About All of Those Solar Company Failures
I've been a fan of solar cells as part of our energy future for decades. The last couple of years, with the high-profile bankruptcies like Solyndra's have been a major disappointment, but not a surprise to me. What went wrong?
First, the lab to manufacturing gap. Getting solar cells that work in the lab to work reliably off an assembly line has almost invariably taken taken both decades and tens of millions of dollars. With enough persistence a company can get there, as First Solar has proven with their Cadmium Telluride cells, but money alone, even hundreds of millions, won't get a process ready for mass production as quickly as it needs to be in today's solar market. Venture capitalists poured hundreds of millions into companies with very promising CIGS thin film chips that worked great in the lab. Essentially all of those companies are years behind and tens of millions over-budget in getting to mass production. In Solyandra's case, they ran out of money, in spite of federal loan guarantees. We'll probably see more CIGS bankruptcies, though the underlying tech remains promsing.
Second: the rapidly declining price of silicon feedstock. A few years ago, there was a shortage of the silicon that is an essential ingredient in most solar cells. That caused two reactions: First, investors poured money into expanding production of the needed highly purified silicon. Second, investors poured money into alternatives that used less (or no) silicon, like CIGS. Result: an oversupply of purified silicon for traditional solar cells that pushed prices down as alternative cell tech struggled to get off the ground. Prices of solar cells went way down, making it difficult for new companies to recoup there research and development.
Third: China incorporated: Chinese companies have built enormous solar cell factories, using traditional decades-old silicon technology. They have seemingly unlimited access to cheap loans--under the rate of inflation, an undervalued currency, and government financial subsidies. They now own well over half of the solar cell market, and rising very quickly.
Finally, demand hasn't grown as much as expected, partly because of the continued recession/slow recovery, and partly because a lot of the earlier demand was artificial--the result of German and then Spanish subsidies that the governments involved have been forced to scale back.
Solar cells are still a viable technology, and current pricing is making them affordable for a lot more unsubsidized uses. Advances keep happening. The problem is that it will probably take ten years at minimum to get those advances into mass production, and at the rate we're going, the resulting cells will be made in China.
First, the lab to manufacturing gap. Getting solar cells that work in the lab to work reliably off an assembly line has almost invariably taken taken both decades and tens of millions of dollars. With enough persistence a company can get there, as First Solar has proven with their Cadmium Telluride cells, but money alone, even hundreds of millions, won't get a process ready for mass production as quickly as it needs to be in today's solar market. Venture capitalists poured hundreds of millions into companies with very promising CIGS thin film chips that worked great in the lab. Essentially all of those companies are years behind and tens of millions over-budget in getting to mass production. In Solyandra's case, they ran out of money, in spite of federal loan guarantees. We'll probably see more CIGS bankruptcies, though the underlying tech remains promsing.
Second: the rapidly declining price of silicon feedstock. A few years ago, there was a shortage of the silicon that is an essential ingredient in most solar cells. That caused two reactions: First, investors poured money into expanding production of the needed highly purified silicon. Second, investors poured money into alternatives that used less (or no) silicon, like CIGS. Result: an oversupply of purified silicon for traditional solar cells that pushed prices down as alternative cell tech struggled to get off the ground. Prices of solar cells went way down, making it difficult for new companies to recoup there research and development.
Third: China incorporated: Chinese companies have built enormous solar cell factories, using traditional decades-old silicon technology. They have seemingly unlimited access to cheap loans--under the rate of inflation, an undervalued currency, and government financial subsidies. They now own well over half of the solar cell market, and rising very quickly.
Finally, demand hasn't grown as much as expected, partly because of the continued recession/slow recovery, and partly because a lot of the earlier demand was artificial--the result of German and then Spanish subsidies that the governments involved have been forced to scale back.
Solar cells are still a viable technology, and current pricing is making them affordable for a lot more unsubsidized uses. Advances keep happening. The problem is that it will probably take ten years at minimum to get those advances into mass production, and at the rate we're going, the resulting cells will be made in China.