Never underestimate the ability of the marginal exciting stuff to generate PR !

Trina Solar,  is  supplying  wing-loaded  solar cells (I never thought I'd ever write that !), for a small 2 seater electrically powered aeroplane to be built by France-based Lisa Airplanes.

See this French language site here - way better than the English one - for an idea of what it would be like. And here's a picture;



It will be called the Hy-Bird. Basically, the same aircraft with solar panel wings.

On a separate note, I've been experimenting with a plug in 1.5w solar panel on my, "ordinary-priced car" ! that connects straight into my cigarette lighter while sitting on the dashboard. The first observation is that the car starts much more quickly when I turn the key. The second is that when I remove the keys from the ignition, if the sun is still shining, the stereo keeps working !

That's why I suspect there's a lot more scope for small solar panels to become standard in vehicles tomorrow in much the same way that airbags are today, rather than an explosion of - albeit fascinating - aircraft like these.

Quite a few media organisations around the world picked up this story in the New Scientist on the latest progress being made in LSCs - basically a newish way of trapping light photons and chanelling them using a waveguide to displace electrons on the cell and hence create direct current electricity. Some researchers at MIT however have come up with a couple of improvements;

i) Getting rid of the plastic substrate and replacing it with a sprayed onto glass mixture of dyes combined with a substance called tris(8-hydroxyquinoline) aluminium which is used as the waveguide. This typically captures high energy light like UV and leads to higher efficiency as less light escapes.

ii) Adding a second sandwich of dye and glass over the first - this traps longer wavelengths that have passed unperturbed through the top level and any lower-energy light that has been re-emitted within the top layer and somehow escaped.

The Economist, uncharacteristically, gets pretty excited and says;

The upshot is a device that, even as a prototype, converts ten times more of the incident light into electricity than a conventional solar cell.

Meanwhile, the BBC, gets even more carried away, confusing light with (highly marginal) incidental light and says

A new way of capturing the energy from the Sun could increase the power generated by solar panels tenfold

So it falls to the New Scientist to fill in two crucial missing bits;

Based on experiments, the team calculates that the power conversion of the prototype would be about 6.8% efficient, about the same as commerical cells made from amorphous silicon. But Baldo believes that with various improvements, the technique could eventually reach an efficiency of more than 20%.

So in other words, they've moved from highly inefficient to very inefficient. The 20% figure we can write off because that's a bit like saying, theoretically, it will be possible to capture 57% of the sun's energy for solar power, one day. Some of us though, live in the present and have an eye on the near future and should resist grand futuristic visions.

The second point, the killer fact iny book is this;

Although the new dyes are not as fragile as the ones used in the 1970s, they still have a lifetime of only about three months

So to get a return on this application, the value of the power it generates has to exceed its financial input in less than 3 months. I'd be staggered if this ever happens, anywhere, in the 21st Century !

It just goes to show, reading one source of information on one event will never give you the full picture. We can all so easily see what we want to see rather than how it really is. Optimism can work against you as well as for you. So don't hold your breath - this particular solar news story is interesting, but not a breakthrough.

A recent report by NanoMarkets suggests that the growth rate of thin film solar pv, will continue to outshine the rest of the solar sector. They predict that the thin-film photovoltaics (TFPV) market will produce the equivalent of 26 gigawatts (GW) by 2015 and will generate well over $20 billion in revenues in that same time frame. What's particularly interesting is that the report points to cadmium telluride as being the fastest growing part of this niche and will be the largest part of this niche - with $8.7 billion in sales.

A few years ago, I was pretty dubious about the prospects for thin-film. Ok, it cost less, was flexible, often expensive polysilicon-lite or free, less weighty and easier to install. On the other hand, it worked at lower efficiency, typically half, so you'd need to buy twice as much of the stuff by surface area to get the same power output, which in my books made it a non-solution. Still, all of those factors can't be decisive if it continues to grow so fast.

Having said that, if I was to put my sceptical hat on, the thin-film report writing business seems to be a very popular one right now - shades of the fuel cell report business in the late 90s or even the mobile phone WAP business technology market that somehow never, ever, appeared. This report published last month by EUPD Research concluded that " . . . less than 50 percent of the 60 companies that have announced their intention to start commercial thin film production by 2010 will keep the timeline".

And they have a point. As with any forecast, the further it goes out into the future, the more likely it is to be wrong.  Both demand and the pace of technological change are slippery customers. That's why one can justifiably have more confidence as a cautious investor in the near forecasts, out to 2 years, than the longer ones, 2- 10 years.

Most of the time, this blog focuses on big listed companies. And yet, whilst they tend to be the most relevant to alternative energy investors, in so doing we are missing out on something crucial; innovative small companies that just might one day deliver the game-changing invention that will BE BIG. It may be a cliche, but my admittedly partial anecodatal evidence is that when alt. e. companies become large blue chips, the corporate culture takes over and the innovation goes out of the window. The question is why?

Arguably, because they have a much greater fear of failure. Silly really, when if you've read Why most things fail: evolution, extinction and economics by Paul Ormerod, you understand that failure is the natural order not only of the economy but of the biosphere. You have to budget for failure to succeed. Roughly 99.8% of all species and companies that have ever existed do not do so today. But that's ok because we have superfecundity - as Eric Beinhocker argued in a similarly excellent book, The Origin of Wealth: Evolution, Complexity and the Radical Remaking of Economics, i.e. a surplus of players in the biosphere and the marketplace who are destined to fail but in so doing provide competition, and a learning mechanism for the survivors.

So after that rather long introduction, I'd like to introduce you to three players who have emerged into the light over the last few weeks, who have very novel innovations to their name.

First of all, Broadstar Wind Systems who have developed a turbine that looks like it fell off the back of a paddle steamer called the Aerocam.

This is potentially exciting not only for the aesthetics (!), or even for the lower avian mortality rates, but more seriously because  Broadstar believe they can deliver this technology at an overnight capital installation cost of $1 per watt - roughly where it was a few years ago before the ramp up in steel prices, construction costs and various supply constraints kicked in. I've tried squinting at the power curve (can't they and everyone else just give us the underlying numbers so we can overlay them with others on the same chart?) on this machine compared to a conventional horizontal axis turbine with inconclusive results - you may do better. It has the added advantage of requiring shorter towers and a possibility to infill on existing wind farm sites.  All that' s quite exciting, novel and still has a high risk of failure because as far as I can see, there is as yet, no working example, displayed on their website.

Here's another wind turbine which is vertical axis - quiet revolution - and beautiful to behold.

On the face of it, it looks pretty expensive but that's not a reason for it not to succeed, just look at Ferrari. If you fancy a trip to a less desirable corner of London some time - Elephant and Castle - you can see one of these perched on top of a block of flats at the opposite end to a conventional Proven wind turbine and draw your own conclusions on the horizontal axis versus vertical axis wind turbine debate.

Finally, Raw Solar. Students at the Masachusetts Institute of Technology have come up with this;

I meant to flag up this article in the FT a while ago when it first appeared in the orange newspaper. It's well worth a read. A few choice points the article - or people quoted in it - mentions;

1) Grid parity will be reached first in Italy by 2011 or 2012 - (for that I'm afraid Italy can thank it's own bureaucratic incompetence in failing to license the building of adequate power supplies!)
2) Germany has 55% of the global solar market, Japan 17% and the USA, just 5% (which makes you think of the growth potential of the United States)
3) the current price of $3.80 per watt of solar capacity equates to a power price of about $0.245 per kilowatt hour - about double the European average wholesale electricity price (which I would suggest will probably go up a bit faster than solar will come down)

I keep thinking though about Texas and how wind power there has actually started to become a deflationary force, lowering the price of electricity to consumers,  as it has become cheaper to produce than gas-fired electricity since 2006. Better than wind parity in other words with gas, or as www.google.org would put it RE<G.

As this article in Renewable Energy World makes clear;

Bringing new wind energy online is critical to protecting Texas consumers from increases in the price of fossil fuels, wind energy advocates point out. Texas currently depends on natural gas to generate 49% of its electricity, and natural gas plants make up 71% of the state's generating capacity. From 1998 to 2006 natural gas prices in the state tripled, which caused the price of electricity for the average residential consumer to increase from US 7.6 cents per kWh to US 12.9 cents per kWh.

Three years ago, Japan, a powerful, wealthy island nation who at the time had the highest retail electricity prices in the world, pulled th plug on its pioneering - albeit expensive - solar subsidies. With hindsight, you could easily say that the timing of this decision was awful, coming as it did just as the cost of conventional energy started to escalate and the solar industry took off. You might even say that this effectively handed leadership of the world's solar industry to Germany. As Japanese demand dropped off, solar sales declined, curtailing investment in capacity expansion and long-term silicon procurement which meanwhile happened everywhere else.

And yet, retrospectively, it wasn't actually that bad a decision - 3 years of no subsidies has saved them some money. For now, the solar industry continues to be much more national than global so they probably have not lost that many exports. Moreover, they still have quite a few solar companies growing fast within the industry at the upstream equipment supplier and solar module manufacturing level.  One last point on Japan's solar industry  - few realize that on some metrics, Japan had actually already reached grid parity with solar power in 2005, it's just that no one got that excited about it  !

So my interest was piqued to learn today from Reuters that Japan, spurred on by its famously interventionist Ministry of Economy, Trade and Industry - METI - is poised to provide subsidies and tax breaks for solar panel makers from 2009. Other than successful lobbying by the Keiretsu, the principle reason for this appears to be a target which aims to have more than 70% of new homes equipped with solar panels by 2020. And with annual housing starts running in Japan at just under 750,000 per year, that's a lot of solar power that will need to be bought.

which will start showing up in the daily report from tomorrow - always feel free to drop me an email if you think there are any that I am missing.

EDP Renovaveis - the recent IPO spin-off from Energias de Portugal of their Renewables Division

and then two Canadian Solar stocks . . .

Opel International - who have a niche in concentrating solar power for photovoltaics, i.e. not CSP or Concentrated Solar Thermal Power

Timminco - a manufacturer of solar grade silicon

Grid parity - you should know - is the point at which photovoltaic electricity is equal to or cheaper than mains supplied electricity and is regarded as the Holy Grail by solar followers. At this point, solar production will literally take-off - without need of subsidy - because as a forward purchase of electricity, it is cheaper and the highly distributed grid becomes reality. In some respects, grid parity is the less glamorous energy equivalent to Ray Kurzweil's Singularity, when artificial intelligence exceeds human intelligence - which he predicts will happen in 2045 - and machine intelligence drives economic growth faster and faster at a pace and rate of change we couldn't easily comprehend.

Now back to the sunny stuff. An excellent piece in today's Guardian by Ashley Seagar provides us with a feast of food for thought on the prospects of solar energy in the next few years. The big question is simply this; when will the solar industry achieve grid parity?

Today, the optimists would say, 2-5 years at most and their arguments are roughly as follows;

i) Higher than anticipated oil prices and other fossil fuels are pricing in solar more quickly than expected
ii) The great polysilicon shortage - where demand significantly exceeded supply - will end in 2009 lowering signifantly the input raw material costs of solar wafer and module manufacturers. Many new polysilicon plants are slated to addtionally come on stream after then as well. As per the article, REC expects 30-40% lower panel costs by 2012.
iii) Come the next American President, everything changes, everything, change we can believe in, etc. Especially, the accelerated rollout of increased incentives to alternative energy.

Now here's what a pessimist might say - 10 years or more to grid parity - and this is why;

i) Even though solar prices have remained the same the last few years in spite of massively increased production, even if even more production will deliver those price falls, why is no one ready to predict, say, a modest 10% fall next year, as a mere starting point? And why is no one lambasting all those who predicted grid parity years ago - should we really forgive them so easily?
ii) Oil prices may be in a small speculative bubble and even if they're not, it's not as if they can double or triple  in price again to $400. Even a war with Iran has limited impact. Iran can retaliate after a US or Israeli strike, but it can only do so once - after which it will be neutered by the US Air Force and/or have its oil assets seized by Marines. So a shift to higher oil prices could be a one-off inflationary adjustment.
iii) Isn't it a little bit naive to assume that falling solar production costs will 100% be returned to the consumer rather than manifest itself in an increased profit margin for suppliers, at least initially?
iv) Historical analysis suggests that American Presidents - like most democratic political leaders - tend to produce marginal shifts of emphasis. Early ambitions tend to be curtailed by political realities, mid-term elections and winning the next one. Passing a new energy bill that would further support solar power takes a lot of time to bring on to the books.
v) It would be very hard to supply electricity needs from solar in serious scale beyond 10% - on average throughout the year - of any country. The highest penetration so far is 0.3% in Germany. The load-balancing of such variable supplies in scale is an unprecedented challenge not easily solved at low cost. And the big consumers of electricity are not homes, they are businesses, big heavy ones.

So here are my parting thoughts;

i) Grid parity will not universally arrive the world over, simultaneously. It will inch through first in those countries which;

a) Have high relative grid prices - Germany, Italy, California
b) Offer some kind of profitable incentive to the producer - Germany, California
c) Have a suitable solar climate as measured in average daily sunlight hours throughout the year and the solar irradiance per square metre - California, Italy
and
d) It will be popular in the Middle East, as a way of extending the lifetime of oil and gas reserves

My instinct is that the case for early grid parity has been a little too uncritically overstated, perhaps a bit like peak oil, which is probably still at least a few years off. But the pessimists may be wrong too. So I'm going to sit on the fence and lean heavily towards the pessimists and state that grid parity may become a reality in some major parts of the world by 2017.

News that Q-Cells AG, one of many alt. e. stocks over the last few years which once claimed to be the largest by market cap.in the world, is investing $1.6 billion in a new plant in Malaysia gave me pause for thought. Will it be the first of many German solar companies to go east of East Germany?

If we were to view the semiconductor industry as a taste of things to come for solar manufacturers, then Western, Japanese and Korean firms started shifting production rapidly in the 90s away from Western Europe towards the less wealthy parts of the Pacific Basin. At the moment, most of Germany's solar firms are independently owned and quite happy where they are. A bit like the Mittelstand cadre of small and medium sized businesses. The difference though is that Germany's solar firms have a global future and are often publicly quoted on the Stock Exchange. So as the solar industry expands and giant utilities and multinational white goods manufacturers choose to buy them out - that is going to change pretty rapidly.

That's why yesterday's news about Ersol Solar Energy AG, which closed up a staggering 63%, because washing machines et al behemoth Bosch agreed to buy a majority stake, offers portents of the future. I doubt this will be the last German solar firm to be bought into by the white goods industry - solar is becoming commoditised. And utilities, will also be buying up a lot more operational windfarms.

A lot of excitement over the last couple of days on JA Solar - as picked up on this post by Motley Fool. JA Solar stands out because;

i) it's making more profits than anticipated
ii) it has done well to secure adequate supplies of polysilicon
iii) it is a relatively low-tech, easily understandable solar play - based in China

Anyway, I'm always struck by how little of a following there is in the anglosphere of stocks not listed in English-speaking markets. A case in point has to be solar stocks, most of which tend to be listed in Germany, the world's leading market for the industry. Yet there's next to no discussion of them outside of the super niche world of globally thinking alternative energy investors. In the ideal future - and I think it will come - the transaction and bureaucratic cost of buying or selling a stock anywhere in the world will be near identical and close to zero. But we're not there yet. That's why I'm launching our first solar stocks screener - just click on the link here.

It shows all solar stocks listed on North American (i.e. USA and Canada) and the London Stock Exchange of which there are 25. It's also got the 10 latest stories on solar stocks for you to pick up. And it will refresh every minute automatically.