by Bob Haavind, editor-at-large, Photovoltaics World

Expected strong demand by electric utilities for solar panels triggered a request by AVA Solar, Loveland, CO, for a loan guarantee from the federal government’s Advanced Energy Loan program that would allow the company to triple manufacturing capacity. The company is just completing an automated factory to produce cadmium telluride (CdTe) thin-film on glass panels for electric utilities, according to Mark Chen, director of marketing.

By the end of 2Q09, AVA expects to be able to turn out about 1 million 2 ft. × 4 ft. laser-etched panels a year, feeding a new panel onto a highly automated line about every two minutes, according to Chen. If the loan request is approved, the company hopes to put additional production lines into a nearby factory, tripling capacity and expanding from 175 to 500 employees.

(Source: AVA Solar)

Electric utilities already have installed a gigawatt of solar capacity, according to Chen, but 90% of the other PV manufacturers do not yet have a commercial product for this market. Although he declined to give efficiency figures for AVA Solar’s panels, he said the mass production methods will drive costs below $1/Watt, making solar cost-competitive to fossil-fuel power plants. Furthermore, he pointed out, solar can provide maximum output at mid-day when electricity demand is highest. Chen sees prime markets in areas such as Arizona, New Mexico, Southern California, and Hawaii, as well as Spain and Italy in Europe.

US legislation is going to give a boost to this market, he believes, not just with the stimulus bill but with other legislation as well. The push for a smart grid for electric utilities is aimed at lowering CO₂ emissions, and solar will contribute to that goal. Also, he said, the investment tax credit is being changed to an outright grant to help companies working on advanced technology. During a recent visit to the new AVA Solar plant, Senator Mark Udall said that the Department of Energy is setting up loan guarantee programs to help commercialize renewable energy sources including solar modules. According to Chen, this program will provide $6 billion in funds that will help guarantee net loans up to $60 billion for the potential customers for AVA’s panels.

AVA Solar was founded in 2007 to commercialize an advanced process for manufacturing thin-film photovoltaic modules based on 15 years of development at Colorado State U.’s Materials Engineering Laboratory. — B.H.

by Debra Vogler, senior technical editor, PV World

A simulation of the carbon-free transportation of the future was presented at Applied Materials’ Silicon Valley research campus during the US-China Clean Energy Forum (Feb. 13), showing how battery-operated vehicles connected into the electrical grid utilize energy generated by the company’s parking lot-based solar array/2MW solar plant. Leaders from both nations were on hand to look at ways to increase collaboration on renewable energy and alternative fuel projects to improve the environment and promote energy security.

The US-China Clean Energy Forum is a high-level, private-sector-led forum focused on addressing how the US and China can cooperate on clean energy technologies and alternative fuels. The Forum includes experts in energy, finance, and public policy who are cooperating to identify priorities and explore solutions in three broad topical areas: energy conservation and efficiency, environmental protection and renewable energy. Applied Materials is a charter supporter of the Forum.

Among the highlights of this event was an opportunity to showcase additional uses for solar energy. “What we’re advocating is that solar can be a robust and important part of the general energy supply to the grid,” Joseph Pon, VP of corporate affairs at Applied, told PV World. “We’re not just demonstrating the cars and the solar panels — we’re also demonstrating smart grid technology and different types of metering technologies, because integrating solar energy into the grid is a sophisticated operation that will involve electronics and Silicon Valley skills to pull off.”

The solution will be no single silver-bullet answer, but rather the result of a number of countries and technologies working together to deal with the issue of greenhouse gases, noted Norm Mineta, former Department of Transportation Secretary and now vice-chairman of Hill & Knowlton, an agency assisting the US-China Clean Energy Forum. “Going back to the beginnings of high-tech, no one is in a position to pick winners and losers. You’ve got to let the marketplace determine what that [the solution] will be,” he said. It’s up to governmental agencies not to set specifications, he added, but rather set performance standards, and then let people decide how technology fits into the grid or network.

Mineta noted that the US-China Clean Energy Forum is a way of getting two economies together to think about where we are going in the future. He likened the group’s efforts to his work in Congress, particularly with fellow Congressmen Jim Blanchard (D-MI) and Jim Jeffords (I-VT) when they co-authored the Wind Energy Systems Act in 1978, which enabled nationwide creation of wind farms. “People thought we were more hot air than we were part of the beginning of an industry,” said Mineta. And at this event, “all these companies and people are trying to scratch out new territory. No one knows if it’s the right answer — but I think in conjunction with a lot of efforts by a lot of people, it will give us the kind of results that we’re all looking for.”

Mike Splinter, president and CEO of Applied Materials, put into perspective the challenges that brought the group representing the US and China together, noting that the two nations are the two biggest emitters of greenhouse gases: 70M tons of CO₂ a day into the air and 30M tons of CO₂/day acidifying the oceans. Solving this problem is a social challenge as well as a huge engineering and science problem, Splinter said, and this combination needs the great science minds of the world and the political and social entities of the world together to solve it. “Because of that, this is going to be the next huge generation of new jobs — much like computers and the internet were in the ’70s, ’80s, ’90s and into the 2000s,” he said. “For the next 20-30 years, transforming how we make energy will be an equally great job creator. When you have change, you have new ideas, you have new job growth.”

One way to tackle the environmental challenges that face society is electrifying transportation, because it is the big user of oil. There are roughly 250 million automobiles on US roads today, and in 20 years, China will have more than that (and that doesn’t count how many will be in other regions, e.g., India), Splinter noted. “To do things the same way we’ve done them in the past, I don’t think is viable,” he said. One answer is to electrify transportation, while at the same time cleaning up electricity. “Solar is the most viable — it’s long-lasting, a free fuel, no moving parts, and a clean source of electricity,” he said.

Investment in scaling up solar energy is necessary to drive down the cost and make it comparable to the rate base of electricity, Splinter emphasized (adding that Applied Materials has spent hundreds of millions of dollars a year to seek ways to make solar cost-effective, building on its history in scaling up IC manufacturing). “If we’re able to do that, there are hundreds of gigawatts available to be deployed in a relatively short period of time,” he said. He looked ahead to a “zone of inflection” in the next ~5 years, when electricity generated from renewable sources “is essentially, at least on a forward-pricing basis, equal to that cost of electricity generated by fossil fuel sources.”

Activities supporting clean energy in Europe are encouraging, Splinter said. “In the US, we now see as much as $60B in President Obama’s stimulus package being aimed at renewable energy sources,” he noted, and “that couldn’t be more exciting. In addition, the package also boosts R&D funds spent on renewable energy on the order of ~5×. “These two developments are going to have a huge impact in the US.”

Splinter’s takeaway message to the diverse group assembled: think beyond the long-term goals established by both the US and Chinese governments (20% renewable energy by 2020 for the US, and ~15% by 2020 for China). Instead of focusing on a 10-year time horizon, he encouraged all to look at the challenge the way the semiconductor industry has paced itself for decades. The IC industry used Moore’s Law (doubling the number of transistors in a specific area every 18-24 months) to stimulate an urgency of action that involved R&D centers worldwide working at “breakneck pace.” Setting milestones that have to be met on a daily, monthly, and yearly basis is the best way to create urgency and establish a progressive policy, he asserted.

“We need to bring the best science from both countries and the best technology and the best manufacturing resources,” he stated. “It’s that kind of cooperation that I hope this meeting today kicks off. We have a problem that is so necessary to solve and one that is incredibly urgent — let’s put the urgency behind it and find a way to indicate that to all the people in the world.” — D.V.

by Bob Haavind, Editorial Director, Solid State Technology

Jan. 29, 2009 – CEOs try to make rational, informed decisions based on the limited data they have, using their experience and intuition about future potential problems as well as opportunities.

Deeply troubled times make this a very tricky task. The global economic havoc described by analysts and economists at the recent ISS ’09 in Half Moon Bay, CA, suggests that many companies are in danger of failing, and that the tested, somewhat reliable models of the past may need adjustment when mapping strategy for the future.

“Markets tend toward disequilibrium,” stated Randy Bane, VP and chief economist at Applied Materials. That view seems opposite to the tendency toward self-balancing of markets and pricing that Alan Greenspan, former Fed chairman, ruefully said had driven his decision-making in testimony before Congress some weeks ago. The results support Bane’s view.

Bane elaborated, saying that regulation, involving oversight and expertise, is required to assure stability. He also stated that asset pricing is flawed, partly because there is no provision for asymmetric risk. Also, it is now clear that the global economy is not at all decoupled, as some policymakers had claimed before the recent turmoil in world financial markets. Bane added some suggestions about survival, including what kind of company and management team are needed.

Dan Hutcheson, CEO of VLSI Research, made some cogent comments about recent events.

“Money is a storage mechanism for labor,” he said, adding that a huge amount of it had been wiped out. He made some financial comparisons, such as that the $89B being spent for homeland security is more than the $86B spent on the Marshall Plan after WWII. The recent tax cuts went mostly to buy goods from China, and thus did little for the US economy, he suggested. If the government paid for all health insurance it would add up to about $2000 per car sold in the US — the Toyota cost advantage, according to Hutcheson.

Facing bad downturn, innovate

The major question many CEOs have is how deep will this recession be, and how long will it last. Aart de Geus, president/CEO of Synopsys, took an informal survey of tech execs to see what the consensus might be. His dividing line for “shallow” and “deep” was 10% US unemployment; for “short” and “long” it was the upturn starting before/after January 2010. He put the numbers of responses to these two questions into a matrix, and the “center of gravity” fell well up into the upper right quadrant — suggesting a long, deep recession.

de Geus sees this recession as more than a normal downturn in the economic cycle — he believes it is a rebalancing between our standard of living and a huge debt overhang. As of early January, he estimated government bailouts and stimuli at $2.6T and loan guarantees at $2.7T, on top of a national debt of about $10.8T.

Navigating the next few quarters will be a severe challenge, but de Geus recommends a favorite management mantra: “Never let a crisis go unused.”

He believes that cost-driven execution will not be enough, so it must be combined with systemic innovation. While Moore’s Law has “made our careers for 40 years,” he says the present calls for adaptive leadership. Current trends will continue, he believes, but reaching goals will prove very turbulent.

“The usual approach won’t work,” de Geus said. As problems multiply, no one will know how to solve them all because of their novelty and variety.

“We have lots of smart people; we’ll need all hands on deck,” he advised. Problems must be clearly defined, solutions worked out, and the right people chosen to tackle them.

Out of all this struggle, he sees the high-tech industry as the bridge to the future economy. Critical mass must shift in every sector, he believes. In energy, for example, every phase will change to provide cleaner sources and greater efficiency in generation, transmission, use, and accounting.

Global productivity can be greatly enhanced through the efforts of the high-tech industries. Current trends in the world economy can be a great opportunity, according to de Geus.

Klaus Rinnen, managing VP, Gartner, echoed a comment of Steve Hillenius, VP, Semiconductor Research Corp., about strategy in tough times: “We must not let research slip,” they said.

Opportunities in energy — and big changes

While several opportunities for new markets in the energy field were cited, none appear to offer the explosive growth of notebook PCs or cell phones, requiring chips by the millions or even hundreds of millions. Instead, there appears to be potential for growth in niche markets. One possible exception is on photovoltaics, if many massive arrays for central utilities are seen as alternatives to conventional power plants, but PV costs are still too high.

Instead a number of niche markets may spring up. Some examples were cited by T.J. Rodgers, CEO of Cypress Semiconductor, for controlling air conditioning in buildings over whole floors, or optimizing the operation of steam traps in power plants. Additionally, Rodgers said that economics will drive the path for a smart grid even without government help with great opportunity for energy savings. Large numbers of controllers and other chip-based devices will be needed throughout the electrical grid, including for power-line communications, he believes. Rodgers said that Cypress’ Envirosystems subsidiary had just been formed to serve this emerging market.

One hope of the industry is that if good solutions for green energy are developed, they will move rapidly around the world as other countries seek greater energy efficiency and lower emissions. But this business will be quite different from the mass markets of the past. Many of the devices needed use trailing-edge technology, which would stretch the life of older fabs and allow chips to be spun out on already-depreciated equipment.

Learning from See’s Candy

Will this mean that more chip companies will become like traditional businesses, not driven by the frantic quest to stay on the Moore’s Law track? Perhaps this was the reason Dan Hutcheson used the story of See’s Candy as a sort of allegory for the industry.

In 1972, he explained, Warren Buffett bought See’s Candy for $25M. This small family business had operated for years with a CAGR of 2%, but it had built a solid reputation for quality. Why was the world’s most successful investor so interested in such a small business?

Since then, Hutcheson said, total earnings have been $1.35B, with reinvestment of only $32M. Sales in 2008 were $383M, with gross profit of $82M (over 21% margins), and there are no accounts receivable. The company makes its money when it sells its product to selected upscale retailers, and places like the SF airport. “You won’t see it in Wal-Mart and Walgreens,” he added.

Hutcheson compared this to the semiconductor business, which sells twice as much products next year at the same price as this year.

“This industry takes excessive risk,” Hutcheson emphasized — while showing a goat clinging to a sheer cliff to lick some salt, with no apparent route to a safe perch.

The only good side, he suggested, is that there is a huge moat around the industry with no sustainable entry for the past three decades. Now the trick is to make it through very tough times.

T.J. Rodgers of Cypress gave his simple answer: “How do you beat the recession? Energy!” — B.H.

by Bob Haavind, Editorial Director, Solid State Technology

Through murky clouds of economic gloom, one beacon of light shone through brightly at ISS ’09 in Half Moon Bay, CA — the tremendous opportunity emerging in energy, especially solar power.

In total, the energy market “offers a $1 trillion opportunity over the next 10 years,” rhapsodized Alain Harrus, partner, Crosslink Capital. Already semiconductors are playing a large role in energy, but it will become much larger, Harrus predicted.

Several speakers cited the bright promise in energy, especially for photovoltaics (PV), but T.J. Rodgers, CEO of Cypress Semiconductor, trumped them all by showing how his company was already seeing the payoff. After a chance meeting in a coffee shop, Rodgers pushed his board to acquire SunPower, which makes a more efficient silicon solar cell. The surface facing the sun is a tangle of sharp reflective crystals rather than being smooth, greatly increasing light trapping, and all wiring is on the backside. “Watts per square meter is just as important as dollars per Watt,” Rodgers explained.

The first SunPower plant — an abandoned factory in the Philippines to keep costs low — cranks out 32M wafers/month for a total capacity of 100MW/year. The company will soon open a new 400MW plant to meet growing demand for panels, not just for homes but also for huge panel arrays such as a major installation at Nellis Air Force Base in Nevada.

So far, Rodgers said, all the solar power generated in the world is about equal to the output of four coal-powered generating plants. But he sees solar matching the cost of coal power by 2012. Harrus showed a chart with the solar cost crossover in the 2012-2015 timeframe. Costs for electricity vary widely over the US and around the world, as does the cost for different types of PV cells and systems, so Harrus showed grid parity as an intersection of bands rather than lines.

Solar is near grid parity. (Source: Crosslink Capital, ISS)
CLICK HERE to view larger image

While there is no Moore’s Law to help solar, there is a learning curve, Harrus pointed out, with new, more efficient cells, multilayer cells, thinner films, and improved panel and system designs. Rodgers, for example, cited SunPower’s low cost 2-axis and 3-axis sun trackers.

As an example of the improvement, Harrus cited the copper-indium-gallium-diselenide (CIGS) cell which at 2μm is 90× thinner than a 180μm-thick silicon cell. The difference is that CIGS is a direct bandgap (BG) semiconductor, making it much easier to get current flowing than in an indirect-BG material like silicon. The most advanced thin-film cells, such as those of SunPower and First Solar, have reached 22.4% cell efficiency, Harrus reported.

He also showed a curve of the energy density across the solar spectrum, along with the sensitivities of various materials, with CIGS giving a superior match. Multi-layers of films with varying spectral sensitivity help maximize the efficiency of extracting solar energy, he explained, citing Boeing’s triple-junction cells for spacecraft that achieve 40% efficiency.

Spectrum of power. (Source: GE, Earthscan; Crosslink Capital, ISS)
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A third generation of cells could use organic semiconductors or sensitive dyes that can be used as paint pigments. This would allow PV coatings all over the exterior of a building rather than just putting solar panels on the roof. Harrus also showed solar panel material being made in huge rolls that can be sliced up, adding to manufacturing efficiency.

Already a public utility has used an array of 167,000 panels to boost the output of a “peaking” plant, which is the most expensive form of generation, of 24¢-39¢/kWh, Harrus said, but the transmission line infrastructure was already in place and the government provided a 30% rebate. He recommended a Web site, www.dsireusa.org, which tracks the various subsidies and incentives for each state.

Harrus estimates that solar power will drop from about $2.60/W to $1.44/W by 2013, which would greatly increase the solar market even without incentives. Places in the world with higher electricity costs than the US, such as Japan, Denmark, and Germany, already have extensive alternate energy programs.

[Harrus slide 32]

Projected solar market growth in US $B, 2008-2012. (Source: Crosslink Capital, ISS)
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The drive for clean energy will be a strong, sustainable trend for the semiconductor industry, believes Randy Bane, VP and chief economist for Applied Materials. PV will grow even during the down cycle, and should rise rapidly from a few hundred MWs now to GWs by 2011, he believes.

“Manufacturing scale will become very important for PV,” Bane said, adding that 6× the amount of silicon for semiconductors was already going into PV cells. By 2011, he expects production of 10M m² of thin-film on glass as costs reach parity with grid electricity. Bane sees a big future for “smart grid technology,” pointing out that hybrid cars could build up energy during the day, and possibly feed some back into the smart grid at night.

Smart grids and local energy networks. (Source: Electric Power Research Institute, Applied Materials, ISS)
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“Is PV the next killer app?” asked Jim Feldhan, president, Semico Research. The solar market is already growing 20%-25% a year and the new Obama administration is talking about additional incentives — though it appears that grid parity could be reached even without incentives, he suggested. California’s peak summer rate is $0.53/kWh, already close to PV cost, he noted.

Feldhan cited a number of promising developments, including:

– Q-Cells planning to cut system cost by 2010.
– SunPower achieving 23.4% cell efficiency on a 5-in. wafer.
– Nanosolar developing a thin-film panel costing $0.99/W.
– U. of Tel Aviv in Israel developing a new type of PV cell that is said to cost 100× less than today’s cells.

He pointed out that while biomass (basically, garbage) now produces about 5% of US power, PV only generates about 0.1%, so the potential is great.

Risto Puhakka, president of VLSI Research, agreed that PV should continue to grow through the downturn, but at a slower rate. He pegs PV growth at 115% in 2008, declining to 28% in 2009. He also expects that PV manufacturing equipment should grow at a 33% CAGR over the 2008-2013 period, compared to about 9% CAGR for semiconductor manufacturing equipment.

Average growth ~12%-15%, 5%-10% better than semiconductor equipment alone. (Source: VLSI Research, ISS)
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Jerry Cutini, CEO, Aviza Technology, expects that $150B will go into renewable energy through government-backed projects over the next 10 years, with the solar energy investment tax credit extended for eight more years.

Harrus of Crosslink Capital sees a “massive opportunity” in PV control systems and in adding sophistication to the electric grid over the next few years as advances in storage technology will enable PV to become a base load for electric supply. One factor that may slow the pace as compared to the growth of the Internet, however, Harrus warned, is that the government and utilities are involved. Yet he sees an immense global need for renewable energy over the next 30 years, requiring investments of up to $45 trillion as 3TW of power generation is added.

Much of this will be what he calls “manufactured energy,” vs. “constructed energy” with centralized nodes and long transmission lines. In the energy business, as in the early days of semiconductors, the attitude was that “real men build power plants.” But the present grid is so unsophisticated that when excess electricity is being generated, since there is nowhere to store it, it is simply pumped into the ground!

In the future, by contrast, he sees a very decentralized grid with lots of “silver buckshot” rather than the current “silver bullets” like coal, gas, nuclear, and hydro plants. This would include, for example, many solar batteries along with distributed sources such as solar and wind.

Harrus stressed that many types of electronic devices will be needed to upgrade the grid as well as to improve the performance of solar systems. Central inverters will be needed with solar installations, but panel electronics will also be required to monitor output, detecting failures or cells that are dirty or in shade, and to help provide optimal energy yield.

Electronics will also be widely used in smart grid development and storage, providing critical grid information, allowing load shifting, and providing better grid efficiency and reliability.

T.J. Rodgers said the opportunity is so great that his company has launched Cypress Envirosystems to provide an array of solutions for power savings as well as management and control of grid systems. He said that power line communication (PLC) will evolve to enable smarter, more efficient transmission and distribution.

Rodgers showed devices that can be used to control air conditioning for whole floors or building sections rather than requiring individual thermostats to be reset. Honeywell will distribute these devices for Cypress. Other controls would improve the efficiency of steam traps common in power generation.

What about jobs in alternate energy? Harrus explained that it could be labor intensive, and that solar power has the advantage of quick installation compared to conventional power plants. A nuclear facility might take eight years to build, including all the regulatory requirements and permitting as well as complex technology. By contrast, a 50MW solar generating facility can be installed in four months. He cited a small area of Germany where 168 jobs for five years were created for solar installation. Most solar manufacturing startups, Harrus said, are in Silicon Valley. In order to make assembly simple in the field it will take lots of assembly jobs at the manufacturing plant.

The ISS ’09 speakers agreed that solar, and other forms of alternative energy, will be driven by economics even without government subsidies and incentives. But the promise of jobs, and quicker additions to the energy supply, may help speed the process. — B.H.

Apr. 28, 2008 – A Japanese media report claiming Matsushita Electric Industrial Co. is buying Sanyo Electric Co. is untrue, say the two companies — but that hasn’t stopped speculation in various media outlets.

The Yomiuri Shimbun reported that the tie-up, seen as a way to rescue both companies “from a long business slump,” would involve selling shares from three Sanyo investors (Goldman Sachs, Daiwa Securities, and Sumitomo Mitsui Banking), said to amount to two-thirds ownership. For Matsushita, the paper speculated, the move would give access to Sanyo’s technical expertise in areas such as rechargeable batteries and other products; for Sanyo the tie-up would speed up a rebuilding effort. The two also were said to be considering how to integrate management.

But today, both Matsushita and Sanyo deny any talks have happened or will. “These reports are not based on any official announcement by MEI, and there is no fact that MEI is considering on the alliance,” said Matsushita in a statement. Sanyo’s version dismissed the rumors of a possible merger as “untrue.”

That didn’t stop investors from voicing their opinion on such a combination. Share trading for both companies was temporarily suspended on the Tokyo Stock Exchange and the Osaka Securities Exchange, but will restart the next day.