturingandimproveefficiency.InflatableCPVAuniquewaytoharnessCPVtechnologybysuspendinginflatablemirrorswhichareinexpensiveandsavelandareaandwhichcanwithstand100mphwindspeedhasbeendevelopedbyDr.CummingswhoisthefounderofCOOLEARTH.Dr.Cummingsclaimsthatitispossibletobringdownthecostperwattto3centsbyusingthistechnology.(Seetechnologyfigure).Coatingandfilmtechnologies:Therearestartupslike1366whichareworkingon3differenttypesoftechnologiestobringdownthecostofsiliconPVcells.Glassconcentratorsareanothermethod.StarSolaranMITstartupisdeveloping“photoniccrystals”tocapturemorelighttoproducemoreenergy.Xerocoat,anAustralianstartupisdevelopingcoatings,whichincreaseanti‐reflectivepropertiesofanysurfacethusincreasingabsorptionofsunlight.Thesetechnologiesfocusonincreasingefficienciesofexistingtechnologies.KonarkaTechnologieshavedevelopedPowerPlasticTM,whichisalowpower,portable,lightabsorbingplastic,whichcanbeusedinsmallelectronicdevices(PDA,mobiles),architecturalmaterials(windowpanes,blinds).PowerPlastic’slowcost(about5timeslessexpensive),easyapplicabilityandintegrationmakesitanattractivetechnology.ConclusionThecurrenthighinvestmentinresearchanddevelopmentwilladvancemanytechnologiestoaneconomicallevelmakingsolarenergyaveryviableoptionwithin10years.ThesiliconbasedPVtechnologieswillretaintheirdominancewithreductionincostofmanufacturingbutupcomingtechnologieslikeCPVandorganicphotovoltaic(OPV)willcompetewithPV,duetoreductionincost.CSP,ifitabletoreducethecostfurtheranddevelopMicroCSPwillbeinpositiontochallengePV’sdominancewithinafewyears.Allthetechnologieswillbeabletoco‐exist,astheSun’sintensityandnaturaldayandnightcycleisanenablerofmanypossibilities.Thechallengesofefficiency,storageofenergy,andintegrationinsolartechnologywouldbedealtwithmoreR&Daswellmorefieldexperienceoftheindustry.Solartechnologyaswholewillco‐existwithrenewableenergytechnologiesandnonrenewabletechnologiesforalongtimetocome.Hybridtechnologies(wind‐solar,solar‐naturalgasetc)couldgetaboostwithadvancementsandintegrationoftechnologies.