December 2007 Archives

A special thanks to Katie Fehrenbacher and Earth2Tech for sharing this interview with Solar Power Authority. The original article was titled 10 Questions for Nanosolar CEO Martin Roscheisen and is located here.

Martin Roscheisen, CEO of thin film solar company Nanosolar, founded the startup five years ago when solar was nowhere near the hot topic it is today. He managed to fund the company with at least $100 million from venture firms like Benchmark Capital and Mohr Davidow and individual investors like Google founders Larry Page and Sergey Brin, and entrepreneur Jeff Skoll.

The Austrian citizen born in Munich is also a long time Internet entrepreneur who already founded three startups with a combined value of more than $1.2 billion. In an email interview he answers 10 questions for us:

Q). You were one of the first Valley entrepreneurs to focus seriously on green tech - If you had to start a clean tech company in 2007, and not 2002, what would you do differently?

A). I know very little about anything in greentech other than solar. If I had to start a solar company in 2007, I would take a pass. This industry is in a very different stage now. This is going to be like the DRAM business much more quickly than many may realize. I have a hard time seeing how anyone can be successful in solar who isn’t truly in volume in 2008 with a very mature, very cost-efficient technology.

Q). Before Nanosolar you were an Internet entrepreneur - what are the lessons that you’ve learned in that industry that have helped you most when you moved into clean tech?

A). Hiring for “raw talent” (and sense of urgency and drive to win) over “experience”. Being disciplined about not overhiring. Focusing on business not busyness. Quickly ignoring all sorts of miscreants. Accelerating momentum without spending a dollar on marketing. A few other things.

Q). In the thin film industry there are several players like Miasole or SoloPower that are looking to build the next CIGS thin film technology. What will make the difference in which technologies win the deals?

A).An IEC-certified panel product available in near-term 100MW volume at a fully-loaded cost point in the sixties [cents/Watt] or less so that one can profitably sell at a $.99/Watt wholesale price point. There’s no chance a process technology based on a high-vacuum deposition technique is going to make this. The window of opportunity for that more conventional approach to CIGS existed perhaps two years ago in the form of the chance of getting to market earlier with such more incremental technology.

But by now, the industry has moved on generally and Nanosolar is there with far better third-generation process technology that took a $150-million deep-dive into very science-intense research and development to develop, and that momentum gap that will continue to broaden fast.

Q). The thin film industry has seemed to undergo delays in general - has the time to production taken longer than you expected, or are critics being unreasonable?

A). It is correct that there’s at least one journalist/blogger running the danger of being remembered in history as the one who scolded Carl Benz for being a month late with the first automobile. Thin film solar cells are an amazingly advanced and complex technology that even the brightest groups of people in the world can find unusually challenging. Furthermore, developing materials processes and building manufacturing tooling and operations simply does not happen on software or consumer electronics development cycles.

Especially not for a profoundly transformative new technology such as Nanosolar’s. So not even our own investors care really all that much about whether we’re a bit late or not; it’s more all about getting there safely. That said, it turns out that we have executed very well and are very close within our internal timeline originally proposed to our investors in 2005.

Q). A report from the Information Network said that delays in thin film have “soured venture capital firms and other equity investors who had hoped for faster returns on investments.” Thoughts?

A). I don’t know about “souring” but if anyone expected a materials based business to deliver YouTube type investment IRRs, they might have put their hopes in the wrong place. On the other hand, a company like Nanosolar has a credible path towards shipping $10 billion worth of high-ops-margin product to strong commercial customers with a sales model that could not be simpler and more predictable; and at that point the company would perhaps still only have a one-digit market penetration percentage. So there will be attractive returns for long-term investors of all sizes. But no overnight killing. We have turned down a ton of interested investors who we did not feel had the right outlook.

Q). Will Nanosolar begin production this year?

A). Yes, we’re on track with this. Do not expect an Apple style product launch though. Our first 100,000 panels are already set to go into closed, private, utility-scale deployments, with a tall fence around them and not much accessibility to the general public.

Q). Does the company need to raise any more money?

A). We are fully funded for reaching profitability. We may choose to raise additional capital for accelerating our capacity expansion.

Q). An analyst told me that thin film solar companies in the U.S. are worried about price competition with Chinese solar firms. . . .is that true and something Nanosolar thinks about competitively?

A). If I ran a company based on solar thin films deposited in high-vacuum chambers, I’d worry too. Because [Chinese market leader] Suntech achieves better capital efficiency today with conventional silicon-wafer based solar factories than a typical thin-film vacuum line. That’s a problem right there. At Nanosolar though, we have a nanoparticle-based printing process that is 5-10x more capital efficient on the total line. So we have a good delta.

All things being equal, given the $/kg economics of solar panels, I don’t think the competitive end game is to be shipping them from China. The end-game winners will be optimized for net working capital days and proximity to customers. (Btw, shipping from China costs ten times as much as shipping to China these days…) The middle game will be dominated by quality issues; this is a product that people expect to last for decades.

Quality is quite hard to do with the kinds of manual factories that are behind the capital efficiency of Chinese production lines. I see a lot of big customers in Europe quite unhappy with Chinese panels. That all said, my general rule on China is that one has to recheck all of one’s assumptions about China about once every three months.

Q). The company’s chief scientist Chris Eberspacher joined Applied Materials and some bloggers were wondering if the company is losing its core startup talent. Thoughts?

A). I don’t think that’s the case. There may have been a bit too much blue-sky blogging on that by some. Perhaps the following background helps to clarify all of this a bit:

Chris Eberspacher is a 20-year PV industry veteran who joined us 2.5 years ago as an R&D group manager at a time when our technology was already in full development and the technical roadmap established. His initial review of the many things we had started doing concluded that this all makes a tremendous amount of sense, has a lot of distinct advantages, and that we should proceed with exactly these plans without incorporating any of the work pioneered by Chris himself.

It turns out that things continued like this. Many of our most significant advances and breakthroughs came from intensely trying new things often diametrically counter to any beliefs. So our core engineering culture got reinforced very much around questioning the past, not assuming anything, and fundamentally not at all that much valuing the past 20 years of solar research. Chris still managed to be part of this for a good amount of time, with him in particular representing us externally very well.

But the internal leadership issue ultimately boiled over late last year after our pilot line team started producing product-quality cells that were more efficient than those produced in the lab by the research team managed by Chris. Lab cells are supposed to be steps ahead not behind the pilot-line cells. So our key engineers, our board, etc. ended up concluding that Chris, for all his experience and industry stature, had to be replaced with one of our younger guys who was the de facto research group leader anyway already.

We did a reorg and moved Chris into a non-operational role. We accepted that he most likely may have larger ambitions that the scope of that. Sure enough, he decided to resign the next month and started looking for a new job. Two more months later he landed at Applied. I actually helped him with getting the job at Applied. He’s going to do very well there among other 20-year solar-industry veterans and presumably a culture that values that kind of experience more than we ever did.

Our own lab team is styling now. And our pilot line running even better. For our first product, the pilot line matters foremost of course. So none of all of the above really affects our product introduction all that much. But we also want to continue to be a powerhouse of lab innovation in the style that’s proven to work best for us: Mostly driven by smart kids straight out of school who we give all the tools and toys to try crazy new things; plus just a thin dose of managers who know how to earn their respect.

Q). Do you have customers lined up to purchase the product, and if so which companies?

A). We are lined up with the industry’s top system integrators as our partners, and it is clear we are going to be manufacturing capacity limited for about as far out as we can see. There’s presently really only two truly scalable solar markets in the world — Germany and Spain — and we do a lot there. Being a scalable market is today as much about feed-in-tariffs as about the administrative framework; tomorrow, with grid-parity PV systems, it is primarily about the latter.

For the United States to also become a truly scalable market, some ingrained bureaucracy stands in the way for that still — everything from 1920s-era conduit-around-cables and grounding requirements to insanely complicated town-by-town permitting processes. It’s hard to believe that California is more bureaucratic than Germany — but it is so in solar power. Fortunately, people are beginning to realize this and so change is possible even if it affects electric code rules designed around 1920s electric technology.

In April 2007 a small dedicated group of concerned citizens in Rocky Mountain National Park, Estes Park Colorado, created Sustainable Mountain Living (SML). This group functions a lot like the recently formed environmental task in Palo Alto California, one of the leading green cities in America and the headquarters for Nanosolar, a company that is revolutionizing solar technology.

The SML group in Estes Park Colorado meets twice a month and also attends Town and Utilities Department meetings. The group has 80 core members today but started with just 15, it also usually sees 20 to 30 interested community members who want to become green or learn about going solar. Not bad for a town with a population of roughly 5,000.

This past summer SML proposed net metering to the town of Estes Park which would allow solar panels to generate electricity during the day and store it on the grid like a battery for use during the night, when the sun is no longer out. Tom Street, a member of SML, took the lead on this issue and did the research to set up and propose guidelines. In this scenario net metering would occur when individual homeowners create energy using solar or wind power and then receive a credit for the excess energy that is created. As each home owner's meter runs backwards local utility departments will offer reimbursement at the end of the year. On October 23rd Bob Goehring, utilities director of Estes Park Light and Power, presented the formal proposal to the town board.

One Estes Park native and SML member, Eli Roehl, displays a solar panel that was placed on the roof of her small wooden cabin. She explains that "mountain living is at its best when it does no harm to Mother Earth".

Estes park relies on tourism to spur it's economy and is focusing on sustainability to keep the park green. SML meets on the first and the third Saturday of the month from 2pm to 4:45pm in the Hondius Room (or Wassen Room) of the Estes Park Public Library.

Nanosolar, the hot shot thin film solar startup out of Palo Alto California, announced that it's first three production grade solar panels will be archived and preserved between the San Jose Tech Museum, a display in their own company headquarters, and a charity auction on Ebay. Things went a bit off course recently however when Ebay shut down the solar panel charity auction because it violated their terms of use.

There haven't been any announcements since the auction was shut down as to what will be done with the coveted third panel. Maybe Nanosolar will donate it to Google so it can be displayed at the Googleplex just a few miles down the road. Larry and Sergey were the first two private investors in Nanosolar and have helped the company remain private. This is a very interesting situation considering that Google recently announced that they will be exploring solar energy production as a part of their own commercial offerings. Maybe there's a merger or acquisition in store for these two companies?

Bali, Indonesia played host to the United Nation’s Climate Change Conference from December 3 – 15.  The United Nations Framework Convention on Climate Change (FCCC) is an international treaty drafted in 1992.  Its aim is to reduce emissions of greenhouse gases in order to combat global warming.  The most recent update to the FCCC is the Kyoto Protocol, which was entered into force in 2005.

The Kyoto Protocol addresses emissions of the six main greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride.  Each party to the protocol has an assigned amount, the “maximum amount of emissions (measured as the equivalent in carbon dioxide) that a Party may emit over the commitment period in order to comply with its emissions target”.  At this writing, 174 countries have signed and ratified the protocol.  The United States signed the protocol but has no intention of ratifying it.  In 2005, the U.S. was the largest emitter of greenhouse gases, but by 2006 China took the lead.  The U.S. believes that China and India, another large producer, should not have been exempted from the Kyoto Protocol.  In a 2001 press conference, Bush said ”These and other developing countries that are experiencing rapid growth face challenges in reducing their emissions without harming their economies. We want to work cooperatively with these countries in their efforts to reduce greenhouse emissions and maintain economic growth.”

The same issues again emerged at last week’s Bali conference.  The United States representative, Paula Dobriansky, stated that the U.S. was not going to agree to any terms that limited the obligations of the developing world.  The room erupted in boos.  Papua New Guinea delegate Kevin Conrad said, “We ask for you leadership.  We seek your leadership. But if for some reason you're not willing to lead. Leave it to the rest of us. Please get out of the way."  Speeches by other representatives made it clear that the U.S. would be to blame if the talks failed.  Finally, Dobriansky agreed to the terms of the new roadmap.  The Bali Roadmap sets in motion plans for a new negotiating process that will culminate in 2009.  This will hopefully lead to an international agreement on climate change by 2012, with an expected deadline for meeting emissions standards in 2020.

Will the Bali Roadmap have any effect on the use of solar energy?  It’s hard to see how solar could not play a part in the global reduction of greenhouse gas emissions.  In the U.S. alone, 2006 carbon dioxide emissions from electricity production were 2,459,800 thousand metric tons.  A 150 kWh per month photovoltaic system can prevent 3600 pounds (about 1.5 metric tons) of carbon dioxide from being released each year.  The average person uses about 1000 kWh per month.  If just one person switched to solar power, they could save about 9 metric tons per year.  If 20 percent of the population switched to solar power, we could save 504,000,000 metric tons per year (based on a population of 280 million).  That is a substantial savings just from a small percentage switch to solar.

The U.S. Senate slashed tax breaks for wind and solar projects in the recently passed energy bill.  The tax credits, which were introduced in the Energy Policy Act of 2005, increased a no-cap tax credit for commercial solar installations from 10 percent to 30 percent and created a new residential tax credit of 30 percent with a cap of $2000.  These credits are set to expire on January 1, 2008.  

The tax credits were sacrificed in order to facilitate an increase in the CAFÉ standards to 35 mpg by 2020, a 40 percent increase.  David Roberts at Gristmill theorizes about the deal.

The loss of tax credits comes at an ironic point.  Recent advances in thin solar film manufacture by Nanosolar promise to reduce the cost of solar power from $4 per Watt to $1 per Watt, a price that might draw more businesses and individuals to opt for the renewable energy source.  Tax credits would make the move even more attractive.  Solar stock prices have yet to react, but the loss of the tax credits may put some companies in an unstable position, hampering their growth potential and reducing their competitiveness in international markets.

The original draft of the bill also included requirements for electric utilities to use more solar, wind, and geothermal energy.  The bill was approved by the House on Tuesday.

Back in May 2007 Beyond Petroleum (BP) and Walmart announced that they will be working together to install solar power for twenty two of Wal-Mart's locations in both California and Hawaii. As is the trend with many other large companies such as Hewlett Packard, Google, and General Motors, Wal-Mart will pay no up front costs to have these solar panels installed and maintained by BP, instead, they will be responsible for paying BP to use the energy being produced.

This is a great partnership because many of Wal-Mart's largest buildings have massive roof tops which can support large solar arrays. Since Wal-Mart has stores all around the world it represents a deep partnership for BP and since Walmart is always looking for ways to bring you "every day low prices" this rental style business model is a great fit.

BP (Beyond Petroleum) gas stations are starting to integrate solar canopies (the cover for the gas pumps) that produce energy to run the entire store! Some consider it "greenwashing" but BP has definitely been taking steps towards investing in renewable energy, and fuel in particular.

The Canopy is usually set up to cover eight fuel stations and is constructed with over four hundred photovoltaic PV modules to generate electricity. Some larger installations are in the works at different locations across the country to cover up to ten fuel stations with enough capacity to produce 20 kilowatts of energy.

These panels are the PowerView (Type A) modules (an innovative new thin film technology), which allow approximately 5% of daylight to pass through.  They are manufactured at BP Solar's facility in Virginia. Each module will produce a nominal 40 watts dc/module (per 2'X4' panel), a total of 17,360 Watts dc under the optimum conditions.  The system is fitted with several inverters in parallel, designed for an array of the solar panels, with their respective outputs combined.  The system will typically produce 15 kWac. Sufficient to power 3-4 homes.

Here's the BP Solar corporate scoop:

• BP is one of the world's largest private-sector consumers of solar power, as well as being one of its largest maufacturers of solar panels and modules.
• BP first "went solar" at its retail sites in 1998, with a project to incorporate solar power into 200 of its retail stations in ten countries around the world.  The 200th site was completed at the end of 2000.  These sites were PV arrays installed on top of a conventional forecourt canopy.
• So far over of 3.5 Megawatts of solar power has been installed at stations across the Globe by BP.
• This clean power will save around 3,500 tons of CO2 emissions annually or 105,000 tons of CO2 over the lifetime.
• BP Solar is a unit of BP Amoco and headquartered in Frederick,MD.  With a global market share of 20% and annual revenues of more than $200 million, BP Solar is at the forefront of the international solar electric industry and is one of the largest manufacturers of solar electric modules and systems in the U.S.

A new company called Freenerg (pronounced free energy) has been conducting pilot runs of a solar panel rental business similar to what a company called Citizenre had proposed last year. What's different about the Freenergy business model is that they are starting on a much smaller scale, they will not be producing their own solar panel equipment, they have a lease and buy option, and they have already done a few test installations!

Click on over to the Freenergy homepage and take their solar survey to help them gather information if you are interested in helping the cause. The company's website gives the following explanation about their solar rental program:

Beginning in July 2008, freener-g will offer all of the benefits of clean, sun-generated electricity for one monthly fee. Freener-g will custom design a solar system for your home or small business and will install, maintain & support it throughout the term of your lease. With freener-g's leasing program, you avoid the significant up-front cost of owning, eliminate the responsibility of maintaining and retain flexibility of choosing solar if you move.

Seems simple enough, the only downside is that this program doesn't launch until July 2008 and even then it will probably not be available on a wide scale in multiple geographic locations. Also, with Freenergy customers will be paying a rate of $200 per month to rent the solar equipment (or buying for roughly $50K) instead of just having it offset the cost of their previous electricity bill as Citizenre is proposing. In many cases this is the difference between a $50 electric bill and a $200 rental, but it still helps the cause and with the line of over 25,000 home owners waiting to hop on with Citisenre the wait may end up being the same?

It's a toss up really, there has been debate over whether these solar rental programs will work in the end at all but it doesn't hurt to investigate and none of them are asking for money up front, they seem to be in the investigation stages still. One thing that is helping Freenerg move on to the actual launch phase is an influx of capital from Xcel Energy. Xcel Energy just announced last week that it has awarded Freenergy nearly $1.5 Million dollars to construct 50 test systems, the press release follows:

Freenerg, Minneapolis, to demonstrate the commercial viability of providing solar-generated electricity for homes based on a leasing and service package of rooftop solar panels connected to the grid. The program will use 50 solar generating systems at 5.6 kilowatts each, $1,488,922.

All of this is great news for home owners because more competition means better, cheaper products on the long run.

Our favorite artists over at Imaginary Foundation out of San Francisco have created a new piece of clothing artwork called Sustainable Future. This shirt is available in white and natural colors for both men and women. Get it while it's still in stock because this type of thing is sure to attract art lovers and solar aficionados alike. Here at Solar Power Authority we've already ordered a few for ourselves and over at our sister company ABSTRACTmall we've actually invested in a few green art pieces of clothing for our own line. Check out Jason Thielke's Dirty D shirt which promotes recycling and explores the breakdown of industry and materialism.

As interest in solar energy products and sustainable business grows and the media and art worlds bring it to light with products like these, more companies will recognize the marketing benefits of investing in it. It's just one more step towards a truly sustainable future. As solar stocks continue to rise and the industry swells into something like the internet bubble of yesteryear, new products will emerge and economies of scale will take hold to make it even easier to adopt. We solute Imaginary Foundation and ABSTRACTmall for promoting this shift and what will surely become one of the most artistic forms of power creation that man has ever seen.

Opened in mid 2007, the Solar One solar power station in Nevada produces enough energy each year to power 15,000 US households! Unlike photo voltaic solar production, this facility uses heat exchange to create steam and run traditional power turbines. Aluminum parabolas focus sunlight to create heat intensity that is eighty times what the direct sunlight is capable of. This super heated oil travels through pipes next to water which creates steam and powers turbines. This is a great way to harness the sun's power without the need for silicon or solar chips, you just need a lot of aluminum.

With solutions like this it may not be necessary for individual households to partake in solar energy production. This project runs much more efficiently than a spread out network of small installations. It's easier to clean, service, and monitor but does lose some efficiency in transporting the electricity into far away towns. There is still some need for a sun independent power source for night time use. Perhaps a worldwide network of solar installations which could efficiently transport electricity into dark locations? As battery technology improves there will be less need for dirty energy, but the use of nickel (which is used newer batteries such as those of the Toyota Prius) still poses a threat to environmental sustainability and balance.

SunPower, which is based in San Jose California, has released some of the details for their partnership with Hewlett Packard to install solar power at the technology company's San Diego manufacturing plant. Sun Power will be installing a one megawatt solar electric power system and HP will actually buy the electricity for less than what dirty energy would have cost! According to SunPower's projections, the system is estimated to offset over a million pounds of CO2 per year.

One of the coolest parts of this HP+SunPower collaboration is that eventually it will benefit employees of Hewlett Packard. The partnership is creating a side program to give US employees of HP a discount on SunPower products to be used on their own homes. For me this is great news because it means the solution is more than just a "greenwashing" publicity feat. While other environmentally conscious companies, such as Google and Microsoft, have installed solar arrays on their headquarters, to date, HP is the first to share their partnership leverage with employees!

Local home owners and residents in Sacramento have been partnering with the government and the Sacramento Municipal Utility District (SMUD) to adopt solar energy in the cheapest, fastest, and most effective way possible. Since 2005 SMUD has been working with residents to rent out solar panels in order to create a distributed network of individual power producers. What's more interesting, since 1989 when residents voted to close a local nuclear energy plant Rancho Seco, SMUD has been able to place solar panels on that land and use the space to sell solar power to residents who might not be qualified to have panels on their own roofs! In both cases, there are huge tax incentives and the great feeling of helping to save our environment.

These developments are very exciting indeed, however, not every town in America is as forward thinking and environmentally focused as Sacramento, which is the home of California state government, that's where the private sector is coming in. Several companies are now offering to partner with home owners in select states across the US to create a solar power rental agreement whereby the owner of the house can generate his or her own power. At it's current state, a company called Citizenre is taking the names of people who are interested to join the program in mid 2008 and so far they have over 25,000!

With Google getting so much attention recently for its solar projects and plans to enter into solar energy production, I thought it was important to draw some positive attention to what Microsoft has done. Few people know that Microsoft's Silicon Valley campus has a very large solar installation of it's own, and it had the panels put in over a year before Google did! Get more detail in the attached Microsoft-Solar-Information.pdf.

As a result of adopting solar power to help feed the enormous electricity use of computers and mainframes, Microsoft saves over 100K per year and helps our environment. As an employee, just going to work at that campus means you are becoming environmentally sustainable yourself, because you are using green power instead of using electricity at home. Even as energy prices rise for traditional power, sunshine never gets more expensive! A few consumer focused companies are beginning to pop up offering to "lock in" power costs in a similar way for people who own houses in certain parts of the country. Companies like Citizenre will rent out the required number of panels to sustain a household for the same price as the original "dirty" electricity would cost. Since the sun's price doesn't change, they will even lock in your power bill for up to 25 years!

With companies like Microsoft and Google actually saving money by using solar, this seems like a great time to get in on the action, or at least get in on some electric or solar powered toys like the Tesla...

 

As the home of the famed Googleplex by Google which utilizes one of the largest solar arrays of any corporation at this time and many other forward thinking corporate campuses such as Microsoft's Silicone Valley headquarters which also has a large solar panel installation, Mountain View has made a commitment to fostering solar energy generation within it's business community and for itself.

Recently it was announced that based on the installation of a 90 kilowatt photovoltaic system that powers the lights and elevators of the California Ave parking garage and the use of solar powered pumps at Shoreline Sailing Lake and the City reservoir the city was honored with a City Solar Award.

The city put out a press release and has also announced the formation of an Environmental Sustainability Task Force to aid in the planning and execution of future endeavors. I intend to join this task force and I'll update this news feed with any solar developments!

At Shoreline Lake in Mountain View California water is being purified using solar technology created by a company called SolarBee. Their solar powered water pump or "long distance reservoir circulator" improves water quality in fresh lakes by reducing or eliminating the need for algaecides and herbicides.

I had always wondered what these things were, I often windsurf on Shoreline Lake and had seen the funny looking buoys with solar panels on top. As I read the winter Mountain View Newsletter I noticed that our city had won an award for the installation of solar powered pumps and it all clicked. Currently, the pumps are being used on Shoreline Lake and the City reservoir. Check out their promotional video below; note that it does not feature Shoreline Lake.