by Gavin TullochSOLAR PERSPECTIVE
Since the end of February, we have witnessed much change in the role of solar in society. At BE we have attended and contributed to five separate symposia/exhibitions in solar, PV Expo in Tokyo, Bloomberg New Energy Finance Summit in New York, Bloomberg Solar Leaders Forum in Singapore, Verona Solar Expo, and Intersolar in Munich.
The message is loud and clear. Industry is living a dream of survival and growth. The 500 companies will soon be whittled down to just a few in each sector (projects, systems, Balance of system components, modules, cells, technology). Greed and a mono-dimensional finance led society have bought the solar airship down. Over the next months we will discuss some of the corporate, regulatory and market issues in greater detail.
In this issue we address the status of technologies and products driven by profit making in utility scale solar deals, the necessary shift of technology to address the distributed market as regulators finally realise the long term costs and risks of creating a FIT led solution that has to survive for 25 years to guarantee a profit.
We have witnessed the first effective failures of big arrays (not just First Solar) but also the crystalline silicon arrays that have caused technologists to concentrate on module and array reliability rather than just lab efficiency of cells. We noticed that some silicon players have realised that black is bad and they have sought means to make their products more attractive to the consumer. Do we now matter? Yes we soon will. At least in Europe, soon solar farms will be a market of the past. We also note that price is not king to the consumer – especially if it is 'her' house.
Energitismo is the solution – quality, aesthetics, adequate performance, style and affordability – but not 'dirt cheap and black' and not just clipped onto our expensive roofs.
Some of the more entrepreneurial producers even promote with young children playing with mothers and in Europe we are seeing the first home management systems linking clean energy generation with stylish energy efficient devices (particularly LEDs), time of usage, and electric vehicle storage.
Meanwhile society is facing the horrendous cost of the destruction of entities such as Q-cells which collapsed from €90/share to effectively nothing – a massive loss of paper wealth by all investors – many private investment funds and pension fund subscribers to the VCs. But there may be a solution on the horizon for the phoenix to rise out of the ashes of the solar fire, Common Goods – the takeover of failing clean energy business by the workers for whom profit from production of power for their homes is not the highest priority – having power security, a job, clean energy and a clean environment are much more important.
Are we still on the sunny side of the street?
In 2010, it became apparent that the worldwide boom in utility scale renewable energy and energy efficiency had resulted in the supply of products that were becoming cost effective as clean energy products, but also that most of the products available had little market appeal. In addition, those routes to market for renewable energy had been developed as financial tools and were structured for utility scale projects (e.g. over €20M per project).
The feed-in-tariffs and other subsidy tools had created a burgeoning market place that could not be sustained. They have caused a significant increase in consumer costs, as well as the technical defect of disruption of the grid, along with added balance of system costs that have been accompanied by a very low rate learning curve (e.g. structures, storage and grids).
Consequently, it became apparent to regulators by 2011 that the future of the industry should be in distributed systems that eliminate the need for generator led grid expansion, special structures, land purchase, mass storage, and unproven technologies to reduce distribution losses - as the distributed installations are effectively the 'end of grid'. The ultimate distributed solar system is a house mounted array. But the technological solutions being already marketed for the home and office applications have been ugly or at least unappealing, except for a few higher priced products such as architectural power glass.
By early 2011, it became apparent that there was little incentive for the financial engineers to address this distributed market due to the complexity in bundling the many installations into a large project (though a few developers have begun to now view this opportunity). At the same time the market place had become excited by electric mobility and recognised the opportunity for energy efficiency system solutions for the home. In particular, Japanese companies had commenced development of total home systems. In carrying out those developments, they had realised the fact that most decisions in the home are made by the 'woman of the house'. Nevertheless, the market push was still governed by financial incentivisation rather than demand for the products and systems.
The founders of Energitismo, realised that there was a strong analogy between the energy efficiency (clean energy) market place and the mobile communications market place. The change of the communications market from fixed line to distributed mobile had occurred very rapidly and was driven by ease of use and comfort and not by price. In fact for most people the cost of communications had increased with the onset of mobiles.
The early introduction of mobiles in the mid 80's and each new revolution of product was associated with high product prices, but also with a seemingly endless demand for innovation and quality. Apple is the epitome of a market leader that took advantage of the human idiosyncrasy to pay more for a product so as to be an early up-taker. The whole Apple 'I' revolution is a lesson in brilliant market awareness and, from a product viewpoint, built in redundancy. The consumer group that immediately takes up each new revolution in the mobile entertainment market (as it now is), is between 3 and 15% of the ultimate market place.
Based on this analogy and the growing awareness of the population as a whole that energy availability may become scarcer due to control by the few, that energy costs will rise and not fall as political wisdom would have it, and that the environment is in increasing chaos due to global warming, the Energitismo team has developed scenarios. Our aim is to create and address the market place for elite consumer driven clean energy products. Energitismo is not only a brand, also it represents a cultural movement, a Renaissance in the energy market and a lifestyle trend.
Energitismo approach is to help people to enjoy the selection and purchase of quality clean energy products. Energitismo seeks to make it easy to find the best in clean energy solutions so that a family can create a low energy home in the same way they purchase furniture – for aesthetics, comfort and quality. When will the market place be ready? Now. It exists in parallel with the utility scale energy market – but not with the same ordinary solely cost driven products.